13 March 2022
The companies and industries contributing most to global warming and climate change (e.g., fossil fuel producers, electric power generators and motor vehicle manufacturers) all have huge amounts invested technology, products, and/or manufacturing facilities. Existing law requires the management of these companies to protect these investments.
The law must be amended to impose new obligations on directors when a company is found to be causing severe damage. At this point, directors’ duties should shift to protecting the public interest much as that duty now shifts to protecting creditors when a company becomes insolvent.
This is the purpose of the Code for Corporate Citizenship (Code). It will require companies to stop. By doing so, the Code will increase the risk of pursuing shareholders’ interests without regard for the public interest and will make directors more cautious and vigilant regarding their company’s potential to cause severe harm.
The Code establishes an important principle, that protecting the environment from severe harm is more important than the financial well-being of a few companies. Until this point is made, the threat of global warming will increase, and climate change will become an even greater danger.