The ‘Logic of Sacrifice’ and ‘Sacrifice Zones’ from a Corporate Law Perspective

1. Introduction

Professor Morgera’s Montesquieu Lecture addresses a highly relevant and timely topic, both in legal scholarship and in current policy debates. Sustainability–and in particular the role of companies in the sustainability transition–is something I work on academically, but it is also a topic that resonates on a more personal level. Listening to her lecture was, in that sense, both confronting and clarifying. It reinforced how structural the problem is, and how unevenly its consequences are distributed, particularly for the most vulnerable.

Central to the lecture is the argument that fossil fuel-based economies are not only environmentally unsustainable but are also based on what she describes as a ‘logic of sacrifice’, in which certain communities and ecosystems are treated as if they can be sacrificed for the benefit of others. From that perspective, defossilising the economy is not merely a policy choice, but also a legal and normative imperative grounded in human rights.

This contribution reflects on these questions from a corporate law perspective. It focuses on what Prof. Morgera’s analysis means in terms of corporate responsibility, governance and implementation. In particular, it explores how existing legal and regulatory frameworks attempt to internalise environmental and social externalities, and the areas where tensions remain between sustainability ambitions, economic interests and practical feasibility.

Moreover, recent developments within the European Union, including the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD),¹ demonstrate an increasing recognition of the need to address sustainability-related harms through corporate governance, disclosure and due diligence obligations. At the same time, political and geopolitical developments also demonstrate how fragile and contested these developments remain. Against this backdrop, this commentary raises the broader question whether step-by-step legal and governance reforms are sufficient to address the underlying structural issues of environmental harm and inequality.

2. The ‘Logic of Sacrifice’ and Corporate Responsibility

In my view, the notion of a ‘logic of sacrifice’ is very powerful. In corporate law, we would typically describe this in terms of the externalisation of costs, or ‘negative externalities’: environmental and social harms that are not adequately internalised in corporate decision-making. The follow-up question is how legal frameworks can effectively force or incentivise that internalisation, which is ultimately a governance question.²

This brings me to the role of companies. John Ruggie’s ‘Protect, Respect and Remedy’ Framework draws a clear distinction between the duty of states to ‘protect’ and the responsibility of companies to ‘respect’.³ This distinction has been extremely influential, but given the scale and influence of multinational corporations today–particularly in the fossil fuel sector–one may ask: is a duty for companies to respect still sufficient? Or are we moving towards a more active duty on companies to protect?

This question becomes especially pressing when considering that a relatively small group of companies accounts for a very large proportion of global emissions. The Carbon Majors Database of the Carbon Disclosure Project shows that around 100 fossil fuel producers have been linked to more than 70% of global industrial greenhouse gas emissions since 1988.⁴ Emissions are increasingly concentrated among fewer companies. In 2024, just 32 companies were responsible for over half of global fossil CO² emissions, down from 38 five years earlier.⁵

With great power comes great responsibility. Yet in practice, power often seems to enable the avoidance of responsibility.

3. Litigation as a Driver of Change

One way in which this problem could be addressed is through litigation. In recent years, we have seen a significant rise in climate-related cases, both against states and increasingly also against companies. Courts have been asked to hold states accountable for their climate obligations under human rights law, as illustrated by cases such as Urgenda in the Netherlands–where the Dutch Supreme Court required the state to take more ambitious climate action–and Klimaseniorinnen in Switzerland.⁶ At the same time, litigation is also increasingly directed at corporate actors, including the Shell Climate Case,⁷ the case brought by a Peruvian farmer against RWE in Germany,⁸ and more recent proceedings against TotalEnergies.⁹

Although they are not all successful, these cases are often described as strategic litigation: they aim not only at individual outcomes, but at broader systemic change.¹⁰ At the same time, there is an ongoing debate, also within corporate law, about how effective this route is. Litigation faces well-known constraints, is by nature reactive and case-specific, and is often accompanied by concerns about judicial activism, the institutional capacity of courts to engage with complex scientific questions on climate change, and broader political resistance or backlash against climate litigation.¹¹

4. Regulation: from Soft Law to Hard Law–and Back?

A second route for addressing these issues lies in regulation. At the EU level, we have seen significant developments in recent years, particularly with the CSRD and the CSDDD, which aim to improve sustainability disclosure based on a so-called double materiality perspective and to impose environmental and human rights due diligence obligations on large companies across the value chain, alongside an increasing emphasis on climate transition planning. From a corporate governance perspective, this combination of CSRD and CSDDD seems powerful, as it links transparency, accountability and risk management.¹² At the same time, recent political developments–including the so-called ‘Omnibus’ proposals at EU level–show a tendency to scale back or delay parts of this framework.¹³

This creates a clear tension. On the one hand, there is an increasing recognition–also in law–of the need to internalise externalities. On the other hand, geopolitical developments seem to move in the opposite direction, with a stronger focus on competitiveness, simplification of regulation, and strategic positioning vis-à-vis the US and China in particular.¹⁴

This raises a more fundamental question about feasibility. If even within the EU–which has traditionally taken a leading role in sustainability regulation–there are already signs of hesitation and adjustments, it becomes necessary to consider the prospects of states taking on the level of responsibility implied by Prof. Morgera’s analysis.¹⁵ Related to that, the lecture frames defossilising the economy as a necessary precondition for a more sustainable economic model. That is a powerful and, I think, important claim. At the same time, it raises questions about timing and coordination: how quickly can such a transition realistically take place, and how do we deal with a situation where only part of the world moves in this direction? We often hear the argument that unilateral action leads to relocation of activities rather than reduction.¹⁶ At the same time, frontrunners can play an important role in creating momentum and setting new standards.¹⁷ This raises a tension between competitiveness concerns and regulatory leadership, and the question of where the most promising pathway lies.

5. Scope and Focus: Beyond Carbon?

The lecture also raises an important substantive point: the risk of an overly narrow focus on carbon emissions, or what Prof. Morgera calls a ‘carbon tunnel vision’. In corporate practice, this is indeed visible. Even within frameworks based on the double materiality, climate–and especially carbon–tends to dominate, partly because it is easier to measure and translate into targets and metrics.¹⁸ Empirical studies confirm this pattern. For instance, analyses by European Financial Reporting Advisory Group (EFRAG) indicate that climate change is among the most consistently reported and prioritised topics, while issues such as biodiversity and certain human rights impacts are addressed less systematically and often in more qualitative terms.¹⁹

This may be understandable from a measurement perspective, but it does raise the question whether current frameworks unintentionally steer attention towards what is easiest to quantify, rather than what is most critical. This concern is also reflected in broader risk analyses. For instance, the World Economic Forum Global Risks Report 2026 shows that environmental risks–such as extreme weather events and ecosystem collapse–continue to dominate the long-term risk landscape, while in the short term attention is increasingly shifting towards geoeconomic confrontation, societal polarization and security concerns.²⁰ Taken together, these findings point to a broader pattern, where risks are widely recognised as systemic and interconnected, but not always prioritised accordingly in decision-making.

In that sense, Prof. Morgera’s call for a more holistic approach and her critique of this carbon tunnel vision are particularly relevant. It suggests that even well-intended regulatory frameworks may fall short if they do not sufficiently capture the interconnected nature of environmental and social systems.

6. Stakeholder Engagement and Implementation Challenges

A final point where I see a strong connection with Prof. Morgera’s work is stakeholder engagement. She emphasises the importance of incorporating the perspectives and lived experiences of affected communities. This is also reflected in corporate law instruments such as the aforementioned CSRD and the CSDDD, which require companies to engage with stakeholders in identifying and assessing impacts. At the same time, this raises practical questions: which stakeholders are included? How are they represented? And how do we ensure that the most vulnerable groups–who are often least able to organise or speak out–are not excluded from these processes? In other words, there might be a gap between the normative strength of stakeholder engagement and its practical implementation.

7. Concluding Remarks

From a corporate law perspective, much of this debate can be framed in terms of internalising externalities through governance, disclosure and accountability mechanisms. Important steps have been taken, particularly in Europe. At the same time, Prof. Morgera’s lecture makes clear that this may still be insufficient if the underlying system–what she describes as the ‘logic of sacrifice’–remains intact.

For me, this points to a clear tension: we are trying to address a structural problem step by step through legal and governance reforms, while the problem itself may require more fundamental change. The question then is whether these reforms are enough to get us there, or whether they remain only part of the solution.