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4 - The Hardening of Corporate ESG

from Part II - Ethics and Sustainability in Corporate Law, Corporate Governance and Conduct

Published online by Cambridge University Press:  30 January 2025

By
Geneviève Helleringer  and
Christina Parajon Skinner
Edited by
Kern Alexander ,
Matteo Gargantini  and
Michele Siri
Kern Alexander
Affiliation:
University of Zurich
Matteo Gargantini
Affiliation:
University of Genoa
Michele Siri
Affiliation:
University of Genoa
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Summary

This chapter documents the parallel paths the US, UK, and EU have taken in transmuting voluntary corporate ESG commitments into hard law – statute, regulation, and judicial precedent.Whereas stakeholder capitalism was originally the province (mainly) of academics, international organizations, and special interest groups, in the years immediately preceding the 2020 pandemic, major businesses worldwide publicly declared their commitment to the so-called stakeholder model in the US, UK, and in continental Europe. These corporate behaviours were encouraged by proxy advisors andinstitutional investors.The chapter questions the extent to which the current generation of ESG-stakeholderism is in fact a sustainable business practice, capable of maintaining its current pace over a longer-term horizon. We also discuss how voluntary corporate ESG commitments have, over a short period of time, hardened into more formal sources of law and regulation, with examples from the US, EU, and UK. In conclusion, we identify some adverse consequences to this trend.

Keywords

voluntary ESG commitmentstransition from soft to hard lawUS legal framework on ESGUK legal framework on ESGEU legal framework on ESGGerman legal framework on ESGFrench legal framework on ESGESG case law.
Type
Chapter
Information
The Cambridge Handbook of EU Sustainable Finance
Regulation, Supervision and Governance
 , pp. 80 - 102
Publisher: Cambridge University Press
Print publication year: 2025

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