ENVIRONMENTAL SUSTAINABILITY & ITS IMPACT ON CORPORATE GOVERNANCE

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ENVIRONMENTAL SUSTAINABILITY & ITS IMPACT ON CORPORATE GOVERNANCE

I INTRODUCTION

In recent years it has been established that global corporations have contributed immensely to climate change and the sustainability of the planet.1 Decisions made by corporations have impacted adversely on environmental resources2 through the production of greenhouse gases ('GHGs'), the unsustainable use of biodiversity, and by the production of toxic and hazardous substances and waste.3 Since the early 1990s, it has been documented that multinational corporations generate more than 50 per cent of global GHG emissions.4 However, over the past 45 years, since the actions of corporations were recognised as being potential threats to the environment, there has been a significant shift in thinking. Decisions made by companies, which are regulated by corporate law Governments worldwide are introducing stringent "climate laws" to curb further environmental damage.5 It is now becoming evident that corporations need to bear the lion's share of responsibility in actively curtailing their emissions into the global atmosphere.6

This essay focuses on the issues surrounding environmental sustainability and the impact it has on corporate governance. It will focus primarily on the changes that will occur for internal corporate governance in Australia once the new