The World Economic Forum Principles on 'Climate Governance on Corporate Boards': Can Soft Law Help to Face Climate Change around the World?

Abstract

Climate change is a financial factor that carries with it risks and opportunities for companies. To support boards of directors of companies belonging to all jurisdictions, the World Economic Forum issued in January 2019 eight Principles containing both theoretical and practical provisions on: climate accountability, competence, governance, management, disclosure and dialogue. The paper analyses each Principle to understand scope and managerial consequences for boards and to evaluate whether the legal distinctions, among the various jurisdictions, may undermine the application of the Principles or, by contrast, despite the differences the Principles may be a useful and effective guidance to drive boards’ of directors’ conduct around the world in handling climate change challenges. Five jurisdictions are taken into consideration for this comparative analysis: Europe (and UK), US, Australia, South Africa and Canada. The conclusion is that the WEF Principles, as soft law, is the best possible instrument to address boards of directors of worldwide companies, foster convergence of their conduct and effectively help facing such global emergency.

Keywords: World Economic Forum, Climate Change, Climate Governance, Board of directors, Climate risks, Climate opportunities, Task Force on Climate-related Financial Disclosure