Resilient LLP (formerly DeMarco Allan LLP)
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DT Vollmer

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

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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…

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International Court of Justice Releases Landmark Climate Change Opinion

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The International Court of Justice (ICJ) today released its unanimous advisory opinion on obligations of States in respect of climate change (the Advisory Opinion). The Advisory Opinion, delivered by Judge Yuji Iwasawa and non-binding, determined that States may face legal consequences under international law for failing to meet their obligations to address climate change and protect the environment. This bulletin briefly summarizes background information, key findings of the Advisory Opinion, and highlights from separate opinions of ICJ judges delivered alongside the Advisory Opinion. Background. On 29 March 2023, the General Assembly of the United Nations adopted a resolution requesting the ICJ to give an advisory opinion on the following questions: (a) What are the obligations of States under international law to ensure the protection of the climate system and other parts of the environment from anthropogenic emissions of greenhouse gases (GHG) for States and for present and future generations? (b) What are the legal consequences under these obligations for States where they, by their acts and omissions, have caused significant harm to the climate system and other parts of the environment, with respect to: (i) States, including, in particular, small island developing States, which due to their geographical circumstances and level of development, are injured or specially affected by or are particularly vulnerable to the adverse effects of climate change? (ii) Peoples and individuals of the present and future generations affected by the adverse effects of climate change? Key findings. Key findings of the Advisory Opinion in response to question (a) include: International climate change treaties, including the United Nations Framework Convention of Climate Change (UNFCCC), Kyoto Protocol (KP) and the Paris Agreement (PA), set forth binding obligations for States parties to ensure the protection of the climate system and other parts of the environment from anthropogenic GHG emissions. Customary international law sets forth obligations for States to ensure the…

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Competition Bureau Releases Final Guidelines on “Greenwashing” Provisions

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Canada’s Competition Bureau today released its final guidelines (PDF) on environmental claims (the Guidelines). The Guidelines follow new greenwashing provisions added to the Competition Act (the Act) through a series of Bill C-59 amendments that became law on June 20, 2024 and two rounds of public consultations conducted over the past year, which resulted in more than 400 submissions. The Competition Bureau also published a backgrounder on the Guidelines.  The Guidelines provide a summary of the civil provisions of the Act that are relevant to environmental claims, including those provisions that deal with: False or misleading representations; Product performance claims; Claims about the environmental benefits of a product; and Claims about the environmental benefits of a business or business activity. The Guidelines then set out a series of six principles for compliance. The principles first appeared in Volume 7 of the Deceptive Marketing Practices Digest and are re-introduced with modifications to reflect the new provisions of the Act: Environmental claims should be truthful, and not false or misleading. Environmental benefits of a product and performance claims should be adequately and properly tested. Comparative environmental claims should be specific about what is being compared. Environmental claims should avoid exaggeration. Environmental claims should be clear and specific – not vague. Environmental claims about the future should be supported by substantiation and a clear plan. The Guidelines are expected to inform how the Competition Bureau exercises its enforcement discretion with respect to environmental claims. Private parties are also able to seek permission to file an application against businesses under the deceptive marketing practices provisions of the Act beginning on June 20, 2025. The Competition Bureau has indicated that it expects to publish updated general guidance with respect to private access to the Competition Tribunal.    For further information or to discuss the contents of this bulletin, please contact Lisa…

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European Commission Proposes Major Simplification of Sustainability Reporting and Disclosure Rules and Expansion of EU Investments

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The European Commission (EC) yesterday announced its first “Omnibus” package of proposals aimed at simplifying EU rules, boosting competitiveness, and unlocking additional investment capacity. The package consists of two main proposals: (i) “Omnibus I”, which focuses on reducing reporting and compliance burdens and costs of the Corporate Sustainability Reporting Directive (CSRD) and the EU taxonomy for sustainable activities (EU Taxonomy), postponing the entry into application of the Corporate Sustainability Due Diligence Directive (CSDDD), and simplifying the carbon border adjustment mechanism (CBAM); and (ii) “Omnibus II”, which would amend the regulations for the InvestEU Program to increase its size, efficiency, and accessibility. If adopted, these measures are expected to generate annual administrative cost savings of approximately €6.3 billion and mobilize an additional €50 billion in public and private investment through InvestEU. This bulletin summarizes key amendments included in Omnibus I and Omnibus II: CSRD and EU Taxonomy. The proposed changes in sustainability reporting under the CSRD and EU Taxonomy include: Narrower CSRD scope. Removing around 80% of companies from CSRD requirements, focusing obligations on the largest companies with the greatest environmental and social impact. The reporting requirements would only apply to large undertakings with more than 1,000 employees on average (i.e., undertakings that have more than 1,000 employees and either a turnover above €50 million or a balance sheet above €25 million) Protection for smaller companies. Ensuring large companies’ reporting requirements do not create excessive burdens for smaller businesses in their value chains. Delayed compliance. Postponing CSRD reporting requirements by two years (until 2028) for companies originally scheduled to report in 2026 or 2027. Limit on EU Taxonomy reporting. Reducing the reporting burden and limiting mandatory EU Taxonomy reporting to the largest companies (aligning with the CSDDD), while allowing voluntary reporting for others. Proportionate standard for voluntary reporting. Issuing a recommendation on voluntary sustainability reporting as soon as possible, based on European Financial Reporting Advisory Group’s (EFRAG) sustainability reporting standard for…

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ECCC Publishes Preliminary Draft DACCS Offset Protocol

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Environment and Climate Change Canada (ECCC) today published the preliminary draft Direct Air Carbon Dioxide Capture and Geological Storage federal offset protocol (the DACCS Protocol). The DACCS Protocol is intended to create an incentive for proponents to undertake projects that capture carbon dioxide (CO2) directly from the atmosphere and store it in subsurface geological formations. Eligible projects would be able to generate federal offset credits under the Canadian Greenhouse Gas Offset Credit System Regulations (see our earlier bulletin here).   Overview. Eligible projects under the DACCS Protocol must generate CO2 removals (CDRs) from the storage of CO2 captured directly from the atmosphere in onshore, subsurface geological formations. Project sites must be located in Canada, in a single province or territory, and the capture facility within the project site must have been operating on or after January 1, 2022. Projects cannot take place on land that is not covered by a CO2 geological storage regulatory framework and CDRs cannot be generated from (i) the storage of point-source captured CO2 (e.g. an industrial facility), (ii) the storage of CO2 in any materials or products (e.g. concrete and mining waste), or (iii) the use of CO2 for the purposes of enhanced oil recovery (EOR).    Eligible project activities. Eligible project activities under the DACCS Protocol include: Operation of a capture facility within the project site. There is no restriction on the specific direct air CO2 capture processes used, including liquid solvents, solid sorbents, or any other existing or emerging methods. Further, during the crediting period, the capture facility within the project site may provide captured CO2 for purposes/end uses other than CO2 geological storage.  Operation of transport infrastructure within the project site (e.g. pipeline, rail, truck). The DACCS Protocol provides that the transport infrastructure within the project site used to transport the captured CO2 may have been operating prior to January 1, 2017,…

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