Renewable energy commitments versus greenwashing: Board responsibilities

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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.

Keywords: Renewable Energy, Greenwashing, Boards of Directors, Corporate Governance

Authors’ individual contribution: Conceptualization — H.G.; Methodology — H.G.; Resources — M.C.; Writing — Original Draft — H.G.; Writing — Review & Editing — M.C.; Visualization — H.G.; Funding Acquisition — M.C.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G3, G30

Received: 12.03.2021
Accepted: 11.06.2021
Published online: 14.06.2021

How to cite this paper: Grove, H., & Clouse, M. (2021). Renewable energy commitments versus greenwashing: Board responsibilities [Special issue]. Corporate Ownership & Control, 18(3), 423–437. https://doi.org/10.22495/cocv18i3siart15