• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month
  1. 1
  2. 2
  3. 3
  4. 4
  5. 5
  6. 6
  7. 7
  8. 8
  9. 9
  10. 10
  11. 11
  12. 12
  13. 13
  14. 14
  15. 15

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 Carbon Pricing Sche

Extracts from this document...


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 Carbon Pricing Scheme ('CPS') is implemented from 1 July 2012. A brief summary will be outlined regarding the emergence of international environmental law and ecological sustainability, the traditional ways corporations have been governed, and how the new CPS will affect corporate governance after 1 July 2012. II THE EMERGENCE OF INTERNATIONAL ENVIRONMENTAL LAW & ECOLOGICAL SUSTAINABILITY Environmental sustainability is one of the defining political challenges of the 21st century.7 Water scarcity, climate change and threatened biodiversity have emerged because humans have, for far too long, overlooked environmental externalities as a variable in decision-making processes.8 One of the challenges of sustainable development is for corporations to consider modes of industrial organisation, in addition to the internal organisation of a firm which will lead companies towards a future which promotes environmental protection and equity.9 This has led to unremitting ...read more.


Such risks are likely to include impacts of climate change, carbon pricing or environmental and sustainability legislation on the company.40 In addition, under ASX Listing Rule 3.1, it provides that once a listed company becomes aware of any information that would reasonably be expected to have material effect on the price of its listed securities, it is required to immediately disclose that information to the ASX.41 The CPS is likely to increase cost of inputs and affect overall profits.42 As a result, listed companies must ascertain the effect of the scheme on financial forecasts. A failure to make appropriate disclosures will attract sanctions under section 674 of the Corporations Act.43 V CONCLUSION There is no doubt that climate change is a major concern in relation to environmental sustainability in the 21st century. It is evident that the climate change net is being drawn increasingly tighter around corporations with respect to corporate governance obligations.44 The internationally agreed environmental principles such as the Kyoto Protocol,45 provide a legal basis for environmental interests to be included within corporate governance regimes. These principles reflect new norms that national and global corporations will be increasingly called upon to uphold.46 The Australian Federal Governments move to introduce a national Carbon Pricing Scheme only strengthens the stand it has on achieving the sustainable development objective that has thus far eluded international environmental law. By ensuring corporations and their directors adhere to the strict provisions, the Australian Government is taking the first step in securing an ecological sustainable future not only for its citizens, but also for the viability of its corporations. BIBLOGRAPHY 1. Articles/Books/Reports Allens Arthur Robinson, Climate Change: Carbon Pricing Scheme (12 July, 2011) <http://www.aar.com.au/pubs/cc/foccjul11.htm> at 5 July 2012. Angel, Jeff, 'CSR - Saving the Environment?' (2005-2006) 87 Reform Issue 32. ASX - Australian Securities Exchange, Listed Entities Update: Important Information for ASX Listed Entities (05/11 ed, 19 July 2011) ...read more.


Australian Journal of Corporate Law 186. According to MacMillan, 'the shareholder primacy model of the corporation, which requires it to put the interests of its shareholders in the generation of corporate profits above other considerations, may tend to induce corporate behaviour that is environmentally harmful.' 22 Jackson, above n 20, 89. 23 Ibid, 90. 24 World Resources Institution, World Resources 2002-2004: Decisions for the Earth: Balance, Voice, and Power (2003) <http://www.wri.org/publication/world-resources-2002-2004-decisions-earth-balance-voice-and-power> at 9 April 2012, 107. 25 Elisa Morgera, above n 3, 8. 26 Valerie Ann Zondorak, 'A New Face in Corporate Environmental Responsibility: The Valdez Principles' (1991) 18 Boston College Environmental Affairs Law Review 457, 457 in David Ong, 'The Impact of Environmental Law on Corporate Governance: International and Comparative Perspectives' (2001) 12(4) European Journal of International Law 685, 688. 27 Corporations Act 2001 (Cth) s 299(1)(f). 28 Janet Dine, The Governance of Corporate Groups (2000) 162. 29 David Ong, 'The Impact of Environmental Law on Corporate Governance: International and Comparative Perspectives' (2001) 12(4) European Journal of International Law 685, 716. 30 Livingstone, above n 10, 297. 31 Clean Energy Act 2011 (Cth), Pt 3. 32 Lyster, above n 1, 309. 33 Corporations Act 2001 (Cth) s 108(1). 34 Gideon Meltzer, Corporate & Commercial February 2012 Newsletter (27 February, 2012) Cornwall Stodart Legal Expertise, <http://cornwalls.com.au/sharing-knowledge/legal-updates/corporate--commercial-february-2012-newsletter.aspx> at 5 April 2012. 35 Clean Energy Act 2011 (Cth). 36 Ibid. 37 Ibid, ss 248(1), 248(2) and 248(3). 38 ASX Corporate Governance Council, ASX Corporate Governance Principles and Recommendations (2nd ed, 2010) <http://www.asx.net.au/governance/corporate-governance.htm> at 9 April 2012. 39 Ibid. 40 Alfonso Grillo, ASX to Review Disclosure of 'Environmental' and 'Sustainability' Risks in Corporate Governance Statements of Listed Companies (TressCox Lawyers, 18 August, 2008). 41 Allens Arthur Robinson, above n 18, 9. 42 Gideon Meltzer, above n 34. 43 Corporations Act 2001 (Cth) s 674. 44 Lyster, above n 1, 281. 45 Kyoto Protocol, above n 13. 46 Nazli Choucri, 'Corporate Strategies Towards Sustainability' (1994) in Ong, above n 29, 695. ?? ?? ?? ?? 1 1 ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree Other Jurisdictions section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree Other Jurisdictions essays

  1. One of the most significant changes to the doctrine of precedent that applies to ...

    To ensure a complete understanding between us we will be stating pertinent information about this advice and a quick recap. The issue here is that you have a neighbour who has a series of perennial woody plants that you take as unfair due to the lack of sunshine you get because of it.

  2. Anticipatory Bail under CRPC. A critical study of the recent amendments and judicial interpretation ...

    An applicant has undoubtedly to make out a case for the grant of anticipatory bail. But one cannot go further and say that he must make a special case. While granting the bail the court may impose certain conditions as necessarily provided in section 438 (2)

  1. Elucidate Doctrine of Res Judicata in the Light of Decided Cases

    others, all persons interested in such right shall, for the purposes of this section, be deemed to claim under the persons so litigating. Explanation VII. The provisions of this section shall apply to a proceeding for the execution of a decree and reference in this section to any suit, issue

  2. Introduction to American Law. 5 questions on the US legal system.

    It is a status that makes a law that categorizes on that basis suspect, and therefore deserving of greater judicial scrutiny. The Supreme Court has seemed unwilling to extend full "suspect class" status to groups other than racial minorities, national origin and for some purpose alienage.

  1. Hong Kong Constitutional Law - in order to combat cross-border crime in an effective ...

    Fugitives Offenders Ordinance (Cap.503) (Accessed at http://www.legislation.gov.hk/blis_pdf.nsf/6799165D2FEE3FA94825755E0033E532/E3967CE0AF40F7A5482575EF0010009D/$FILE/CAP_503_e_b5.pdf on 13 February 2011) Hong Kong Bill of Rights Ordinance (Cap. 383) (Accessed at http://www.legislation.gov.hk/blis_pdf.nsf/6799165D2FEE3FA94825755E0033E532/AE5E078A7CF8E845482575EE007916D8/$FILE/CAP_383_e_b5.pdf on 13 February 2011) Secondary Sources: Books Albert H.Y. Chen, "Huiguihou xianggang yu neidi fazhi de hudong: huigu yu qian zhan (Interaction between the legal systems of Hong Kong and the Mainland after the reunification: reflections and prospects)"

  2. Family Law in Australia. The legal system has changed dramatically in the last century ...

    Legal remedies have also been evident in various cases of common law which have resolved many conflicts relating to same-sex relationships. This can be seen in the case of Jan Bell, who in 1996 successfully appealed the terms of the property division of her lesbian partners' estate, who died intestate.


    The EPBCA13 established the Australian Whale Sanctuary (AWS) in order to give formal recognition of the high level of protection and management afforded to cetaceans in Commonwealth marine areas, including Australia's EEZ. Section 225 provides provisions that regulate actions that will have, or are likely to have, a significant impact on threatened or migratory cetacean species that are listed under the Act.14 Pursuant to section 5(4)

  2. Unilateral Divorce in Muslim Law

    relations and would have no connection of any sort with you?, or ?I have released thee from being my wife?, in such cases divorces will be implied if the intention to divorce is proved. According to Ameer Ali, ?The word talaq in its different grammatical forms is regarded as express

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work