(6) Environmentalism

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What is Corporate Social Responsibility (CSR)?

CSR-Globe

Commercial Environmentalism

Corporations in a few sectors, such as forestry, have long histories of working toward “environmental” objectives such as sustainable yields; the purpose, however, was primarily about improving efficiency, reducing waste, and managing long-term risks to profits, not conservation, or environmental protection.

As governmental and nongovernmental environmentalism was strengthening and spreading during the 1960s and 1970s, most corporations in most sectors tried to block, stall, and counteract environmental regulations and criticisms. Tactics varied across cultures and economic settings, but the core objective-to stop environmentalism from cutting into profits-was the same. In countries like the United States business executives financed political parties, deployed industry scientists to create uncertainty, lobbied politicians, and sued government departments such as the Environmental Protection Agency. In countries like the Philippines and Indonesia, multinational and local corporations funded military operations, bribed enforcement officers, and gave millions of dollars to politicians and their families.

The corporate approach to the challenges of environmentalism started to change in the 1980s. This was occurring partly because government regulations and civil society pressures were forcing corporations in many countries to alter practices. And it was happening partly because more and more firms began to see opportunities to gain competitive advantages and increase efficiencies by engaging with, rather than opposing, environmentalism. One example is Responsible Care®, which began in 1985 as a voluntary commitment by the chemical industry to improve the health, safety, and environmental performance of chemical operations. By the end of the 1980s, multinational corporations were working toward developing a more constructive role in international environmental negotiations. The willingness of DuPont (the chemical company) to develop substitutes for CFCs, for example, was instrumental in moving along the international agreement to phase out ozone-depleting substances. By 1991, Swiss industrialist Stephan Schmidheiny had founded the Business Council for Sustainable Development to participate more effectively in the upcoming 1992 United Nations Conference on Environment and Development, as well as facilitate business efforts to achieve sustainable development and develop a green image.

Since this conference, just about every multinational corporation (MNC) has now created an environment section and put in place internal guidelines to advance sustainable development. Programs similar to Responsible Care® are now common, and their reach is extending. Responsible Care®, for example, is now operating in over 50 countries, with more expected after the International Council of Chemical Associations passed a Responsible Care® Global Charter in 2005 that encourages adoption of national Responsible Care® programs. Together, “corporate environmentalists” advocate a business approach to environmentalism: policies such as eco-efficiency (a business strategy to maximize resource efficiencies and minimize ecological impacts to produce more with less), market liberalization, industry self-regulation, corporate codes of conduct, and voluntary eco-labeling and certification schemes. They participate in international meetings and “partnerships” with governments, communities, and NGOs (especially with more moderate groups such as WWF). They have also become increasingly active in developing international environmental policy, such as the Kyoto Protocol, advocating for flexible, voluntary, trade-and market-based instruments.

A common business label for this approach to environmentalism is corporate social responsibility-or, what is now commonly called CSR. Often, corporate brochures describe this as meeting a “triple bottom line”: economic, social, and environmental. Such an approach requires companies to be diligent producers, sometimes even going “beyond compliance” with existing environmental regulations (especially in poorer countries with relatively low standards). The phrase corporate social responsibility first began to spread in the 1970s and 1980s in response to calls from nongovernmental groups and some states for stricter national and international regulations (including an initiative to develop a United Nations code of conduct) for multinational corporations. In the 1990s CSR began to take hold as a standard policy for MNCs, and today just about every MNC is using the phrase to frame its approach toward, and input into, national and international environmental policy.

Supporters of corporate environmentalism see these contributions as a practical and effective way to advance sustainable development. For some it is a way for MNCs to raise environmental standards in developing countries, such as the policy of the Swedish firm Electrolux to require suppliers and contractors in developing countries to follow its code of conduct. For other supporters it is a way to expand niche eco-markets into profitable global ones. Corporate environmentalism is, they argue, currently encouraging many markets to grow, such as for wind and solar power, organic foods, fair trade coffee, and sustainable timber. For them the case of fair trade coffee is indicative. For decades this was a tiny market prodded along by the energy of international activists and farmers in the developing world; but today it is expanding quickly as big coffee chains like Starbucks purchase more as part of their policies of corporate social responsibility. Another revealing trend for supporters of corporate environmentalism is the growth of forest certification schemes, which now cover hundreds of millions of hectares of forests. Not everyone is enthusiastic about the growing strength of corporate environmentalism. Critics see many of these initiatives as disingenuous public relations-what some call green wash-to conceal business as usual: that is, more profits from more production and more consumption, all of which requires more natural resources and generates more waste. Some critics, too, are increasingly worried that corporate environmentalism is undermining the radicalism of grassroots, nongovernmental, and Third World environmentalism as more and more groups and community leaders join corporate partnerships in an effort to achieve concrete changes without disrupting the economic growth arising from corporate investment and trade.

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