European Union Initiatives and Regulations on Sustainable Corporate Governance
European Union Initiatives and Regulations on Sustainable Corporate Governance

Summary/Abstract: The European Commission's guidelines for the period 2014-2019 provide for the European Union to focus on integrating the UN's sustainable development goals into economic, social, climate and industry competitiveness initiatives and policies. This tendency to focus on the financial profitability of the company in the short term and on the redistribution of a large part of the generated revenues to shareholders is widespread at EU level and can hinder the essential investments for the transition to sustainability, in productive facilities, innovation, modernization, training and re-qualification of employees. It can also contribute to income inequality, as in the short term it creates pressure to reduce wages, and employees often do not benefit similarly and proportionately from payments made to corporate management and shareholders. The goal of financial performance reduces the ability of companies to properly integrate sustainability considerations into their business strategies and decisions. This trend is manifested on two levels: on the one hand, companies do not properly identify and address climate change and other environmental, social, and human rights risks (including workers' rights, child labor, etc.) in operations and within their supply chains. On the other hand, companies fail to integrate potential new investment opportunities, or to ensure sustainability. These trends have been facilitated by weaknesses in corporate law and corporate governance codes, as they encourage directors' liability to shareholders and do not sufficiently cover the interests of other stakeholders. The study proposed for presentation aims to analyze the evolution of the European regulatory framework on sustainability, resilience and corporate social responsibility, as well as the stage of implementation of European directives in Romanian company and financial law with a focus on coding ESG standards ("environment, science, governance") and how to translate them from the soft law area to concrete, measurable obligations and how to sanction breaches of standards and obligations incumbent on Member States on the one hand and companies on the other.

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