Professor dr. juris Beate Sjåfjell
Sustainable Companies
& Climate Change
@BeateSjafjell
Planetary
boundaries
(Rockström
et al 2009,
Steffen et al,
2015)
&
What is
realistic?
«Living
within the
dougnut»
Kate
Raworth,
2012
Companies from a shareholder perspective
Shareholders
Company
Stakeholders
including employees
Companies from a typical CSR perspective
The company
Employees
External
workers
Environment
Global
developm.
Local
community
Suppliers
Other
Other
creditors
contractual
parties
(Local
authorities)
Other
sources of
finance
Sources of
finance
Banks
Company
Shareholders
Board
Management
Other employees
Customers
(clients, patients, pupils)
External workers
CG
Company
Company
Company
Global community
Company
Company
Company
Company
Companies can be organised in groups
Who controls companies?
Bjarnadottir, Margret and Hansen, Gudmundur Axel, 2010, SIC report, Vol. 9, Appendix 2, pp. 23 - and Johnsen, G., 2014, Bringing Down the Banking System:
Lessons from Iceland, Palgrave-Macmillan.
… may be difficult to unravel
Bjarnadottir, Margret and Hansen, Gudmundur Axel, 2010, SIC report, Vol.
9, Appendix 2, pp. 23 - and Johnsen, G., 2014, Bringing Down the Banking
System: Lessons from Iceland, Palgrave-Macmillan.
Companies and Sustainability
• The company is an ingenious invention
– Channelling capital to entrepreneurs
– Creating value for investors, employees and society
• «Business as usual» is not an alternative
– Societal challenges require sustainable companies
– Voluntary shift towards sustainability too slow
– Competitive advantage for unsustainable companies
• The Sustainable Companies Project investigated legal
infrastructure for companies & corporate decisions
Results of comparative analysis of
Sustainable Companies Project
•
•
•
•
Shareholder primacy the main barrier
Inadequate reporting requirements
Reg. of groups: gap control & responsibility
What we need to do:
– move beyond CSR and mainstream CG approach
– achieve a better interaction between external
regulation and the internal company law
• Identified barriers indicates reform level &
direction
A Legal Framework for Competitive,
Sustainable Companies
• Redefine the corporate purpose:
– creating sustainable value within the planetary boundaries while
respecting the interests of its investors and other involved parties
• Redefine the duty of the board:
– To promote life-cycle-based sustainable value creation
– Includes group issues & supply chain
• Operationalise through long-term, life-cycle-based
business plan; key performance indicators to report on
• Supportive areas: financial market rules, public
procurement, state aid, etc.
EU Company Law & Sustainability today
• Certain convergence tendency between
corporate governance and CSR
• Short-termism seen as problematic
• Risk-management focus includes CSR
•
•
•
•
Still shareholder primacy
Still no clear CSR duties
Limited scope of CSR reporting requirement
Lack of proper auditing and enforcement
Sustainable Development in EU Law
• Overarching global societal goal
• Strong legal position in EU Treaty Law
– Overarching objective of the EU, Art. 3(3) &
21(2)(d) & (f) TEU
– Emphasis on human rights & fundamental social
rights
– Principle of sustainable development
– Codification of core in rule in Article 11 TFEU
• EU law has legal basis for necessary changes
The Norwegian Constitution & Sustainability
• Increasing tendency for constitutional protection of
the environment & human rights
• Norwegian constitution, new chapter on HR
• Especially about Article 112: environment & HR
– 1987: Our Common Future
– 1992: Right to a liveable environment where
biodiversity is protected, also for future
generations. Duty for the state
– 2014: Amendment to clarify duty for the state to
«undertake adequate and necessary action» to
secure our right to a liveable environment
– What does this mean for the Norwegian state?
From Sustainable Companies to Sustainable
Market Actors For Responsible Trade (SMART)
• SMART goal: contribute to transition to low-carbon,
environmentally & socially sustainable societies
• Building on SC results; broadening & deepening
• Our factual starting point:
– EU company selling products to EU consumers
– Products have international life cycle involving also leastdeveloped countries
• International law, EU law, law of select jurisdictions
• Interdisciplinary project: requires a broad and
heterogenous research team
More information & stay in touch!
• Info on SC Project and register interest for SMART:
jus.uio.no/companies (under Projects)
• Current and forthcoming publications:
– A number of papers, including special issues of ECL (under Publ.)
– The Greening of European Business under EU Law, Sjåfjell &
Wiesbrock (eds), Routledge, 2015 (Nov -14)
– Company Law and Sustainability, Sjåfjell & Richardson (eds),
Cambridge University Press, April/May 2015
– Sustainable Public Procurement, Sjåfjell & Wiesbrock (eds),
forthcoming end 2015
E-mail: b.k.sjafjell@jus.uio.no
LinkedIn: Beate Sjåfjell; Facebook: Beate Sjåfjell
@BeateSjafjell