Ignorance is Strength: Climate Change, Corporate Governance, Politics, and the English Language

97 Pages Posted: 18 Feb 2024 Last revised: 8 May 2024

See all articles by Leo E. Strine, Jr.

Leo E. Strine, Jr.

Wachtell, Lipton, Rosen & Katz; University of Pennsylvania Carey Law School; Harvard Law School Forum on Corporate Governance

Date Written: 2024

Abstract

George Orwell dilated on the negative role that the denial of objective fact could have on society’s ability to preserve democracy and human freedom. He envisioned a world where political elites had lost any genuine belief in a cause larger than themselves, and where “Power is not a means; it is an end.” In that world, there was no word for “science” because the Party elite wished nothing to be empirically verifiable: “Ignorance is Strength.” In pursuing power, these elites manipulated language and the very concept of truth so that their followers would happily embrace any portrayal of reality as a matter of identification with their chosen Party, even while recognizing that the portrayal was objectively untrue.

For the elites, all that mattered was that the message secured their power, and that their Party acolytes accepted their message as part of their core identity. Disconnecting political language from objective fact encouraged compliant, unthinking, and emotionally manipulable reactions from the Party rank and file, using the rallying point of a common enemy to unifying rote acceptance of the Party line.

This article discusses the Orwellian nature of the current debate about the role of climate change in corporate governance, by juxtaposing the arguments of climate-denying commentators about corporate governance against the objective facts. No issue could be less ideological than climate change. No one has any rational or emotional reason to want carbon and methane emissions to cause warming and harm. But wishes are not realities, and human-caused climate change is real and not reasonably deniable. Not only that, human-caused climate change is an objectively undeniable economic, not just environmental and societal, problem and risks an enormous decline in economic output and tremendous downside harm to many industries. Settled law allows corporations and institutional investors to take into account risk factors like climate change and may require them to consider those risks when they are directly material to the business or an investment, as climate change is for many industries. If anything, the response of the corporate and institutional investor sector to climate change has been too tepid, and the pace of climate change and its corresponding harm is outrunning efforts to constrain it.

One might think that objective reality would cause a concerted public-private effort, devoid of ideology or partisanship, to address human-caused climate change on something like a war footing. After all, rationality in the face of facts is expected of fiduciaries and scientific reality should not be a basis for partisan division.

Instead, the so-called culture wars have fully penetrated the debate over climate change and corporate governance, and in a distinctly Orwellian way, involving the manipulative use of language, denial of fact, and process of doublethink that Orwell warned were all inimical to freedom. The same climate-denying politicians who argue that corporations and institutional investors may not consider climate change or other ESG issues and should stick solely to generating profits are among the largest consumers of corporate political spending and support corporations taking public policy positions but only those they personally favor.

It remains impossible to have sensible policies in a free society if “two plus two make four” is not accepted as true. Citizens do not function as such if they do not justify their political views in terms of objective reality.

Many huge questions must be answered to redress human-caused climate change before it causes catastrophic harm. Answering them would be difficult enough if the debate were based on truth. But when Orwellian manipulation causes a substantial percentage of Americans to deny objective facts as a matter of personal political identity, the dangers to humanity and our nation’s ability to function as a republican democracy are ominous.

No simple answer exists to addressing the dangers this Orwellian manipulation creates. But identifying that behavior for what it is and holding political elites responsible for a basic acceptance of fact and for consistently applying their stated principles is a necessary start.

Keywords: Climate change, corporate governance, environmental harm, environmental issues, ESG, Orwellian approach, political spending, environmental responsibility, institutional investors, stakeholders, boards of directors, ERISA, fiduciary duties, ESG risk, Environmental

JEL Classification: G32, G38, G39, K22, L21, M14, Q54, Q58

Suggested Citation

Strine, Jr., Leo E., Ignorance is Strength: Climate Change, Corporate Governance, Politics, and the English Language ( 2024). Journal of Law and Political Economy, Forthcoming, U of Penn, Inst for Law & Econ Research Paper No. 24-01, Available at SSRN: https://ssrn.com/abstract=4705107

Leo E. Strine, Jr. (Contact Author)

Wachtell, Lipton, Rosen & Katz ( email )

51 W 52nd St
New York, NY 10019
United States
212-403-1178 (Phone)

University of Pennsylvania Carey Law School ( email )

Philadelphia, PA
United States

Harvard Law School Forum on Corporate Governance ( email )

1563 Massachusetts Avenue
Cambridge, MA 02138
United States

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