Consultant Heather Ruddock discusses how climate change has transformed legal practice with its growing relevance beyond environmental law. Learn more in advance of our upcoming Climate Change Law and Governance Conference happening on 17 November 2021.
Lawyers have historically regarded climate-related areas as almost exclusively the domain of environmental lawyers. Now climate is touching commercial law, work health & safety and employment law.
With mergers and acquisitions on track to smash records for the year to 31 December, according to the AFR 19 October p1, how good are the due diligence processes in relation to climate risks and opportunities? What do the supply chain carbon emissions exposures look like? Are the ESG disclosures just ticking the boxes?
Lawyers could benefit from the insights of investment managers engaged in ESG investing and their governance expectations. They could also benefit from hearing from their accounting peers about how the ESG focus of capital markets converges with business reporting through Sustainability Standards (SASB) and Climate-related Financial Disclosures (TCFD).
What is transformational for lawyers is that ESG is at the centre of the climate conversation.
In-house counsel are being encouraged to work with relevant internal stakeholders including (though not limited to) their business and finance teams, to understand ESG metrics, ratings and reporting methodologies, to think about how to draft ESG disclosures and align any disclaimers. There will be challenges for small to medium size enterprises who do not have scale. Indeed even larger corporations may not have the internal capability to understand and act on current and future exposure to climate risk and opportunity. It may be the case that there is more focus on supply chains for human rights violation than for carbon emissions exposure.
Directors cannot assume that climate change will not intersect with the interests of the company and expose them to climate litigation.
ESG and “greenwashing” are on the radar of external stakeholders and shareholders as well as regulators. Climate risk is already being priced into insurance contracts. Extreme weather events impact the workplace conditions for employees and contractors and the livelihoods of communities around the world. With over 1,000 filings globally climate-related litigation, like ESG, is here to stay. The climate science in the August IPCC report is now being tendered as evidence.
As John Kerry US Special Presidential Envoy for Climate says “you are all climate lawyers now whether you want to be or not”, in his address to the American Bar Association 4 August 2021.
To assist you, Legalwise Seminars is convening its first ever Climate Change Law and Governance Conference on 17 November 2021 with an extraordinary panel of experts to step you through the narrative that is transforming legal obligations and litigation, insurance, directors’ duties, capital markets and investment, financial and non-financial reporting, and climate geopolitics. For details of the full program click here: Climate Change Law and Governance: Think Global Act Local
Heather Ruddock has more than 30 years of experience engaging with regulators, industry bodies and professional advisers. She has assisted lawyers and non-lawyers with their governance, risk and compliance frameworks and spent many years in strategic market engagement for a global knowledge and technology business servicing lawyers, corporations and accountants. In that role she developed an Australia wide network of corporate tax and finance professionals.
For Legalwise, Heather is assisting with programs in climate change, financial services, corporate governance, and innovation and technology. She is a Graduate Member of the Australian Institute of Company Directors, has Degrees in Arts and Law and early in her career tutored in Constitutional Law at Macquarie University.
