The seminar will focus on explaining the recursive failure of European regulators to enact effective corporate sustainability and accountability legislation and the current risks of (another) regulatory capture.
Following the adoption of the EU Green Deal, European institutions spent five years discussing legislative initiatives aimed at strengthening corporate sustainability and accountability. As a result, we have witnessed a wave of ground-breaking legislative initiatives, including the EU Taxonomy; the Corporate Sustainability Reporting Directive (CSRD); and the Corporate Sustainability Due Diligence Directive (CSDDD). However, business opposition has increased, aiming at blocking or watering down and, ultimately, capturing the regulatory process. Finally, in November 2024, President von der Leyen decided for a review of all three initiatives (the ‘omnibus’ regulation), motivated by the need to reduce the regulatory burden for companies. This embarrassing U-turn is particularly contentious because of the haste and secrecy of the review process. How can we make sense of this abrupt regulatory change?
Covering a period of over 50 years (1970-2025), the seminar will present evidence that this outcome is far from new. European regulators have recursively failed corporate sustainability and this is the fourth time they are manifestly captured. However, current research lacks historical depth and this recursive regulatory failure has been largely overlooked and rarely discussed. The proposed explanation for such systemic failure focuses on two structural aspects. First, EU regulators follow a representationalist approach to corporate social accountability, mirroring the Anglo-Saxon financial accounting model, considered the ‘golden standard’ for corporate disclosure. This ‘wrong analogy’ limits the possibility of effective regulation. Second, the privatisation of accountability standards - outsourced to professional accountants and auditors - has deprived regulators of the power to radically reform accounting laws in line with sustainability objectives.
David Monciardini is a social scientist with a strong interdisciplinary background, which spreads across Accounting, Law and Sociology. He joined the University of Turin, Department of Economics and Statistics, in March 2024. Prior to joining the University of Turin, David held a position as a Senior Lecturer at the University of Exeter Business School (2015-2024) in the United Kingdom, where he still is Honorary Fellow. David’s long-term research interest deals with the pressing issue of enhancing corporate sustainability and accountability, particularly focusing on EU regulation. His research has been published in several international academic journals including Business Ethics Quarterly; Business & Society; Journal of Business Ethics; and Regulation & Governance.