The Role of State-Owned Enterprises in the Pursuit of the Sustainable Development Goals

Abstract

Business conduct and enterprises’ commitment to social responsibility have a far-reaching impact on corporate shareholders and external stakeholders, but they are not effectively aligned with the globally recognized agenda of Sustainable Development Goals (SDGs). The necessity and difficulty of studying state-owned enterprises’(SOEs) roles in corporate governance and the SDGs agenda stem from their unique position at the intersection of various legal sectors and their underrated status within the SDGs schemes and relevant studies. In particular, the issue of characterizing SOEs from the perspective of private international law is emblematic, raising doubts about whether to treat SOEs as private or state entities in international dispute resolution and how such categorization may affect their performance of sustainability obligations. A sovereign function test is routinely invoked for deciding whether state immunity applies to SOEs. This test proposes four criteria: (a) state ownership and control, (b) nature of the activities at issue, (c) principal purposes of the entities, and (d) specific purposes of the activities at issue. However, given the limitations of this test, an additional criterion can be added consisting in examining whether the SOEs could have carried out the same act - or could have seized the same property - without relying on state power.