Document Type

Article

Publication Date

11-10-2025

Keywords

Corporations, corporate purpose, climate change, litigation, separation of powers, Milieudefensie

Abstract

With the existential threat of climate change, there is increased attention about the corporation's duty to maintain a healthy environment, particularly in light of the conventional shareholder primacy model of corporate purpose. This article proposes the idea of judicial climate governance. In the absence of robust legislative reforms that would obligate corporations to mitigate and even eliminate their inordinate climate impacts, in climate change litigation courts can and should render liability and compensation decisions that direct corporations towards a more stakeholder-friendly model of corporate purpose. To substantiate the need for judicial climate governance, this article canvasses and contextualizes the historical corporate purpose debate in some common law jurisdictions. It also compares private law litigation that can result in significant compensatory awards for corporate wrongdoing with regulatory fines and penalties that merely constitute the cost of doing business. Ultimately, it contends that-without contravening the separation of powers-courts can effectively promulgate corporate climate policies that account for stakeholder impacts. And, in doing so, they would be falling in line with historical precedents that recognized corporate liability for stakeholder harms, namely to overseas colonial subjects and former employees.

Comments

"Forthcoming: Hassan M. Ahmad & Ahmed R. Chowdhury, Judicial Climate Governance: Corporate Purpose and the Courts, 38 Geo. Env’t L. Rev. XX (2025)."

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