Climate change and environmental risk: A note from Australia's Head of Risk Advisory

I hope you have been enjoying reading the first three weeks of posts from my Risk Advisory team following the launch of our Risk Advisory thought leadership hub, ‘Spotlight on Risk’, on 28 October.  

This week, I would like to introduce two further posts – collaborations between Dr Kai Luck, a senior advisor in the Risk Advisory team, and three of Norton Rose Fulbright’s expert climate and environment partners: Elisa de Wit, Noni Shannon and Rebecca Hoare.  

These posts reflect our commitment to thought leadership in emerging industries, focusing specifically on the significant risks posed by a changing climate and the transition to a lower-carbon economy across multiple sectors.  Those sectors range from the more obvious energy, resources and manufacturing sectors to agriculture and agribusiness, infrastructure, transport, tourism and, importantly, also banks and insurers with significant exposure to fossil fuels and heavy emitters.  

The key theme of both of this week’s posts is that climate change is not some kind of passing ‘fad’; an issue for ‘tomorrow’s board’.  Rather, it is a now issue which requires directors of all companies to proactively consider the climate risks uniquely impacting on a company’s operations (whether physical or transition risks).  Companies will then need to disclose and take mitigating action to address those risks if they are material.  

Failure to do so will expose both a company and individual directors to civil and criminal penalties and compensation orders in enforcement proceedings pursued both by ASIC and in shareholder class actions sponsored by deep-pocket litigation funders.

This week’s posts will be the first of many collaborations between our Risk Advisory practice and our global climate and environment network at Norton Rose Fulbright.  Our team of experts across the world is uniquely placed to provide you with the insights you need to remain on top of the latest climate risk developments.  We can also take you through the required steps to reduce your organisation’s exposure to material climate risks and ensure compliance with the growing maze of climate regulations in Australia and internationally.  

On that note, happy reading!  

Scott