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As the physical and economic harms of climate change accumulate, corporate managers have faced increasing pressure to reduce their companies’ greenhouse gas emissions and adapt their businesses to climate-related risks. In parallel, civil society organizations and activist investors have increasingly sought to compel private sector action on climate change, while the “anti-ESG” political movement has sought to prevent financial managers from considering climate risks entirely. These discussions have frequently centered on one key element of corporate governance: fiduciary duties.

Broadly, fiduciary duties arise when one person entrusts another with discretion over their financial affairs. For decades, legal scholars have recognized that fiduciary duties under corporate law may force private companies to address climate change. Writing in 2002, Professor Perry Wallace argued that both the physical threats of climate change and the legal and economic impacts of society’s response to those threats will inevitably implicate “the heart of corporate governance.” In recent years, as the impacts of climate change and the energy transition have become more apparent, boards and courts have faced a challenging question: what fiduciary duties do corporate directors and officers owe around climate change?

On February 21, 2025, the Sabin Center for Climate Change Law and the Millstein Center for Global Markets and Corporate Ownership, in partnership with the European Corporate Governance Institute, hosted a colloquium exploring that question. This blog offers reflections on the Colloquium and highlights areas for future research and action around climate-related fiduciary duties.

The New Climate Fiduciaries Colloquium

The New Climate Fiduciaries Colloquium, held at Columbia Law School, brought together approximately three hundred participants who explored whether, and how, corporate directors and officers are obligated to respond to climate change. The Colloquium intentionally gathered a diverse set of panelists and participants, and was not intended to produce consensus about the scope or direction of climate-related fiduciary duties.

See here for the Colloquium agenda; video recordings of the keynote addresses and panels are available on the Sabin Center’s YouTube channel and linked below.

Takeaways from the Colloquium

The Colloquium revealed several key dynamics that will shape the development of climate-related fiduciary duties. This section discusses three core takeaways from the Colloquium, which reflect the interpretation of the authors, and may not align with the opinions of every panelist or attendee.

Corporate legal analysis and judicial decision-making is hampered by a lack of climate change-related expertise

The Colloquium highlighted a core problem: a significant portion of corporate law commentary suffers from a lack of exposure to climate science and policy. Corporate scholars addressing climate change frequently understate or ignore the imminence and economic significance of climate change. While the Colloquium’s panelists and the attendees offered a sophisticated grasp of climate change, some influential corporate scholars like Professor Stephen Bainbridge frame climate change as an issue of social responsibility rather than an economic threat. Scholars like Bainbridge argue that climate change should trigger no fiduciary obligations because the duty of corporate directors and officers is to understand and oversee “the corporation’s business,” not to conform to “emerging social norms.” And while other recent scholarship finds that fiduciary duties extend to “mission-critical” risks to corporations, including “ESG” risks, this work assesses climate change as a reputational and liability concern for major emitters, and does not focus on the material supply chain and market disruptions that many corporations face due to climate change. And as several Colloquium panelists highlighted, courts are often ill-informed about the economic risk that companies face from the changing climate.

Even academics with a sophisticated understanding of climate risks sometimes shorthand the terminology that distinguishes between corporate climate mitigation (the process of reducing greenhouse gas emissions), and corporate climate adaptation (the process of responding to the changing physical, legal, and economic landscape caused by climate change). This imprecision can undercut promising lines of debate. For example, during panel discussions focused on climate mitigation, the debate revolved around whether fiduciary law implied any broad duty to for fiduciaries to monitor the impact of corporate activities on the wider world. However, several panelists also raised when, and whether, corporate fiduciaries could owe a duty to preserve the long-term value of firm or portfolio investments through climate adaptation, even if that adaptation is not immediately rewarded by the capital markets. Because the distinction between mitigation and adaptation was rarely clarified, several attempts to discuss fiduciary duties related to long-term corporate climate adaptation fell flat. This ambiguity in conversations among highly informed experts is likely mirrored and magnified in boardroom discussions.

Public debate around corporate climate duties is muddled given the different sources of fiduciary duty

“Fiduciary duty” describes a category of legal obligation, but fiduciary duties arise in different, and legally distinct, contexts. Board members owe their corporations different obligations than asset managers owe their clients, for example. The different silos of fiduciary duty law are easily confused in judicial decisions and broader commentary.

For example, in the weeks leading up to the Colloquium, a Texas District Court ruled in Spence v. American Airlines, that American Airlines, Inc. had breached its fiduciary duty to its pension beneficiaries under the Employee Retirement Income Security Act of 1974 (ERISA) by allowing its investment manager, BlackRock, to consider certain ESG issues. While this decision has not been affirmed by any higher court, and is one among many “anti-ESG” cases that have been heavily criticized by corporate and antitrust scholars, several panelists and participants in the Colloquium noted that it has already impacted their discussions with corporate directors and officers. This should be somewhat surprising, as the fiduciary duties owed by pension fund managers under the federal statute ERISA are similar to, but distinct from, the similarly-named duties owed by corporate directors and officers that arise from state statutes and common law. Setting aside the merits of the decision, there is no reason to think that the ERISA-focused ruling in Spence should directly affect the decisions of judges assessing fiduciary duties that arise under other legal schemes. But the distinctions are muddled, boards and officers may respond by being overly cautious, or by adhering to the wrong set of obligations. Discussions at the Colloquium highlighted that there is important legal analysis to be done clarifying the different sources of obligations for fiduciaries.

Fiduciary duties will remain a key legal battleground as competing climate standards advance

Debates at the Colloquium also suggest that corporate climate action will continue to be shaped by litigation. Panelists discussed emerging litigation theories that seek to force corporations to respond to climate change, or to protect the discretion of directors and officers to independently assess climate risks. There was also concern about the potential for anti-climate litigation to preclude corporations from acting on climate risks.

Experts debated whether competing standards would create a “Brussels effect” around climate corporate fiduciary duties, if multi-jurisdictional companies are pressured into a “race to the top” to operate in jurisdictions with high regulatory standards. In response to rising international standards and the increasing legal salience of climate change, plaintiffs may seek to bring fiduciary duty claims against directors and officers who fail to oversee corporate compliance with climate change laws in other jurisdictions.

Corporations also face legal action from anti-ESG politicians and fossil fuel interests seeking to prevent corporate compliance with climate change-related laws in other jurisdictions. For example, Texas House Bill 4049, introduced on April 9, 2025, purports to ban companies doing business in Texas from complying with greenhouse gas reporting laws in other jurisdictions. This bill has not passed, and its legality and practical impact are highly suspect. But it reflects a troubling trend opposing corporate responses to climate change. Some panelists observed that this anti-environmental activism may, somewhat ironically, prompt fiduciary litigation from climate advocates defending corporations, in an effort to establish that fiduciary duty law gives directors and officers the right to consider climate risks, even if it does not necessarily mandate that they do so.

What Comes Next?

The 2025 Colloquium on Climate-Related Fiduciary Duties suggests several new avenues to advance private sector responses to climate change. As discussed above, corporate law scholars and climate change experts sometimes lack a shared expertise and terminology. A body of neutral, educational research and “primer” resources would be valuable to reduce confusion about the legal status of climate-related fiduciary duties. This material could educate researchers, practitioners, commentators, and the public about the different silos of fiduciary duty law, with analysis of the climate-related rules and caselaw applicable to each. This would both inform the public discourse around climate-related fiduciary duties, and, importantly, help corporate decision-makers and their counsel to understand the range of permitted corporate climate action.

Interdisciplinary scholarship is also vital to address areas where climate-related fiduciary duties intersect with other bodies of law. Participants in the Colloquium are already conducting groundbreaking research at the intersection of fiduciary duty and transactional law, religious freedom, and antitrust, among other areas. Greater resources are necessary to support these efforts and generate scholarship that responds to the pressures and exigencies of climate change across all sectors and practice areas.

The Colloquium also highlighted key areas where researchers can respond to legal developments that are undermining climate action. It is clear that courts, commentators, and corporate legal decisionmakers often use flawed assumptions about the physical, economic, and societal impacts of climate change. Elsewhere, judicial decisions around fiduciary duty are often laden with assumptions drawn from Law and Economics literature that do not necessarily reflect the reality of markets or the full impact of climate change. For example, consider when courts are asked to use the present value of shares as a metric of corporate harm: this seemingly neutral approach depends on a version of the efficient markets hypothesis, which presumes that markets incorporate important information into the price of stocks. However, many studies suggest that climate change-related risk is imperfectly priced by capital markets. There is a significant need for research and scholarship that identifies the underlying assumptions of corporate law, and assesses where such assumptions may fail under the physical, economic, and societal pressures of climate change.

Through its the Initiative on Climate Risk and Resilience Law (ICRRL), the Climate Law & Finance Initiative (CLFI), the Sabin Center is committed advancing this research and building on the complex discussions raised during Colloquium. As ever, the Center welcomes scholars and practitioners to contribute their expertise and efforts to advance a whole-society approach to the urgent challenges of climate change.