Redefining the Corporation for a Sustainable New Economy

AuthorBeate Sjåfjell
DOIhttp://doi.org/10.1111/jols.12077
Publication Date01 Mar 2018
JOURNAL OF LAW AND SOCIETY
VOLUME 45, NUMBER 1, MARCH 2018
ISSN: 0263-323X, pp. 29±45
Redefining the Corporation for a Sustainable New Economy
Beate SjÔfjell*
`Business as usual' is a very certain path towards a very uncertain
future. On the `business as usual' trajectory, the achievement of the UN
Sustainable Development Goals (SDGs), epitomizing the overarching
goals of global society, is unlikely. A fundamental transition away from
`business as usual' and onto a sustainable path is necessary. However,
the SDGs themselves do not seem informed by a recognition of a
potential conflict between indefinite economic growth and planetary
boundaries. This article posits that this is symptomatic of our economic
system, and turns to the dominant business form ± the corporation ± to
discuss its significance as a barrier to and potential as a driver for
sustainability. Drawing on multi-jurisdictional, comparative research,
the article presents a reform proposal, challenging the shareholder-
primacy drive, and ending on a positive note with the potential of
corporate contribution to systemic change.
I. CHALLENGES TO GLOBAL SUSTAINABILITY
The adoption of the UN Sustainable Development Goals (SDGs) is a
promising sign of a consensus in the global community on the necessity of
ensuring environmental, social, and economic sustainable development.
1
29
*University of Oslo, Faculty of Law, Department of Private Law, PO Box
6706, St Olavs Plass 5, NO-0130 Oslo, Norway
b.k.sjafjell@jus.uio.no
Sustainable Market Actors for Responsible Trade (SMART) receives funding from the
European Union's Horizon 2020 research and innovation programme under Grant
Agreement No 693642, and I gratefully acknowledge its support. Warmest thanks to
Bronwen Morgan for organizing the colloquium where this article was first presented, to
the participants for stimulating discussions, and to the three reviewers for insightful
suggestions and constructive criticism.
1 United Nations General Assembly resolution 70/1, Transforming Our World: The
2030 Agenda for Sustainable Development, A/RES/70/1 (25 September 2015), at
. More information on the SDGs is available at
.
ß2018 The Author. Journal of Law and Society ß2018 Cardiff University Law School
Yet, it is difficult to envisage that there will be sufficient political will to
ensure necessary macro-economic changes quickly enough. This article
argues that the SDGs are characterized by a lack of active engagement with
that which must after all be assumed to be common knowledge: that we live
on one planet and that we are putting the ecological basis of our existence at
risk.
2
Sadly, this appears to be symptomatic of the prevailing understanding
of our economic system.
3
The furthest our current mainstream economic
system seems to have been able to go is towards a weak version of
sustainability, according to which financial value can be maximized using
natural resources wi thout the setting of any ecological limits. Al so
illustrative of the dominance of growth- and GDP-focused economic
approaches over strong sustainability, which would recognize environmental
sustainability as a prerequisite, is the reaction after the global financial crisis
of 2007±2008, with the UN initiative, the `Global Green New Deal', quickly
fizzling out.
4
In light of this, this article presents the argument that the key to
achieving fundamental change quickly enough could be found on the the
micro-le vel: chang ing the corp oration, t his vital c omponent o f our
economies, from within.
In this section, the article briefly discusses the conflicted nature of the
SDGs as symptomatic of the weak understanding of sustainability on the
international political and economic scene, before introducing the corpora-
tion as the economic actor at the heart of our unsustainable system.
5
In
section II, the significance of the corporation and state-of-the-art knowledge
about what shapes the problematic nature of the corporate impact is
discussed, while section III turns to the role of law in achieving corporate
sustainability, drawing on a tentative proposal for reforming corporate law
30
2 Science shows us that we are transgressing four out of nine currently identified
planetary boundaries; the groundbreaking concept of `planetary boundaries' was first
introduced by J. RockstroÈm et al., `Planetary Boundaries: Exploring the Safe
Operating Space for Humanity' (2009) 14(2) Ecology and Society, article 32, at
, revised and updated by W. Steffen et al.,
`Planetary boundaries: Guiding human development on a changing planet' (2015)
347(6223) Scien ce do i: 10. 1126 /sci ence .125 985 5 (13 Fe brua ry 201 5), at
.
3 For an alternative approach, placing economics firmly within planetary boundaries
and with the aim of securing a safe and just operating space for humanity, see K.
Raworth, Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist
(2017).
4 UN Environmental Programme (UNEP), ` ``Global Green New Deal'' ± Environ-
mentally-Focused Investment Historic Opportunity for 21st Century Prosperity and
Job Generation', p ress release (22 Oct ober 2008), at ://www.unep.o rg/
newscentre/Default.aspx?DocumentID=548&ArticleID=5957>; E.B. Barbier, `Green
stimulus is not sufficient for a global green recovery' Vox, 3 June 2010, at
www.voxeu.org/index.php?q=node/5134>. For more about UNEP's more recent
green economy efforts: .
5 Corporation and corporate law are used interchangeably with company and company
law.
ß2018 The Author. Journal of Law and Society ß2018 Cardiff University Law School

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