Hennick Centre Co-Director, Prof. Cynthia Williams receives prestigious grant from the Ivey Foundation
Prof. Cynthia Williams, Co-Director of the Hennick Centre for Business and Law, has received a grant from the Ivey Foundation for the Commonwealth Climate Liability Initiative (CCLI), a project with researchers at the Smith School of Enterprise and the Environment at Oxford University, the Allard School of Law at UBC, and the Environmental Justice and Sustainability Clinic at Osgoode. CCLI will study corporate law obligations of boards of directors to develop transition strategies towards a low-carbon economy. Learn all about CCLI Canada below.
Taking into account the most recent Global Risks Report of the World Economic Forum, it is clear that climate change presents material – if not unparalleled – economic risks and opportunities. As a result, shareholders are increasingly demanding strategic responses from their investee companies.
Institutional investors and insurers, in particular, have significantly increased their corporate engagement on climate change risk management. In contrast, there remains little systematic analysis of how prevailing corporate governance approaches and understandings of fiduciary duties facilitate – or constrain – the actions of company directors confronted with complex climate change challenges.
The Commonwealth Climate and Law Initiative (CCLI) is a research, education, strategic litigation theory development and outreach project currently involving institutions in four Commonwealth countries: Australia, Canada, South Africa, and the United Kingdom. Launched in 2016, the Initiative has convened expert meetings at Oxford University, Smith School for Enterprise and the Environment , which is the home of the initiative and at University of Melbourne, Australia to date.
CCLI Canada will be producing three White Papers during the summer of 2017 (details below), which will form the basis of the meetings in Toronto and Vancouver.
Upcoming meetings in Canada:
Toronto: October 20, 2017 @ Osgoode Hall Law School, York University
Vancouver: October 25, 2017 @ Peter A. Allard School of Law, University of British Columbia
The CCLI Canada Conferences website will be launched soon. In the mean time, to join the mailing list for either of these meetings, please submit your request by email.
CCLI is examining the legal basis for directors to be required to take account of, and disclose, physical climate change risks and societal responses to climate change, under prevailing statutory and common (judge-made) laws. It is also undertaking a practical assessment of the materiality of these considerations, in terms of liability exposure (by reference to scale, timing, magnitude, and probability) and the potential implications for company and investor decision-making in the real economy. Third, it is studying what leading companies are doing in the transition to a low-carbon economy from a governance perspective.
The underlying theory is that corporate law, and securities regulation, have been relatively underutilized as drivers of positive action on climate change. Given the rapid evolution of climate change science and economics, and global policy developments such as the Paris Treaty of 2015 and the Financial Stability Board’s Task Force on Climate-related Financial Disclosures, established in 2016, corporate directors and institutional investor trustees are challenged to develop strategies to adapt to, and drive, the transition to a low-carbon economy.
Summer 2017 upcoming three White Papers:
- What are the expectations by investors of Canadian businesses regarding disclosure of climate-relevant information, in specified industries, particularly given the framework of the FSB Task Force on Climate Disclosure?
- What is the quality of current climate disclosure by Canadian public companies, as determined by recent research projects undertaken by the Ontario Securities Commission and Chartered Professional Accountants (CPA), Canada? Can disclosure as anticipated by the FSB’s Task Force help promote serious thinking at board and managerial levels about transition strategies?
- Can robust disclosure help companies resist short-term pressures, such as those of hedge-fund shareholder activists?
2) Fiduciary Obligations
- Evaluation of the fiduciary obligations of officers and directors to develop transition strategies, given the Supreme Court precedents in Canada on the duties of care and loyalty, given an analysis of what leading companies are doing (to be elaborated upon in the third White Paper).
- Evaluation of fiduciary obligations of institutional investors to include climate change risk in their investment strategies, particularly the obligations of defined-benefit pension funds, which have long-term obligations to beneficiaries.
3) Transition strategies
- How Canada, a resource-heavy economy, can start to transition to a low-carbon economy, and particularly how to start that transition without the costs falling disproportionately on workers in the particularly-affected industries (oil, gas, coal, cement, energy, transportation).
- What are some actual, scientifically-sound strategies for the transition, and what are leading companies doing in those industries?