March 20, 2023
A new guide clarifies the legal duties of executives of junior mining companies with respect to climate change
VANCOUVER, 20 March 2023 – It is the responsibility of directors to report to their investors how the board and management of junior mining companies are mitigating risks associated with climate change. Failure to do so could leave the company, its board, and management vulnerable to investor exit and even legal action, says a new guide by the Canada Climate Law Initiative.
Junior companies have greenhouse gas emissions that are seen as insignificant, especially compared to major mining companies. Even so, there is growing demand from investors and regulators for all companies to disclose their emissions and their plans to decarbonize.
Proposed changes to legislation in Canada, as early as next year, will require more comprehensive reporting of climate-related risks, and what the board and management of publicly-listed companies are doing to assess and manage those risks.
“In meeting their duty to act in the best interests of the company, directors and officers must be diligent in identifying and managing climate-related risks and opportunities that could affect the short-, medium-, and long-term viability of their companies”, said Dr. Janis Sarra, Professor of Law, University of British Columbia and Principal Co-Investigator, Canada Climate Law Initiative.
The guide’s author, Mona Forster, has worked in the mining and mineral exploration sector for over 30 years. She says she sees a major shift happening in the sector: “As demand for critical metals and minerals increases, pressure is on the mining sector to discover new deposits, develop existing projects quickly, engage with First Nations and local communities so they understand the projects, and work with governments to streamline the permitting process for more timely approvals to meet this growing demand. Amongst all these priorities, junior resource executives often overlook or aren’t sure how to respond to new reporting requirements about how their company is undertaking climate-related risk management practices.”
The guide offers resources to assist companies traded on the TSX Venture Exchange to effectively meet their regulatory and marketing requirements, and meet their fiduciary duties to their investors and other stakeholders.
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