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New legal opinion cautions Indian company directors to take climate change seriously or risk personal liability

16 September 2021 – Directors of Indian companies could face civil or penal liability
for failing to consider climate change, warns a new legal opinion from Mr. Shyam Divan, a
Senior Advocate who practices before the Supreme Court of India.

Indian law requires directors to act in the best interests of the environment, which includes the company’s effects on climate change, the new legal analysis explains. If directors fail to do so, both the directors and their companies may potentially face claims by shareholders for mismanagement based on a breach of ‘public interest’.

Directors may also face prosecution under environmental laws – which could lead to penal sanctions – for the company’s failure to comply with statutory provisions or directions of the
regulator relating to climate change.