Global Warming – Who Might Get Sued
A number of companies are leaving themselves vulnerable to shareholder lawsuits regarding their carbon emissions, but a CNNMoney article claims the companies most vulnerable are some less obvious firms.Corporate Library, a corporate governance research group, took the top fifty emitters of CO2 and the top fifty companies that emit more CO2 than other industries in their sector, then ranked the companies using a number of criteria. Hasbro, Corning, and Burlington Northern were some of the companies that scored lower than most utilities and other large emitters of CO2 because their disclosure and reduction strategies were not detailed enough.
No such suits have been filed yet, but should a cap on CO2 emissions be passed, lawsuits would most likely come not from environmentalists, says Beth Young, author of the Corporate Library report, but from pension or hedge funds that take a loss or index funds that can’t dump the company’s stock.
Environmental lawyer Jeffrey Smith believes that winning a shareholder suit related to CO2 emissions would be very difficult. He also says that Corporate Library’s study, is “A good first step, but these issues are developing so rapidly, and the nuances of any individual company’s decisions about what and how to disclose this information make them largely incompatible with such a scoring device.”
Forty-three climate-related shareholder resolutions were filed with US companies in 2007.
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