Implications of the International Court of Justice’s Advisory Opinion on Climate Change for directors’ duties in relation to climate-related risks
MACH Energy’s Mount Pleasant Coal Mine (credit: Elaine Johnson)
Joint Legal Opinion: Climate Integrity
Johnson Legal welcomes the new advice of Ruth Higgins SC, Zoe Bush and Jennifer Robinson, commissioned by Climate Integrity, on the implications of the ICJ Opinion on Climate Change for directors’ duties.
Delivered in July 2025 as a unanimous decision of a 15-member Court, the ICJ Opinion said that States have a duty to prevent significant harm to the climate system. This requires States to regulate the conduct of private operators within a State’s jurisdiction or control so as to “achieve deep, rapid, and sustained reductions of GHG emissions.”
The ICJ expressed the view that a breach of the obligation to protect the climate system constitutes an internationally wrongful act, giving rise to State responsibility, which could attract legal consequences.
This new advice addresses the implications of the ICJ Opinion for directors’ duties in relation to climate-related risks in Australia.
The advice finds that:
It is now well-established that climate change poses foreseeable risks of harm to most, if not all, Australian companies.
The ICJ Opinion is likely to inform legal and regulatory developments that amplify the climate-related risks to which some Australian corporations, particularly those in high-emitting sectors, are exposed.
As the magnitude of those risks rises, so too may the standard of care expected of directors including under s 180(1) of the Corporations Act 2001 (Cth).
To minimise risks, directors should be appraised of the corporation’s climate-related risks, take a diligent and intelligent interest in information about climate-related risks, consider and seek advice on climate related risks, and take all reasonable steps to ensure a corporation’s material climate-related risks are appropriately disclosed.
The advice observes that the ICJ Opinion has already been influential including in three Australian cases, including two in which Johnson Legal acts:
Friends of Australian Rock Art’s Federal Courtcase seeking judicial review of the Commonwealth Minister for the Environment and Water’s decision to conditionally approve the North West Shelf gas extension, listed for hearing in July 2026, in which the UN Special Rapporteur on the Human Right to a Clean, Healthy and Sustainable Environment has sought leave to intervene.
High Court of Australia hearing of DAMSHEG’ssuccessful casein which the NSW Court of Appeal declared the invalidity of a NSW Independent Planning Commission grant of a development consent for the construction and operation of MACH Energy’s Mount Pleasant Coal Mine in the Hunter Valley, listed for hearing in May 2026.
Johnson Legal is proud to represent clients in relation to government and corporate accountability for climate change and the environment.
This new advice offers valuable insight into the increasing obligations of corporate entities in a changing climate and the wide-ranging impacts of the ICJ Opinion.
We look forward to continuing to work with clients to shape this important area drawing on our expertise and Australian and international developments.
If you would like to discuss with us further, please reach out.
