Directors of Malaysian companies are legally required to incorporate climate change considerations into their decision-making processes, according to a new legal opinion dated 22 July 2022. A failure to do so may be a breach of a director’s legal duties and could expose them to litigation from shareholders or enforcement action from the regulatory authorities.

Commissioned by the Commonwealth Climate and Law Initiative (CCLI), the legal opinion, ‘Legal Opinion on Directors’ Duties and Disclosure Obligations under Malaysian Law in the Context of Climate Change Risks and Considerations’ is authored by Tan Sri Zarinah Anwar, Chairman, Institute of Corporate Directors Malaysia, and To’ Puan Janet Looi, Senior Partner at law firm Skrine.

Tan Sri Zarinah Anwar, the Chairman of Institute of Corporate Directors Malaysia and To’ Puan Janet Looi, Senior Partner at law firm Skrine, conclude that directors of Malaysian companies “are duty bound to proactively and urgently apprise themselves of all aspects of climate change that can affect their companies, take action to manage the full spectrum of climate related risks by integrating them into their corporate strategies, plans and actions, and ensure proper disclosure of such risks.”