A Case Study on the Legal Impacts of Corporate Sustainability Pledges in the Alberta Oil Sands

Dalhousie Journal of Legal Studies, Vol. 23

20 Pages Posted: 16 Jun 2014 Last revised: 14 Jul 2014

Jeff Bone

University of Alberta - Department of Marketing, Business Economics & Law; University of Connecticut, School of Law

Date Written: 2013

Abstract

Suncor Energy Inc. is Canada’s largest oil and gas producer with significant operations in the Alberta oil sands. In its 2010 Sustainability Report, the corporation made several long-term environmental pledges. This paper confronts a hypothetical situation involving these environmental pledges. What if Suncor’s commitments prove to be effective from an environmental standpoint, however they’re more costly from a financial perspective than Suncor anticipates? In accordance with their statutory fiduciary duties, Suncor directors have a choice to make between two options. The company could increase or maintain expenditures in order to meet these commitments. Or, the company could limit the projected expenditures with the consequence that environmental commitments will not be met due in part to financial constraints. This case study applies Canadian corporate statutory fiduciary duties to these alternatives ultimately finding that such pledges do not create legal liability for directors when they fail to uphold environmental commitments. However, directors may follow through on a voluntarily environmental pledge without incurring liability from disgruntled shareholders.

Keywords: Oil Sands, Sustainability, Corporate Law, Suncor Energy Inc

Suggested Citation

Bone, Jeff, A Case Study on the Legal Impacts of Corporate Sustainability Pledges in the Alberta Oil Sands (2013). Dalhousie Journal of Legal Studies, Vol. 23. Available at SSRN: https://ssrn.com/abstract=2445629

Jeff Bone (Contact Author)

University of Alberta - Department of Marketing, Business Economics & Law ( email )

3-23 Business Building
Edmonton, Alberta T6G 2C7
Canada

HOME PAGE: http://business.ualberta.ca/about/contact-us/school-directory/jeff-bone

University of Connecticut, School of Law ( email )

CT
United States

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