Shifting the SME Corporate Model Towards Sustainability: Suggestions from Italian Company Law

Corporate Social Responsibility is now at the center of the debate on Company Law all over the world, but the prominent discourse on this topic remains focused on large enterprises operating at a multinational level. The purpose of this paper is to introduce some reflections on the relationship between Corporate Social Responsibility and minor companies. It examines what organizational solutions can be found in the regulatory framework of Italian Company Law to lead small and medium sized Enterprises (SMEs) to transition towards sustainability. Firms of this dimension represent 99% of European businesses and account for more than 90% of the world’s business enterprises that need to make this transition. Despite the fact that SMEs are defined «the backbone of Europe’s economy», organizational models of sustainability in small- and medium- sized enterprises have not yet been studied in depth, and the usefulness of company models that consent to combine altruistic and lucrative purposes, and above all impose a sustainable manner of action, is still to be analyzed comprehensively regarding enterprises of this dimension. The main contribution of the work is to identify the effects of the introduction of the ‘Società Benefit’ model into Italian company law and of the first empirical evidence from its application. Useful operational tools are drawn from it, especially for smaller companies, which, inspired by this business model, can develop their own sustainability strategies by relying on an organizational model that highlights a complete and analytical communication of non-financial performance.