CSR and The Triple Bottom Line
for issuing a CSR report
for issuing a CSR report
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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.
Counties where there are triple bottom line reporting laws
|Law||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.|
In Portugal, businesses must issue a
report about their labor force under two laws:
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
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
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.||
||Companies of a certain size. Over 2,000 companies report in Sweden.|
|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
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.||
|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.|
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
|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
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|
Introduced in the House of Representatives (click here if link is broken.)
||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.
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.|
Nike for publishing that it
had a code of conduct for labor rights but not complying with it along
its supply chain. The
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
Doe I v. Unocal Corp., 395 F.3d 932 (C.A.9 (
v. Royal Dutch Shell, 96 Civ. 8386, 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)|
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).
|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):
copyright Laura Musikanski email@example.com