In recent years, fiduciary law has moved toward the center of scholarly attention in the common law world.1 In spite of its “elusive” nature,2 enough instances of fiduciary relationships occur across a wide variety of legal areas that many – with good cause – describe it as a distinctive field.3 Courts as well as scholars in common law jurisdictions deal concepts and ideas concerning fiduciary law back and forth.4 Although civil law countries have no tradition of the trust as a legal institution,5 courts and scholars alike term relationships based on some kind of personal or professional trust “fiduciary.”6 German law subjects guardians,7 trustees in bankruptcy,8 attorneys,9 and others to a specific set of fiduciary duties, the most important of which is a duty of loyalty.10 France has introduced “la fiducie,” a substitute for the common law trust.11 Indeed, civil law countries have long combined property and contract law in order to fashion substitutes for the common law trust. Contract-based Treuhandverhältnisse – that is, relationships of trust – have been a staple part of the German legal discourse for several decades, if not centuries.12 And in recent years, the trust as a legal institution is gaining ground in civil law jurisdictions, following national recognition of the Hague Trust Convention by countries such as Italy and the Netherlands.13

As investors and shareholders drive public companies to address climate change, there is a political movement driven by conservative state treasurers pushing back on the concepts of ESG using the premise that ESG will adversely impact their investment returns.

As scholars and activists seek to define and promote greater corporate political responsibility (CPR), they will benefit from understanding practitioner perspectives and how executives are responding to rising scrutiny of their political influences, reputational risk and pressure from employees, customers and investors to get involved in civic, political, and societal issues. This chapter draws on firsthand conversations with practitioners, including executives in government affairs; sustainability; senior leadership; and diversity, equity and inclusion, during the launch of a university-based CPR initiative. I summarize practitioner motivations, interests, barriers and challenges related to engaging in conversations about CPR, as well as committing or acting to improve CPR. Following the summary, I present implications for further research and several possible paths forward, including leveraging practitioners’ value on accountability, sustaining external calls for transparency, strengthening awareness of systems, and reframing CPR as part of a larger dialogue around society’s “social contract.”

The popularity of digital assets and blockchain solutions is accelerating. This chapter explores the environmental, social, and governance (ESG) impact of digital assets due to increasing institutional and retail investors participation. Blockchain technology can help financial institutions drive favourable enterprise ESG outcomes.

Environmental, social and corporate governance (ESG) have been at the core of the global academic debate throughout the last decade, while affecting several fields of knowledge, among which legal jurisprudence. Although much has been said about ESG policies in different fields of the law, less has been said about their multidisciplinary dimension. In this Chapter we analyse ESG policies at the intersection of corporate governance and competition policy, focusing especially on technological innovation – given the centrality of dynamic efficiency for the solution of the environmental crisis. We also highlight other potential intersections of ESG themes across competition and corporate law and governance, while suggesting the need for an integrated policy-making in this area.

This book contributes to the literature on comparative social enterprise law in four respects. First, it demonstrates that the existing legal forms and laws in common law Asia, the UK and US, do not properly address the three principal types of conflicts of interests affecting social enterprises. Second, this book distinguishes social enterprises and profit-driven companies that take into account sustainability or environmental, social and governance (ESG) considerations. Third, given the key difference between social enterprises and profit-driven but socially responsible companies, the concern that having a new legal form for social enterprises will undermine the sustainability practices of profit-driven companies is misplaced. Finally, creating a new legal form comprising the five criteria will reduce transaction costs for social entrepreneurs, investors, and consumers.

This chapter discusses the relationship between corporate governance and corporate sustainability. We start by looking into the different components of the general corporate governance system. This allows us to revisit a central tension: shareholder- versus stakeholder-oriented governance. We then discuss how well-designed corporate governance can support firms’ sustainability efforts. We label this debate ‘corporate governance for sustainability’, and we discuss how sustainability topics can be integrated into the discussions of boards of directors. Next, we show that some aspects of corporate governance can themselves pose challenges that need to be discussed under the ESG umbrella. We label this debate ‘corporate governance as sustainability’, and we focus on topics that reflect the ‘G’ in ESG (e.g., executive compensation). Finally, we discuss elements of a possible reformed corporate governance system which would allow to better address sustainability-related debates.

This chapter starts by discussing the changing overall context in which business, nature and society operate. It is important to understand this context, because it shapes the problems that corporate sustainability aims to address, and it influences how firms can cope with these problems. We then introduce the concept of corporate sustainability. We discuss similarities and differences to related concepts such as corporate social responsibility and business ethics. Next, we review some of the main environmental, social and governance (ESG) issues that firms are asked to address as part of their corporate sustainability commitments. Finally, the chapter reviews four key motivations (instrumental, ethical, stakeholder-based and political) that underpin firms’ corporate sustainability commitments.

There have been countless studies of corporate social responsibility and ESG across many disciplines. Law, economics, business administration and management, sociology, ethics, and theology, among others, have all made contributions. One might hope that a compelling business case for either corporate social responsibility/ESG or shareholder value maximization would have emerged from all that work. In fact, however, the results have been all over the map.

Shareholder value maximization is the law. It ought to be the law. This is, in part, because the chief alternative available in liberal democratic societies – stakeholder capitalism – is fundamentally flawed. If executives such as those who signed the Business Roundtable’s 2019 statement on corporate purpose really tried to run their companies according to the altruistic principles laid out therein, they would find it an impossible task. Developing the set of objective and quantifiable metrics necessary to operationalize stakeholder capitalism will prove an intractable problem. Even if the requisite set of metrics could be designed, boundedly rational managers cannot reasonably be expected to balance the huge number of competing factors necessary to account for the varied interests of the firm’s many constituencies.

There are four basic arguments in favor of stakeholder capitalism. (1) It is a necessary response to the externalities generated by corporations. (2) Society expects business to solve problems when governments will not. (3) Corporations have too much power. (4) Millennials will only work for woke corporations. None of these arguments proves persuasive.

Defines the terms corporation, corporate purpose, shareholder value maximization, stakeholders, stakeholder capitalism, corporate social responsibility, and ESG (environmental, social, and governance). Provides the plan of the work.

Stakeholder capitalism results in a loss of accountability, as executives who are responsible to everyone are responsible to no one. Stakeholder capitalism would be extremely difficult to implement. Proposed means of doing so – such as constituency boards, codetermination, and team production – are all unworkable. Stakeholder capitalism is inconsistent with democratic capitalism. Shareholder value maximization is the result that would emerge if shareholder and stakeholders could bargain (the so-called hypothetical bargain). Shareholder capitalism is pro-social. The profit motive results in socially efficient resource allocation. The profit motive is an essential motivational spark for innovation. The profit motive promotes freedom.

Beneficence is the act of doing good, while benevolence is being willing to do good. Walmart is cited as a case where, despite its founder’s belief that businesses do sufficient good simply by fueling wealth through commerce and employment, the company is nevertheless highly involved in community projects. Corporate philanthropy may be used strategically to increase future profits, while many corporations see themselves as morally responsible for stakeholders – employees, communities, consumers, and the wider environment – without requiring a clear return on investment. Corporate intervention is discussed historically in terms of apartheid, where some companies applied pressure for social change whereas others felt firms should abide by local norms despite violating human rights. Corporate intervention in the political affairs of Central America are discussed, as well as businesses that supply biased educational materials. The final case describes the sponsorship of an artistic production that becomes politically embroiled and asks what an appropriate level of corporate involvement in the community should be.

Climate change has dramatically increased the frequency and severity of disasters including hurricanes, floods, wildfires, droughts, and pandemics. In a globally connected economy, climate-change fueled disasters disrupt supply chains and upend markets, affecting corporations no matter where they are located. From a risk-management perspective, however, climate change is just another external threat to hedge against, no different in principle than the risk that interest rates might rise or that an economic downturn could reduce the demand for a corporation’s products or services. Thus, corporations have reason to address the problem of climate change, but only to the extent that corporations can thereby produce value for their shareholders. This chapter argues, to the contrary, that climate change should trigger a compliance response. Unlike risk management, a compliance-based approach would require corporations to internalize the problem of climate change and to give it priority over competing considerations.