Speaker Summary: Professor Umakanth Varottil

28 Jun 2023


Umakanth Varottil, Associate Professor at the National University of Singapore Faculty of Law, outlined how climate change liability is, and will, be impacting board directors in Asia. The presentation made clear that Asian countries take a diverse range of approaches to climate governance which directors should bear in mind when considering their own liability. Across the region, there has been a growth in substantive laws relating to climate change that has not yet been matched by strong enforcement mechanisms.

Key Takeaways

  • Asia is not a monolith. Climate-related laws and regulations vary greatly between different Asian countries. Directors should therefore aim to understand how they might be exposed to climate liability in each jurisdiction in which they operate. The Commonwealth Climate and Law Initiative (CCLI), in partnership with the Climate Governance Initiative, has commissioned relevant research from experts in multiple Asian jurisdictions providing this context.
  • Different jurisdictions assign different weight and meaning to the environment as a factor in board decision-making. In India, directors must specifically consider their business’s impact on the environment and treat the environment as a discrete stakeholder, whereas in the UK, directors only need to consider environmental action in light of its benefit to the companies’ shareholders. Other jurisdictions do not reference the environment at all when setting out directors’ duties.
  • There are expanding substantive requirements to address climate change in businesses, but these do not always have strong enforcement mechanisms. While the nature of requirements varies between countries, there is a general trend towards stronger, substantive climate laws, especially in areas such as disclosure and reporting. The nature of enforcement mechanisms, especially those targeting private individuals, is currently unclear, but directors should be prepared for stricter enforcement in the future.
  • Successful litigation against boards may not be likely in some Asian jurisdictions. Shareholders in the UK and other common law countries may bring ‘derivative actions’ against directors for breach of their duties, but such claims are less common in an Asian context. Instead, enforcement from government bodies, such as securities regulators, may be more viable.


Boards in Asia face differing legal requirements and potential liability relating to climate change. Whilst some trends hold true across most of the continent, directors should be careful not to treat Asia as a monolith. This is particularly important in the extent to which directors must consider the environment when meeting their legal duties, and also the implementation of new disclosure regulations. Enforcement mechanisms also vary across countries in the region, but these are generally weaker compared to substantive legal obligations of directors.