Corporate Law and Climate Change

Article By : Halima Gargouri

The environment is facing several problems affecting various disciplinesand it seem to be worsening with time. Climate change represents a major threat to our environment, as it is a long-term change in the average temperatures and weather patterns that have come to define earth’s climates. Communities are facing multiple social, economic, and environmental problems.Some of the major Sustainability issues that can be identified are pollution, global warming, overpopulation, waste disposal, ocean acidification, loss of biodiversity, deforestation, ozone layer depletion andpublic health issues. The world has warmed over the last 150 years, which has triggered many other changes to earth’s climate from the top of the atmosphere to the depths of the oceans caused primarily by humans.
The business world has evolved and economic growth has improved livelihoods and contributed to significant technological advances. However, society has used resources and generated waste, which made it drawn further away from a sustainable society. Corporates are one of the many other social agents that need to assume responsibilities related to their impact on environment. The recent sustainability researchers are trying to hold corporates responsible for their impact on climate change. We find multiple big companies today with damaged environmental reputations andconsidered asunethical companies. To solve that, theyneed to respect the planet by limiting theirs impact on the environment.
Recently a new area of interest has developed, focusing on the role of corporations in the achievement of global temperature objectives and on the combination of the areas of corporate law, corporate governance and climate change. Corporate law describes the law relating to matters that arise directly from the life cycle of a persons, companies, organizations and businesses as it relates to their legal rights, relations, responsibilities and obligations. It has the most effect on corporates management. This new focus seeks to cut ties with the traditional approaches in corporate law theory and practice focusing on shortterm financial benefits for shareholders while neglecting social and environmental issues such as climate change.
In the historical development of corporate law, the trajectory of companies’ interest has been starting from the general business ethics going to the corporate social responsibility then to the sustainability up into reaching the purpose, meaning, and shared value for all. For climate change, law reinforcecompanies’ ability to mobilize an effective responseto sustainability issues. Normative rules regarding the implementation of corporate sustainability were adopted as part of other bodies of law, such as inlabor law and environmental law. The modernization of corporate law and the employment of mechanisms to support environmental objectives on an international scale became a necessity. It is therefore essential to make majorsignificant changes to company corporate law, as it is the main guideline for the management and direction of companies.
The question to be raised here is to what extent can corporate law be seen as a solution to climate change, given that it is a current problem and is considered to be aggravating it today? Many countries along with the European Union are currently considering options to strengthen corporate responsibility for climate change through corporate law reform. Therefore, on the one hand, the link between corporate law and climate change needs to be analyzed (Part 1) and, on the other hand, corporate law and practices needs to be analyzed on an international and comparative ground(Part 2).