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Fiduciary Duties and Corporate Climate Responsibility

Posted by on Wednesday, November 24, 2021 in Articles, Volume 74, Volume 74, Number 6, Volumes.

Cynthia A. Williams | 74 Vand. L. Rev. 1875 (2021) |

In this paper, I take up this question by reference to a public law issue much in focus today, that of climate change. In Part I, I provide an extremely brief overview of the understanding of climate risk as a financial risk, connecting that overview to the question of why private law fiduciary duties might be engaged to address that risk. In Part II, I summarize the familiar territory of directors’ and officers’ fiduciary obligations, using Delaware law as the exemplar, and in Part III, I describe a more ambitious approach to directors’ fiduciary obligations, a new idea by the Dutch academic and practitioner Jaap Winter of directors having “societal duties.” In Part IV, concentrating on Delaware law, I develop some of the implications of these duties for directors’ and officers’ obligations to include climate change in their oversight, strategic direction of the company, and possible disclosure. Part V connects these discussions back to the question with which I began, that is, could the fiduciary duties of officers and directors be engaged to securely ground the company’s duties to society generally, beyond climate change? I then briefly conclude the article.

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Cynthia A. Williams