Transcript Sustainability

Business & Society
Ethics, Sustainability, and Stakeholder
Management
Eighth Edition
Archie B. Carroll
Ann K. Buchholtz
© 2012 South-Western, a part of Cengage Learning
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Chapter 15
The Natural
Environment as
Stakeholder
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Learning Outcomes
1. Discuss the concept of sustainability.
2. Describe ten major natural environment issues.
3. Describe the NIMBY environmental problem.
4. Discuss the roles that business and government play
in environmental issues.
5. Explain the concept of environmental ethics.
© 2012 South-Western, a part of Cengage Learning
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Chapter Outline
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The Sustainability Imperative
A Brief Introduction to the Natural Environment
Impact of Business upon the Natural Environment
Responsibility for Environmental Issues
The Role of Governments in Environmental Issues
Other Environmental Stakeholders
Business Environmentalism
The Future of Business: Greening and/or Growing?
Summary
Key Terms
Discussion Questions
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The Sustainability Imperative
Externalities
• Side effects or by-products of actions that
are not included in standard cost
accounting systems.
• Businesses used to label the environment
an externality and paid no attention to the
damage they caused.
 Businesses still pose hazards to the
environment, in spite of much effort.
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The Sustainability Imperative (continued)
Sustainability
• Business that meets the needs of the
present without compromising the ability
of future generations to meet their own
needs.
 Focuses on the creation of a good quality
of life for both current and future
generations of humans and nonhumans.
 Know the Six Principles to Sustainable
Success.
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Introduction to the Natural
Environment
Humans are part of their natural
environment.
The environment is extremely complex.
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Important and Helpful
Environmental Terms
Environment
Cycle
Carbon Neutral
Threshold
Carrying Capacity
Pollution
Entropy
Irreversibility
Ecosystem
Sustainability
Niche
What are the top 10 environmental issues?
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Climate Change
Climate change
• Also known as global warming
Greenhouse effect
• The prevention of solar heat absorbed by
our atmosphere from returning to space.
 Nearly all legitimate scientists fear the
possibility of swift and radical climactic
changes
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Energy
 A major environmental issue is energy
inefficiency, wasting nonrenewable sources
of energy.
Addressing energy efficiency
• Use as little energy as possible
• Shift to renewable sources
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Solar
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Wind
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Hydroelectric
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Biomass
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Water
Degradation of oceans and waterways
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Municipal sewage
Industrial wastes
Urban runoff
Agricultural runoff
Atmospheric fallout
Overharvesting
Dam sedimentation
Deforestation
Overgrazing
Over-irrigation
 The world is facing water bankruptcy
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Biodiversity and Land Use
Biodiversity
• The variation of life forms inside an
ecosystem.
 Because of human activity, biodiversity is
being lost at 1,000 times higher than the
natural rate.
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Land Use
Land degradation from human use
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Desertification
Deforestation
Overgrazing
Salinization
Alkalization
Soil acidification
Urban sprawl
Soil sealing
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Chemicals, Toxics and Heavy
Metals
Toxic substances
• Chemicals or compounds that may present
an unreasonable threat to human health and
the environment.
• Two main problems:
1. We are not always aware of the effects of
exposure to chemicals.
2. Toxic substances can be associated with
industrial accidents, causing unforeseen
widespread biological damage.
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Air Pollution
Effects of air pollution
 Acid Rain
 Global Warming
 Smog
 Depletion of the ozone layer
 Serious respiratory illnesses
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Ozone Depletion
Ozone depletion
• Ozone is harmful near the surface of the
earth, but vital in the atmosphere.
• It blocks dangerous ultraviolet radiation
from the sun.
• Decrease in stratospheric ozone comes
from human use of CFCs and other
chemicals.
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Oceans and Fisheries
Watershed
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An area that drains to a common waterway.
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Business activities are associated with
significant damage to a number of coastal
ecosystems, including salt marshes, mangrove
swamps, estuaries, and coral reefs.
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The oceans are running out of fish to meet
human needs.
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Conservation efforts have helped some species
recover.
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Deforestation
Deforestation
• Adds to soil erosion problems and is a
major contributor to the greenhouse effect.
 Costs money.
 Plays a key role in global warming.
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Responsibility for Environmental
Issues
Wicked problems
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Problems with characteristics such as
interconnectedness, complexity, uncertainty,
ambiguity, conflict, and societal constraints.
Tragedy of the commons
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A “commons” is a plot of land available to all.
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Constraints must be placed on the use of the
commons (i.e., our environment) because selfinterest is likely to lead individuals and
organizations to behave in ways that will not
sustain our shared resources.
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The NIMBY Problem
Not in my Backyard: NIMBY
• Human denial of responsibility for misuse
of the environment.
• Entities causing environmental pollution
are not identified as the sources of the
problem.
• A NIMBY attitude avoids or denies the
root cause of the damage.
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The Role of the U.S. Government in
Environmental Issues
U.S. Government Response
• Environmental impact statements (EISs)
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Reports of studies explaining and
estimating the environmental impacts of
questionable practices and proposing
alternatives to these practices.
• National Environmental Policy Act
(NEPA)
• Environmental Protection Agency (EPA)
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Air Quality Legislation
 Clean Air Act
• Emissions trading (Cap and trade)
• Intended to reduce a particular pollutant
over an entire industrial region by
treating all emission sources as if they
were beneath one bubble.
• A business can increase its emissions in
one part of a plant or region if it reduces
its pollution by as much or more in
another part of the plant or region.
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Water Quality and Land-Related
Legislation
Water quality legislation
 Clean Water Act
Land-related legislation
 Toxic Substances Control Act
 Superfund (Comprehensive Environmental
Response, Compensation, and Liability Act
of 1980)
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Endangered Species Protection
• 15,000 species are considered to be
threatened with extinction.
 Endangered Species Act (ESA)
• Stakeholders argued that the ESA was
weakened under the Bush
administration.
• Obama has been more ESA-friendly
than Bush was.
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International Government
Environmental Responses
 United Nations Environmental Programme
(UNEP)
 Montreal Protocol
 Global Waters Assessment
 Global Compact
 Global Reporting Initiative (GRI)
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Other Environmental Stakeholders
Environmental interest
groups:
Radicals
Mainstreamers
Accomodators
Ecoterrorists
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Other Environmental Stakeholders
(continued)
Green consumers
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Actual and potential customers of retail who
express preferences for products, services, and
companies that are perceived to be more
environment friendly than competitors.
Green employees
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Employees play a major role in promoting
environmentalism at work.
Green investors
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A growing number of mutual funds, stock and
bond offerings, money market funds, and other
financial instruments have included
environmental components.
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CERES Principles
1. Protection of the biosphere
2. Sustainable use of natural resources
3. Reduction and disposal of waste
4. Energy conservation
5. Risk reduction
6. Safe products and services
7. Environmental restoration
8. Informing the public
9. Management commitment
10.Audits and reports
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Business Case for Sustainability
1. The upside benefits: Innovation and
entrepreneurship that can help a firm gain
a competitive edge.
2. The downside risks: Companies that do
not care for the environment risk incurring
society’s wrath.
3. The right thing to do: Sustainability is the
only option.
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Cost-Benefit Analysis
Cost-benefit analysis
• Costs are totaled and compared with
overall benefits. If benefits are sufficiently
greater than costs, the project is given the
go-ahead; if not, it is shelved, revised, or
scrapped.
• Helps managers decide which projects to
undertake and which to forego.
• Is used frequently in natural environment
policy decisions.
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Triple Bottom Line
Triple Bottom Line (TBL)
• A form of reporting that covers social and
environmental performance in addition to
economic performance.
 Forces corporations to focus not only on
financial performance but also on the ways
in which the company either adds to or
detracts from society and the environment.
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Systematic Business Responses to
the Environmental Challenge
 Crisis management
 Issues management
 Stakeholder management
 Sustainability
 Strategic environmental management
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Key Terms
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Acid rain
Air pollution
Biodiversity
Carbon neutral
Cap and trade
Ceres Principles
Clean air act
Clean water act
Climate change
Cost-benefit analysis
Deforestation
Ecoterrorists
Emissions trading
• Endangered Species
Act (ESA)
• Energy inefficiency
• Environment
• Environmental Impact
Statements (EISs)
• Environmental
Protection Agency
(EPA)
• Externalities
• Fossil fuels
• Global Compact
• Global reporting
initiative
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Key Terms (continued)
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Global warming
Green values
Greenhouse effect
ISO 14000
Montreal Protocol
NIMBY
Ozone
Strategic Sustainable
Management (SEM)
• Superfund
• Sustainability
• Toxic substance
• Toxic substances
control act
• Tragedy of the
commons
• Triple Bottom Line
• Watershed
• Wicked problems
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