Peabody Energy, the world’s largest privately owned coal producer has filed for bankruptcy protection.
As coal is phased out, other carbon intensive companies need to look urgently at how they will manage the transition to a low carbon economy.
Commenting on the news, Alice Garton, a lawyer at the environmental law organisation ClientEarth, said:
“Peabody serves as a pertinent example of what happens when directors fail to account for changing market dynamics. The companies of the future will be those who survive the zero net carbon transition by addressing climate risk head on in strategic business decisions.
“Directors of other carbon intensive companies should study what’s happened to Peabody carefully and learn lessons very quickly. These directors have a duty to the company to steer a course for business success – and that requires factoring climate related risks into their business decisions, and adapting their business models where necessary. Directors who breach their duties to the company can find themselves personally liable for losses.”
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