Structural sustainability cannot be enforced through liability

Inside Stibbe
NL Law
EU Law

In her inaugural lecture at Leiden University on 22 March, Branda Katan spoke about enforcing sustainability through liability. The number of civil cases against companies is expected to increase in the coming years. According to Branda, this is not the right way forward if the aim is to achieve behavioural change.

The number of civil cases brought against companies is expected to increase in the coming years. Branda argued that this will not significantly contribute to companies taking measures to improve their sustainability. Civil proceedings are too specific to one case: they relate to an issue that went wrong in the past, at one company, and it is therefore a challenge to apply the results of the lawsuit to other specific cases. These proceedings also take far too long. 

Structural change requires forward-looking measures that encourage behavioural change. Civil proceedings do not facilitate that. According to Branda, effective measures to achieve behavioural change require, besides financial incentives, above all clear public-law standards, with consistent supervision and enforcement. This also protects companies that want to be at the forefront of sustainability in a competitive market.

Branda Katan is a partner in Stibbe's Corporate Litigation practice, specialising in ESG-related matters, and Professor by Special Appointment of Corporate Law (Corporate Litigation) at Leiden University, where she leads the research programme on sustainability through liability. The programme includes research into the liability of parent companies for subsidiaries that have violated sustainability obligations and research into the influence of the threat of liability on directors' behaviour.

For more information about Branda Katan's work at Leiden University, click here. For more information about her inaugural lecture, click here.