Tougher obligations on company directors mean they could be held to account for corporate ESG failures, explains James Whitaker, partner, Mayer Brown International LLP
In March 2022, it was announced that the board of directors of a major UK-listed company were facing potential litigation from the environment-focused charitable organisation, ClientEarth. The news was welcomed in many quarters, as an early – and potentially ground-breaking – example of how the existing legislative framework of duties and obligations to which company directors are subject could be used to hold those directors to account for corporate performance in the context of growing climate risk.
The significance of the prospect of widening potential liability, including personal liability, for the environmental impacts of corporate activities should be heeded and respected, particularly in the broader context of increased regulatory and societal focus on individual accountability for corporate performance.
