Whilst organisations usually have a choice, adopting and maintaining a voluntary code or similar standard may be in an organisation’s interest – perhaps to demonstrate good and responsible practices. In the case of businesses, it is often to win customers or demonstrate to shareholders due diligence in managing risks and competitiveness. The KPMG report noted that ‘close to half of the G250 companies reported gaining financial value from their [corporate responsibility] initiatives’ (KPMG, 2011, p. 19).
Corporate sustainability reporting has become a key part of marketing, gaining competitive advantage, image and brand management as much as a fundamental concern with management practice and environmental performance. Supporters argue that organisations engaging in voluntary approaches and self-regulation may go further than compulsory regulation with the added benefit of paying for compliance costs and helping to strengthen corporate legitimacy and public trust (Nash and Ehrenfeld, 1996). Critics see some voluntary approaches, particularly self-regulation, as a way for commercial organisations in particular to forestall or avoid detailed regulation, inspections and increased costs (Gunningham, 1994).
The centre view is that all voluntary approaches and self-regulation must function within the context of applicable law. In other words, voluntary action undertaken by an organisation is not a direct replacement or substitute for adhering to legal and social norms and expectations of acceptable practices.
At the centre of determining the value and ongoing support of voluntary approaches to environmental management are concerns about:
- data quality and collection – what is or isn’t collected, and how is it processed/interpreted and by whom?
- reporting standards – is there an independent body that is able check the data and analysis?
- boundary setting – who decides the boundary of the organisation and the analysis, particularly relating to environmental impacts, scale and time issues?
Now let us look at compulsory approaches to environmental management.