Sustainable Companies under the Lithuanian Company Law

Abstract

The paper analyses possibilities and barriers to promoting sustainable companies through company legislation in Lithuania with specific focus on environmental protection and climate change.

The authors start by overviewing the framework of Lithuanian company law, including types of companies, their purpose, functions of the bodies formed, as well as certain issues relating to regulation of groups of companies in Lithuania. In addition, data on the ownership structure in Lithuanian listed companies is presented, which indicates that ownership concentration is high and follows the trend of other states in the Continental Europe. It is stated in the paper that Lithuanian company law is mainly centred on the protection of the shareholders’ interests (with certain exceptions, for example, the insolvency situation when the interests of the creditors prevail).

Furthermore, environmental protection laws, civil, criminal and administrative liability issues in context of environmental protection and climate change are addressed. The paper also presents environmental reporting standards and practices in Lithuania. The authors conclude that Lithuanian company law does not contain any environmental obligations applicable to the bodies of the company. Moreover, laws establish only few incentives for the companies to voluntarily engage in more sustainable and environmentally-conscious activities. Case law and practice of the companies do not show any significant indications in this respect as well.

This paper is one of a series of international mapping papers in the Sustainable Companies Project at the Faculty of Law in Oslo addressing the barriers and possibilities for environmentally sustainable companies.

Keywords: Lithuania, company law, corporate governance, ownership structure, sustainability, environmental protection

JEL Classification: G32, G34, G38, K22, K32