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Technology, Business and Society Programme Paper 3: Corporate Environmental Responsibility in Singapore and Malaysia: The Potential and Limits of Voluntary Initiatives

1 Aug 2001

  • Authors: Martin Perry, Sanjeev Singh

In the 1990s, many transnational corporations took steps to improve their environmental record through "self-regulation" and "voluntary initiatives", arguing that this was a better approach to sustainable development than reliance on government regulations. This paper examines the experience of voluntary environmental initiatives in Malaysia and Singapore. Based on survey findings, it identifies the influences and pressures underpinning such initiatives; examines the types of action taken, and considers the extent to which they may substitute for other forms of environmental regulation.

In both countries, TNC affiliates are under pressure from Western-based parent firms to raise their environmental standards. But substantive measures to improve corporate environmental performance are still limited to a small proportion of companies and to specific industrial sectors. So-called "win-win" scenarios, where voluntary improvements can benefit both the environment and a company's attempts to cut costs, are also found to be less relevant than is often claimed.

The study finds that several drivers of environmental initiatives in Singapore, including community pressures, are relatively weak and that most firms regard compliance with minimum regulatory standards as a sufficient indicator of environmental responsibility. Although per capita incomes in Singapore now exceed those of many Western countries, corporate and public interest in environmental responsibility is relatively weak.

Paradoxically, in less-developed Malaysia, public environmental concern and pressure on business appears to be greater and voluntary environmental initiatives have been more pronounced in high-pollution sectors. This may be linked to the less consistent enforcement of regulation as well as the greater risk of community action against environmental infringements.

In conclusion, the paper finds that, at the present time, voluntary corporate environmental action cannot be an effective substitute for government regulation.

Furthermore, signs that some TNCs are adhering to performance standards above local regulatory requirements should be viewed as an opportunity to tighten regulation.

Martin Perry is a former Professor in the Department of Geography at the National University of Singapore, and presently is a Senior Research Analyst for the Department of Labour, New Zealand. Sanjeev Singh is a Ph.D. scholar in the Department of Geography at the National University of Singapore.

Order PPTBS 3 from UNRISD ($5 for readers in the North; $2.50 for readers in the South).