Climate risk threatens global economic and political stability, as well as human health. Some institutions are beginning to recognize this uniquely systemic risk. Unfortunately, not all corporations are following suit. Consequently, stakeholders and regulators are urging directors to account for climate change risk. Shareholders, too, are urging boards to account for climate risk, using every tool at their disposal under Delaware law.

One of these tools, the Caremark derivative suit, allows shareholders to hold directors accountable by alleging that directors failed to oversee the corporation’s risks in violation of their fiduciary duties. These claims, however, are famously difficult to plead. A new doctrine is emerging, however, in which courts are applying greater scrutiny to board oversight of “mission critical” areas of business. In these cases, courts have found that highly-regulated, essential lines of business that implicate human health and safety are “mission critical” for board oversight. Some argue that this expansion of Caremark has the potential to enhance board oversight of climate risk, though they suggest its scope is limited to certain industries. 

Others, however, argue that Caremark in its current state should not or does not effectively apply to climate risk oversight. This Note argues that Delaware courts should hold that climate risk is “socially critical,” or “mission critical” for all boards to oversee, as a rebuttable presumption in Caremark litigation.