External regulation is not sufficient
Taking companies’ substantial contributions to climate change as a given fact, companies have to be addressed more effectively when designing strategies to mitigate climate change. A fundamental assumption is that traditional external regulation of companies, e.g. through environmental law, is not sufficient. Our hypothesis is that environmental sustainability in the operation of companies cannot be effectively achieved unless the objective is properly integrated into company law and thereby into the internal workings of the company.
Internalising externalities in company law
Our main hypothesis is that what is required is what we may call the internalisation of externalities. The externalities that are to be internalised are the negative environmental consequences of the company's production and business. The internalisation has two functions:
1) to make more effective external regulations, notably environmental law;
2) to move business towards a sustainable development.
The core of our project is investigating how this can be done through company law and company law-related areas (including functional equivalents in the various jurisdictions). This choice, which distinguishes our project from many other initiatives, is based on research making a case for the necessity of regulating the internal decision-making processes in the responsible organs of the company through law.
This internalisation would need to be done in such a way as to create a binding basis for the internal drive that will make environmental thinking a part of the day-to-day running of companies, from the first product idea to the final recycling of the used product – with the goal of mitigating climate change and improving the environment a decisive factor. Such an internalisation would be a matter of both law and of social norms, and of the interrelation between them, and requires research that covers both dimensions.
Main goal and core focus
The main goal is at the end of the project period to be able to present workable and realistic proposals for necessary changes in the regulation of companies, which may function as models for legislators and researchers.
The project's core focus will be on non-financial companies in the industrial sector, while an interlinked part of the project will focus on financial companies and the financial sector in general, as the level ‘above’ industrial companies. Also this part of the project will assess the necessity of proposing amendments in relevant regulation. The project requires an interdisciplinary approach, combining legal research with legal-empirical research based on economics and social sciences approaches to how law functions in practice.
Our vision: Realising the potential of companies
Our vision is to contribute specifically and concretely to the tools available to realise the significant potential within companies to make independent, creative and active contribution to mitigate climate change. Climate change provides a powerful example to illustrate broader challenges in promoting corporate environmental responsibility through company law reform. In other words, if it is possible to induce a company to act more responsibly on climate change issues, then presumably it would extend its heightened environmental awareness and commitment to other environmental issues. Focusing on climate change can provide a catalyst for wider corporate engagement with the environment and also have a positive rub-off effect as regards the social dimension of sustainable development.
An eco-friendly project
Sustainable Companies will endeavour to be an eco-friendly project in itself.
The number of meetings in Oslo with foreign team members will be sought limited to a minimum, with electronic discussion and video conferences used where appropriate. All team members that live close enough to do so, are encouraged to travel in an environmentally-friendly way. Carbon emission offsets will be purchased for all flights for team members and speakers at project workshops, meetings and conferences.
Hotels and caterers used for project meetings will also be selected based on environmental criteria.