one page question/ business

lzy19951031

Carroll_10e_CH15_PPT.pptx

Home >Business & Finance homework help >Management homework help >one page question/ business

Chapter 15 Sustainability and the Natural Environment

Learning Outcomes

Discuss the concept of sustainability and its imperative.

Describe the natural environment, the impact of business on the natural environment, and the ten major natural environment issues.

Identify and discuss the issues that arise for businesses in their responsibility for the environment and sustainability.

Discuss the role of governments in environmental and sustainability issues.

Describe other environmental stakeholders, including interest groups, employees, and investors.

Discuss business environmentalism sustainability goals, and the future of the business/environment relationship.

Chapter Outline

The Sustainability Imperative

The Natural Environment

A Brief Introduction to the Natural Environment

The Impact of Business on the Natural Environment

Responsibility for and Sustainability Environmental Issues

The Role of Governments in Environmental and Sustainability Issues

Other Environmental and Sustainability Stakeholders

Business Environmentalism and Sustainability

The Future of Business: Greening and/or Growing?

Summary

Key Terms

Sustainability and the Natural Environment

Sustainability -

Business that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Akin to walking lightly on the earth, taking only what’s needed, and leaving behind enough for future generations to have access to the same resources.

Creative business people need to develop new ways to benefit the triple bottom line – people, planet, profits.

Swift growth due to realization that sustainability is the right thing to do, and can also drive revenue, savings, and give a competitive edge.

The Sustainability Imperative (1 of 2)

Years ago, discussing sustainability would bring arguments about why businesses would benefit. Today, the need for sustainability is a “given.” CERES’ Roadmap to Sustainability identifies several key drivers:

Competition for resources - demand is growing more quickly than they can be replaced.

Climate change - business must be prepared to respond to new policies regarding emissions, and to take advantage of new technology.

Economic globalization - wide disparities in social and environment standards bring risks and opportunities.

Connectivity and communications - stakeholders can monitor and react to sustainability efforts more quickly. Reputations are quickly built and destroyed.

The Sustainability Imperative (2 of 2)

A leading advocate of business sustainability is Unilever. The CEO sought out long-term investors as shareholders, rather than short-term hedge-fund managers, banned quarterly earnings reports, and embarked on a 10-year plan.

Carbon emissions have been slashed by 32%

Greenhouse gases- Halved by 2020

Water – halve water associated with consumer use of products by 2020

Sustainable sourcing – 100% of agricultural raw materials sustainably by 2020

The Natural Environment

For years, businesses conducted their operations with little concern for environmental consequences. They consumed significant amounts of materials and energy, causing waste accumulation and resource degradation.

They caused major air, water, and land pollution problems. They looked the other way, labeling the negative consequences of their actions as externalities—side-effects or by-products not intended, and often disregarded.

Any environmental effort usually came from compliance or efficiency. Businesses would stop damaging the environment only when it became illegal or unprofitable to do so.

Now, environmentalism is becoming profitable.

A Brief Introduction to the Natural Environment

This chapter focuses on the natural environment—what it is, why it is important, how it has become a major concern, and what businesses and other organizations have done to it or for it.

The environment has become one of the most significant societal issues of our time.

To help you make environmental business decisions in the future, we’ll describe the variety of responses humans and businesses have developed to address these issues, and present data.

The emphasis is on two themes:

Humans are part of their natural environment

The environment is complex, defying simple analyses

Glossary of Environmental Terms

Bio-based Product	A product composed of biological products or renewable agricultural or forestry materials.
Environment	External living, working, and playing spaces and natural resources and more.
Carbon Footprint	The amount of greenhouse gases one emits.
Carbon neutral	Maintaining a balance between producing and using carbon dioxide.
Carrying capacity	Volume and intensity of use by organisms that can be sustained
Entropy	A measure of disorder of energy indicating its unavailability for recycling for the same use.

Ecosystem	All living and nonliving substances present in a particular place, interacting
Irreversibility	The inability of humans and nature to restore environmental conditions to a previous state.

The Impact of Business on the Natural Environment

The Top Ten fundamental environmental issues:

Climate Change

Energy

Water

Biodiversity and Land Use

Chemicals, Toxics, and Heavy Metals

Air Pollution

Waste Management

Ozone Layer Depletion

Oceans and Fisheries

Deforestation

Climate Change

Climate change global warming creates the:

Greenhouse effect - the prevention of solar heat absorbed by our atmosphere from returning to space, can persist in the atmosphere for centuries.

Melting glaciers, decline in crop yields, and the effects of sea-level rise are all signs of warming.

Environmental Protection Agency’s Clean Power Plan introduced in 2015 under the Clean Air Act address climate change issues

In 2016, the Paris Agreement on Climate Change brought 190 countries together with an aim to limit global warming to below 2 degrees Celsius.

Some businesses us internal carbon tax or carbon pricing to offset emissions with investments in sustainability projects.

Global Carbon Dioxide Emissions

Energy

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

Fossil fuels such as coal, oil, and natural gas were formed millions of years ago under unique conditions; once they are depleted, they will be gone forever.

Because such fuels are not equally distributed around the world, disastrous armed conflicts result.

Businesses should use as little non-renewal energy as possible, and shift to renewable sources such as solar, wind, hydroelectric, biomass

Energy represents a challenge and an opportunity; firms that succeed in this area will reap big profits.

Water

Both quality and quantity of water endangered.

Quality – Degradation of oceans & waterways

Municipal sewage, industrial wastes

Urban runoff, agricultural runoff

Atmospheric fallout, overharvesting

Dam sedimentation, deforestation

Overgrazing, over-irrigation

More than a billion people lack clean water.

Quantity –

Earth is a closed system with a fixed water supply; growing populations use more water.

The world is facing water bankruptcy.

Biodiversity and Land Use

Biodiversity - The variation of life forms inside an ecosystem, serves as a key indicator of its health. It is being lost at an unprecedented rate.

Ecosystem and habitat destruction, pollution, other excesses in individual and organizational activities are responsible.

Species die off at a natural rate of 1 to 5 a year, now dozens go extinct each day.

Land degradation threatens the livelihood of more than one billion people, especially in Africa, the continent most affected by drought.

Chemicals, Toxics and Heavy Metals

Toxic substances -

Chemicals or compounds that may cause damage to the nervous system, reproductive and developmental problems, cancer and genetic disorders and the environment.

Can be intentionally or unintentionally created.

Two main problems -

We are not always aware of the effects of exposure to chemicals.

Toxic substances can be associated with industrial accidents, causing unforeseen widespread biological damage.

Air Pollution

Outdoor Air pollution -

Acid Rain

Global Warming

Smog

Depletion of the ozone layer

Serious respiratory illnesses

Indoor Air Pollution –

Comes from oil, gas, kerosene, coal, wood and tobacco products, building materials and furnishings, damp carpets, household cleaning products and lead-based paints.

Long term effects—respiratory diseases, heart disease and cancer—can be fatal.

Waste Management

Recycle

Reuse

Reduce

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 chlorofluorocarbons (CFCs) and other chemicals.

In 2013, the hole in the ozone was at its second smallest point in 20 years.

Oceans and Fisheries

Watershed - an area that drains to a common waterway. We all live in a watershed.

Trillions of gallons of sewage & industrial waste are dumped into marine waters each year.

These & other pollutants do significant damage coastal ecosystems, resulting in shellfish bed closures, seafood-related illnesses, and reduced shoreline protection from floods and storms.

Once inconceivable, now 85% of the world’s fisheries are at capacity, over capacity or have collapsed. The oceans are running out of fish to meet human needs.

Conservation efforts have helped some species recover, and such efforts continue.

Deforestation

Humans depend on forests for building materials, fuel, medicines, chemicals, food, employment and recreation.

Deforestation -

Adds to soil erosion problems.

Plays a key role in global warming; Felled trees can no longer absorb carbon dioxide. Dead trees release it into the atmosphere.

Accounts for 20% of global carbon emissions – more than the world’s trains, boats and planes combined.

Responsibility for Environmental Issues

Wicked problems - (smog, toxic waste and acid rain) are problems with complexity, uncertainty, interconnectedness, ambiguity, conflict, and societal constraints. When no one takes responsibility -

Tragedy of the commons – is likely to occur

A “commons” (our environment) is a plot of land available to all.

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

Environmental Ethics

Humans must consume at least some plants and water to survive. What level is ethical? Which school of environmental thought should we apply?

Kohlberg – levels of moral development

Utilitarianism – greatest good for greatest number

Integrating sustainability into a firm’s philosophy is a natural extension of stakeholder theory, including as a stakeholder the ecological system from which the firm obtains resources and to which it bears responsibility for its impacts, both positive and negative.

The NIMBY Problem

Not in my Backyard: NIMBY -

Reflects human denial of responsibility for misuse of the environment.

Entities causing environmental pollution are not identified as the sources of the problem, so no action is taken.

A NIMBY attitude avoids or denies the root cause of the damage.

One popular cartoon pictures a stream of polluting, honking cars passing along the highway in front of a billboard that reads:

“Honk if you love the environment.”

The Role of Governments in Environmental and Sustainability Issues

Governments have played major roles in environment issues:

developed habitable lands,

protected, taxed and zoned natural environment-based areas, and

exercised regulatory control over how those environments could be used.

Canadian Federal Sustainable Development Strategy

Responses of Governments in the United States (1 of 5)

National Environmental Policy Act (NEPA, 1970)

permit required for discharge of hazardous waste into navigable waters

requires federal agencies to prepare Environmental Impact Statements (EISs)

Environmental Protection Agency (EPA, 1970)

An independent agency to research pollution problems, aid state and local government efforts, and administer many federal environmental laws

Responses of Governments in the United States (2 of 5)

Air Quality Legislation – The Clean Air Act

Sets standards and timetables for implementation

Created 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.

Businesses that reduce their emissions can trade them to other businesses, earning income.

Responses of Governments in the United States (3 of 5)

Water Quality Legis. – The Clean Water Act

Involves both state and federal governments

Goal: to achieve water quality safe for humans, and protection of fish, shellfish and wildlife

Banned discharge of pollutants into navigable waters through pollution permit system

Set timetables for installation of state-of-the-art pollution control equipment.

Marine Protection , Research & Sanctuaries Act set a similar system for coastal waters

The Safe Drinking Water Act of 1974 establishes maximum contaminant levels for drinking water.

Responses of Governments in the United States (4 of 5)

Land-Related Legis. – Solid Waste Disposal Act

State and local governments mainly responsible

Resource Conservation & Recover Act set up a regulatory system for tracking hazardous waste

Toxic Substances Control Act requires businesses to identify chemicals posing substantial risks.

Superfund (CERCLA) places responsibility for remediation of hazardous waste dumps

Emergency Planning and Community Right-to-Know Act requires manufacturers to report annually all of their releases into the environment of any of more than 500 toxic chemicals

Responses of Governments in the United States (5 of 5)

Endangered Species –

World’s species are disappearing at an alarming rate

Nearly 20,000 species now considered threatened or extinct

Endangered Species Act (1973)

Prohibits harm to endangered and threatened species

May require moving the species to another location or restricting threatening business activities, resulting in intense political conflicts between business and environmental groups

International Government Environmental and Sustainability Responses (1 of 2)

United Nations Environmental Programme (UNEP) – has led the way in identifying global environmental and sustainability problems and resolutions:

Montreal Protocol, 1987 - by which most CFC-producing nations agreed to a quick phase-out of these ozone-destroying substances. This was the first UN treaty to achieve universal ratification.

International Government Environmental Responses (1 of 2)

Global Compact – joins firms across the world to support environmental and social principles.

Global Reporting Initiative (GRI) – a collaborating center of the UNEP. GRI developed a sustainability reporting framework, now the most widely used standard in the world; outlines principles and indicators that organizations can use to measure and report their economic, environmental and social performance.

Other Environmental and Sustainability Stakeholders

Environmental Interest Groups –

A collection of nonprofit membership and think-tank organizations has moved the world in the direction of environmental responsibility. Known as “the environmental movement,” they are responsible for the “greening” of nations.

Environmental interest groups have evolved, and have been instrumental in significantly influencing business environmental policy.

Examples: Environmental Defense is working with Federal Express on building a new generation of vehicles; with DuPont on developing nanotech standards; with PHH Arval on becoming the first carbon neutral fleet.

Environmental Groups Based on Cooperation with Business

Radicals

Confrontational behaviors

Mainstreamers

Seek pragmatic reform through

cooperation and confrontation

Accommodators

Avoid confrontation, and are

more trusting of corporations

Other Sustainability Interest Groups

Green consumers - actual and potential customers of retail who express preferences for environmentally-friendly products and services.

Green employees - play a major role in promoting environmentalism at work.

Green investors - individuals and organizations who prefer to invest with firms that are associated with environmentally-oriented companies. A growing number of bond offerings, money market fund and other financial instruments now include environmental components.

Business Environmentalism and Sustainability

These firms are “shaking up” sustainability. They have taken “principled stances” and/or led innovative programs for better social and environmental conditions.

Patagonia – Recycled decades before others

Made its outdoor gear out of old plastic soda bottles

Discovered the dangers of cotton due to dependencies on pesticides, insecticides, and defoliants.

Apple – Partners with multiple initiatives to avoid conflict of minerals and unfair labor conditions. The electronics brand with the highest use of renewable energy.

Business Environmentalism and Sustainability

CVS Health – Stopped the sale of tobacco products in their stores. Offer smoking cessation programs.

Tesla – Known for the development of the electric vehicle. Building an ecosystem of sustainable brands – group of interconnected elements, formed by interactions with others in its community and environment.

Business & Environmental Partnerships-Activists, NGOs, & Interest Groups –

Accommodation replacing antagonism with understanding of mutual dependence.

Business needs environmental partners to inform and validate environmental efforts.

Activists, NGOs and interest groups need business to change the way it operates in order to protect the planet.

GreenBiz survey shows corporations view NGOs in 4 ways: trusted partners, useful resources, brand challenged, and the uninvited.

The Future of Business: Greening and/or Growing?

The salient environmental question:

How much is enough?

How much economic growth?

How much materials and energy?

Limits on growth are not popular. But the problem with unrestrained economic growth is that, unless technology or people change significantly within a generation, environment problems will change in degree from significant to severe.

Key Terms (1 of 2)

acid rain

air pollution

Biodiversity

COP19

COP21

cap and trade

carbon neutral

carbon positive

CERES’ Roadmap to Sustainability

clean air act

Clean Water Act

circular economy

climate change

cost-benefit analysis

deforestation

ecosystems

emissions trading

Endangered Species Act (ESA)

energy inefficiency

environment

Environmental Impact Statements (EISs)

Key Terms (2 of 2)

Environmental Protection Agency (EPA)

externalities

fossil fuels

global compact

Global Reporting Initiative (GRI)

global warming

greenhouse effect

internal carbon tax

Montreal Protocol

NGOs

NIMBY

ozone

recycling

superfund

sustainable apparel coalition

sustainability

toxic substances

Toxic Substances Control Act

tragedy of the commons

triple bottom line

Warsaw International Mechanism

watershed

wicked problems