Transcript 3031 F2008 Chpt 14

Defining Environmental Ethic
and Sustainable Development


Environmental ethic: the set of values or
principles that govern a corporation’s
practices relating to the environment.
Sustainable development: development
ensuring that the use of resources and the
impact on the environment today does not
damage prospects for the use of resources or
the environment by future generations.
Chapter 14
Copyright © 2008 McGraw-Hill Ryerson Ltd.
1
Environmental Concerns in Business and
Society





Acid rain
Air pollution
Ecosystems
Energy production
and consumption
Nature and wildlife
(destruction of
habitat, loss of
biodiversity)
Chapter 14





Ozone
Other pollution
(noise, aesthetic)
Waste management
(e-waste)
Water quality and
abundance
Climate change/
global warming
Copyright © 2008 McGraw-Hill Ryerson Ltd.
2
Government’s Influence

Government departments and agencies:





Environment Canada
Canadian Council of Ministers of Environment
National Roundtable of the Environment and the Economy
Canadian Environmental Assessment Act Agency
Regulation:


Canadian Environmental Protection Act, Canadian
Environmental Assessment Act, (Kyoto Protocol)
Aspirational goals: APEC 2007
Chapter 14
Copyright © 2008 McGraw-Hill Ryerson Ltd.
3
APEC Statement on Global Warming

APEC Leaders Adopt Global Warming Statement By VOA News
08-September-2007
Australian Prime Minister John Howard said the 21 economies on Saturday
agreed to adopt what he called "aspirational" goals to reduce emissions, with all
nations contributing according to their own capacities.
They did not adopt firm emission-reduction targets.
Environmentalists had called on the Asia-Pacific Economic Cooperation group to
set some firm reduction targets, instead of non-binding goals. But many
governments -- including the United States, China and Australia -- opposed such
an agreement.
Their statement, also called the "Sydney Declaration," sets a target for reducing
what is known as "energy intensity" by 25 percent by 2030. Energy intensity is a
measure of the energy efficiency of a nation's economy.
4
Betting on Science: Carbon Capture
& Storage

CCS (sometimes ‘Sequestration’) allows
firms to continue to produce GHGs, but they
must capture them before they are released
to the atmosphere.

CO2 is then stored underground.

Some limited use of the technology in
place (Encana injects CO2 to raise oil).
Science is largely unproven, very costly
and CCS seen by some as a stall.

Chapter 14
Copyright © 2008 McGraw-Hill Ryerson Ltd.
5
Betting on the Market: Cap & Trade


Emissions trading: A system whereby
corporations set targets for greenhouse gas
reduction; if one corporation cannot meet the
target, it purchases credits from those that
have met their targets. Ex: Ontario Registry.
Offsets: Credits purchased from other
corporations or organizations to mitigate
greenhouse gases released into the
environment. Ex: Bullfrog Power.
Chapter 14
Copyright © 2008 McGraw-Hill Ryerson Ltd.
6
Dissenting Views on
Environment / Sustainability

According to some business journalists:





Concepts difficult to define and understand
Means stopping or constraining economic
development (Ex: GHG release limit vs. intensity)
Implies capitalism is unsustainable
Apparent misunderstanding of how markets work
Are executives being misled as to severity / reality
of some issues (An Inconvenient Truth?)
Chapter 14
Copyright © 2008 McGraw-Hill Ryerson Ltd.
7
GHG / Climate Change Issues
Summary





Is global warming / climate change real?
Did human activity cause it?
Social & economic trade-offs: Simply
reducing current GHG emission levels will
stagnate economies and cost jobs.
Options: 1) Reduce intensity, 2) CCS, 3) Cap
& Trade, 4) Non-GHG energy production
(wind, solar), 5) Reduce energy consumption
Combine options: 1 + 3 + 4 + 5 = Reduction
Chapter 14
Copyright © 2008 McGraw-Hill Ryerson Ltd.
8
Environmental NGO Influence


Environmental non-governmental organizations
(ENGOs): groups that hold shared values or
attitudes about the challenges confronting the
natural environment and advocate for changes to
improve the condition of the environment.
Such groups (e.g., Greenpeace) influence
corporations through protests, blockades, boycotts,
and annual shareholder meetings.
Chapter 14
Copyright © 2008 McGraw-Hill Ryerson Ltd.
9
Managing Responses to Environmental
Concerns




Token response (e.g., ‘greenwashing’)
Compliance with laws and regulations
Comprehensive environmental management
(gaining a competitive advantage)
Sustainable development
Chapter 14
Copyright © 2008 McGraw-Hill Ryerson Ltd.
10
Six Sins: Telling Green from Greenwashing
http://www.terrachoice.com/



1) Hidden Trade-off:
eco-friendly product
shipped world-wide
2) No Proof: Not tested
on animals? Prove it.
3) Vagueness:
‘Chemical-free’ makes
no sense.
Chapter 14



4) Irrelevance: ‘CFCfree’ is just following
the law
5) Lesser of Two
Evils: Hybrid SUVs
6) Fibbing: no such
thing as ‘certified
organic’
Copyright © 2008 McGraw-Hill Ryerson Ltd.
11
City of Lethbridge Initiatives




Sustainable development of the city
Links to provincial and federal environment
sites
Environmental Tips
Office of Environmental Management and
Urban Sustainability
Chapter 14
Copyright © 2008 McGraw-Hill Ryerson Ltd.
12
The “Greening” of
Business Functions




Financial management (environmental
accountability, SRI funds
Marketing (green product marketing)
Human resources (environmental
awareness in workplace, recruitment)
Production (pollution, packaging waste,
design for reuse, recycle or safe
disposal)
Chapter 14
Copyright © 2008 McGraw-Hill Ryerson Ltd.
13
Measuring and Reporting on
Environmental Sustainability








Type and amount of materials used
Source of energy and efficiency of use
Source and quality of water
Impact on biodiversity
Reduction of emissions, effluents, and waste
Product design that minimizes impact
Compliance with environmental laws
Use of efficient transportation
Source: Global Reporting Initiative, 2006
Chapter 14
Copyright © 2008 McGraw-Hill Ryerson Ltd.
14
The Environment:
Corporate Opportunities








Reputations likely enhanced
Customers attracted
Investors attracted
Costs reduced through recycling/conservation
More competent staff attracted
Better integration with local community
New technologies or expertise developed
More efficient ways of producing products found
Chapter 14
Copyright © 2008 McGraw-Hill Ryerson Ltd.
15
The Environment:
Corporate Threats








Corporate image may deteriorate
Revenues may suffer if customers are lost
Investors may decide not to invest
Material and production costs may increase
Financial penalties increasing
Insurance premiums can increase
Potential alienation from local community
Government may enact stricter legislation
Chapter 14
Copyright © 2008 McGraw-Hill Ryerson Ltd.
16