Corporate sustainability entails a transformation of private law

The course of this journey is shaped by the Open Letter on the Planetary Power of the Unsustainable by Natalino Irti, the distinguished jurist from Abruzzo who passed away recently, and who had never before devoted such attention to a conference initiative. Irti immediately dismisses any temptation to offer consolation. If the capitalist form of enterprise is structured around profit and if the latter inherently carries a tendency towards indefinite expansion, we must ask ourselves what force can halt this movement. And, once sustainability has been identified as this restraining factor, it remains to be established who is entitled to determine its extent and possesses the necessary power to ensure compliance within an economy that now operates on a global scale.

The issue thus goes far beyond that of environmental protection, however central that may be. Making something sustainable means setting a limit on growth and introducing a criterion of proportionality into a process that does not seem to produce it spontaneously. That limit, however, cannot be left to mere exhortation: it must be defined, formulated in legal terms, monitored for compliance and, where necessary, backed by prohibitions and penalties. A concept generally associated with a positive outlook thus ends up bringing one of the perennial problems of legal coexistence back to the fore: how much scope to grant to freedom and what authority can legitimately restrict it.

The research project by Genovese and Barela takes shape precisely within this tension. In his opening address at the conference from which this book originates, Genovese raised the issue of the possible transformation of civil law categories in the face of the need to reconcile the demands of production and profit with social and environmental concerns that have now taken on an undeniable significance. The issue at stake, therefore, is not simply to apply a new label to the tradition of private law. It is a question of understanding whether, and to what extent, it can change whilst remaining recognisable as private law.

Modern private law has constructed most of its categories by taking as its point of reference an individual who actually exists, as the current bearer of legal interests and situations. Sustainability, on the other hand, compels us to broaden our perspective beyond this contemporary context. 

The same phenomenon is evident in the contract. The concept that best represents the autonomy of private individuals has traditionally been regarded as a means by which the parties organise their own interests. In the current organisation of the economy, however, the effects of a contractual choice may extend along production chains spanning multiple legal systems, involve the work of parties outside the agreement, and affect the consumption of raw materials, the production of emissions and the environmental balance. This therefore raises a problem that is not confined solely to legal technicalities: whether it is still sufficient to assess contractual autonomy by looking solely at the parties, or whether it is also necessary to take into account external consequences affecting other parties and collective interests.

The contrast becomes even more evident when we turn to business. Can the pursuit of profit truly be reconciled with the requirements of sustainability? Does the solution lie solely in imposing limits on the ways in which financial results are achieved, or – taken to its logical conclusion – is sustainability capable of affecting the very purpose of economic activity? Corporate transparency, directors’ responsibilities, ESG criteria, monitoring of supply chains, and the assessment of social and environmental impacts all show that this is no longer a question confined to theory. Regulations are already grappling with it. It remains to be seen whether the traditional conceptual framework can assimilate these developments or whether they are destined, at least in part, to alter its very nature.

It is precisely the absence of a uniform response that makes this work particularly interesting. The book does not present sustainability as a truth to be accepted unquestioningly. On the contrary, it makes it the subject of a discussion that brings profound differences of opinion to the fore. 

The significance of these questions is not confined to a dispute over terminology. Whenever a legal concept retains a wide margin of uncertainty, it becomes inevitable to ask which body is responsible for giving it concrete form. This is the institutional crux of the matter that lies behind the conceptual problem. If it lacks sufficient substance, sustainability can degenerate into a mere ornamental phrase, usable without any real prescriptive effect. If, on the other hand, it is accorded extremely broad scope without specifying the criteria, it may become the basis for very extensive powers entrusted to the legislator, administrative authorities, regulators and the courts.

In concluding the conference, Maria Barela chose, not without a touch of subtle irony, to claim membership of that category of ‘utopians’ which Irti had referred to in a critical sense. It is not necessary to interpret those words as naive optimism. They may indicate something different: the decision not to accept the conceptual frameworks handed down by tradition as definitively established, but rather to subject them to the test of phenomena that did not belong to the historical context within which they had been constructed.

For this reason, the question mark at the end of the subtitle – VTowards a theory of ‘sustainable private law’? – is not merely rhetorical. The book does not present as a settled conclusion a theoretical position that is still the subject of debate.

Perhaps it is here that the book’s overall value is best appreciated. Private law does not merely serve to distribute assets, facilitate trade and regulate agreements. Through it, a community also determines the extent to which individual autonomy should be recognised, where to draw the boundaries that it must not cross, and what proportion of the costs generated by today’s choices it is legitimate to leave to those who will live tomorrow.