A reformed global legal architecture for corporate responsibility
This paper considers key features within the legal architecture of all jurisdictions that utilise the ‘corporation’ as a primary medium for business enterprise. Therefore it highlights the legal frameworks under which ‘corporations’ operate and the pressure that this places upon corporate directors to achieve specific financial outcomes. It then illustrates how this legal architecture can have certain negative effects for other stakeholders such as the environment and communities.
The paper considers the reasons why the law was originally designed in this manner and seeks to demonstrate that this design represents one of the ‘drivers’ of environmental degradation and greenhouse gas emissions, which in turn affects peoples’ human rights.
It takes into account the initiatives that have developed in recent years, which include the work of the UN’s Special Representative of the Secretary General – Professor John Ruggie, the work of the Global Reporting Initiative and the development of the concept of ‘corporate social responsibility’. It assesses the effectiveness of these initiatives and questions whether they address the ‘root causes’ of the problem that they look to resolve.
Finally, consideration is given to recent research which has proposed a new type of legal architecture, that would provide a framework of legal responsibilities for corporations to adhere to within an international system of administrative oversight. This redesigned legal and administrative framework would necessitate that all business activity would be predisposed to outcomes of environmental sustainability.