Climate Change

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As long-time readers of this blog know, one of the long-range concerns in the D&O insurance industry is the possible exposures of corporate directors and officers to liability claims arising from climate change (as discussed most recently here). In the following guest post, attorneys from the Legalign Global Alliance member firms take a comprehensive look at the climate change-related risks and exposure that corporate directors and officers may face, as well as at the climate change-related D&O claims developments in a variety of different countries. A version of this article previously was published as a Legalign Global client alert. I would like to thank the authors for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.
Continue Reading Guest Post: D&O Exposures to Climate Change Risk

In a recent post in which I reviewed recent legal developments in Australia, I discussed the growing possibilities for future climate change-related D&O claims. A recent paper highlights the extent of these D&O claim risks in the United States. The October 2021 paper, published by the Commonwealth Climate and Law Initiative and entitled “Fiduciary Duties and Climate and entitled “Fiduciary Duties and Climate Change in the United States,” discusses how evolving understandings of climate change has “changed the relevance of climate change to the governance of corporations,” with important implications for the fiduciary duties of directors and officers. The paper discusses how in the current legal environment in the U.S. a board’s failure to adequately regard climate change-related issues could lead to potential litigation and liability. A copy of the full paper can be found here, and an executive summary of the paper can be found here.
Continue Reading Climate Change-Related Breach of Fiduciary Duty Lawsuits?

An Australian Federal Court class action lawsuit alleging that the Australian Federal Government failed to disclose to investors the climate change risks associated with the government’s sovereign bonds has survived in part an attempt by the government to have the action dismissed. In an October 8, 2021 Judgment (here), a Federal Court of Australia Judge “declined to strike-out” the applicant’s claim based on allegations of misleading or deceptive conduct, while agreeing with the government to “strike-out” others of the applicant’s claims, as discussed below. The court’s rulings in this case arguably represent something of a milestone in the development of climate change-related litigation.
Continue Reading Australian Bond Climate Change-Related Disclosure Class Action to Proceed

If you have not yet seen SEC Commissioner Allison Herren Lee’s speech delivered last week to the PLI’s annual Institute on Securities Litigation, you should take a few minutes and read what she had to say. In her November 5, 2020 speech, which can be found here, Lee warns that climate change represents a “systemic risk” to markets, the financial system, and our economy. After noting that climate change presents an even greater risk of “grave human and economic costs” than we experienced in the pandemic — and urging that we should learn the lessons that the pandemic presents — she calls for a coordinated effort to create uniform climate change reporting and disclosure standards to ensure that investors and markets are better informed about the risks that climate change represents.
Continue Reading Climate Change as a “Systemic Risk”: Markets, Regulation, and Disclosure

In an interesting development that could prefigure further climate change-related disclosure litigation, an Australian investor has filed a lawsuit against the Australian Federal Government and two government officials, on her own behalf and on behalf of over investors in Australian Government Bonds, for allegedly failing to disclose to investors the climate change risks attached to the sovereign bonds.  According to an August 12, 2020 memo from the Allens law firm (here), the suit is “a first-of-its-kind action worldwide,” one that could serve as a “stepping stone” toward both more activist litigation and more commercially focused climate change disclosure litigation.
Continue Reading Australian Government Sued Over Sovereign Bond Climate Change-Related Disclosures

Francis Kean

As long time readers know, I have long been warning that climate change-related issues could have a significant impact on directors and officers liability exposures. In the following guest post, Francis Kean provides a summary outline of the specific litigation exposures that corporate directors and officers may face as a result of emerging climate change-related concerns. Francis is Executive Director FINEX Willis Towers Watson. Francis will be joining McGill and Partners in early spring 2020. I would like to thank Francis for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Francis’s article.
Continue Reading Guest Post: Climate Change Litigation Threats to Directors and Officers

In a lengthy and detailed post-trial opinion, New York (New York County) Supreme Court Justice Barry Ostrager has ruled that the New York Attorney General failed to establish that ExxonMobil Corporation made material misrepresentations in its public disclosures concerning how the company accounted for climate change risk.  As discussed below, there are a number of interesting features to Justice Ostrager’s ruling. A copy of Justice Ostrager’s December 10, 2019 opinion can be found here.
Continue Reading Court Rules Against NYAG in ExxonMobil Climate Change Disclosure Trial

Once again, wildfires are raging across the length of California, from San Francisco to Los Angeles. Once again, the electricity transmission facilities of PG&E are thought to have caused or contributed to at least some of the wildfires. And once again, in the wake of the wildfires, shareholders have launched a securities class action lawsuit against company executives. As discussed below, the new lawsuit is the latest example of the way in which transformative changes arising from climate change can lead to directors’ and officers’ liability litigation.
Continue Reading Securities Suit Arising From Climate Change-Caused Conditions Hits Utility

As I noted in a prior post, earlier this month I participated in a panel in a climate change liability event sponsored by Clyde & Co in collaboration with Willis Towers Watson as part of the Mayor of London’s Climate Action Week. In connection with the event, on July 11, 2019 the Clyde & Co law firm published an excellent, comprehensive paper on climate change developments and risks, entitled “Climate Change: Liability Risks for Businesses, Directors and Officers – The Coming Wave of Litigation” (here). This paper provides an overview of the challenges that businesses face as a result of climate change-related developments and of the potential areas of liability that may arise as a result of these developments.
Continue Reading “Increasingly Likely” Climate Change Liability Risks

The risk of extreme weather events resulting from climate change and the collective global failure to address climate change represent the most significant current global risks, according to the World Economic Forum’s annual survey of global risks. These kinds of risks represent significant concerns for human safety, social and business disruption, and property loss. As discussed below, and as recent claims have shown, these risks may present management liability concerns as well. The World Economic Forum’s January 15, 2019 Global Risks Report can be found here.
Continue Reading Thinking About the World Economic Forum’s Global Risks Report