How can the business sector be encouraged to become more environmentally responsible to their customers and stakeholders?

by alzuc (student)

University Degree Business and Administrative studies

MANAGING THE ENVIRONMENT

POPP 3404

ENCOURAGING ENVIRONMENTALLY FRIENDLY BUSINESS PRACTISES:

How can the business sector be encouraged to become more environmentally responsible to their customers and stakeholders?

Alessandro Zucchelli

P10514772

Tutor: Mark Roberts

Tutorial: Friday 12.00- 1.00 PM

Word Count : 2116

Introduction

In this era of continuous challenges faced by Planet earth Globally from pollution (whether it be air, ocean or noise), climate change and scarcity of natural resources, a Global awareness and focus on sustainability has been in rapid increase partly due to an increased environmental awareness, consumer demands, Legislation, Economic controls (carbon taxes & Government subsidies towards Green technologies) and the ever increasing phenomenon of Corporate Social Responsibility (CSR). Recent Natural disasters, rising prices and sensibility campaigns are among other factors contributing to our ever increasing interest for Nature and the Health of our Planet.

It could be argued that the industrial revolution of the 19th Century which helped to shape the world Economy consolidated the power of Capitalism in the western world and created Britain’s middle class creating wealth and wellbeing and improved social conditions (housing and improved health) for millions of people, also sadly impacted negatively and significantly the wellbeing of our planet. Fossil fuels (in particular coal) were used to fuel the Industrial Revolution, natural resources began to be used (and in some cases wasted) for the sake of wealth creation (which is among the main Principles of Capitalism).

This Paper seeks to investigate and discuss ways to encourage businesses to be more environmentally friendly towards customers and stakeholders ultimately bringing benefits to the society, planet Earth and to the businesses themselves by being more efficient by reducing waste, recycling and using renewable sources. The essay will start by looking at the industrial revolution, it will then briefly discuss how our world revolves around Businesses, this section will be followed by a subsection which will highlights the possible ways to encourage Businesses to be more environmentally friendly and the final section prior to the conclusion will brief some benefits achievable through sustainable business practises the conclusion will

From Industrial Revolution to Sustainable development

Undoubtedly the Industrial Revolution has been a significant turning point in the relationship between Human beings and the Ecology, this process which Started in the 1700’s in Britain and reached the rest of the world in the 1800’s drastically changed the production processes. Human labour was replaced with machinery and fossil fuels where used instead of water, wind and wood. Although the Industrialisation of the world brought enormous improvement to the economy and society, it also significantly gave a first wound to our planet’s health. The use of Natural resources has been ever since in constant increase to a point that we are now discussing about the scarcity of certain resources and the harm of using other resources like fossil fuels which not only will finish one day but most importantly pollute our planet by creating carbon emissions. The effects of the Industrialisation process where first brought to the General public by Rachel Carson’s Silent Spring which discussed the effects the Industrial evolution brought to the Human existence and prompted the need for a change towards a more Sustainable production and development which involves the clever use and mix of social, economic and environmental policies to create a better present and future. Among other significant debates was the Bruntland Commission Report (1987).

A lot has been done since then and without a doubt society’s thoughts and reflections have been shaped towards a more sensible and Sustainable development as we now take into account the fact that what we do today should not damage the wellbeing of generations to come. Significant steps have been made by Government across the whole world that now include sustainability into policies and planning, local and worldwide sensibility campaigns in favour of environmental conservation are increasing and Businesses are embracing sustainable business practices to their management and production process. There is solid evidence about the fact that our ...

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A lot has been done since then and without a doubt society’s thoughts and reflections have been shaped towards a more sensible and Sustainable development as we now take into account the fact that what we do today should not damage the wellbeing of generations to come. Significant steps have been made by Government across the whole world that now include sustainability into policies and planning, local and worldwide sensibility campaigns in favour of environmental conservation are increasing and Businesses are embracing sustainable business practices to their management and production process. There is solid evidence about the fact that our lifestyle and past and present choices are directly affecting climate change and suggestions that natural catastrophes (Vardman 2007) are to come due to these choices. It is therefore a necessity to do more in terms of sustainable production and development.

Businesses

Half of the world’s Top 100 economies are businesses, the world revolves around Capitalism and wealth creation. In an ideal world, Business should be more concerned about the outcome of the choices they take and the effects it has on the environment we live in as every action as a consequence and we are ultimately interlinked. This is not always the case as we live in a Capitalistic world and the focus seems to be more on GDP, Profit Maximisation and on a wealth led business rather than a Value led business approach. It is therefore necessary to regulate, incentivise and encourage businesses to be more environmentally friendly for the sake of their consumers, stakeholders and the planet. There are various ways to encourage businesses to be more environmentally friendly and even more benefits (towards businesses) can be derived from following more sustainable Business and production practises. The following chapter will look into ways Businesses can be encouraged to embrace more environmentally responsible business practises by taking into account Corporate Social Responsibility towards consumers and stakeholders, profits and returns on Investment that could be made by investing in Greener businesses and the role of Government and International cooperation.

Encouraging Businesses

Following the previous chapter which had a look into the way our Economies and Businesses are aimed at (wealth led business), this chapter will look at ways to encourage Businesses to be more environmentally. Since the early introduction of the term Corporate Social Responsibility (CSR) between 1960’s and 1970’s, Multinationals (MNCs) first and Small & Medium Business Enterprise (SMEs) later began to be more concerned about consumers, Stakeholders and the Environment in which they operate. CSR has grown ever since into a very powerful tool and guideline for modern Businesses as political pressure, consumer and environmentalist movements as well as consumers & stakeholders are beginning to ask businesses to be more accountable for the choices they make and the actions they take. Protest, boycotts and immobilisation can be witnessed around the world in favour or to prompt Businesses and organisations as well as Governments to take the safeguarding of our planet more in consideration. Governments and International Organisations like the United Nation, the Organisation for Economic Co-operation & Development or The International Organisation for Sustainable Development are encouraging business and promoting Sustainable and Environmental campaigns. But for businesses to be really encouraged, strong actions are needed to follow citizen’s idea and their commitment for changes to be made. Consumers and citizens can heavily influence the way Businesses behave by for example deciding to be smarter shoppers, buying or choosing products that are proven to have less impact possible on the environment or products with less or with no toxins in them. Stakeholders on their hand can have an even more direct say in this matter as they are closely linked to the decision processes Businesses make and can therefore have impose their opinions or choose to invest in firms that choose Sustainable production. Recent years have proven and shown how Stakeholders interest are of much interest to firms, an example of Stakeholder power can be seen with Pension funds which have grown to be very influential stakeholders in many influential Global firms. A clear example of stakeholder pressure is the case which involved Apple and their decision to withdraw some of its products form the EPEAT (Electronic Product Environmental Assessment Tool) registry, infuriating stakeholders and consumers and forcing Apple to take a step back on their decision. Government and international organisations have to be part of the process to Encourage Businesses to be more environmentally friendly and accountable for their actions as a synergy between all forces is necessary in order for change to happen. Various summits, policies and projects around the world are seriously taking into account the well-being of our planet. Policies and Economic reforms in particular can promote and boost Environmental and sustainable business practises, incentives towards firm’s energy efficiency, carbon taxes or investments in Greening businesses are a few examples of how Government can help and do their part. International co-operation has been a huge catalyst for change; summits like Rio +20 or Kyoto’s protocol and debates about Circular Economy are really trying to make businesses to be more accountable for their business practises. Businesses are therefore incorporating more sustainable Business practises to their daily management and production practises. This effort is not merely to satisfy consumers and stakeholders, it in fact can lead to huge benefits and rewards to be reaped by Businesses who choose to go in this direction. The following chapter will consider the benefits that can be obtained from sustainable practises.

Benefits of Sustainable Business practises

70 of the world’s top 100 organisations have sustainability programmes and ever more Firms like Starbucks now produce yearly sustainability report proving there are a multitude of advantages and benefits businesses can obtain by being more environmentally responsible and following sustainable business practises and it has been proven that Firms environmentally aware and sustainable can be very efficient and successful. As they are very good in improving their performance, reduce waste and be more eco & energy efficient. Not only does environmental responsibility improve a Firm’s image, it can also bring substantial financial benefits. The Co-Operative group is a significant example as they’ve grown doubling its profit in the last four years (Martin 2012). They have focused not only on environmentally friendly practises but also on the social side of the sustainability ladder. As they are very good in improving their performance, reduce waste and be more eco & energy efficient. Not only does environmental responsibility improve a Firm’s image, it can also bring substantial financial benefits. Reduce, Reuse & Recycle which was a popular slogan made even more popular by Jack Johnson’s songs is a very important principle of the Waste Hierarchy, by following these principles, firms can obtain multiple benefits. Cost can be reduced by reducing consumables like paper for example, reusing products or items and by recycling efficiently. Energy efficiency, use of renewables opposed to fossil fuels and Innovation (doing more with less) can bring substantial financial and social rewards to Businesses and Society alike. Also new technologies aiming at producing in a more efficient way by for example reducing waste produced or time involved or even using less energy are all steps firms can benefit and have an investment on return after an initial Investment.

Conclusion

The aim of this paper has been to investigate and propose solutions or ways to encourage businesses to be more environmentally friendly towards their customers & stakeholders alike. This has been done by looking into the Industrial Revolution which changed the production processes bringing a very high efficiency at the cost of polluting our planets and natural resources. Ever since then progresses have been made due to political and consumer pressures but also significant measures have been taken by the firms themselves who seek to have a better image, reduce cost by being more efficient and having more sustainable business practises bringing rewards and returns to initial investment. Firms have to consider sustainability as a key goal or objective as it is good for any business public’s image and good for their finances as well. The list of Top companies (from Co-operative to Unilever, Coca- Cola to Google) following this route is very long and especially in times of recession firms following and embracing sustainability are reaping enormous rewards. Talks and discussions have been raised on Eco Capitalism (Porritt 2005), providing evidence that there can be great benefits to everyone by thinking at not only corporate profits but most importantly sustainable profits. Ultimately our dear planet earth needs us more than ever now that we have highly populated it’s surfaces and reduced drastically its natural resources.

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