Carrots and Sticks in Private Climate Governance
Jonathan M. Gilligan, Carrots and Sticks in Private Climate Governance, 6 Texas A&M Law Review, 179 (2018).
20 Pages Posted: 8 Dec 2018 Last revised: 27 Mar 2019
Date Written: June 11, 2018
When public governance fails to address important environmental threats — such as climate change — private governance by firms, not-for-profits, individuals, and households can produce significant reductions in greenhouse gas emissions. Private governance can take the form of either a carrot or a stick, using incentives or punishments. Shareholder activism as a form of private governance of corporations has largely been confrontational, leading most climate-related actions to fail. This Article examines the potential for private governance to take a more collaborative approach and to frame shareholder engagement with management in terms of opportunity. It also examines private governance successes at reducing household emissions and finds that these too emphasize making it attractive and convenient for households to act.
Keywords: Private Governance, ESG, Institutional Investor, Climate Change, Shareholder Activism, Private Environmental Governance
JEL Classification: K32, Q54, G32
Suggested Citation: Suggested Citation