The Law of the Corporation As Environmental Law

Abstract

A firm is not a black box with a pipe sticking out of it. Firm managers make decisions with environmental consequences long before pollution comes out of a pipe or a smokestack as an externality. Corporate law governs how firms are created and the duties their managers owe to firm stakeholders. Securities regulations govern the information that firms must share with investors. Antitrust law governs how firms behave in the marketplace with respect to competitors and customers. And bankruptcy law governs how firms wind down or are reorganized when they face financial trouble. Each of these fields of positive law governing the firm has significant implications for firm behavior with respect to the environment. Yet they are not ordinarily considered part of the environmental law toolkit. To address fully the most pressing environmental problems of our time, including issues of cumulative harm like climate change, environmental law should embrace these non-traditional levers that are central to its enterprise. The Article sounds a clarion call: the law of the corporation is environmental law.

Keywords: environmental law, climate change, corporate law, bankruptcy law, securities regulation, antitrust law