Commonwealth Climate and Law Initiative (CCLI)

🆕Blog post: Redefining governance: The CSDDD’s impact on directors 🆕 The EU’s Corporate Sustainability Due Diligence Directive (CSDDD) was published in the EU Official Journal on 5 July 2024. In our new blog post we explore what this means for directors’ duties, greenwashing and company climate transition plans. We share our key takeaways in the carousel below. ❓Interested in learning more❓ 👇Link in comments to our full blog post which provides a deeper dive into the CSDDD and our thoughts on practical considerations for directors. #CSDDD #sustainability #naturerisk #climaterisk #corporategovernance

🆕Webinar on our Commonwealth Climate and Law Initiative (CCLI) YouTube channel: “Boards and nature - the evolving landscape for director’s duties🆕 Watch it here - https://lnkd.in/eY2kR9kH In this Taskforce on Nature-related Financial Disclosures (TNFD) webinar, Commonwealth Climate and Law Initiative (CCLI) Cynthia Williams and Sarah Barker explored: 🌳Why nature-related issues (as part of a broader set of sustainability issues) are relevant for boards and why they are part of the fiduciary duty of directors 🌳The growth of investor and regulatory focus on nature-related issues and the significance of recent legal opinions in New Zealand, Australia and the UK, and their potential global application 🌳How boards can build the knowledge and capabilities around nature-related issues and the current state of board readiness

Earlier this month Network for Greening the Financial System (NGFS) published a report titled “Nature-related litigation: emerging trends and lessons learned from climate-related litigation”. We share insights on the report and some of our key takeaways for directors and financial institutions below: ❓What is nature-related litigation❓ 🌳NGFS defines nature-related litigation as all strategic claims, brought before judicial bodies, focusing on climate, biodiversity loss and ecosystem services degradation. 🌳Whilst the majority of cases to date have been directed at states and public entities, litigants are starting to target corporates and financial institutions for causing adverse impacts on ecosystems, in particular through global supply chains. ❓What are the emerging trends in nature-related litigation against corporates❓ NGFS identified a number of cases filed against companies and financial institutions, challenging their role in causing adverse impacts on ecosystems, in particular through global supply chains. Examples of three strategic nature-related litigation cases are: 1️⃣ Under corporate sustainability due diligence legislation: a French credit institution has been challenged on the alleged inadequacy of its due diligence plan to prevent deforestation in the Amazon, and the violation of the rights of indigenous communities. The claim refers to the commercial ties of the credit institution to beef producers operating in the region. 2️⃣ In tort law: in Brazil, litigants have brought a case seeking to hold a steel company and its manager accountable for promoting illegal deforestation, as well as climate damages through GHG emissions derived from illegally sourced coal. 3️⃣ Shareholder rights: in Australia, a shareholder of the listed parent of a financial group has sought the court’s permission to access internal risk management documents, claiming that the bank within the group is failing to properly manage the twin crises of climate change and biodiversity loss. 💡Takeaways for directors and financial institutions: 👉Like for climate-related litigation, a potential trend may emerge in respect of claims arising from company law, such as shareholder actions against directors for breaches of fiduciary duties. 👉 Recent legal opinions commissioned by Commonwealth Climate and Law Initiative (CCLI) and Pollination point to the possibility of litigation risk arising from directors’ duties under existing corporate law, arguing that such duties include the responsibility to identify the company’s nature-related dependencies and impacts, as well as consider the potential risks these might pose to the company. 👉While strategic nature-related litigation is still in its infancy, the NGFS anticipates that the nature, scope and addressees of nature-related legal action will continue to evolve and grow. 👇 Links to resources in comments below. 📷from the NFGS report, page 17

📝 [Event Recap] Last week, Commonwealth Climate and Law Initiative (CCLI)’s Executive Director, Cynthia Williams, and Board Member, Sarah Barker, spoke on a panel organised by the Taskforce on Nature-related Financial Disclosures (TNFD) titled “Boards and Nature: The evolving landscape for director’s duties”. Some of our key takeaways… ❓Why is nature important❓ Roughly USD58 trillion of economic value - over half of the world’s GDP - is moderately or highly dependent on nature and its services (PwC 2023). ❓How does nature relate to directors’ duties❓  ▶️As noted by Cynthia Williams: ”Fiduciary duty obligations of boards and officers are consistent across jurisdictions, both civil or common law. Every board needs to have some insights into what their nature dependencies are and how to mitigate these risks.” ”Risks change over time. 10-years ago, nature would not have been on the board agenda. Now, it has to be.” ▶️Commonwealth Climate and Law Initiative (CCLI) and Pollination’s recently published UK and Australia nature opinions were discussed at length. Both these opinions concluded that under the respective laws, a failure to consider nature-related risks could amount to a breach of directors’ duties. As noted by Sarah Barker, "as a matter of legal principles this is not that controversial. This is not new law. It is establishing the facts and context to established principles of law". ❓Are there risks associated with greenhushing❓ Sarah Barker observed that “greenhushing is both legally and commercially imprudent. It is imprudent because so many nature-related dependencies and impacts are material financial risks and opportunities over short term, medium term, long term time horizons. So you have to be communicating those to your investors. If you don't, you are misrepresenting a material financial issue of your company.” ❓What should directors do❓ ▶️Sarah Barker highlighted the importance that directors have “functional fluency”. Directors need to be “critically evaluating what comes before them” and “actively apply their independent judgment, and there's just no substitute for that, particularly given the complexity and uncertainty.” ▶️Directors struggle because nature is complex and uncertain. It's really “incumbent on sustainability teams, finance teams, management and the board to really get across these issues and to understand the range of future states, and where the complexity and uncertainty lies.”  ▶️Directors could use the TNFD #LEAP framework and recommended disclosure and assessment tools to get started on this journey. Thank you for an excellently moderated panel Tony Goldner and Candice Dott 📷  by jms on Unsplash

🌳UNEP-WCMC Nature Actions Dialogue🌳 📝 [Event Recap] Last week, our Climate and Biodiversity Lawyers Jasmin Fraser and Jenni Ramos, attended as Delegates the UNEP-WCMC’s Nature Action Dialogue. The event was held in Cambridge under the theme “the Road to CBD COP16: Scaling private sector action in support of global goals”. The Dialogue featured speakers and organisations from across the business and nature landscape, and was structured around interactive workshops and discussions. Find out more below! #nature #natureaction #climateaction #riskmangement #accountability BirdLife International, Taskforce on Nature-related Financial Disclosures (TNFD), Glasgow Financial Alliance for Net Zero (GFANZ), Integrated Biodiversity Assessment Tool (IBAT), Science Based Targets Network, United Nations Environment Programme Finance Initiative (UNEP FI), IUCN, Global Reporting Initiative (GRI), Business for Nature

📢 Commonwealth Climate and Law Initiative (CCLI)’s Board Members, Cynthia Williams and Sarah Barker, will be speaking at the Taskforce on Nature-related Financial Disclosures (TNFD)’s webinar: "Boards and Nature: The evolving landscape for director’s duties" This is not a webinar to miss. The webinar will cover how directors’ duties are evolving to include nature-related issues and the role the TNFD recommendations and related guidance can play to support directors’ duties. Further details below. ✍ Sign up here: https://lnkd.in/eC89245Q  📅 Date: 11 July 2024 ⏰ Time: 09:00 - 10:00 New York | 14:00 - 15:00 London | 15:00 - 16:00 Paris | 21:00 - 22:00 Singapore #naturerisk #systemicrisk #directorsduties Tony Goldner Helle Bank Jørgensen, GCB.D, CCB.D and NACD.DC

The Commonwealth Climate and Law Initiative (CCLI) is looking for a new Executive Director - could it be you or someone you know? This is an exciting opportunity to grow and develop a pioneering, highly respected global research and engagement non profit, building on almost ten years of impactful work in the field of directors' duties, climate and nature. There is huge scope for writing and commissioning new papers and opinions around the globe, clarifying the significance of the rapidly developing regulatory and market context for #corporategovernance, and finding new ways to communicate with and broaden the CCLI's audience of decision makers, advisors, lawyers and finance professionals. 👇See the job description below for further details! #sustainability #leadership #law #governance #legaljobs #nature #climate

📝 [Event Recap] This week, our Biodiversity Lawyer Jenni Ramos and Climate Lawyer Sarah Hill-Smith, attended the Legal Sustainability Alliance Summer Event 2024 - A Legal Lifeline for Nature. Nature related risks are increasing in political and commercial importance as science demonstrates the steep decline in wildlife populations – down 70% since 1970. Sharif A. Shivji KC, who co-authored the opinion, and Clare Brook CEO Blue Marine Foundation discussed what law firms should be thinking and doing about biodiversity and how best they can advise their clients. ❓Why does this matter to law firms and their clients❓ The recent legal opinion commissioned by Commonwealth Climate and Law Initiative (CCLI) and Pollination found that Board Directors could potentially breach their duties by failing to consider or act on relevant nature-related risks, which could lead to personal liability. 🌊Oceans🌊 The ocean is part of nature. Oceans play a critical role in the global economy, providing a foundation for various industries (e.g., tourism and fisheries), supporting millions of jobs worldwide, providing a vital source of food, and facilitating international trade. Directors should address the economic and environmental implications of their company's operations on marine ecosystems. By integrating these considerations into their decision-making processes, directors can help ensure long-term business viability and compliance with emerging legal standards focused on environmental stewardship. This approach aligns with the increasing recognition of the vitality of oceans (see our previous post on the recent ITLOS opinion). 👇See links in the comments for a link to the UK nature opinion and Australia nature opinion #directorsduties #climatechange #governance #riskmanagement

Last week Grantham Research Institute on Climate Change & the Environment published its much anticipated 2024 Report on Global Trends in Climate Litigation. Here are some key points for directors: ❓What does the report say about litigation against directors for mismanaging climate risk❓ 🌿The question of how to manage transition risks has so far manifested most commonly in climate-washing claims. 🌿However, this year, the report has introduced a new category, “transition risk”, to reflect an increase in litigation over the management of climate risk by corporate directors. 🌿Just 17 transition risk cases have been recorded since 2015 but considerable growth is anticipated in this area, despite the fact that one of the seminal strategic cases in this category (Client Earth v Shell Board of Directors) was dismissed in unfavourable terms by the UK High Court last year. ❓ Does the report say anything about director liability for mismanaging nature-related risks❓ 🌿The authors highlight the legal opinion commissioned by Commonwealth Climate and Law Initiative (CCLI) and Pollination, which demonstrates that UK-based directors can and must consider nature-related risk arising from dependencies and impacts on nature in the course of their duties. 🌿Biodiversity Risk Advisor, Zaneta Sedilekova, discussed her thoughts on the direction of biodiversity litigation at the launch of the report by The Grantham Institute (see previous post). 🏆 Congratulations to Catherine Higham, Joana Setzer and their team for an insightful snapshot report on climate litigation! 👇See links in the comments for further resources and a link to the full report. #climatelitigation #biodiversitylitigation #directorsduties #climatechange #governance

🆕Yesterday marked the launch event of Grantham Research Institute on Climate Change & the Environment’s “2024 report on global trends in climate change litigation" 🆕 The report features an overview of the latest global developments and insights into recent cases. We’re overjoyed to see the UK legal opinion commissioned by the Commonwealth Climate and Law Initiative (CCLI) and Pollination called out in the report (p.37)! As a refresher, the opinion argues that directors in England and Wales should consider #naturerisks arising from dependencies and impacts on nature in the course of their duties. ❓Climate litigation continues to be on the rise, but what about biodiversity❓ CCLI’s Biodiversity Risk Consultant, Zaneta Sedilekova was speaking on the panel at the launch on this issue. Some of Zaneta’s takeaways: 1️⃣ The principles around ‘climate-washing’ cases can be “lifted and shifted” to biodiversity  🌳Climate-washing cases have met significant success, with more than 70% of completed cases decided in favour of the claimants. We are starting to see more and more biodiversity-related statements (e.g., “nature-positive” and “deforestation-free”). Greenwashing cases relating to biodiversity will no doubt follow a similar trajectory to climate since the legal framework around greenwashing will remain the same.  2️⃣ Where damage-based climate litigation cases have struggled, biodiversity may succeed 🌳As a result of the global nature of emissions, it is difficult to attribute damage to specific parties through causation. In contrast, biodiversity damage is often local, and causation tends to be easier to establish. Think about tracing through supply chains, following money trails to identify links to illegal activities (and potentially money laundering) and analysing ownership structures to determine parent company liability for damage caused by subsidiaries (e.g., the Mariana Dam case)). These provide biodiversity litigation with the opportunity to “fast track climate litigation". A fantastic report Joana Setzer and Catherine Higham! #legalrisk #climaterisk #litigation #climateaction #governance 👇See links in the comments for further resources and a link to the report!