Race to the Left: A Legislator's Guide to Greening a Corporate Code
24 Pages Posted: 13 Sep 2009 Last revised: 10 Apr 2010
Date Written: September 12, 2009
This Article foretells a new round of interstate charter competition as jurisdictions vie to attract green businesses to incorporate under their laws. To succeed in this “race to the left,” states must make their corporate laws more amenable to green businesses and sustainable practices. At a minimum, this entails clarifying and reaffirming that valid green-business decisions will enjoy deference under the business judgment rule. Beyond that, a host of green corporate laws are possible. After setting forth generally applicable provisions consistent with current corporate law, the Article develops and proposes a set of novel green corporate-law provisions to govern firms electing such status. These green corporate laws - directing the firm to operate sustainably, requiring triple-bottom-line reporting, and facilitating sustainable decisionmaking - may help some jurisdiction win the race to the left and establish itself as the Delaware of green business.
Keywords: corporate governance, corporations, sustainability, corporate social responsibility, legislation, green business
JEL Classification: K22
Suggested Citation: Suggested Citation