Directors’ Masterclass Series 2026: Climate Litigation: Risk and Governance

Speaker: Kiu Jia Yaw, Partner at Kiu & Co. and Co-Chair of the Bar Council's Environment, Climate Change and ESG (ECCESG) Committee

Moderator: Chong Kok Wai, Council Member, Climate Governance Malaysia

Climate Governance Malaysia's Directors' Masterclass Series 2026 commenced with its opening session, Climate Litigation: Risks and Governance, held physically at the Institute of Corporate Directors Malaysia (ICDM), KL Eco City. The masterclass brought together corporate directors, sustainability practitioners, and legal advisers to examine a development that has shifted climate risk from the margins of the boardroom agenda to its centre the emergensce of climate litigation in Malaysia and the governance responses now required of boards. Delivering the opening remarks, Chong Kok Wai emphasised that climate litigation is no longer a distant or foreign concern. Instead, he underscored that it has become a governance issue that boards and aspiring directors must understand and proactively address as climate-related legal risks continue to evolve.

In the main presentation, Kiu Jia Yaw, structured his discussion around two themes: risk and governance. On risk, he highlighted two judicial review actions currently before the High Court of Kuala Lumpur that demonstrate climate-related litigation has now materialised in Malaysia. The first, brought by an environmental think tank, challenges two government ministries over a "carbon neutral" claim on a Shell motor oil product, questioning whether it constitutes greenwashing that regulators failed to investigate. The second, filed by a group of Malaysian youths, challenges government forest conversion plans alleged to undermine Malaysia's commitment to maintain at least half its land under forest cover and its Nationally Determined Contributions (NDCs) under the Paris Agreement, drawing on the July 2025 advisory opinion of the International Court of Justice on States' climate obligations. Jia Yaw emphasised that both cases target public authorities rather than corporations, providing directors with an early indication of how corporate exposure may develop.

Jia Yaw then identified six converging factors driving climate-related litigation: an increasingly active citizenry; growing recognition of consumer, environmental, and human rights; stronger procedural rights, including participation and access to information; maturing institutions and improved access to justice; expanding corporate disclosures available for scrutiny; and clearer legal norms and standards of care. Jia Yaw highlighted the National Action Plan on Business and Human Rights (NAPBHR) 2025–2030 launched in August 2025, as a significant milestone that embeds human rights within Malaysia's legal and policy landscape.

Turning to governance, Jia Yaw argued that climate litigation should be understood as a subset of public interest litigation. Boards that assess climate risk only through the expectations of investors and lenders overlook a much broader range of stakeholders. Communities affected by environmental impacts may pursue claims based on nuisance or health rather than climate itself. He advocated a rights based approach that treats human rights as a non-negotiable foundation while evaluating risk through the organisation's relationships with all stakeholders, including those without contractual ties. Boards that actively manage these relationships, Jia Yaw noted, are more likely to identify grievances early.

Building on this, Jia Yaw outlined four governance priorities: ensuring board charters are genuinely aligned and empowering rather than merely amended; integrating the NAPBHR into existing sustainability frameworks alongside the Global Reporting Initiative (GRI) Standards and the United Nations Guiding Principles; recognising the growing human rights dimension in directors' decision making duties; and fostering organisational maturity to openly discuss limitations rather than focusing solely on achievements. Jia Yaw also cautioned against the reputational and legal risks of strategic litigation against public participation, particularly where carbon or land based projects rely on community representatives who may lack genuine local legitimacy.

During the fireside chat, Kok Wai asked about the practical safeguards available to directors. Jia Yaw identified effective grievance mechanisms as the immediate priority, with the NAPBHR providing the framework for systematic implementation. Reflecting on the Shell matter, Jia Yaw suggested the issue stemmed from a governance disconnect rather than a lack of evidence, as substantiated information failed to flow effectively between compliance and marketing before reaching the public. An audience reinforced that sustainability reports are public documents approved by the board, and directors remain personally accountable for their contents rather than delegating responsibility to management.

The session concluded with an engaging Q&A, during which participants raised questions on whether regulatory compliance and accurate reporting alone are sufficient protection against activist claims, the need for a dedicated Chief Sustainability Officer, and how organisations should balance finite resources against expanding climate-related risks. Jia Yaw encouraged directors to understand and engage constructively with activist movements rather than dismissing them. On organisational structure, Jia Yaw suggested that the effectiveness of a Chief Sustainability Officer (CSO) can often be judged by the office's proximity, both physically and functionally, to the chief executive. Responding to a question from an audience, on balancing competing priorities, Jia Yaw recommended trusted cross sector partnerships as the most effective way for boards to understand emerging risks without attempting to monitor every community or issue independently.

Across the session a consistent message emerged. Climate related litigation has arrived in Malaysia and is being driven by legal, institutional, and social developments moving in the same direction. The risks facing boards extend well beyond climate specific claims to the wider spectrum of public interest disputes arising from stakeholder relationships. The most effective protection lies not in compliance alone, but in aligned governance structures, the integration of human rights into sustainability practices, and meaningful stakeholder engagement that enables boards to anticipate and respond to emerging risks before they become litigation.

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