This chapter links to other discussions in this book by identifying different interpretations of sustainability and sustainable development, in conversations about economic and political reform, and their relevance for law and legal governance. It considers that sustainability is currently understood in terms of two rather distinct conceptual perspectives: one version centring, broadly speaking, on ensuring sustainable economic growth and on socially embedding global markets (sustainable-capitalism); the other insisting that more fundamental changes and systemic revisions, including of the growth objective itself, are necessary (sustainable-systems). The purpose of the chapter is to trace these versions of sustainability through current reform proposals in the area of corporate law and governance, which have as their objective to make companies operate more sustainably.
The chapter begins by sketching out the two perspectives on sustainability. Sustainable-capitalism is built fundamentally on an optimistic view of our existing systems and their operating principles, and their ability to address, if appropriately engaged and policed, sustainability challenges. Figuratively speaking, this perspective assumes that, much like we might trim a hedge or tree to adjust it to its environment, so we must trim our established systems to align them with our political concern for sustainable development. In both scenarios, however, while we might trim them, we leave their existing organisms intact. Sustainable-systems, on the other hand, insists that the scope and urgency of sustainability challenges today make a fundamental overhaul of central aspects in our current systems necessary; replacing some of the existing narratives of post-industrial capitalism, and its operating principles, with an alternative set of narratives and principles. Figuratively speaking, rather than trimming a hedge or tree – a process of curbing excess through intervention – this view on sustainability encourages that we should sow, and grow, alternative seeds (operating principles) that will yield alternative organisms (systems).
Based on these sketches, the chapter argues that while express linkages between corporate governance and sustainability are a relatively recent phenomenon, it is clear that these conceptual distinctions do matter in the framing of sustainable corporate governance reform. How we choose to frame sustainability – whether we understand it in the (stylised) terms of a sustainable-capitalism or sustainablesystems perspective – directly influences how we set about shaping a sustainable corporate governance framework.