November 24, 2021

Fiduciary Duties and Corporate Climate Responsibility

In this paper, Professor Cynthia Williams takes up this question by reference to a public law issue much in focus today, that of climate change.

In Part I, she provides an extremely brief overview of the understanding of climate risk as a financial risk, connecting that overview to the question of why private law fiduciary duties might be engaged to address that risk. In Part II, Williams summarizes the familiar territory of directors’ and officers’ fiduciary obligations, using Delaware law as the exemplar, and in Part III, she describes a more ambitious approach to directors’ fiduciary obligations, a new idea by the Dutch academic and practitioner Jaap Winter of directors having “societal duties.” In Part IV, concentrating on Delaware law, she develops some of the implications of these duties for directors’ and officers’ obligations to include climate change in their oversight, strategic direction of the company, and possible disclosure. Part V connects these discussions back to the question with which she began, that is, could the fiduciary duties of officers and directors be engaged to securely ground the company’s duties to society generally, beyond climate change? Professor Williams then briefly concludes the article.