Partners Nicola Swan and Alana Lampitt were engaged to provide the legal advisory opinion on director duties to manage nature-related risk by The Aotearoa Circle, which is a unique partnership of public and private sector leaders, formed to restore natural resources and ensure sustainable prosperity for future generations.
The opinion seeks to highlight current and anticipated regulatory and market trends to allow directors on the boards of New Zealand businesses that are particularly reliant on natural capital to stay “ahead of the curve” as new frameworks, regulations and expectations emerge globally and locally.
Globally, the threat to nature (particularly biodiversity loss) is an emerging crisis – one that has the potential to outstrip the impact of the climate crisis. As a result, regulation and markets are moving rapidly to adopt “nature positive” approaches, including through New Zealand’s Resource Management Act reforms and European Union supply chain requirements, new reporting frameworks such as the Taskforce on Nature-related Financial Disclosures and voluntary corporate initiatives. Nature-based risk management is therefore emerging internationally as the next area that companies – and their directors - will need to be across.
The legal opinion advises that New Zealand company directors are required to ensure that their businesses are identifying “nature-related risks" where these are foreseeable and material for their businesses, and equally take any such risks into account in their decision making. Whether they are foreseeable and material for a particular company will be impacted by anticipated domestic and international regulatory change that prioritises protection of nature, the degree of understanding of the risk, their dependence on the environment, and stakeholder expectations.
Chapman Tripp has provided two legal opinions to The Aotearoa Circle previously: