Directors’ Liability on Climate Change: Why Boards should be bothered

– Sikha Bansal, Partner and Payal Agarwal, Senior Executive (corplaw@vinodkothari.com)

ESG has been a buzzword for a long time now, and is demonstrating sufficient presence in the corporate world as well. Of the three pillars of ESG, the Environmental pillar can be said to be the most pervasive component as it transcends beyond localities, societies and even beyond economies. Concerns of carbon emissions, ozone layer depletion, deforestation, energy wastage and consequential effects on environment like global warming and climate change are not localised to one nation or one continent, rather are spread across the globe. Climate change, for example, has drawn massive international concern – the United Nations Framework Convention on Climate Change^[1] acknowledges the vulnerability of all countries towards the effects of climate change, and urges them to take measures to pacify the consequences; the Kyoto Protocol^[2] also binds the developed countries to take steps in order to increase resilience towards the effects of climate change; the Paris Agreement^[3] emphasised on a so-called “net zero carbon economy” in the COP 21 meeting; and the Glassgow Climate Pact^[4] acknowledges the important role of a broad range of stakeholders at the local, national and regional level in averting, minimizing and addressing loss and damage associated with the adverse effects of climate change.

The article has been published in the December, 2021 edition of ICSI Chartered Secretary journal and can be accessed on the link here, from Page 91 onwards.