Securing the Future of European Business: SMART Reform Proposals

89 Pages Posted: 3 Aug 2020

See all articles by Beate Sjåfjell

Beate Sjåfjell

University of Oslo - Faculty of Law

Jukka Mähönen

University of Oslo - Faculty of Law; University of Helsinki - Faculty of Law

Tonia Novitz

University of Bristol - School of Law

Clair Gammage

University of Bristol - School of Law

Hanna Ahlström

Date Written: May 7, 2020

Abstract

Fulfilling the Sustainable Development Goals (SDGs), and more broadly, achieving sustainability, requires reform of EU laws, policies and practice concerning business. The contribution of business is vital to achieving sustainability, and yet we know that business-as-usual currently undermines sustainability goals. To change this, reform is necessary.

The Covid19 pandemic, currently affecting most countries around the world, highlights the interconnectedness, complexity and vulnerabilities of our global society. At the time of writing, the EU and many Member States struggle to find out how to mitigate the worst economic and social impacts of the virus and the measures put into place to limit the spread. In the months and years ahead, more economic rescue packages and incentives will be introduced to reboot the economy after this unplanned and unwanted shutdown. It is imperative that this is done in a way that supports the transition to sustainability.

Our SMART Project proposals aim to contribute to this transition and secure the future of European business. In this report, we introduce a broader understanding of the financial risks of unsustainability, than the current one that tends to focus on (a limited understanding of) climate risk. This show the necessity of fundamental change for business and indicates the possibilities for business.

Our proposals encompass the EU’s role as a global actor in international trade and investment, as well as the EU’s role as European legislator with the power to regulate European business, including their governance of global value chains. We propose that the EU take regulatory action to shape business conduct in trade and investment as in other facets of their operations. We also propose changes to EU company law, to redefine the purpose of business and the duties of the board. This will ensure that the purpose of sustainable value creation is integrated throughout the business, and that business contributes to global society staying with planetary boundaries. This is supported by our proposals for a comprehensive and reliable reporting framework.

Keywords: EU Green Deal, sustainability, planetary boundaries, human rights, business, corporate purpose, duties of the board, due diligence, coronavirus, shareholder primacy

Suggested Citation

Sjåfjell, Beate and Mähönen, Jukka T and Novitz, Tonia A. and Gammage, Clair and Ahlström, Hanna, Securing the Future of European Business: SMART Reform Proposals (May 7, 2020). University of Oslo Faculty of Law Research Paper No. 2020-11, Available at SSRN: https://ssrn.com/abstract=3595048

Beate Sjåfjell (Contact Author)

University of Oslo - Faculty of Law ( email )

PO Box 6706 St Olavsplass
Oslo, 0130
Norway

HOME PAGE: http://www.jus.uio.no/ifp/english/people/aca/beatesj/

Jukka T Mähönen

University of Oslo - Faculty of Law ( email )

Karl Johansgt 47
N-0162, Oslo
Norway
+4722859534 (Phone)

HOME PAGE: http://www.jus.uio.no/ifp/english/people/aca/jukkam/index.html

University of Helsinki - Faculty of Law ( email )

Porthania 5th Floor
P.O. Box 4
Helsinki, FIN-0001 4
Finland

Tonia A. Novitz

University of Bristol - School of Law ( email )

Wills Memorial Building
Queen's Road Clifton
Bristol BS8 1RJ, BS8 1RJ
United Kingdom

Clair Gammage

University of Bristol - School of Law

Wills Memorial Building
Queen's Road Clifton
Bristol BS8 1RJ, BS8 1RJ
United Kingdom

No contact information is available for Hanna Ahlström

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