Climate Change and Insolvency: An Undeniable Intersection

Introduction

Climate change is no longer a distant economic and political concern—it is already reshaping Ontario’s insolvency landscape. From carbon-intensive businesses facing stranded assets, to crypto miners grappling with energy regulations that place their investments in jeopardy, environmental risks are now critical factors in financial decision making. Lawyers advising on insolvency, restructuring, and bankruptcy must understand how climate liabilities, ESG (Environmental, Social, and Governance) pressures, and emerging technologies like blockchains and cryptocurrency intersect with insolvency law. Recent climate litigation, including Canada (Attorney General) v. Mathur¹ and Orphan Well Association v. Redwater Energy², demonstrates that courts are increasingly willing to impose climate accountability on corporations, with direct implications for insolvency risk. These cases signal a growing trend: businesses that ignore climate liabilities may face financial distress, regulatory enforcement, and even court-ordered dissolution. For insolvency law practitioners in Ontario, this shift demands urgent attention.