Navigating Contradictory Demands: An Analysis of Corporate Responses to Regulatory Hardening

Abstract

Mandatory due diligence has become increasingly common to address the harmful impacts of corporations, forcing them to navigate hardened regulatory requirements. This article focuses on the responses of large Swedish companies to the European Commission’s proposal for a Corporate Sustainability Due Diligence Directive. Drawing on critical theory, it aims to understand how companies navigate the contradictory dynamic between profitability and sustainability. The findings highlight that companies, for the most part, accept hardened demands for sustainability—but the closer to corporate practice their responses get, the more they oppose and reject these demands. The article discusses how these responses follow a neoliberal logic of regulation, and draw attention to the inherent instability of this logic, as companies struggle to find a position in which they can be both sustainable and profitable.