Climate Governance Initiative


3 August 2023

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Τhis section is to be read in conjunction with the above EU section and focuses specifically on rules under Polish law regarding director’s duties and obligations as they pertain to climate change.

Poland has not submitted its own Nationally Determined Contribution (NDC) to the UNFCCC, but is covered by the EU NDC, which includes policies that will deliver a 40% reduction in greenhouse gas (GHG) emissions compared to 1990 levels, working towards the EU’s objective of achieving a climate neutrality by 2050.1 While the Polish government has not, to date, made its own net zero commitment, it is currently facing litigation arguing that it is required to reduce national GHG emissions by 61% by 2030 (below 1990 levels), and reach net zero emissions by 2043.2 The Polish government has published policies regarding climate change, including its national energy strategy (which sets out a roadmap for a transition to a just and low carbon energy system including a reduction of GHG emissions from the energy system by 30% by 2030 compared to 1990 levels),3 and its National Energy and Climate Plan, which includes targets on increasing energy efficiency, reducing energy intensity and reducing GHG emissions from sectors which are not covered by the EU energy trading scheme by 7% by 2030 compared to 2005.4

Polish regulators have begun to consider climate change risks as part of their remit. The Polish Financial Supervision Authority (Komisja Nadzoru Finansowego, KNF) has joined the Network for Greening the Financial System (NGFS), and has worked with the Polish Chamber of Insurance (Polska Izba Ubezpieczeń, PIU) to prepare stress test scenarios concerning climate change.5 The PIU has published a report examining the vulnerability of Poland to physical climate risks, concluding that weather phenomena will cause increasing substantial losses, and will require a comprehensive risk management strategy.6

The National Bank of Poland (Narodowy Bank Polski, NBP) has recognised physical and transition climate impacts as posing a risk to the financial sector. While the NBP has concluded that direct exposure to high carbon assets, and the systemic risks which they entail, is low for Polish banks, it notes that indirect exposures may be much greater.7 However, the NBP generally devotes far less attention to climate risks than other European central banks, especially compared to the Banque de France or the Bank of England. In the Financial Stability Report 2022, climate issues hardly feature at all, despite the progressive impact of climate risks on the financial system.8

These policies and regulatory developments indicate that boards of Polish companies may increasingly be expected to consider the impacts of climate change risks, in particular physical and transition ones, on their business models.

Directors’ Duties and Climate Change

Polish companies are governed by management boards and, in the case of enterprises with share capital exceeding PLN 500,000, supervisory boards.9 Generally, the management board is responsible for the day-to-day management of the company, and the supervisory board is responsible for approving major decisions regarding the company's business activities.

The duties of directors of Polish companies are generally set out in the Commercial Companies Code.10 Directors are required to act in the best interest of their company with due care, which corresponds to the professional nature of their function, and should avoid conflicts of interest. These duties are owed to the company, which includes the interests of all shareholders.11

Directors and executive board members in Poland are personally responsible for the proper management of the company, including the accuracy of their decisions.

In Polish law, the internal process of identifying, assessing and managing risks, including climate risk, takes the form of the obligation to disclose non-financial information. The responsibility for preparing a statement on non-financial information is regulated by the Accounting Act (Ustawa o Rachunkowości; henceforth: the Act). A recent amendment to the Act has implemented the provisions of Directive 2014/95/EU (NFRD) into Polish law. Among others, its Article 49b states that the statement on non-financial information is part of the management board report. Article 4a of the Act contains a provision that obliges the supervisory board* to ensure that the financial statements and the executive board report prepared by their company (including non-financial data) comply with the requirements of the Accounting Act.

The obligations imposed by the Act on supervisory boards* that refer to climate risks are presented in Article 49, which, among other things, requires the executive board report to present risk factors along with risk description and information on the foreseeable development of the entity and its current and expected financial position. The generally observed growth of importance of climate risks, both in the regulatory and business context, along with their effect on access to capital, as well as on the technological context of core business and, very often, on enterprise’s reputation, necessitates the provision of the Act to be applied to climate risks that affect the foreseeable future of each business.

Article 49b.5 of the Act indicates that the statement on non-financial information should include a description of material risks related to the entity operations that may adversely affect the environment, including those concerning counterparties, along with an appropriate description of risk management.

Therefore, a new obligation to disclose the effect of climate risk on the business, as well as the effect of business operations on climate, including appropriate value chains, occurs. The obligation has prepared enterprises for the introduction of the double materiality principle, which will become a new EU standard upon CSRD introduction.

A separate issue subject to inspection under the Act as part of the management board report, indicated in Article 49.b.4 thereof, is the necessity to provide the statement on non-financial information with reference to amounts disclosed in financial statements if a relationship exists between figures presented in annual financial statements and information presented in the statement on non-financial information. Such reconciliation of financial and non-financial reporting in the form of indicating appropriate figures and additional explanations thereto seems of particular importance and makes both the report and corporate strategy more reliable if an enterprise declares undertaking any measures to address climate-related risks and opportunities or to achieve climate neutrality.

For those who prepare management board report in an unreliable manner, in non-compliance with statutory requirements, or fail to prepare it, Article 77 of the Act provides for a fine or imprisonment of up to two years. Thus, disclosing unreliable information on the effects of business operations on the environment (e.g. climate) and failure to indicate (or unreliable indication of) climate-related risks, or providing unreliable description thereof in terms of projected growth, current and projected financial standing of an enterprise, or a failure to indicate a relation between non-financial financial information and respective figures in financial statements if the relation exists, can be considered the non-performance of the obligation to ensure that both the financial statements and the management board report (including non-financial data) fulfil the requirements of the Act. Such omissions in the management board report may imply material risks related to climate changes with regard to the supervisory board obligations.*

Regulation of the Minister of Finance, Funds and Regional Policy on the requirements applicable to the members of the management board to maintain and improve their knowledge and competence requires, among other things, an understanding of the company's business, the risks associated with that business and the strategy for managing those risks.12 Therefore, each company is required to establish a policy for maintaining and improving the knowledge and competence of its management and supervisory board members and to provide them with both general and specialized training. The most important areas include the risk profile accompanying its business, the current market conditions and the company's regulatory environment. The latter is especially important given the rapidly changing business landscape, including the recently increasing importance of physical and transition climate risks.

At the end of 2022, one of the most significant amendments to the Commercial Companies Code in recent years was introduced. As a result, there have been some substantial changes to the duties and powers of the management board and the supervisory board, allowing efficient handling of climate-related risks inherent in management practices. However, by analogy, refraining from using new powers and opportunities to strengthen a company's resilience to climate risks may affect the performance quality assessment of supervisory and management boards.

The new amendments comprise among others an ability to issue binding instructions for subsidiaries to pursue the interests of a capital group, which may be of importance in cases of preventing climate risks in the form of implementation of transition and adaptation plans including changes to corporate strategies or business models.

An important change introduced by the amendment concerns new obligations imposed on and powers granted to the supervisory board (and non-executive directors), which include their right to demand the management board, holders of the power of proxy and employees to prepare or provide any and all information, documents, reports or explanations concerning the company, its subsidiaries and related entities; moreover, the supervisory board may pass a resolution that its advisor shall analyse an issue regarding company’s operations or assets, which can be used for prompt update of the corporate risk profile related to the effect of the climate change on business continuity.

Another important issue concerns the mitigation of liability of management and supervisory board members, who will not be liable to their companies for any damages incurred as a result of their loyal actions, within the limits of reasonable economic risk (the so-called business judgment rule). From the perspective of the potential liability of board members to the company, the change is revolutionary, as it means that board member's actions are judged based on the correctness of the decision-making process, not on their outcome. Therefore, if the process of making a difficult decision was diligent and the board member involved considered various options, took into account different perspectives, and, as a result, made the best possible decision, which was reasonable as at the time of making it, they will not be held liable by the company, even if in future the decision turns out to cause damage regardless of the applied due diligence. The amendment necessitates the implementation of a careful and well-documented decision-making process, which is of particular importance for business planning where several possible scenarios regarding the severity of physical climate change effects and risks occur, as well as various options to develop policies reducing greenhouse gas emissions, which results in a broad range of transition risks.

In addition, listed companies in Poland should adhere to the best practice principles of the Warsaw Stock Exchange Group (Giełda Papierów Wartościowych w Warszawie, GPW) (the GPW Principles) on a ‘comply or explain’ basis.13 The GPW Principles require listed companies to disclose certain climate-related information (please see below), which should make directors acting in their decision-making and management capacity consider climate-related matters.

The GPW requires disclosure of risks of performing or non-performing sustainability transformation, presentation of a strategic plan of actions to minimize the resulting damage along with the relevant metrics, their target values, and the time horizon for achieving these values. The GPW Principles clearly indicate that a corporate strategy must include aspects related to ESG and climate change, and that the strategy is an official document accepted by management board members and evaluated by the supervisory board.

Furthermore, according to GPW principles, the climate change-related issues to be included in reports and on websites of listed companies to provide appropriate information to stakeholders include, but are not limited to, short-, medium- and long-term physical and transformation risks and opportunities associated with climate change; an analysis of the business model resilience to climate change, as well as corporate goals or plans related to adaptation thereto. Furthermore, issuers should disclose direct and indirect greenhouse gas emissions; the related reduction targets they have adopted, indicating whether these targets are consistent with the reduction goals of the Paris Agreement, the European Union's climate policy and NDC; information on strategy and business model transformation plans and actions undertaken or planned to achieve these targets.

A comparison of the contents of formal statements made by listed companies with regard to compliance with GPW Principles to their reports indicates material discrepancies between the declared transparency level and the actual climate risk-related disclosures. In line with recommendations of the European Commission, GPW is entitled to check how issuers fulfil their corporate governance obligations. In this respect, they should cooperate with GPW and on request provide information allowing verification of both explanations and the actual compliance with GPW Principles.

In line with general principles of law and procedures adopted by each Member State, civil liability of directors for damages occurs in the case of material irregularities or breaches of the duty of skill and care. The existence of risks should be reflected in financial statements, both in the measurement of assets and liabilities, and in notes. Absence of such disclosures may qualify as creative accounting, or even fraud. Both may mislead investors when making investment decisions. Disclosing risks in corporate reports protects the management from liability as investors may make informed decisions to invest in more or less risky stocks.  

The amendment of the Act on liability of collective entities dated 2 September 2022 prepared by Ministry of Justice introduces provisions allowing effective application of sanctions for wrongful acts committed by a company or by its employee, provided that the company benefits from these acts. The provisions apply only to large companies and are intended to ensure that internal compliance procedures are in place and adhered to. The amendment can support effective enforcement of the reliability of disclosed information on climate risks and carbon footprint.

Boards of directors of Polish companies should take advantage of the new opportunities identified above and the mobilizing pressure of the overall regulatory environment and capital markets to address emerging climate risks well in advance and not expose themselves to accusations of failing to meet their obligations. Special attention is required with regard to transition risks related to the predictably shrinking EU ETS pool of CO2 emission rights and the upcoming fundamental technology changes.

With the transition plan for Poland lagging behind and the Energy Policy of Poland until 2040 (EPP2040) being materially outdated, there is no robust formal or strategic basis for the state to protect interests of enterprises. Therefore, an analysis and assessment of climate-related risks (especially transformation ones) based on European and expert frameworks and compliant with best sectoral practices becomes increasingly important, since it must replace the measures to be undertaken by the state which, as the only EU member, has not formally adopted climate neutrality as its goal. This increases the responsibility of company managers for the analysis of climate-related risks and for maintaining commercial relationships between Polish companies and their Western counterparties, who will enforce the reduction of carbon footprint in their supply chains getting rid of trading partners who use energy produced from coal, as do most of Polish enterprises. As a result, maintaining a position in low-emission value chains may be very difficult for Polish companies. Poland plans to eliminate coal only in 2049, which increases the transformation risk in every sector.  

The unclear current status has encouraged a number of entities to test the extent of climate change-related liability in the form of legal actions. In 2018, ClientEarth, an NGO, filed a claim against Enea and Energa, power distributors, regarding their plan to build a coal-fired power plant, arguing that the financial risk of the project faced by both the companies and their shareholders meant that their management boards had failed to apply due diligence and act in the best interest of these parties.14 The court decided that the resolution approving the project had been null and void; therefore, the arguments raised by the claimant were not considered.15Another legal action in the case was initiated by labor unions in order to hold the management accountable for their questionable strategic decisions that could jeopardize the condition of the company as the employer. Therefore, boards of high-emission companies should be aware of the risk related to such litigation.

Directors' Disclosure Obligations and Climate Change

Poland is not obliged to disclose climate-related risks in more detail than required by the upcoming EU regulations. This may extend the time necessary for reports on climate-related risks to mature and put Polish companies at disadvantage against those from other countries. However, early adoption of measures improving the quality of disclosures and ensuring efficient implementation of appropriate solutions may give Polish enterprises a chance to maintain their positions in transnational supply chains or to gain a competitive advantage in sustainability, a new third area of market competition, separate from the two traditional ones, i.e. quality and price.

Polish companies are subject to the requirements of the NFRD (on which, see above), which was transposed into Polish law in 2017. The NFRD requires companies to disclose the impact of the company on environmental matters, including climate change.

The EU has adopted the Corporate Sustainability Reporting Directive (CSRD), which broadens the group of companies required to make sustainability disclosures, and introduces more stringent and harmonised reporting obligations, including plans to align the business model and strategy to the temperature-limitation goals of the Paris Agreement, and reporting on a ‘double materiality’ basis. Pursuant to the CSRD, sustainability disclosures will be required as part of the management report and will undergo assurance procedures. Companies first required to report under the CSRD (those already subject to the NFRD) will have to make their initial CSRD disclosures in 2025, in respect of FY2024. The CSRD has not yet been transposed into national law. For further information on the CSRD, please refer to the above EU section.

In the Polish context, the need to pay special attention to the credibility of information disclosed and reported on climate and ESG issues is of special importance. If decarbonization of companies is delayed, reliable information must be disclosed. Reliability is essential in order to prevent the consequences of greenwashing. Still, it may result in lower ESG rating of Polish companies and reduced access to capital or insurance in the context of the growing climate ambitions of the economic environment and business partners. In particular, when reporting in line with CSRD, disclosures should be free from unclear statements regarding business conduct, breaches of human rights or due diligence. If in doubt, financial institutions will treat any ambiguities as a proof of non-compliance.

The GPW Principles require companies to incorporate ESG topics in their business strategy, including metrics and risks associated with climate change and sustainability issues, and to explain how climate change considerations are integrated into their decision-making processes.16 Therefore, apart from disclosing this information, boards should consider how to integrate these factors into their decision-making process. The GPW has published guidelines on how companies can report in line with the NFRD, Sustainable Finance Disclosure Regulation, Taxonomy Regulation and the recommendations of the Task-Force on Climate-related Financial Disclosures (TCFD).17

Regardless of reporting under requirements of NFRD, many listed companies fail to recognise climate risks threatening their business, which hinders the commencement of work on climate change adaptation plans. Most companies limit their actions in this respect to a description of their impact on climate change, which, however, is most often incomplete, since the reporting of Scope 3 greenhouse gas emissions (GHG) is still a difficult task. Incomplete information on the carbon footprint results in inability to properly address transformational risks and build a credible transformation plan for an enterprise.

Two years before the effective date of the mandatory ESRS E1 reporting standard, Polish companies are not prepared for the upcoming mandatory disclosures, with less than half of listed entities disclosing any climate risk-related information in their reports, and a little more than half disclosing any GHG emission values. Less than one-third of issuers measure and disclose, even partially, their Scope 3 emissions.

Practical Implications for Directors

Given the European Commission’s adoption of world-leading climate disclosure regulations for non-financial companies, and additional very detailed and advanced regulations governing the management of climate risk by banks, well-counselled boards will:

  1. considering in particular the legal and policy developments in relation to EU climate goals, and the potential direction of travel of these developments, put on the agenda for the board to review, within 3 or 6 months, a process to initiate the development of a climate transition roadmap to 2050, with transparent carbon neutrality targets, clear interim targets to 2040, 2030 and near-term within the current rolling multi-medium and long-term targets, and at least annually thereafter report back to the board; 
  2. allocate identification of climate risks and opportunities and their evaluation to a clearly-identified team in management that reports directly to the board;  
  3. ensure that all relevant departments, such as legal and compliance, risk management, scenario-planning, strategy, audit, procurement, human resources, government relations, investor relations, stakeholder relations, reach a clear understanding of their functional contribution to the design and delivery of the company’s climate transition plan, coordinate their efforts under the leadership of the CEO, and are jointly accountable to the board; 
  4. allocate to the appropriate committee(s) of the board, such as risk, audit, governance, scenarios/strategy, nominations/remuneration, or sustainability/corporate responsibility, the task of translating the long-term strategy into a clear decision-making process for each aspect that is relevant to each committee before its final approval by the board as a whole; and discuss with disclosure counsel, in order to develop an external engagement and communications plan.


  • Halina Frańczak, Deloitte Poland
  • Monika Sadkowska, Deloitte Poland
  • Katarzyna Sredzinska, Deloitte Poland 
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End notes:

1:  European Commission, Submission by Germany and the European Commission on behalf of the European Union and its Member States (December 2020) <>.
3:  Government of Poland, Energy Policy of Poland until 2040 (EPP2040) (February 2021) <>.
4:  Government of Poland, National Energy and Climate Plan for the years 2021-2030 (December 2019) <>.
5:  KNF, Report on the Activities of the UKNF and the KNF Board in 2020 (May 2021) <>.
6:  PIU, Climate of Risk How can Prevention and Insurance reduce the impact of Natural Disasters on the Environment? (14 April 2021) <>.
7:  NBP, Financial Stability Report (December 2021) <>.
8:  NBP, Financial Stability Report (December 2022) <>
9:  Article 213 Commercial Companies Code.
10:  The Commercial Companies Code dated 15 September 2000 r. (Dz.U. tłum. gb Nr 94, poz. 1037).
11:  Resolution of the Supreme Court – Civil Chamber, dated 22 October 2009, III CZP 63/09.* The same obligation according to the Act also applies to head of the entity - in listed companies, the head of the entity is the executive board members usually.
12:  Rozporządzenie Ministra Finansów, Funduszy i Polityki Regionalnej z dnia 24 listopada 2020 r. <>.* The same obligation according to the Act also applies to head of the entity - in listed companies, the head of the entity is the executive board members usually.
14:  ClientEarth, Briefing - Ostrołęka C: Enea’s and Energa’s Board Members’ Fiduciary Duties to the Companies and Shareholders (19 December 2018) <>.
15:  See Judgment: Fundacji „CLIENTEARTH Prawnicy dla Ziemi” w Warszawie przeciwko pozwanemu: ENEA SA w Poznaniu (KRS 0000012483) IX GC 1118/18, 31 July 2019 <>.
16:  GPW Principles, 1.3, 1.4.
17:  GPW, ESG Reporting Guidelines: Guide for issuers (May 2021) <>.