Why Can’t Stakeholder Theory Save the Planet and What Can Corporate Law Do Instead?

In the midst of a multidimensional crisis with economic, social and environmental aspects, corporations have become aware that the reality of our day necessitates that they must play a dual role both for their businesses and for the general public. A primary reason for the change in this perception is the alarming state of the environment and especially the potentially irreversible effects of the climate crisis. As a living and evolving entity within society, companies now take on the public duty to address the mounting concerns about the environment and adopt environmentally sustainable corporate strategies. While doing this, many of them refer to the stakeholder theory. Almost forty years ago, the stakeholder theory was introduced by Freeman as a management concept. Including environmental sustainability within the scope of the stakeholder theory is, therefore, a fairly new approach and raises the following question: Is the stakeholder theory the best tool to integrate environmental sustainability into corporate activity? This article will aim to demonstrate why the answer to this question should be ‘no’. Adding to this, it will then discuss how legal reform in the area of corporate law focusing on the key concepts of corporate interest and directors’ duties should be done instead.