Execs in climate denial claims could be personally liable

Your corporate clients may want to revisit their existing coverage, as some groups are saying that executives could be facing personal liability in climate denial-related claims.

Risk Management News

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Your corporate clients may want to revisit their existing coverage, as some groups are saying that executives could be facing personal liability in climate denial-related claims.

Non-governmental organizations like Greenpeace International, WWF and the Center for International Environmental Law have written to the executives of large insurance corporations as well as fossil fuel and other carbon major companies, seeking clarity on who will pay the bill if such a lawsuit is brought against their directors or officers.

Generally, liability policies provide coverage for claims that put individual directors’ and officers’ assets at risk. These liability policies protect individuals who are conducting their business in good faith but are at risk of being held liable for undesirable business occurrences, which may be beyond their control.  However, a serious question is whether these policies would cover a director facing a climate-related claim.

“It’s personal to the victims of super typhoon Haiyan who lost family members and homes in the Philippines,” says Leanne Minshull, Greenpeace International’s Climate and Energy Campaigner. ”It’s personal to farmers in California and Australia whose land is now too dry for farming. It should also be personal for any oil, gas and coal company directors who mislead the public by funding climate denialism and stopping action on climate change. The responsibility – not just the devastating effects – should be personal.”

Carroll Muffett, the president of the Center for International Environmental Law, says that from “asbestos to tobacco to oil spills, history shows that those who mislead the public, the market or the government about the risks of their products, or the availability of safer alternatives, can face substantial legal liability, both as companies and as individuals. (continued.)
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“As the impacts of climate denialism and regulatory obstruction become clear, we want to understand how corporations, insurers, and officers and directors are allocating those risks among themselves,” says Muffett. “Just as importantly, we ask what steps they're taking to prevent the misconduct that creates those risks in the first place.”

Samantha Smith, leader of WWF's Global Climate and Energy Initiative, says fossil fuel companies owe it to their shareholders and the public to tell us the truth about the devastating impacts of their activities on our shared climate.

“Sooner or later, those who hide the facts and oppose policies to fight climate change will be held to account by the courts,” says Smith. “By signing this letter, we hope to bring attention to the importance of truthful, transparent and responsible corporate reporting and policy engagement on climate change.”

 

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