The EU’s recent
legislations on corporate sustainability have reignited the debates about the
roles and duties of directors in addressing climate change, mainly due to the
obligation on climate transition plans outlined under Article 22 of the
Corporate Sustainability Due Diligence Directive (CSDDD). However, defining the
directors’ role in this regard remains a challenging task due to the silence of
the European legislation regarding directors. Moreover, the tensions between
the obligations under the EU legislation on climate, national corporate laws
that strongly emphasize corporate interest, and corporate dynamics that often
grant shareholders a dominant position, create a web of conflicting dilemmas.
As a result, directors are caught in a love triangle of competing shareholder,
corporate, and climate-related interests. These dilemmas can further lead to
risks for liability if directors want to go beyond mere legal compliance and
seek ambitious climate strategies. Against this background, this paper aims to
answer two interconnected questions: (1) What dilemmas could directors face in
the climate transition processes? (2) What intervention scenarios targeting
directors and shareholders could enable more ambitious climate strategies?
While this paper primarily draws on Dutch corporate law as a point of departure
for a more concrete examination, its findings may offer broader insights as
comparison allows.