Advisory

Legal Risk

Understanding how climate change is shaping legal risks today ensures that businesses can thrive tomorrow.

Concerns around the physical impacts of climate change are reshaping the business landscape across every economic sector and are rapidly shifting the decision-making context in which organisations are operating. The fallout from the COVID-19 pandemic has cast new light on the implications of failing to address systemic risks that present large-scale, and often foreseeable shocks, such as those driven by climate change.

We understand that foreseeable climate impacts have wide-ranging implications that can translate into legal risks and opportunities. These legal risks can arise from new climate-related regulations, laws, and litigation, as well as compliance with existing law.

A proactive and strategic response to these climate-related legal risks is not just a measure of corporate performance and social responsibility but is increasingly indispensable to future corporate success and value.

Working with us

As a specialist advisory and analytics company focused exclusively on climate risk for the past 15 years, Acclimatise has provided science-based advise to public and private sector clients across multiple geographies and sectors. From institutional investment and insurance to water and extractives, Acclimatise is able to bring its wealth of experience to bear across a range of sectors.

Acclimatise can draw on its unparalleled multidisciplinary experience to advise on physical climate risks to corporate strategy, transactions, compliance and other areas, as well as provide expert input into contentious cases.

Using our experience helping organisations understand climate risks to their businesses, Acclimatise will work with you to plainly set out the implications of climate change for your – or your client’s – assets, operations, and transactions.

Anticipating and managing climate-related legal risks can be complex, requiring a blend of technical and legal expertise. We both advise law firms and work with legal partners to help businesses across sectors understand and manage these risks.

Examples of our services include:

  • support to transactional due diligence through on-demand appraisal of embedded climate liabilities.
  • strategic advice informed by the latest science to help you map, understand and manage the universe of legal risks facing your or your clients’ business arising from historic actions, decisions taken today and horizon climate impacts.

Talk to our expert today: Dr Richard Bater

Showcase

Nine key questions to assist Non-Executive Director oversight of physical climate risk management, Chapter Zero (2020)

Chapter Zero is a global voluntary programme that connects and supports Non-Executive Directors (NEDs) to improve oversight and action on the issue of climate change.

Acclimatise worked with Asia-Pacific’s largest law firm, MinterEllison to produce Chapter Zero’s first primer on physical climate risk for its global members. This guidance is designed as a ‘pick-up-and-use’ tool to be used in the boardroom setting, listing nine sector-agnostic key questions – covering themes ranging from climate impacts to liability – that NEDs can put company Directors. This document sets out the scientific and regulatory context to corporate action on physical climate risk.

By being prepared with key facts and probing questions, NEDs can help improve Board accountability and ensure that key – potentially overlooked – issues are being addressed.

Download the primer here.

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A timeline of legal climate risk

Financial regulators are placing increased emphasis on the disclosure of climate-related risks and investors are scrutinizing rigorously such risks. In 2015, France introduced laws mandating climate disclosure for institutional investors and asset managers and in 2017 the Financial Stability Board’s Taskforce on Climate-related Financial Disclosure published recommendations for corporate climate disclosures. In 2019, National Instrument 51-102 Continuous Disclosure Obligations set out new requirements for firms reporting in Canada to disclose material risks in their Annual Information Form.

Legal Risk

Our work

TCFD-related assessment of the governance and risk management of climate, environmental and social risk in Mexican banks

Acclimatise analysed the progress of Mexican banks in achieving TCFD recommendations by reviewing their current governance and environmental, climate and social (EC&S) risk management frameworks and activities. We achieved this in three ways: (1) auditing, utilising our in-house audit tool; (2) international benchmarking of good governance practices for climate risk management; and (3) the development of a user-friendly and bespoke tool for TCFD-readiness self-evaluation and comparison with peers through a common-metrics framework. The project was also supported by Acclimatise-led training workshops for both Mexican and South African banks.

Emerging trends in mainstreaming climate resilience in large multi-sector infrastructure PPPs

Acclimatise authored a World Bank Group’s Global Knowledge Product on how climate risk and resilience may be incorporated in PPPs. This pinpoints ways in which PPP contracts can be jeopardised through a failure to adequately assess and include climate risks in PPP policy frameworks. This can in turn have implications for project outcomes, and the liabilities that accrue to counterparties. Not only PPPs, but other types of contract could benefit from assessing and managing the liabilities that could arise from evolving climate-related physical and transition risks.