Performative versus Substantive Compliance: What Makes Responsible Business Truly Sustainable?

When the European Union becomes a gatekeeper for market access through its corporate sustainability legislation, businesses in other countries that invest in the EU or bring products and services to the EU market often adopt these regulatory standards or adjust their business practices to maintain access. However, does such adaptation amount to a mere box-ticking exercise, or does it lead to substantive compliance in which sustainability requirements become embedded in corporate governance and business decision-making?

Geopolitics is dictating how corporations worldwide do business and set up supply and value chains different from their local demands. So how are businesses across jurisdictions balancing international regulatory pressures with local values? 

An unmissable trend reshaping global business conduct is regulatory formalisation: non-Western countries are redefining their national-level corporate social and environmental duties in response to Western-driven regulations/initiatives. But how are region-specific regulations disputed and contested before courts and arbitration venues in cases of disputes related to non-compliance with sustainability obligations?

Answering these complex yet urgently relevant questions demands a comparative analysis of corporate sustainability legislation and compliance. In a forthcoming volume that will be published by Kluwer and edited by Dr. Qiao Cong-rui and Dr. Yulia Levashova, 21 sustainability law experts draw on legal theories and case studies to examine how jurisdictions across key regions of the EU, BRICS (Brazil, Russia, India, China, South Africa), and Central Asia (Kazakhstan and Kyrgyzstan) are reformatting global business compliance practices. While existing scholarship has either focused on instrumental environmental, social and governance (ESG) obligations within a single context or addressed sector-specific challenges, this book offers a distinct cross-regional and cross-cultural analysis. The objective is to provide practitioners with strategies to shift from self-defeating external obligations to embedding value-based compliance, ultimately balancing financial gains with socio-environmental development and welfare.    

Why a comparative analysis

The EU frameworks, including the Corporate Sustainability Due Diligence Directive (CSDDD) and Corporate Sustainability Reporting Directive (CSRD), have increasingly influenced compliance with European standards for business practices by non-EU countries: Chinese technology exporters, Central Asian resource firms, and African raw material suppliers. As a result, the EU’s core corporate assessment indicators often misalign with local ground realities, practices, and values. For instance, EU frameworks value participatory rights, China favours rural development and poverty alleviation, while South African frameworks support both, as the South Africa chapter finds.

It often forces local businesses into compliance decoupling, where they adopt documentary, procedural reporting to meet the requirements of capital allocators and allay credibility concerns about the sustainability data from Southern markets. This points to thin compliance, i.e., formal box-ticking to avoid penalties. For instance, in Brazil, a geolocation-based traceability of beef under the EU Deforestation Regulation (EUDR) presents a compliance challenge as cattle move across farms before meat processing. The rules may enable exporters to identify risk and transfer responsibilities along the value chain without addressing the capacity to manage such risks, argued Andrea Cardoso, a chapter author on Brazilian jurisdiction.  

A comparative lens helps map how different regions are responding to mandates from influential market regulators, including the EU. This allows practitioners (academics, policymakers, compliance lawyers, business strategists, and sustainability consultants and auditors) to identify strategies for thick compliance, i.e., how to embed sustainability into governance structures, operational practices, and corporate rationales.        

How the global business order is changing

With asymmetrically greater economic, political and regulatory influence, Global North countries set the standardisation for socio-environmental requirements. However, the global order for conducting sustainability-based business is changing as influential countries peel back layers of requirements from their systems. Case in point: the Omnibus simplification packages. In 2026, the EU narrowed the scope of sustainable reporting and due diligence for in-scope businesses, although the implications for non-European countries have yet to be fully realised. The United States Securities and Exchange Commission (SEC), too, recently rescinded its “overly burdensome and costly” climate disclosure requirements.   

Some Global South jurisdictions, like India and Brazil, have taken a gradual, staged approach to avoid normative rigidity (resembling the EU), adopting the International Sustainability Standards Board (ISSB) as the global baseline for sustainability disclosure to mitigate cross-border regulatory pressure and adopt standards that fit local contexts. China has been on the fast lane to develop its ESG policies, including region-specific regulations to handle foreign compliance disputes, as authors of the chapter on China note. In May 2026, the Chinese government leveraged the Improper Extraterritorial Application of Foreign Laws and Measures in the cross-border case involving Threat Detection System (TDS) maker Nuctech, determining that the EU’s Foreign Subsidies Regulation (FSR) to conduct cross-border investigations on Chinese entities is unlawful.

The book thus approaches sustainable law not merely as a market corrective measure and static obligations, but as an evolving process that drives broader corporate culture change in implementing legal business requirements. Through the comparative framework, we argue that cultural legitimacy bridges regulatory compliance and the overdue cultural change of embedding accountability, transparency, and integrity into daily business decision-making and operations.    

The comparative framework is operationalised across 15 chapters, in two parts: the evolving scope, content, and accountability mechanisms of corporate social and environmental requirements across 11 jurisdictions (the EU, Germany, France, Brazil, India, China, South Africa, Kazakhstan, Kyrgyzstan, the United Kingdom and the US); and interpretations and contestations of compliance dispute cases. The chapters explore how EU sustainability law improves corporate compliance quality; the domestic implementation via Germany’s Lieferkettensorgfaltspflichtengesetz (LkSG); how the post-Brexit Anglo-Saxon regulatory approach contrasts with the US’ volatile political landscape; how environmental compliance clashes and aligns with communal land rights and agribusiness dynamics in Brazil; and the evaluation of corporate mandates amidst emerging market formalisation and sustainable manufacturing in India, among others.