An Open Systems Approach to Law, Strategy, and Sustainability: The Role of the In-House Counsel in the Anthropocene Era
Abstract
In an embarrassing rebuke, referred to by some as “the vote heard round the world” (Le Berre, 2021), the board of directors of oil and gas giant ExxonMobil lost a proxy contest in May 2021 mounted by a group of institutional investors who faulted the company for not adequately taking into account the effects of climate change and the likely ensuing global regulation of greenhouse emissions on the firm’s strategy and operations (National News, 2021). The insurgents forced the company to replace three members of its twelve-member board with the former chief executive of the oil and gas refinery Andeavor; a former Neste executive involved with Neste’s expansion into renewable fuels; and a strategist at Alphabet’s X innovation lab who is also a former U.S. assistant energy secretary (National News, 2021). The institutional investors voting for the insurgent slate included BlackRock, Vanguard, and State Street (Phillips, 2021). Clearly environmental concerns had moved from being a niche concern of “tree huggers” to major hard-core financial players concerned with ensuring a robust return for their clients, who include life insurance beneficiaries and pension holders who might not collect benefits until decades in the future. One must ask whether the general counsel of ExxonMobil could have done anything differently to have avoided this result.
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