Shareholder litigation in response to the climate emergency and human right to a healthy environment in Asia and the Pacific

Abstract

The objective of this study was to search for and review material that sheds light on the role of shareholders of companies in influencing internal corporate policy on climate change and the human right to a healthy environment. While shareholders may exert influence in multiple ways, litigation between shareholders and corporations carries unique weight as lawsuits are a matter of public record, and in some jurisdictions, a judgment in a lawsuit against one company can generate legal norms that are binding on other companies. On the other hand, shareholders can also influence internal policies by exercising voting rights at company meetings, but such instances are less visible and more difficult to trace unless they are reported in the media, and do not create generally applicable legal obligations on other companies. As part of the study, a search was conducted for primary and secondary material that offered evidence of shareholder influence on corporate policy on climate change and environmental matters. The search was carried out for several jurisdictions in the Asia-Pacific region – namely India, Singapore, Hong Kong, Indonesia, and Australia. The search for material revealed that in most jurisdictions there was no visible evidence of instances where shareholders had exercised their rights at meetings when it came to matters concerning climate change and the environment. On the other hand, litigation involving shareholders and corporations pertaining to environmental issues was well-documented, albeit only in one jurisdiction among the several Asia-Pacific jurisdictions investigated in this study. The domestic company laws of the jurisdictions surveyed also varied, with some imposing greater obligations on company directors to take account of climate change and environmental issues in directing the affairs of their companies. While the way that directors’ duties are set out and interpreted under domestic law could have an impact on the prevalence of shareholder actions against directors in this area, other relevant factors could include the lack of awareness and incentive on the part of shareholders to take legal action when directors fail to consider environmental impact in their decision-making processes.