EXAMINING DIRECTORS’ LEGAL DUTIES IN RELATION TO CLIMATE RISK: A NIGERIAN CORPORATE LAW PERSPECTIVE

Abstract

The increasing impacts of climate change are creating substantial financial and systemic risks for businesses globally, necessitating a close look at corporate governance structures. In Nigeria, where the economy is heavily dependent on fossilfuels and vulnerable to climate change, the responsibility of corporate directors in managing these risks is under increased scrutiny. This paper analyzes the legal duties of company directors under Nigerian corporate law within the context of climate risk in Nigeria. It examines the extent to which Nigerian corporate law, primarily the Companies and Allied Matters Act (CAMA) 2020 mandates or permits directors to consider climate risks in their decision-making processes. The paper argues that while CAMA 2020 introduces provisions that gesture towards responsible and sustainable business conduct, it remains largely silent on the specific obligations of directors in relation to climate risks. This regulatory gap may expose companies to significant financial, operational, and reputational risks, particularly as investors, regulators, and stakeholders increasingly demand climate-conscious governance. The paper recommends that the current legal frameworks in Nigeria must be reformed to explicitly incorporate climate risk into directors’ legal duties. Doing so will not only align corporate governance with Nigeria’s climate commitments but also enhance corporate resilience, transparency, and long-term value creation in the face of escalating climate uncertainty.