NEW ZEALAND Law and Practice Contributed by: Josh Williams, Anderson Lloyd
ed recently, the current government has pledged to repeal the changes made in 2023. This repeal was made on the basis that directors were already per - mitted to consider environmental, social and govern - ance considerations when making decisions (provided that doing so was not contrary to the constitution of the company) and that, therefore, the recent changes were redundant. There is currently no New Zealand case law in which a director has been found liable (under the Companies Act, other legislation, or at common law) for climate change impacts. However, the upcoming hearing of Smith v Fonterra Co - Operative Group Limited will go some way to determining the liability of New Zealand companies in this respect. In a recent decision, the Supreme Court of New Zealand declined to strike out claims in nuisance, negligence and a proposed novel tort of “climate system damage” against seven cor - porate defendants who were each involved in either an industry that emits greenhouse gases or one that manufactures and supplies products that emit green - house gases when used. Whether the claim is ulti - mately successful remains to be seen, but this case represents the potential evolution of the common law on climate change in New Zealand. 4.3 Shareholder or Parent Company Liability A limited liability company is the most common type of company in New Zealand. It is a separate legal entity and is called a limited liability company because the liability of the shareholders is limited to the amounts provided to the company in return for shares. Shareholders of limited liability companies are not liable for the company’s debts or liabilities as the company itself is responsible for these. Accordingly, shareholders are not liable for climate change damage or breaches of climate change law. 4.4 Social Context In New Zealand, a combination of economic, cultural and regulatory narratives is shaping how corporates and government respond to climate change. A central consideration is the relationship between the country’s “clean, green” international brand and its overall emissions profile, including emissions from the
agriculture sector. This creates ongoing expectations for both government and corporates to demonstrate credible climate leadership, particularly in export mar - kets where sustainability standards are evolving. At the same time, agriculture’s significant economic role means there is ongoing attention to maintaining com - petitiveness and managing the potential impacts of regulatory change across the sector. There is also growing focus on the distributional impacts of climate policy. Public debate increasingly centres upon cost-of-living pressures and who bears the cost of transition, which has moderated the pace and ambition of some policy settings and influenced corporate pricing and investment decisions. Māori perspectives, particularly concepts of kaitiaki- tanga (stewardship) and intergenerational responsi - bility, are an important influence. These perspectives are shaping expectations that climate responses align with Te Tiriti principles and adopt a longer-term, holis - tic approach to environmental governance. In addition, the increasing visibility of climate-related events, such as flooding and coastal erosion, has reframed climate change as a tangible risk issue. This has heightened expectations around resilience, adaptation, and climate risk disclosure, reinforced by New Zealand’s mandatory climate-related financial disclosure regime. Finally, global market and regulatory pressures, includ - ing investor expectations and carbon-related trade measures, are pushing both government and corpo - rates toward more robust and transparent strategies.
5. Transactions 5.1 Due Diligence
For M&A and financing transactions, the level and scope of climate change due diligence will depend on the business or underlying assets being acquired or financed and/or the regulatory framework that applies to the relevant business. Unless a business or the underlying assets are particularly at risk to the effects of climate change, or the entity is regulated by New Zealand’s climate change legislation, there is no
75 CHAMBERS.COM
Powered by FlippingBook