Sanjay M. Shirodkar is of counsel, and Deborah R. Meshulam and Jeffrey L. Salinger are partners at DLA Piper. This post is based on a DLA Piper memorandum by Mr. Shirodkar, Ms. Meshulam, Mr. Salinger, Edward Hanover, and Arielle Katzman. Related research from the Program on Corporate Governance includes The Illusory Promise of Stakeholder Governance by Lucian A. Bebchuk and Roberto Tallarita (discussed on the Forum here); For Whom Corporate Leaders Bargain by Lucian A. Bebchuk, Kobi Kastiel, and Roberto Tallarita (discussed on the Forum here); and Socially Responsible Firms by Alan Ferrell, Hao Liang, and Luc Renneboog (discussed on the Forum here).
The United Nations Framework Convention on Climate Change was established in 1992 with the goal of preventing “dangerous” human interference with the climate system.
The Paris Climate Agreement was the most recent attempt to establish international cooperation over climate change. Although the United States withdrew from the agreement effective November 4, 2020, President-elect Joe Biden has promised to rejoin the Paris Agreement on his first day in office. In addition, former Secretary of State John Kerry has been named special envoy to lead the Biden Administration’s efforts to fight climate change. In this role, it is expected that Mr. Kerry will coordinate programs to address climate change across multiple agencies.
As the new Administration is expected to make climate change a top priority, there is a broad consensus that climate change presents a profound challenge for humanity. We anticipate that public and private companies will face increasing pressure to respond to this challenge and act in climate-positive ways. In the short run, we expect this pressure will come principally from market participants, including during the upcoming 2021 proxy season. That pressure that has already started; discussions in boardrooms related to governance matters, ESG activism and other similar shareholder/investor driven initiatives are well under way, and climate-related topics have assumed increased prominence among areas of focus. Accordingly, as we wind down the unprecedented year of 2020 and look ahead to the 2021 proxy season, we want to focus your attention on climate activism.
