Regulating Companies as If the World Matters - Reflections from the Ongoing Sustainable Companies Project
University of Oslo, Faculty of Law, Department of Private Law
November 24, 2011
Wake Forest Law Review, 2012
University of Oslo Faculty of Law Research Paper No. 2011-35
Wake Forest Law Review Symposium (The Sustainable Corporation), Winston-Salem, North Carolina, April 1, 2011
Nordic & European Company Law Working Paper No. 10-27
The company is one of the most ingenious inventions of our time. With limited liability for its investors, enabling capital to be (in theory) put to its most efficient use, the company has become the backbone of our economies. But must this all-important component of our market economies be equated with environmental degradation to the extent that we risk dangerous loss of biodiversity and passing the tipping point of climate change? In my opinion it must not. We need to find out how to make the necessary changes. We have a moral imperative for action.
Climate change is a case in point for the necessity of working towards a sustainable development; towards the achievement of economic development and social justice within the non-negotiable ecological limits of our planet. According to even the most conservative estimates of the Intergovernmental Panel on Climate Change, business as usual will most probably lead to climate change of a magnitude to which we cannot adapt, or to which we can only adapt to at extremely high costs. Runaway climate change involves a high risk of severe environmental, social and economic consequences, and the challenge of climate change needs to be dealt with on all those levels, both in terms of mitigating as much as possible, and adapting to that which cannot be avoided.
Climate change is not the only crisis we face. There is a convergence of crises. We have the financial crises; the loss of biodiversity threatening the stability of our ecosystems; the peaking of fossil energy sources and the harsh brutality of tens of thousands of people dying every day for poverty-related reasons. In the aftermath of one financial crisis and furious effort to try to avoid a new full-blown crisis, the attention of the world leaders is on stimulating growth and getting back onto a track of business as usual. Getting back on track with economic growth and business as usual is a postponement of the necessary focus on dealing with climate change and other overriding environmental concerns - a postponement that may turn out to be highly detrimental to our chances of achieving a sustainable global society; financially, socially and environmentally.
This paper discusses the role of companies and the role of the law regulating companies as a response the challenges the convergence of crises poses, and presents tentative results of research carried out in the international research project 'Sustainable Companies'.
Number of Pages in PDF File: 24
Date posted: November 24, 2011 ; Last revised: May 21, 2012