Company directors can be held legally liable for ignoring the risks from climate change

The recently ratified Paris Climate Agreement
 is a major incentive for companies
to take climate risks into account.

Company directors who don’t properly consider climate-related risks could be liable for breaching their duty of due care and diligence, a new legal opinion has found.

Although the alarm for business leaders has been sounding for some time, the release of the opinion by senior barristers and leading solicitors confirms the potential liability for Australian company directors.

Australian companies are particularly exposed to the physical, transition and liability risks posed by climate change. The Paris Climate Agreement, which comes into force today, brings the transition risks (and opportunities) forward, given the policy and business changes necessitated by the agreement’s commitment to a sustainable economy.

Read the piece on The Conversation by an Honorary Fellow in the School of Social and Political Sciences at the University of Melbourne, Travers McLeod, and a Professorial Fellow, also from the University of Melbourne, John Wiseman “Company directors can be held legally liable for ignoring the risks from climate change.”