The Role of Business Law in the Jigsaw Puzzle of Sustainability
Reframing the Game: The Transition to a New Sustainable Economy. A Special Issue of Building Sustainable Legacies, Mike Townsend (ed.), (Greenleaf Publishing, 2015)
17 Pages Posted: 8 Sep 2015 Last revised: 9 Oct 2015
Date Written: September 7, 2015
This article presents the argument that reforming business law is a necessary contribution to the greening of our economies and societies. The article is specifically about European business law, while similar arguments can be made for other regions of the world. Sustainable development has a strong legal position among the ultimate objectives of the European Union, underpinned by the growing recognition in the EU of the inextricable entity of humanity, our natural environment and our economic system.
Contrary to common belief, EU law is not just about free movement and market integration. This article starts with the assertion that EU Treaty law contains the necessary elements for the EU to instigate change and take the lead to shift from the path of business as usual, towards a truly sustainable development. The codification of the sustainable development principle in the environmental integration rule in Article 11 TFEU is the key. Article 11 TFEU, properly interpreted, has significant legal implications for the institutions of the European Union, entailing direct obligations on all levels: Law-making, administration, supervision and judicial control.
This article thereafter shows the significance this has for the regulation of European companies and financial markets — central to the greening of our economies and societies — and how Article 11 TFEU should be implemented. A reform of European company law is central here, with a number of other areas of business law providing important contributions as well. The article concludes by presenting the core elements of work-in-progress reform proposals based, inter alia, on the results of the international Sustainable Companies Project.
Keywords: European Union Treaty law, Sustainable Companies, Corporate Social Responsibility, Directors’ duties, Purpose of the Company, Company law, Planetary boundaries
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