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Hansel LLP Opinion on the Legal Oblig...

Hansel LLP Opinion on the Legal Obligation of Canadian Boards to Address Climate Risk Discussed in Corporate Knights

Senior Partner Carol Hansell’s ground breaking legal opinion on the obligations of directors to consider climate change risk was featured in an article in Corporate Knights on June 26, 2020.

From the article:

Corporate directors have a legal obligation to address the risks and opportunities that climate change poses to the companies on whose board they serve, a corporate governance expert says in a new study.

“Directors should recognize that the courts, regulators and investors accept that climate change poses real risks,” veteran lawyer Carol Hansell wrote in a 25-page legal opinion released on June 25.

“They expect that management teams and boards are alert to those risks and opportunities, and are reflecting their assessment of that risk in their strategic thinking and risk management practices.”

Hansell is one of Canada’s top experts on corporate governance. In addition to her distinguished legal career, she has served on corporate boards, and as fellow with the Institute of Corporate Directors and adviser to the Corporate Laws Committee of the American Bar Association.

In her analysis, she states unequivocally that corporate directors have a duty to assess the degree to which climate change will impact a company over the long-term, not just its short-term profits or business plans. They must also ensure that, where risks and opportunities are material to the firm’s business, management must come up with strategies to address them.

Hansell prepared the legal opinion for the Canadian Climate Law Initiative, which is housed at University of British Columbia Allard School of Law and York University’s Osgoode Hall Law School. It is the first in-depth legal analysis of directors’ duties in a corporate governance context by a senior Canadian lawyer.


In her legal brief, Hansell made it clear that boards that fail to address climate change risk potential legal liability. She said directors cannot let their personal beliefs about climate science impede their duty to the corporation.

“Canadian courts have accepted climate change and the risks it presents as self-evident and uncontroversial, as has the investment community,” she wrote. It would be nearly impossible for a director to dismiss climate change risk out of hand.”

Read the full article here.