Last week, Pollination and the Commonwealth Climate and Law Initiative (CCLI) launched a legal opinion, Nature-related risks and directors’ duties, prepared by barrister Sebastian Hartford Davis and climate lawyer Zoe Bush that suggests Australian company directors may already be exposed to nature-related risk under the Corporations Act 2001 (Cth).
The opinion piece makes it clear that Australian company directors have a duty of care under corporations law to consider their company’s exposure to nature-related risks – now, not some unspecified time in the future. Section 3C of the opinion says:
‘Directors of companies should at least identify the company’s nature-related dependencies and impacts, and consider the potential risks this may pose to the company. Directors who fail to consider nature-related risks could be found liable for breaching their duty of care and diligence.’
Coupling this legal opinion with the recent release of the final recommendations for the Taskforce on Nature-Related Financial Disclosures (TNFD) ought to prompt company directors to start assessing their nature-related risks as soon as possible.
The beauty of applying a natural capital approach is that businesses can tell their story around nature relates risks, opportunities, dependencies and impacts.
The best – and most cost-effective – way to get started is to develop a Natural Capital Roadmap. This customised process allows you to:
- understand your company’s natural capital maturity level
- identify the risks and opportunities in applying a natural capital approach
- create a natural capital plan for quantifying and valuing your connection to natural capital with actions over the short, medium and longer term.
An initial objective is to establish your Natural Capital Profile – a customised baseline of natural capital dependencies and impacts. A Natural Capital Profile will support company directors in meeting their duty of care and diligence obligations.
Want to know more?
Book a free 30-minute discussion to start your natural capital journey with us.
Call our Director, Mark Eigenraam on 0412 239 492 or email mark.eigenraam@ideeagroup.com Joint-Memorandum-of-Opinion-Nature-related-risks-and-directors-duties