Labour MEP Alfred Sant said that society should be put before shareholders and has supported a report that aims to improve the EU regulatory framework on company law and corporate governance.
The European Parliament initiative would enable companies to focus on long- term sustainable value creation rather than short-term benefits and aims to better align the interests of companies, their shareholders and society. It would also help companies to better manage sustainability-related matters in their own operations.
Although voting in favour of the report, Alfred Sant expressed some doubts concerning the outline of a EU corporate sustainability strategy and stated that a company is defined not only in relation to short-term profit maximisation, but also in relation to environmental and social challenges.
Long-term benefits and sustainability risks, also opportunities, are entirely part of a company’s strategy and many entrepreneurs out there are already on the go in this respect.
The rapporteur has put forward the need for a EU framework ensuring that the members of the administrative, management and supervisory bodies of undertakings have the collective responsibility to define a corporate sustainability strategy.
“I agree that there should be in this regard a clear definition of a fair salary policy. However, care should be given with respect to the establishment of advisory and monitoring committees that might end up asphyxiating European companies, already busy with heavy schedules of obligations”, Alfred Sant said.
For them, additional rules and administrative burdens would be detrimental to innovation and organic growth and SMEs might be exempted from establishing such a committee. Furthermore, any EU sustainability strategy should be based on facts, including measurable and scientifically based targets.
