Companies could face class action on climate

COMPANIES could face class actions from shareholders unless the companies adequately report the risks that climate change poses to their businesses.

While climate change-related litigation has been confined to planning in Australia, class actions against regulatory authorities have been taken up in the US.

Renee Garner, climate change lawyer with Freehills, said increasingly savvy shareholders were wanting more information about the carbon profile of companies ahead of the carbon pollution reduction scheme.

"This information could, and is likely to affect, shareholder value and how they see the company, and it could change people's investment decisions," Ms Garner said.

"The risk of not providing that information leaves open the potential for class actions, which we are likely to see more and more of.

"Whether or not it is shareholder action against companies for failure to disclose, or other class actions, it will become more real."

Ms Garner, who co-authored the recently published book Global Climate Change: Australian Law and Policy, said about 700 companies would eventually be required to report their emissions levels under the National Greenhouse and Energy Reporting Act, brought in from July 1 this year.

"It is all well and good for a company to say this is how much they emit, but actually the material risks that arise out of the regulation, shareholders want to know that as well. If companies can sort out what those risks are now … then they will be in front."

http://www.freehills.com.au