Corporate environmental conduct in transition : developments and challenges

The actions that corporations take have become critical as the climate crisis escalates. Their activity (or inactivity) affects the transition to a greener economy, even more so now as net zero commitments fluctuate.

However, corporate law often shields decision-makers through norms and liability rules that discourage intervention in managerial choices, even when environmental harm is at stake and corporate actions have fallen far short of climate goals. This problem intensifies when corporations face financial distress and transition from usual business to insolvency. In the period approaching insolvency, corporate law incentives may, in fact, drive excessive risk-taking, environmental neglect and resource extraction.