The Duty to Update Corporate Emissions Pledges
Facing both internal and external market pressures, a rapidly growing number of private companies are making public, voluntary, and ambitious pledges to reduce or outright eliminate by a certain date or benchmark their greenhouse gas emissions. Yet, ambition and necessity notwithstanding, nonfulfillment of these emission reduction targets (“ERTs”) is a looming, if not an already realized, concern for markets, which are noticeably and increasingly attuned to the long-term value and climate performance of companies. In the absence of a comprehensive disclosure regime for climate performance and risk, this Note highlights the duty to update—a judicial doctrine that polices forward-looking statements, like ERTs, that become misleading over time—as a bulwark against unfulfilled ERTs that linger in the market and have the potential to mislead investors concerning a company’s climate performance or reputation. In fact, ERTs—which convey clear expectations regarding the quantity of emissions to be reduced, the steps needed to achieve those reductions, and the timeframe of achievement—are uniquely suitable for the duty to update.