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Towards a Definition of a Sustainable Corporation Under the International Frameworks on Business and Human Rights

Published online by Cambridge University Press:  12 December 2025

Naphtali Ukamwa*
Affiliation:
School of Law, Trinity College Dublin , Ireland
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Abstract

This article argues that the global Business and Human Rights movement demonstrates a push towards a human-rights type of sustainable corporation, reconciling economic development and human rights. It explains the necessity for and significance of a definition of a sustainable corporation at the intersection of traditional international human rights and sustainable development instruments. It argues, inter alia, that an internationally recognised definition of a sustainable corporation can settle fundamental questions and create a minimal framework for meaningful discourse on corporate accountability for human rights, climate change and the environment. It identifies difficulties of defining a sustainable corporation such as the integration problem. It suggests ‘direct human rights obligation’ as a minimally sufficient normative criterion for the definitional correctness of a sustainable corporation. The suggested definition of sustainable corporation requires taking a normative position which makes the term ‘essentially contested’ resulting in discursive and behavioural norm contestation in the search for definitional determinacy and consensus within the divide between international and domestic law.

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© The Author(s), 2025. Published by Cambridge University Press

I. Introduction

In the past five decades, the global Business and Human Rights (BHR) movement has witnessed significant interstate efforts to impose direct human rights obligations on transnational corporations through an international legally binding instrument.Footnote 1 These efforts represent ambitions towards a human-rights-compliant sustainable (transnational) corporation, signifying interstate commitments to integrate sustainable development into international human rights (IHR) in the business context.Footnote 2 Additionally, these BHR efforts over time indicate a significant commitment to situate ‘corporate respect for human rights in the sustainable development context’, which, among other reasons, explains why states implicitly or explicitly connect sustainable development to BHR.Footnote 3 In other words, development objectives should not violate human rights and the environment, thereby reconciling ‘economic development with the protection of the environment’.Footnote 4 However, it is striking that these BHR instruments (mainly soft law) linking IHR to the Sustainable Development Goals (SDGs) do not have an express and definitive pronouncement on the legal meaning of a sustainable corporation.Footnote 5 A lack of definition or definitional indeterminacy exists because there is no concrete ‘specification of [the] meaning’Footnote 6 of sustainable corporation in the BHR context.Footnote 7 This definitional uncertainty of a sustainable corporation manifests in at least two ways. First, the circularity problem under which the term is used to define itself. Second, as ‘corporation’ and ‘sustainable development’ are mutually exclusive terms, placing them side by side does not, in and of itself, define a sustainable corporation.

This article justifies the need for, and proposes a definition of, a sustainable corporation within IHR law. It argues that defining the concept of a sustainable corporation can: (1) settle the fundamental questions relating to corporate abuses of human rights and the environment; (2) create a minimal framework on which meaningful discourse can occur on the global efforts to consolidate direct human rights obligations of transnational companies; and (3) set the limits on the classification of which transnational companies are truly sustainable.Footnote 8 This article proposes a ‘direct human rights obligation’ for transnational corporations as a defining normative criterion for a sustainable corporation in the BHR context.Footnote 9 This suggested definition is minimally sufficient as a starting point. Since any definition of a sustainable corporation requires taking a normative position, the term can be essentially contested, resulting in discursive and behavioural norm contestation arising from the divide between international and domestic laws.Footnote 10 Norm contestation notwithstanding, a BHR definition of a sustainable corporation is an important conceptual quest with practical implications for efforts to formulate an international legally binding instrument on transnational corporations.

Significantly, the lack of a BHR definition of a sustainable corporation highlights the challenges of integrating the SDGs and human rights into corporate regulation in international law (‘the integration problem’). While the integration problem is not essentially novel,Footnote 11 its significance is not self-evident, and the need for a definition exposes its importance. At least many (if not all) states have a consensus on the need to set corporations on a sustainable development path because the SDGs essentially aim to ‘realise human rights for all’.Footnote 12 What many states have not agreed on, inter alia, is whether the consensus to set transnational corporations on a sustainable development path should entail direct human rights obligations for these companies.Footnote 13 This lack of consensus is not new, as demonstrated in the relatively unsuccessful attempts to develop a global treaty on human rights obligations of transnational corporations.Footnote 14 Similarly, companies have self-claimed sustainability based on varying, arbitrary criteria as discussed in Sections II and Sections III. Thus, defining a sustainable corporation offers a solution to, inter alia, the integration problem and definitional prejudice and uncertainty, thereby harmonising SDGs-based and human rights-based efforts on corporate regulation in international law. In this sense, the definition of sustainable corporation strengthens the substantive agenda of the international BHR movement to achieve corporate sustainability with respect to the protection of human rights and the environment.

One key question that needs to be addressed is the terminological choice: why the use of the term ‘sustainable corporation’ in this article instead of alternatives such as ‘human rights-compliant corporation’ or ‘human rights–centred corporation’? At least two answers suffice here. First, there have been other attempts to define a sustainable corporation arising outside the legal BHR or IHR context, such as in the broader sustainability discourse.Footnote 15 The legal definition of a sustainable corporation that this article proposes for the BHR and IHR context does not disregard the plethora of non-IHR/BHR definitions. Furthermore, related terms such as ‘sustainable enterprise’ or ‘sustainable business’ are sometimes used in the broader sustainability discourse. In fact, a sustainable enterprise or business has been defined in a non-legal BHR context as businesses that operate without jeopardising the interests of present and future stakeholders, such as protecting the environment in corporate operations.Footnote 16 However, this article fills a gap by outlining, from an international law perspective, why and how BHR scholars and practitioners should legally define a sustainable corporation. Second, alternative terms such as ‘human rights compliant corporation’ or ‘human rights–centred corporation’ serve the very end to which a definition of the term ‘sustainable corporation’ from an international law perspective seeks to achieve.

The central issue addressed in this article is conceptual: a universally recognised legal definition of a sustainable corporation under the IHR framework applicable in the BHR context. This enquiry differs from other quests in the existing literature on BHR, which have mainly considered why and how corporate respect for human rights is important, drawing on present and past corporate power, corporate wrongdoings, and complicity in human rights abuses.Footnote 17 The existing BHR discourse has focused on numerous other questions,Footnote 18 which include but are not limited to the following: what regulatory duties states have in the BHR contextFootnote 19; what justifies corporate human rights responsibilityFootnote 20; in what ways can companies be made accountable for human rights abusesFootnote 21; and what challenges businesses encounter when they undertake human rights due diligence (HRDD)?Footnote 22 While these questions are important for BHR theory and practice, this article pursues a different objective—a theoretical aim: a case for an internationally recognised legal definition of a sustainable corporation—and calls on states to specify and delineate its characteristics.Footnote 23 This article adopts a human-rights vision under the influence of public international law, which differs from a traditional company law view of a sustainable corporation. Thus, it does not seek to address what a corporation is in domestic law or how it operates; rather, it focuses on a simple conceptual objective that draws principally on IHR instruments applicable to transnational corporations.

The benefits that may arise from having a definition of a sustainable corporation, from an actor-specific perspective, are vast and are briefly outlined here. First, national governments will have a clearer understanding of what, and to what degree, companies may be held accountable. Second, civil societies and other stakeholders seeking to hold corporations accountable will have a more definitive framework on which to litigate or pursue other remedial mechanisms.Footnote 24 Third, respondent companies will be well-prepared, as the legal definition will specify their obligations, making it well-established for all parties in future disputes. Fourth, courts at various levels will have a clearer legal framework, thereby reducing excessive judicial activism.

This article has the following outline: First, this article introduces the concept of a sustainable corporation for BHR. Second, it explains the necessity and significance of defining a sustainable corporation within the international BHR system, at the intersection of traditional IHR and sustainable development instruments (in Section II). Third, it identifies doubts and difficulties of defining a sustainable corporation and the integration problem (in Sections II and III). Fourth, it suggests criteria towards a definition of a sustainable corporation (in Section IV), arguing that the proposed definition in this article requires taking a legally normative position because the term is ‘essentially contested’ (Section V). Therefore, this suggested legal definition of a sustainable corporation can give rise to discursive and behavioural norm contestation within the divide between international and domestic laws (Section V).Footnote 25 However, it does not argue that the international community should adopt the suggested definition of a sustainable corporation; rather, it sets the stage for the logic and content of a human-rights-based meaning of the concept in a legally normative sense. The last section is the conclusion.

II. Justifying a Definition of a Sustainable Corporation

The need for a definition of a sustainable corporation may appear to some practitioners as merely an uninteresting academic exercise. It is admitted that such a sceptical posture, why define or what is the point of defining sustainable corporation, should be raised, and most importantly, that addressing this question will not only clarify inconsistencies in the arbitrary description of the term and set criteria for verifying corporate self-claim to sustainability,Footnote 26 but also provides a vital precursor for understanding the kind of norm contestation (in Section V) that the pursuit to define this term may produce.

One potential scepticism about why an internationally recognised human rights definition of a sustainable corporation matters is that it cannot settle the fundamental questions and problems arising from corporate abuses of human rights and the environment.Footnote 27 Two responses are presented against this sceptical posture. First, the merit of proposing a definition of a sustainable corporation—and whether it can address fundamental concerns arising from corporate violations of human rights—depends on the theory underlying the definition.Footnote 28 Thus, if states decide to come up with a definition of a sustainable corporation that is based on a human rights theory (especially a theory that consolidates corporate respect for human rights and the environment),Footnote 29 with roots in natural law theory and social justice, this would support the argument that modern corporations should not only have a moral but a legal obligation to respect human rights in their operations.Footnote 30 Second, an internationally recognised definition of a sustainable corporation can settle fundamental problems associated with corporate abuses of human rights because definitional certainty adds to the broader conceptual and practical project in BHR to strengthen corporate respect for human rights.Footnote 31

Furthermore, the justification for defining a sustainable corporation is premised on the need to create and maintain a minimal framework for meaningful discourse on the direct human rights obligations of transnational companies.Footnote 32 This is no small task because defining a sustainable corporation reinforces existing interstate contestations over the life of transnational corporations, as evidenced in the relatively unsuccessful efforts to develop an international, legally binding treaty on transnational companies. The need to create a minimal framework of discourse on direct human rights obligations for companies is important in establishing and verifying whether the companies that claim to be sustainable today are truly sustainable.Footnote 33 The point here is that without definitive criteria on the content of a sustainable corporation, the present global BHR discourse on direct human rights obligations of corporations may continue to fail.Footnote 34 One of these definitive criteria is the direct human rights obligation of transnational companies, as suggested in Section IV.

Defining a sustainable corporation sets the limits on which transnational companies are truly sustainable. There are at least three interrelated merits of setting limits on how a sustainable corporation is defined and categorised. First, the merit of setting limits on a classification of sustainable corporations is to prevent arbitrary specifications of what a sustainable corporation is; it counteracts the arbitrariness of ‘self-claimed sustainability’.Footnote 35 The second merit of setting limits on the use of the term is to establish uniform normative standards under IHR for determining which corporations are sustainable. Third, setting a limit on how a sustainable corporation is defined and classified provides a conceptual monitor for the use of the term, assisting states in drafting uniform mandatory corporate human rights obligations at the national level.Footnote 36 Depending on the state and legal system, the precise scope of what constitutes a sustainable corporation under domestic (corporate) law may differ.Footnote 37 Monitoring how the term ‘sustainable corporation’ is used reveals some practical, social, and legal realities in efforts to regulate corporations in international law, as discussed in Sections IV and V.Footnote 38

If states produce an internationally recognised definition of a sustainable corporation, why would a company want to become sustainable? In other words, could a company use a definition of sustainable corporation to its advantage, such as to get a tax benefit, or a reduced due diligence obligation? While questions like these are vital, the point here is not whether companies want to be sustainable or why they would want to be sustainable, because these entities are already claiming sustainable practices as a strategic communicative tool to boost their commercial reputation; claims that can be termed generally as ‘greenwashing’.Footnote 39 How powerful corporations selectively use the term ‘sustainable’ to qualify their operations and entice consumers demonstrates the problem of self-claimed sustainability,Footnote 40 depicting subjective ascription of meaning to the term ‘sustainable corporation’ that results in definitional indeterminacy.

However, the question of why companies would want to be sustainable is largely a cost-benefit question from the perspective of the relevant companies, which differs from the question of why companies should be sustainable from a social justice perspective, which takes human rights obligations as the normative core of sustainability. Thus, the question should be, why do companies claim to be sustainable when they do not have direct human rights obligations? As companies have claimed to be sustainable, an internationally recognised definition helps the international community to objectively ascertain the criteria for such claims. The incentives for companies are not, in themselves, what necessitate a definition of a sustainable corporation; it is the consideration of social justice, expressed through human rights protection, in corporate operations. As discussed in Section IV, a direct human rights obligation is the defining feature of the sustainable corporation this article proposes. A human-rights definition of a sustainable corporation translates ‘sustainable’ from the periphery and exogenous life of the transnational corporation into its endogenous life, thereby making it an undertaker of human rights obligations as a matter of social justice.Footnote 41

III. A Sustainable Corporation in the Sustainable Development and Business and Human Rights Instruments

Although the traditional IHR instruments predate sustainable development instruments (such as the Brundtland Report, the Millennium Development Goals (MDGs) and SDGs),Footnote 42 these IHR and development instruments interact to influence the evolving BHR framework in varying degrees, which cannot be entirely captured here. The Brundtland Report, the MDGs and the SDGs emphasise sustainable practices, corporate social responsibility and respect for human rights. However, the normative content of the Brundtland Report, the MDGs and the SDGs does not create binding human rights obligations for corporations. It is this latter point that places the BHR and SD movements, as they are today, on a quest for IHR validation, expressed as a search for an international, legally binding instrument on transnational corporations. The reason for this quest is to consolidate a common normative ground of an enforceable framework to regulate the practices of transnational corporations, as evident in the current work of the UN Open-ended Intergovernmental Working Group (UN IGWG). At the core of this quest for a legally binding instrument on transnational corporations is the functional relevance of a definition of sustainable transnational corporations. As will be discussed in Sections IV and V, a definition of a sustainable corporation is a legally normative act with relevance for the making of a global BHR treaty. Since most of the SDGs are grounded in or poised to actualise human rights, one would logically expect companies that claim to be sustainable to embrace direct human rights obligations. However, this is not the case. Thus, an internationally recognised definition of a sustainable corporation is a logical first step in solving this integration problem.

However, the efforts to arrive at an international, legally binding BHR instrument on transnational corporations are not only to integrate the soft norms in the Brundtland Report, the MDGs, and the SDGs into IHR, but also to translate them into a hard, enforceable BHR framework. These IHR instruments, which traditionally impose obligations on states, include but are not limited to the Universal Declaration of Human Rights (UDHR),Footnote 43 the International Covenant on Civil and Political Rights (ICCPR),Footnote 44 the International Covenant on Economic, Social and Cultural Rights (ICESCR)Footnote 45 and other specialized conventions addressing specific rights, such as the Convention on the Rights of the Child (CRC),Footnote 46 and the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW).Footnote 47 While these instruments do not expressly define a sustainable corporation, they establish the framework for human rights protection and provide a basis for understanding the broad scope of human rights, including the state’s obligation to ensure corporate responsibility to protect human rights.Footnote 48 Articles 29 and 30 of the UDHR, the common Article 5 of the ICCPR and the ICESR not only prohibit states but also any person or group from violating human rights.Footnote 49 These key provisions have informed the expectations beyond the obligation of states to include the human rights responsibilities of corporate actors across jurisdictions.Footnote 50

Nevertheless, it would be false to claim that there is no slight reference or effort to define a sustainable corporation in the context of IHR law applicable to BHR framework. While the SD and BHR instruments include indicators of a sustainable corporation, states have not provided a precise definition or concrete criteria that unambiguously specify what the term entails.Footnote 51 For instance, the International Labour Conference (ILC) Conclusions Concerning the Promotion of Sustainable Enterprise (2007) speaks expressly of ‘sustainable enterprises’. However, the ILC Conclusion connects the term to sustainable development, a term that is very elusive, indeterminate and essentially contested, at least from the viewpoint of international law.Footnote 52 Although sustainable development is a well-known concept in international law, and international courts have recognised it,Footnote 53 its meaning remains largely ambiguous.Footnote 54 In other contexts, the idea of a sustainable corporation is loosely associated with terms such as sustainability or sustainable development, which are essentially contested in the legal context.Footnote 55 For example, the ‘Norms on the Human Rights Responsibilities of Transnational Corporations and Other Business Enterprises’ (also known as the Draft Norms) mentions in its Article 14 the obligation of transnational corporations and other business enterprises to ‘generally conduct their activities in a manner contributing to the wider goal of sustainable development’.Footnote 56 Similarly, while the OECD Declaration on International Investment and Multinational Enterprises sets out ‘recommendations on responsible business conduct’,Footnote 57 which can be interpreted as fostering an idea of a sustainable corporation, it ties this idea to terms with no legal certainty such as ‘responsible business conduct’, ‘sustainability’, ‘sustainable development’, ‘sustainable economies’ and ‘sustainable development outcomes’. However, the UN Code of Conduct on Transnational Corporations (also known as UN Code of Conduct) makes provision for transnational corporations to protect the environment and ‘respect human rights and fundamental freedoms in the countries in which they operate’.Footnote 58

Defining a sustainable corporation as one that is sustainable or as one that ‘fosters sustainable development’ is unhelpful, since the concepts of sustainability or sustainable development do not provide concrete legal criteria.Footnote 59 The ILC Conclusions Concerning the Promotion of Sustainable Enterprise ties the idea of sustainable corporation to ‘sustainable development’, stating that ‘sustainable enterprise is related to the general approach to sustainable development – forms of progress that meet the needs of the present without compromising the ability of future generations to meet their needs –an approach which postulates a holistic, balanced and integrated perspective on development’.Footnote 60 Arguably, the circularity problem arising from the latter statement rests on the assumption that, since terms such as sustainability, sustainable development and corporate sustainability are ubiquitous today, the meaning of a sustainable corporation is already known and requires no further definition. As corporation and sustainable development are mutually exclusive terms, placing them side by side does not, in and of itself, define sustainable corporation. For example, the International Labour Organisation’s Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy in 1977 uses terms such as ‘sustainable development’, ‘Sustainable Development Goals’ and ‘sustainable economic growth’ in mutually exclusive ways that suggest a BHR shift towards the idea of a sustainable corporation.Footnote 61

Comparatively, the UN Global Compact, the UN Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy’ Framework in 2011 (the UNGPs), and the Draft UN Legally Binding Instrument (LBI) make some attempt to avoid circularity in defining a sustainable corporation, even though none of the instruments expressly mentions the term. First, the UN Global Compact positions corporate operations within ‘principles on human rights, labour, environment and anti-corruption’.Footnote 62 The Global Compact nudges states and other actors to adopt and implement these principles. These guidelines provide a foundation for sustainable corporate operations and ethical business conduct. Second, the UNGPs aim to drive ‘a socially sustainable globalization’ under the BHR-specific mantra. Although the UNGPs do not expressly mention or define a sustainable corporation, they can be interpreted as providing an ‘authoritative statement’ on the subject while connecting it to legally determined terms, such as the corporate responsibility to respect human rights and the right of victims to access remedy.Footnote 63 While the UNGPs are largely concerned with state duties, their specific content provides concrete elements for a sustainable corporation. Third, the UN LBI, in its Preamble, speaks to the capacity of enterprises to foster sustainable development, contextualising and specifying the idea of a sustainable corporation in IHR law. This logic is evident in the mandate of the UN IGWG, which seeks ‘to elaborate an international legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises’.Footnote 64 Emphatically, the cumulative reference to sustainable development and IHR in these instruments suggests a BHR posture towards a human-rights type of sustainable corporations.

IV. Defining a Sustainable Corporation: A Human-Rights Approach

This article suggests the following BHR definition of a sustainable corporation as a minimally satisfactory proposal and inspiration for states and other actors:

A sustainable corporation is any business/company of transnational character that undertakes direct human rights obligations arising from a legally binding treaty on transnational businesses ratified by one or more of the states/jurisdictions where such corporation operates.

This proposed definition is minimally sufficient but does not suggest a degree of voluntariness, which may appear aspirational, and captures only companies that voluntarily undertake human rights obligations. For the avoidance of doubt, the proposed definition is intended to mean that a sustainable corporation is any business entity of a transnational character that is required to undertake direct human rights obligations. Thus, for a transnational corporation to be sustainable, the obligation arising from the proposed definition is not optional.

The soundness of this human rights definition of a sustainable corporation is based on the sufficiency of the explanation it produces about the concept.Footnote 65 The sufficiency of this explanation is determined under the following criteria: first, whether there exists prior definitive legal criteria of the notion of a sustainable corporation within the existing BHR normative thresholds; second, the normative consequence(s) of the suggested definition; third, whether the thresholds of the definition are adequate in light of the problem it is designed to solve.

First, since a sustainable corporation is legally undefined within the existing IHR/BHR system, this suggested definition is minimally sufficient for thinking about the concept. This suggested definition retains the transnational character of businesses that fall within the material content of those corporations relevant under the proposed UN LBI, and it is not limited to any sector.Footnote 66 To be considered a sustainable corporation, the transnational company must undertake direct human rights obligations under an international, legally binding instrument on BHR, such as the proposed LBI. The latter point raises a key question: what happens if a sustainable corporation is defined in a regional instrument before or together with an international treaty? Where a regional instrument is the first to define a sustainable corporation, it should be amended, where necessary, to give effect to an internationally recognised definition that subsequently appears in an international treaty. In any case, a regional instrument that gives coherence to the core of this suggested definition, pending when such a definition is adopted in an international instrument, should not be discouraged, provided that a direct human rights obligation for transnational corporations is at the core of such a regional instrument. The main point is to avoid the problem of fragmented definitions of a sustainable corporation across different instruments. To ensure convergence, coherence, and uniformity across regions of the world, an international instrument such as the LBI provides a more suitable locus for such a definition, provided that regional and domestic systems can implement it. To avoid the multiplicity of instruments and standards on the definition of a sustainable corporation, regional instruments, such as the European Union Corporate Sustainability Due Diligence Directives (CS3D), should follow the proposed definition or any definition that this article suggests should be in an international framework, in particular, the LBI. Similar explanations are offered in the context of domestic implementation in Section V. However, a proposal for a definition of a sustainable corporation in the LBI offers a stronger position, as the LBI represents global community interests, than a definition in a regional instrument representing fundamentally the interests of the relevant region. Thus, an international instrument, rather than a regional one, should exclusively cover the field of defining a sustainable corporation. This argument is not a presumption of the supremacy of international law over regional law,Footnote 67 which has received considerable attention in the Kadi case.Footnote 68

Second, this suggested definition requires taking a normative position on the meaning and content of the concept of a sustainable corporation.Footnote 69 The normative position is ‘a direct human rights obligation’ for transnational corporations. ‘Direct human rights obligation’ is a legal criterion because of its binding nature and is based on principles of natural and social justice, which are sources of human rights norms.Footnote 70 Importantly, the problem of defining a sustainable corporation, or definitional indeterminacy, in the existing SD and IHR/BHR instruments is not the absence of norms; social justice norms underpin these instruments. Rather, it is the non-binding nature of the norms in the SD and BHR instruments and their imprecision in a legal sense that underpins the uniqueness of this suggested definition. The norm in the suggested definition is enforceable, which is different from other normative contents in existing instruments, which are voluntary, non-binding and less effective,Footnote 71 requiring the push in BHR for an international, legally binding instrument on transnational corporations.Footnote 72

The normative consequence of the suggested definition of a sustainable corporation requires a distinction between aspirational actions and formational actions for legal ascription of meaning.Footnote 73 By aspirational action, one may speak of what a corporation should do to have the status of a ‘sustainable corporation’. Aspirational action makes a sustainable corporation a ‘destination’ that companies should reach. This analysis accounts for the non-binding nature of existing BHR instruments, which can be generally considered as aspirations. It is for aspirational reasons that one may ask why corporations would want to be sustainable, as discussed earlier. In answering the latter question, the search is for incentives that make companies want to be sustainable—for example, undertaking voluntary sustainability initiatives to maintain customer loyalty or to be in the government’s good books. However, the core of the suggested definition of a sustainable corporation is ‘formational action’, meaning it is grounded in legally binding norms requiring transnational corporations to undertake direct human rights obligations. In other words, the proposed definition of a sustainable corporation requires such a transnational company to take an enforceable normative position on human rights. By the standard of the suggested definition, it is not aspirational but indispensable for a transnational corporation to have direct human rights obligations because, among other reasons, its operations have effects on people and planet more than ever. The suggested definition of a sustainable corporation, in the context of ‘formational action’, presents an endogenous proposal: that transnational companies should be considered undertakers of direct human rights obligations, rather than merely responsible for protecting human rights and the environment across their supply/value chains. Thus, the ‘sustainable’ becomes an internal logic of corporate existence,Footnote 74 and, therefore, it should be integral to the nature of corporations operating in two or more jurisdictions.

Third, the normative threshold of the suggested definition of a sustainable corporation is adequate considering the problem it is designed to solve. The proposed definition essentially makes human rights the centrifugal factor in defining a sustainable corporation, and it is not circular because it connects the core of such a corporation to direct human rights obligations. The proposed definition avoids definitional circularity by specifying the characteristics of sustainable corporations.Footnote 75 It is neither too narrow nor too broad, and it is framed in positive terms.Footnote 76 This suggested definition of a sustainable corporation organises and unifies the elements of the term, delineating its core features in a legally normative sense and providing an authoritative basis (discussed in Section V) for direct human rights obligations of transnational companies.Footnote 77

The multiplicity of definitions of a sustainable corporation within a non-BHR context is a very good reason for an international, legally recognised definition of the term to be a logical necessity. How might conflicts between definitions (such as between BHR and non-BHR regimes) be addressed? The proposed human rights–centred definition of sustainable corporation is expected to take priority for two reasons.Footnote 78 First, the human rights approach places people and planet over profit. Second, the suggested definition is legally binding, and where it conflicts with a non-legal definition, the legally binding one prevails. Even when there are two legal definitions, the first in time, with greater legal authority and representing more global interests, should prevail. However, such a definition must be widely accepted and reflect state practice across different continents to prevail,Footnote 79 which, again, makes the LBI or a similar framework a suitable venue for such a definition. What is important here is that an internationally recognised definition of a sustainable corporation helps advance the shared global efforts to regulate transnational corporations. How the definition of a sustainable corporation is developed and implemented will largely depend on the political and legal will of states.

V. A Sustainable Corporation: Discursive and Behavioural Norm Contestation

Nevertheless, contestations are essential regarding the normative content of the suggested definition of a sustainable corporation, which accentuates the problem of public international law in the BHR context.Footnote 80 Since any definition of sustainable corporation requires taking a normative position, the suggested definition is, therefore, an ‘essentially contested’ concept.Footnote 81 Given the normativity of the meaning of a sustainable corporation, two points are key here. First, its source matters; the legitimacy of such a definition originates from the appropriateness of the authority or community, namely the states or international courts, that create, adopt, accept and recognise this or any proposed definition.Footnote 82 If states decide to ascribe an internationally recognised definition to the term ‘sustainable corporation’, they give authoritative expression to a set of prescriptions that constitute the term. Second, the definition is expected to be a clear and effective statement detailing the specification of a sustainable corporation for which conformity is required, regardless of how the term is typically used, described or perceived in general parlance. In the suggested definition, ‘direct human rights obligation’ provides the requisite normative criterion for sustainable corporations.Footnote 83

The normativity of the meaning of a sustainable corporation is bound to produce discursive and behavioural norm contestation.Footnote 84 Norm contestation is not new in international law and relations; it is at the heart of the international community’s relative success and failure in producing a legally binding instrument on BHR.Footnote 85 First, a discursive norm contestation is a debate about the ‘meaning and/or (relative) importance’ of a sustainable corporation as a normative product.Footnote 86 Discursive norm contestation is prevalent throughout the history of BHR, particularly in the debates and lack of consensus within the various IGWGs over time regarding the establishment of an international, legally binding instrument on transnational corporations.Footnote 87 The meaning of a sustainable corporation and its relative importance are therefore bound to be contested among different actors, particularly states. On the one hand, it would not be surprising to see some states push for a very narrow definition or discredit the need for an international definition of a sustainable corporation. On the other hand, some states may advance a definition that is too broad, depending on their differing economic interests. Although mandatory human rights due diligence (MHRDD) legislations do not expressly define a sustainable corporation, they illustrate the problem of definitional narrowness and broadness that states may face in attempting to define the term. The EU CS3D and some national due diligence frameworks limit the scope of HRDD to certain types of companies.Footnote 88 The French Vigilance Act is restricted to large corporations and their corporate partners.Footnote 89 The Dutch Due Diligence Act is broad and applies to all corporate entities operating in the Netherlands.Footnote 90

The second contestation of any proposed definition of a sustainable corporation is behavioural norm contestation. This norm contestation challenges the practical implementation of the normative content of sustainable corporation in the diverse national jurisdictions. In this context, a corollary of this behavioural contestation is the systemic divide (or the international and domestic divide) of the global legal order.Footnote 91 Thus, putting forward an internationally recognised definition of a sustainable corporation is bound to produce new contestations or reinforce existing ones over the normative relationships between the international and domestic orders regarding the soul of transnational corporations. International law expressly recognises the primacy of domestic law on corporate matters, a position which has received international judicial approval in the Barcelona Traction, Light and Power Company Limited (Belgium v. Spain). Footnote 92 While company law is largely a field within national jurisdiction,Footnote 93 IHR law in its contemporary form is mainly a product of interstate arrangements.Footnote 94 Accordingly, the creation of corporations is primarily within the legislative precinct of states, even though this article pursues a distinct aim, arguing for internationally recognised criteria for sustainable corporations.

The contestation between these international and domestic legal orders notwithstanding, the creation of a sustainable corporation (under domestic law) is one issue, and the legal definition of such a corporation (under international BHR) is a different matter. This article is centred on the latter. Thus, the international framework on BHR should shape the definition of a sustainable corporation to ensure a consistent global standard of reference, and domestic laws should foster implementation, including criteria for creating sustainable corporations within national jurisdictions. In this context, the question of the legal meaning of a sustainable corporation is intrinsically linked to the success of an international legally binding instrument, yet these pursuits are not mutually inclusive.

This later analysis raises one vital question: whether an international BHR treaty can effectively address the lack of a definition of a sustainable corporation. Since any definition of a sustainable corporation is normative, its authoritative source should be a treaty or other sources of international law. Three of these sources are briefly discussed: the LBI, an advisory opinion, and domestic legislative sources. First, the current work of the UN IGWG to produce a legally binding instrument on transnational businesses provides an important starting point for defining, or at least expressly referencing, sustainable corporations in the context of the LBI. Thus, the LBI’s ambition should be expressly expanded to address the integration problem by drawing on the proposed definition, as no other legal definition of a sustainable corporation is known at the time of this writing. The LBI is a desirable venue not only for defining a sustainable corporation but also for addressing the integration problem, for at least two obvious reasons. First, the LBI, as compared with the elements of the suggested definition of a sustainable corporation, is expected to be legally binding on transnational companies. Second, the LBI, similar to the suggested definition, places people and the planet above profit. Admittedly, the aim of solving the integration problem is already intrinsic in the LBI’s ambition. The second authoritative source of international law that may produce a definition of a sustainable corporation is an advisory opinion of an international court or tribunal. The UN General Assembly may therefore ask the International Court of Justice: what is the legal definition of a sustainable corporation in international law, with specific reference to IHR instruments and SDGs instruments.

Third, while international law can propel domestic legal change in defining a sustainable corporation, the inverse is also possible: domestic institutions and laws are sources of law, and they can resolve normative contestation at the international level. As national institutions such as courts have influenced the development of norms at the global level by shaping state practice, these institutions may also shape a definition of a sustainable corporation that can be translated to the international level. HRDD laws and National Action Plans (NAPs) can shape state practices towards the meaning of a sustainable corporation. However, as discussed earlier, these practices are inconsistent and set different standards for the nature and types of companies that may be classified as sustainable corporations.

The implementation of a human rights definition of a sustainable corporation within the domestic system is not pursued in this article; however, the following brief suggestions are offered. The relative success and shortcomings of the growing HRDD legislations in translating the UNDPs and other instruments into domestic law speak to how an international definition of a sustainable corporation may be transposed into national systems.Footnote 95 Assuming states decide to develop an internationally recognised definition of a sustainable corporation, one way to reflect such a definition in a domestic context is for states to create or amend their existing company and/or HRDD legislation to incorporate a direct human rights obligation for companies.Footnote 96 For example, HRDD legislations around the world, such as those discussed earlier and the German Supply Chain Act, encourage companies to respect human rights in their global supply/value chains.Footnote 97 Another, but less effective measure for domestic implementation of an international definition of a sustainable corporation is for states to incorporate its meaning into their NAPs on BHR.Footnote 98 It will be difficult to convince states to adopt these proposals, as they enact corporate laws to support their economies. These concerns could be addressed at a secondary level after the primary issue of defining a sustainable corporation has been settled, by securing the requisite political will of states for a universally recognised legal definition of a sustainable corporation in BHR context. Norm contestation notwithstanding, the emergence of an internationally recognised definition of a sustainable corporation creates the possibility of normative responsibility for states to implement such a definition at the domestic level.

VI. Conclusion

This article’s proposal for a universally recognised legal definition of a sustainable corporation should be seen as contributing to and forming part of existing paradigms and movements to consolidate global BHR efforts towards direct human rights obligations for transnational corporations. An internationally recognised definition of a sustainable corporation can: (1) settle fundamental questions on corporate responsibility for human rights, climate change and the environment; (2) create a minimal framework for meaningful discourse on direct human rights obligations of transnational companies; (3) sets the limits on the classification of a sustainable corporation; and (4) solve the challenges of integrating the SDGs and human rights for corporate regulation in international law. However, this proposal comes at many costs, among others, the difficulty of obtaining the necessary state/political will to formulate an internationally recognised definition of a sustainable corporation. These difficulties are already evident in the drafting history of the various attempts to create an international, legally binding treaty on transnational corporations.

Without pessimism or optimism, an internationally recognised definition of a sustainable corporation speaks of what is possible now. A definition of a sustainable corporation is important from different actor-specific perspectives. It will provide governments with an understanding and the extent of their implementation of direct corporate human rights obligations; it will provide civil societies and other stakeholders with a predictable litigating and other remedial frameworks; it will prepare corporations for legal action where necessary; and clarify the legal framework for courts, reducing excessive judicial activism.

Given the lack of a definition of a sustainable corporation, the meaning provided in this article focuses on the direct human rights obligations of transnational corporations, offering a minimally sufficient normative criterion for the term’s correctness in IHR applicable in BHR context. As a sustainable corporation is an essentially contested concept, getting different states to agree on the suggested definition requires resolving discursive norm contestation over what should or should not be the criteria for the concept. What matters is that the legal definition of a sustainable corporation solves the problem of integrating sustainable development into traditional human rights. However, behavioural norm contestation over such a definition is inevitable, as implementing the idea of a sustainable corporation can produce different commitments and reactions across national jurisdictions. The inevitability of contestation provides a meaningful avenue for discourse that refines what can ultimately become a legal definition of a sustainable corporation in IHR applicable in BHR context, a quest that should be situated within the ongoing efforts to produce an international legally binding instrument on transnational corporations.

Acknowledgements

Many thanks to the anonymous peer reviewers and the Editors-in-Chief Professors Anita Ramasastry and Florian Wettstein for their valuable comments on earlier drafts of this article. I appreciate Professors Valentin Jeutnerand Daria Davitti for their considerable comments on earlier drafts. For their comments, I thank Daniel Morris, Anna Bruce and participants during my online presentation ‘Human Rights and Supply Chains: The Role of Sustainability Litigations in the Global South in Shaping European Union Accountability Frameworks for Corporations’ at the X Interdisciplinary Seminar on Climate, Energy and Sustainability at the University of Copenhagen, where I presented some of the ideas under the initial title of my LLM thesis ‘Sustainable Corporations, Human Rights and the Penumbra of Uncertainty in High-Risk Supply Chains’ which was later revised to the title ‘Towards a Definition of a Sustainable Corporation Under the International Frameworks on Business and Human Rights’, submitted to Lund University in 2023. At the initial stage of writing my LLM thesis, I benefited from Professor Jessica Almqvist’s classes on methodology. I thank my LLM classmates for their comments during our works-in-progress seminars at the Faculty of Law, Lund University.

Financial support

There is no funding for this paper; however, it was written during the author’s LLM and PhD studies when he received scholarships and awards for his education.

Competing interests

No conflict of interest in this publication.

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64 Human Rights Council, ‘Elaboration of an International Legally Binding Instrument on Transnational Corporations and Other Business Enterprises With Respect to Human Rights’, UN Doc. A/HRC/RES/26/9, adopted on 26 June 2014.

65 The definition proffered above is not expected to be infallible; therefore, the title of this article is ‘towards a definition of sustainable corporation’. Winston, note 28 at 89, arguing that the soundness of a legal theory is determined by how adequate the definition it produces, ‘especially if adequacy is tested by certain pretheoretical criteria’.

66 The Draft LBI defines a transnational corporation as ‘any corporation, partnership, joint venture or another business enterprise that operates in more than one country or whose activities affect more than one country’.

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76 A definition should ‘not be negative where it can be positive’, see Copi, Cohen and McMahon, note 59.

77 Cohen, note 28, makes the argument that a definition is adequate if it arranges and unites the concept in question in a manner that delineates its core features.

78 In making these two points, I adapt and adopt principles of equity such as ‘where the equities are equal, the first in time prevails’, and ‘where the equities are equal, the law prevails’. International law does not frown at the use of equity. For example, Article 38(2) of the Statute of the International Court of Justice XV UNCIO 360 empowers the ICJ to make a decision based on equitable rules, ex aequo et bono.

79 State practice is discussed in Section V.

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82 The recent turn to advisory opinion before international courts and tribunals offers a good example of how courts may generate meaning and explanations of concepts.

83 For a general discussion on normativity of the SRSG’s Framework and the Guiding Principles, see Bilchitz, D, ‘A Chasm Between “Is” and “Ought”? A Critique of the Normative Foundations of the SRSG’s Framework and the Guiding Principles’ in Deva, S and Bilchitz, D (eds.), Human Rights Obligations of Business: Beyond the Corporate Responsibility to Respect? (Cambridge: Cambridge University Press, 2013) 107–3710.1017/CBO9781139568333.009CrossRefGoogle Scholar; Wettstein, Florian, ‘Normativity, Ethics, and the UN Guiding Principles on Business and Human Rights: A Critical Assessment’ (2015) 14:2 Journal of Human Rights 162–8210.1080/14754835.2015.1005733CrossRefGoogle Scholar.

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86 Quote from Stimmer and Wisken, note 84.

87 Deva has discussed the ‘consensus rhetoric’ in context of the UN Guiding Principles on Business and Human Rights: Deva, Surya, ‘Treating Human Rights Lightly: A Critique of the Consensus Rhetoric and the Language Employed by the Guiding Principles’ in Deva, S and Bilchitz, D (eds.), Human Rights Obligations of Business: Beyond the Corporate Responsibility to Respect? (Cambridge: Cambridge University Press, 2013) 78104 10.1017/CBO9781139568333.007CrossRefGoogle Scholar.

88 See generally Proposal for a Directive of the European Parliament and of the Council on Corporate Sustainability Due Diligence and amending Directive (EU) 2019/1937, COM/2022/71 final, 23 February 2022; Nadia Bernaz et al, ‘The UN Legally Binding Instrument and the EU Proposal for a Corporate Sustainability Due Diligence Directives: Competences, Comparison and Complementarity’, https://friendsoftheearth.eu/wp-content/uploads/2022/10/Complementarity-study-on-EU-CSDDD-and-UN-LBI-October-2022.pdf (accessed 28 April 2023).

89 Cossart, S, Chaplier, J and de Lomenie, T Beau, ‘The French Law on Duty of Care: A Historic Step Towards Making Globalization Work for All’ (2017) 2 Business and Human Rights Journal 320 10.1017/bhj.2017.14CrossRefGoogle Scholar; Deva, Surya, ‘Mandatory Human Rights Due Diligence Laws in Europe: A Mirage for Rightsholders?’ (2023) 36 Leiden Journal of International Law 407 10.1017/S0922156522000802CrossRefGoogle Scholar.

90 See Ropes & Gray, ‘Dutch Child Labor Due Diligence Act Approved by Senate—Implications for Global Companies’, www.ropesgray.com/en/newsroom/alerts/2019/06/Dutch-Child-Labor-Due-Diligence-Act-Approved-bySenate-Implications-for-Global-Companies (accessed 22 May 2023).

91 On the international-national law divide, see generally Denza, note 67 at 401–30. On the emphasis on human rights within the dualist context of international and regional law, see generally the Kadi case, note 68.

92 Judgement [1970] ICJ Reports, paras 37–42, 48–49, 78–80, 87–90 and 96–102, stating that the questions of company and shareholders are matters of national jurisdiction.

93 See generally Kraakman, Reinier et al, The Anatomy of Corporate Law: A Comparative and Functional Approach, online edn. (Oxford University Press, 2017)10.1093/acprof:oso/9780198739630.001.0001CrossRefGoogle Scholar.

94 Alternatively, it can be argued that human rights predate the origin of the modern state (and by extension, international law) at least from the perspective of natural law theory. Without prejudice to cultural relativism, human rights today are body of universal norms adopted and requiring all states to implement them.

95 On effectiveness of HRDD, see McCorquodale, R and Nolan, Justine, ‘The Effectiveness of Human Rights Due Diligence for Preventing Business Human Rights Abuses’ (2021) 68:3 Netherlands International Law Review 455-7810.1007/s40802-021-00201-xCrossRefGoogle Scholar. It is worthy to note the many efforts of national courts in support of corporate responsibility to respect human rights: in Nigeria (Ogiale v Shell Petroleum Development Company (Nig) Ltd CLR 1(f) (CA) (1997); in the US (Kiobel v Royal Dutch Petroleum Co.) 569 U.S. 108 (2013); in the Netherlands (the State of the Netherlands v Urgenda Foundation, The Supreme Court of the Netherlands case 19/00135 (20 December 2019), (English translation), https://www.urgenda.nl/wp-content/uploads/ENG-Dutch-Supreme-Court-Urgenda-v-Netherlands-20-12-2019.pdf (Supreme Court decision) (accessed 12 May 2023); in the UK (Friends of the Earth Ltd v Secretary of State for Int. Trade (UKEF) & Others EWHC 568 (2022), Friends of the Earth Ltd -v- Secretary of State for Int. Trade (UKEF) & Or - Courts and Tribunals Judiciary (accessed 23 May 2023); Schrempf-Stirling, J and Wettstein, F, ‘Beyond Guilty Verdicts: Human Rights Litigation and Its Impact on Corporations’ Human Rights Policies’ (2017) 145 Journal of Business Ethics 545–6210.1007/s10551-015-2889-5CrossRefGoogle Scholar.

96 For a discussion on how company law and sustainability development may interact, see Deva, Surya, ‘Sustainable Development: What Role for the Company Law?’ (2011) 8:1 International and Comparative Corporate Law Journal 76102 Google Scholar.

98 The use of National Action Plans has been well captured in de Felice, Damiano and Graf, Andreas, ‘The Potential of National Action Plans to Implement Human Rights Norms: An Early Assessment With Respect to the UN Guiding Principles on Business and Human Rights’ (2015) 7:1 Journal of Human Rights Practice 4071 10.1093/jhuman/huu023CrossRefGoogle Scholar.