Jun 18 2023 52 mins
In this episode, Professor John Armour and Professor Thom Wetzer discuss their joint research paper, ‘Green Pills’ with Dorothea Oyetunde, and the role of this novel mechanism in making corporate climate commitments credible. In light of the move to transition to a net-zero economy, they discuss why corporate climate commitments matter in the first instance, and how the problem of the lack of credibility in corporate climate pledges arises.
Through identifying a gap in traditional corporate governance measures, Professor John Armour and Professor Thom Wetzer discuss the need for their ‘Green pill’, a contractual mechanism allowing firms to deliver a degree of commitment that can be tailored to the firm’s circumstance, resolving the credibility problem. The adoption of the 'green pill' emphasises the important role that legal frameworks can play in resolving the societal challenges arising from the climate crisis.
The research paper is also joint work with Professor Luca Enriques.