Directors’ Duties and Climate Risks
When CPD set out on this work in early 2016, we began with the premise that performance and leadership on sustainability-related risks in the Australian corporate sector were lagging – but that the time was ripe for business leaders and regulators to make a more constructive, forward-looking contribution on long-term sustainability challenges like climate change.
The centrepiece of this work was a ground-breaking legal opinion on directors’ duties and climate risk commissioned by CPD in partnership with the Future Business Council. The opinion found that company directors who ignore or mismanage climate-related risks could be held personally liable for breaching their legal duties under the Corporations Act. This analysis has been highly influential in the business community, and helped to spur major statements by Australian regulators APRA and ASIC on the importance of properly managing climate risks in the financial system. Together, the opinion and these developments have ensured that climate risks are firmly on the agenda for Australia’s leading corporates, financial institutions and regulatory bodies.
Our follow-on work has focussed on frameworks for better understanding climate risk, and understanding how this new emphasis on climate and other sustainability issues can help reshape finance across the board. Our award-wining research on climate scenarios gave investors and corporates new tools for understanding climate risk at a critical time. New work on how directors and decision makers in government board’s and authorities are obliged to respond to climate risk highlights the key role the public sector must play in this area. Meanwhile, we are working closely with stakeholders in the private sector, public sector and civil society on building a roadmap for a more sustainable Australian financial system, in line with exciting developments in Europe, the United Kingdom and elsewhere.
Click here to view a timeline on recent climate risk developments in Australia, featuring our work.
Latest Articles
Australia’s access to capital may be strangled over climate stance
Georgia Wilkinson - October 2021
Article by Lucas Baird featuring CPD’s Climate & Recovery Initiative, published in the Australian Financial Review on 22 September 2021. Australia risks punishment from global markets that will blow out...
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Travers McLeod and Toby Phillips: Time to respond to the climate for investment
Georgia Wilkinson - September 2021
A shorter version of this op-ed was published in The Australian on 29 September 2021. While Scott Morrison met with Quad leaders at the White House last week in the...
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CPD appears at the inquiry into the prudential regulation of investment in Australia’s export industries
Georgia Wilkinson - July 2021
On Wednesday 28 July 2021, CPD’s CEO Travers McLeod and Sustainable Economy Program Director Toby Phillips appeared at the inquiry into the prudential regulation of investment in Australia’s export industries....
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Companies warned that ‘greenwashing’ could have legal consequences
communications - April 2021
Published by RenewEconomy on Monday 26 April 2021. Company directors that rush to make net zero pledges without fully examining the firm’s ability to meet the goals could be guilty...
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Directors liable for ‘greenwashing’ disclosures
communications - April 2021
Published in the AFR on Monday 26 April 2021 Companies and their directors could be sued for “greenwashing” their commitments to achieve their net zero carbon pledges or emissions reductions...
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CPD releases new materials on directors’ duties, climate risk and net zero
communications - April 2021
Today, the Centre for Policy Development has released a range of new materials relating to directors’ duties and climate change that have emerged from a special roundtable convened by CPD...
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Legal action on climate is what we all want to avoid – CPD CEO Travers McLeod in the AFR
Travers McLeod - December 2019
Efforts to understand climate risk within companies and across the economy are not about managing climate through the legal system, usurping the role of government, or forcing companies to go...
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CPD Business Roundtable on Climate and Sustainability | EVENT | November 2019
communications - December 2019
On 21 November, CPD convened a business roundtable on climate change and sustainability which brought together senior executives and directors from Australia’s biggest banks, insurers, investors, businesses and superannuation funds, senior...
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Full text of Kenneth Hayne AC QC remarks to CPD climate roundtable
Travers McLeod - December 2019
Below is the text of remarks delivered by The Hon Mr Kenneth Hayne AC QC at the Centre for Policy Development’s Business Roundtable on Climate and Sustainability on 21 November...
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Travers McLeod’s response to Rebecca Huntley’s Quarterly Essay, Australia Fair: Listening to the Nation
Luisa Boll - July 2019
In reply to Rebecca Huntley’s Quarterly Essay, Australia Fair: Listening to the Nation TRAVERS MCLEOD At the heart of Rebecca Huntley’s Australia Fair is the idea that we are a nation of democrats....
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Updated Hutley opinion on directors’ duties and climate risk
Luisa Boll - March 2019
Full supplementary memorandum of opinion here Today CPD has released an update of a landmark 2016 legal opinion on how Australian law requires company directors to consider, disclose and respond to...
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Heavyweights now speaking with one voice on climate change risks | Op-ed Sam Hurley | March 2019
Luisa Boll - March 2019
Published in The Sydney Morning Herald on 24 March 2019 Climate change is reshaping Australia’s economy and financial system, and its consequences will be devastating without urgent action. If that message had...
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Climate Change and the Economy with the RBA’s Guy Debelle | PUBLIC FORUM | March 2019
Luisa Boll - March 2019
Full audio of the public forum available here. Full speech by RBA Deputy Governor Dr Guy Debelle available here. On 12 March, as part of our latest public forum on...
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Murray-Darling report shows public authorities must take climate change risk seriously | Op-ed | Arjuna Dibley
Luisa Boll - February 2019
Published in The Conversation on 4 February 2019. The tragic recent events on the Darling River, and the political and policy furore around them, have again highlighted the severe financial and...
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Public authority directors’ duties and climate change | DISCUSSION PAPER | January 2019
communications - February 2019
CPD has released a new discussion paper on the legal obligations of public sector corporate boards and directors to consider climate-related risks. Public authority directors’ duties and climate change finds...
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