Why Leadership with Integrity is Crucial to Achieving
Sustainable Business Practices for Corporations:
How the In-House Legal Function May Serve as a Driving Factor in Promoting Sustainable Value
Klemen Kreca, Legal Corporate and Investment Banking Germany, Austria, Switzerland & Scandinavia, Banco Santander, S.A., Germany
The importance of an environmentally and socially friendly business model has risen to an all-time high. It is a direct result of significant cultural changes, which have altered, potentially forever, the perceptions and preferences of parties engaged in business and commerce. This has created a far-reaching ripple effect, which brings about enormous challenges for regulators as well. Even though regulators and customers alike seek to propagate sustainable behaviour, old habits may be hard to unlearn. Regulators, too, are facing uncharted territory, and customers need to cope with a distinct asymmetry of information that may ultimately lead to consumers unwillingly subsidizing the very products and companies they wish to avoid. On the other hand, some companies failed to adapt to new market trends and many more suffer under the burden of bureaucracy, uncertainty and costs associated with onerous albeit well-intentioned regulation. The question remains which mechanism is best to match the undeniable consumer appetite for environmentally and socially considerate products from the companies that produce in such a manner and behave not only environmentally and socially considerate on paper.
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