Environment

At the heart of many 'impact on society' questions is what economists describe as externalities and the rest of us call "who pays?". The difficulty comes from what we all call 'freeloaders'. On environmental questions, it means one company cannot voluntarily take on the costs of disposing of its products once the consumer has finished with them, if that puts up the overall cost, for fear of a less responsible competitor undercutting. Overcoming the problem requires legislation to create a level playing field, followed by industry cooperation to create the solution. (The former without the latter caused the fridge mountain.) Legislating to internalise the cost has the extra advantage of giving producers an incentive to plan for the complete life cycle, reducing materials, removing nasty substances and simplifying design to aid dismantling.

According to the Environmental Services Association, the UK will fail to meet its 2015 goal of recovering two thirds of municipal waste, falling short of targets by 11m tonnes. It says member companies are willing to invest up to £1bn a year to capture more material and energy from waste. This is big business indeed - and business that lends itself to added social impact through community groups, which can often find alternative routes to market for reused goods, and create jobs for often low skilled tasks in refurbishing. The DARP report highlights the potential and some of the problems - such as lack of training and even shortage of tools to dismantle certain equipment. That needs the support of large manufacturers - another case where focused community support can help the company meet both its commercial and social goals.

Although industry partnerships can be difficult to create and sustain, the solution to many CSR issues lies outside the boundaries of a single firm. If firms don't act voluntarily, pressure mounts for state intervention. In this area, where 'reduce, reuse, recycle' is the prescription, companies can tackle the first and third, with a bit of legislative encouragement. The social sector can deliver the second and help achieve the third.