October 25, 2023

Nature-related risks and directors’ duties’

Under the Australian Corporations Act, nature-related risks are within the scope of directors’ duties to act with care and diligence, according to a legal opinion.

Authored by Sebastian Hartford-Davis and Zoe Bush, the opinion ‘Nature-related risks and directors’ duties’ concluded that nature-related risks to a company should be regarded as foreseeable now, given the large amount of information already available about economic dependency on nature and the rate at which it is being degraded in Australia and globally.

The authors recommended that directors of Australian companies need to identify their company’s dependencies and impacts on nature and consider potential risks these pose to the company. Failure on the part of a director to identify, manage and disclose material nature-related risks may lead to increased shareholder pressure and even litigation against personal assets of directors.