Governing the energy transition: The role of corporate law tools

Jacqueline Peel, Anita Foerster, Brett McDonnell, Hari M. Osofsky

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

Conventionally the private sector has been considered a barrier to effective energy transition governance. However, in the wake of the 2015 Paris Agreement, a range of international initiatives have emerged that focus on enhancing the positive role of the private sector in energy transition governance. These developments reinforce a gradual international shift in the business community to view climate change in financial risk terms. Climate change seen as a matter of financial risk for corporations, and for the large institutional investors who invest in them, has the potential to engage corporate law tools, such as requirements for risk disclosure, shareholder actions and the fiduciary duties of company directors. This article explores the potential, and limitations, of such corporate law tools to drive private sector action on sustainable energy transition. The article draws on empirical research examining business perceptions and practices relating to climate risk management and promotion of clean energy sources. Although there are promising signs of a more serious consideration of climate risk in business decision-making, corporate practices around climate risk disclosure, and shareholder and board engagement with clean energy issues, remain highly variable and in flux. If corporate law tools are to make a more substantial contribution to energy transition governance, they will likely need to be complemented by a robust regulatory framework for greenhouse gas emissions reduction.

Original languageEnglish (US)
Pages (from-to)459-476
Number of pages18
JournalEnvironmental and Planning Law Journal
Volume36
Issue number5
DOIs
StatePublished - 2019

Bibliographical note

Funding Information:
This research received funding support from the Australian Research Council pursuant to a Discovery Project grant on ?Devising a Legal Blueprint for Corporate Energy Transition? (Peel, Osofsky and McDonnell, 2016?2019). The article draws on analysis in Hari M Osofsky et al, ?Energy Reinvestment? (2019) 94 Indiana Law Journal 635. This article was originally presented at the Energy Transitions workshop convened by the University of New South Wales on 5?6 February 2019. The authors are grateful for feedback and comments provided by convenors and participants of the workshop, and particularly to Louis Kotz? who acted as commentator for the article. The authors also appreciate research assistance from Ms Julia Korolkova in compiling data on shareholder climate resolutions in Australia.

Funding Information:
* Jacqueline Peel: Professor, Melbourne Law School, University of Melbourne; Associate Director, Centre for Resources, Energy and Environmental Law. Anita Foerster: Senior Research Associate, Melbourne Law School, University of Melbourne. Brett McDonnell: Senior Lecturer, Monash University Business School. Hari M Osofsky: Professor, Dorsey and Whitney Chair, University of Minnesota Law School; Director, Institute for Law and Economics, University of Minnesota Law School. This research received funding support from the Australian Research Council pursuant to a Discovery Project grant on “Devising a Legal Blueprint for Corporate Energy Transition” (Peel, Osofsky and McDonnell, 2016–2019). The article draws on analysis in Hari M Osofsky et al, “Energy Reinvestment” (2019) 94 Indiana Law Journal 635. This article was originally presented at the Energy Transitions workshop convened by the University of New South Wales on 5–6 February 2019. The authors are grateful for feedback and comments provided by convenors and participants of the workshop, and particularly to Louis Kotzé who acted as commentator for the article. The authors also appreciate research assistance from Ms Julia Korolkova in compiling data on shareholder climate resolutions in Australia.

Publisher Copyright:
© 2019, Thomson Reuters (Professional) Australia Ltd. All rights reserved.

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