Sustainable Companies: Barriers and Possibilities in Swedish Company Law
21 Pages Posted: 12 Apr 2013 Last revised: 26 Sep 2014
Date Written: April 11, 2013
Abstract
In Swedish company law there are no statutory provisions as such regarding sustainable companies or, for that matter, corporate social responisibility. The question is therefore if the company organs are allowed – and if so to what extent – to spend money and time on building a sustainable company. In this regard the Companies Act of 2005 may hinder or at least make it more difficult to promote sustainable companies because of a general principle in Swedish company law which prohibitits acts obviously contrary to the profit purpose. A environmental friendly decision or act cannot be introduced by the majority shareholders unless such an decision or act at the same time is in line with the profit purpose of the company and otherwise in line with other minority shareholder rules in the Companies Act of 2005.
Even though there are no statutory provisions regarding sustainable companies, the publicly owned companies in Sweden must since 2008 make a sustainability report consistent with the guidelines in GRI. Other than that, private actors make norms in this area that are voluntary for the companies to follow. Nevertheless, more than 70% of the biggest companies in Sweden voluntarly choose to publish a report regarding their sustainability policy.
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