The Treaties of the European Union (EU) set out sustainable development, or sustainability as it often is referred to, as the guiding principle for the EU’s policies and activities within Europe and in its relations with the rest of the world, to promote ‘peace, its values and the wellbeing of its peoples’. Is the EU doing enough to achieve these overarching goals; is it working towards a competitive social market economy, protecting and improving the environment, promoting social justice and solidarity, and contributing to peace, security and the sustainable development of the Earth?
Sustainability talk as a deflection device
Sustainability is certainly on the EU agenda as it is of many businesses, financial institutions and civil society organisations. Yet, the sustainability talk often lacks a basis in research, which making it far too easy for policy-makers and businesses and other organisations to make broad statements about their sustainability goals and initiatives. All the sustainability talk may act as deflection devices away from the reality that is well-documented in research: that the environmental basis for human prosperity on this planet continues to be undermined and social injustice is pervasive.
The volume Sustainable Value Creation in the European Union takes a research-based understanding of sustainability as its starting point: securing social foundations for humanity now and for the future within planetary boundaries. Within this framework, as we as editors set out in our introductory chapter, the volume undertakes a constructively critical analysis of ‘sustainable value creation’ as a concept that economic activity generally should aim for, to contribute to overarching societal goals of sustainability.
The contributions in the book all address the notion of value creation through the prism of sustainability by focussing on the opportunities offered and the limitations present to the development of the legal, political and social value system that the EU aspires to offer. Through four Parts, the chapters in this book analyse why the EU is struggling, the challenges it faces in achieving sustainable value creation and offers suggestions as to what the EU – and all of us together – ought to do now.
The unsustainabilities of the EU economic system
In Part I, Dirk Zetsche and Roberta Consiglio present a highly topical analysis of the EU’s COVID-19 response, while Irene Lynch Fannon and Michael James Boland discuss the unsustainability of the corporation, with suggestions for a more value-focused approach as a basis for change. Part II focuses on the unsustainability of the European economic system. Andrew Johnston and Trevor Pugh show that while quantitative easing policies boosted asset prices and made the wealthy even wealthier by lowering borrowing costs for governments and large companies, such policies did not necessarily stimulate economic activity.
In his analysis, Alexandros Kyriakidis criticises Eurozone 2, with its imbalances, casting doubt on claims that changes to the Eurozone have had a beneficial effect. The Eurozone measures have been one-dimensional and limited because they focus only on the economic dimension; they are geared towards austerity; and budgetary discipline increases inequality. Kyriakidis elaborates on how the result has been unbalanced fortifications against shocks. Panagiotis Liargovas and Voula Kratimenou demonstrate how the negative results of austerity, drawing on the Greek experience in 2010-2019 where extreme austerity was imposed through the bailout programme.
The role of shareholders and the barriers and the opportunities for shareholders to support a sustainable economy are analysed by Jukka Mähönen, who shows how shareholder participation in business brings both threats and possibilities.
How can sustainable value creation be achieved?
In Part III, the volume puts forward some suggestions that may contribute towards stronger and more lasting solutions. The EU’s sustainable finance initiative, which the EU launched with its action plan in 2018 and followed up quickly with legislative measures, illustrates that the EU can act quickly when it is sufficiently motivated to do so. In their contribution to the volume, Jay Cullen, Jukka Mähönen and Heidi Rapp Nilsen discuss how changing the contribution of EU financial markets to unsustainable business practices is vital to realizing the EU’s commitments on sustainability. The authors argue for a fundamental recalibration of reform efforts and propose a menu of policy interventions.
Beate Sjåfjell and Georgina Tsagas propose a range of corporate law and corporate governance reforms, drawing inter alia on the results of the SMART project. To integrate sustainable value creation into corporate governance, reforms of company law and corporate governance codes are proposed, together with ideas for integrating sustainability into corporate documents, notably the companies’ constitution.
Through an analysis of the case of the Dutch reusable bottle company Dopper, Tineke Lambooy et al. discuss how the contribution of social enterprises to sustainability can be facilitated, while Charlotte Villiers and Roseanne Russell present the argument for stronger empowerment of women and their potential to contribute to the economy and to benefit from it more meaningfully. They highlight how important it is to avoid instrumentalising women’s roles.
A fundamental shift towards a genuine sustainability is needed
In the concluding chapter, we as editors flag up some pressing concerns as regards the development and future of the EU and offer suggestions on how to move forward in addressing the challenges ahead. We state that the EU needs to continue its emergent shift away from a neo-liberal agenda and more fully onto a path towards a genuine sustainability agenda that is underpinned by solid and strong theories, promoting and reinforcing possibilities for positive futures.
Very much in line with the EU’s overarching Treaty goals, legal duties and legal bases, all areas of law and policy should be assessed and reformed as and to the extent necessary, to integrate sustainability into the operations and activities of the EU. A common thread through all legislative and policy reforms of and relevant to business and finance should be sustainable value creation within planetary boundaries as an overarching purpose for business, with mandatory rules to ensure that sustainability is integrated into the governance of business across global value chains. Such key features would provide a context that can make a more sustainable economy truly possible.
We submitted the manuscript for this volume to Cambridge University Press in December 2021. Two months later Russia invaded Ukraine, with devastating consequences for millions of Ukrainians and with negative impacts across Europe and the world. This ongoing catastrophe underlines further the importance of finding ways to promote social justice, peace, security and the sustainable development of the Earth.
The volume Sustainable Value Creation in the European Union, published in print and digitally by Cambridge University Press (2023), is available digitally at selected libraries through Cambridge Core. The introductory chapter, Stimulating Value Creation in a Europe in Crisis, is freely available at SSRN, as are abstracts of the other chapters