Sustainability and corporate responsibility—overview

LexisNexis Legal & Professional, LexisNexis UK, LexisPSL, Environment, 17 July 2017

Lawyers' analysis and advice must incorporate and make sense of concepts frequently associated with (but legally distinct from) environmental risks and obligations. Key recurring concepts are:

  • sustainability, and
  • corporate responsibility (or corporate social responsibility)

Sustainability

Sustainability is used in a range of UK and devolved legislation:

  • Environment Act 1995 requires the Environment Agency to promote sustainable development
  • Planning and Compulsory Purchase Act 2004 requires planning authorities to exercise their powers ‘with the objective of contributing to the achievement of sustainable development’
  • Sustainable and Secure Buildings Act 2004 amended building regulations to empower the Secretary of State to make regulations 'facilitating sustainable development'
  • Clean Neighbourhoods and Environment Act 2005 required the Commission for Architecture and the Built Environment (CABE) to have regard to advice on sustainable development issued by the Secretary of State, and more broadly
  • Sustainable Communities Act 2007 required local authorities to prepare a 'sustainable community strategy' for 'promoting or improving the economic, social and environmental well-being of their area and contributing to the achievement of sustainable development in the United Kingdom'

As indicated by the scope of sustainable community strategies, sustainability has social and economic as well as environmental aspects. This is frequently expressed as the triple bottom line when discussing legal or market drivers for an expansion of corporate reporting to take into account not just financial outcomes but also environmental and social performance.

'Sustainability' and 'sustainable development' are not synonymous. Sustainability is a higher order social goal, while sustainable development is the policy manifestation of a society's attempt to achieve 'development that meets the needs of the present without compromising the ability of future generations to meet their own needs' (the Brundtland definition).

Sustainable development was defined in terms directed to national governments by Agenda 21, the draft text debated at the United Nations Conference on Environment and Development, Rio 1992. Section 8.17 of the agenda called on governments to assess their laws and enacted regulations in the fields of environment and sustainable development with a view to rendering them more effective in practice. The concept of sustainable development continues to be reflected in the UN Framework Convention on Climate Change (UNFCCC), which affirms that responses to climate change should be coordinated and integrated with social and economic development.

Legally actionable?

Legislative provisions concerned with sustainable development vary, but most use mandatory language requiring the relevant public body at least to direct its mind to the concept as a factor in the exercise of broader discretionary powers. Where sustainable development appears as one of a list of duties or factor to be taken into account (eg in Water Industry Act 1991, s 2) specific statutory language or guidance would be required to impose an obligation to prioritise it over other legitimate goals (eg economic development). Equally, while Horsham District Council v First Secretary of State [2004] All ER (D) 449 (Mar) confirmed that sustainability is a material consideration, it must be weighed against others when reaching planning decisions and a decision that prioritises some other factor will not necessarily be open to challenge.

Judicial review is possible, but the scope for successful challenge on substantive grounds is limited. Successful challenge is far more likely on procedural grounds, eg where the relevant legislation imposes a duty to:

  • produce or follow guidance, regulations or directions
  • to issue or publish a notice or decision

It is possible that sustainability will develop as a legally actionable concept through EU jurisprudence or through the application of human rights legislation. Under the Lisbon Treaty (which came into force in December 2009) sustainability was established as a separate objective, having previously been a secondary objective modifying economic activities.

Corporate responsibility

Corporate responsibility (or corporate social responsibility) issues are most likely to arise in a legal context as:

  • an element in formal corporate reporting (whether mandatory or voluntary)
  • as economic, social or corporate governance (ESG) factors in weighted indices measuring ethical or socially responsible investments
  • qualifying criteria in procurement processes requiring bidders (and their supply chains) to disclose and demonstrate corporate responsibility
  • as the potential basis for litigation where environmental, sustainability or corporate responsibility claims cannot be substantiated or verified

Links to content in this overview

See: Sustainability and corporate responsibility—overview to browse all of our content in this overview which includes:

Practice Notes: Presumption in favour of sustainable development, Sustainability indicators, Responsible business and corporate social responsibility, Human rights due diligence and Sustainable procurement—private sector.

Precedents: Sustainable procurement clauses (public sector)—examples relating to the provision of services.

Checklists: Human rights due diligence—checklist.