Sustainability and corporate governance: The online consultation launched by the European Commission

Mattia Raffaelli, Clovers law firm, 05/01/2021

More and more often we hear about sustainability, a term now common in the common language.

But what exactly is meant by sustainability?

In short, it indicates the impact that humanity has on the planet.

Usually associated with three major areas (environmental, economic and social) sustainability is beginning to gain more and more importance also within companies, offering the opportunity to become an integral part of a strategic vision.

Sustainability can represent, for example, a key element for companies in order to create a solid and recognizable image, allowing them to access new capital and better manage risks (think, for example, how sustainability is integrated within supply chain strategies).

The issue is also of growing interest at the political level, so much so that the European Commission launched an online consultation on sustainability in corporate governance on 26 October 2020.

One of the brakes to sustainable development has been identified, by the company law experts appointed by the European Commission, in the systems of corporate governance.

Company directors, in fact, according to the results of this research, would not give sufficient importance to sustainable objectives, since they would be considered as goals that are not directly profitable and too far apart in time.

Research conducted by the EU has shown that in recent years EU listed companies are continuing to focus more on short-term shareholder benefits than on long-term shareholder benefits, often without adopting a view that shareholder welfare is not attainable without taking into account the welfare of the stake-holders.

The European Commission believes that there is a need for concrete political intervention to contribute to the lengthening of the time horizon in the decision-making processes of companies and thus facilitate the path towards a more sustainability-oriented governance.

 On the website of the European Commission a public consultation has been launched with the declared objective of defining the outlines of a political intervention that can promote a cultural change deemed absolutely necessary and urgent.


The consultation will end on February 8, 2021 and has the following aims:


  • Gather the views of stakeholders on the need and objectives of EU intervention, as well as on different policy options;
  • Collect data that can be used to better assess the costs and benefits of different policy options
  • Gather further knowledge on some specific issues, in particular regarding national frameworks, enforcement mechanisms and current case law.


A very wide public is called upon to respond: from private citizens to the business world, from NGOs to large industrial groups and the bearers of widespread interest.


But it is clear that corporate governance is the first to be called upon to respond to this invitation, to measure itself against the phenomenon of sustainability that no longer seems to be neglected. An evolution that in the intentions of the European political initiative should be planned in the long term, so that in the future it does not become an urgency.


It is no coincidence that the UN Agenda 2030 also moves in this direction, promoting one of the most important initiatives aimed at a profound cultural change, which gives an important role to the private and corporate sector for the achievement of the 17 objectives of sustainable development:


  1. Zero Poverty
  2. Zero Hunger
  3. Good health and well-being for people
  4. Equal and quality education
  5. Gender equality
  6. Clean water and sanitation
  7. Clean and accessible energy
  8. Decent work and economic growth
  9. Industry, Innovation and Infrastructure
  10. Reducing inequalities
  11. Sustainable cities and communities
  12. Responsible consumption and production
  13. Climate change
  14. Underwater life
  15. Life on earth
  16. Peace, justice and strong institutions
  17. Partnership for objectives


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