Abstract
Since many companies are making renewable energy commitments, boards of directors have responsibilities to monitor such commitments for enhanced corporate governance. This paper develops such board corporate social responsibilities for renewable energy commitments, especially in response to activist investors. In the existing literature, there are no research papers that addressed the major research question, and corresponding relevance, of this paper. What are the boards of directors’ responsibilities for monitoring their companies’ commitments to renewable energy and are they making significant efforts, or just greenwashing, i.e., just making commitments or pledges without any substantial subsequent performance? The shifting energy landscape to renewables, especially for carbon-free electricity, and the affordability and reliability of renewables are developed. Global corporations committed to 100% renewable electricity are cited for boards to monitor. Following guidelines from activist investors, boards of directors can assess whether their companies are reporting in alignment with the Task Force on Climate-related Financial Disclosures or other reporting systems. Boards can monitor how their companies’ business plans are compatible with transitioning to a net-zero economy and how such plans are incorporated into long-term strategies. They can monitor if sustainability connections to stakeholders are driving long-term durable profits and delivering value to shareholders, customers, employees, and communities. Future research could investigate these board responsibilities with case studies or empirical studies, especially to see if greenwashing exists
Highlights
This paper develops board corporate social responsibilities for renewable energy commitments, especially in response to activist investors
In the following literature review, there were no research papers that addressed the major research question of this paper: What are board of directors’ responsibilities for monitoring their companies’ commitments to renewable energy as corporate social responsibilities, especially in response to activist investors? Several papers did discuss environmental issues, such as the emerging area of green banking practices, corporate social responsibility reporting, and related impacts on financial performance and one study did investigate the impact of climate change on food production and corporate governance responsibilities, as subsequently discussed here
The results showed that a lack of corporate governance (CG) in monitoring and supervisory mechanisms, as well as a high concentration of managerial ownership, can significantly contribute to low levels of corporate social responsibility (CSR) (Lahjie, Natoli, & Zuhair, 2021)
Summary
This paper develops board corporate social responsibilities for renewable energy commitments, especially in response to activist investors. Since many companies are making renewable energy commitments, boards of directors have responsibilities to monitor such commitments for enhanced corporate governance. This paper theoretically extends corporate governance concepts by exploring such board responsibilities from the practical perspective of current developments of renewable energy. The major research question of this paper is: What are the boards of directors’ responsibilities for monitoring their companies’ commitments to renewable energy, and are they making significant efforts, or just greenwashing, i.e., just making commitments or pledges without any substantial subsequent performance?.
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