The chapter opens with the historic decision by the Philippines Human Rights Commission that carbon-major companies can be liable for climate-induced harms. While this decision has no direct legal impact on companies, it illustrates the ever closer connection between human rights and climate impacts. The chapter assesses the transnational business and human rights landscape, primarily through an assessment of the UN Guiding Principles on Business and Human Rights and illustrated by a recent dispute mediated by the Dutch National Contact Point under the OECD Guidelines on the climate impacts of ING’s lending practices. It charts the two waves of climate-based litigation against states and companies, with a focus on cases in the United States, The Netherlands, and Pakistan and two recent UK cases. The chapter provides an assessment of the direct overlap between human rights and climate litigation with the RWE v Lliuya case and the Philippines Human Rights Commission’s investigation of carbon-majors. The chapter closes with a look at the potential crystallisation of corporate climate obligations in the future through the Principles of Climate Obligations of Enterprises and the barrier that separate legal personality poses within corporate groups to the success of climate litigation efforts.

Chapter 7 examines both fiscal barriers and incentives to corporate climate action. Barriers such as fossil fuel subsidies and relative political inaction on that issue (at the World Trade Organization and other fora) and on the issue of carbon taxes are assessed. In contrast, the picture at the institutional investor level looks more active, with investors becoming increasingly concerned about the risks of climate change to fiscal stability. Issues of stranded assets, divestment, short-termism and financial regulatory developments are covered. In addition, some limited climate litigation initiated by investors (and its mixed results) is assessed. Varying jurisdictional approaches to sustainable investing from the SEC in the United States to the Bank of England in the United Kingdom are highlighted. Recent statements by Lord Sales at the Anglo-Australasian Law Society, as well as by the institutional investor BlackRock, in 2019 are indicative of a changing approach to climate investing. Regulatory developments requiring climate risk disclosure by the Department for Works and Pension, guidance by the Financial Conduct Authority and the focus on ESG investing in the EU, all signal the slow greening of capital in the context of climate change.

Chapter 4 assesses the history of companies in the international environmental law movement.Traditional voluntary-only approaches of industry groups to international environmental law led to a burgeoning of largely voluntary corporate social responsibility (CSR) initiatives. A review of the United Nations Framework Convention on Climate Change and the Kyoto Protocol are provided, along with a detailed examination of the Paris Agreement. Unlike previous experiences with international environmental law, many non-state actors supported the Paris Agreement, and some even wanted to become a party to it. While it remains a state-based treaty, non-state actors have become a main pillar of its implementation, particularly its long-term temperature goals. This international consensus shifting on climate change has led to new CSR and private environmental governance initiatives, specifically around climate change. These are eliciting a compliance reaction from many companies, with net-zero emissions targets announced by a variety of industry actors. Examples of Canadian Supreme Court decisions around corporate citizenship, the King IV Report from South Africa and CSR provisions in the Indian Companies Act 2013, as well as new corporate climate reporting requirements in the United Kingdom based on the recommendations of the Task Force on Climate-Related Financial Disclosures, are illustrative of this shift.

This concluding chapter ties together the various elements of regulatory and market-based developments covered earlier in the book and the impacts they have on dominant corporate norms. International consensus shifting on climate change indicates that these dominant theories and norms have become outdated, and should be adapted to reflect broader public and private investor concerns around climate change. The systemic risks of climate change are proving to be a market driver for reallocation of capital away from fossil fuel assets and towards a low or no carbon economy. Companies themselves are reacting with net-zero emissions targets, although these approaches mainly cabin climate concerns to risk-based approaches. This chapter argues that public regulation is still needed to ensure corporate climate action protects not only profits but the public. It ends with two areas of likely future regulatory development – standardised disclosure obligations for companies on climate risk, as well as governance and strategy making by companies on climate change. It also advocates that companies hire climate expertise on an either an ad hoc or permanent basis to help directors reimagine the corporate purpose in the Anthropocene.

The chapter begins with the historic announcement by then UK Prime Minister Theresa May of a net-zero emissions target. It looks at the theory of regulation as applied to companies, and EU and UK energy and climate law in particular. With a focus on the Climate Change Act 2008, this chapter highlights some of the unique characteristics of the independent and expert-based nature of the Committee on Climate Change, and its relationship to climate science. It also looks at the increasing overlap between the reporting requirements on directors under the Companies Act 2006 and the Climate Change Act 2008. It focuses on the desire for a ‘Green Brexit’ as the motivation behind the UK Environmental Bill 2020, the Clean Growth Strategy and plans for a UK emissions trading system. The chapter includes a section on energy companies’ evolving approach to climate and energy regulation, with a focus on market-based mechanisms like the EU emissions trading system and Article 6 of the Paris Agreement.

This chapter provides a deep dive into UK company law, assessing the common law before the changes to the Companies Act enacted in 2006. It finds that prior to 2006, the judiciary provided directors with a significant amount of discretion to make even profit-sacrificing actions if they benefited the company as a whole, widely reflecting the entity theory of companies. Corporate governance reviews, from the Cadbury Report onwards, did not reflect this common law approach. A detailed examination of the work of the Company Law Review Steering Group illustrates that the changes codified in s172 of the Companies Act 2006 actually entrenched a shareholder primacy approach to company law that previously was not dominant in English common law. This development could have negative impacts for the climate, although the relationship between s172 and the prior common law interpretation of directors’ duties remains unclear. Post-2006 cases are also assessed, and an overview of where climate liability could arise for directors under the 2006 Act is provided.

Chapter 2 assesses dominant corporate theories and norms such as shareholder primacy and shareholder wealth maximisation through the lens of climate change. It describes the ascent to dominance of these theories through the historical diversification of shareholder ownership and issue of agency costs. It highlights the three major negative contributions these theories have made to the issue of climate change: the elevation of the interests of shareholders to the detriment of non-shareholders, the fostering on a short-term approach to profit-making and finally the externalization of greenhouse gas emissions. The chapter then assesses competing theories of the corporate form which focus on stakeholder interests and the company as an entity, and how these theories provide a more holistic and appropriate model of the company in the context of climate change. The chapter concludes with the UK enlightened shareholder value approach and the US shareholder-centric approach to company law. While the United States has a more entrenched version of these dominant corporate theories such as shareholder wealth maximisation, even in this jurisdiction recent developments such as the Business Roundtable statement in 2019 illustrate discursive movements away from a shareholder-centric approach in the business world.