The green side of the International Codes of Conduct for Business

Multinational corporations (MNCs) benefit from globalization, they have emerged as major actors of the global economy and expanded their activities worldwide. Meanwhile, international society has become increasingly concerned about environmental issues and, therefore, a considerable number of international instruments providing environmental protection have been adopted. Moreover, various groups across the social and economic spectrum have expressed their concerns about environmental degradation caused by industrial activities and demanded greater awareness with respect to business decisions that might have a potential impact on the environment. Since the 1970s, several attempts have been made to adopt instruments regulating multinational corporations conduct at the international level. The result has been a number of codes of conduct at international and regional level focused on the impact of MNCs in two main areas: social conditions and the environment. Among the codes of conduct are: the OECD Guidelines for Multinational Enterprises, the UN Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights, the Global Compact and, the most recent attempt in this field, the Guiding Principles on Business and Human Rights: Implementing the United Nations 'Protect, Respect and Remedy' Framework proposed by UN Special Representative John Ruggie. These codes are voluntary in nature and have no enforcement mechanism. This paper examines the environmental approaches of the above mentioned codes. The guiding question is whether environmental issues included in the international codes of conduct fall within the principles of international environmental law in order to encourage a more environmentally friendly behavior of MNCs (green businesses). The first part of this paper provides an overview of the relationship between business and the environment and, moreover, the impact of industrial activities on the environment. The second part analyses the environmental content of the above mentioned codes of conduct. It also identifies the principles of international environmental law that are included in these codes. The third part examines how MNCs apply these codes, either for reducing their impact on the environment or making use of them as a green marketing strategy. Finally, conclusions are drawn as to the effectiveness and influence of these codes over company management and environmental behavior of MNCs.