- Climate change poses material financial risks and opportunities for companies of all kinds, which can trigger commercial liability exposures.
- Amid an increasing focus on governance, strategy and risk oversight, boards and directors face an elevated climate-related liability environment.
- Here are the top five climate liability issues that directors (and chief legal officers) should interrogate so as to manage their liability exposures.
A decade ago, ‘climate change law’ largely centred on compliance with environmental, natural resources, energy and planning regulations. Unless your company was a major fossil fuel producer or consumer, the potential for a climate-related claim may have seemed remote. And even then, the prospect of a loss in court may have seemed unlikely.
That was then. Now, new regulatory frameworks are being enacted across the world, and climate cases are on the rise. In fact, more than 230 climate cases across 55 countries were filed in 2023 – from the United States to South Africa, Brazil, India, China, Indonesia, Panama, Nigeria and beyond, according to the Climate Change Litigation Databases.
Claims range from breach of regulation to breach of contract, from human rights violations to securities fraud. Defendants feature companies from a broad range of economic sectors – from energy and agriculture to forestry, industrial production, aviation, shipping, finance and housing.