Under Philippine Corporation Law, the risks arising from climate change are – as with other foreseeable financial risks – within the scope of directors’ duties to act in the best interest of the corporation and its shareholders, according to a new legal opinion dated 18 October 2022. Additionally, directors owe their duties to stakeholders more broadly, and hold a stewardship role to ensure that company operations do not degrade the
environment or contravene environmental laws.
Commissioned by the Commonwealth Climate and Law Initiative (CCLI), the legal opinion, ‘Directors’ Duties & Responsibilities and Disclosure Obligations under Philippine Law on Climate Change Risks’ is authored by Cesar L. Villanueva (Senior Founding Partner, Villanueva Gabionza & Dy), Lily K. Gruba (Senior Partner, Zambrano Gruba Caganda & Advincula), Angelo Patrick F. Advincula (Senior Partner, Zambrano Gruba Caganda & Advincula) and Joyce Anne C. Wong.
The authors conclude that directors of Philippine companies “directors play a critical role in managing climate change risks to which the corporate business enterprise is exposed, as well as in fulfilling the companies’ social responsibilities towards the protection of the environment.”