Why Having Strong CSR Credentials is Important for Businesses

Corporate Social Responsibility has become the latest buzzword of late, only because people have started realizing that the ‘profit only’ motive of the corporate giants has a terrible impact on social issues, like human rights and environmental sustainability. Infact, many corporations push governments to ease environmental regulations to save millions through shortcuts in environmental care and their short-term greed has definitely overshadowed the long-term pragmatism.

Corporate social responsibility – not a new concept entirely, but what has changed, is its focus: from labor issues and local philanthropy to environmental actions. More and more companies desire to go “green” and are building to LEED (Leadership in Energy and Environmental Design) certification standards.

Numerous factors are driving this trend, including managerial altruism, cost-cutting efficiency improvements, the emergence of a new generation of green consumers, and savvier business leaders who take pro-active steps to avert political conflict rather than reacting to public pressure after the fact.


From a business perspective, having strong CSR credentials has never been more important. Today, suppliers are increasingly requested to demonstrate their CSR credentials when pursuing new business or, once commercial relationships have commenced, commit to adhering to the sustainability policies of their clients. Legislation around environmental performance and carbon emissions is also serving to ensure that sustainability and corporate carbon footprint occupies an increasingly important position on the corporate agenda.

Whether targeted exclusively at the largest carbon or greenhouse gas offenders, in the form of national or intra-national cap-and-trade systems, or smaller organizations, through emissions-based vehicle taxation or taxes on waste disposal, environmental legislation is forcing all business to make changes to the way they operate.

The European Union Emission Trading System is a cap-and-trade system aimed at large emitters of carbon dioxides. Under the scheme, such organizations are required to monitor and report their emissions, and return an amount of emission allowances, equivalent to their CO2 emissions for that year, to the government. The Carbon Reduction Commitment of United Kingdom targets public- and private-sector organizations consuming more than 6,000 megawatt-hours (MWh) of electricity per year and encourages them to become more energy efficient through a cap-and-trade system.

Carbon trading Europe
European Union Emissions Trading Scheme was the first large emissions trading scheme in the world.

What has come into the limelight is that the positive news for the environment has almost universally happened only in the developed world. Wealth and lifestyle make environmental protection a lot easier for people from the middle class.

While recycling, ecotourism and general ecological awareness are all second nature for people from the developed world, the sheer struggle to survive in the developing world makes it more difficult for poor people to consider the environment.


In short, the long term health of our planet has become a luxury for the middle class while the world’s poor are marginalised into forgetting the environment.

Hetika Shah
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