Changing Climate, Changing Duties: Shifting Board Liability And Disclosure Issues Around Climate Change

There is an increasing trend towards requiring Boards of Directors to report on and disclose risks due to climate change. In Canada, recent commentary and policy developments suggest that directors have a fiduciary obligation to be informed about, act on, and disclose the risks and opportunities associated with climate change. This article canvasses some of these developments, from tying COVID recovery to climate disclosure to Canadian Securities Administrator guidance, and details the potential implications for corporate directors.

Climate change risk and the economy

Climate change poses a significant risk to organizations across the world but the large-scale and long-term nature of the problem makes it uniquely challenging. Organizations are generally affected by three types of risk: i) physical risks, such as the impact of changes in water availability or temperature on operations and financial assets; ii) liability risks, such as litigation due to damage or