Chartering Sustainable Transnational Corporations
30 Pages Posted: 1 Feb 2009
Date Written: January 29, 2009
Using a recent innovative Oregon sustainable corporation law as a springboard, this article argues for requiring all transnational corporations to be chartered as sustainable corporations. Given the far-reaching effects of their operations and their uniquely powerful role, the global wealth that has been accumulated in these organizations must be fundamentally redirected toward creating a sustainable world. As a privilege of doing transnational business, transnational corporations should be required to incorporate environmental and social responsibility into their corporate charters - the document that sets forth the prime mission of the corporation and its directors, essentially baking sustainability into the corporate DNA of transnational corporations.
To be both effective and to harness the entrepreneurial creativity of these organizations, the sustainable corporation charter must be implemented per provisions that require transnational corporations to develop corporate sustainability strategies in accordance with the guidance provided by the implementing provisions. The implementing provisions should also require that the transnational corporations monitor and report in a standardized manner compliance with the corporate sustainability strategy, with sustainability-related laws, and with nonbinding environmental, labor, human rights, corruption, and other sustainability-related standards.
The sustainable corporation charter requirement should be imposed as a matter of international law, through an international convention and administered by an international commission. The requirements should be directly applicable to transnational corporations as a condition of doing transnational business. The commission should be authorized to take enforcement action directly against the corporation. In addition, both home and host nations to transnational corporations should agree to compel the corporations - either incorporated in that nation or doing business in that nation - to comply with the sustainable corporation charter requirement as a condition of doing any business. Nations that fail to join the international convention, or that fail to enforce the international convention, should be subject to mandatory trade and other economic sanctions by all signatories to the international agreement.
We can no longer allow transnational corporations to aggregate the bulk of societal wealth and then operate in an environmentally and socially irresponsible manner. The proposals in this article are one step toward turning transnational corporations into sustainable corporations.
Keywords: transnational corporations, corporate charters, multi-national corporations, sustainability, environmental, international convention, environmental assessment, voluntary compliance, environmental standards, alien tort, corporate social responsibility, human rights, international law, enforcement
JEL Classification: F23
Suggested Citation: Suggested Citation