W7 Article Analysis

Chapter 12: Sustainability: Ethical and Social Responsibility Dimensions: 12-8 Chapter Review Book Title: Business Ethics: Ethical Decision Making and Cases Printed By: Kennisha Holloman ([email protected]) © 2019 Cengage Learning, Cengage Learning

12-8 Chapter Review

12-8a Summary

Sustainability from a strategic business perspective is the potential for the long-term well-

being of the natural environment, including all biological entities, as well as the mutually

beneficial interactions among nature and individuals, organizations, and business

strategies. Sustainable development involves meeting the needs of the present without

compromising the ability of future generations to meet their own needs. Sustainability

includes the assessment and improvement of business strategies, economic sectors, work

practices, technologies, and lifestyles while maintaining the natural environment.

Sustainability falls into the social responsibility domain of maximizing positive and

minimizing negative impacts on stakeholders.

The protection of air, water, land, biodiversity, and renewable natural resources emerged as

a major issue in the twentieth century in the face of increasing evidence that mankind was

putting pressure on the long-term sustainability of these resources. Global sustainability

topics include atmospheric issues, including air pollution, acid rain, and global warming;

water issues, including water pollution and water depletion; and land issues, including land

pollution, waste management, deforestation, urban sprawl, biodiversity, and genetically

modified organisms. By being proactive in addressing these issues, companies can reduce

their environmental impact and generate a reputation as an eco-responsible company.

The most influential regulatory agency that deals with environmental issues and enforces

environmental legislation in the United States is the Environmental Protection Agency

(EPA). The EPA was created in 1970 to coordinate environmental agencies involved in

conducting environmental research, providing assistance in reducing pollution, and

enforcing the nations’ environmental laws. A significant number of laws were promulgated to

address both general and specific environmental issues, including public health, threatened

species, toxic substances, clean air and water, and natural resources. Some of the most

important environmental laws include the Clean Air Act, the Endangered Species Act, the

Toxic Substances Control Act, the Clean Water Act, the Pollution Prevention Act, the Food

Quality Protection Act, and the Energy Policy Act. LEED is a certification program that

recognizes sustainable building practices and strategies. Alternative energy sources also

have a major impact on many stakeholders. Some of the major alternative forms of energy

include wind, geothermal, solar, nuclear, biofuels, and hydropower.

Better environmental performance can increase revenue in three ways: through better

access to certain markets, differentiation of products, and the sale of pollution-control

technology. Good environmental performance also reduces costs by improving risk

management and stakeholder relationships, reducing the amount of materials and energy

used, and reducing capital and labor costs.

Green marketing is a strategic process involving stakeholder assessment to create

meaningful long-term relationships with customers while maintaining, supporting, and

enhancing the natural environment. However, some companies desire to obtain the benefits

of green marketing without the investment. Greenwashing involves misleading a consumer

into thinking a good or service is more environmentally friendly than it really is. While it

might seem to be helpful to a firm, companies discovered engaging in greenwashing may

suffer reputational damage.

Businesses have responded to the opportunities and threats created by environmental

issues with varying levels of commitment. Those firms proactive in anticipating risks and

environmental issues develop strategic management programs that view the environment

as an opportunity for advancing organizational interests. Many organizations engage in

recycling, the reprocessing of materials, especially steel, aluminum, paper, glass, rubber,

and some plastics, for reuse. Additionally, stakeholder assessment, risk analysis, and the

strategic environmental audit are important parts of a high-commitment approach to

environmental issues. Stakeholder assessment is a process that acknowledges and actively

monitors the environmental concerns of all legitimate stakeholders. Through risk analysis, it

is possible to assess the environmental risks associated with business decisions.

Organizations highly committed to environmental responsibility may conduct an audit of

their efforts using standards such as ISO 14000 and report the results to all interested

stakeholders.

Chapter 12: Sustainability: Ethical and Social Responsibility Dimensions: 12-8 Chapter Review Book Title: Business Ethics: Ethical Decision Making and Cases Printed By: Kennisha Holloman ([email protected]) © 2019 Cengage Learning, Cengage Learning

© 2020 Cengage Learning Inc. All rights reserved. No part of this work may by reproduced or used in any form or by any means - graphic, electronic, or mechanical, or in any other manner - without the written permission of the copyright holder.