Clemency Fisher spent a packed day at the Institute of Advanced Legal Studies last month, learning all about company law and sustainnability. Read on for reflections on the success duty, greenhushing and possible regulation…
“Sustainability” – what does that word mean to you?
To many, it means “reduce, reuse, recycle.” To others, it is a maxim, to be considered throughout their life. To some, it is no concern at all. But for directors of UK companies, sustainability is increasingly impossible to ignore.
In the UK, at least, it is certainly poor public strategy to ignore sustainability. Public demand for environmentally responsible practice is mounting; environmental responsibility has been a mandatory subject in secondary education since 1989, and has a non-negligible effect on politics. Green Party membership has doubled this year, and the party is polling at a record high. More tangibly, the UK has seen both the wettest Winter and the driest Spring in over a century in the previous two years alone. It is more important than ever that companies toe the line of “sustainability” carefully.
On 7th November, I attended the Institute of Advanced Legal Studies’ conference on Company Law and Sustainability. The event brought together researchers from across the UK to explore how corporate governance, legislation, and environmental responsibility interact, and asked how the role of sustainability is changing for UK companies.
Registered Companies and Sustainability: Mandatory or Merely Desirable?
The Companies Act 2006 requires company directors to consider the environment. Section 172, the “Success Duty,” states that directors must act in a way they believe will promote the success of the company “for the benefit of its members as a whole,” while “having regard to the impact of the company’s operations on the community and the environment,” among other obligations.
The Success Duty was a central discussion point, specifically in relation to the primacy of shareholder interests in UK company law. Under the Success Duty, the environment is effectively a stakeholder in any listed company, but not a shareholder. Its interests are to be considered only insofar as doing so promotes the success of the company for shareholders.
This aspect of the Success Duty was discussed eloquently by Jonathan Horner (of Queen’s University Belfast), presenting his upcoming paper Rebalancing the Success Duty: Evaluating the Company Directors (Duties) Bill as a Tool for Promoting Sustainability. He discussed section 172’s current effect, and potential changes proposed in MP Martin Wrigley’s new bill. Both Horner and Wrigley believe that the current duty is not fit for purpose and lacks enforceability. The text of the new Bill, however, does not fully address Horner’s concerns – he believes that explicit regulation may be necessary to ensure UK companies face scrutiny on their sustainable practice.
As an illustrative case of s172’s shortcomings, we can look to ClientEarth v Shell 2023 – in paragraphs 24 and 25, we see some of Shell’s winning arguments: that simply having an Energy Transition Strategy towards Net Zero proves the “directors have already identified that [Shell’s] climate strategy is a commercial objective which is… necessary to protect medium- and long-term shareholder value.” This framing of environmental interests as commercial objectives is inescapable, as it echoes the wording of the Success Duty. Shell also argued that the duties are “inherently vague and incapable of constituting enforceable personal legal duties,” as Horner himself agrees.
While the sustainably-conscious may have wished for a different result, within Company Law we ought to note that these discussions are likely best-held outside of the courtroom. In fact, abundant litigation on climate-issues is perhaps actively detrimental, as the following point shall illustrate.
Greenhushing: When Silence Replaces Sustainability
Another theme discussed at the conference was “‘greenhushing,” presented by Charlotte Villiers’ in her paper, Greenhushing as Strategic Silence: A Disturbing Twist for Stakeholder Engagement and Sustainable Business. “Greenhushing” is when companies choose not to report on ESG (Environmental, Social, and Governance) practices or intentionally reduce the accessibility of this information to the public.
This phenomenon is distinct from the more familiar “greenwashing” but closely related. As Villiers explained, the increase in public scrutiny, litigation, and regulatory attention has created a “communications chilling” effect, where companies prefer to say nothing rather than risk criticism for saying too much, or for failing to meet aspirational commitments.
Greenhushing is unfolding against a background of growing climate-liability litigation. ClientEarth, who brought the aforementioned case against Shell, are becoming notorious in this sector. Lliuya v RWE in Germany, a case against a private company which began in 2015 and finished only in May 2025, ultimately found that the defendant was not liable for agricultural problems caused by climate change; nonetheless, the case proves that national courts are willing to seriously consider corporate responsibility for small-scale environmental harm over many years. These changes may make environmental commitments intimidating to both small and multinational businesses.
In a further presentation, Victoria Barnes (QUB), Philip Gavin (UCL), and Peter Underwood (U. of Auckland) discussed a further concern which may feed into “greenhushing.” They presented their case study of Jaguar’s 2024 rebrand, which introduced an all-electric range, and marketed itself on sustainability. In moving away from fossil-fuels, Jaguar likely met its section 172 duty comfortably, but the problem was elsewhere. The brand saw immediate backlash from fans of Jaguar’s “old-money” image, and the rebrand was deemed a disingenuous betrayal by many. This kickback, the economic result of which is not yet understood, may add to companies’ hesitation to present and pride themselves on sustainable branding. Worse still, this level of public backlash seems to relate to established brands associated with tradition – these are often the brands founded on non-sustainable, outdated technology and practices.
Greenhushing poses a serious risk. In avoiding disclosure, companies may protect themselves from short-term reputational harm, but they also suppress information ecosystems which legislation and investors rely upon. Greenhushing feeds into an existing vicious cycle, and threatens the transparency needed for meaningful environmental progress.
Solutions: Regulation?
How can we reconcile this need for regulation and legislation with the interests of companies? Do we preserve the status quo? Is it, perhaps, time to recognise the environment not merely as a stakeholder, but a shareholder whose interests cannot be subordinated at will? It was this question that animated the closing discussions of the conference.
A reframing – one that integrates environmental well-being into the heart of company law – is aspirational. But we may be closer to achieving this goal through legislative reform, reporting obligations (to combat “greenhushing”), and a collective commitment to talk about these issues, which was so strongly displayed at this recent IALS Conference.
With thanks to QUB’s Victoria Barnes and Zi Yang for facilitating both the event and this article, to those who contributed to the conference, and the British Academy’s Early Career Researcher Network, the Global Corporate Law Seminar Series, the Society of Legal Scholars (SLS), and, of course, the Institute of Advanced Legal Studies.
Clemency Fisher is a GDL student who studied Archaeology before converting to law. She loves modern art, archaeology, and politics, and is interested in pursuing Criminal or Public Law after the GDL. Outside her studies, she enjoys running, visiting art galleries, and watching The Traitors. Clemency is a member of the 2025-26 Lawbore Journalist Team.