Governing the Energy Transition: The Role of Corporate Law Tools

28 Pages Posted: 21 Aug 2019 Last revised: 26 Nov 2019

See all articles by Jacqueline Peel

Jacqueline Peel

University of Melbourne - Law School

Anita Foerster

Monash University - Department of Business Law & Taxation

Brett McDonnell

University of Minnesota Law School

Hari M. Osofsky

The Pennsylvania State University (University Park) – Penn State Law

Date Written: March 29, 2019

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.

Keywords: energy transition, climate change, private sector governance, corporate law tools, disclosure, fiduciary duties, shareholders

JEL Classification: K22, K32

Suggested Citation

Peel, Jacqueline and Foerster, Anita and McDonnell, Brett H. and Osofsky, Hari M., Governing the Energy Transition: The Role of Corporate Law Tools (March 29, 2019). Available at SSRN: https://ssrn.com/abstract=3439212 or http://dx.doi.org/10.2139/ssrn.3439212

Jacqueline Peel (Contact Author)

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+613 8344 1115 (Phone)
+613 9347 2394 (Fax)

HOME PAGE: http://https://law.unimelb.edu.au/about/staff/jacqueline-peel

Anita Foerster

Monash University - Department of Business Law & Taxation ( email )

Caulfield Campus
Sir John Monash Drive
Caulfield East, Victoria 3084
Australia

Brett H. McDonnell

University of Minnesota Law School ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States
612-625-1373 (Phone)

Hari M. Osofsky

The Pennsylvania State University (University Park) – Penn State Law ( email )

Lewis Katz Building
University Park, PA 16802
United States

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