Updated: Jan 5
"You're Martin Luther, you're telling heresies”, were the words I heard from one partner from a law firm in 2012, when I was talking about the thesis I had written at the end of the LL.M. program at McGill University in Montreal, Canada. Although his words caused me to rather not talk about my thesis for around 10 years, how glad I am now that he called me that.
Lionel David Smith supervised my thesis, in which I analyzed a shareholder's duties of loyalty to the company and other shareholders. I was haunted by the question of whether the purpose of companies' existence is only to maximize profits to make the shareholders rich, or whether there are other, broader purposes that companies are supposed to serve.
The inspiration for the paper came from the financial crisis of 2008, which was then nearing its end. At that time, the governments of most countries rushed to the rescue of companies whose bankruptcy (or the specter of it) shook the financial markets and the global economy. We all paid the price of this bailout, and the geopolitical impact of this crisis changed the distribution of power in the world and opened wide the possibility of capital inflows from the East.
These events revived an age-old question that has plagued theorists for years: is it fair for a company's goal to enrich only its shareholders, when in the event of its failure a much wider group than just its shareholders suffers the consequences?
Originally, the role of companies was to exist for the public good. Enterprises provided jobs, prosperity, and economic development that benefited a significant portion of society. In order to fulfill these purposes, it was necessary to adopt a long-term existence mindset. Since the 1970s, the above concept has been completely reversed in favor of viewing companies as a vehicle for multiplying shareholder profits.
The crisis of 2007-2010 inspired reflection on the above trend. It initiated changes in the pursuit of so-called sustainable development. This new trend no longer includes not only the private business sector, but also public entities, cities, states, organizations and even individuals.
Sustainability for some involves a complete reversal of the existing business profile. A great example is Danish mining giant Ørsted, which in 2008 decided to make a fundamental change. Within 10 years, Ørsted transformed itself from a leading coal power producer to a pioneer in wind power production. At companies whose business does not involve the direct exploitation of natural resources, such as insurance giant Liberty Mutual, investments in sustainability include introducing insurance products that promote loss settlement to customers using environmentally friendly technologies (e.g., rebuilding a roof after a hurricane while also installing solar panels).
The Polish market is still quite immature, and many entrepreneurs see the pursuit of sustainability as a passing fad. At the moment in Poland, the largest market players must include non-financial data in their financial statements (Article 49b of the Accounting Act), as a result of the implementation of European law. Across the European Union, it is estimated that only 11,700 entities are currently subject to this type of reporting. As of 2025, many more entities will be subject to the reporting obligation (about 50,000 across the EU), which is related to the entry into force of the so-called CSRD (Directive No. 2022/2464 as regards corporate sustainability reporting).
In the fall of 2022, Polish law additionally began to include regulations similar to those I dealt with in Canada in 2012: the duty of loyalty to the company. It now applies to members of corporations (Polish: spółki kapitałowe). I am convinced that the introduced changes reflect the ongoing shift in the perception of the function that enterprises play in the economy. Many of them are so powerful that the actions they take can shake geopolitical relations in a region. Therefore, the sustainable conduct of their operations is crucial to the environment in which they operate.
To conclude, I would just like to give my best regards to the person who, back in 2012, called me Martin Luther.
 T. Cort, "Making Companies Work for Society: Harnessing Global Financial Markets for Sustainability," 2019, in A Better Planet: Forty Big Ideas for a Sustainable Future edited by Daniel C. Esty, 241-9, New Heaven, CT: Yale University Press  ibid  https://www.spglobal.com/esg/podcasts/how-walmart-and-danish-energy-company-orsted-are-tackling-supply-chain-emissions  https://orsted.com/en/about-us/about-orsted/our-vision-and-values  https://www.libertymutualgroup.com/documents/lm-esg-report-2021-2.pdf