Will CO2 cost you your shirt?

Is it really fair to make a single individual in a massive organisation personally liable for failing to meet complex requirements couched in new legislation?

Because that's what my colleague, Grant Anderson, has been warning CEOs and executive teams about climate change – if companies do not meet their emissions reporting obligations the CEO can be held personally liable. It's a fact that has escaped a lot of the debate around climate change and it could be the start of a concerning trend.

Some would argue that we have seen the decline of the concept of Ministerial Responsibility in recent years and therefore it's a little ironic for politicians to now say the climate change buck stops with the CEO.

But for those who counter that CEOs are well remunerated and should take ultimate responsibility, let's consider an extension of this concept of personal liability.

CEOs not only become personally liable for emissions reporting obligations but also occupational health & safety breaches or harassment, bullying or mental health issues in the workplace. These are all important issues but they are also compliance issues. They are not about looking over the horizon for opportunities but rather dealing with day-in, day-out issues.

They are risk averse, not risk taking.

In an economic downturn taking risk gets overly negative press just as it often gets overly positive press in a boom – the phase we may now entering.

The CEOs of leading companies are taking climate change issues seriously. What once was a 'CSR' issue in the marketing department is increasingly being moved into specialist teams under the guidance of General Counsel.

I'm struggling to recall an AGM I've attended where a CEO has stood up and said, 'thanks to additional regulation and compliance legislation we've been able to enjoy substantial growth this year'. So getting the balance between growth and compliance is the big challenge.

Making CEOs personally liable for non-compliance will certainly get their attention, but it's the things that it distracts them from that is the real concern – maximising shareholder returns, growing the company and, ultimately, creating a strong economy. That's something authorities must remember as carbon reduction moves from legal theory into practice.

Paul Quinn is a partner at law firm Allens Arthur Robinson where he heads the Corporate Department and is the Practice Director of the Melbourne office.