Corporate environmental responsibility
The environmental aspect of CSR has been debated over the past few decades, as stakeholders increasingly require organizations to become more environmentally aware and socially responsible. In the traditional business model, environmental protection is considered only in relation to the "public interest". Hitherto, governments had maintained principal responsibility for ensuring environmental management and conservation.
The public sector has been focused on the development of regulations and the imposition of sanctions as a means to facilitating environmental protection. Recently, the private sector has adopted the approach of co-responsibility towards the prevention and alleviation of environmental damage. The sectors and their roles have been changing, with the private sector becoming more active in the protection of the environment. Many governments, corporations, and big companies are now providing strategies for environmental protection and economic growth.
The World Commission on Environment published the Brundtland Report in 1987 to address sustainable development. Since then, managers, scholars, and business owners have tried to determine why and how big corporations should incorporate environmental aspects into their own policies. In recent years, an increasing number of companies have pledged to protect natural environments.
There are different perceptions of CSR between government, the private sector, non-governmental organizations (NGOs) and society in general, and thus, the concept has no single definition.
CSR may cover:
- a company running its business responsibly in relation to internal stakeholders (shareholders, employees, customers and suppliers);
- the role of business in relation to the state (locally and nationally) as well as to inter-state institutions or standards; and
- business performance as a responsible member of the society in which it operates and the global community."
The European Union defines CSR as "...the concept that an enterprise is accountable for its impact on all relevant stakeholders. It is the continuing commitment by a business to behave fairly and responsibly and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large." According to this definition, a CSR strategy is more focused on social aspects, particularly the interests of stakeholders.
CER is, in many ways, connected to CSR, as both of them influence environmental protection. CER, however, is strictly about the consideration of environmental implications and protection within corporate strategy. The understanding of CER cannot be separated from CSR—both are interconnected and based on environmental protection. There are three major areas related to these two concepts—economic, environmental and social. CER is focused more on economic and environmental while CSR relates to social and environmental aspects. Economy, society, and environment all play significant roles in the development of an efficient and effective company strategy.
These cover the environmental implications of a company's operations:
- Eliminate waste and emissions
- Maximize the efficient use of resources and productivity
- Minimize activities that might impair the enjoyment of resources by future generations.
Drivers and challenges
Among the main drivers for CER are government policies and regulations. Many states provide their own legislation, regulations and policies, which are important in creating a positive environmental attitude within companies. Subsidies, tariffs and taxes play a vital role in the implementation of these policies. Another significant factor is the competitive environment among companies generated by media, public, shareholder and NGO awareness, which are also major drivers of CER.
Challenges include the cost of regulation and difficulties in predicting economic gains, which could become problematic for a company's management. Additionally, new technologies are frequently too expensive for a lot of companies. Another challenge is the lack of harmonization of regulations among different states—often there is a mosaic of propositions, leading to unclear strategies for environmental behavior, especially in multinational corporations.
The environmental aspects of security have increasingly become a major issue being considered by states. The process of securitization has had a big impact in creating a new understanding of security. Globalization also plays a key role in the adoption of new environmental strategies as a multi-faceted process influencing modern societies, and creating interconnected and multidimensional environments.
CER is used by multinational corporations as well as small, local organizations. It is highlighted and more institutionalized because of stakeholders' awareness of the huge impacts of business activities on the environment. To understand CER, its relations with CSR strategies need to be recognized. CER and CSR are the main strategies that help in the creation of efficient and environmentally sustainable businesses.
- Mazurkiewicz, Piotr. "Corporate Environmental Responsibility: Is a common CSR framework possible?" (PDF). siteresources.worldbank.org. Retrieved 2016-12-12.
- John Duker; Michael Olugunna. "CORPORATE ENVIRONMENTAL RESPONSIBILITIES (CER): A Case of Logistic Companies in Sweden" (PDF). www.diva-portal.org.
- Piotr Mazurkiewicz. "Corporate environmental responsibility: Is a common CSR framework possible?" (PDF). siteresources.worldbank.org.
- "Promoting a European framework for Corporate Social Responsibility" (PDF). europa.eu.int (Green paper). European Commission. Archived from the original (PDF) on March 11, 2003.
- Przychodzen, J.; Przychodzen, W. (2013). Corporate sustainability and shareholder wealth. Journal of Environmental Planning and Management. pp. 474–493.