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Episode 114 Buy Episode

Nature Positive Business: Identifying and Managing Nature-related Risk

Law as stated: 2 February 2024 What is this? This episode was published and is accurate as at this date.
Pollination's Laura Waterford and Olivia Back dial into Curiosity to talk through the joint memorandum of opinion on nature-related risks and directors' duties. Touching on the TNFD and disclosing and managing nature-related risk.
Substantive Law Substantive Law
Laura Waterford & Olivia Back
Pollination

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1 hour = 1 CPD point
How does it work?
What area(s) of law does this episode consider?Legal opinion on nature-related risk.
Why is this topic relevant?Section 180 of the Corporations Act is a mainstay of Australian corporate law. It provides for the requirement that directors and officers exercise their powers and discharge their duties with care and diligence. The section – and those words – capture a wealth of meaning, and today we’re covering a new and developing part of it.

In October 2023, Sebastian Hartford-Davis and Zoe Bush – instructed by Pollination Law – issued a joint memorandum of opinion on the topic of nature-related risks and directors’ duties. The opinion discusses the extent to which the duty of care and diligence permits or requires consideration, disclosure, and management of nature-related risks arising from dependencies and impacts on nature.

What legislation is considered in this episode?Corporations Act 2001 (Cth), s 180
What are the main points?
  • Section 180 of the Corporations Act mandates that directors exercise their powers with care and diligence.
  • In October 2023, Sebastian Hartford-Davis and Zoe Bush – instructed by Pollination Law – issued a joint memorandum of opinion on the topic of nature-related risks and directors’ duties.
  • Legal opinion outlines that directors should identify and prioritise their company’s nature-related risks including how directors should consider, disclose, and manage nature-related risks.
  • Nature-related risks arise from a company’s impact on and dependence on nature.
  • The Taskforce on Nature-related Financial Disclosures (TNFD) is a framework for companies to identify and disclose nature-related risks.
  • Boards may now need to consider nature-related risks as part of their regular duties.
  • Both impacts (e.g., pollution) and dependencies (e.g., pollination services) constitute nature-related risks.
  • Even companies that don’t have a direct impact on nature may still have exposure through their supply chain.
  • Nature-related risk assessments must consider the full spectrum of a company’s value chain, from direct operations to supply chains.
What are the practical takeaways?
  • There is an increasing amount of work being done around biodiversity and alignment with nature-positive strategies.
  • Climate-conscious lawyering is suggested as necessary, taking environment considerations into account in all legal practices.
  • Corporate strategies should be checked for potential nature-related risks, even when supporting climate beneficial goals like solar energy projects.
Show notesTaskforce on Nature Related Financial Disclosures (TNFD) (link)

Taskforce on Climate Related Financial Disclosures (TCFD) (link)