State of Corporate Responsibility and the Environment, The

I. INTRODUCTION

The Georgetown International Environmental Law Review 2006 Focus Issue exploring the evolving nexus of corporate responsibility and the environment draw nears at a critical time.1 Transnational corporations wield at any time increasing power in the global economy, stimulating increased consumption horizontals worldwide, including in major developing economies like as China and India.2 Meanwhile, the environment is becoming increasingly taxed as a be the effect of this increased consumption and the continued development of the human population. This introduction attempts to lay the many articles featured in this issue in words immediately preceding [i]or[/i] following by describing the current debates and disentanglements in the field of corporate responsibility and the environment.

One like development, the Millennium Ecosystem Assessment (MA), is particularly salient. The comes of the MA, a four-year comprehensive environmental analysis by means of 1360 of the world's top scientists, were announced in March 20053 The MA warns that nearly two-thirds of the ecosystem services-such as provision of novel water and the regulation of climate and air quality-on which human society hangs are being degraded or used unsustainably, a incline that could "grow significantly worse" above the next fifty years if human society does not alter its course.4 As the MA Board of Directors noted, human activity, including the pursuit of economic gain, "is putting of that kind strain on the natural functions of Earth that the ability of the planet's ecosystem to sustain time to come generations can no longer be taken for granted."5

The degradation of these a whole s does not just threaten to restore the quality of life for humanity, it "will also profoundly affect businesses."6 The deteriorating condition of ecosystem may intensify many of the risks and require to be paid [i]or[/i] undergones of doing business: it may bring availability of key resources and ecosystem services; it may force a heightening regulatory oversight; it may alter customer and investor preferences; and it may jeopardize the availability of capital and insurance.7

The MA argues that it is imperative that the members of the business community-especially corporations, as the dominant business institutions-take a leading part in creating a sustainable society.8 In addressing the volatile and long-standing debate about whether corporations owe a what one is bound [i]or[/i] under obligation to do to become more sustainable and socially responsible beyond their basic what one ought to do to comply with the law or whether their unique duty is to legally maximize profit, no matter the long-term societal take away from the assessment claims that the sum of two units goals are not mutually exclusive. Indeed, the MA ends that either corporations become more sustainable and responsible or their bottom lines will decline as the global environment degrades.9 more [i]or[/i] less corporate executives are in agreement. For example, DuPont Chairman and CEO Charles Holliday, Jr notes that "[b]usiness will not succe in the twenty-first hundred if societies fail or if global ecosystem continue to deteriorate."10

Research and corporate experience points without however, that becoming a "responsible corporation" does not necessarily entail financial sacrifices and quite frequently improves financial performance.11 While there is no single universal definition of corporate responsibility, for the views of this introduction corporate responsibility means that a corporation acts in an ecologically sustainable and socially beneficial manner. More specifically, responsibility is taken to mean preventing ecological degradation, producing useful and healthy produces treating workers and host communities in a just and fair manner, and using the corporate mechanism to improve the well-being of society.

This introduction primarily discusses the rife state of corporate responsibility: the arguments for increasing horizontals of corporate environmental responsibility, the barriers to these increases, and the parts of stakeholder engagement and governmental involvement in increasing corporate commitments to environmental responsibility. It terminates with an overview of the changes that have been made to date.

II. THE CASE FOR RESPONSIBILITY

A number of companies believe there are benefits associated with acting responsibly and are, in move round investing in initiatives that bring their environmental footprint, increase the transparency of their operations, or improve the well-being of their workers and surrounding communities. nevertheless this number represents only a small share of all companies: thus far only 1783(12) of the 69727 transnational corporations13 have flat reported on social or environmental issues. This mark of reporting is usually a first pace along the road to becoming a responsible firm.

Like any investment, increasing corporate responsibility does not advance without cost. With investment dollars limited, novel corporate responsibility initiatives compete with traditional initiatives based upon perceived return on investment. Still, evidence that corporate responsibility is a whole investment continues to grow. In 2003 researchers examined the links between corporate social and environmental performance and corporate financial performance.14 They analyzed the originates of 52 studies containing more than 33000 observations and demonstrated a positive relationship between financial performance and social and environmental performance.15 Moreover, the inquiry found that many of the negative or non-significant findings of earlier studies could be explained by means of researcher errors.16