Article
Harvard Business Review Digital Articles

The EU's Unsustainable Approach to Stakeholder Capitalism

By: Jesse M. Fried and Charles C.Y. Wang

Format:Electronic

Abstract

A recent report by the EU claims that investor-driven short-termism is encouraging firms to return cash rather than invest it, which reduces capital available for investment in growth. The authors show that the data behind the report do not support its claims and argue that if the EU implements the recommendations of the report, EU-listed firms will struggle to compete as decision-making slows up and capital gets allocated to questionable ventures.

Keywords

Short-termism; Sustainability; Capital; Investment; Decision Making; Business and Stakeholder Relations; European Union

Citation

Fried, Jesse M., and Charles C.Y. Wang. "The EU's Unsustainable Approach to Stakeholder Capitalism." Harvard Business Review Digital Articles (January 29, 2021).