Creditor Duty and Corporate Sustainability

Savva, Rafael (2025) Creditor Duty and Corporate Sustainability. In: Directors and Creditors : Law and Liability. Oxford University Press (OUP), Oxford. (In Press)

Abstract

Since the turn of the current decade, policy, regulation, and industry practice call companies to pursue corporate sustainability more than ever before. However, the challenges that doing so may create for the governance and management of insolvent and nearly insolvent companies seems to be overlooked. This Chapter contributes to a growing literature exploring the promotion of pursuing corporate sustainability as an inquiry into governing distressed companies and the laws governing them. It argues that the creditor duty’s jurisprudence offers some guidance to directors about how they can legitimately pursue corporate sustainability when their company is doubtfully solvent. However, acting on this guidance requires directors having the means and capacity to do so. The Chapter points out that this is a blind spot in the regulation and policy seeking to establish the pursuit of corporate sustainability as a mainstream corporate practice, and calls for greater attention to be paid on the matter.