The Responsibilities of Carbon Major Companies: Are They (and Is the Law) Doing Enough?

Abstract

Transnational carbon major companies are responsible for over 30% of global industrial greenhouse gas emissions and exert tremendous influence over future global climate trajectories. Yet, they are not governed through top-down, stringent emissions limits, but are instead regulated largely by disclosure-only domestic requirements and market-based or voluntary corporate social responsibility mechanisms. Through an examination of the requirements of domestic laws such as the United Kingdom (UK) Climate Change Act 2008 and the UK Energy Act 2013, as well as the environmental and sustainability reports produced under the UK Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013, this article analyzes the regulatory requirements placed on carbon majors, and the climate change pledges and emissions of five UK-based carbon majors: BP, Royal Dutch Shell, BG Group, National Grid, and Centrica. The article concludes that the efforts to curb emissions in these carbon major entities are being subverted by company law, company theory and commercial norms such as shareholder wealth maximization.

Climate change litigation: A review of research on courts and litigants in climate governance

“…For example, Richard Heede's () “Carbon Majors” was expressly developed to provide lawyers seeking to hold corporations liable with the evidence‐base to legally establish the causal link between corporate activity and climate change. The research has been regarded as “a turning point in the debate about apportioning responsibility for climate change” (Starr, , p. 859; see also Benjamin, ; Ganguly et al, ). In anti‐regulatory cases, claims often challenge climate science or the legitimacy of climate scientists (Ley, ).…”

Energy business transformation & Earth system resilience: A metabolic approach

“…In other words, shareholders are unlikely to be sued because their companies did not perform appropriate actions to prevent climate change. Benjamin (2016) particularly argues that this legal context is what allows carbon majors to cite concern about climate change but not make dramatic efforts to reduce their associated emissions. Furthermore, the concept of 'appropriate climate action' can have a high degree of legal and technical ambiguity on business actors.…”

“…In fact, the direct relationship between shareholder primacy and higher carbon emissions was recently explored and shown by Kock and Min (2016) 2 , who also argue that large international climate agreements are already influencing shifts in core tenets of corporate law and business systems. Even more specific to the EBS, Benjamin (2016) analyses how shareholder wealth maximisation inhibits emission curbing efforts of large energy corporations, exposing key tensions between proactive climate action and fundamentals in the current corporate legal culture. We expect these core sustainability questions of the EBS will be more pressing as the window to achieve climate targets narrows.…”

Foreword to the TEL Fifth Anniversary Issue Re-evaluating the Principle of Common But Differentiated Responsibilities in Transnational Climate Change Law

“…Lisa Benjamin's article 'The Responsibilities of Carbon Major Companies: Are They (and Is the Law) Doing Enough?' 34 offers another, starkly different, 'internal' context for examining the role of CBDRs in transnational climate change law and looks at the reporting behaviour of the largest polluting companies or 'carbon majors'. 35 Benjamin's focus is on the arena of domestic company law and the constraints that those legal frameworks and associated commercial norms, such as shareholder wealth maximization, place on efforts to curb corporate emissions.…”