SUSTAINABILITY: A REVIEW OF THE CONCEPT AND IMPLICATIONS FOR COMPANY LAW

ABSTRACT

Sustainability has become a generic term that covers a wide range of ethical and socially responsible practices for business and government that has developed into a hard-to-ignore contemporary reality. In partic- ular, the theme of sustainability as “sustainable development” has occu- pied a place in modern international law since the 1990s as reflected in various international treaties and declarations. By bringing environmen- tal, social and governance matters into the political and legal realm, sus- tainability is today very much on the agenda for policy and lawmakers, not only because there is a growing demand for sustainable practices from many actors, but also because of the financial, political, and reputational risks associated with ignoring this developing landscape. It can be argued that the corporate sector has been faced with a fundamental mismatch between conventional thinking on the role of the company with its objec- tive of shareholder wealth maximisation and these emerging legal and moral parameters under the overarching umbrella concept of sustainabil- ity. This has pushed them towards incorporating sustainability into their decision-making process in varying degrees, most recently under the ban- ner of “ESG”. This has in turn started discussions regarding the role ofcompanies in society and how company law should respond to the new landscape. This article will briefly discuss the contemporary approaches to sustainability with its implications for company law. The paper argues that the encouragement by the state, along with effective monitoring and enforcement of ESG practices is clearly necessary to enhance sustainability compliance by the corporate sector.

Keywords: Sustainability, ESG, CSR, Reporting, Compliance