12/1. (Part 1). Enforcing the Code. A change to the corporate law duty of directors must be enacted that simply tells the directors they are to no longer operate in a way which causes severe harm to the environment. After a brief grace period, they will be held responsible for making the emissions stop.
The way to do this is to amend the law which now says:
Directors must act in the best interests of the company,
By adding the following eleven words:
But not at the expense of severe damage to the environment.
Photo by Richard Miller
Which I refer to as the Code (short for Code for Corporate Citizenship).
Adding the Code will alter the purpose of all corporations. The people in
charge, directors, will now have to concern themselves with more than just the bottom line (i.e., profit).
Government officials should stop trying to negotiate restrictions on emissions with oil company lobbyists and talk directly to the people. The Code is simple and just common sense. Anyone can understand it. Corporations, which only exist thanks to the corporate law enacted by government, shouldn’t have the power to cause severe damage to the environment that government may find itself unable to stop.
Keeping in mind Upton Sinclair’s advice that, “It is difficult to get a man to understand something when his salary depends on him not understanding it,” it’s hard to see how anyone could oppose stopping corporate behaviour which causes severe harm. Existing law, which gives companies that latitude, is more than a little bizarre when you think about it.
Over the last twenty years corporate customers and investors have shown an increasing preference for companies that do more to protect the public interest. How could they oppose legislation which prohibits only severe damage?
That being said, the Code raises three questions: Why does it apply to all types of severe harm to the environment (not just GHG emissions)? What is meant by the term severe? How will it be enforced (i.e., People will want to know that directors won’t just ignore it)?
I’ll answer these questions in order.
The first is easy. At its heart, the spirit of the Code is to eliminate all corporate behaviour which inflicts severe damage, not just halting global warming. The next time an industry is found causing severe harm to the environment, why shouldn’t corporate directors already have a duty to stop it?
Put the Code in place for all such corporate abuse of the public interest now and all company directors will become more conscientious. Before they approve each new capital investment or enter into a new business, they will ask about more than just the expected rate of return. They’ll want to be sure there are no potential severe adverse impacts on the environment. Making all directors more cautious with the public interest is a major goal of the Code.
I’ve run out of space. Answers to the second and third questions will come in Part 2 (and if necessary,3).
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