Mandating corporate environmental responsibility by creating a new directors’ duty

Abstract

This article explores the legal and commercial reasons for companies’ failure to internalise their environmental externalities, and suggests that the company law framework, nature of environmental harm and rise of short-term shareholders are all jointly responsible. It then explores the possibility of remedying this situation through altering company law briefly analyses a number of alternative legal structures and concludes that it would be preferable to introduce a directors’ duty of environmental care, which should be monitored by a new industry body.