However, in recent years more and more companies boast to the public about their initiatives to operate more sustainably. The question is whether CSR campaigns are the result of companies’ proactive attitude, or a consequence of legal requirements?
Corporate social responsibility is a popular buzzword, but it has no legally binding definition. In 2001, the European Commission presented the Green Paper Promoting a European framework for Corporate Social Responsibility where it defined CSR as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.”
However, in A renewed EU strategy 2011–14 for Corporate Social Responsibility, the Commission proposed a new definition of CSR as “the responsibility of enterprises for their impact on society.” Despite some changes in the CSR definition, the Commission did not depart from the multidimensional nature of CSR. The strategy shows that the notion of ‘society’ needs to be interpreted widely, and CSR covers human rights, employment practices, as well as environmental issues (such as biodiversity, climate change, resource efficiency, pollution prevention and life-cycle assessment).
CSR vs environment
The state of the environment has been a hotly debated topic over the last few years. This should come as no surprise, as our planet is not in good shape. Once in a while, scientists present data on humans’ negative impact on the environment. For example, the report of the Intergovernmental Panel on Climate Change (IPCC) presented in October 2018 found that “limiting global warming to 1.5oC would require rapid, far reaching and unprecedented changes in all aspects of the society.” The IPCC report also found that the consequences of 1oC of global warming are currently noticeable among other things in extreme weather, rising sea levels, and diminishing Arctic Sea ice. However, another report presented two years ago at the World Economic Forum in Davos by the Ellen MacArthur Foundation raised the alarm by stating that with projected growth in consumption and a business-as-usual scenario, it is expected that by 2050 the weight of plastic waste in the oceans will be greater than the weight of fish swimming in them.
So it is no wonder that environmental issues play an important role in CSR strategy. Businesses want to show that they are operating in a sustainable way, or have at least started to implement some steps in that direction. However, if we look at the legal regulations in the field of environmental protection, some may raise the question whether the real reason companies are taking CSR action is a proactive attitude, or the need to comply with requirements imposed by law. Let me give some examples.
Climate change: The European Union Emission Trading Scheme (EU ETS) was set up in 2005 as the world’s first international trading system, covering all the member states. EU ETS is based on the “cap and trade” principle. The overall volume of certain greenhouse gases that can be emitted within a multi-year period by installations covered by the system is capped at a certain amount. Within that cap, individual installations receive or buy allowances that can be traded. If the actual emissions exceed the allowances, fines are imposed. Such a system pushes operators to invest in clean, low-carbon technologies, and thus reduces emissions. However, EU ETS is not the only instrument aimed at combating harmful pollutants. The Industrial Emission Directive introduced an integrated approach to prevent and control air, land and water emissions from industrial installations. It also sets emission limit values for particular pollutants that cannot be exceeded. Another act, the Medium Combustion Plants Directive, introduces rules to control emissions from combustion plants with a capacity less than 50 MW and also sets limits on particular gas emissions that cannot be exceeded. Member states are obliged to transpose directives into national legal systems, and thus operators are required to comply with new requirements.
Waste: Another hotly debated topic nowadays. In July, the Circular Economy Package of four directives regarding waste legislation came into force. The new legislation increases targets at the EU level for recycling of municipal and packaging waste, simultaneously reducing the target of waste that can be landfilled. Thus, it puts pressure on member states to give priority to waste prevention, re-use and recycling. The European Commission believes that implementation of the Circular Economy Package will stimulate a transition from a linear to a circular economy, which may also include changing business models. Member states have 24 months to implement the package into national law. Last but not least, work is currently underway to adopt the Single-Use Plastics Directive. The proposal puts a ban on particular single-use plastic items for which sustainable alternatives are available. Therefore, those who use plastic items in their day-to-day operations would need to reorganise their business models towards more eco-friendly solutions if the products they use are prohibited.
To summarise, adopting stricter legislation in the field of environmental protection undoubtedly has an impact on business operations by stimulating more pro-environmental solutions. However, it will always be a subject of debate whether such behaviour is a result of legal regulations or whether it is a proactive initiative.
But the ultimate question may be, “Does it really matter?” Eventually, all of us as a society benefit from measures to protect the environment.