Thought for the Day: The Better Option

Legally modifying the corporate goal to better protect the environment will be much more effective than first trying to stop corporate lobbying. 

The corporate law sets the goal of every corporation. Directors must act their company’s best interests. Modifying this rule only slightly can eliminate the threat of global warming and ensure that no company ever again operates in a manner which severely harms the environment. 

Globally, only a very few companies cause severe damage to the environment. Unfortunately, existing law gives the directors of these companies an excuse that legally justifies them continuing to emit great quantities of greenhouse gases (GHGs). Stopping the emissions would cost their companies lots of money. That wouldn’t be in the company’s best interests. So, they don’t. 

Changing the duty of directors to add that acting in the company’s best interests must not include severely damaging the environment, will nullify this excuse. The emitters of large quantities of GHGs will need to either: (i) alter their current means of operating or (ii) get out of business altogether and leave room for companies that will.

Tomorrow I’ll discuss why changing the duty of directors should be easier than you might think.