An independent legal opinion has found that directors should take into account their company’s exposure to nature-related risk as part of their duties under the UK’s Companies Act 2006. Failure to identify and assess latent financial risks arising from a company’s nature-related impacts and dependencies could subsequently expose directors to legal consequences, the report noted, as well as increased shareholder scrutiny. It suggested directors may take steps to manage and mitigate such risks by designing and implementing a nature-focused risk management framework, as well as providing disclosures in line with regulatory requirements. The report was commissioned by investment advisory firm Pollination Law and the Commonwealth Climate and Law Initiative. “The natural systems upon which our societies depend are collapsing,” said Thea Philip, Associate Director at Pollination Law. “The current state of nature means that countries like the UK no longer have intact natural systems to support the growing demand for clean water, climate regulation, air purification and food production.”
