Dynamics of the Pending Harmonization of the Corporate Sustainability Disclosure

The paper aims at addressing and critically questioning policy issues of the EU Directive 2014/95 regarding non-financial disclosure of large companies. The Directive can be deemed a paradigm shift towards a certain juridification of CSR-concepts due to factual pressure of the reporting requirement to compliance which may lead to steering of Multinational Corporations (MNCs). Thus, despite recent developments (expansion of jurisdiction, transnational human rights litigation, National Action Plans on the Implementation of the UN Guiding Principles on Business and HR, Treaty on Business and HR in process) enforcement of sustainability concerns in low governance zones seems partially dependent on the willingness of MNCs to regard CSR-standards as binding. The subject is particularly interesting, given that until now, there is no reflection in the scholarly literature on how theories of legal norms account for empirical evidence of global business self-regulation through sustainability standard setting. What is more, there is still no sufficient empirical evidence about direct effects of mandatory reporting on corporate organizational decision-making. The main statement of the paper is that the EU CSR-Model leaves open considerable leeway to facilitate bridge-building between corporate self-regulation and formal law. However, a shift from self-regulation towards juridification of CSR is discernible. Reporting objectives and methodologies should be specified in order to serve legal certainty and build up the competitiveness of business. Some proceduralisation of monitoring MNCs’ compliance can be advantageous, too