This chapter engages with the grand challenge of our time: how to secure the social foundation for people, while staying within planetary boundaries. The convergence of crises that we face as a global society emphasises the importance of discussing the role of the market actors: businesses, investors, consumers and the public sector in its many roles as market actor. In spite of all the business initiatives using a sustainability language, status quo remains very much unchanged: ‘business as usual’ continues, and is a very certain path towards a very uncertain future. After outlining and discussing the grand challenge of our time, and the significance of market actors in this context, the chapter canvasses fragmented and conflicted law and policy approaches to seeking to stimulate market actors to contribute to resolving this challenge – to contribute to sustainability. The chapter concludes with reflections on the potential for achieving policy coherence for sustainability.
Andrew Johnston and Beate Sjåfjell
Achieving sustainability requires that business not only complies with environmental law, but also that business goes beyond that which is expressly regulated by environmental law. This chapter examines regulatory approaches that seek to integrate environmental sustainability into the decision-making of business. In canvassing the EU’s main policy and legislative initiatives, we find strong reliance on various forms of disclosure, insufficient to mitigate the destructive social norm of shareholder primacy. This Anglo-American, law-and-economics inspired concept is not rooted in EU law but has spread and gradually colonised the discretionary space that European company law gives corporate decision-makers to decide on how to best run the companies. The result is a prioritisation of short-term maximisation of shareholder returns. A fundamental shift towards coherent and more stringent regulation is needed to mitigate shareholder primacy and realise the potential of European business to contribute to sustainability.