Obstacles to Sustainable Global Business. Towards EU Policy Coherence for Sustainable Development

Abstract

This report is a deliverable from the international research project Sustainable Market Actors for Responsible Trade (SMART, 2016-2020). SMART positions the pursuit of policy coherence for development within the broader context of achieving sustainability, which we define as securing the social foundation for humanity everywhere, now and in the future, while staying within planetary boundaries. This encompasses protecting human rights and other fundamental social rights, ensuring good governance, contributing to securing the economic basis for functioning societies, and doing this in a way that protects the very basis of our existence – living well within the limits of our planet, in the EU terminology. An important step to achieving sustainability is to understand why global value chains of products sold and bought in Europe continue to be informed by decisions that undermine sustainable development. In this report, we analyse the regulatory complexity faced by the European market actors involved in these global value chains: the businesses, their investors and financiers, the consumers, and public procurers. We identify what hinders sustainability and reflect on possible options to better ensuring sustainability. With the aim of policy coherence for sustainable development, we identify the incoherencies and the gaps in law and policy. We identify specific barriers and explore how well-intended legislative initiatives and EU-supported international norm developments may be insufficient. In Section 2 of this report, we analyse what sustainability entails, engaging with the UN Sustainable Development Goals (SDGs) as the strongest indicator of a global consensus on the aims of achieving sustainability. Thereafter, in Section 3, we present the market actors we concentrate on in the analysis in this Report. We go in depth into these market actors in Sections 4-10, with Sections 4-8 devoted to the large corporation, and SMEs and social enterprises discussed in Sections 9 and 10, respectively. Section 11 presents our general findings, while Section 12 summaries and concludes with a discussion of what sustainable business and a policy framework for sustainability would look like, and reflects on the way forward.