A Ponzi scheme on the environment? Failures of fiduciary duty and the challenges of climate governance

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Project leader(s)

The business practices of our current generation have been likened to a giant ‘Ponzi scheme’ on the environment. Current resources are being used at an unsustainable rate and emissions of greenhouse gases threaten future generations and non human species. This project takes seriously this metaphor of a Ponzi scheme and explores the notion of a gross failure of fiduciary duty in the context of governance regimes aimed at combating climate change. Through an analysis of the more familiar Ponzi scheme, where business executives exploit investor funds for personal gain, the project argues that fiduciary obligations in the financial sphere aimed at minimising financial misconduct by executives act to undermine governance regimes aimed at combating climate change. Financial fiduciary obligations motivate business executives to look for loopholes in any emerging climate regime and to lobby to preserve shareholder value in a manner that weakens emerging regulatory regimes aimed at reducing GHG emissions. Placing obligations to the environment within corporate law and more broadly within measures of economic wellbeing (i.e. moving away from measures such as GDP ) are needed to prevent obvious conflicts between fiduciary duties to shareholders and investors and those to the environment. Without such changes, there remains a legal obligation for companies and their executives to maximise investor value by sacrificing the planet.


Haines F. 2012. ‘A Ponzi Scheme on the Environment? Failures of fiduciary duty and the challenges of climate governance’ in Tim Smith, Charles Sampford and Ken Coghill (Eds.) Fiduciary Duty, Public Trust and the Governance of Climate Change, Ashgate, ch 12 235-252.

Image: Honorary Professor Fiona Haines (RegNet)

Professor Fiona Haines

Dr Fiona Haines is Professor of Criminology in the School of Social and Political Sciences, Honorary Professor at RegNet in the College of Asia and Pacific at ANU and...

Climate, energy & the environment cluster

Climate, energy and the environment

This cluster has four broad regulatory and governance research themes: identifying obstacles and options for effective energy governance; analysing state and private governance mechanisms for mitigating climate change; examining the opportunities and constraints of the green economy in transforming infrastructure and urban development; and exploring creative regulatory solutions to transnational environmental problems.

Updated:  10 August 2017/Responsible Officer:  Director, RegNet/Page Contact:  Director, RegNet