Annual Meeting of the European Law Institute at the University of Vienna
Franz Pfluegl – European Law Institute
In September, the European Law Institute held its annual meeting in Vienna, Austria. The meeting brings together judges, attorneys, professors, and policy experts from throughout Europe to discuss issues facing the European Union. This year, the meetings focused heavily on climate change policy and its impact on the legal field. The opening panel addressed enterprise foundations, a new form of business investment structure in the European Union that allows for a focus beyond profits, including the prioritization of environmental and sustainability concerns.
Enterprise foundations are an investment tool that allow for the prioritization of issues over straight profit. They are frequently formed by wealthy individuals as a form of trust, creating a legacy that can continue to work on their passions.
They are not created exclusively through monetary investments, but can also include the transition of a business to the foundation. The foundation maintains a majority control of companies, steering the focus of the company to align with the enterprise foundation’s priorities.
ELI noted that “enterprise foundations – ‘foundations that own companies’ – play an important role in European society as responsible, long-term owners of business companies. In addition, through their donations and operating philanthropy, they contribute significantly to the public good. They promote equality, social progress, protection of the environment, and scientific and technological advances.”
Enterprise foundations exist in Europe, but the regulatory framework is not fully established. Denmark was an early adopter, and a leader in the field. Austria also has some level of regulation, but there is room for development. Typically, enterprise foundations function within existing regulations that do not directly consider that type of organization. Foundation owned companies in Europe include Ikea and Bosch.
These issues were the subject of a panel at the European Law Institute’s annual meeting. ELI is an independent legal think tank funded, in part, by the European Union to draft model laws and provide guidance on emerging topics, focusing on European legal development in a global context. ELI was founded in 2011 and is based at the University of Vienna. ELI Fellows gather in the fall for annual meetings that alternate between Vienna and other host countries in the EU. The 2024 annual meeting was hosted in Dublin, Ireland.
Panel on Enterprise Foundations at the European Law Institute 2025 Annual Meeting at the University of Vienna. (L-R) Pelle Munk-Poulsen, Anne Sanders, Anne Birgitte Gammeljord, Colin Mayer, Eva Baumgartner.
Franz Pfluegl – European Law Institute
The panel on enterprise eoundations was moderated by Anne Birgitte Gammeljord, a lawyer at the Danish Supreme Court and ELI First Vice-President. The panelists were Anne Sanders, professor at the University of Bielefeld; Pelle Monk-Poulsen, general counsel at Novo Nordisk Foundation; Eva Baumgartner, attorney at Briem Baumgartner Attorneys at law; and Colin Mayer, Emeritus Professor, Said Business School, University of Oxford.
Sanders serves as the project reporter for ELI Enterprise Foundations in Europe, an ELI project focused on creating a model law to be used by member states wishing to enact regulations to allow for enterprise foundations. The project is nearing completion, with publication forthcoming.
Sanders gave a general overview of the draft model law and the need for clearer regulation. While the model law creates a framework than can be adopted by every EU member state, she expressed doubt that there will be harmonisation of the law throughout Europe.
Harmonisation is a European concept focused on establishing identical laws in all EU jurisdictions. Typically, that is driven by the European Commission, through directives like the currently debated Corporate Sustainability Reporting Directive.
Looking at the broader impact of enterprise foundations, Sanders stated that it could reshape capitalism from “capitalism that isn’t only profit oriented, but profit oriented with a purpose.”
Munk-Poulsen brought a practical approach to enterprise foundations. As the general counsel for the Novo Nordisk Foundation, a Danish enterprise foundation focused on medical treatment and research, he is directly involved in this area of law. The fund has an endowment of approximately $150 million and is the majority voting shareholder of Novo Nordisk. Additionally, it annually awards grants worth approximately $8 billion.
Baumgartner addressed conflicts relating to the foundation’s priorities and the role of an independent advisory board. The creation of an enterprise foundation is to act towards a set priority, utilizing its resources to influence that outcome. When an enterprise foundation is formed, those priorities are outlined in a governing document. While the initial founder is alive, that document can be amended. However, once that first generation of founders passes, that document is locked. In her experience, this is problematic as issues evolve.
Mayer connected climate change, human rights, and the role of enterprise foundations. In a spirited speech, he argued that the common perception of capitalism and profits is inaccurate. He stated that a company’s purpose is not to make profits, it is to derive profits. There are profits in creating solutions. Applying his argument to the issue of climate change and human rights, companies can find ways to derive profits from the issue while also protecting the environment. He noted that there are conflicts between business structures in the United States and the EU model.
The issue of enterprise foundations in Europe and their impact on issues like sustainability and climate change is complex, as will be reflected in the final model law by ELI. The debate will continue beyond this panel.