Climate change is an issue of global importance, which may turn out to be the issue
of this century. Companies are at the core of both the problems and solutions for climate
change. Given this reality, it is astounding that in virtually all jurisdictions in the world
‘acting in concert rules,’ which were designed decades ago to facilitate an efficient market
for corporate control, effectively prevent shareholders who hold a majority of shares from
democratically replacing boards of dirty companies.
Our Article exposes this overlooked reality by undertaking the first in-depth comparative
analysis of acting in concert rules with a focus on their impact on climate-related
shareholder activism. It reveals how acting in concert rules, in virtually all jurisdictions
around the world, perversely prevent institutional investors from replacing boards that
resist (or even deny) climate change solutions–even if (or, ironically, precisely because)
they collectively have enough shareholder voting rights to democratically replace the
boards of recalcitrant companies. This heretofore hidden problem in corporate and securities
law effectively prevents trillions of dollars of shareholder voting rights that institutional
investors legally control from being democratically exercised to change companies
that refuse to properly acknowledge the threat of climate change.
We explain how this perverse result has arisen because the legal rules concerning
acting in concert were designed in a different age when contests of control–not shareholder
activism targeting the existential threat of climate change–formed the foundational rationale
undergirding such rules. This has created a panoply of rules that disincentivize–
and, in cases of mandatory bids and poison pills, may functionally disenfranchise–institutional
investors from using aggressive tactics to drive climate change prevention initiatives
supported by a majority of shareholders.

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