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Corporations, Risk Management and the Environment

Professor Neil Gunningham
Australian Centre for Environmental Law - Australian National University
Email: neil.gunningham@anu.edu.au| 

Date: 21 May 2002
Time: 1:00pm - 2:30pm
: CARR Seminar Room, H615


In humankind's struggle to prevent further deterioration of its natural environment, the capitalist business corporation - typically thought of as a major source of that degradation - holds one of the keys to success. Scientists and environmentalists analyse and publicize environmental problems, and governments promulgate environmental laws and regulations. But it falls to business corporations to develop, finance and install pollution prevention technologies and practices.

This seminar will summarise the findings of a recent study of the pulp and paper industry by Gunningham, Kagan and Thornton. The Gunningham et al study found that improvements in environmental performance over time were associated with increasingly stringent demands from legal and social actors. These improvements resulted in companies taking 'beyond compliance' actions. However, the degree to which compliance was exceeded was limited by the demands of the market. The study also found that legal, social, and economic demands have converged over time, so that they explain little of the current variation in environmental performance. Instead, variation in the commitments and attitudes of management appear to explain contemporary variation. Perceptions of how to address risk management are central. Corporate cost-benefit calculations for environmental actions are nowadays broader, and more sensitive to cultural and political values than the traditional model of firms as 'amoral calculators' would have us believe. But it is management that gives these cultural and political values breadth and life. Consequently, this seminar seeks to explore the following questions:

  • By what mechanisms do corporate management styles/commitments lead to improved environmental performance?
  • How do good corporate management styles/commitments to the environment arise?
  • Can improved management styles be facilitated or encouraged? And if so, how?
  • Under what circumstances, and by what mechanisms, can social actors most effectively take actions to improve the environmental performance of corporations?

Can legal systems support effective social action? And if so, how can they do so most efficiently and effectively?