Business & Society

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Feb 22, 2014 (2 years and 9 months ago)

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Business & Society

Ethics, Sustainability, and Stakeholder
Management

Eighth Edition

Archie B. Carroll

Ann K. Buchholtz

© 2012 South
-
Western, a part of
Cengage

Learning

1

Chapter 15

The Natural
Environment as
Stakeholder

© 2012 South
-
Western, a part of Cengage Learning

2

Learning Outcomes

© 2012 South
-
Western, a part of Cengage Learning

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.

3

Chapter Outline


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

4

© 2012 South
-
Western, a part of Cengage Learning

The Sustainability Imperative

Externalities


S
ide
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.






© 2012 South
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Western, a part of Cengage Learning

5

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.






© 2012 South
-
Western, a part of Cengage Learning

6

Six Principles of Sustainable
Success

1.
Your business is part of a much larger system.

2.
The culture of your business is determined by
the context you create for it.

3.
The soul of a business is found in the hearts of
its people.

4.
True power is living what you know.

5.
You can’t predict the future, but you can
create it.

6.
There is a way to make an idea’s time come
.



7

© 2012 South
-
Western, a part of Cengage Learning

Introduction to the Natural
Environment



Humans are part of their natural
environment.

The environment is extremely complex.




8

© 2012 South
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Western, a part of Cengage Learning

Important and Helpful
Environmental Terms



9

© 2012 South
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Western, a part of Cengage Learning

Environment

Cycle

Carbon Neutral

Threshold

Carrying Capacity

Pollution

Entropy

Irreversibility

Ecosystem

Sustainability

Niche

Top Ten Environmental Issues

1.
Climate Change

2.
Energy

3.
Water

4.
Biodiversity and Land Use

5.
Chemicals, Toxics, and Heavy Metals

6.
Air Pollution

7.
Waste Management

8.
Ozone Layer Depletion

9.
Oceans and Fisheries

10.
Deforestation



10

© 2012 South
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Western, a part of Cengage Learning

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



11

© 2012 South
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Western, a part of Cengage Learning

Global Carbon Dioxide Emissions

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Western, a part of Cengage Learning

12

Energy


A major environmental issue is
energy
inefficiency,
wasting nonrenewable sources
of energy.

Addressing energy
e
fficiency


Use as little energy as possible


Shift to renewable sources


Solar


Wind


Hydroelectric


Biomass





13

© 2012 South
-
Western, a part of Cengage Learning

Water

Degradation of oceans and waterways


Municipal sewage


Industrial wastes


Urban runoff


Agricultural runoff


Atmospheric fallout


Overharvesting


Dam sedimentation


Deforestation


Overgrazing


Over
-
irrigation



The world is facing
water bankruptcy




14

© 2012 South
-
Western, a part of Cengage Learning

Biodiversity and Land Use


Biodiversity


The variation of life forms inside an
ecosystem.



Because of human activity,
b
iodiversity is
being lost at 1,000 times higher than the
natural rate.




15

© 2012 South
-
Western, a part of Cengage Learning

Land Use

Land
d
egradation
f
rom
h
uman
u
se


Desertification


Deforestation


Overgrazing


Salinization


Alkalization


Soil acidification


Urban sprawl


Soil sealing





16

© 2012 South
-
Western, a part of Cengage Learning

Chemicals, Toxics and Heavy
Metals

Toxic substances


C
hemicals
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.



17

© 2012 South
-
Western, a part of Cengage Learning

Air Pollution


Effects of air
p
ollution


Acid Rain


Global Warming


Smog


Depletion of the ozone layer


Serious respiratory illnesses



18

© 2012 South
-
Western, a part of Cengage Learning

Waste Management

19

© 2012 South
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Western, a part of Cengage Learning

Recycle

Re
-
Use

Reduce

Waste Trends in the U.S.

© 2012 South
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Western, a part of Cengage Learning

20

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.







21

© 2012 South
-
Western, a part of Cengage Learning

Oceans and Fisheries

Watershed


An area that drains to a common waterway.


Business activities are
associated with
significant damage to a number of coastal
ecosystems, including salt marshes, mangrove
swamps, estuaries, and coral
reefs.


The oceans are running out of fish to meet
human needs.


Conservation efforts have helped some species
recover.




22

© 2012 South
-
Western, a part of Cengage Learning

Deforestation


Deforestation


A
dds
to soil erosion problems and is a
major
contributor to the
greenhouse
effect.


Costs money.


Plays
a key role in global warming.



23

© 2012 South
-
Western, a part of Cengage Learning

Responsibility for Environmental
Issues

Wicked problems


Problems
with characteristics such as
interconnectedness, complexity, uncertainty,
ambiguity, conflict, and societal
constraints.

Tragedy of the commons


A “commons” is a plot of land available to
all.


Constraints
must be placed on the use of the
commons (i.e., our environment) because
self
-
interest
is likely to lead individuals and
organizations to behave in ways that will not
sustain our shared resources.





24

© 2012 South
-
Western, a part of Cengage Learning

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.



25

© 2012 South
-
Western, a part of Cengage Learning

The Role of the U.S. Government in
Environmental Issues

U.S. Government Response


Environmental impact
s
tatements (EISs)


R
eports
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)





26

© 2012 South
-
Western, a part of Cengage Learning

Air Quality Legislation


Clean Air Act


Emissions trading (Cap and trade)


I
ntended
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.





27

© 2012 South
-
Western, a part of Cengage Learning

Water Quality and Land
-
Related
Legislation


Water
quality
l
egislation


Clean Water Act


Land
-
related
l
egislation


Toxic Substances Control Act


Superfund (
Comprehensive Environmental
Response, Compensation, and Liability Act
of
1980)





28

© 2012 South
-
Western, a part of Cengage Learning

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.





29

© 2012 South
-
Western, a part of Cengage Learning

International Government
Environmental Responses



United
Nations Environmental
Programme

(UNEP)


Montreal Protocol


Global Waters Assessment


Global Compact


Global Reporting Initiative (GRI
)



30

© 2012 South
-
Western, a part of Cengage Learning

Other Environmental Stakeholders

31

© 2012 South
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Western, a part of Cengage Learning

Environmental interest

groups:

Radicals

Mainstreamers

Accomodators

Ecoterrorists

Other Environmental
Stakeholders
(continued)

Green consumers


A
ctual
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


Employees play a
major role in promoting
environmentalism at
work.

Green investors


A growing number of mutual funds, stock and
bond offerings, money market funds, and other
financial instruments have included
environmental
components.




32

© 2012 South
-
Western, a part of Cengage Learning

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



33

© 2012 South
-
Western, a part of Cengage Learning

Business Environmentalism


Responsible environmental
s
tewards


Patagonia


3M Company



34

© 2012 South
-
Western, a part of Cengage Learning

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.





35

© 2012 South
-
Western, a part of Cengage Learning

Cost
-
Benefit Analysis


Cost
-
benefit
a
nalysis


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.


36

© 2012 South
-
Western, a part of Cengage Learning

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.


37

© 2012 South
-
Western, a part of Cengage Learning

Systematic Business Responses to
the Environmental Challenge



Crisis management


Issues
management


Stakeholder
management


Sustainability


Strategic environmental management



38

© 2012 South
-
Western, a part of Cengage Learning

Future of Business: Greening or
Growing?



How much is enough?


The pressures on the environment come
from many
directions.


Global population growth


Increased demand for resources


Growing popularity of consumptive
lifestyles.



39

© 2012 South
-
Western, a part of Cengage Learning

Key Terms


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


© 2012 South
-
Western, a part of Cengage Learning

40

Key Terms
(continued)


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


© 2012 South
-
Western, a part of Cengage Learning

41