Corporate Law, directors’ duties and ESG interventions: Analysing pathways towards positive corporate impacts relating to ESG issues

Considering the steps necessary to steer companies towards positive impacts in terms of environmental, social and governance (ESG) issues requires analysis of the way that corporate decisions are made, the effectiveness of existing initiatives to influence decision-making and the relationship that both have with corporate law itself. This article contributes to that process by considering the relationship that ESG initiatives have with corporate law. It provides an analysis of the tensions that can exist between ESG initiatives and directors’ fiduciary duties, to investigate the threshold at which an ‘upper limit’ in ESG regulatory efficiency occurs. However it argues that directors’ duties should not be viewed in isolation when consideration is given to ESG issues, as they are only one part of the broader legal construct of ‘the company’ – a construct that is predisposed towards negative outcomes for ESG concerns. It therefore argues that a broader approach is necessary and suggests pathways towards more effective development of law and regulation in this sphere.