MarIus 467: Corporate environmental due diligence and accountability

This thesis is discussing the applicability of internationally-accepted environmental principles to transnational corporations (TNCs), the main questions being 1) what normative guidelines are there for TNCs’ environmental responsibility in a global context, and 2) is there any form of effective accountability for TNCs in this regard?

The outlined questions are relevant because they involve international norms relevant to TNCs’ activities. In an increasingly globalised world economy where multinational enterprises are the main sources of international investment, it is important to question if there are global norms that apply to their operations, especially since not all states are fully able or willing to adequately regulate the activities of TNCs. This is a particularly pressing issue in the field of international environmental law. The main reason for this is because the effects of environmental damages can be irreversible and consequently deprive possibilities from future generations. Thus in environmental law, as opposed to other areas of law, time is of an essence. In this field one may not have the luxury of waiting for binding, better and clearer norms to develop, because when they do it may be too late to change the course of history.

The increasing levels of investment by powerful TNCs into poor and often corrupt developing states are particularly problematic. Many developing states do not have effective legal institutions, so even if they have regulations, there may be no effective ways of implementing them. Moreover, developing countries are hard pressed to attract foreign investment in order to develop their economies, and this has been claimed to press down the level of regulation.[1]

For these reasons it becomes two highly relevant questions if there are international environmental standards that apply to TNCs’ operations, and if there are any way of holding them accountable for these norms. Global minimum standards would also avoid the much discussed problem of the prisoners’ dilemma, where the ethical multinational corporations are at a competitive disadvantage in comparison to less ethically developed competitors.


Chapter one will address the applicability of principles of international environmental law to TNCs. It aims to demonstrate that the principles of sustainable development, prevention and precaution contain universal elements that apply to multinational enterprises as participants to the international legal order.

Chapter two analyses the OECD Guidelines’ environmental standards for TNCs. It illustrates that international environmental law defines and clarifies the content of corporate environmental obligations under the Guidelines.

Chapter three looks at the implementation of corporations’ environmental responsibilities in the NCP system. It demonstrates that the NCP system is a partially functioning accountability mechanism, in need of reform.

Chapter four outlines the Council on Ethics’ interpretation of TNCs’ environmental obligations. It focuses on the Council’s practices in relation to what kind of damage TNCs are responsible to avoid, and what they should undertake in order to avoid it. 

The conclusion summarises the most important aspects of TNCs’ environmental ethical responsibility, as well as their level of implementation.

Moritz-Olsen, Ragnhild Rath: Corporate environmental due diligence and accountability. 2016. (164 p.)

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Tags: Corporate environmental due diligence, accountability
Published Sep. 18, 2016 5:58 PM - Last modified Mar. 9, 2021 3:35 PM