ICCL work in progress session - Professor Daniel Attenborough on the ‘Law’s Triviality in the Regulation of Climate Change’

26 April, 2024

2 pm - 3 pm

Online

Abstract

There is increasing pressure and expectation on companies to address growing economic inequality, lack of diversity and inclusivity, and, especially, the transition to a low-carbon future. To drive such change, global shareholder stewardship has become a proxy for regulation of climate change and social risk. But as the number of “climate conscious” investors expand, doubt remains as to whether - or not - the fungibility of the company’s share register can exert a sufficiently powerful restraining influence on managers to commit credibly to immediate and progressive climate transition. Therefore, attention is increasingly refocused on the impressive momentum of debt financing, or “green bonds”, as one possible instrument that can sharpen how serious a company is on the issue of climate change. Thinking about market-invoking/private ordering solutions, a key question that follows is: what role does the law that applies to companies play in all this?  Within the framework described above, law appears backgrounded, if trivial, in sense that it is absent from the more direct and overt solutions to climate change, at least in corporate law and finance. On this basis, this paper makes three contributions to the debate on law and climate change. First, we provide an outline of, and intervention in, contemporary debates about the virtues and limits of equity capital and debt capital as a default regulatory solution to companies’ transition to net zero. Secondly, we examine why law has, it seems, proved either forgettable or unsatisfactory in this context. Third, we examine how this subject requires both an understanding of what law substantively is, and what it can be, both in terms of its limits, but also in its creative possibilities.