Law, agency and sustainability: the role of law in creating sustainability agency

Are materiality determination practices evolving in the wake of increasing legislation on sustainability reporting? Findings from EU pharmaceutical companies’ reports

“…The role of private law and its institutions, such as corporation, has been largely overlooked until recently (Sjåfjell, 2018;Salminen and Rajavuori, 2021). Salminen and Rajavuori (2021) have argued that private law institutions have enabled the pursuit of wealth maximization strategies that shift externalities to other actorsindividuals, local communities, the state and the global ecosystemand have ignored sustainability considerations. Sjåfjell (2018) has posited that the key to fundamental sustainability change is internal change of corporations.…”

“…In legal scholarship, “sustainability” has slowly evolved from a broad general concept to a narrower one, and an object to be promoted by law (Salminen and Rajavuori, 2021). Sjåfjell and Bruner (2020) have described sustainability as an overarching societal goal – a state in which all human activity must be directed toward respecting planetary boundaries, protecting human rights and meeting fundamental social needs.…”

“…In general, legal scholarship has considered law as a technique to affect the outer bounds of allowed, incentivized or prohibited practices and behavioral patterns to attain sustainable economic activity (Salminen and Rajavuori, 2021). This can be done, for example, by imposing new reporting obligations or by incentivizing companies to address shortcomings throughout their supply chains.…”

“…The law has been seen as a reactive mechanism dealing with the externalities rather than the root causes of the activities that result in harm. The role of private law and its institutions, such as corporation, has been largely overlooked until recently (Sjåfjell, 2018; Salminen and Rajavuori, 2021). Salminen and Rajavuori (2021) have argued that private law institutions have enabled the pursuit of wealth maximization strategies that shift externalities to other actors – individuals, local communities, the state and the global ecosystem – and have ignored sustainability considerations.…”

“…Sjåfjell and Bruner (2020) have clarified that the social foundation is the minimum that humanity must strive for, while planetary boundaries represent the limits to how much pressure can be put on ecosystems to achieve this. In general, legal scholarship has considered law as a technique to affect the outer bounds of allowed, incentivized or prohibited practices and behavioral patterns to attain sustainable economic activity (Salminen and Rajavuori, 2021). This can be done, for example, by imposing new reporting obligations or by incentivizing companies to address shortcomings throughout their supply chains.…”