As elsewhere, the corporate system in the UK has attracted intense scrutiny in terms of its sustainability credentials and two issues are especially important in this context. First, to what extent does the law permit company directors to adopt sustainable solutions and in particular those that are costly for shareholders; and second, within the permitted zone of directors’ action, what corporate law techniques are appropriate to enable the pursuit of sustainable outcomes. During our presentation, focusing on the position in the UK, we will deal with the scope of directors’ discretion in board decision-making, the role of non-financial reporting, stakeholder engagement and corporate purpose. We then link these issues to our earlier proposal of an ‘entity model of ESG’ where the focus is on board decision-making and corporate fiduciary duty, in contrast with the financial model of ESG investing which focuses on the role of capital and investors in driving change in sustainability practices and pays more attention to intermediary fiduciary duties. We conclude with observations on the likely trajectory of development in the UK and elsewhere.

This presentation draws on research conducted by Prof Esser, Prof Iain MacNeil and Dr Kasia C-Ladna during the last 5 years with a focus on their empirical work on non-financial and strategic reporting requirements applicable in the UK, workforce engagement as well as a proposed ESG entity model. See, for an overview of their projects: https://www.gla.ac.uk/schools/law/research/groups/corporate-and-financial/impact/#consultations,financeandsocialjusticeproject,environmental%2Csocialandgovernance(esg).