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By Isobel Crowne

We are now living in a world where corporations only obey the law when it is cost effective for them to do so. If the cost of them getting caught is less than the potential gains from breaking the law, then it is simply a business decision.

What’s the problem?

Ray Anderson in the documentary ‘The Corporation’ described the damage corporations are doing using a metaphor of the early attempts to fly. He said it seems like we have unlimited resources but the ‘plane’ will eventually crash into the ground and humanity will run out of materials to continue living how we do now. Climate scientists have been aware of this and continuously tried to warn the public, yet the majority have failed to grasp the seriousness and urgency of this threat to our very existence.

The structure of corporations is an issue for the protection of the environment due to the shareholder value principle. Corporations must prioritise maximising returns to shareholders above everything else. This was illustrated in the ‘Dodge vs Ford’ court case in 1916, where Henry Ford argued that, as a company, they shouldn’t make such huge profits yet Dodge argued that the law compels corporate leaders to prioritise the interests of shareholders over all other interests. The judge ruled in favour of Dodge and this principle still stands to this day. This means that even in modern times the CEO of a corporation may want to invest into making their products more sustainable and less damaging to the environment, however it is extremely difficult for them to do so without affecting the shareholder’s profit.

There appears to be a conflict of interest between what is good for the corporation and what is good for a country as a whole. Markets are seen to generate a ‘double movement’ (Karl Polanyi, 1944) where tension forms between morals and norms of society and profit seeking of corporations. Public interest is not the same as the financial interests of a corporation; for example, Amazon had sales in the UK of £3.35bn in 2011 but only reported a tax expense of £1.8m. Similarly, Starbucks had sales of £400m in the UK in 2012 but paid no corporation tax. The problem is the action of these companies is perfectly legal but we must question whether they are taking from the public and not giving back to the system in any useful way.

In today’s society there are increasing concerns over the direct damage many corporations are doing to the environment through the use and harvesting of our finite resources like fossil fuels. The proposed sinking of the Brent Spar oil platform in the North Atlantic catalysed the need for corporations to become more socially responsible. In 1995 Royal Dutch Shell were planning on sinking the Brent Spar oil platform as a cheap way of disposal. This plan was due to be approved by the UK government before Greenpeace activists occupied the Brent Spar and sparked a media campaign alongside a mass of public support. Subsequently this led to the boycotting of Shell petrol and share prices plummeted before a final decision was made to not sink the oil platform. This demonstrated the new power of social movements against corporations and caused many other public campaigns to force corporations to take responsibility; the 1990s campaign against Nike for their use of sweatshops is a perfect example of this.

Solving the problem of corporate responsibility

So why aren’t these corporations being stopped?

The underlying issue is that governments around the world are funded by these fossil fuel giants. Oil companies and petrostates have given at least £5m to MPs in the UK over the last decade in the form of donations, expenses-paid trips, salaries and gifts. Three of the biggest donors to the Conservative party are funders or board members of the climate science sceptic thinktank The Global Warming Policy Foundation. Even when laws are put in place, corporations find a way to cheat the system. For example, the Volkswagen ‘Dieselgate’ scandal in 2015 where VW installed devices on over 11 million diesel cars that could detect when they were being tested and changed their performance to improve emissions results and make them seem less damaging to the environment.

Social responsibility should be a concern for these corporations and not just when there is public outcry over their actions. Fundamentally there needs to be more laws and regulations in place that are properly enforced to prevent these corporations from exploiting the environment and the consumer for the pure aim of maximising profit. Greenpeace have put forward their ‘10 Principles for Corporate Accountability’ to place more restrictions on corporations and, ultimately, find a solution to this ever-expanding crisis.

Corporate interests simply must not be the only consideration when environmental decisions are made; this plane is going to crash if we continue to ignore the obvious problems in front of us, but that’s not to say there isn’t time to stop it.

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