More about the project

At opposite ends of a spectrum

Comparative work on business models has identified the US and the Nordic models as being at opposite ends of the competitive-cooperative dimension (Strand and Freeman, 2015), which also resonates with the comparative work on corporate law and sustainability (Sjåfjell et al, 2015). The US model is the point of reference for the dominant economic theories of the firm, and the perceived problems of the Anglo-American corporation drive much of the current thinking on which issues corporate law and corporate governance should address. A key example of this is the narrow, shareholder-centric use of agency theory (Sjåfjell 2017). The social norm of shareholder primacy originates from this discourse, and has had considerable impact across the globe (e.g. Sjåfjell et al, 2015).

Conversely, Nordic approaches are considered to provide an alternative model in well-performing welfare societies (Strand and Freeman, 2015; Strand et al., 2015). Yet, in our globalized world, the shareholder primacy understanding has encroached also on Nordic understandings of the relationship between business and society. In contrast, in our comparative analysis, California provides an especially interesting US case as the state that is regarded as a green leader and with potential to inspire the world (Vogel, 2018). Further, there is in practice an integration of business and finance that cares little about national borders or historically different approaches and theoretical concepts of business models and corporate governance.

Aim: building blocks of corporate sustainability

With this backdrop, the comparative analysis at the heart of RealSusty contrasts and interrogates theories, policies and practices in California and the Nordics, aiming to identify building blocks of corporate sustainability. Ensuring corporate contribution to the environmental, social and economic goals of sustainability is vital. The adoption of the United Nations Sustainable Development Goals has given new impetus to the debate on how to achieve environmental, social and economic sustainability for a growing population on a planet under ecological pressure. Human activity is transforming geological processes and threatening the very basis for human existence, to the extent that it has been suggested that our geological epoch be officially named the Anthropocene. It is estimated that humanity has already transgressed at least four of the currently identified nine planetary boundaries: climate change, biosphere integrity, biogeochemical flows and land-system integrity. The grand challenge of our time is accordingly how to ensure the protection of human rights and meeting basic needs of humanity now and in the future, while staying within planetary boundaries. This has been described as achieving a ‘safe and just operating space for humanity’ (Leach, Raworth and Rockström 2013).

Cutting through the noise

There is much sustainability talk from business. Indeed, the increasing number of sustainability declarations from business may indicate a gradual shift in business values. Yet, we are no closer to a comprehensive plan for action. Many companies report on their sustainability activity, while there is still a lack of coherent and stringent regulation of sustainability reporting and generally no requirements for external verification of sustainability claims. The result is a considerable amount of ‘noise’: colourful websites and promotion material that may reflect real progress but may also be ‘ green-washing’ or ‘SDG washing’, blurring what may in practice be ‘business as usual’. For investors, the lack of reliable, relevant, verified and comparable information complicates the process of sustainable investing, although obviously, investor demand for such corporate information is a potential driver for change. So-called ESG ratings, aiming to provide sustainability-related information about the corporations, and also informing sustainability indices, are increasingly influential.  Yet, also these ratings are based at least partly on information from the corporations, and the assessment the rating agencies undertake do not seem to take a research-based sustainability concept as their starting point. 

There is a need to cut through the noise and identify actual best practices and remaining challenges for realizing corporate sustainability. RealSusty will do this through three phases: moving from a critical analysis of theory, through a comparative assessment of corporate best practice and remaining challenges in the perceived front-runners of sustainability: California and the Nordics, to identifying the buildings blocks of global corporate sustainability.  The two-day conference in Berkeley, March 2019, which will bring together scholars, practitioners, policy-makers and students, will be milestone in the project.

Published Oct. 11, 2018 10:46 AM - Last modified Oct. 11, 2018 10:46 AM