Certification of Sustainable Companies: "Good Companies" at the Intersection of Market and State

• Applicants: Professor Dr. Martin Burgi; Professor Dr. Florian Möslein
• Subject Area: Public Law ; Private Law
• Term: from 2017 to 2021
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 345763044

At least since the adoption of the Sustainable Development Goals by the UN General Assembly, sustainability in economic development ranks high on the global agenda. Certification serves as an important regulatory instrument to demonstrate compliance with the respective environmental or social requirements. While certification procedures for goods and services are widely known, the certification of sustainable corporations breaks new ground: Subject of this specific certification are businesses as a whole, not individual products. Instead of "good products", "good companies" are certified. In the US, this type of certification has rapidly gained in importance. Under a well-established private certification regime, corporations that meet certain social and environmental standards are granted the status of "Certified B Corporation". Companies that wish to obtain such certificate must undergo the B Impact Assessment. The certification and regulatory body which is in charge of this assessment acts as a private, non-profit organization. Triggered by the success of such certification practices, numerous US states now even offer a new corporate form, the so-called Benefit Corporation, for companies which intend to serve the dual purpose of common good and profit. The certification as such is now widespread also beyond the United States, namely in Germany. At the same time, there are various policy reform proposals both at EU level and at Member State level to improve the conditions for "social entrepreneurship". For instance, a respective initiative of the EU Commission has been published in a communication of 2011.Against this background, our research project aims to analyze the regime of certification of sustainable corporations with respect to its subject, its current law framework and its functional parallels. In addition, a potential future legal framework for the establishment of a certification regime will be developed, be it at European or national level (with particular respect to Germany). We can observe a process of change here which transcends the various jurisdictions and the various areas of law: How do market and state, self-regulation and statutory law interact, already nowadays, but in particular in the future to come? Since companies are products of law, and since they compete, as opposed to other products, in very different markets (goods, labor and product markets), the certification of "good companies" follows a very unique dynamics, and that at both levels of the government regulatory framework and of market actions. Given the global success of such certification, the time seems ripe for a thorough analysis of these characteristics at the intersection between the state and the market.

• DFG Programme: Research Grants