Climate Change Belongs At Board Table

With the scientific community identifying climate change as an existential threat and governments and regulators taking action to address the threat, board directors must consider the risks that climate change presents for the corporations they serve, says Carol Hansell, a senior partner at Hansell LLP. In the Hansell McLaughlin Advisory ‘Climate Change Risk on the Boardroom Table,’ she says Canadian courts and the investment community have accepted climate change and the risks it presents as self-evident and uncontroversial. So climate change risk belongs on the boardroom table and directors have an obligation to consider the implications of climate change risk as part of the duties each director owes to the corporation they serve. In managing or overseeing the management of risk, directors must meet the objective standard of what a reasonably prudent person would do in comparable circumstances. Among other things, directors must put aside any preconceptions they may have about the reality or imminence of climate change risk and be open to the information relevant to the business of the corporation. They must require reports and recommendations from management and external sources as necessary and be satisfied that the corporation is addressing climate change risk appropriately.