Panel 3: For Whose Benefit? Climate Corporate Governance after McRitchie v. Zuckerberg

Climate change presents enormous risks to our society, and many scholars (and investors) have argued that diversified shareholders benefit from corporate actions that reduce climate externalities. However, others have argued that directors and officers are bound to prioritize only the wellbeing of their firm, and that this tension presents an enormous barrier to pro-social climate action. In a recent decision, McRitchie v. Zuckerberg, the Delaware Court of Chancery sided firmly with the latter camp, holding that Delaware’s corporate law follows “a single-firm model.” Given this development, what do corporate fiduciary duties mean for shareholders who want to encourage climate action, or reduce climate risk, across their portfolios? If fiduciary duties do not require managers to take a diversified shareholder perspective, do they allow it?