Companies and Climate Change: Theory and Law in the United Kingdom

Description

Companies lie at the heart of the climate crisis and are both culpable for, and vulnerable to, its impacts. Rising social and investor concern about the escalating risks of climate change are changing public and investor expectations of businesses and, as a result, corporate approaches to climate change. Dominant corporate norms that put shareholders (and their wealth maximization) at the heart of company law are viewed by many as outdated and in need of reform. Companies and Climate Change analyzes these developments by assessing the regulation and pressures that impact energy companies in the UK, with lessons that apply worldwide. In this work, Lisa Benjamin shows how the Paris Agreement, climate and energy law in the EU and the UK, and transnational human rights and climate litigation, are regulatory and normative developments that illustrate how company law can and should act as a bridge to progressive corporate climate action. Cover Half-title Series information Title page Copyright information Dedication Contents Acknowledgements 1 Introduction 1.1 The Climate Crisis 1.2 Climate Action 1.3 The Causal Relationship between Companies and Climate Change 1.4 Company Law and Climate Change 1.5 Varying Corporate Forms 1.6 Systemic Barriers and Opportunities: Short-Termism, CSR and Societal Expectations 1.7 Climate Risks and Corporate Transitions: The United Kingdom as a Model 1.8 Structure of the Book 2 Theorising the Company in the Context of Climate Change 2.1 Corporate Theories and Norms in the Context of Climate Change 2.1.1 The Beginnings of Agency Theory and Shareholder Primacy 2.1.2 Agency Costs and Shareholder Primacy 2.1.3 Law and Economics, and Shareholder Wealth Maximisation 2.1.4 Shareholder Wealth Maximisation and Contractarians 2.1.5 Negative Externalities and Law and Economics 2.2 Impact of Corporate Theories and Norms on the Environment and the Climate 2.2.1 An Exclusive Focus on Shareholders by Company Law 2.2.2 Focus on Short-Term Profitability 2.2.3 Encouragement of Negative Externalities and Greenhouse Gases 2.3 Alternative Climate-Friendly Corporate Theories 2.3.1 The 'Stakeholder Approach' 2.3.2 Team Production and Entity Theories 2.3.3 The United Kingdom Enlightened Shareholder Value Approach 2.3.4 U.S. Approaches to Corporate Law 2.4 Conclusion 3 English Company Law and Climate Change 3.1 Corporate Governance Reviews in the United Kingdom and the Takeover Code 3.1.1 The Cadbury Report 3.1.2 Subsequent Corporate Governance Reports 3.1.3 The Takeover Code 3.2 The Common Law Position Prior to 2006 3.3 Company Law Review Steering Group Reports 3.4 The Companies Act 2006 and Climate Concerns 3.5 Post-2006 Case law 3.6 Conclusion 4 International and Transnational Climate Change Law and Policies 4.1 International Treaties on Climate Change 4.1.1 The Role of the State in Environmental Law-Making 4.1.2 The First Phase of the International Environmental Movement and Corporate Environmentalism: 1972-1992 4.1.3 The Second Phase of the International Environmental Movement and Corporate Environmentalism: 1992-2015 4.1.4 The Paris Agreement 4.2 Corporate Social Responsibility and Private Environmental Governance 4.2.1 The Early Days of Corporate Social Responsibility 4.2.2 Corporate Social Responsibility and the Social License to Operate 4.2.3 CSR and Corporate Reporting Requirements 4.2.4 Private Environmental Governance 4.3 International Codes of Conduct and Private Transnational Initiatives 4.3.1 The United Nations Global Compact 4.3.2 Private, Voluntary Initiatives 4.3.3 Emerging International Initiatives 4.4 Conclusion 5 Domestic Climate and Energy Regulation 5.1 Regulating Companies 5.2 Climate and Energy Regulation in the European Union 5.3 Climate and Energy Regulation in the United Kingdom 5.3.1 Parliamentary Supremacy in Climate and Energy Regulation 5.3.2 A 'Green Brexit' 5.4 Energy Market Reform in the United Kingdom 5.4.1 The Climate Change Act 2008 5.4.2 Intersection between the Climate Change Act and the Companies Act 5.4.3 The Energy Act 2013 5.4.4 Energy Companies' Approaches to Climate Change 5.5 Market Mechanisms 5.5.1 State-Based Market Mechanisms: The Kyoto Protocol 5.5.2 The EU Emissions Trading System 5.5.3 Brexit-ing the EU Emissions Trading System 5.5.4 The Paris Agreement: Article 6 Trading Mechanism 5.6 Companies' Approaches to Trading Mechanisms 5.7 Conclusion 6 Companies, Human Rights and Climate Litigation 6.1 Companies and Human Rights 6.2 Human Rights as an Environmental Concern to Companies: The development of the UN Norms 6.3 The United Nations Guiding Principles 6.4 The OECD Guidelines and National Contact Points 6.5 Broader Effect of the United Nations Guiding Principles on Companies 6.6 Climate Change and Human Rights 6.7 Climate Change Litigation 6.7.1 US Climate Litigation 6.7.2 Non-US Climate Litigation 6.7.3 An Assessment of Global Climate Litigation Trends 6.8 The Convergence of Human Rights-Based Climate Litigation against Companies 6.9 The Oslo Global Principles and Enterprise Principles 6.10 Some Stumbling Blocks to Climate Litigation Efforts against Companies 6.11 Conclusion 7 Fiscal Barriers and Incentives to Corporate Climate Action 7.1 Fossil-Fuel Subsidies 7.1.1 Subsidies under the WTO Rules 7.1.2 Industry-Based Subsidies 7.2 Carbon Taxes 7.2.1 The Benefits of a Carbon Tax 7.2.2 Development and Application of a Carbon Tax 7.2.3 Towards a Global Carbon Tax? 7.3 Institutional Investors and Climate Change 7.3.1 Stranded Assets and Systemic Risks 7.3.2 Short-Termism and the Emergence of Climate Risk 7.3.3 Fiduciary Duties and Short-Termism 7.3.4 Investor-Initiated Climate Litigation 7.4 Sustainable Investment and Environment, Social and Governance Factors 7.5 The Divestment Movement 7.6 Shareholder Climate Action via Resolutions 7.7 Impact of Initiatives on Companies 7.8 Conclusion 8 Conclusion 8.1 Key Findings 8.1.1 Corporate Norms and Their Entrenchment in Company Law 8.1.2 International Consensus-Shifting on Climate Change 8.1.3 Systemic Financial Risks of Climate Change as a Market Driver 8.2 What the Future Holds for Companies in the Context of Climate Change 8.2.1 Disclosure Obligations on Climate Risks 8.2.2 Strategic and Governance Approaches to Climate Change 8.3 Final Thoughts Index