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Waste Management
- CSR Engagement within the Construction Industry in Sweden
Master Thesis within Business Administration Author: Anna Nordlander & Jelena Tararyko Tutor: Prof. Tomas Müllern
Acknowledgements
The authors of the thesis want to acknowledge all the people who made it possible for us to conduct this research. Firstly, we want to thank our thesis supervisor Professor Tomas Müllern, for motivation, guidance and always constructive criticism, which kept encourag-ing us to produce the best research paper possible. We also want to show appreciation to all the interview respondents who found time in their busy schedules to answer our ques-tions, we could not have attained the results we have and fulfilled our research objectives without the information and help provided by these people and companies. Finally we would like to thank our families and friends for their patience, support and encouragement during the course of writing this thesis.
Anna Nordlander & Jelena Tararyko
Jönköping, May 2011Master Thesis within Business Administration
Title: Waste Management –
CSR Engagement within the Construction Industry in Sweden
Authors: Anna Nordlander Jelena Tararyko Tutor: Prof. Tomas Müllern Date: May 31, 2011
Subject terms: Construction Industry, Corporate Social Responsibility (CSR), Demolition
Projects, Environmental Management, Environmental Disclosure, Waste Management, Competitive Procurement
Abstract
Introduction:
Over the last few decades there has been a great increase in the attention to Corporate So-cial Responsibility. Organizations that up until recently have had profit maximization and shareholder value as their only concerns have found themselves in a position where stake-holder demands have created pressure to produce and act on sustainability agendas. Con-cepts like intergenerational equity, wealth distribution, equality and macroeconomic stability became a part of everyday business language and these days the majority of firms com-municate a variety of CSR related issues through annual or separate sustainability reports. Up until recently the construction industry has managed to avoid such demands, however lately, the pressure from various stakeholders such as society, activist groups, governments and external competition, has put the industry among the more environmentally sensitive sectors. Although industry wide CSR involvement has increased within environmental con-struction management, much is still left to be done.
Problem:
One area which has received little attention is recycling after demolition. Most companies focus on making new building projects as environmentally friendly as possible, however hardly any attention is geared towards what happens to old buildings being torn down and the lifecycle of the old material. Although construction companies have the legal obligation to recycle hazardous material, much can be improved within the other areas especially re-garding the reusing of materials from the demolishing sites which means both environmen-tal and economical aspects are so far being overlooked.
Purpose:
The authors aim to examine the complexities and challenges facing the construction indus-try in environmental management of demolition projects, and more specifically the effect this has on the recycling and reusing of materials.
Methodology:
In order to research the waste management practices on demolition sites the research em-ploys interview studies conducted through qualitative mostly face-to-face and a few tele-phone interviews. Complementary cases were selected within different categories of the construction industry sectors related to demolition projects: client, construction, demoli-tion and waste management companies‘ employees were interviewed.
Conclusion:
The results show that companies within the construction industry realize the potential neg-ative effects their line of business has on the environment. Sustainability agendas in all cas-es focus extensively on environmental management, which includcas-es proper disposal of demolition waste. The main benefits for recycling and reusing (in some cases reselling) the material were financial incentives and generated competitive advantage, which resulted in better competitiveness concerning procurement. The main challenges identified are time and monetary constraints. Lack of regulation, common standard that would enable firms to compete equally, and lack of common effort and cooperation towards more efficient waste management practices on demolition sites were identified as main hindering factors for in-dustry wide improvement.
Table of Contents
1
Introduction ... 1
1.1 Research Questions ... 3 1.2 Purpose ... 3 1.3 Definitions ... 32
Methodology ... 4
2.1 Research Perspective ... 4 2.2 Research Philosophy ... 6 2.2.1 Epistemology ... 6 2.3 Research Design ... 7 2.3.1 Research Approach ... 72.3.2 Research Strategy: Qualitative Interview Study ... 8
2.4 Primary Data Collection Method ... 8
2.4.1 Sample Selection... 8
2.4.2 Interview Technique ... 11
2.5 Secondary Data ... 12
2.6 Trustworthiness of the Collected Data ... 12
2.7 Data Analysis and Interpretation Method ... 13
2.7.1 Summarization ... 13 2.7.2 Interpretation ... 14 2.8 Validity ... 14 2.9 External Validity ... 15
3
Frame of Reference ... 16
3.1 Research Model ... 163.2 Research Model: Purpose ... 17
3.2.1 Projecting a Positive Corporate Image ... 17
3.2.2 Mitigation of Negative Effects and Negative Publicity ... 18
3.2.3 Compliance with Regulations ... 18
3.2.4 Long Term Risk Management ... 19
3.2.5 Utilizing the Resources ... 19
3.3 Research Model: Implementation ... 20
3.3.1 Planning ... 20
3.3.2 Governance ... 22
3.3.3 Execution ... 22
3.4 Research Model: Outcomes ... 23
3.4.1 Outcome Communication ... 23
3.4.2 Environmental Disclosure ... 24
4
Empirical Findings ... 26
4.1 Purpose ... 26
4.1.1 Assumed Values of CSR ... 26
4.1.2 Assumed Values of Environmental Management ... 27
4.2 Implementation ... 28
4.2.1 Planning: Corporate Sustainability Agendas ... 28
4.2.2 Governance ... 30
4.2.3 Execution ... 31
4.3 Outcomes ... 34
4.3.2 Communication: Environmental Disclosure ... 35
4.3.3 Values of Practices and Communication ... 37
5
Analysis ... 39
5.1 Purpose ... 39
5.1.1 Assumed Value of CSR ... 39
5.1.2 Assumed Values of Environmental Management ... 40
5.2 Implementation ... 41
5.2.1 Planning: Corporate Sustainability Agenda ... 41
5.2.2 Governance ... 42
5.2.3 Execution ... 43
5.3 Outcomes ... 45
5.3.1 Practices: Environmental Management ... 45
5.3.2 Communication: Environmental Disclosure ... 46
5.3.3 Values of Practices and Communication ... 48
6
Analysis Overview and Conclusion ... 49
7
Industry Implications ... 53
8
Discussion & Further Research ... 54
References ... 56
Figures
Figure 2.1 Sampling Criteria... 9Figure 2.2 Research Model. ... 13
Figure 3.1 Research Model. ... 17
Figure 4.1 Extended Research Model: Empirical Findings. ... 26
Figure 4.2 Environmental Impact of Project Development. ... 32
Figure 4.3 Example of Key Figures for JM AB’s Annual Report ... 36
Figure 6.1 Initial Theoretical Research Model ... 49
Figure 6.2 Research Based Model ... 51
Tables
Table 2.1 Interviewed Companies by Industry Sector ... 101
Introduction
CSR is the commitment of business to contribute to sustain-able economic development, working with the employees, their families, the local community and society at large to improve their quality of life, in ways that are both good for business and good for (international) development.
World Bank (cited in Blowfield & Murray, 2008)
Corporate social responsibility has been studied to a great extent since the term was coined in the 1950‘s by H. R. Bowen (Valor, 2005). Ever since the middle of the twentieth century sus-tainability issues have become more debated and business‘ obligations to operate in a sustain-able manner have changed the corporate world forever (Garriga & Mele, 2004). Firstly the environmental pollution and negative effects on the ecosystems was acknowledged, and so-cial and economic aspects that followed throughout the years have completed what is now called the triple bottom line of corporate responsibility. Concepts like intergenerational equi-ty, wealth distribution, equality and macroeconomic stability became a part of everyday busi-ness language. The result is that ―the last 15 years have seen an increase in the production of corporate social responsibility (hereafter CSR) reports in many ―developed‖ world econo-mies‖ (Bebbington, Larrinaga and Moneva, 2008). The idea is that in order for a company to be sustainable ―it must be financially secure, minimize, or ideally eliminate, its negative envi-ronmental impacts, and it must act in conformity with societal expectations‖ (Juholin, 2004). ―Heightened corporate attention to CSR has not been entirely voluntary. Many companies awoke to it only after being surprised by public responses to issues they had not previously thought were part of their business responsibilities‖ (Porter & Kramer, 2006). Up until then the only responsibility of business was doing business successfully, as widely advocated by Milton Friedman (1970), hence firms have felt no external pressures to act in ways which concern anything but profit maximization.
Suddenly corporations found themselves in the middle of what many of them may have in-terpreted as a minefield. Different groups and actors in the market had the potential stake and hence a possibility to evaluate and in one way or another influence or be influenced by corporate performance (Freeman, 1984; O‘Connor & Spangenberg, 2008). Companies found themselves accountable for their actions and hence needed to legitimize the corporate behav-ior and decisions (Wilhurst & Frost, 2000).
Furthermore, not only companies themselves have been subjected to higher demands on the CSR front, the entire logistics and the supply chains were expected to adhere to a certain sat-isfactory standard (Brown, 2005). When considering ones‘ suppliers, business partners and contractors, firms now have to ensure there are no severe social or environmental violations. Competitive procurement is hence strongly affected by the ways companies address the sus-tainability issues. For this reason a lot of organizations require suppliers and contractors to adhere to codes of conducts and sustainability agendas as one of the conditions for the part-nership (Brown, 2005).
In general CSR implementation can be linked to rather wide range of benefits which organi-zations can attain. Various literature suggests that companies utilize CSR in order to create positive corporate image (Wigley & Pfau, 2010), save money (Lovins, Lovins & Hawken,
2000), comply with current and impending regulations (Porter & van der Linde, 2000), gain competitive advantage over the rivals (Lovins et al., 2000) etc. The construction industry is no exception and all those benefits can be pursued through various forms of corporate sus-tainability. Up until recently the construction industry has managed to avoid such CSR de-mands, however lately, the pressure from various stakeholders such as society, activist groups, governments and external competition, has put the industry among the more envi-ronmentally sensitive sectors (Toms, 2002). The construction industry in Sweden has also seen intensification in CSR reporting during the last years. Given the nature of business of the industry, environmental sustainability has been paid a lot of attention. With both internal and external stakeholders putting pressure on the companies to improve, mainly environ-mental, aspects of the corporation, suddenly construction and demolition companies are competing to be the ―greenest‖ and use various means to show how they excel especially within environmental activities accomplishments within the CSR field.
Although industry wide CSR involvement has increased within environmental construction management, much is still left to be done. One area which has received little attention is re-cycling after demolition. Many of the large companies, Skanska, NCC, Peab and JM, focus on making new building projects as environmentally friendly as possible, however hardly any at-tention is geared towards what happens to old buildings being torn down and the lifecycle of the old material. Only one out of these companies has mentioned this type of recycling in their CSR reporting, but after showing one great cost-effective example there has been no sign of the company implementing similar methods in later projects (www.skanska.se). Alt-hough construction companies have the legal obligation to recycle hazardous material, much can be improved within the other areas especially regarding the reusing of materials from the demolishing sites, which means both environmental and economical aspects are so far being overlooked.
The reasons behind such practices are not extensively researched and the information as to why companies are not practicing (or simply not reporting) reusing and recycling materials from demolition sites more intensively are not known. There may be many possible practical and theoretical explanations. Companies might be facing various challenges and barriers due to various internal and external factors and complexities. As there is almost no research to be found concerning this particular issue within construction industry, and given the intensifica-tion of CSR within it, not only on a naintensifica-tional Swedish but also on the internaintensifica-tional EU level, conducting such study is very interesting from both theoretical and practical points of view. The results are likely to unveil the difficulties construction industry is facing and the factors that hinder a more efficient environmental policy implementation. Furthermore the authors hope to identify what the companies consider to be important, as well as what issues could be addressed by the society, industry and the government or international officials so that the practices within demolition projects could become more sustainable.
The main interest is to get an in depth view of how the general principles of corporate sus-tainability work within this specific setting. Hence, the authors aim to identify and explain the complexities and challenges facing the construction industry and the effect this has on the re-cycling and reusing of materials on demolition sites. Whether CSR and environmental man-agement has impact on chances regarding competitive procurement, and what other values can be generated for firms by extensive CSR involvement and implementation within the Swedish construction industry.
1.1 Research Questions
What is the potential value of sorting used material and utilizing it in other projects within or outside the company?
What role does CSR play in competitive procurement of a demolition contractor? What are the current challenges and practices, regarding environmental management
of demolition projects?
1.2 Purpose
The authors aim to identify and explain the complexities and challenges facing the construc-tion industry in environmental management of demoliconstruc-tion projects, and more specifically the effect this has on the recycling and reusing of materials.
1.3 Definitions
Corporate Social Responsibility (CSR or Corporate Sustainability) – ―is company‘s
commitment to minimizing or eliminating any harmful effects and maximizing its long-run beneficial impact on society. The dimensions of CSR […]specify important areas of respon-sibility, such as obeying laws and ethical norms, treating employees fairly, protecting the environment, and contributing to charities‖ (Petkus and Woodruff, 1992, cited in Mohr, Webb, & Harris, 2001).
Environmental Management (Environmental Sustainability) - ―involves using scientific
insights to reduce the environmental footprint of an organization‘s operations and products […] doing so can help to address issues including the earth‘s diminishing supply of nonre-newable resources and capacity to absorb the waste from our production and consumption‖ (Helsin & Ochoa, 2008).
Environmental Disclosure – ―disclosures relating to the company‘s attitude, policy or
be-havior towards its environmental impact, emissions, pollution, cleaning up (after pollution), re-landscaping or energy efficiency‖ (Campbel, 2004).
Demolition Project – actively pulling down a decommissioned building or part of a building
to reuse the ground or interior in a more advantageous way
Waste Management – recycling and reusing the non – degradable by products generated
throughout business operations and product lifecycle.
Competitive Procurement – ―contractual acquisition (purchase or lease) by an organization
of any kind of any kind of asset, whether material (goods, products or construction) or im-material (services) with appropriated funds, enabling all deemed responsible sources to com-pete in a fair and open environment‖ (Civil Engineer Online Magazine, 2011).
2
Methodology
2.1 Research Perspective
The original intent of CSR was to ―open business thinking up to a wider societal agenda, to spur the introduction of the necessary management systems, to create information-rich con-nections across global supply chains, to transform cultures and paradigms, and, ultimately, to better inform the global push towards more sustainable forms of development‖ (Global Re-porting Initiative: Learning Series, 2010). What it was not primarily meant for is to create jobs for consultants and sustainability report writers or justify CSR department formation. How-ever current CSR practices often open up a lot of questions about the extent companies are fulfilling that purpose.
Different pressures from various stakeholder groups described by the stakeholder theory (Freeman, 1984) are one of the drivers pushing corporations to engage in CSR activities. Stakeholders‘ increased demand on corporations forced firms into CSR related activities simply to improve their reputation that way creating a competitive advantage over other firms (Porter & Kramer, 2006, Cormier & Magnan, 1999) and not creating value to the full potential possible.
As Porter and Kramer (2006) suggest ―corporations are not responsible for all the world‘s problems, nor do they have the resources to solve them all‖. However trying to respond to different stakeholder groups‘ demand and respond to the world‘s environmental, social and economic problems, firms do try to tackle as much sustainability related issues as they possi-bly can. Often it seems corporations are simply ―checking boxes‖ through a set of standard rules used to obtain the level of responsible corporate citizenship required by society and stakeholders (Porter & Kramer, 2006).
Given these circumstances it is no surprise that different sustainability claims and reported actions are questioned and often brought to public discussions. Critique of commitment and sincerity, especially of corporations with enormous amounts of financial and human re-sources to expend on sustainability issues, is very common and accusations of ‗window dress-ing‘ commonly appear in the media. Cormier and Magnan (1999) have identified that ―there is some evidence that firms in good financial condition choose to disclose more than firms in poor financial condition‖. However it is hard to tell in such cases if firms are doing better in terms of sustainability or if they simply have more available resources to invest in acting on and communicating their CSR.
Some stakeholder groups, oftentimes activists, NGOs, media accuse corporations of abusing CSR and turning it into a public relations tool and they perceive the actions as an evil mean to cover up too many wrongs with a few rights; others believe firms are doing the bare min-imum in order to avoid real commitment and integrity, and finally question the credibility and trustworthiness of CSR activities.
―Social investment by a firm, as with any individual, may arise from two types of motivations: altruistic and egoistic‖ (Husted & de Jesus Salazar, 2006). Whether one is worthier than the other depends mostly on perception and interpretation of the definition of a socially respon-sible firm and which way of thinking one applies when evaluating CSR performance.
One of the main questions when assessing CSR activities of firms is whether the intentions matter. There is a major disagreement on whether it is important that the corporation engag-es in sustainability simply because it seengag-es a potential benefit or if it doengag-es it sincerely to im-prove overall environmental, economic and social conditions. The disagreement and
explana-tions for different noexplana-tions can be found in modern moral philosophy used to assess the cor-porate social responsibility activities. Two rather opposite beliefs could explain the two ex-tremes often emerging in CSR research and evaluation of corporate actions regarding social responsibility – utilitarian and Kantian philosophies (O‘Sullivan, 2010).
Kant‘s main argument for morally good action is the initial intent. He claims that the sole cri-terion for this is a selfless good intent or as Kant defines it ―good will‖. Utilitarianism, first elaborated in the late 18th century by Jeremy Bentham and refined and restated in a highly in-fluential manner in the mid- 19th century by John Stuart Mill, in contrast emphasizes the outcome of action as the main criteria brought to evaluation (O‘Sullivan, 2010). Only the consequence or the actual outcome is taken into consideration and conclusions of whether the action was right or wrong are drawn exclusively upon that. The way to evaluate an action as right or wrong is the total sum of total utility (well being) that a certain action passes onto society (O‘Sullivan, 2010). Utilitarian approach is oftentimes used by the advocates, such as Milton Freidman, of free market capitalism in order to justify corporations‘ behavior solely based on their self interest. ―The pursuit of self interest leads to the most efficient allocation of society‘s resources and, thus, to maximum social well-being‖ (Wood, 1991).
It is up to every individual and stakeholder group to decide upon what approach, Kantian, utilitarian or mixed, to use when passing judgment on companies‘ CSR activities. The criti-cism of companies‘ insincerity and green washing are good indicators to identify which ap-proach is more popular among various stakeholders. Often, having done well in order to achieve financial benefits or communicating CSR in exchange for higher competitive ad-vantage is not seen as sufficient. This is implicit and is a subject to authors‘ interpretations; however anyone who reads into sustainability reports or official CSR policies will easily no-tice lack of communication in relation to corporate gains.
Consequently one can say that the majority, when evaluating value of CSR, are adopting a philosophy somewhere in between utilitarian and Kantian, something which takes into ac-count the selfless activities as well as positive outcome. Corporations have to genuinely care and give back to society in order to be seen as truly responsible. The corporate intent is one of the most sensitive and largely debated issues in CSR literature and practice.
Even though discussions of moral behavior and business ethics play a major role in CSR re-search and practices, moral evaluation of CSR activities and reporting is not within the scope of the thesis. The authors do not aim to identify and pass judgment upon the motives of un-dertaken sustainability activities in the construction industry in demolition projects. The aim is not to identify whether the intents of corporations are selfish or selfless. The authors in-stead aim to gain an in depth insight into practicalities of undertaking environmental sustain-ability practices from different companies‘ perspective on demolition sites, more specifically in the recycling and reusing of construction waste.
2.2 Research Philosophy
Research philosophy could be defined as a set of researcher‘s attitudes, values, beliefs and perceptions about most suitable ways that should be used in order to produce and develop knowledge (Thomas, 2004). Beginning with the initial idea and throughout the entire research process the authors‘ view of reality has a major impact. The initial formulation of research questions and purpose, research design and the data analysis differs highly depending on the philosophical stands of the authors. Furthermore different approaches to reality and truth, if not properly understood and discussed, can become a source of bias and inadequacies throughout the research process. For these reasons it is ―important to understand and discuss these aspects in order that approaches, congruent to the nature and aims of the particular in-quiry are adopted, and to ensure that researcher biases are understood, exposed, and mini-mized‖ (Flowers, 2009).
2.2.1 Epistemology
Firstly it is crucial to attempt to understand the ways one is engaging in social and natural worlds (Johnson & Duberley, 2000). Research epistemology is ‗what is knowledge and what are the sources and limits of knowledge‘ (Eriksson & Kovalainen, 2008 cited in Flowers, 2009). The epistemology defines what criteria are acceptable in deriving knowledge related to a certain phenomenon of interest, and what criteria can be used to dismiss knowledge as bi-ased or irrelevant. ―Such self comprehension not only entails identifying our epistemological pre-understandings and their philosophical derivation, it also requires us to challenge them by noticing and exploring alternative possible commitments‖ (Johnson & Duberley, 2000). Only being aware of alternative epistemological stands one can truly be sure the made commitment is the best possible for the conduction of the research.
―Positivism is characterized mainly by an insistence that science can deal only with observa-ble entities known directly to experience and is opposed to metaphysical speculation without evidence.‖ (Abercrombie et al., 2000; cited in Thomas, 2004). Saunders, Lewis & Thornhill, (2007) further add that the positivist approach to research is undertaken as far as possible in a value free way. Interpretivism is on the opposite of the epistemological continuum and is of-ten referred to as anti-positivism. The approach suggests that all the knowledge is relevant and that ―the world of lived reality and situation-specific meanings that constitute the general object of investigation […] are constructed by social actors‖ (Schwandt, 1994, p.118; cited in Thomas, 2004, p.44).
Since the area of interest of the thesis is CSR, specifically waste management on demolition sites, it is when it comes to discussing research epistemology one needs to take into account two somewhat separate parts of the subject. First the research is about the environmental management practices (realities) that as noticed through the authors‘ personal experience is allegedly in need of major improvement. And second, the reasons behind the existence of such realities, which include interpretation of perceptions, complexities, challenges that exist in the area.
Taking the two into consideration, neither positivism, nor constructivism appears to fit the purpose perfectly. Both approaches have aspects that are suitable for conducting the study, however both also pre-assume stands that clash with original intentions. Positivism, being more of a quantitative and strictly realistic nature (Saunders et al., 2007), fits the aim to iden-tify the current practices in demolition projects and the waste management. It also fits the value-free approach, as moral evaluation of the CSR actions are not within the scope of the research. However it completely fails to be used in explaining the challenges and extensive reasoning behind implementing such environmental initiatives, as these need to assume
hu-man factors, which are often too complex, and need to be understood and interpreted. Con-structivism in turn seems to fit the research purpose in an inverse way, i.e. provide more ex-planations in terms of softer issues (human behavior within an organization) and fail to ac-count for hard facts and quantifiable information that the authors seek to obtain.
Hence the authors turn to realism, which ―like positivism […] assumes that there is an out-side world that exists independent of our knowledge of it [and] unlike positivism, it does not assume that this world can be known directly without any interpretation on the knower‘s part‖ (Thomas, 2004). It is important for the research purpose to identify both the realities in terms of recycling practices at the demolition sites and interpret the reasons behind them, and most realists do believe in causal explanations (Grix, 2004). Critical realists use scientific theory to describe structures and mechanisms that generate observable phenomena, the de-scriptions enable the researches to explain causal interrelationships between various aspects of area of interest (Grix, 2004). Interpreting causal links from observable outcomes (Kerr, 2003, cited in Grix, 2004) is exactly what the research paper at hand intends to do by finding out the practices of CSR and later attempting to find the causalities that have contributed to such practice creation.
2.3 Research Design
2.3.1 Research Approach
Business research literature suggests two ways to approach a research process: inductive and deductive (Saunders et al., 2007). Deductive research is referred to when testing an existing or assumed hypothesis in order to verify or falsify it (Grix, 2004). Inductive approach on the other hand is described as ―the process by which conclusions are drawn from direct observa-tions of empirical evidence‖ (Landman, 2000, cited in Grix, 2004). According to Saunders et al. (2007) the inductive approach is used to build a theory and draw conclusions from con-ducted research data.
Since there is very little research on the topic the authors have no preset hypothesis to be tested, there is no intention to neither accept nor decline previous research but rather provide new empirical data and draw conclusions from them, which is more of an inductive nature. Even though the research approach most relevant to the study at hand appears to have more similarities with an inductive one, the deductive approach is also relevant to a certain degree. The deductive part of the research involves the assumption raised by the authors that there are some aspects of the waste management on demolition sites that are still in need of im-provement.
The discussion above shows that neither purely inductive, nor deductive approach fits the re-search purposes of this study. The described logics instead fit perfectly with what some au-thors describe as retroduction approach to research. Retroduction is interplay of induction and deduction (Grix, 2004). Ragin (1994, cited in Grix, 2004) advocates that it is impossible to do research without any prior assumptions, which means that almost all research includes at least minor evidence of deduction. The authors believe that retroduction is the most accu-rate description and that even though research is primarily inductive, the important deductive aspects should not be dismissed.
2.3.2 Research Strategy: Qualitative Interview Study
Research strategy selection is guided by the research questions and the purpose, the existing knowledge and recourses available as well as philosophical underpinnings (Saunders et al., 2007). When it comes to research strategy one must consider the methods that are the most suitable to meet the intended purpose. Depending on the research field and research purpose one may choose between conducting the study in a qualitative or quantitative way. Numeric data which can be measured and quantified is used for the quantitative part (Bryman & Bell, 2005) whereas meanings collected through results in non-standardized data is called qualita-tive data collection. In this research form the analysis is requiring conceptualization and cate-gorization (Saunders et al., 2007).
When studying the recycling within the building industry a qualitative study is preferred ra-ther than a quantitative. Hardly any numerical data can be found on the subject and the in-formation is more likely to be easier accessible through less standardized research and non-numeric measures. The researchers aim not only to describe the realities and current practices of waste management on demolition sites, but also getting a deeper insight into the reasons behind such practices. Qualitative research is more useful when trying to identify causal rela-tionship between different aspects of the studied issues (Saunders et al., 2007) as quantitative research often is ―reluctant to move from statements of correlation to causal statements‖ (Grix, 2004). As the authors aim to collect and analyze empirical data from different compa-nies related to demolition and recycling and draw conclusions about the practices and com-panies‘ reasoning qualitative research is more appropriate for this ambition.
Depending on the research purpose and the choices made in terms of qualitative and quanti-tative study methods, one may choose to apply different strategies to address the problem. Some of the strategies are more suitable for qualitative and others for quantitative data collec-tion. As noted before, the research at hand will focus on collecting qualitative primary data and an interview study is one of the more suitable for qualitative research. Furthermore the issues at hand are rather sensitive, corporate sustainability is often related to corporate image and most companies do not wish to disclose any possible drawbacks of their practices in the area. The authors believe that personalized interviews of conversational nature will yield more open and trustworthy results.
As the aim is to get an in depth understanding of the phenomenon of interest, and since there is usually more than one company involved in the majority of demolition projects it seems important to consider different perspectives (those of different sectors in the indus-try). The choice was hence to conduct interviews in several companies in order to identify and explain CSR and the recycling processes on demolition sites. The authors believe select-ing a sselect-ingle company for analysis would not have been enough as it would have provided with very limited data. Interviewing multiple companies however will provide complementary information from different perspectives within the industry and will allow to get individual as well as overall industry-wide overview of the issue at hand.
2.4 Primary Data Collection Method
2.4.1 Sample Selection
―Sample is a group selected from target population from which the needed data will be sought‖ (Groves, Fowlers, Couper, Lepkowski, Singers & Tourangeau, 2004). Sampling is used to narrow down the population (all the companies related to the construction industry in this case) to an attainable number of firms that once researched can provide reliable results
in the matter of interest (Saunders et al., 2007). Companies were chosen so that they will re-flect the various attributes of the population but the aim is not to produce a statistically rep-resentative sample (Thomas, 2004). The firms were selected because they are expected to yield either repetitive or exclusively different data about the demolition projects in Sweden. In order to address the research questions and attain the purpose set for the thesis the au-thors have chosen to apply the criteria below (figure 2.1) when selecting the companies to in-terview:
Country: Swedish based or operating extensively in Sweden Industry: companies related to construction industry
Industry sector: different parts of construction industry sector that has links and re-lates to demolition projects
Figure 2.1 Sampling Criteria.
The authors intend to research the entire process of recycling within the building industry through interviews with different types of companies throughout the chain. The company chain in a typical demolition project is the following: the client, who wishes to develop a new project on a site with an existing building, employs a construction company to be in charge of the construction site. Most construction companies do not have their own department for demolition and will therefore hire a demolition company. They in turn have agreements with waste management companies where the material is being taken care of.
All different companies have a separate role within the demolition project and at the same time they are all interrelated in a loop – like fashion to the practices in terms of recycling and waste management after demolition. This was extremely important when selecting the sample of the research in question.
The sampling for the research was primarily based on gathering information from various parts of the recycling process in demolition sites in Sweden. This was used in order to gain an insight to different aspects on recycling at demolition sites and to get an industry wide under-standing to the practices and issues that occur. Several companies were contacted in each of the categories but the response rate was fairly low. The companies which the authors pro-ceeded to work with were in four different categories (construction industry sectors): client of the construction industry, construction company, demolition company and recycling com-pany. In each company we aimed to interview upper management or executive level employ-ees that are either directly working with sustainability management or have extensive knowledge about it. This includes heads of environmental departments, CEOs, heads of quality control etc.
The clients in the construction industry who responded to the interview are called Fabege AB and AROS Bostadsutveckling AB. FabegeAB is ―one of Sweden‘s leading property compa-nies, focusing mainly on letting and managing office premises as well as property develop-ment‖ (http://www.fabege.se). The company is based in Stockholm and has 126 employees. The respondent for the interview works as a project leader at Fabege AB. Aros Bostadsut-veckling AB is a construction development company situated in Stockholm. Their business idea is to acquire, convert and develop existing commercial buildings and land to attractive
conceptually developed and target group residences
(http://www.arosbostad.se/om_foretaget.aspx). The head of Construction Management and Procurement was interviewed for the research.
The first construction company which agreed to participate is called JM AB (http://www.jm.se). JM‘s environmental director and head of the quality and environmental department describes his company in the following way: ―JM AB is a public company and is on the Stockholm stock exchange. The number of employees in Sweden, Norway, Denmark and Belgium is around 2150 and the revenue of 2010 was around 9 billion SEK. The company is Sweden‘s leading developer of residential buildings and the core business is project development of residential housing as well as commercial buildings in central locations in sprawling suburbs. Great commitment has been focused on quality and environmental questions, which distin-guishes the core business‖ (Andersson, 2011). The second company is called Transab (http://www.transab.se/), a construction, recycling and logistics company based in Jönkö-ping with focus on environmental issues and quality. Transab has about 120 employees and the respondent for Transab is foreman on construction projects.
The demolition company involved in the interview is called Rivners AB and the questions were answered by the CEO. Rivners AB is one of Sweden‘s oldest demolition companies with about 70 employees, which takes on various types of demolition, decontamination and recy-cling work. Rivners also specializes in reselling material from demolition sites to construction companies as well as private persons. (www.rivners.se/sites/rivning.html)
The waste management company is called Sita AB and is one of Sweden‘s largest recycling com-panies and winner of Waste Management Company of the Year by the Swedish Recycling Award 2010. Sita has about 1100 employees but is part of Suez Environment with 62 000 employees worldwide (http://www.sita.se/Ovrigt/om-sita/). The environmental coordinator for Sita answered the interview questions.
Table 2.1 Interviewed Companies by Industry Sector
Industry Sector Company Name Interviewee
Company Size (employees)
Client
Fabege AB Project leader 126
AROS Bostadsutveckling AB Head of Construction Management and Procurement 5 Construction
JM AB Head of the Quality and
Environmental Department 2150
Transab Foreman 120
Demolition Rivners AB CEO 70
Management
2.4.2 Interview Technique
Since the authors aim to closely examine the recycling processes on demolition sites inter-views appear to be the most appropriate. Interinter-views are often used in qualitative studies since using such technique can provide more extensive, in depth information and causal explana-tions (Saunders et al., 2007). Different types of interview techniques can be used: structured, semi-structured, and unstructured (Grix, 2004). Structured interviews are the least flexible of the three and usually consist of predetermined closed questions, the data is then easily to standardize and compare. However such technique leaves very little room for unexpected in-formation that might be relevant (Grix, 2004), therefore the authors do not see such inter-view format fit. The aim is to understand the complexities and causal relations between dif-ferent aspects and structured interviews will not provide such extensive information. Un-structured interviews (interviewer has a few random concepts in mind and lets the interview develop in a conversational form (Saunders et al., 2007) on the other hand seem to be too in-formal for the purposes of gathering specific information on such a narrow area of interest as recycling in certain projects.
Semi-structured interviewing technique seems to fit the purpose of the study at hand the best. Saunders et al. (2003) describe the semi-structured interview as a mean to gather infor-mation and understand relationship between variables. Semi-structured interviews have the necessary balance of predetermined questions that need to be answered and it ―allows a cer-tain degree of flexibility allowing the pursuit of unexpected lines of enquiry during the inter-view‖ (Grix, 2004). Therefore the study will consist of qualitative semi-structured face to face interviews.
To conduct the interviews two types of questions have been used. Some closed (yes or no) questions were used in order to get more descriptive and general information about the com-panies and their CSR practices. In order to get a better insight and extensive explanations open questions were asked. The authors of this study have decided to mainly use open-ended questions since these provide the study with developmental and extensive answers in order to obtain facts and perhaps reveal attitudes within the companies interviewed (Grummit, 1980). The nature of the asked questions can be separated into two distinct parts. The first part of the interview was used to find out more general ideas on companies‘ sustainability agenda, such as the extent and history of CSR agendas, the employee involvement and commitment, standards and forms of reporting, benefits gained and faced challenges. The second part con-tains discussing how the companies specifically deal with CSR within the building industry and demolition sites, for instance the amounts of demolition waste recycled and reused, whether the companies are satisfied with current practices, is there need for improvement, as well as main challenges and likely benefits of environmental management throughout the demolition process. Depending on type of company interviewed (client company, construc-tion company, demoliconstruc-tion company or recycling company) the quesconstruc-tions were a little altered in order to fit the context.
Finally most interviews were conducted face to face and, depending in different cases, lasted from an hour to an hour and a half. A few of the interviews were made through telephone and email correspondence due to the distant location of the offices. The same set up of ques-tions was used for all interviews no matter what form of execution was used and all uncer-tainties were clarified through extensive communication.
2.5 Secondary Data
In order to get an overview of how different companies communicate their CSR activities and what areas are officially reported the authors in addition to conducting primary inter-views with different firms also looked into different print and online sources (annual reports, websites, brochures etc.) that provide such information. Initially parts of the findings were then used as a point of reference when designing certain aspects of the research. The second-ary data partially served as a tool to build up the research topic and the direction of the inter-views. More importantly it was extremely important to identify whether the answers of the interviewees differ significantly or are the same as the officially promoted CSR and environ-mental management agendas and initiatives. The data was also used for backing up and com-paring the data gathered throughout the primary data collection, ensuring trustworthiness and accuracy of the results.
2.6 Trustworthiness of the Collected Data
The authors want to separately address the trustworthiness of the primary data collection method and the material composed through the qualitative interviews. The technique chosen to collect the data was qualitative interviews. The authors believe that taking an hour to an hour and a half to talk to the respondents increases the chance of more in-depth and more reliable results. It is rather difficult to provide inaccurate or misleading information over a lengthy period of time. Additionally this enables access to respondents‘ thoughts about the issue at hand which can lead to some very interesting and unexpected findings.
Nonetheless there is a weak point of the primary data collected that is – unfortunately despite the effort to contact more than one individual for the interviews in the same organization, only one representative from each company was interviewed. This was out of the thesis au-thors‘ control however is very important to address and deal with. The fact may be perceived as a source of bias in the collected material, however understanding this and addressing the issue can somewhat verify the data and strengthen the reliability of the information provided by the interviewees.
Firstly the interviewed people were chosen in such a manner that they most likely hold or have access to the accurate information regarding companies‘ CSR involvement and the envi-ronmental management on demolition sites. The positions included heads of envienvi-ronmental departments, CEO, founders etc. which are executive level employees. The authors believe that interviewing such respondents will enable a collection of trustworthy and accurate data as these people are either directly responsible or have high involvement in sustainability and have an overview of how the business operates in general. This kind of information is partic-ularly useful when answering the research questions related to the general values, benefits and challenges of environmental sustainability planning and implementation.
The authors do realize that interviewing one person can result in data that is exclusively based on the interviewee‘s point of view and is not representative of the entire organization. However the issue was addressed through adding the secondary source of data collection, such as printed brochures, annual and CSR reports and website information. The secondary data was not as extensively used in the analysis and interpretation of the topic at hand. Sec-ondary data was rather used a source of reference and comparison in order to decide whether the answers of respondents and the official company policies of CSR are consistent overall and do not strongly contradict one another.
Finally for the industry sectors where 2 companies were interviewed the authors compared the results in order to see if the companies see the same issues similarly. This was of course
not to exclude the differing points of view as the authors believe individual organizations can vary extensively even when the line of work is the same, however it was important to be aware of whether for example issues as environmental management and procurement are ad-dressed in a similar manner.
2.7 Data Analysis and Interpretation Method
2.7.1 Summarization
First step to data analysis and interpretation process is to reduce the raw dataset in order to condense and summarize them so that they become meaningful in terms of the study pur-pose and research questions (Thomas, 2004). There are various ways to reduce datasets. However it is important to keep a few things in mind: one must seek to summarize data to be more intelligible, with the least meaning lost and in a way so that interrelationships between different variables and aspects of the study can be identified (Thomas, 2004). Qualitative data summarization is different and a little more complex than the statistical and numeric analysis of the quantitative methods. With qualitative data the researcher using various technique pat-terns in the textual materials and condenses a large volume of text into category label, a type or a few sentences (Thomas, 2004).
When choosing which data is significant to include in the dataset narrative the researchers have put the transcribed data into an excel sheet according to the questions asked. Later the data that was common among all respondents was the first set that the authors decided to in-clude. Also common answers, more than (two or more interviewees) have been decided to use as well as it does give a general overview of what majority of the companies consider to be important or true in the industry. Finally exceptionally interesting answers and insights were selected according to the authors‘ perception of that these information may add addi-tional value when explaining the trends and reasoning related to the CSR within construction industry.
In order to systemize and divide into themes the dataset collected and determined significant for the research purpose and the upcoming analysis, the authors use the categories presented in the theoretical analysis model (figure 2.2). Yin (2003, cited in Saunders et al., 2007) de-scribes such data summarization technique as a use of theoretical framework in order to iden-tify the main variables, components, themes and issues of the research and the supposed rela-tionships between them. Using the main categories in the research model derived from the theoretical base of CSR the authors will categorize and organize the transcribed data. Catego-rized and condensed data is later displayed in a narrative manner.
2.7.2 Interpretation
Johnson (2004, cited in Saunders et al., 2007) defines analytic induction as ―intensive exami-nation of a strategically selected number of cases so as to empirically establish the causes of a specific phenomenon‖. Even though the approach of the thesis at hand was identified as retroductive, the tendency of it to lean towards an inductive side, hence the authors find it appropriate to use inductive approach to data analysis technique.
―Inductive, rather than deductive, reasoning is involved, allowing for modification of con-cepts and relationships between concon-cepts occurs throughout the process of doing research, with the goal of most accurately representing the reality of the situation‖ ( Radcliff, 1994). The multiple companies were particularly selected to represent the situation of the CSR prac-tices in construction industry from different perspectives, hence one may claim that the pri-mary intent of the paper is indeed to gain an understanding of what and why is happening on demolition sites when particular organizations are involved. What is more analytic induction is often used to analyze data collected through highly qualitative in-depth interview or obser-vation techniques (Saunders et al., 2007) which goes hand in hand with the research strategy, qualitative interview study of the thesis.
The summarized data will be analyzed in terms of the theoretical framework developed for the research purposes. The data sets once systemically summarized will be divided into dif-ferent categories according to the research model. The research model is further broken down into more detailed categories described in the frame of reference, which will enable an-swering the research questions and meeting the purpose of the study through analyzing the empirical findings in reference to the existing theoretical concepts of corporate social respon-sibility.
The authors will look into the recycling process and attempt to identify existing practices and connections and interrelationships between different companies and the specific industry set-ting. Furthermore the authors aim to compare different sector cases in relation to the cate-gories identified (figure 2.2) in order to identify whether there are significant differences, sim-ilarities or connections between them. The authors also hope that the use of the theoretical framework and the categorization of data according to the model will unveil and help explain challenges and reasons as to why the current sustainability situation on demolition sites is as it is.
2.8 Validity
Validity according to Saunders et al. (2007) is concerned with the error in identifying causal relationship and whether the results are what they appear to be. There are many sources of threat to validity, and small sample interview studies in particular are often criticized for the likelihood of investigator bias and the impossibility of replication (Thomas, 2004). However even the most structured and rigorous data collection techniques cannot guarantee bias-free process. In the study at hand the researchers have identified and are well aware of various is-sues that may threaten the validity of the results.
One of the constraints when conducting the interviews was the language barrier where the respondents felt more comfortable answering the questions in Swedish which in turn opened up for interpretations of translation. However as one of the authors is native Swedish speaker the translation bias had been reduced to minimum, moreover all the interviews were record-ed that way allowing going back and listening to the answers again, making sure no mistakes were made or misinterpretations occurred.
Another constraint regarding the subject as a whole is that the only companies willing to col-laborate are the ones who are ahead regarding CSR issues. The companies who do not work with these issues will most likely want to avoid being interviewed on the topic. Companies are also prone to elaborate on their advantages which could give a one-sided picture of the actual situation. This leads to another complication: only people in certain positions in the company want to answer the questions. Even though the questions were initially designed to be answered by different level employees in the company, almost all of the respondents were in charge of the environmental department or CEOs of the companies. In a few cases em-ployees were unable to answer the questions since they agreed with everything their co-workers had answered. Whether this is because the environmental policies are synonymous with the core values of the company or because these employees were afraid to answer the questions ―wrongly‖ after their supervisors had answered is difficult to tell. It does however give a slightly misguided view of the employees‘ beliefs.
Consequently the authors have not been able to collect data from various levels of the com-pany, which is seen as the major setback for the results validity. Unfortunately this aspect was not possible to deal with and the authors have to accept the possibility of error, and hope for the interviewees to have depicted the CSR practices and situation in an honest and correct matter. The trustworthiness of the results had also been partially attempted to boost by using secondary data and comparing them to the data collected through primary interviews.
Finally, the overall response rate was quite low. More than 15 different companies within the construction industry have been contacted but only a handful of them agreed to take part in the study. This however was not unexpected since the issue studied can be rather sensitive and many organizations might be cautious, not wanting to appear incompetent at managing corporate sustainability (environmental) issues. In order to partially deal with this bias the re-spondents have been allowed to remain anonymous if this is preferred from the company‘s side, however none of the respondents felt the need to use this option.
2.9 External Validity
External validity, also referred to as generalisability, is the concern whether the results of the study can be generalized and applied to other settings or other organizations (Saunders et al., 2007). It is particularly relevant for the research conducting interviews in a small sample of companies as it is very difficult to claim results can apply to other companies than the num-ber of companies that were studied (Saunders et al., 2007). However the authors‘ intention was not to create a universally applicable theory or claim that the situations in the chosen case companies are identical to other actors in the constructions industry in Sweden or other countries, especially given that the area of interest is still rather new and that different com-panies have very diverse ways of managing environmental sustainability. The authors instead have aimed to get a better understanding and insights to what are the CSR practices, drivers and challenges that occur in the demolition projects. Regarding the generalisability aspect the authors agree with the explanation of Stake (1995, cited in Thomas, 2004):
―[…] particularization, not generalization. We take a particular case and come to know it well, not primarily as to how it is different from others but what it is, what it does. There is em-phasis of uniqueness, and that implies knowledge of others that the case is different from, but the first emphasis is on understanding the case itself.‖
3
Frame of Reference
3.1 Research Model
In order to organize and simplify the research design and analysis, the authors have decided to compile a model where it would be clearly shown how the study was conducted and what were the main categories used to address the research questions and the purpose at hand. The main categories were clarified and elaborated through the use of relevant CRS research literature (presented in the current chapter). The research model is later used throughout the entire process, including data collection and findings presentation, and also serves as the base for analysis structure.
As any other business aspect, corporate social sustainability activity can be addressed using the same business perspective (Porter & Kramer, 2006). Most business activities go through the stages of initiating, planning, executing, controlling and closing (Project Management In-stitute, 2000). These are core aspects to any activity or project an organization undertakes: in-tention or purpose is identified, means to achieve the purpose are set and implemented, im-plementation governance and management occurs throughout the project execution, and fi-nally the outcomes are evaluated and communicated. Success of the project is often assessed in terms of how the outcomes have or have not met the initially set objectives and whether contribution to organizations‘ strategy have occurred (Dietrich & Lehtonen, 2005). All these aspects, or steps, may be applied to CSR activities that an organization undertakes. A similar approach is used in order to address the research questions at hand in this research paper, especially since the part of sustainability activity that is of interest (environmental manage-ment on demolition sites) can be easily broken down into single projects. As the demolition itself requires involving different parties and extensive preparation, the work is usually carried out on a project basis that constitutes a more holistic picture of demolition projects and waste management in the Swedish industry. When the need for CSR activities is identified, certain aspirations to the benefits for the company are made and the CSR is agenda com-piled. Later the company undertakes measures to implement the agenda through various lev-els of the organization. The outcomes of the activities later are assessed and evaluated, and depending on the results achieved communicated internally and externally.
Figure 3.1 presents the logic of the research procedure. As the first research question aims to uncover potential value of recycling and proper waste management in demolition projects, the authors believe it corresponds to the purpose of engaging in such CSR activity. All busi-nesses operate in a manner that is profit oriented, and hence no activities are undertaken in a purely selfless way, even those that generate social value (Wood, 1991). After the goal is set
implementation occurs, in this case it consists of planning, governance, and execution. Here is where
most likely one may discover official CSR strategy and policy creation, creation of action strategies and of course, another matter of interest of the thesis, the complexities and the challenges emerging. Finally the outcomes of CSR ‗project‘ in reference to the set goals are evaluated and communicated to identify whether the outcomes are in line with the value as-sumed. Ideally the outcomes of the undertaken sustainability actions meet or exceed the ini-tial expectations and the purpose as well as the official policies derived from those expecta-tions.
Figure 3.1 Research Model.
Further sections of the theoretical framework will address each part of the model separately in the context specific to corporate (environmental) sustainability.
3.2 Research Model: Purpose
As discussed before, organizations make conscious, thought through decisions to undertake certain activities and CSR is no exception. As one of the research questions aims to identify potential values of implementing CSR in construction industry in Sweden, the reasons com-panies undertake sustainability activities in demolition sites are important and can be inter-preted in terms of existing research literature on the topic. There are numerous possible gains generated by engaging in corporate sustainability and the following section aims to cover the most common ones among organizations within (but not limited to) the environmental man-agement. The literature suggests that there are two main incentives for organizations to pur-sue environmental sustainability strategies: adhere to external stakeholder pressures (Free-man, 1984) and internal economic pressures (cut internal costs on energy, materials and waste) (Lovins, et al., 2000). Externally driven pressures are particularly important for firms ―operating in more environmentally sensitive sectors‖ (Toms, 2002).
Long term and future oriented firms are innovative and insightful enough to identify power-ful business opportunities derived from both internal and external pressures for efficient en-vironmental management and doing business in a sustainable manner (Lovins et al., 2000). There are many reasons why it is worthwhile, except for creation of social welfare, doing business in an environmentally sustainable way, among those one can find reputation and corporate image, public relations, long term risk management as well as risk mitigation, cut-ting costs on consumption of energy, water and raw materials, reducing waste etc. (Lovins et al., 2000; Cormier & Magnan, 1999; Reinhardt, 2000; Cormier & Magnan, 2003).
3.2.1 Projecting a Positive Corporate Image
Many organizations use sustainability as a way to associate company image to something pos-itive (good deeds, philanthropy, different areas of sustainability etc.) (Wigley & Pfau, 2010). Lovins et al. (2000) suggest failure to invest and commit to environmentally sustainable busi-ness practices can hit revenues in an indirect way. Companies reporting high level of corpo-rate environmental sustainability tend to gain a competitive advantage over the competitors with weaker sustainability agenda (Lovins et al., 2000). Cormier and Magnan (1999) also sug-gest that firms perceived as irresponsible, oblivious or whose claims of environmental com-mitment are mistaken may lose good name among customers, employees, lenders, and sup-pliers, which may often lead to weaker market position and irreversible harm to company fi-nancials.
In addition to public negativity the risk of losing face can reach as far as terminated contracts, loss of financing and business partners. Many firms today aim to have a sustainable supply chain in order to deliver a truly sustainable product or service to the end customer, and are channeling that in codes of conducts that contractors and suppliers need to adhere to (Brown, 2005). Associating with a corporation that presumably is at fault for severe environ-mental or social damage is likely to damage reputation of the partner firms as well. Hence the need to distance from such firms had grown alongside with the sustainability development.
3.2.2 Mitigation of Negative Effects and Negative Publicity
Wilhurst and Frost (2000) note that ―when activities have an adverse impact upon the envi-ronment, management therefore will seek to re-establish its credentials through the disclosure of additional information‖. Legitimacy Theory is often referred to when discussing corpora-tions‘ sustainability activities and more important activities‘ communication. The legitimacy theory has its roots in a company management‘s need to redeem itself after it has been held responsible for a social, environmental or economical faux pas or as a precaution in order to avoid these and follow societal expectations (Wilmhurst & Frost, 2000). Research shows that there is a positive correlation between an increase in the level of environmental disclosures (mostly positive) and firms prosecuted by the state. This indicates that higher public attention and previous criticism towards certain actions of the organizations often create stimuli for firms to report and communicate CSR more aggressively in order mitigate risks and redeem the good name, especially in industries with generate environmental impact (KPMG, 2005, cited in Blowfield & Murray, 2008).
Benoit (1995; cited in Bebbington et al., 2008) suggests there are different techniques that firms use in their social responsibility reports in order to minimize or shake the offensiveness of corporate actions and the negative outcomes of those actions. Among those is denial, lack of information, unexpected negative outcome, pointing out worst practices etc. The CSR communication in these cases is used as defensive disclosure that is hoped to lessen the ten-sions between the firm and the society and redeem the reputation. Defensive CSR communi-cations approaches however have been widely criticized by CSR literature and are often a source of stakeholder suspicion and negative media exposure. Once negative perceptions have spread damage control through different CSR and PR activities becomes very sensitive and has to be addressed in an extremely discreet manner.
3.2.3 Compliance with Regulations
Given all the recent natural and manmade environmental disasters (e.g. BP oil spill in the Gulf of Mexico, natural catastrophes associated to climate change etc.) sustainable business practices, especially environmental management are becoming central in the corporate re-sponsibility discussions. Governments and Intergovernmental Organizations play a big role in regulating the environmental standards for pollution, waste and energy use. There are dif-ferent ways to do so, such as corporate taxation, hazardous material restrictions, environmen-tal quality standards etc. It is often argued that from a business perspective such actions are putting an intolerable burden on the industry (Mylrea, 2005). However the responsibility for the well being of the environment had been left in the corporate hands for too long and the consequences prove that there have to be changes (Lambert, 2005).
European Union is one example of expanding regulatory base on businesses environmental impacts. Slow but steady shift can be observed in terms of how companies are required to manage the environmental aspects of their daily operations. A good example is European Union Emission Trading Scheme. It works in direction of creating real financial incentives
