Corporate Social Responsibility in the Age of Ecocide: The case for stronger corporate governance frameworks

art by Shar Tuiasoa (Hawai’i, USA)

Braiya White (SAGE Environmental Services); Hannah White (Commonwealth Director of Public Prosecutions)

We need to harness environmental peacebuilding principles and toolsets to develop stronger corporate governance frameworks that promote holistic environmental protection.

Context

The increasing impact of human activity on the global environment has led to the recognition of the need for environmental principles that prevent irreversible impacts. Deforestation, industrial fishing, and the use of fossil resources are rapidly transforming Earth beyond a liveable standard. These widespread changes to the environment have inextricable links to corporate activity and commercial gain, carried out for human benefit.

The need to hold corporations liable for the environmental damage that they inflict due to their operations is being recognized in legal and social settings. In some cases, corporations hold more power than States, making their actions more influential than State action overall. The actions they choose transcend international borders.

The recent development of a legal definition of ecocide[i] promises new avenues for holding corporations liable for gross environmental destruction caused by their activities. Corporations have been held accountable for extensive environmental destruction, and even ecocide, under national jurisdictions. For example, the Guatemalan law of ecocide was successfully used in 2015 to hold Empresa Reforestadora de Palma de Petén SA (REPSA) accountable for the “criminally negligent” pollution of the La Paison River with pesticides used in Palm Oil plantations.[ii] Additionally, the recent incorporation of draft principles related to protecting the environment during armed conflict from the International Law Commission[iii] may provide sufficient legal obligation for corporations to develop stronger governance related to environmental protection. Specifically, these draft principles identify the need for corporate due diligence and provide avenues to assign liability for environmental damages caused during armed conflict.

However, the legal definition of ecocide and these draft principles have not yet been widely accepted by the international community. They are non-binding on nation States and, in turn, multinational corporations.[iv] We have entered the age of ecocide with a system of international law that, although evolving, is not yet fit for purpose. In these circumstances, corporate social responsibility has never been more important. The enduring nature of corporations places them in a unique position to assume a role as stewards for the environment through their actions.

What’s been done

Changes in the socially perceived role of corporations over recent decades have perpetuated the need for corporate responsibility in promoting and positively engaging with environmental, social and governance (ESG) outcomes. An example of ESG in the business context is the expectation that the governance of modern corporations does not violate human rights, cause unnecessary damage to the environment, or further corrupt practices. The requirement to prevent human rights abuses and corruption in business are recognized in law, internationally and within individual States.[v] This legal recognition has subsequently enabled corporations to develop frameworks and toolsets that enable them to identify violations and provide measurable data on their compliance with such legislation.

The implementation of corporate governance for environmental protection, however, has not shared the same success. It is often limited in scope to corporations committing to non-binding targets related to waste minimization, greenhouse gas emission reduction, or the promotion of “climate-friendly” action at the individual level. Weak corporate governance on environmental issues is largely due to the absence of legal frameworks that identify the obligations of corporations. 

In the age of ecocide, environmental protection depends upon the establishment of effective corporate governance frameworks. The mechanisms of environmental peacebuilding that promote institutional change[vi] need to be harnessed to generate a dialogue with corporations that acknowledges the power these entities have in standardizing and mainstreaming practices that are environmentally protective.

Looking ahead

We propose the development of clear legal and policy frameworks that allow corporations to make their intentions and actions towards environmental protection transparent to the public and the law. Such frameworks not only offer legal and regulatory benefits, but can strengthen a corporation’s social licence to operate.[vii] Appealing to the stakeholder desire for more protective environmental practices can boost their public favour and can also translate to greater investor confidence. We propose that these frameworks should be developed using principles and toolsets that empower and encourage corporations to address their social and legal obligations to the environment and educate them on the interconnectedness of environmental protection to peace and security.

These principles should be implemented alongside existing corporate governance frameworks to avoid any hesitation to commitment that may be driven by “compliance fatigue”.[viii] As such, working within frameworks such as the UN Global Compact (UNGC) Principles[ix] and UN Guiding Principles for Business and Human Rights[x] can allow a new set of environmentally-centred principles to be developed for businesses. UNGC Principle 8 provides an avenue for developing an agenda that recognizes environmental peacebuilding and business, stating that businesses should undertake initiatives to promote greater environmental responsibility.[xi]

These principles should be developed collaboratively with environmental peacebuilding practitioners, corporations, and local stakeholders to reflect best practices and existing principles within areas of environmental and humanitarian law. Efforts should be made to connect with professional organizations, particularly those servicing the engineering, construction, and environmental industries, to disseminate knowledge on this topic and the field of environmental peacebuilding more broadly. The creation of transparent and measurable strategies for environmental protection at a corporate governance level will enable the bottom-up action required to place holistic environmental protection at the forefront of corporate activities.

Footnotes

[i] Stop Ecocide Foundation (2021) Independent Expert Panel for the Legal Definition of Ecocide: Commentary and Core Text. Amsterdam.

[ii] Parker, C. (2016) ‘Justice in Guatemala: Guatemalan court upholds revolutionary ruling on ecocide’, Intercontinental (https://intercontinentalcry.org/justice-in-guatemala-guatemalan-court-upholds-revolutionary-ruling-on-ecocide/)

[iii] UNGA (2019) Protection of the Environment in Relation to Armed Conflicts: 71st session, UN Doc A/CN.4/L.937. International Law Commission, United Nations General Assembly: New York

[iv] Dam-de Jong, D. and Wolters, S. (2020) ‘Through the Looking Glass: Corporate Actors and Environmental Harm Beyond the ILC’, Goettingen Journal of International Law, 10(1). doi:10.3249/1868-1581-10-1-damdejong-wolters

[v] For example, the international legal community has established authoritative and legally binding global standards to address and prevent human rights impacts associated with business activity and the criminalization of corruption in international business transactions. See: the UN Guiding Principles on Business and Human Rights (UNGPs) which were unanimously endorsed by the UN Human Rights Council and the OECD Anti-Bribery Convention, respectively. 

[vi] Dresse, A. et al. (2019) ‘Environmental peacebuilding: Towards a theoretical framework’, Cooperation and Conflict, 54(1): 99-119. doi:10.1177/0010836718808331.

[vii] Raufflet E. et al. (2013) ‘Social License’, In Encyclopedia of Corporate Social Responsibility edited by Idowu, S.O., Capaldi, N., Zu, L. and Gupta, A.D. Berlin, Heidelberg: Springer. https://doi.org/10.1007/978-3-642-28036-8_77.

[viii] Clarke, A. (2006) ‘Small and Medium-Sized Enterprises (SMEs) and Corporate Governance: Politics, Resources and Trickle-down Effects’, Keeping Good Companies. 58(6) 332–337.

[ix] United Nations Global Compact (2014) Guide to Corporate Sustainability: Shaping a sustainable future. New York.

[x] OHCHR. (2011) Guiding Principles on Business and Human Rights. New York and Geneva, HR/PUB/11/04.

[xi] United Nations Global Compact (2014) Guide to Corporate Sustainability: Shaping a sustainable future. New York, 11.