A 2026 Single Market Economics Paper titled ‘The role of Responsible Business Conduct in addressing the Competitiveness-Resilience-Decarbonisation trilemma’ authored by Berden Edith, Garrone Maria, Mangione Giuseppe, Ristaniemi Michael, and Scrieciu Şerban examines how Responsible Business Conduct (RBC) can influence the relationship between competitiveness, resilience and decarbonisation in the EU economy. The paper reviews existing literature and develops a conceptual framework identifying three main channels through which RBC can affect these objectives: firm governance and stakeholder inclusion, supply-chain governance and risk management, and broader network effects across economic actors.

Key insights

•    RBC can support long-term competitiveness: The evidence reviewed indicates that RBC can contribute to productivity, innovation and risk management, although short-term adjustment and compliance costs can arise, particularly in transition-exposed sectors. The relationship with economic performance is not always causal and varies across sectors and firms.

•    Supply-chain governance is a key channel: Transparency, traceability, due diligence and risk management can improve firms’ ability to identify vulnerabilities and respond to supply-chain disruptions. The paper notes that only 6% of firms report supply-chain visibility extending beyond two tiers of suppliers.

•    RBC can strengthen resilience: Responsible business practices can build stakeholder trust and social capital, support resilience-oriented decision-making and help firms absorb external shocks. Resilience can also involve maintaining and restoring existing supplier relationships through corrective action, rather than relying only on alternative suppliers.

•    RBC can contribute to decarbonisation: The paper identifies stakeholder engagement, social inclusion, innovation and responsible value-chain practices as potential channels through which RBC can support low-carbon transitions and improve their social acceptance.

•    Effects depend on context: The impact of RBC varies according to market structure, supply-chain complexity, firm size, sector, competitive conditions and demand. Smaller businesses may face proportionally greater compliance burdens, particularly where larger companies require sustainability data from suppliers.

•    Three transmission channels shape the trilemma: The paper identifies firm governance and stakeholder inclusion; supply-chain governance and risk management; and network and structural economic effects as the main conceptual channels through which RBC can influence competitiveness, resilience and decarbonisation.

•    Policy design is important: The paper concludes that RBC-related policies can act as a strategic tool for addressing the three objectives, provided they are proportionate, supported by clear and consistent legal frameworks, adapted to industry contexts and coordinated at EU level. The authors find that the positive influence of RBC on the trilemma generally tends to outweigh the potential negative effects, while recognising that trade-offs remain context dependent.

The paper concludes that RBC can help connect competitiveness, resilience and decarbonisation when it is embedded in corporate strategy and supported by appropriate policy frameworks. However, its effects are neither automatic nor uniform, with outcomes depending on firms, sectors, markets and the wider regulatory environment.

For further information, please read the entire paper on the official website of European commission.