Scholar Carol Liao on Why Corporate Law Needs to Urgently Address Climate Change
Climate change is no longer a distant threat but a pressing reality reshaping industries and professions. For Dr. Carol Liao, a leading corporate law scholar at the University of British Columbia and chair of the Canada Climate Law Initiative, the legal profession is at a crossroads. In a recent interview with Canadian Lawyer, Liao emphasized that climate change is not just an environmental issue but a critical business risk that demands immediate attention from corporate law.
Liao argues that the impact of climate change extends far beyond environmental law. It now influences corporate governance, risk management, financial regulations, insurance, real estate, and even litigation. This broad reach means that all lawyers, regardless of their specialty, will soon need to understand climate law. “Climate change is a material business risk that touches nearly every area of law and business,” Liao explained.
Canada, in particular, faces unique challenges. The country is warming at twice the global average and has among the highest per capita greenhouse gas emissions globally. These factors create significant financial risks that the legal system must address. However, Liao points out that Canadian corporate law is already equipped to handle sustainability without requiring new legal entities, unlike in the U.S. This existing framework provides a foundation for businesses to prioritize sustainability within current structures.
One growing trend Liao highlighted is the surge in greenwashing litigation. As companies face increasing pressure to appear environmentally responsible, many are revising their environmental claims in response to legislation like Bill C-59. This shift underscores the importance of mandatory environmental, social, and governance (ESG) disclosure standards to ensure accountability and transparency.
For young lawyers, the challenges are unprecedented, but so are the opportunities. Liao urged the next generation of legal professionals to use their collective voice to push for change. “The legal profession is being transformed, and those who step up now will help define its future in addressing climate change,” she said. Staying engaged, informed, and undeterred by the complexity of these issues is crucial, Liao added, as young lawyers play a vital role in creating a sustainable legal profession.
In summary, Liao’s message is clear: climate change is rapidly altering the landscape of corporate law and the broader legal profession. The call to action is urgent—lawyers, especially emerging ones, must proactively address climate issues and help reshape legal practice to meet this global challenge.
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Liao stressed the importance of staying engaged and informed, particularly for the next generation of legal professionals. She encouraged young lawyers to remain committed to addressing climate issues, even when faced with complex and daunting challenges. “The urgency of this moment cannot be overstated,” Liao said. “Young lawyers have a critical role to play in ensuring the legal profession evolves to meet the demands of a sustainable future.”
The legal profession, Liao argued, is undergoing a profound transformation. She highlighted that those who take initiative now will be at the forefront of shaping its direction in the decades to come. As climate change continues to reshape industries and societies, the legal system must adapt to address these challenges effectively. Liao’s call to action underscores the vital role lawyers will play in navigating this new landscape and ensuring that corporate law aligns with the urgent need for sustainability.
Conclusion
Dr. Carol Liao’s insights underscore the critical role of corporate law in addressing climate change, emphasizing that it is no longer an environmental issue but a significant business risk. The legal profession must adapt to this new reality, with climate change influencing corporate governance, risk management, and financial regulations. Canada’s unique challenges, including higher greenhouse gas emissions, necessitate immediate legal attention. The rise in greenwashing litigation highlights the importance of mandatory ESG disclosures, ensuring transparency and accountability. Young lawyers are urged to take an active role in shaping a sustainable legal system, as the profession undergoes a profound transformation. The call to action is clear: the legal community must proactively address climate issues to align corporate law with the urgent need for sustainability.
Frequently Asked Questions
Why is climate change important for corporate law?
Climate change is a critical business risk that affects corporate governance, risk management, financial regulations, and more, making it essential for corporate law to address these challenges proactively.
What is greenwashing litigation?
Greenwashing litigation refers to legal actions against companies making false or misleading environmental claims, emphasizing the need for mandatory ESG disclosures to ensure transparency and accountability.
How can young lawyers contribute to addressing climate change?
Young lawyers can contribute by staying informed, engaged, and proactive in advocating for sustainability within the legal profession, helping to shape its future in addressing climate change.
How can corporate law evolve to better address climate change?
Corporate law can evolve by integrating sustainability principles, leveraging existing legal frameworks, and supporting mandatory ESG disclosures to ensure businesses operate responsibly and sustainably.
