CSR and The Triple Bottom Line

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LAWS AND LAWSUITS

There are two sources of law relevant to CSR and the triple bottom line. The first are laws for issuing reports on social and environmental performance. The second are laws under which a company can be sued or fined. Lawsuits may arise from a triple bottom report or the adoption of a code of conduct or from allegations about environmentally, socially or financially harmful activities. Below is a list of some of the countries with triple bottom line reporting laws, some of the lawsuits. The information on this website is presented is for informational purposes only.

LAWS

Counties where there are triple bottom line reporting laws

Country	France	Portugal	Australia	Denmark	Sweden
Law	Nouvelles Régulations Economiques	Social Balance Report	Corporations Act, 2001, §§ 299(1)(f) and 1013(D)(1)(l)	The Green Accounts Act & The Danish Financial Statements Act	The Annual Accounts Act, Arsredovisningslagen.
Synopsis	For France, businesses publicly traded on the French market must issue annual reports about the social and environmental performance report. In addition, employees must be consulted before mergers and acquisitions under 2001-420 Art. 113	In Portugal, businesses must issue a social performance report about their labor force under two laws: Leido Balanco Social no. 141/85 14 do Nov. Decreto Regulamenar no 9/92 ambos de 28 de Abril.	Australian business that operate under environmental protection laws must include reportage about their environmental performance with their annual financial reports (§ 299). Australian businesses must also issue a triple bottom line report for any product that is funded through the Australian capital market (§ 1013)	In Denmark, businesses in industries that are highly polluting must submit annual environmental performance reports to the Danish Commerce and Companies Agency. A Green Report has 3 parts: General company information. A directors report written for non-expert readers. Data on resource consumption based on flow of inputs and emission/releases of polluting substances. Financial Statements must include the true and fair value of intellectual capital and environmental performance must be reported for businesses above a certain size.	The amended Annual Accounts Act In Sweden, companies over a certain size must include reporting on environmental performance and social issues in the board of directors report section of their financial reports.
Who	Group companies (Parent and Subsidy, two Subsidies held by an entity, etc) and international companies that are quoted (listed) on the capital market.	Businesses that employ over 100 people.	Any business for which environmental protection laws apply and any business that finances a product of service on the Australian capital market.	Environmental Reports: Polluting businesses listed in the Act (e.g. production, processing, extraction) Financial impacts of Social and Environmental performance: Businesses with over 250 employees and DKK 238 M.	Companies of a certain size. Over 2,000 companies report in Sweden.

Country	Germany	Japan	South Africa	Norway	Belgium
Law	Bilanzrechtreformgestz (BilReG)	Law of Promotion of Environmentally Conscious Business Activity	National Black Economic Empowerment Act No. 53 of 2003 & Employment Equity Act No. 55 of 1998	Norwegian Accounting Act Regnskapsloven	VLAREM II, art. 4.1.8 & Bilian Social
Synopsis	Companies must report performance for environmental and social indicators	Companies must issue annual environmental reports.	No. 53: Companies must submit progress reports to the government for promoting black empowerment. No. 55: annual status reports to government on affirmative action for black people, women. disabled.	Environmental, health and safety performance must be included in Director's Report.	VLAREM II: Companies must issue annual environmental reports Bilian: Companies must issue social reports covering employment issues
Who	German Companies	Companies specified under the act.	National Black Economic Empowerment Act: Any companies that intend to do business with the government. Employment Equity Act: Public and Private companies that employ people	All companies (must report environmental impacts).	VLAMREM: only Flanders companies.

Country	Brazil	India	Spain	Canada	USA
Law	Decreto Lei no 76.900 – the Annual Report of Social Information (Rais in Portuguese).	Companies Act, §217(1)	Resolution de 25 de marzo de 2002 & National Accounting Plan	Securities Commission	EEO-1 & Securities Exchange Commission, reg. S-K & Sarbanes-Oxley Act & Toxic Release Inventory
Synopsis	Companies must issue reports covering employee data. The Instituto Brasileiro de Análises Sociais e Econômicas (IBASE) is a voluntary framework with quantitative indicators. It was created by non-governmental organizations. The Ethos Institute of Social Responsibility compete with the IBASE with its Guide for Social Responsibility Annual Report Statement. It includes stakeholder engagement where IBASE does not.	At all company general meetings in which a balance sheet is laid out, there must be an accompanying report on environmental conservation issues and foreign exchange earnings.	Must include environmental assets and liabilities in financial statements, with details under the National Accounting Plan.	Annual report must include impact of environmental protection laws on current and future financial status.	Companies must file employment data with the government, including race and gender proportions. Annual financial reports must include information about reasonably certain material impacts from environmental performance. Also, under various environmental laws, a company must report data to show compliance with the law
Who	All companies must issue employee data.	All companies		Public Companies	EEo-1: any company with over 100 employees. SEC and SOX: Public Companies Environmental laws: Depends on the company's activities. TRI aims at industrial faculties.

Countries where CSR and triple bottom line laws are under consideration.

Country	USA	Great Britain	The Netherlands
Effort	Corporate Code of Conduct Act, H.R. 5377	Corporate Responsibility Bill	Environmental Protection Act
Synopsis	Code of conduct for environmental and social practices. Extends to suppliers and partnership outside of U.S. borders. Annual CSR reports to be issued to Congressand the public. Creation of agency to enforce code. Introduced in the House of Representatives (click here if link is broken.)	Environmental, Social and environmental responsibility extends subsidies outside of Great Britain Annual CSR reports issued to Parliament. Secretary of State as enforcement agency with Stakeholders can take complaints to Secretary. Directors liable for breach due to negligence or willful misconduct.	Largest polluting companies were required to publish two environmental reports to the public and to the government. Deregulation acted to repeal this law
Who	Any company that employs more that 20 people outside of U.S.	Vaguely described in the bill as "certain companies."	No longer law

Analysis of laws for the triple bottom line:

There is a trend in Europe for triple bottom line reporting laws. This trend is supported by the European Commissions communications advocating CSR reporting. Nevertheless, the majority of CSR reporting is done under a voluntary regime.

Although CSR reporting and CSR reporting laws and voluntary organizations are largely coming from developed nations, the courts in developed nations are starting to hear suits for violations of codes of conduct that occur in developing nations.

The law may act as a starting point for CSR, whether in reaction to a lawsuit or as a way to manage risk, real opportunity comes from finding ways to increase profits and drive down costs through CSR and the triple bottom line.

LAWSUITS

Triple Bottom Line Lawsuits

Case	Kasky v. Nike	Jane Doe and John Doe v. Wal-Mart
Law	Unfair Competition Laws, Cal. B&P § 17200 and False Advertising Claims, Cal. B&P § 17600).	Unfair business practices and unjust enrichment.
Synopsis	Kasky sued Nike for publishing that it had a code of conduct for labor rights but not complying with it along its supply chain. The California Supreme Court found Kasky has a right to sue Nike. The U.S. Supreme Court would not hear the case and sent it back to California. Nike Settled. The issue of whether codes of conduct are commercial speech, and have lesser First Amendment protections, is not clear.	Employees of Wal-Mart's oversees suppliers sued Wal-Mart for not upholding its "Standards for Suppliers" code of conduct; for negligence vis-a-vis its hiring, supervision and treatment of employees; and for unjust enrichment due to the supplier working conditions, for unfair and deceptive advertising; and under the alien tort statute. In 2007, the case was dismissed by the U.S. District Court for the Central District of California.

CSR Laws and Lawsuits

Case

Doe I v. Unocal Corp., 395 F.3d 932 (C.A.9 (Cal.),2002)

Wiwa v. Royal Dutch Shell, 96 Civ. 8386, 1998

U.S.

Dist. LEXIS 23064 (S.D.N.Y. Sept. 25, 1998)

Law

Alien Tort Claims Act of 1789, 28 U.S.C. § 1350

Torture Victim Prevention At of 1991 (28 U.S.C. Section 1350)

Synopsis

Myanmar Villagers are suing Unocal for forced labor, murder, rape, and torture. Unocal allowed governmental forces and others to help them in constructing a gas pipeline. The help Unocal received included forcing villagers with murder, rape and torture to work on the pipeline.

The court found Unocal is subject to liability because it knew of the crimes.

For a link to an ATCA lawsuit against Firestone.

Royal Dutch Shell received help from the Nigerian government to explore for oil. Protesters were rated, beaten and executed by the government.

The Court found Royal Dutch Shell is subject to liability as there was substantial cooperation between the government and Royal Dutch Shell.

Other lawsuits: In 2007, the U.S. Supreme Court decided that green house gases are an "air pollutant" and that harms associated with climate change are serious and well recognized. Massachusetts v. EPA, 127 S.Ct. 1438, April 2, 2007. (No.05-2110).

Dismissed Lawsuits

Case	Morefield v. Excelon Services Inc. 204-SOX-00002 (Jan 28, 2004)	Bulyanhulu Gold Mine incident in Tanzania and Barrick Gold Corp. of Canada	Aquinda v. Texaco, Inc. 945 F.Supp. 625, (S.D.N.Y.,1996)
Law	Sarbanes Oxley Act of 2002, § § 806, 1107	World Bank Group Standards	Environmental Protection Acts and Norms.
Synopsis	In the USA, a public company must establish anonymous whistleblower hotlines for employees of its public entity and its public and non-public subsidiaries in the U.S. This law does not appear to apply outside of the U.S. Carnero v. Boston Scientific Corp., 2004 U.S. Dist. Lexis 17205 (D. Mass. August 27, 2004); Cocone v. Capital One Financial Corp., 2005-SOX-00006 (Dec. 3, 2004).	Canadian Mining company received money from World Bank (Multilateral Investment Guarantee Agency) to create mine and bring in potable water in Tanzania. Small scale miners were ordered by the government to leave. They did not and were buried alive during land clearing activities. After an investigation, official decided there was not enough evidence to try the Canadian mine company.	The people of a community in Ecuador sued Texaco and Ecuador's state-owned oil company for damages to the environment caused by decades of oil exploration and extraction. The court dismissed for forum non conveniens (not a convenient court: the case would be better heard in Ecuador) and because the plaintiffs did not include the Ecuadorian government with Texaco when it sued.

Analysis of lawsuits over CSR:

There are two points where a business manager should take care: Codes of conduct should be adopted carefully, with full consideration of the activities and interactions that arise from it. Secondly, lawsuits are disruptive to business operations and profitability. No one is in the business of being sued. It is better to ensure a business is operating above the letter of the law than at or below it. One ways to do this is by integrating the triple bottom line into current business activities in ways that meet the financial goals of a company by bettering the environment and society.

Sources (this list excludes linked sources):

Surya Deva, SUSTAINABLE GOOD GOVERNANCE AND CORPORATIONS: AN ANALYSIS OF ASYMMETRIES 18 Geo. Int'l Envtl. L. Rev. 707, 731 (2006).
Cecile Baudon et. al., 2004 Global Forecast of Environmental, Health & Safety Policy and Regulatory Developments Impacting Industry, Transparency (2004) available at ehstrends.com/2004Forecast_Transparency.htm (last visited September 27, 2006).