Commonwealth Climate and Law Initiative (CCLI)

🆕 The Navigator on Directors' Duties: Climate Risk and Sustainability Disclosures is now live on the Climate Governance Initiative hub! This is the fourth edition of the previously-titled 'Primer on Climate Change: Directors' Duties and Sustainability Disclosures', authored by the Commonwealth Climate and Law Initiative (CCLI) with support from lawyers around the world, in collaboration with the Climate Governance Initiative. The Navigator covers over 30 jurisdictions. It is a comprehensive tool for directors and lawyers to understand the legal and regulatory context around climate change in their jurisdiction, and sets out key information informing how directors and officers manage climate-related risks. This includes information on: 1️⃣ Government and regulatory approaches to climate change, including climate-related legislation and guidance; 2️⃣ Directors’ duties in relation to climate change, specifically how these duties and company and securities law frameworks require directors and officers to incorporate climate risk in corporate strategy, governance and management; 3️⃣ Sustainability and climate-related disclosure requirements, both narrative and financial, and directors’ duties and responsibilities in relation to them; 4️⃣ Liability risks for companies, directors and officers who fail to comply with the above; and 5️⃣ Practical tips for directors. Certain jurisdictions also include a 'Biodiversity Risk' box, which addresses the information above but in relation to nature-related risks. The Navigator can currently be found on the Climate Governance Initiative hub here: https://lnkd.in/ef7ZybYx but will be made available in pdf form on our website in the coming weeks, and more substantive updates will be made across all jurisdictions in 2025. Thank you to all the contributing authors from around the world, and the CGI Chapter Zero members, for their valuable contributions and support. 

🎉 Wrapping up 2024: Key Corporate Governance Resources 👇 As we close out 2024, we are happy to share a summary of the resources we’ve created this year, to help directors, investors, and legal professionals navigate the climate and nature-related risks shaping corporate governance. 📌 What does the CCLI do? We connect the dots between 🌍 climate science, ⚖️ law, and 🏢 governance to clarify directors’ and trustees’ legal duties. Our tools and insights bridge the gap between legal requirements and real-world sustainable practices, helping to manage risks and drive global change. ✨ 2024 Highlights: 📘 Directors' Duties Navigator This global guide, developed in partnership with the Climate Governance Initiative, provides directors with practical guidance to navigate the legislative, policy, and legal developments around the world. It’s an essential tool for understanding the responsibilities and risks directors face today in relation to climate and nature. 🔗 Visit: https://lnkd.in/gBubPM4X 📄 UK Legal Opinion on Nature-Related Risks Co-commissioned with Pollination, this opinion outlines directors’ duties under the law of England and Wales to consider nature-related risks as part of their duties to promote the success of the companies and to act with care and diligence. 🔗 Read: https://lnkd.in/d5-quXp5 📝 Board Directors’ Briefing In partnership with the Climate Governance Initiative and the World Benchmarking Alliance, this briefing highlights how companies are integrating 🌿 nature into their strategies and offers governance tips drawn from Nature Benchmark indicators. 🔗 Read: https://lnkd.in/ejD8Kiy4 🤝 COP 16: Key Takeaways for Corporates One of our brilliant biodiversity lawyer Jasmin Fraser analysed some of the main outcomes of COP16 and their significance for corporates. 🔗 Read: https://lnkd.in/dieF9DZg 📰 Insights and Blogs Throughout 2024, we’ve shared in-depth analysis and perspectives on how to address climate and nature-related risks. 🔗 Insights: https://lnkd.in/ewz7_HHj 🔗 Blogs: https://lnkd.in/d7dR_gc3 🎄 As we look to 2025, we want to thank all our partners, supporters and readers for engaging with our work. Together, we can continue driving progress in governance, sustainability, and climate action. Wishing you a joyful holiday season and an impactful 2025! 🌟 #ClimateGovernance #DirectorsDuties #Sustainability #NatureRisks #HappyHolidays

🌍 Climate Risks & Directors’ Duties in the United Kingdom How should UK directors address the challenges of #climaterisks? Read the fourth edition of our Directors’ Duties Navigator (linked in the comments 👇) produced with the Climate Governance Initiative, to find out! 📌 UK Climate policy in 2024 ➡️ The past year was mixed for UK climate. The former Government backslid on key climate targets, and faced legal challenges on its #mitigation and #adaptation strategies (one successful). ➡️The new Labour Govt bolstered UK climate policy with new climate and energy bills (including the ‘Great British Energy Bill’ and the ‘National Wealth Fund Bill’). ➡️UK announced a new target (#NDC) of reducing emissions by 81% by 2035 at COP29. 📌 Directors’ duties in the UK ➡️ Nov 2023: First-of-its-kind derivative lawsuit brought by a shareholder against company directors. ClientEarth argued Shell directors had breached their statutory duty to act in the best interest of the company and their duty of care by failing to develop and implement a climate strategy that aligns with the Paris Agreement. The Court dismissed the claim on procedural grounds, before considering the merits of the arguments. ➡️Jan 2024: Landmark legal opinion (linked below) found that directors must consider how to reflect climate-related information and risks in financial statements to ensure annual accounts provide a “true and fair view” of the company’s assets, liabilities, financial position, and profit and loss. ➡️ March 2024: Legal opinion confirmed that nature-related risks (including climate-risk) are material financial risks to companies. Directors may breach their duties if they fail to adequately identify, consider, mitigate and address nature-related risks. 📌 Sustainability Disclosure Requirements & Transition Plans ➡️ The UK was among the first to mandate #TCFD-aligned reporting for large and listed companies (from 2021). ➡️ Oct 2023: Transition Plan Taskforce (TPT) published TPT Framework and since published sector-specific guidance to help companies set credible climate transition plans. ➡️ May 2024: UK to adopt International Sustainability Standards Board (ISSB)-aligned Sustainability Reporting Standards by Q1 2025. 📌 Biodiversity in focus ➡️ March 2024: Legal opinion (linked below) found that directors could be liable if they mismanage nature-related risks, which are material financial risks to companies. ➡️ April 2024: Oxford Green Finance Initiative report states that the UK is one of the most nature-depleted countries. Report finds that damage to the natural environment could lead to a 12% loss of UK GDP in coming years. ➡️ Govt welcomed the work of Taskforce on Nature-related Financial Disclosures (TNFD) but has not yet committed to implementing mandatory nature-related reporting obligations. Many thanks to the author Sarah Hill-Smith for her contribution 🌟 #TCFD #ISSB #TNFD #ClimateReporting #SustainabilityReporting #DirectorsDuties

🌏 Climate Risk & Directors’ Duties in Indonesia 🌏 📢 The Commonwealth Climate and Law Initiative (CCLI) in partnership with the Climate Governance Initiative, have released the fourth edition of the 'Navigator on Directors' Duties: Climate Risk and Sustainability Disclosures'! This tool empowers lawyers and directors worldwide to navigate their climate-related duties amid evolving regulatory landscapes. 🌱 This week, we're spotlighting #Indonesia, where the regulatory approach to climate is still developing. While Indonesian regulators have yet to formally recognize climate change as a systemic #financialrisk, Indonesia has enacted several laws that aim to accelerate the #energytransition. There are notable requirements for directors and companies to engage with sustainability practices 👇 Full section is linked in comments below 👇 📖 Directors’ Duties regarding climate change in Indonesia 📖 💼 When fulfilling their fiduciary duty to act in the best interest of the company, directors should take climate risks into consideration.  💼 Directors have a responsibility to consider regulations aimed at mitigating #climatechange when making decisions for their companies’ management. 💼 Directors are responsible for ensuring that the company complies with all environmental obligations, including regulations aimed at mitigating the impact of climate change.   💼 Directors of Indonesian subsidiaries may be influenced by the strategic direction and sustainability goals set by their regional company, to incorporate climate change considerations into their decision-making processes. ⚖️ Liability Risks for Directors ⚖️ 🚫 Directors’ duties with respect to climate change have not been tested in the courts. ⚠️ However, directors and companies can be held criminally liable for environmental crimes, which has been tested and upheld by the courts. ⚠️ Indonesian courts often confuse the criminal liability of the company with that of its directors. Directors can be held responsible for the company's environmental crimes without the court examining their actual involvement. ⚠️ Sanctions for individuals include imprisonment and fines. 📝 Disclosure Requirements 📝 🚫 Currently, there is no mandatory sustainability disclosure framework for all companies, nor specific obligations to disclose climate- or nature-related risks. 📢 Listed financial service institutions must prepare Sustainable Finance Action Plans (SAFPs) and report on their sustainability efforts. 📢 Directors are under obligations to report incidents of water pollution, implementation of air pollution mitigation, obligations related to the control of marine pollution and/or damage, and implementation of marine pollution mitigation to government authorities. ➡️ Learn more by reading the full section. Many thanks to the authors: Ira A. Eddymurthy, Dewi Savitri Reni, Aldilla Stephanie Suwana and Raisya Majory of SSEK Law Firm

🌟 Exciting News! 🌟 We’re delighted to announce that the Commonwealth Climate and Law Initiative (CCLI) has been shortlisted for the NGO of the Year 2025 at the prestigious edie Awards! 🎉 This nomination is a testament to our unwavering commitment to ensuring that climate and nature become priorities in boardrooms worldwide. Here’s a glimpse of our recent work: ✅ Cutting-edge research: Published expert legal analyses in 11 countries, equipping corporate directors with the tools to navigate their legal duties on climate and nature. ✅ Empowering decision-makers: Launched the fourth edition of the Directors Duties Navigator with World Economic Forum’s Climate Governance Initiative, which covers 32 jurisdictions and the EU. ✅ Championning Innovation: Partnered with behavioural scientists to create a framework that helps boards integrate climate and nature into decision-making. ....and much more! ❓ What are the edie Awards? ❓ The #edieAwards are hosted by the UK’s largest and longest-running sustainable business media outlet, edie, which covers a broad range of topics including #ESG, #climatechange, #CSR, #sustainability, #energy, and #politics. These awards celebrate sustainability leadership across diverse categories, shining a light on organisations driving positive change. 🌍✨Our nomination underscores the power of collaboration in accelerating the global transition to a net-zero economy and nature-positive future. We’re immensely proud to share this achievement with our incredible team and extend our heartfelt thanks to our funders, partners, and friends. 💚🙌 Your unwavering support has been instrumental in advancing our mission and reaching this exciting milestone. 🌟🌱 We’re looking forward to celebrating at the awards ceremony on 13 March 2025 at the Intercontinental, London, The O2. Many congratulations to all our fellow nominees: ⭐ Hubbub ⭐ Let's Go Zero ⭐ Smart Freight Centre ⭐UK SUSTAINABLE INVESTMENT AND FINANCE ASSOCIATION (UKSIF) ⭐ World Sustainable Hospitality Alliance Natalie Shippen Jasmin Fraser Klara Iochem Victoria Puxley Sarah Hill-Smith Param Pandya Cynthia Williams Ernest Lim Thom Wetzer Sarah Barker Umakanth Varottil Carol Liao Sonia li T. Jenni Ramos Zaneta Sedilekova Climate Governance Initiative ClientEarth World Benchmarking Alliance Canada Climate Law Initiative #NGOoftheYear #CCLI #SustainabilityLeadership

🌍 Climate Risks & Directors’ Duties in #Malaysia How should Malaysian directors address the challenges of #climaterisks? The fourth edition of our Directors’ Duties Navigator (linked in the comments 👇) produced with the Climate Governance Initiative, offers the latest insights. 📚 Many thanks to the authors: Francine Paul and To’ Puan Janet Looi of Skrine Malaysia for their contributions. 📌 Key Developments in Malaysia ➡️ Financial Institutions: Bank Negara Malaysia (BNM) issued the Climate Change and Principle-based Taxonomy, mandating that financial institutions embed climate considerations into all business strategies. ➡️ Green Funding: The government introduced a RM1 billion biodiversity sukuk (Islamic bond) to fund biodiversity restoration, including forest replanting for carbon credits. 📌 Key findings on Directors’ Duties ➡️ Legal Risks: A legal opinion commissioned by the CCLI (link in comments 👇 ) highlights that directors who fail to address climate risks may expose themselves to statutory and common law liability. This could also manifest as tangible risks for their companies. ➡️ Securities Commission Malaysia Guidelines: Directors of listed companies must establish and ensure that the group-wide framework on corporate governance include, amongst others, managing material #sustainabilityrisks. ➡️ Malaysian Code on Corporate Governance: Emphasizes integrating sustainability into corporate strategy, governance, and decision-making to create durable and sustainable value and maintain confidence of their stakeholders. 📌 Disclosure Requirements ➡️ Proposed National Sustainability Reporting Framework: Phased requirements on listed companies and large non-listed companies (annual revenue ≥ RM2 billion) to incorporate the standards issued by the International Sustainability Standards Board (ISSB) in their annual reports. ➡️ Listed Companies: Enhanced requirements from 31 December 2024, including prescribed sustainability matters and climate-change related disclosures in line with the FSB Task Force on Climate-related Financial Disclosures (TCFD) recommendations. ➡️ Financial Institutions: Required to establish a board-level policy on climate disclosures and make annual climate-related disclosures in line with TCFD requirements. 📌 Biodiversity in Focus ➡️ Malaysia’s Financial Sector Blueprint 2022-2026 prioritizes biodiversity alongside climate. ➡️ Twelfth Malaysia Plan (2021-2025) identifies biodiversity loss as a key challenge, aiming to reduce reliance on natural resources. ➡️ The CCLI has published a report on how companies in Malaysia and other jurisdictions may depend on biodiversity for the functioning of their business models. Biodiversity risks may constitute material financial risks which boards are required to consider within the purview of directors’ duties. 👉 Read the full Malaysia section to find out more! #ClimateAction #SustainabilityLeadership #CorporateGovernance #ClimateDisclosure

⚖️ International Court of Justice #ClimateChange hearings begin – What are the implications for corporate actors? 📅 Today, at 10:00AM CET, the International Court of Justice (ICJ) will begin hearing arguments in historic advisory proceedings on climate change for the next two weeks. 🌳The ICJ, which is considered the world’s highest court, will examine States’ obligations to protect present and future generations and the environment from climate change. 🌳Importantly, the Court will clarify the consequences of breaching those obligations. It could provide countries with a legal avenue to seek redress for climate harms. ❓The Court's Advisory Opinion - which is expected in 2025 - is set to answer two questions❓ 1️⃣ What are States’ obligations under international law to ensure the protection of the climate system, on which both present and future generations depend. 2️⃣ What are the legal consequences for States that have failed to meet these obligations. ❓Why is this relevant for corporate actors❓ ➡️ While the ICJ will consider the obligations of states under international law, there will be important indirect implications for both the private and public sector. ➡️ Based on the Court's finding, its Opinion may exert pressure on states to align domestic actions with international legal obligations, prompting states to implement more stringent domestic regulations to address climate change. ➡️This could include, for example: 🛑 Emissions caps or financial contributions (e.g., taxes or levies) to fund compliance with climate commitments. 🛑Restrictions on new fossil fuel projects or other high-emission activities, particularly in industries like energy and agriculture. ✅ Enhanced due diligence and environmental impact assessment obligations. ✅Economic incentives to shift markets toward sustainable solutions. ⚠️States' legislative and regulatory responses to the Court’s ruling could create significant challenges and opportunities for businesses. ⚠️Companies may face stricter compliance requirements or litigation risks linked to state action or inaction, as domestic and international courts increasingly reference these advisory opinions. ⚠️ Businesses operating in emissions-intensive sectors – including aviation, shipping, and the energy industry, are likely to be most exposed following these developments    🗣️ Who is participating? The level of participation in these proceedings has been unparalleled, with 98 states and 12 international organisations set to participate in oral hearings. 👁️🗨️ Where can I watch the hearings? The hearings are public and can be watched on UN Web TV here: https://lnkd.in/e9Yuz6-b #ClimateJustice #ICJ #ClimateJusticeAtTheICJ #ClimateICJAO #ICJAOforClimate

🌏 Climate Risk & Directors’ Duties in #Singapore 🌏 How should Singaporean directors address the growing challenges of #ClimateRisks? The 4th edition of our Directors’ Duties Navigator (linked in comments 👇) produced with the Climate Governance Initiative has the latest on evolving laws and regulations shaping corporate governance. 🌟 𝐆𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐚𝐧𝐝 𝐫𝐞𝐠𝐮𝐥𝐚𝐭𝐨𝐫𝐲 𝐚𝐩𝐩𝐫𝐨𝐚𝐜𝐡𝐞𝐬 𝐭𝐨 𝐜𝐥𝐢𝐦𝐚𝐭𝐞 𝐜𝐡𝐚𝐧𝐠𝐞 🌟 ▶️ Singapore has committed to achieving net zero emissions by 2050. ▶️Carbon Pricing (Amendment) Act 2022 raises carbon taxes progressively to S$45/tCO2e by 2026, potentially reaching S$80/tCO2e by 2030. Directors, particularly of companies with high emissions, should be alert to the potential increased costs this could entail. ▶️The Monetary Authority of Singapore (MAS) launched a final public consultation on a green and transition taxonomy for financial institutions. ▶️Government estimates S$100 billion would be required to combat rising sea levels and climate change. 📖 𝐈𝐦𝐩𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬 𝐟𝐨𝐫 𝐝𝐢𝐫𝐞𝐜𝐭𝐨𝐫𝐬' 𝐝𝐮𝐭𝐢𝐞𝐬 📖 🪟 𝘚𝘶𝘴𝘵𝘢𝘪𝘯𝘢𝘣𝘪𝘭𝘪𝘵𝘺 𝘙𝘦𝘱𝘰𝘳𝘵𝘪𝘯𝘨 Singapore has adopted a phased approach aligned with the Taskforce on Climate-related Financial Disclosures (TCFD). ▶️ From FY25, all listed companies must report on climate-related issues using standards aligned with the ISSB frameworks. ▶️ From FY26, listed companies will be required to disclose Scope 3 emissions. ▶️ From FY27, certain large non-listed companies will need to provide climate disclosures. 🌡️ 𝘔𝘢𝘯𝘢𝘨𝘪𝘯𝘨 𝘊𝘭𝘪𝘮𝘢𝘵𝘦 𝘙𝘪𝘴𝘬𝘴 A #LegalOpinion (linked in comments) by Jeffrey Chan Wah Teck, S.C. and others, concluded that: ▶️Directors in Singapore are obliged to take into account climate change risks, particularly insofar as those risks are or may be material to the interests of the company. ⚖️ 𝐏𝐨𝐭𝐞𝐧𝐭𝐢𝐚𝐥 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐲 ⚖️ ▶️ Directors may be held criminally liable under Singaporean environmental sustainability and climate change statutes for failing to ensure that their companies have in place principles and systems for compliance. 🌿𝐁𝐢𝐨𝐝𝐢𝐯𝐞𝐫𝐬𝐢𝐭𝐲 𝐑𝐢𝐬𝐤 🌿 Regulatory focus on #biodiversityloss as a material financial risk may be increasing. ✳️ 𝐁𝐞𝐬𝐭 𝐩𝐫𝐚𝐜𝐭𝐢𝐜𝐞 𝐟𝐨𝐫 𝐝𝐢𝐫𝐞𝐜𝐭𝐨𝐫𝐬 ✳️ ▶️ Integrate climate and #biodiversity risks into #corporatestrategy and #riskmanagement frameworks to mitigate liabilities. ▶️ Regularly review physical and transition risks posed by #climatechange, including impacts on asset valuations and financial performance. ▶️ Engage external experts to address gaps in knowledge and ensure a comprehensive understanding of environmental risks. 💡 Read the full section for more! 🌻 Many thanks to the authors Richard Allen, Min-tze Lean, Yuan-Bing Mock, and to Andrew Martin for his comment. Baker McKenzie Wong & Leow Climate Governance Singapore Singapore Institute of Directors

🌍 Climate Risk & Directors’ Duties in Japan🌍 How should Japanese directors address the challenges of #climaterisks? The fourth edition of our Directors’ Duties Navigator (linked in the comments 👇) produced with the Climate Governance Initiative has the latest insights into the evolving laws and regulations shaping corporate leadership around the world. 1️⃣ The Japanese Government recognizes #climatechange as a material issue impacting the #sustainability of almost all companies, creating heightened expectations for business leaders to act. 2️⃣ Japan’s Climate Change Adaptation Act 2018 and its Act on Promotion of Global Warming Countermeasures together create regulatory expectations that all sectors of Japanese society must make efforts to control climate change through mitigation and adaptation. 3️⃣ Japan’s Financial Services Agency recognises that climate change poses serious financial and transition risks to the financial system in Japan. 📖 Implications for Directors' Duties in Japan📖 🌡️𝐌𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭 𝐨𝐟 𝐜𝐥𝐢𝐦𝐚𝐭𝐞-𝐫𝐢𝐬𝐤𝐬: Failure to monitor climate change risks and relevant regulations could give rise to a breach of the director’s duty of care if a board were to fail to set up an appropriate risk management system. 🪟  𝐄𝐧𝐡𝐚𝐧𝐜𝐞𝐝 𝐃𝐢𝐬𝐜𝐥𝐨𝐬𝐮𝐫𝐞 𝐑𝐞𝐪𝐮𝐢𝐫𝐞𝐦𝐞𝐧𝐭𝐬:  #Disclosure statements should include how the company perceives and intends to address sustainability issues. They should be aligned with the four pillars of the FSB Task Force on Climate-related Financial Disclosures (TCFD) —governance, strategy, risk management, and metrics and targets: ▶️ Governance and risk management disclosures are mandatory. ▶️ For strategy and metrics/targets, companies must justify any omission as unnecessary. ❗𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐫𝐢𝐬𝐤𝐬: Directors face increasing #liabilityrisks in two critical areas: ▶️ Narrative Sustainability Disclosures: the management of a submitting company may be held liable if it fails to disclose material forward-looking information that could affect investors’ investment decisions. ▶️ Financial Statements: Omissions or inaccuracies in financial statements related to climate risks may lead to regulatory scrutiny, shareholder litigation, and stakeholder trust erosion. 🌿 𝐁𝐢𝐨𝐝𝐢𝐯𝐞𝐫𝐬𝐢𝐭𝐲  Biodiversity risks may constitute material financial risks which boards are required to consider within the purview of directors’ duties. Prudent directors would be well advised to consider the relationship between business and nature in their context, in advance of the FSA’ s possible adoption of nature-related financial disclosures. 👉 Read the full Japan section to find out more! 📚 Special thanks to the authors: Dr. Yoshihiro Yamada (Ritsumeikan University), Dr. Masafumi Nakahigashi (Nagoya University), and Dr. Janis Sarra (The University of British Columbia, Canada Climate Law Initiative). #ClimateAction #SustainabilityLeadership #CorporateGovernance #ClimateDisclosure

📢 The Commonwealth Climate and Law Initiative (CCLI) is delighted to welcome Klara Iochem as our new Communications & Development Manager! Klara will be leading the organisation's communications, social media and media relations, and help coordinate our stakeholder engagement programs. She joins us with specialist knowledge and experience in strategic communications around complex legal issues and international campaigns. Please join us in welcoming Klara to the team!