CSR and The Triple Bottom Line

Tool for issuing a CSR report


Home Frameworks Principles Indicators CSR Reports Laws and Lawsuits Sustainable Materials Blog
About Us Contact Us




There are  two sources of law relevant to CSR and the triple bottom line. The first are laws for issuing reports on social and environmental  performance. The second are laws under which a company can be sued or fined. Lawsuits may arise from a triple bottom report or the adoption of a code of conduct or from allegations about environmentally, socially or financially harmful activities. Below is a list of some of the countries with triple bottom line reporting laws, some of the lawsuits. The information on this website is presented is for informational purposes only. 




Counties where there are triple bottom line reporting laws                                      

Country France Portugal Australia Denmark Sweden

Nouvelles Régulations Economiques

Social Balance Report Corporations Act, 2001, §§ 299(1)(f)  and 1013(D)(1)(l) The Green Accounts Act & The Danish Financial Statements Act The Annual Accounts Act, Arsredovisningslagen.
Synopsis For France, businesses publicly traded on the French market must issue annual reports about the social and environmental performance report.

 In addition, employees must be consulted before mergers and acquisitions under 2001-420 Art. 113

In Portugal,  businesses must issue a social performance report about their labor force under two laws:
  1. Leido Balanco Social no. 141/85 14 do Nov.
  2. Decreto Regulamenar no 9/92 ambos de 28 de Abril.
Australian business that operate under environmental protection laws must include reportage about their environmental performance with their annual financial reports (§ 299). Australian businesses must also issue a triple bottom line report for any product that is funded through the Australian capital market (§ 1013) In Denmark, businesses in industries that are highly polluting must submit annual environmental performance reports to the Danish Commerce and Companies Agency. A Green Report has 3 parts:
  1. General company information.
  2. A  directors report written for non-expert readers.
  3. Data on resource consumption based on flow of inputs and emission/releases of polluting substances.

Financial Statements must include the true and fair value of intellectual capital and environmental performance must be reported for  businesses above a certain size.

The amended Annual Accounts Act In Sweden, companies over a certain size must include reporting on environmental performance  and social issues in the board of directors report section of their financial reports.

Group companies (Parent and Subsidy, two Subsidies held by an entity, etc)  and international companies that are quoted (listed) on the capital market.

Businesses that employ over 100 people. Any business for which environmental protection laws apply and any business that finances a product of service on the Australian capital market.
  • Environmental Reports: Polluting businesses listed in the Act (e.g. production, processing, extraction)
  • Financial impacts of Social and Environmental performance: Businesses with over 250 employees and DKK 238 M.
Companies of a certain size. Over 2,000 companies report in Sweden.


Country  Germany Japan South Africa Norway Belgium
Law Bilanzrechtreformgestz (BilReG) Law of Promotion of Environmentally Conscious Business Activity  National Black Economic Empowerment Act No. 53 of 2003 & Employment Equity Act No. 55 of 1998 Norwegian Accounting Act Regnskapsloven  VLAREM II, art. 4.1.8 & Bilian Social
Synopsis Companies must report performance for environmental and social indicators Companies must issue annual environmental reports. No. 53: Companies must submit progress reports to the government for promoting black empowerment.

No. 55: annual status reports to government on affirmative action for black people, women. disabled.

Environmental, health and safety performance must be included in Director's Report. 
  • VLAREM II: Companies must issue annual environmental reports
  • Bilian: Companies must issue social reports covering employment issues
Who German Companies Companies specified under the act. National Black Economic Empowerment Act: Any companies that intend to do business with the government.

Employment Equity Act: Public and Private companies that employ people

All companies (must report environmental impacts). VLAMREM: only Flanders companies.


Country Brazil India Spain Canada USA
Law Decreto Lei no
76.900 – the Annual Report of Social Information (Rais in Portuguese).
Companies Act, §217(1) Resolution de 25 de marzo de 2002 & National Accounting Plan Securities Commission EEO-1 & Securities Exchange Commission, reg. S-K & Sarbanes-Oxley Act & Toxic Release Inventory
Synopsis Companies must issue reports covering employee data.

The Instituto Brasileiro de Análises
Sociais e Econômicas (IBASE) is a voluntary framework with quantitative indicators. It was created by non-governmental organizations. The Ethos Institute of Social Responsibility compete with the IBASE with its Guide for Social Responsibility Annual Report Statement. It includes stakeholder engagement where IBASE does not.

At all company general meetings in which a balance sheet is laid out, there must be an accompanying report on environmental conservation issues and foreign exchange earnings. Must include environmental assets and liabilities in financial statements, with details under the National Accounting Plan. Annual report must include impact of environmental protection laws on current and future financial status. Companies must file employment data  with the government, including race and gender proportions.

Annual financial reports must include information about reasonably certain material impacts from environmental performance. 

Also, under various  environmental laws, a company must report data to show compliance with the law

Who All companies must issue employee data. All companies   Public Companies EEo-1: any company with over 100 employees.

SEC and SOX: Public Companies

Environmental laws: Depends on the company's activities. TRI aims at industrial faculties.


Countries where CSR and triple bottom line laws are under consideration.                    

Country USA Great Britain The Netherlands
Effort Corporate Code of Conduct Act, H.R. 5377 Corporate Responsibility Bill Environmental Protection Act
  • Code of conduct for environmental and social practices.
  • Extends to suppliers and partnership  outside of U.S. borders.
  • Annual CSR reports to be issued to Congressand the public.
  • Creation of agency to enforce code.

Introduced in the House of Representatives (click here if link is  broken.)

  • Environmental, Social and environmental responsibility extends subsidies outside of Great Britain
  • Annual CSR reports issued to Parliament.
  •  Secretary of State as enforcement agency with Stakeholders can take complaints to Secretary.
  • Directors liable for breach due to negligence or willful misconduct.
Largest polluting companies were required to publish two environmental reports to the public and to the government. Deregulation acted to repeal this law
Who Any company that employs more that 20 people outside of U.S. Vaguely described in the bill as "certain companies." No longer law


Analysis of laws for the triple bottom line:


There is a trend in Europe for triple bottom line reporting laws. This trend is supported by the European Commissions communications advocating CSR reporting.  Nevertheless, the majority of CSR reporting is done under a voluntary regime.

Although CSR reporting and CSR reporting laws and voluntary organizations are largely coming from developed nations, the courts in developed nations are starting to hear suits for violations of codes of conduct that occur in developing nations.

The law may act as a starting point for CSR, whether in reaction to a lawsuit or as a way to manage risk, real opportunity comes from finding ways to increase profits and drive down costs through CSR and the triple bottom line.





Triple Bottom Line Lawsuits

Case Kasky v. Nike Jane Doe and John Doe v. Wal-Mart
Law Unfair Competition Laws, Cal. B&P § 17200  and False Advertising Claims, Cal. B&P § 17600). Unfair business practices and unjust enrichment.
Synopsis Kasky sued Nike for publishing that it had a code of conduct for labor rights but not complying with it along  its supply chain. The California Supreme Court found Kasky has a right to sue Nike. The U.S. Supreme Court would not hear the case and sent it back to California. Nike Settled.
The issue of whether codes of conduct are commercial speech, and have lesser First Amendment protections, is not clear.

Employees of Wal-Mart's oversees suppliers sued Wal-Mart for not upholding its "Standards for Suppliers" code of conduct; for negligence vis-a-vis its hiring, supervision and treatment of employees; and for unjust enrichment due to the supplier working conditions, for unfair and deceptive advertising; and under the alien tort statute.   In 2007, the case was dismissed by the U.S. District Court for the Central District of California.



CSR Laws and Lawsuits

Case Doe I v. Unocal Corp.,  395 F.3d 932 (C.A.9 (Cal.),2002) Wiwa v.  Royal Dutch Shell, 96 Civ. 8386, 1998 U.S. Dist. LEXIS 23064 (S.D.N.Y. Sept. 25, 1998)
Law Alien Tort Claims Act of 1789, 28 U.S.C. § 1350 Torture Victim Prevention At of 1991 (28 U.S.C. Section 1350)

Myanmar Villagers are suing Unocal for  forced labor, murder, rape, and torture. Unocal allowed governmental forces and others to help them in constructing a gas pipeline. The help Unocal received included forcing villagers with murder, rape and torture to work on the pipeline. 


The court found Unocal is subject to liability because it knew of the crimes.

For a link to an ATCA lawsuit against Firestone.

Royal Dutch Shell received help from the Nigerian government  to explore for oil. Protesters were rated, beaten and executed by the government.

The Court found Royal Dutch Shell is subject to liability as there was substantial cooperation between the government and Royal Dutch Shell.

Other lawsuits: In 2007, the U.S. Supreme Court decided that green house gases are an "air pollutant" and that harms associated with climate change are serious and well recognized. Massachusetts v.  EPA, 127 S.Ct. 1438, April 2, 2007. (No.05-2110).


Dismissed Lawsuits

Case Morefield v. Excelon Services Inc. 204-SOX-00002 (Jan 28, 2004) Bulyanhulu Gold Mine incident in Tanzania and Barrick Gold Corp. of Canada Aquinda v. Texaco, Inc.  945 F.Supp. 625, (S.D.N.Y.,1996)
Law Sarbanes Oxley Act of 2002, § §  806, 1107 World Bank Group Standards Environmental Protection Acts and Norms.
Synopsis In the USA, a public company must establish anonymous whistleblower hotlines for employees of its public entity and its public and non-public subsidiaries in the U.S. This law does not appear to apply outside of the U.S.  Carnero v. Boston Scientific Corp., 2004 U.S. Dist. Lexis 17205 (D. Mass. August 27, 2004); Cocone v.  Capital One Financial Corp., 2005-SOX-00006 (Dec. 3, 2004).  Canadian Mining company received money from World Bank (Multilateral Investment Guarantee Agency) to create mine and bring in potable water in Tanzania. Small scale miners were ordered by the government to leave. They did not and were buried alive during land clearing activities. After an investigation, official decided there was not enough evidence to try the Canadian mine company. The people of a community in Ecuador sued Texaco and Ecuador's state-owned oil company for damages to the environment  caused by decades of oil exploration and extraction. The court dismissed for forum non conveniens (not a convenient court: the case would be better heard in Ecuador) and because the plaintiffs did not include the Ecuadorian government with Texaco when it sued.


Analysis of lawsuits over CSR:


There are two points where a business manager should take care: Codes of conduct should be adopted carefully, with full consideration of the activities and interactions that arise from it.  Secondly, lawsuits are disruptive to business operations and profitability. No one is in the business of being sued. It is better to ensure a business is operating above the letter of the law than at or below it. One ways to do this is by integrating the triple bottom line into current business activities in ways that meet the financial goals of a company by bettering the environment and society.


Sources (this list excludes linked sources):

  2. Cecile Baudon et. al., 2004 Global Forecast of Environmental, Health & Safety Policy and Regulatory Developments Impacting Industry, Transparency (2004) available at ehstrends.com/2004Forecast_Transparency.htm (last visited September 27, 2006). 

copyright Laura Musikanski laura.musikanski@gmail.com