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Abstract: Companies’ actions increasingly have public impacts, yet the legal frameworks that govern their financial failure remain anchored in private, creditor- and shareholder-centric paradigms that often disregard broader environmental responsibilities. This article critically examines how the legal mechanisms of disclaimer (English law) and abandonment (United States (US) law) in insolvency law allow for the removal of environmentally burdensome assets from debtors’ estates, thereby externalising remediation costs. While these tools aim to maximise returns for creditors by shedding onerous or low-value assets, they may undermine environmental accountability and frustrate climate mitigation efforts. Using English and US laws as examples, the article explores how the power to disclaim or abandon assets interacts with environmental obligations, drawing on international environmental law principles such as the polluter pays principle. It argues that the current legal environment insufficiently constrains the use of these powers, enabling the avoidance of environmental cleanup duties and perpetuating perverse incentives that prioritise financial expediency over sustainability. The comparative analysis reveals the relative shortcomings of English law in ensuring environmental protection, and highlights limited, albeit inconsistently applied, safeguards within the US framework. The article concludes that meaningful reform—especially in the United Kingdom (UK)—requires thoughtful integration of climate policy considerations into insolvency proceedings to align economic and environmental objectives more coherently.
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