Corporate Environmental Responsibility

“With increasing awareness of environmental issues and the magnitude of costs associated, it has become imperative for companies to integrate environmental efforts into their business strategy. There is a growing awareness among organizations on conservation and optimum utilization of natural resources to gain competitive advantage (Hart, 1995). In this regard, a growing body of environmental management literature suggests that firms can gain sustainable competitive advantages by reducing the adverse impacts of their operations on the natural environment (Clarkson et al., 2011).

Environmental responsibility is now accepted as a norm for sustainable organizations. Hansen and Mowen (2007) argue that “successful treatment of environmental concerns is becoming a significant competitive issue” and “meeting sound business objectives and resolving environmental concerns are not mutually exclusive” Clarkson et al. (2011) provide empirical evidence to support this argument.

Corporate environmentalism manifests either as part of corporate social responsibility (CSR) or safety, health, and environment (SHE) project of an organization. Corporate environmental responsibility (CER) as defined by Jamison et al. (2005) takes into account environmental commitment, whereby the company fully embraces sustainability and has a net positive impact on the environment and society.

Stakeholder engagement with full transparency and accountability and a process to engage and empower stakeholders is emphasized. Lyon and Maxwell (2008) define CER as “environmentally friendly actions not required by law, also referred to as going beyond compliance, the private provision of public goods, or voluntarily internalizing externalities.”

Broadly CER can be described as precautions and policies organizations adapt to reduce and prevent hazards to the environment (Kusku, 2007) along with stakeholder participation to induce transparency.”