Commonwealth Climate and Law Initiative Publishes Resilient LLP Legal Opinion on Directors’ Duties & Nature Risks in Canada

We are pleased to announce the release of Resilient LLP’s legal opinion, Nature-related risks and the duties of directors of Canadian corporations, commissioned and published by the Commonwealth Climate and Law Initiative (CCLI) and co-authored by Lisa DeMarco and DT Vollmer.

Read the Executive Summary with the full text of the legal opinion available on the CCLI website here. CCLI’s press release is also available here.

The legal opinion provides guidance on the legal obligations of directors of Canadian for-profit corporations in relation to nature-related risks and outlines how such risks fall within directors’ legal duties under Canadian law:

• Nature-related risks fall within core legal director duties. Under the Canada Business Corporations Act, directors must oversee foreseeable and material nature-related risks under established duties of care and loyalty. This includes physical (e.g. wildfires), transition (e.g. regulation), and systemic (e.g. ecosystem collapse) nature-related risks.
• Inaction could expose boards to liability. Directors who fail to identify or respond to material nature-related risks could face a wide range of legal action including claims for breach of duty, shareholder or creditor lawsuits, regulatory enforcement for misleading disclosure, greenwashing and consumer protection claims, negligence or nuisance suits, and liability for failing to respect Indigenous rights.
• Governance expectations are rising. Directors are not expected to be environmental experts, but they must be reasonably informed. Courts will expect boards to demonstrate a reasoned, informed, and well-documented approach to nature-related risks.
• Overseeing these risks is both a legal and strategic imperative. Effective governance means understanding the corporation’s nature-related dependencies and impacts, engaging relevant stakeholders and Indigenous rightsholders, and integrating nature into boardroom decision-making.

Key expert insights:

Lisa DeMarco, Senior Partner and CEO, Resilient LLP, and lead author of the legal opinion:

“This opinion makes the legal position clear. Directors don’t need to be expert scientists or activists, but they are required to consider nature-related risks like any other foreseeable risk to their business. Ignoring nature risks is no longer legally defensible as proper corporate governance.”

Kelly LaRocca, Chief of the Mississaugas of Scugog Island First Nation:

“As Chief of the Mississaugas of Scugog Island First Nation, I strongly support the legal opinion from Resilient LLP, which underscores the critical importance of addressing nature-related risks in corporate governance. Our Indigenous rights, deeply rooted in our relationships to the land and its ecosystems, are constitutionally protected and must be respected. This opinion rightly emphasizes that directors of Canadian corporations have a duty to consider the impacts of their operations on nature, including our traditional territories. By integrating Indigenous ecological knowledge and prioritizing meaningful consultation, corporations can mitigate risks, uphold our rights, and contribute to sustainable practices that honour the land for future generations.”

Natalie Shippen, Executive Director, CCLI:

“Nature loss affects every business and must therefore move from the margins to the centre of boardroom thinking. This legal opinion gives directors a solid legal basis to integrate nature in their decision-making – regardless of political headwinds or short-term market pressure