Is There Really a Fiduciary Duty to Destroy the Climate?

At a recent Columbia Law School colloquium, jointly sponsored by the Sabin Center and the Millstein Center, participants posed a foundational question: How do corporate law standards of fiduciary duty relate to what scientists call the “climate emergency”?[1]

Unfortunately, under what I will call the Maximization Model of fiduciary duty in the United States and many other jurisdictions, the answer is that there really is a fiduciary duty to destroy the climate when doing so will maximize profits for firms and investors. This means that the leaders of U.S. corporations and institutional investors owe a fiduciary duty to maximize profits through economic activities that continue to produce, sell, and use fossil fuels (i.e. coal, gas, and oil) without considering how to contribute to a global economic transition toward more climate-friendly sources of power (such as solar, wind, hydro, geothermal, and nuclear). In addition, if profits can be maximized by deforestation or releasing methane or other greenhouse gases as well, then profits must again take precedence. More on the Maximization Model of fiduciary duty in a moment.

At the colloquium, several scholars reported that some jurisdictions in the world – and some U.S. states – allow for a more moderate and permissive interpretation of fiduciary duties. Professor Cynthia Williams said, for example, that Canada’s national-level corporate fiduciary duty explicitly includes “the environment” among the relevant considerations.[2]  The relevant Canadian statute provides that “Every director and officer of a corporation in exercising their powers and discharging their duties shall (a) act honestly and in good faith with a view to the best interests of the corporation; and (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.”[3] “Best interests of the corporation” is further defined to include “the following factors:” (a) “the interests of shareholders, employees, retirees and pensioners, creditors, consumers, and governments; (b) “the environment;” and (c) the long-term interests of the corporation.”[4]

Canada’s statute is an updated version of what have been called “constituency statutes” in the United States, which explicitly expand the fiduciary duties of corporate managers and directors “beyond shareholders” but do not usually include “the environment” among allowable factors, except in Arizona and Texas.[5] Approximately two-thirds of U.S. states have constituency statutes, but not yet, importantly, the great corporate law state of Delaware.[6]  At the colloquium, former Delaware Supreme Court Chief Justice Leo Strine reiterated that corporate fiduciary duties should continue to focus solely on the interests of profits for shareholders.[7]

In the Netherlands, courts have recently found that the nation’s corporate fiduciary duty laws not only permit but also require consideration of climate risks and damage that a firm may be causing. This development appeared to follow a movement among Dutch corporate law professors arguing for expanding corporate fiduciary duties to include “societal responsibility.”[8] In 2021, a court in the Hague found that Royal Dutch Shell violated its fiduciary duties under Dutch law by failing to address its climate risk adequately and ordered the company to “reduce CO₂emissions by net 45% by the end of 2030” against a 2019 baseline.[9] On appeal, quantification of a reduction target was nullified, but the overall holding of a fiduciary duty to consider climate risks was affirmed.[10]

After Royal Dutch Shell reincorporated in the United Kingdom, a follow-up lawsuit accused the company’s directors of violating their fiduciary duties under UK law.[11] As Professor Thom Wetzer noted at the Columbia colloquium, however, this case was dismissed because the court found that the plaintiff, ClientEarth, brought the case for improper purposes. It was a close call for Shell, though, because the UK corporate fiduciary statute, like Canada’s, includes “the environment” as a relevant factor in the exercise of fiduciary duty, and the facts alleged by ClientEarth were compelling.[12] Specifically, ClientEarth claimed that Shell had made a “net zero” carbon dioxide emission pledge as in the long-term interests of the corporation and its shareholders but did not put in place an actual or realistic plan to achieve this target. This allegation, if true, would seem to violate a basic fiduciary duty to be honest and trustworthy.[13]

The European Union also appeared momentarily ready to adopt an EU-wide change in corporate fiduciary duties as part of its “Green Deal” legislation, which would have included legal responsibility for climate risk, but this proposal was deleted – even before a more general rollback of the EU legislation was recently announced.[14]

Except perhaps in the Netherlands, then, there is no mandatory fiduciary duty for corporate directors and managers to consider the climate as a reason to mitigate their reliance on fossils fuels or take other pro-climate actions that would reduce profits for “the corporation and its shareholders.”[15] Shareholders are people too, however, and so one can argue that the permissive scope of corporate fiduciary duties should allow for the adoption of climate-friendly policies if they generally enhance shareholder “welfare” rather than profits.[16] Also, there is wiggle room in arguments favoring  the “long-term” interests of shareholders, though future generations of not-yet-existing “shadow shareholders” are unlikely to be included.[17] “Enlightened shareholder value” is another expansive formulation into which climate concerns might be smuggled.[18] The business judgment rule and procedural impediments to shareholder lawsuits still protect significant discretion to adopt some climate-favorable policies and actions in the United States and elsewhere.

At the colloquium, Professor Roberto Tallarita drew on an old-school jurisprudential distinction by the legal philosopher Wesley Hohfeld to suggest that corporate directors and managers may have the “privilege” to consider the climate problem in their decision-making but not a corresponding “duty.”[19] This theoretical approach may not satisfy those who see the climate emergency as urgent – and indeed urgent enough to ground an imperative moral duty to act. Essentially, under the traditional view of corporate fiduciary duty, caring about the climate may sometimes be permitted but not required. There may be a “privilege” to care about the climate but not a mandatory “duty.”

If this were not bad enough, there is another level of fiduciary duty that is more problematic in requiring profit maximization even when it means contributing to climate damage. As scholars have observed, the effects of broadening  the corporate governance standard for fiduciary duties are substantially countered by narrower financial fiduciary duties that apply to institutional investors.[20] Without going into the details, a pecuniary standard is applied for many investment fund managers that essentially requires profit maximization.[21] Even if a corporate board may have significant leeway to consider climate issues, its investors may insist on a narrower financial focus: or else! Companies with low profits and shareholder returns may find themselves the targets of hedge fund activists or private equity hunters. Hard-core profit-maximizing investors may act to achieve their own financial objectives whether the corporate directors and managers of operating companies like it or not.[22]

The Maximization Model of fiduciary duty lies at the center of the problem. According to this approach, which has been most influentially and succinctly expressed by Milton Friedman, the focus of corporate directors and managers must be on profits alone.[23] To maximize profits is the preeminent corporate fiduciary duty. For Friedman, the climate crisis (if he had considered it) would count as simply another kind of “pollution” or “social responsibility” issue which corporate directors and managers should ignore. He believed that economic externalities of this kind should be handled by government.[24] Friedman recognized law and (to an uncertain extent) ethics as legitimate constraints on the profit motive.[25] So one might think that Friedman allowed for moral arguments for a “climate imperative in business.”[26]Nevertheless, the shareholder profit-maximization model is taught today in many business schools and law schools as the definition of corporate fiduciary duty.[27]

A large hole in Friedman’s Maximization Model is his assumption that business and its profit calculations are separable from the political system that is supposed to adopt laws to control pollution and other externalities. If the influence of Elon Musk and the big oil and gas companies has taught us anything, it is that one cannot depend on an independent political system to check business operations, at least not in the United States after the ironically named Citizens Unitedcase and its progeny.[28]

Consider also the decades-long failure of international governance regimes to regulate the climate problem effectively. As one scholar recently wrote:

In 1992, countries promised, in international law, to “prevent dangerous anthropogenic interference with the climate system.” In the decades that followed [the adoption of the first treaties at the Earth Summit in Rio de Janeiro], countries met again, and again, and again, but “dangerous anthropogenic interference with the climate system” got worse. It has been suggested that doing the same thing again and again and expecting a different result is a definition of insanity.[29]

Government regulation alone won’t get a handle on the “super wicked” and notoriously complex climate problem.[30]As the well-known corporate lawyer William Savitt observed at the Columbia colloquium, the climate is “everybody’s problem,” and it therefore becomes “nobody’s problem.”

Changing the fiduciary duties of corporate directors and officers, as well as institutional investors, to allow for a truly “reasonable person” standard to address the climate problem will not come easy, given the entrenchment of the Maximization Model in business and law. As a recent study indicated, teaching profit maximization as the “truth” of fiduciary duty also has a significant effect on how willing businesspeople are to support social or environmental causes that do not enhance profits.[31] Even if one can show that the Maximization Model is too narrow, wrong, and dangerous, it will prove practically difficult to dispel.[32]

Professors Dorothy Lund and Elizabeth Pollman have persuasively shown that there is today a “corporate governance machine” that reinforces a view that profit maximization for shareholders is fundamental.[33] However, this view directly contributes to the climate crisis because the use of fossil fuels is ubiquitous in the economy. Maximizing profits is equivalent to supporting the ever-increasing discovery, production, sale, and use of coal, gas, and oil – and the ever-increasing climate damage that results. As James Gleick observes recently in a different context:

A machine is autonomous, defined by it own internal operations, self-regulating, and self-propelling. Step back a bit, though, and what looks like a marvel begins to seem monstrous.[34]

So it is with the Maximization Model of corporate fiduciary duties. It has elegantly and efficiently served to encourage economic growth, and it nicely fits mathematical equations, but it has become monstrous by causing certain, foreseeable, and deadly climate damage.[35]

Here are a few recommendations for reform.

1. Stop teaching the Maximization Model as if it were a natural law. Fiduciary duties and business corporations are much older than the financial models of the firm that, at least since Milton Friedman, have popularized profit maximization for shareholders as an unalterable truth.
2. Adopt laws that reject the Maximization Model and allow for the consideration of pro-climate corporate policies and actions as legitimate ends of business managers and investors. The Netherlands may be leading the way toward adopting a mandatory fiduciary duty to consider climate consequences in business decisions. At least, list “the environment” along with other business interests and concerns beyond shareholders in fiduciary duty statutes whether nationally (as in Canada and the UK) or at state or regional levels (as in Arizona and Texas). Although adopting a federal corporate statute of this kind is impossible to imagine in the United States at the moment, Delaware could make a major statement by adopting a version of a fiduciary duty statute that would include “the environment,” and maybe even specifically “the climate.”[36] Other states with constituency statutes could amend them too. At the same time, fiduciary duties for institutional investors should be changed to permit and maybe even require pro-climate issues to be considered or at least fully and accurately disclosed.[37]
3. Push for international actions recommending that companies and institutional investors consider the climate emergency to be an important fiduciary issue. Although the ESG movement has been watered down in its mainstream version to be concerned only with profit maximization, it could recover its original purpose expressed by the United Nations, including addressing the climate crisis, through creative legal interpretation and reform.[38]

Is there really a fiduciary duty to destroy the climate? The short answer is yes. As long as profit maximization is the standard for corporate governance and institutional investors, the law of fiduciary duties will continue to contribute to the climate problem. Unlike other externalities, climate damage is a ubiquitous consequence of our fossil-fuel economy. “Drill, baby, drill” leads inexorably to “burn, baby, burn.”

Because the climate is everybody’s problem, everybody, including businesses and investors, should contribute to preserving it. Fiduciary duties must change, even if that will be difficult. As Paul Hawken wrote more than 30 years ago: “There is no polite way to say business is destroying the world.”[39] There is a moral duty to stop doing so, which should translate also into legal fiduciary duties. 

 ENDNOTES

[1] William J. Ripple, et al., “World Scientists’ Warning of a Climate Emergency 2022,” 72 BioScience 1149 (2022), https://academic.oup.com/bioscience/article/72/12/1149/6764747. Although some observers have argued that different labels for “climate change,” “global warming,” or “climate emergency” may make a difference, recent research finds no such effects. Danielle Goldwert, Kimberly C. Doel, Jay J. Van Bavel, and Madalina Vlasceanu, “Climate change terminology does not influence willingness to take climate action,” 100 Journal of Environmental Psychology 102482 (2024), https://www.sciencedirect.com/science/article/pii/S027249442400255X.

[2]  See also Janis P. Sarra and Cynthia A. Williams, “Directors’ Liability and Climate Risk: Canada-Country Paper,” Commissioned Reports, Studies and Public Policy, Osgoode Hall Law School (2018), https://digitalcommons.osgoode.yorku.ca/cgi/viewcontent.cgi?article=1208&context=reports.

[3] Canada Business Corporations Act § 122(1).

[4] Id. §122(1.1) (emphasis added).

[5] Lucian A. Bebchuk and Roberto Tallarita, “The Illusory Promise of Stakeholder Governance,” 106 Cornell Law Review 91, 116–17 & tbl. 1 (2020); Christopher Geczy, Jessica S. Jeffers, David K. Musto, and Anne M. Tucker, “Institutional Investing When Shareholders Are Not Supreme,” 5 Harvard Business Law Review 73 (2015); Eric W. Orts, “Beyond Shareholders: Interpreting Corporate Constituency Statutes,” 61 George Washington Law Review 14 (1992). For the Arizona and Texas exceptions, see Bebchuk and Tallarita, op. cit., at 17 & tbl. 1; Lucian A. Bebchuk, Kobi Kastiel, and Roberto Tallarita, “For Whom Corporate Leaders Bargain,” 94 Southern California Law Review1467, 1491 (2021).

[6] Bebchuk & Tallarita, op. cit., at 117 tbl. 1; Gecsy, Jeffers, Musto, and Tucker, op. cit., at 130 app. A. Proposals made for Delaware to adopt a constituency statute have not yet been followed. Megan E. Weeren, “Fiduciary Duty and Social Responsibility: Implications of the Business Roundtable’s Statement on the Fiduciary Duties of Boards of Directors to Corporate Stakeholders Other Than Shareholders,” 2 Corporate and Business Law Journal 157, 174–79 (2021). In a case also discussed extensively at the Columbia colloquium, the Delaware Chancery Court affirmed that “directors do not owe fiduciary duties to nonshareholder constituencies. They owe duties to promote the value of the corporation for the benefit of shareholders.” McRitchie v. Zuckerberg, 315 A.3d 518, 548 (Del. Ch. 2024).

Note also, as Cynthia Williams emphasized at the Columbia colloquium, that the Canadian legal system is “flipped” compared with the United States in that Canadian corporate law is enacted at the national level, while its securities laws are adopted at the provincial level: vice versa the U.S. federal system.

[7] Former Chief Justice Strine’s long-standing view has been that “the corporate law requires directors, as a matter of their duty of loyalty, to pursue a good faith strategy to maximize profits for the stockholders.” Leo E. Strine, Jr., “Our Continuing Struggle with the Idea That For-Profit Corporations Seek Profit,” 47 Wake Forest Law Review 135, 155 (2012). He qualifies this view, as do others, with the observation that directors may take a “long term view” of a profit-oriented strategy, but he agrees with Milton Friedman’s description of what I describe as the Maximization Model. Id. at 155, 171 (quoting Friedman that “there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.”). See also Milton Friedman, “A Friedman Doctrine – The Social Responsibility of Business Is to Increase Its Profits,” New York Times, Sept. 13, 1970, https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html. Expanding the fiduciary duty standard in Delaware does not make an appearance on Strine’s co-authored list of possible corporate law reforms. Lawrence A. Hamermesh, Jack B. Jacobs, and Leo E. Strine Jr., “Optimizing the World’s Leading Corporate Law: A Twenty-Year Retrospective and Look Ahead,” 77 Business Lawyer321 (2022). Strine’s view of a relatively narrow shareholder-profit-only focus for corporate governance, however, appears to be in some tension with his argument that changes should be made to expand fiduciary duties of institutional investors to allow for consideration of environmental “sustainability.” Leo E. Strine, Jr., “Stewardship 2021: The Centrality of Institutional Investor Regulation to Restoring a Fair and Sustainable American Economy,” 24 University of Pennsylvania Journal of Business Law 1, 17 (2021) (listing as a proposed reform “requiring institutional investors to consider – as part of the fiduciary duties they owe to their clients – their ultimate beneficiaries’ investment objectives and horizons, such as saving for retirement or education, and requir[ing] institutional investors to consider their ultimate beneficiaries’ economic and human interest in having companies create quality jobs and act responsibly toward their consumers and the environment as part of their decision-making process”).

[8] See Cynthia A. Williams, “Fiduciary Duties and Corporate Climate Responsibility,” 74 Vanderbilt Law Review1875, 1894-95 (2021) (citing work by Professor Jaap Winter and others). See also Jaap W. Winter, “Addressing the Crisis of the Modern Corporation: The Duty of Societal Responsibility of the Board,” University of Amsterdam/INSEAD, SSRN, May 5, 2020, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3574681.

[9] See Iva Lea Aurer, “Guest Commentary: An Assessment of the Hague District Court’s Decision in Milieudefensie et al. v. Royal Dutch Shell plc,” Climate Law: A Sabin Center Blog, May 28, 2021, https://blogs.law.columbia.edu/climatechange/2021/05/28/guest-commentary-an-assessment-of-the-hague-district-courts-decision-in-milieudefensie-et-al-v-royal-dutch-shell-plc/.

[10] See Maria Antonia Tigre and Marlies Hesselman, “Milieudefensie v Shell: 3 Takeaways and Challenges on the Appeal’s Court Decision,” Climate Law: A Sabin Center Blog, Dec. 12, 2024, https://blogs.law.columbia.edu/climatechange/2024/12/12/milieudefensie-v-shell-3-takeaways-and-challenges-on-the-appeals-court-decision/. The case is likely to be further appealed to the Netherlands Supreme Court because that court previously found the government itself to have legal responsibility to reduce the nation’s overall greenhouse emissions. Id.; Urganda Foundation v. Netherlands, Dutch Supreme Court, available in English translation at  https://climatecasechart.com/non-us-case/urgenda-foundation-v-kingdom-of-the-netherlands/.

[11] Maria Antonia Tigre and Cynthia Hanawalt, “The Fiduciary Duty of Directors to Manage Climate Risk: An Expansion of Corporate Liability Through Litigation?” Climate Law: A Sabin Center Blog, Feb. 15, 2023, https://blogs.law.columbia.edu/climatechange/2023/02/15/the-fiduciary-duty-of-directors-to-manage-climate-risk-an-expansion-of-corporate-liability-through-litigation/.

[12] For a critique of the reasoning in ClientEarth, see Robert Carnwath, “ClientEarth v Shell: What future for derivative claims?  https://www.lse.ac.uk/granthaminstitute/wp-content/uploads/2024/02/ClientEarth-v-Shell-what-future-for-derivative-claims.pdf. Lord Carnwath is a former justice of the UK Supreme Court.

[13] As Carnwath argues, the court’s reasoning in ClientEarth left much to be desired. Although the remedy of holding Shell to its net-zero pledge could have been too dependent on experts to be judicially manageable, the option of simple “declaratory relief” would have removed this difficulty. Also, the argument that ClientEarth did not bring the case in “good faith” was not supported. ClientEarth is in fact a nonprofit organization advancing a pro-climate policy, but it represented at least some shareholders, and its arguments focused on holding Shell to its own climate-related promises. Id.

[14] Luca Enriques, Matteo Gatti, and Roy Shapira, “How the EU Sustainability Due Diligence Directive Could Reshape Corporate America,” European Corporate Governance Institute, Law Working Paper No. 817/2024, Jan. 2025, at 12 (forthcoming in Stanford Law Review). The scope of coverage of the EU’s legislation has been significantly reduced and its implementation delayed. John Verwey, Rachel Lowe, Sulaiman Malik and Michael Singh, “CSRD Slashed: EU’s Corporate Sustainability Regulations Significantly Reduced,” Proskauer, Regulatory & Compliance,  Feb. 26, 2025, https://www.regulatoryandcompliance.com/2025/02/csrd-slashed-eus-corporate-sustainability-regulations-significantly-reduced/. Nevertheless, it is still possible that stricter European Union climate reporting standards could have a “Brussels Effect” on non-European companies through fiduciary oversight standards. Enriques, Gatti, and Shapira, op. cit.

[15] As some discussions at the Columbia colloquium illustrated, the standard formulation of fiduciary duty to “the corporation and its shareholders” sometimes omits or elides the conjunction. At least as traditionally understood, the duty is to both the corporation and its shareholders, even though some contemporary commentators prefer to read this implicitly instead as “the corporation’s shareholders.” This mistaken conflation allows those pushing a “shareholders only” view of fiduciary duties to ignore the important question with a long intellectual pedigree of “what is the corporation?” The true answer embraces many more business participants than shareholders. See Eric W. Orts, Business Persons: A Legal Theory of the Firm (rev. paper ed. 2015). Cf. Madison Condon, “Externalities and the Common Owner,” 95 Washington Law Review 1, 59 (2020) (“A firm manager is typically said to have a fiduciary duty to manage in the best interests of ‘the corporation and its shareholders.’ What happens when the interest of the corporation and its shareholders diverge? Or when different shareholder groups have divergent interests?”).

[16] See Oliver Hart and Luigi Zingales, “Companies Should Maximize Shareholder Welfare Not Market Value,” 2 Journal of Law, Finance, and Accounting 247 (2017) (making this argument in economic terms).

[17]  On the “shadow interests” of future generations and their weak claims on present decision-makers with respect to “long problems” like climate degeneration, see Thomas Hale, Long Problems: Climate Change and the Challenge of Governing Across Time 29-32, 78-90 (2025). (Thanks to Thom Wetzer for this reference.)  In addition to changes in political structures, Hale argues that corporate governance laws and norms should be reformed as well, though he does not directly address fiduciary duties. Id. at 91-94.

[18] See, e.g., Robert P. Bartlett III and Ryan Bubb, “Corporate Social Responsibility Through Shareholder Governance,” 97 Southern California Law Review 417 (2024); Virginia Harper Ho, “’Enlightened Shareholder Value’: Corporate Governance Beyond the Shareholder-Stakeholder Divide,” 36 Journal of Corporate Law 59 (2010).

[19] See Wesley Newcomb Hohfeld, “Some Fundamental Legal Conceptions As Applied in Judicial Reasoning,” 23 Yale Law Journal 16, 28-54 (1913).

[20] See Geczy, Jeffers, Musto, and Tucker, op. cit., at 103 (“Constituency statutes provide our first glimpse at a complicated problem regarding institutional investors’ fiduciary duties. . . . Changing corporate directors’ fiduciary duties and allowing them to pursue non-profit maximizing interests does not alter the separate fiduciary duty under which institutional investors operate. When the legal regime for corporate actions shifts away from profit maximization . . . this may not pose a problem for the individual investor, but may create a conflict for agency investors – those who invest the money of others. . . .”).

[21] Id. at 80–92 (describing generally “high” fiduciary standards in terms of profit maximization for institutional investors such as private and public pension funds as well as foundation and endowment funds, while some other institutional investor fiduciaries such as certain banks, insurance companies, and investment advisers have more flexible duties). See also Max M. Schanzenbach and Robert H. Sitkoff, “Reconciling Fiduciary Duty and Social Conscience: The Law and Economics of ESG Investing by a Trustee,” 72 Stanford Law Review 38 (2020).

As Professor Madison Condon observed at the Columbia colloquium, the life expectancies of citizens now investing in funds for retirement highlight the irrationality of a profit maximization standard. Consider a time horizon for retirement in 2070. Does any rational or reasonable investor really want to trade off an inhabitable climate for higher returns?

[22] Often, of course, the current owners and managers of a target are given a lucrative “offer that they can’t refuse,” which lightens the burden for them if not other business participants such as employees.

[23] Friedman, op. cit.

[24] Id.

[25] Id. (defining the responsibility of business to “make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom”). This formulation begs the question of where the sources and principles of “ethical custom” are to be found. However, it would seem at least to count out the possibility of using a cost-benefit analysis of expected profits to decide whether to follow the law.

[26] Brian Berkey and Eric W. Orts, “The Climate Imperative for Business,” California Management Review (2021), https://cmr.berkeley.edu/2021/04/climate-imperative/.

[27] See, e.g., Geczy, Jeffers, Musto, and Tucker, op. cit. at 75 (“According to the shareholder primacy view of U.S. corporations, a corporate board’s duty is to maximize shareholder value. Although debated, it is a popular and influential view . . . [though] entrepreneurs, legislators, and investors have contemplated variations of this duty.”). See also Rebecca Henderson, Reimagining Capitalism in a World on Fire: How Capitalism Can Save the World 6 (rev. ed. 2021) (noting Friedman’s strong influence in business schools). For an updated version of Friedman’s argument in the corporate law vernacular, see Stephen M. Bainbridge, The Profit Motive: Defending Shareholder Value Maximization(2023).

[28] Citizens United v. Federal Election Commission, 558 U.S. 310 (2010). See also American Tradition Partnership, Inc. v. Bullock, 567 U.S. 516 (2012); SpeechNow.org v. FEC, 559 F.3d 686 (D.C. Cir. 2010). Musk far outpaced other billionaires in his donation of approximately $250 million to Trump’s campaign, as well as his use of X (formerly Twitter) for pro-Trump propaganda, but he was not alone. In addition to oil and gas, cryptocurrency and other finance interests were also a significant factor. Raphael Hernandes, Lauren Aratani, and Will Craft, “Revealed: the tech bosses who poured $394.1m into US election – and how they compared to Elon Musk,” Guardian, Dec. 7, 2024, https://www.theguardian.com/us-news/2024/dec/07/campaign-spending-crypto-tech-influence; Dharna Noor, “Big oil spent $445m in last election cycle to influence Trump and Congress, report says,” Guardian, Jan. 23, 2025, https://www.theguardian.com/us-news/2025/jan/23/big-oil-445m-trump-congress. See also David Gelles, Lisa Friedman, and Brad Plumer “‘Full on Fight Club’: How Trump Is Crushing U.S. Climate Policy,” New York Times, Mar. 2, 2025, https://www.nytimes.com/2025/03/02/climate/trump-us-climate-policy-changes.html (“The fossil fuel industry donated more than $75 million to Mr. Trump’s presidential campaign and Mr. Trump, in turn, promised to weaken environmental regulations in ways that would lower its costs and increase its margins.”).

[29] Hale, op. cit., at 43.

[30] Richard J. Lazarus, “Super Wicked Problems and Climate Change: Restraining the Present to Liberate the Future,” 94 Cornell Law Review 1153, 1159-61 (2009); Eric W. Orts, “Climate Contracts,” 29 Virginia Environmental Law Journal 197 (2011).

[31] Hajin Kim, “Expecting Corporate Prosociality,” 53 Journal of Legal Studies 267 (2024).

[32] Another problem with the Maximization Model is that it is too abstract. Particularly with respect to investors, the Maximization Model treats shareholders as concerned only about their pecuniary wealth and not as having more fully rounded human interests. They are treated as “fictional shareholders” rather than real human beings who may care about the climate as well as profits. See Daniel J.H. Greenwood, “Fictional Shareholders: For Whom are Corporate Managers Trustees, Revisited,” 69 Southern California Law Review 1021 (1996); Grant M. Hayden and Matthew T. Bodie, “One Share, One Vote and the False Promise of Shareholder Homogeneity,” 30 Cardozo Law Review 445 (2008).

[33] Dorothy S. Lund and Elizabeth Pollman, “The Corporate Governance Machine,” 121 Columbia Law Review 2563 (2021). As Lund and Pollman show, “shareholder wealth maximization [has become] ingrained in the very notion of ‘mainstream’ corporate governance.”  Id. at 2578.

[34] James Gleick, “The Prophet Business,” New York Review of Books (book review), Feb. 27, 2025, https://www.nybooks.com/articles/2025/02/27/the-prophet-business-century-of-tomorrows-adamson/.

[35] As Gleick also points out, one reason for the difficulty in gaining public acceptance and recognition of the scientific evidence of the climate emergency is that an analogous alarm about human overpopulation made by academic experts in the 1960s and 1970s proved unjustified. Id.

[36] See, e.g., Weeren, op. cit., at 172–74 (recommending a permissive constituency statute in Delaware). See also Robert M. Ackerman and Lance Cole, “Making Corporate Law More Communitarian: A Proposed Response to the Roberts Court’s Personification of Corporations,” 81 Brooklyn Law Review 895, 998–1004 (2016) (proposing mandatory fiduciary duty constituency states in all states, including Delaware).

[37] Although serious political and legal headwinds have arisen lately, the European Union and the state of California appear to remain leaders with respect to corporate climate disclosure. See, e.g., Magali Delmas, Michael Gerrard, and Eric Orts, “In California and Europe, a new dawn for corporate climate disclosure,” The Hill, Oct. 5, 2023, https://thehill.com/opinion/energy-environment/4238182-in-california-and-europe-a-new-dawn-for-corporate-climate-disclosure/.

[38] See, e.g., Ethics of ESG: Critically Assessing the Environmental, Social and Governance Movement (Valentina Gentile, Eric Orts, Andreas Rasche, and Alan Strudler eds. 2025, forthcoming in Cambridge University Press). See also Elizabeth Pollman, “The Making and Meaning of ESG,” 14 Harvard Business Law Review 403 (2024) (reviewing the original intentions of the United Nations as well as institutional investors regarding ESG).

[39] Paul Hawken, The Ecology of Commerce 3 (1993).

 This post was originally published on Columbia Law School’s Blue Sky Blog here and is inspired by a colloquium on “The New Climate Fiduciaries”  jointly sponsored by the Sabin Center for Climate Change Law and the Millstein Center and held at Columbia Law School on February 21, 2025.