Board directors duties on nature and climate related risks

Manila, 14 April 2026 – ClientEarth, in partnership with the Commonwealth Climate and Law Initiative (CCLI) and the Institute of Corporate Directors (ICD), convened a high-level dialogue session with board directors, senior regulators, government representatives alongside legal, governance and sustainability professionals at Fairmont Makati.

The convening launched the CCLI-commissioned legal opinion “Nature-related risks & opportunities, and the duties of company directors under Philippine law” which was issued on 31 March 2026.

The legal opinion provides an analysis on board directors’ duties surrounding nature- and climate-related risks and opportunities. Per the opinion, there is an identified need for directors to integrate these nature-related risks into board-level risk assessment and strategic planning. These will not only ensure compliance with the Philippines’ evolving regulatory expectation – but also strengthen the country’s alignment with global best practices, while helping board directors safeguard long-term business value and interests. Fifty sixty percent (56%) of Philippines GDP comes from economic sectors that directly depend on the flow of goods and services from nature, and it is particularly relevant therefore for businesses to identify nature dependencies, risks and opportunities to comply with their fiduciary duties as directors.

The session commenced with opening remarks by the Chairperson of the ICD, Atty. Benedicta Du-Baladad, who said that the roles of directors in the Philippines have evolved. Increasingly, directors must examine their corporate action and their impact on society, including environmental impact. In an increasingly connected world, risks do not exist in silos and these include nature-related risks, and that these are financial realities that Boards should take seriously. Good governance is about foresight and integrating nature into corporate strategy, thereby enabling companies to be more resilient to survive a rapidly changing world.

Jasmin Fraser, Lawyer from the CCLI then presented an overview of the work CCLI is doing in other parts of the world, on directors’ duties relative to climate- and nature-related risks.  She stressed that directors have a duty to identify and manage material climate and nature risks. This Legal Opinion is thus a timely update in the face of changing global landscape. The Philippines derives numerous economic benefits from nature and therefore, has great incentives to protect it when under threat due to economic activities.

The Securities and Exchange Commission’s (SEC) Commissioner Rogelio V. Quevedo then delivered a keynote address. He discussed the materiality, foreseeability and governance of nature risks and emphasised the fiduciary duties and corresponding liabilities of directors under the current legal framework. He also reminded the audience that the Philippines is a biodiversity hotspot whose ecosystems support livelihoods and that damage to nature and biodiversity loss could cause significant economic losses to companies. He also highlighted that corporate governance goes beyond compliance and that nature risks should be part of enterprise risk management. The law already expects directors to exercise judgement and diligence in addressing risks that are material to the corporation. The SEC is not only focused on governance and enforcement but also on creating a conducive environment for better board oversight, better disclosure and decision-making. Boards do not need to wait for crisis or shocks before asking themselves the right questions. The SEC sees sustainability not as a peripheral issue but as part of broader market and corporate sector development and responsibilities. Responsibility for oversight cannot be delegated away.   

Co-author of the Legal Opinion, Atty. Cesar L. Villanueva, shared that the newly launched opinion is timely because the Philippines is ranked first globally as the country most at-risk to nature and climate threats. It is therefore imperative that constitutional rights to health and to a balanced and healthful ecology be taken into account by directors in their decision making. He also emphasized that one of the key findings of the legal opinion is that nature-related risks constitute material and foreseeable risks to Philippine companies and that directors should therefore identify, assess and manage them in the exercise of their fiduciary duties. He also spoke about directors’ duties in relation to Indigenous Peoples’ rights and the need to properly obtain Free, Prior and Informed Consent (FPIC) from affected indigenous cultural communities before undertaking any activity or project on ancestral lands. Failure to comply with these duties may expose directors to personal liability.

Co-author Atty. Joyce Anne C. Wong then discussed legal updates on disclosure frameworks, highlighting that under SEC’s Memorandum Circular No. 16, series of 2025, all publicly listed companies and large non-listed entities are required to have their Sustainability Reports reviewed and approved by the board of directors prior to issuance. She then remarked that directors must play a role to ensure companies disclose material nature-related risks in their sustainable reporting.

The programme then shifted to a panel discussion moderated by Racle Rodriguez, ClientEarth’s Lawyer for Resources, Energy, Mobility, Japan and Southeast Asia. Joining Racle on the panel were Atty. Roel Refran, Executive Vice President and COO of the Philippine Stock Exchange (PSE), Ms. Sherisa P. Nuesa, Chairperson of the Board of Metro Retail Stores Group (MRSG) and Lead Independent Director of Manila Water, Mr. Dennis Montecillo, Chairman of the Sustainability Committee of the  ICD, Atty. Angelo Patrick F. Advincula, co-author of the legal opinion and Senior Partner at Gruba Caganda Advincula Melo & de la Fuente, Atty. Rachel Gumtang-Remalante, Director of the SEC’s Corporate Governance & Finance Department and Atty. Raymond Marvic C. Baguilat, Head Legal Officer from Institute of Human Rights from the University of the Philippines Law Centre.

The panel observed that the level of awareness of directors regarding their responsibilities and duties is growing. Atty. Refran discussed the importance of having a strong understanding of materiality when undertaking corporate disclosures, while Ms. Nuesa emphasized the importance of boards establishing appropriate frameworks and systems to ensure they are adequately informed about nature risks and are able to manage them effectively. Atty. Remalante observed that significant gaps remain in boards’ understanding of these risks, with varying levels of maturity across organizations and highlighted the need for further capacity building to close these gaps. Mr. Montecillo noted that while compliance is necessary, boards should look beyond it and consider these risks in the context of long-term value creation and as part of corporate strategy. Atty. Baguilat emphasized that, particularly in relation to Indigenous Peoples (IP), properly obtaining free, prior and informed consent is critical, stressing that directors should move beyond mere recognition of IP rights and ensure that these rights are genuinely respected in practice. Lastly, Atty. Advincula discussed when breaches of these duties may give rise to personal liability for directors, noting that the standard under Section 30 of the Revised Corporation Code continues to apply – namely, when directors wilfully vote for or assent to patently unlawful acts, or are guilty of gross negligence or bad faith in directing corporate affairs.

Directors are generally engaged and supportive, there remains a gap in awareness that may limit their ability to effect material change. The legal opinion is intended to help bridge this gap and guide them in navigating the challenges ahead.