Directors Duties and Climate Risk

Aligning corporate Australia with a sustainable, prosperous economic future

Directors duties as they relate to climate risk have been a central focus of the Centre for Policy Development’s work since 2016.

That year saw CPD commission the first of several ground-breaking legal opinions from barrister Noel Hutley SC.

This influential analysis prompted interventions by regulators APRA and ASIC on managing climate risk. Climate risk is now a first-order concern for Australian companies, financial institutions and regulatory bodies.

We have also worked on frameworks to understand climate risk and reshape finance accordingly. Our award-wining research on climate scenarios provides new tools for understanding climate risk.

Our work on directors duties for government authorities highlights the key role of the public sector.

This work is part of the Sustainable Economy Program at the Centre for Policy Development.

Directors Duties highlights

Clouds and sunlight above a stormy ocean

Raising the bar examines the legal and practical aspects of how directors’ duties in public authorities and government-owned corporations (GOCs) apply in relation to climate risk, and makes six recommendations for best practice

Black and white image of a man in a suit with glasses - Noel Hutley SC

The Centre for Policy Development commissioned a series of landmark legal opinions from Noel Hutley SC on how Australian law requires company directors to consider, disclose and respond to climate change

Climate horizons report cover image

Climate horizons: Scenarios and strategies for managing climate risk shows how Australian companies, investors and policymakers can manage climate risks and support a transition to a zero carbon economy

Directors Duties experts

Directors Duties recent work

CPD made a submission to Treasury providing feedback and recommendations on their exposure draft of climate disclosure legislation, advising that the legislation should apply to a wide range of companies
CPD made a short, follow up submission to Treasury regarding their 'climate-related financial disclosure second consultation process, recommending broader coverage, stricter transition planning and expediting transition timings.
Government authorities and large privately-held businesses should ultimately disclose climate risks alongside publicly traded companies to support a swift, just and orderly transition to net zero

Directors Duties in the media

The Centre for Policy Development, a key contributor to the debate on the economic risks posed by climate change, says large government entities, such as Australia Post and the Future Fund, should be forced to disclose.
Government firms, such as the Future Fund, should disclose climate risks alongside their public counterparts, an independent policy institute has said.
As the world moves towards net zero, capital markets and investors are demanding better quality and internationally comparable information on how companies and businesses are tackling climate change.
The announcement of moves towards a clear and uniform taxonomy for climate risk and opportunity for Australian corporate and financial institutions is a vital and necessary step towards an orderly climate transition. 
A new report by the Centre for Policy Development (CPD) has revealed that the Future Fund’s response to climate risk likely falls short of international standards.
The Centre for Policy Development (CPD) is calling for Future Fund to observe industry best practice to manage climate-related risk.

Directors Duties related initiatives

A clean, innovative, productive economy that supports sustainable, shared prosperity
Building a just energy transition in the Indo-Pacific
Bringing leaders together accelerate climate ambition and action

Contact the Directors Duties and Climate Risk team

At the Centre for Policy Development, our team is at the forefront of policy research and innovation in Australia.

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