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Cambridge Institute for Sustainability Leadership (CISL)

Sustainability decision mak

Alongside the global economic and financial crisis of 2008, the current COVID-19 pandemic has brought significant changes to our economic, social and political thinking. These changes include an increased interest in transitioning from the shareholder capitalism model and the shareholders’ ‘wealth maximisation paradigm’ to a new form of stakeholder capitalism. This new stakeholder capitalism is built on the ‘triple bottom line’ and aims to measure a company’s economic value alongside its social responsibilities and environmental impact. Within this context, the project aims to identify opportunities and challenges for organisations to adopt new corporate forms and governance structures suitable for companies willing to align their business purpose and strategies with long-term value creation for society.

About the project

The 2030 Agenda represents a fundamental change of paradigm for international policies relating to sustainable development. This change of paradigm can only be implemented thorough strong cooperation between governments, the private sector, and civil society. In this context, the importance of the business sector as a force for social change is indisputable, and the role of enterprises in creating an equitable and sustainable economic growth continues to gain traction.

Through an interdisciplinary approach combining both comparative law and economic analysis of law methods and the management research approach, the purpose of this study is to:

  1. identify and encourage the adoption of new organisational paradigms concerning firms’ legal form and governance. These paradigms will better identify key characteristics of ‘sustainable’ or ‘purposeful’ companies;
  2. establish a comprehensive and coherent legal framework for sustainable companies.

The main areas of attention will be:

  1. New ‘hybrid’ business organisational forms and their corporate governance structure;
  2. Statutes and regulations to build sustainable and resilient supply chains;
  3. The design of incentives (regulatory and market-based incentive policies) to encourage the growth of sustainable firms.  

Impact and relevance

The issue of sustainability is now at the centre of the debate on corporate governance. Numerous certification systems aimed at measuring a company's social and environmental impact have been created, and several new hybrid organisational forms have been introduced in countries worldwide.

Identifying new governance structures and building a consistent legal framework for sustainable enterprises may serve two fundamental purposes:

  1. Providing domestic legislators with a uniform point of reference for implementing domestic regulations for sustainable enterprises;
  2. building a model capable of being adopted by small and medium to multinational enterprises which belong to different legal traditions and different economic and social environments, thus contributing to possible forms of unification or harmonisation of laws at a regional or international level.

The benefits of a specific legal framework supporting sustainable enterprises are numerous. This includes the alignment of the existing legal framework with societal changes and needs; the enhancement of legal certainty by being a first mover in the absence of clear legislation; and the enablement of entrepreneurs’ private ordering. This framework could also lead to the growth of a strong ‘fourth sector’ of the economy, encouraging a ‘race to the top’ between companies seeking to deliver the greatest societal benefits in the most profitable way.

Moreover, the growth of sustainable enterprises—in addition to its positive impact on the sustainability of the territory and national economy—brings competitive advantages in a global market increasingly oriented towards sustainability. Benefitting from the ‘signalling effect’ and an uptick in perceived trustworthiness, such companies will gain access to capital and investments and develop the ability to attract increasingly conscious consumers.


To elaborate a legal framework for sustainable companies, this analysis will focus on:

(i) New ‘hybrid’ business organisational forms and their corporate governance structure.

Work will be conducted on the main characteristics of a new hybrid business organisational form and the development of a governance structure suitable for incorporating sustainability in every stage of the decision-making process. This research will investigate rules which allow firms to develop a dual-purpose clause, new directors’ fiduciary duties, and new transparency requirements and enforcement schemes. An evaluation of the main existing impact assessment metrics will also be needed to address transparency requirements, identifying those metrics which are most appropriate to measure a company's real impact on society and improvements in their own sustainability strategy.

(ii) Statutes and regulations to build sustainable and resilient supply chains.

The aim is to develop appropriate legal solutions for a mandatory due diligence on all companies involved in the supply chain, and the extent to which they show respect for human rights and social and environmental sustainability criteria. This workstream will also research existing best practices of sustainable procurement to create appropriate statutes/guidelines that can be implemented by public bodies and companies.

(iii) Incentives for sustainable firms.

The research will be focused on the design of regulatory and market-based incentive policies to foster the development and the growth of sustainable firms (e.g., tax policies, indirect incentives in the field of equity and debt financing, and the use of public procurement as an economic lever).


The findings of this research will be disseminated through academic and non-academic outlets. The core scientific work developed under the Fellowship will be submitted to peer-reviewed academic journals, and the findings will be shared at national and international academic conferences. Additionally, relevant audiences will be reached through other types of outputs, including reports, policy briefs, and working papers. To increase public outreach and raise awareness in the business sector, the findings will also be shared through dedicated workshops, lectures, and social media platforms.

Collaborators and funding

This work is supported by a philanthropic gift from Anglian Water Services.


Dr Livia Ventura

Prince of Wales Global Fellow in Business Transformation and New Corporate Forms

"The essential role of the business sector in achieving the 2030 Agenda SDGs is undisputable. To accelerate the transition towards ‘sustainable companies’, an appropriate legal framework is needed. The right legal framework indeed can influence behaviours and provide the right incentives to achieve sustainability outcomes."

Dr Livia Ventura