Why Law Matters: Corporate Social Irresponsibility and the Futility of Voluntary Climate Change Mitigation
University of Oslo, Faculty of Law, Department of Private Law
March 2, 2011
European Company Law, Vol. 8, Nos. 2-3, pp. 56-64, 2011
University of Oslo Faculty of Law Research Paper No. 2011-04
Nordic & European Company Law Working Paper No. 10-26
Corporate Social Responsibility (CSR) encompasses an enormous complexity of debate and private and public initiatives. This article deals with one section of the debate, with the definition of CSR commonly accepted by business and legislators as the starting point.
CSR in a sustainable development perspective could be seen as dealing with and bringing together two inter-related issues: firstly, legal compliance and secondly, the company’s responsibility for going beyond such compliance, with the legal rules forming the floor and the voluntary part of CSR being a striving beyond that – a race to the top. In that sense CSR would encompass and form a bridge between hard law, soft law and ethical obligations. Certainly there is no doubt about the necessity of companies acknowledging their societal role as all-important components of our societies. We have little hope of achieving overarching societal goals such as that of a sustainable development without the contribution of companies. The limitations of existing regulation, including notably environmental law, necessitate a different approach to involve companies as part of the solution to pressing challenges such as climate change. CSR in the sense just indicated could have been the different approach, merging the legal and ethical obligations of companies and the people involved in them.
However, the business lobbyists have captured the CSR concept and ensured that the definition legislators subscribe to is that of CSR as a voluntary activity. The business message may be said to be: ‘Do not legislate us, and we are willing to talk about how we behave’. This is not meant to ignore that good is done in the name of CSR. And certainly the CSR movement has led to or been a part of a process where no business leader with respect for herself will claim that her company disregards CSR. However, as this article will argue, defining CSR through delimitation against legal obligations is deceptive and detrimental to the development of a sustainably and socially responsible business and has contributed to giving CSR a bad name.
This article goes on to address several of the problems associated with this voluntary CSR concept, forming an argument to show why law matters, and specifically why company law has to be involved in addressing the necessity of getting companies to contribute to climate change mitigation. The article concludes with some reflections on the CSR contribution to a truly responsible business debate.
Number of Pages in PDF File: 20
Keywords: CSR, sustainable devleopment, internalising externalities, company decision-making, climate change
Date posted: March 4, 2011 ; Last revised: March 14, 2012