BE-PP3

PHI 6301, Business Ethics 1

Course Learning Outcomes for Unit III Upon completion of this unit, students should be able to:

3. Consider businesses’ ethical obligations to the environment. 3.1 Explain a business’ ethical obligation to an environmental issue. 3.2 Determine business strategies that a business can implement to help the environment.

Course/Unit

Learning Outcomes Learning Activity

3.1, 3.2

Unit Lesson Chapter 10 Article: “Morality, Ethics, and Values Outside and Inside Organizations: An

Example of the Discourse on Climate Change” Unit III PowerPoint Presentation

Required Unit Resources Chapter 10: Sustainability and the Natural Environment In order to access the following resource, click the link below. Besio, C., & Pronzini, A. (2014, February). Morality, ethics, and values outside and inside organizations: An

example of the discourse on climate change. Journal of Business Ethics, 119(3), 287–300. https://libraryresources.columbiasouthern.edu/login?url=https://search.ebscohost.com/login.aspx?dire ct=true&db=bsu&AN=93892799&site=ehost-live&scope=site

Unit Lesson Many people in the United States share concerns about global warming or climate change, as evidenced by a myriad of factors—from extreme heat and cold to torrential down-pouring rainstorms, hurricanes, and drought to changes in ecology both on earth and in the oceans. As concern has grown so too has the need to take action. In the past, leaders have discussed this issue numerous times, though many fear not enough is being done to resolve what may be a catastrophe in the making and an existential threat to the world. In 2021 a Conference of the Parties (COP26) commenced in Glasgow, Scotland. Many of the world's top leaders came together to reach an agreement about how to avert a potential climate disaster. Not since the Paris Climate Accords of 2015 had an event of such significance been held to address scientists' warnings of the dire need to establish a lower global temperature of 1.5 degrees Celsius. To meet this lofty goal, it was concluded global emissions must be reduced by 45% by 2030 to reach the goal of net-zero by 2050 (Filks, 2021). Doing so would require tremendous changes to a country’s energy and transport systems, manufacturing, production, and farming. Currently, however, pledges of the countries present at the COP26 are predicted to increase emissions by 16% by 2030. The fact that many leaders of prominent countries came together is all well and good, but there was some question about corporate involvement and the presence of prominent business leaders at COP26. Martyn McLaughlin (2021) described the discontent of COP26 sponsors since their interests were not adequately represented. Some sponsors of the event paid no more than lip service to global warming and environmental concerns, and their own history regarding lowering greenhouse gas emissions is less than stellar.

UNIT III STUDY GUIDE Business Obligations to the Environment and Global Warming

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Meanwhile, one prominent activist, Greta Thunberg, criticized politicians at a House Oversight Committee on Earth Day of 2021 for being slow to act on climate change and continuing to subsidize fossil fuel companies, claiming that these politicians fail to truly understand the full implications of climate change and/or global warming. Essentially, she told this committee to use its common sense and divest from the use of fossil fuels (Porterfield, 2021). One may rightly wonder what the many leaders of corporations are doing about the rise in global warming, not to mention additional environmental concerns. Though it does appear fossil fuel companies have not been willing to take significant steps in reducing greenhouse gas emissions, what about other corporations, and what are they doing about global warming and additional environmental concerns? Fortunately, many leaders of corporations have recognized the real threat of climate change and other environmental issues and have decided to take at least some action in reducing their greenhouse gas emissions. We will be examining what is called corporate environmental responsibility. In this context, we will imagine that the principle-based ethical tradition would state that it is our strongest duty to avoid harm and do good to the environment. Similarly, the possibilities of our actions causing harm would likewise be significant from the point of view of the utilitarian tradition in ethics (DesJardins, 2020). Given the nature of business operations, an argument could be made that pollution of any type could be claimed as a market failure because of negative implications. The complete cost of emitting pollutants is seldom realized by the parties in relation to the immediate transaction; and for that reason, there cannot be a reliance on market forces to remedy this situation to achieve the overall good. One question to raise is whether companies have an ethical responsibility to reduce greenhouse gas emissions, even though market incentives are lacking. Additionally, since companies are in a better position to finance alternative energy sources than individuals are, do they have an ethical obligation to invest in wind or solar generation (DesJardins, 2020)? These questions and more will be raised and answers attempted during this unit. Another way to view this topic is the role CSR plays in relation to the environment. As has been mentioned in Unit I, CSR is the idea that businesses have obligations to both shareholders and society, and they ought to act in socially and environmentally responsible ways. According to Autumn Spanne (2021), businesses ought to focus on three aspects: people, the planet, and profit—what has often been called the triple bottom line. When businesses focus on people, they are considering all stakeholders, and when focusing on the planet, they focus on a commitment to reducing their environmental impact. Today, industries and businesses alike have an enormous environmental impact from consuming tremendous amounts of natural resources to emitting hazardous pollutants into the atmosphere. However, businesses today are also undertaking environmental sustainability not only as a legal obligation but also as a moral imperative. Although these are all important aspects regarding the concerns businesses are having towards the environment and sustainability, they also see their commitment to these issues as an opportunity to increase profits. Another important aspect to consider is the relationship businesses have to sustainability, and why it is also so important. As a result of global warming and environmental issues that have developed over the past several years, there has been much discussion in business about the importance of sustainability and how companies ought to embrace it. The author of your textbook also discusses this topic at some length, though more should be said about it. According to Knut Haanaes (2016), Professor of Strategy, and International Management at the International Institute for Management Development (IMD), sustainability is becoming increasingly more significant throughout all companies and industries. As of 2016, 62% of executives believe a strategy of sustainability is a necessity to stay competitive in today’s market, and at least 22% believe it will be in the future. One question to raise when considering the term in context of business is what exactly sustainability means. According to Haanaes (2016), sustainability is a type of business strategy that attempts to create long-term value through consideration of the ways a company operates in the sociological, ecological, and in economic environmental domains. Sustainability is therefore predicated on the assumption that developing related strategies will foster the longevity of a company. Moreover, as corporate responsibility becomes more prevalent and the procedures and activities of companies become more transparent, companies are increasingly recognizing the duty to act in a sustainable manner. In the past, good intentions and professional

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communications were enough; however, today consumers are asking more from companies than mere words but rather demand action on the principles of sustainability.

References DesJardins, J. (2020). An introduction to business ethics (6th ed.). McGraw-Hill Education.

https://online.vitalsource.com/#/books/9781260687354 Filks, I. (2021, October 31). COP26: World will try again to avert climate disaster. Reuters.

https://www.reuters.com/business/environment/cop26-world-makes-new-bid-avert-climate-disaster- 2021-10-31/

Haanaes, K. (2016, November). Why all businesses should embrace sustainability: Some top companies are

leading the way. International Institute for Management Development (IMD). https://www.imd.org/research-knowledge/articles/why-all-businesses-should-embrace-sustainability/

McLaughlin, M. (2021, October 19). COP26 climate change summit: Corporate sponsors’ grumbling reveals

influence of fossil fuel firms, palm oil producers and more. The Scotsman. https://www.scotsman.com/news/opinion/columnists/cop26-climate-change-summit-corporate- sponsors-grumbling-reveals-influence-of-fossil-fuel-firms-palm-oil-producers-and-more-martyn- mclaughlin-3424854

Porterfield, C. (2021, April 22). ‘Use your common sense’: Greta Thunberg slams Congress on Earth Day for

subsidizing fossil fuels. Forbes. https://www.forbes.com/sites/carlieporterfield/2021/04/22/use-your- common-sense-greta-thunberg-slams-congress-for-subsidizing-fossil-fuels-on-earth- day/?sh=3f40f7156e92

Spanne, A. (2021, June 8). Corporate social responsibility and the environment: Why it matters. Treehugger.

https://www.treehugger.com/corporate-social-responsibility-and-the-environment-5186904 Suggested Unit Resources In order to access the following resource, click the link below. The article below examines the belief/behavior gap regarding barriers to green consumerism and the environment. Gabler, C. B., Butler, T. D., & Adams, F. G. (2013, Summer/Autumn). The environmental belief-behaviour

gap: Exploring barriers to green consumerism. Journal of Customer Behavior, 12(2/3), 159–176. https://libraryresources.columbiasouthern.edu/login?url=https://search.ebscohost.com/login.aspx?dire ct=true&db=bsu&AN=93433062&site=ehost-live&scope=site