In May 2026, Brazil's securities regulator withdrew a rule that would have required listed companies to report on sustainability using international standards, before it took effect. The decision sparked protests and is being challenged by civil society organizations and other actors in the country who believe that sustainability rules belong in the capital markets regulatory system and that no setback should take place. The episode of redrawing corporate sustainability rules, which is not an isolated one, revives an important question: how did sustainability become a matter for business law in the first place?
Convergence around sustainability: asking how, not just whether
Company law, bankruptcy law, financial regulation, antitrust: none of these fields was built with the environment or human rights in mind. Since the mid-2010s, however, each has absorbed sustainability concerns in its own way. Bankruptcy courts have started asking whether environmental obligations count as claims. Antitrust authorities have relaxed rules to let firms cooperate on climate goals. And this is being observed in different jurisdictions.
Many existing accounts explain and push these shifts one field at a time. Within company law, for instance, they are commonly read as an internal recalibration, a ‘public turn’ that orients the field toward more public-facing goals. Within the bankruptcy realm, proposals to green the system highlight the structural incentives in business decision-making. Read this way, the changing winds make sense on their own terms, but the wider pattern across fields disappears from view.
Other scholarship looks across fields, making the transversal dimension visible. Some accounts spot the same shift moving through several fields at once, although confining the analysis to a single country, whereas others have contributed to set valuable and ambitious visions, arguing for what business law as a whole should become to meet the sustainability challenge. Sustainability-oriented scholarship has greatly contributed toward breaking down legal silos and understanding regulatory processes together. Most notably, Beate Sjåfjell's Corporate Sustainability Law provides an explicitly teleological framework for analysing the regulatory ecology of business and sustainability, identifying barriers, openings, and possibilities for legal change. Building on this transversal impulse, we ask not just whether sustainability should be embedded in business law, but how it comes to be contested across fields and jurisdictions. What institutional processes turn sustainability pressures into changes in business law?
Business law as the architecture of a global economy
Part of the answer lies in a feature of business law that is easy to overlook: its role in building the global economy itself. Cross-border trade, finance, and investment do not simply happen. They depend on legal institutions that reduce uncertainty, protect investment, and make transactions enforceable across borders, and constructing those institutions has been a deliberate, decades-long project.
Corporate governance reform is a clear example. Waves of reform concerning shareholder protection, disclosure, and board structure did not arrive as isolated technical fixes. They were part of a broader effort to build institutional environments compatible with integrated global capital markets, and part of a deeper transition toward more financialised forms of capitalism.
Firms as powerful global actors and targets of pressures
The above scenario provided the stage for firms to become powerful actors in the global economy, to whom activists, investors, and consumers have turned, demanding solutions to arising global problems in the face of governance gaps imposed on state action. Voluntary certification schemes, sectoral codes of conduct, and corporate social responsibility commitments filled some of that space well before any national legislator acted to demand a minimum standard of behavior from business.
That combination of business law as the architecture of the global economy and firms as powerful actors that became targets of social demands is what turned business law into the site where sustainability pressures eventually landed. The bridge from institutional developments in private regulation to changes in business law is not automatic, and it evolved through different pathways.
Business law as a site for pursuing collective goals
The demands targeting firms and the pressures they created move along two main paths. One is normative: frameworks like the United Nations Guiding Principles on Business and Human Rights set expectations for how companies should behave wherever they operate, and firms that ignore them increasingly face reputational and legal risk. The other runs through economic infrastructures: investors (under pressure themselves) began pricing environmental, social, and governance factors into their decisions, and lead firms in global supply chains came under pressure to answer for what happens many tiers down, in factories and farms they do not own.
Both paths convert pressure on firms into pressure on the law that governs them, and because business law is a shared toolkit stretching across company law, bankruptcy law, antitrust and financial regulation, that pressure does not stop at any specific field’s border. If business law is part of what makes global capitalism run, it follows that it also becomes a natural target for anyone seeking to change how that economy operates. Once firms sit at the centre of global economic governance, the legal regimes that structure them become privileged sites for pursuing broader social objectives, sustainability included.
Why the paths of legal change matter
Understanding these pathways matters because identifying a desirable legal reform is different from understanding the conditions under which it can be institutionalized. Sustainability rules do not simply follow from a growing consensus that firms should behave more responsibly. They emerge from contested processes in which transnational expectations, economic pressures, political coalitions, and existing legal institutions interact. Looking at those processes helps explain not only why similar reforms emerge across fields and jurisdictions, but also why they take different forms, encounter resistance, or fail to endure.
The Brazilian episode brings this point into sharp relief. The reversal of the sustainability reporting rule is not simply a regulatory setback, it exposes the contingency of the institutional process that brought sustainability into capital-markets regulation in the first place. The same coalitions and institutional openings that make legal change possible can weaken, reorganize, or be challenged by opposing coalitions. Understanding how sustainability becomes institutionalized in business law is therefore also a way of understanding the conditions under which those changes can be defended, expanded, or reversed.
Given the impact of business, corporate sustainability is a sine qua non to achieve sustainability goals. And considering historical developments, the path to corporate sustainability involves reassessing the role of the law that governs corporations. This is why the ‘how’ matters for the ‘whether’. If business law is to play a meaningful role in advancing corporate sustainability, normative proposals need to engage with the institutional processes through which business law actually changes. Mapping those processes does not tell us what sustainable business law should ultimately look like - a question that sustainability-oriented frameworks explicitly confront. It does, however, provide a grounded basis for assessing which reforms are possible, where their limits lie, and what may be required to make them durable.
This blog post is based on the paper to be presented at the conference Sustainability Law: Law’s Response to the Convergence of Crises, 16-18 September 2026, at the University of Oslo
