October 2019 | Sarah Barker, Ellie Mulholland | Reports
This paper provides a high-level summary and comparison of the CCLI’s previously published country papers on directors’ duties and climate risk. The prevailing directors’ duties regimes under Australian, Canadian, South African and United Kingdom laws are all conceptually capable of being applied to governance failures in the identification, assessment, oversight and disclosure of climate-related financial risks. Building on the country papers, this comparative paper finds that Australia is the jurisdiction where the liability risk to directors and fiduciaries is most material. This is not to say that the risk of liability is far-fetched in Canada, South Africa and the United Kingdom, and the risk is likely to increase in the future. Directors and fiduciaries must now approach their governance of climate change in the same way as they would any other financial matter. The only safeguard against liability exposure will be a proactive, dynamic and considered approach to the impact of climate change on strategy, risk management oversight and reporting. To assist boards and their committees to integrate the risks and opportunities of climate change into corporate governance and disclosure practice, the 2019 Climate risk reporting journey – A corporate governance primer is set out in the Annexure. Originally released in November 2018, this actionable framework has been updated to reflect developments in the climate risk landscape.