Freshfields x Chapter Zero - Legal considerations in transition planning for UK non-executive directors: Legacy business and risk

In a new series of events, Freshfields has partnered with Chapter Zero and the Centre for Climate Engagement to explore key climate-related legal questions with non-executive directors from across the UK. The first event provided an overview of the interaction between climate change, legal issues and business, exploring how these issues affect board decisions relating to legacy business and risk. 

From trends in climate-related litigation and regulation, to guidance on how organisations can best navigate legal elements as they transition, key take aways from the session included:

Key takeaways for NEDs

1. Legal action against companies is increasingly used as a tool for change, placing pressure on organisations to align with the net zero transition. While litigation poses a range of risks to entities and decision makers that have not adopted, or do not adopt, appropriate measures, it also presents opportunities for ambitious businesses, or even for those willing to course-correct or simply understand the legal boundaries of their responsibilities.

2. Monitoring fast-changing regulatory environments and understanding their application and interaction with an organisation’s strategy and operations is essential for ensuring compliance with climate requirements – which can be especially complicated in the face of concurrent pro- and anti-ESG pressures in different markets.

3. Effective governance is key for ensuring that any transition plan, but especially one with ambitious climate action, is aligned with continued financial success, as well as maintaining stakeholder trust in an increasingly environmentally conscious business landscape.

4. NEDs are well-placed to push their companies toward optimising the level of ambition in climate targets across their organisations and assuring implementation. In addition to reaping financial and reputational benefits from the net zero transition, this could help mitigate future exposure to regulation and litigation.

Read the full session briefing here.

Chapter Zero is the UK Chapter of the Climate Governance Initiative – developed in collaboration with the World Economic Forum. Chapter Zero empowers non-executive directors and chairs to lead on climate from the boardroom and drive the business response to a net zero transition by 2050. Find out more and become a member.