Reversing the Hierarchy of Business, Finance and Circular Economy: Enabling Policy Coherence for the Transition to Sustainability
Posted: 3 Feb 2020
Date Written: February 3, 2020
The global economy is producing unequal economic exchanges between countries. Such exchanges, which include the illegitimate transfer of wealth from low-income countries, ultimately undermine any efforts towards securing robust social welfare systems. This puts trade, company law, corporate governance, finance and other investment-related dynamics at the centre of the global development puzzle. Policy coherence for development must be understood in the context of the tension between the overarching societal goal of achieving sustainability and the functioning of the global economy. In this paper, we focus on the political and legal challenges this puzzle presents, using the case of the current European Union (EU) legislative process for business, finance and circular economy, which has direct and indirect global impacts. We examine the interactions between these policies and the extent to which these enable or constrain their contribution to EU sustainability policies. We use a qualitative content analysis with data from two sources: (1) Field notes taken during discussions with policy-makers and (2) autoethnographic accounts. We furthermore integrate those research findings into the reform proposals on business and financial market law from the Sustainable Market Actors for Responsible Trade (SMART) project (see Sjåfjell et al., 2019). We argue that the use of a social-ecological systems (SES) approach is crucial in order to be able to fully analyse the impact of EU business- and financial market activities on policy coherence. Employing such an approach to the analysis, we are able to map policy goals and legislative instruments, in the context of policy coherence, linking them to both environmental and social aspects. This gives us a foundation for a better understanding of how these policy areas are linked and which problems are connected to them. We find that there is currently a skewed policy focus on financial policies to the detriment of significant work on other important policy areas. The SES approach enables us to develop a conceptual figure of a prioritisation of the three different policy areas of study. We present what we term ‘an ideal hierarchy of business, finance, and circular economy’, which is a reversal of the current hierarchy. This ideal hierarchy implies that we make use of and fundamentally integrate the principle of sustainability into these three policy areas.
Keywords: EU business and financial market law, policy coherence, sustainable finance, international investment, circular economy, corporate governance
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