26 April 2021
Company directors that rush to make net zero pledges without fully examining the firm’s ability to meet the goals could be guilty of “misleading or deceptive conduct” and vulnerable to regulatory or legal penalties.
They also have a legal obligation to act on climate risk, not just to disclose it, or face accusations of “greenwashing” that could carry real legal consequences.
Those are the opinions of lawyers Noel Hutley SC and Sebastian Hartford Davis, published in an official update to their landmark 2016 legal opinion entitled “Climate Change and Directors’ Duties”, commonly known as the Hutley opinion.
The update followed a business and regulatory roundtable on climate risk hosted by the Centre for Policy Development, and attended by major business groups including the Business Council of Australia, the Australian Institute of Company Directors and the Australian Chamber of Commerce and Industry.