FINLAND Law and Practice Contributed by: Kari Marttinen, Laura Leino, Outi Iso-Markku and Aino Lahti-Nuuttila, Erottaja Attorneys Ltd
6.3 Incentives, Exemptions and Penalties There are no specific incentives or exemptions for good environmental citizenship in Finnish legisla- tion. With regard to environmental taxes that can to some extent be considered as incentives, see 6.2 Environmental Taxes . Penalties for breaches against environmental laws are covered in 3.2 Breaching Pro- tections , 4.5 Consequences of Breaching Permits/ Approvals and 6.1 Liability for Environmental Dam- age or Breaches of Environmental Law . 6.4 Shareholder or Parent Company Liability According to the Finnish Limited Liability Companies Act (No 624/2006) ( osakeyhtiölaki ), a limited liability company is a legal entity separate from its sharehold- ers and therefore the shareholders are not liable for the company’s debts, obligations or liabilities (includ- ing environmental damage or breaches). The same applies to parent companies. Thus, shareholders and parent companies are not liable for environmental damages or breaches of environmental law. However, Finnish jurisprudence has shared the view that – in certain exceptional circumstances – a share- holder could be liable for the company’s obligations without the explicit support of the law. This kind of limited liability without legal support refers to the prin- ciple of piercing the corporate veil. 6.5 ESG Requirements In Finland, ESG requirements are regulated by several different laws. There is therefore no specific corporate social responsibility (CSR) law in Finland, which fur- ther means that the reporting, monitoring and enforce- ment of obligations vary depending on the subject matter and the specific legislation applicable. By way of example, laws safeguarding the social component of CSR especially address the rights of a company’s employees and its customers (ie, consumers). These laws create obligations and responsibilities for com- panies to actively ensure the safety of employees and consumers, and this is monitored by specific authori- ties. Finland, as part of the EU, has also implemented EU regulation on ESG requirements. Please see 16.4 Green Finance .
6.6 Environmental Audits There are no binding requirements regarding environ- mental audits in Finland. However, the Act on Volun- tary Participation in an Environmental Management and Auditing System (No 121/2011) ( laki vapaae- htoisesta osallistumisesta ympäristöasioiden hallinta- ja auditointijärjestelmään ) implements the elements necessary for the corresponding regulation of the European Parliament and Council. The Act defines the terms related to voluntary auditing by the EU’s Eco-Management and Audit Scheme (EMAS) and regulates the authorities responsible for supervising the auditing. In Finland, it is possible for directors and other officers to be held personally liable for environmental damage or breaches of environmental legislation committed by the company. In legal practice, liability is primarily imposed on the person or persons within a company who are respon- sible for ensuring compliance with the relevant pro- visions, such as the CEO, board member, director or another employee of the company. Secondly, the liability is imposed on the company, and the company may be issued with a corporate fine. The Supreme Court has in its precedent (case KKO 2023:71) given weight to the facts related to the employee’s actual position in the association/company and whether the employee had been in a position to ensure that the permit regulations were fulfilled and whether the employee had used all means available to avoid the breaching of the permit regulations. Please also see 5.1 Key Types of Liability and 5.3 Key Defences . Insurance companies provide cover against direc- tors’ and officers’ indemnification liability, pursuant to the Limited Liability Companies Act – according to which, members of management may become per- sonally liable for loss or damage caused wilfully or through gross negligence or by breaching said Act or the company’s articles of association. However, such an insurance does not usually cover environmental damages referred to in the Act on Compensation for 7. Personal Liability 7.1 Directors and Other Officers
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