Climate Change on the Corporate Governance Landscape

Climate change is no longer just an ethical environmental issue. It has fast become a matter of corporate governance, with regulators both here and abroad increasing oversight and pressure on greater corporate disclosure of climate change risks. At the same time, litigation against companies and their boards on climate change exposures has accelerated pace.

As a result, the implications of climate change on the personal liabilities of company directors are increasingly apparent. Against this changing landscape, this paper examines what protection for climate change exposure can be offered under current directors and officers (D&O) policies, where potential gaps in cover exist, and how a policy is likely to respond in the event of a regulatory investigation, shareholder litigation or the threat of an adverse outcome with environmental obligations.