Mapping Paper : Sustainable Companies UK Report

This mapping paper for the UK provides a general descriptive overview of company law in the UK and how it might apply to environmental issues. Although, broadly, environmental matters are covered specifically by a detailed framework of environmental law and regulations, there are some aspects of company law that impact on the environment. In the Companies Act 2006, sections 172 and 417 expressly include the environment as a factor to be considered by directors when running the business and when reporting on the company's business performance. The adoption of the enlightened shareholder value approach also presents an opportunity for company law to be applied in a way that recognises environmental needs and the role of shareholders and directors, in this respect, will be of special significance. Shareholders have been identified as having an important part to play in protecting the environment by challenging directors' activities and in the decisions they make. The corporate governance regime in the UK encourages shareholders to be 'stewards' of their companies and to take a long term view of their companies' objectives. How environmental requirements are enforced also reflects on the level of effectiveness of the system. This paper also considers the special issues relevant to corporate groups