New Directions in the European Union’s Regulatory Framework for Corporate Reporting, Due Diligence and Accountability: The Challenge of Complexity
Year: 2022
Type: article
Abstract: Climate change and the pursuit of sustainability and sustainable business might be regarded as among the world’s “wicked problems”, especially as they are multi-dimensional problems. Achieving corporate accountability in this context is also difficult when corporate structures are complex as they operate globally and through supply chains. At the European level, under the Green Deal, the Sustainable Finance Initiative and the Sustainable Corporate Governance Initiative include new reporting requirements to amend and expand the scope and application of the 2014 Non-Financial Reporting Directive, alongside changes to directors’ duties to ensure they take account of stakeholders’ needs and environmental and human rights due diligence requirements. This paper will argue that these legislative and regulatory efforts are to be welcomed, but the complexity of the regulation threatens to undermine its potential impact. It may therefore be necessary to reduce some of the complexity of the regulatory arrangements. However, some complexity may increase resilience and adaptability for responding to the risks involved in the uncertainty and unpredictability of climate change and in dealing with complex corporate structures. The answer is to provide robust regulation that will prompt the corporate behaviours required to avoid the catastrophic trajectory we currently face.
DOI: 10.1017/err.2022.25
Author: Charlotte Villiers
Institution: University of Bristol
Language: English
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $3,255
OpenAlex ID: W4295339103