Publications

'Troubling Incrementalism': Is the Canadian Pension Plan Fund Doing Enough to Advance the Transition to a Low-carbon Economy?
September 2020 | Cynthia Williams | Reports

In a new in-depth legal analysis by the Canada Climate Law Initiative, 'Troubling Incrementalism': Is the Canadian Pension Plan Fund Doing Enough to Advance the Transition to a Low-carbon Economy?, report author Cynthia A. Williams finds that Canada Pension Plan's approach to managing the financial risks of climate change may not be consistent with the best interests of Canadian beneficiaries and contributors. Rather, CPP Investments' private investments in the oil and gas sector reveals a 'troubling incrementalism' that exposes Canadians’ pension investments to significant climate related risks; risks that the Bank of Canada has stated affect the ability of central banks to achieve goals for financial stability. The Canada Pension Plan is one of the world’s largest and most influential public pension funds with more than CA$434.4 billion in assets under management as of June 30, 2020. The funds are managed by CPP Investments (formerly CPP Investment Board or CPPIB) with a mandate to serve the best interests of over 20 million Canadian workers and retirees whose retirement savings are vested in the plan. Professor Williams takes the view that CPP Investments can demonstrate leadership by increasing transparency and setting aggressive targets for reducing carbon in its Canadian portfolio, thus supporting Canada’s low carbon transition and good jobs for future generations of Canadians.

The emergence of foreseeable biodiversity-related liability risks for financial institutions: A gathering storm?
August 2020 | Sarah Barker, Ellie Mulholland, and Temitope Onifade | Reports

Recent economic literature identifies liability as a key category of foreseeable financial risk associated with biodiversity loss. However, it has not, to date, provided further guidance on the nature and extent of litigation and legal risks that should be considered in determining the potential materiality of relevant risks for a given financial actor or system. This report complements and extends the economic literature by proposing a framework by which biodiversity-related liability risks should be considered by financial sector supervisors and participants in their broader assessment of biodiversity-related financial risks.

Directors' Liability and Climate Risk: Comparative Paper - Australia, Canada, South Africa and the United Kingdom
October 2019 | Sarah Barker, Ellie Mulholland | Reports

This paper provides a high-level summary and comparison of the CCLI's previously published country papers on directors' duties and climate risk. The prevailing directors’ duties regimes under Australian, Canadian, South African and United Kingdom laws are all conceptually capable of being applied to governance failures in the identification, assessment, oversight and disclosure of climate-related financial risks. Building on the country papers, this comparative paper finds that Australia is the jurisdiction where the liability risk to directors and fiduciaries is most material. This is not to say that the risk of liability is far-fetched in Canada, South Africa and the United Kingdom, and the risk is likely to increase in the future. Directors and fiduciaries must now approach their governance of climate change in the same way as they would any other financial matter. The only safeguard against liability exposure will be a proactive, dynamic and considered approach to the impact of climate change on strategy, risk management oversight and reporting. To assist boards and their committees to integrate the risks and opportunities of climate change into corporate governance and disclosure practice, the 2019 Climate risk reporting journey – A corporate governance primer is set out in the Annexure. Originally released in November 2018, this actionable framework has been updated to reflect developments in the climate risk landscape.


Time to Act - Response to questions posed by the Expert Panel on Sustainable Finance

January 2019 | Janis Sarra, Cynthia Williams | Reports

In their report to the Expert Panel on Sustainable Finance in Canada, Dr Janis Sarra and Prof Cynthia Williams address two critically important issues: the fiduciary obligation of corporate and pension fiduciaries to consider climate and broader environmental, social and governance issues, and government's responsibilities to promote the incorporation of ESG and climate issues in financial disclosure. The report serves as a practical guide for policymakers, offering a comprehensive set of 25 recommendations on the legislative changes required to embed sustainability in fiduciary obligations and financial disclosures.


Climate Change and Legal Risk in Canada

14 November 2018 | Janis Sarra, Cynthia Williams | Presentation

In this presentation, Dr Janis Sarra, Presidential Distinguished Professor and Professor of Law University of British Columbia, outlined the fiduciary obligations of corporate directors and pension fiduciaries as they relate to climate change. Professor Cynthia A. Williams, Osler Chair in Business Law, Osgoode Hall Law School provided an overview of the Task Force on Climate-related Financial Disclosures, highlighted the potential for liability risks in Canada for misleading or inaccurate disclosures relating to climate change, and surveyed the field of current climate-related litigation.


The Climate Risk Reporting Journey: A Corporate Governance Primer

November 2018 | Sarah Barker

To assist boards and their committees navigate the step-change in corporate governance and disclosure expectations regarding the impacts of climate change on their business, the Commonwealth Climate and Law Initiative has collaborated with leading governance advisors to develop The Climate Risk Reporting Journey: A Corporate Governance Primer. The primer serves as an actionable framework on how to incorporate climate change risks and opportunities into corporate governance practice. Recognising the centrality of financial reporting as the primary source of assurance to shareholders, the primer proposes key questions relevant to the assurance of a corporation’s reporting on climate-related financial issues and to the robust processes of governance and oversight on which those disclosures must be based. Although the recommendations of the Task Force on Climate-related Financial Disclosures are voluntary and provide a framework for reporting rather than board governance per se, they are emerging as the key benchmark against which to assess a company’s strategic approach to climate change. The primer seeks to place each query in context by indicating the category of the TCFD recommendations to which they relate: governance, strategy, risk management, and metrics and targets.

Legal research papers on Canadian fiduciary duties and disclosure obligations in the climate change context
April 2018 | Janis Sarra, Cynthia Williams | Reports

The Commonwealth Climate and Law Initiative (CCLI) has published two legal research papers on Canadian fiduciary duties and disclosure obligations in the climate change context. In Obligations in Business and Investment: Implications of Climate Change, legal analysis by Dr Janis Sarra, Presidential Distinguished Professor and Professor of Law University of British Columbia, shows that directors, officers and pension fund trustees must identify and address climate-related financial risk or they may be personally liable for breach of their fiduciary obligation or duty of care. In Disclosure of Information Concerning Climate Change: Liability Risks and Opportunities, Cynthia A. Williams, Osler Chair in Business Law, Osgoode Hall Law School, considers the Canadian legal framework for corporate disclosures and reporting of climate risk, current disclosure practices of companies and expectations of investors, and the liability risks to companies for misleading disclosures relating to climate change. These papers formed the basis of Directors' Liability and Climate Risk: Canada - Country Paper, published in April 2018 as part of the series of national reports which were the first comprehensive legal assessments of the discharge of directors’ duties in the climate context.

Directors’ Liability and Climate Risk: National Legal Papers for Australia, Canada, South Africa, and the United Kingdom.
17th April 2018 | Sarah Barker, Alice Garton, Christine Reddell, Janis Sarra, Alexia Staker, Cynthia Williams | Reports

The Commonwealth Climate and Law Initiative (CCLI) is examining the legal basis for directors and trustees to take account of physical climate change risk and societal responses to climate change, under prevailing statutory and common (judge-made) laws. These are the first comprehensive legal assessments of the discharge of directors’ duties in the climate context for four Commonwealth common law countries: Australia, Canada, South Africa, and the United Kingdom. These have been complemented by conferences in Australia (August 2016), Canada (October 2017), South Africa (January 2018) and the UK (June 2016).

The national legal papers follow a uniform structure and can be downloaded here: Australia, Canada, South Africa, and the United Kingdom.

Concerns misplaced: will compliance with the TCFD recommendations really expose companies and directors to liability risk?
25 September 2017 | Alexia Staker, Alice Garton, Sarah Barker | Briefing Paper

 

In this briefing from the Commonwealth Climate and Law Initiative (CCLI), experts refute misplaced fears in industry about the legal risks of climate disclosure. New analysis confirms that saying nothing at all about climate issues in corporate reporting puts directors at far greater risk of being sued than disclosure would. Complying with the new reporting recommendations from the Task Force on Climate-related Financial Disclosure (TCFD) will actually protect companies from the kind of liability claims they fear. It is highly likely that there will be additional regulation requiring disclosure of climate risk, or, at the very least, existing laws will be interpreted as requiring robust climate risk analysis. For all these reasons, astute directors should embrace the TCFD recommendations and recognise that climate-risk disclosure is a key component of financial reporting.

Climate Change Risk and Corporate Governance Directors' Duties and Liability Exposures in a post-Paris World
29-30 August 2016 | University of Melbourne

Please find the symposium highlights here.

International Symposium on Directors' Liability for Climate Change Damages Summary
8 June 2016 | Lady Margaret Hall, University of Oxford

As business steels itself to deal with seismic changes in the world’s climate, what is legally expected of directors is becoming more stringent. The Paris talks in December confirmed what we already knew – that more serious action is required from the corporate world in future. Business leaders must understand how to respond to this cultural and economic shift – which means legal and financial experts must collaborate to elucidate the law and give the right information to business leaders. The inaugural CCLI conference, the International Symposium on Directors’ Liability for Climate Risk, was the first of an intended series designed to do just that. International experts on finance and climate change met to clarify how the business world must respond to a changing climate.

Please find additional under the following link: https://www.clientearth.org/pictures-university-oxford-hosts-inaugural-ccli-conference/

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