Professor Janet Dine

Corporate regulation and climate change: Corporate governance and corporate law challenges and balances in an internationalised and globalised world

“There is “a looming environmental crisis, which poses a threat to the basic of our very existence” (Sjafjell, Beate, Towards a Sustainable European Company Law, Wolters Klwer (2009) 3; Dieter Helm and Cameron Hepburn (Eds) The Economics and Politics of Climate Change, (2009)). The IPCC believe “[t]here is high confidence that neither adaptation nor mitigation alone can avoid all climate change impacts . . . Unmitigated climate change would, in the long term, be likely to exceed the capacity of natural, managed and human systems to adapt. Reliance on adaptation alone could eventually lead to a magnitude of climate change to which effective adaptation is not possible, or will only be available at very high social, environmental and economic costs (The Intergovernmental Panel on Climate Change (IPCC) Core Writing Team, R K Pachauri  and A Reisinger  (eds), Climate Change 2007: Contribution of Working Groups I, II and III to the Fourth Assessment Report of The Intergovernmental Panel on Climate Change (Geneva: IPCC 2088,, accessed on 16th October 2012).

This paper tries to link climate change and corporate governance because corporate governance systems have failed to mitigate dangerous emissions by companies. Partly this is because of the powerful neo-liberal paradigm which does not recognise company externalities and tries to deregulate in a global context. It seems that we cannot continue to prosper in this planet with unlimited deregulated growth. We need a new paradigm for corporate governance. If growth is to be constrained significant distribution is necessary and this is a huge challenge for corporate governance particularly in the Western world. The thesis of this paper tries to defining the ‘sphere of influence’ of companies to measure its responsibility for damaging the atmosphere and considers a way of mitigating it using a stakeholder model of companies.