Corporate Purpose and Sustainability Due Diligence

In this chapter, I argue that corporate purpose is an old concept, which has been variously defined in different jurisdictions without determining great variations in practice. Continental European laws often consider the company’s interest rather than corporate purpose, i.e. the interest that a company should pursue which may pertain either to the company as such or to its shareholders. Corporate purpose is mostly identified with the pursuit of corporate profits, albeit with variations concerning the relevance of given stakeholders and of social values in general. On policy grounds, I ask whether EU company law should be reformed to reflect sustainability goals, or national laws should be left to decide whether corporate purpose and/or director duties need to explicitly refer to sustainability. Moreover, I analyse the proposed Corporate Sustainability Due Diligence Directive (CSDD) and try to assess its impact on corporate governance and corporate purpose. I conclude by highlighting the mounting role of regulatory and ethical constraints to business activities which derive from sustainability concerns.