Managerial Ethics And Social Responsibility-4
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Chapter9-SustainableDevelopmentandGlobalBusiness.pptxChapter 9
Sustainable Development and Global Business
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Ch. 9: Key Learning Objectives
9-1 Understanding how business and society interact within the natural environment.
9-2 Defining sustainable development.
9-3 Recognizing the ways in which population growth and economic development interact with the world’s ecological crisis.
9-4 Examining common environmental issues, including climate change, that are shared by all nations and businesses.
9-5 Analyzing the steps both large and small businesses can take globally to reduce ecological damage and promote sustainable development.
9-6 Describing the leading global codes of environmental conduct.
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Business and Society in the Natural Environment
Business and society operate within constraints of the planet and its resources.
Natural Capital: World’s stocks of natural assets, including its geology, soil, air, water and all living things.
For human society to survive over time it must operate sustainably, so that natural resources are preserved for future generations.
Preserving our common ecosystem is an urgent imperative for governments, business, and society.
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Business, Society and the Natural Environment: An Interactive System
Figure 9.1
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Sustainable Development
Development that “meets the needs of the present without compromising the ability of future generations to meet their own needs.”
Sustainable development requires that human society use natural resources at a rate that can be continued over an indefinite period.
Sustainable development is about fairness. The benefits and burdens of the use of natural resources must be distributed equitably:
Between developed and developing countries.
Between present and future generations.
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Threats to the Earth’s Ecosystem
Humanity has entered a new era, called the Anthropocene, in which human activity has become the dominant influence on climate and the environment.
Businesses now face:
Limited supplies of critical resources.
Unpredictable weather changes.
Increased political risk.
But business also have great opportunities:
Established firms and innovative entrepreneurs who can figure out how to address environmental challenges can both help society and enjoy great commercial success.
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Forces of Change Accelerating Ecological Crisis
Two critical factors have combined to accelerate the ecological crisis facing the world community and to make sustainable development more difficult:
The population explosion.
Economic development.
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Population Explosion
A major driver of environmental degradation is the exponential growth of the world’s population.
Many more people would be added during the second 50 years than during the first, even though the rate of growth would stay the same.
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Economic Development
Another source of pressure on the Earth’s resource base is the rapid industrialization of many countries.
Advantages:
Reducing poverty and slowing population growth.
Development is often accompanied by rising incomes.
Disadvantages:
Economic development has also contributed to the growing ecological crisis.
Rising incomes bring higher rates of consumption and waste.
In many instances, environmental regulations have lagged the pace of development.
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Population of the World and Major Areas
Figure 9.2
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The Earth’s Carrying Capacity
The Earth’s resource base is essentially finite, or bounded.
If human societies use up resources faster than they can be replenished, and create waste faster than it can be dispersed, environmental devastation will be the inevitable result.
Human society is already overshooting the carrying capacity of the Earth’s ecosystem.
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Ecological Footprint
A method to measure the Earth’s carrying capacity and how far human society has overshot it.
It refers to the amount of land and water a human population needs to produce the resources it consumes and to absorb its wastes, given prevailing technology.
Society is now using resources and producing waste at greater than one and a half times what the ecosystem can sustainably support.
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How can human society restore balance between Earth’s carrying capacity and society’s demands?
Technological innovation: Develop new technologies to produce energy, food, and other necessities of human life more efficiently and with less waste.
Changing patters of consumption: Individuals and organizations concerned about environmental impact could decide to consume less or choose less harmful products and services.
“Getting the prices right”: Some economists have called for public policies that impose taxes on environmentally harmful products or activities.
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Global Environmental Issues
Commons: a shared resource, such as land, air, or water that a group of people use collectively.
Paradox of the commons: if all individuals attempt to maximize their own private advantage in the short term, the commons may be destroyed, and all users, present and future, lose.
The only solution is restraint, either voluntary or through mutual agreement.
Tragedy of the commons: freedom in a commons brings ruin to all.
Example: Fishing grounds.
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Five Global Problems: 1. Climate Change
Climate Change: Changes in the Earth’s climate caused by increasing concentrations of carbon dioxide and other pollutants produced by human activity.
Causes include:
Burning of fossil fuels.
Increased emissions of nitrous oxides.
Black carbon.
Deforestation.
Beef production.
The Convention on Climate Change is an international treaty that limits emissions of greenhouse gases, such as carbon dioxide.
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Global Warming
Figure 9.3
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Five Global Problems: 2. Ozone Depletion
Ozone: bluish gas, composed of three bonded oxygen atoms, that floats in a thin layer in the stratosphere between 9 and 28 miles above the planet.
Causes: chlorofluorocarbons (CFCs), manufactured chemicals formerly widely used as refrigerants, insulation, solvents, and propellants in spray cans.
In 1987, world leaders negotiated the Montreal Protocol, agreeing to cut CFC production.
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Five Global Problems: 3. Resource Scarcity
Fresh Water
Only about one-tenth of 1 percent of the Earth’s water is in lakes, rivers, and accessible underground supplies, and thus available for human use.
Fresh water is renewable.
By the early 2010s, water shortages had already caused the decline of local economies and in some cases had contributed to regional conflicts.
Arable Land
World’s arable land is threatened with decline from soil erosion, loss of nutrients, water scarcity, salinization, and poor drainage.
Example: Loss of arable land can lead to migration and civil unrest.
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Five Global Problems: 4. Decline of Biodiversity
Biodiversity: the number and variety of species and the range of their genetic makeup.
Scientists estimate that species extinction is occurring at 100 to 1,000 times the normal, background rate due to pollution and habitat destruction.
Genetic diversity is vital to each species’ ability to adapt and survive and has many benefits for human society as well.
A leading cause: Destruction of rain forests, particularly in the tropics.
The reasons for destruction of rain forests include commercial logging, cattle ranching, and conversion of forest to plantations to produce cash crops.
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The Convention on Biological Diversity
By 2018 it had been ratified by all U.N. members except the United States.
Commits these countries:
To draw up national strategies for conservation.
To protect ecosystems and individual species.
To take steps to restore degraded areas.
It also allows countries to share in the profits from sales of products derived from their biological resources.
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Five Global Problems: 5. Threats to Marine Ecosystems
Marine Ecosystems: oceans, salt marshes, lagoons, and tidal zones that border them, as well as diverse communities of life they support.
Salt water covers 70 percent of the earth’s surface and supports many species.
Key threats to these ecosystems:
Exploitation of fish populations.
Decline of coral reefs.
Coastal development in ecologically fragile areas.
Ocean acidification.
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Response of the International Business Community
The international business community plays a critical role in addressing the ecological challenges.
Numerous voluntary initiatives are being undertaken by companies around the world to put the principle of sustainable development into practice.
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Voluntary Business Initiatives1
Life cycle analysis
Involves collecting information on the lifelong environmental impact of a product, from extraction of raw material to manufacturing to its distribution, use, and ultimate disposal.
Industrial ecology
Refers to designing factories and distribution systems as if they were self-contained ecosystems.
Extended product responsibility
Occurs when companies take continuing responsibility for the environmental impact of the products and services, even after they are sold.
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Voluntary Business Initiatives2
Carbon neutrality
An organization or individual produces net zero emission of greenhouse gases; this is usually accomplished by a combination of energy efficiencies and carbon offsets.
Technology cooperation
Sustainable development through long-term partnerships between companies in developed and developing countries to transfer environmental technologies.
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Codes of Environmental Conduct
Some of the leading universal codes include the following:
Business Charter for Sustainable Development – developed by the International Chamber of Commerce.
CERES Principles – developed by the Coalition for Environmentally Responsible Economies.
ISO 14000 – a series of voluntary standards developed by the ISO, an international group based in Switzerland.
The Greenhouse Gas Protocol – to help businesses measure and manage their greenhouse gas emissions.
Many executives are championing the idea that corporations have moral obligations to future generations.
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Accessibility Content: Text Alternatives for Images
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Business, Society and the Natural Environment: An Interactive System Text Alternative
It contains three concentric circles.
The circle at the center is labeled business.
There are six double-ended arrows that arise from this circle and point at the next circle that is labeled society.
Six double-ended arrows arise from this circle and point at the outermost circle that is labeled natural environment.
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Population of the World and Major Areas Text Alternative
The x-axis contains five markings. From the left to the right, these markings read 1950, 1980, 2013, 2050, and 2100.
The y-axis is labeled world population (in billions). It contains seven markings. From the bottom to the top, these markings read 0, 2, 4, 6, 8, 10, and 12.
The population of Oceania was .041 billion in 2017 with an expected rise to .057 billion in 2050 and .072 billion in 2100.
The population of North America was 0.361 in 2017. In 2050, the population is estimated to be 0.435 billion. By 2100, the population is estimated to be 0.499 billion.
The population of Africa was approximately 0.25 billion in 1950. It increased to approximately 0.5 billion in 1980. In 2017, the population was 1.25 billion. By 2050, the population would be approximately 2.5 billion. By 2100, the population is expected to be approximately 4.5 billion.
The population of Europe was approximately 0.55 billion in 1950. The population plateaued at approximately 0.75 billion from 1980 to 2017. The population is estimated to decline to 0.7 billion in 2050 and to 0.65 billion in 2100.
The population of Latin America was approximately 0.2 billion in 1950. The population has slowly increased since 1980. In 2017, the population was approximately 0.65 billion. It is estimated that in 2050 the population will grow to 0.78 billion and then decline slightly to 0.7 in 2100.
The population of Asia was approximately 1.4 billion in 1950. It increased to approximately 2.6 billion in 1980. There was further increase in population to approximately 4.5 billion in 2017. It is estimated that by 2050, the population will be approximately 5.3 billion. It is estimated that by 2100, the population would decline to approximately 4.8 billion.
The world population was approximately 2.5 billion in 1950. It increased to approximately 4.5 billion in 1980. It further increased to approximately 7.5 billion in 2017. It is estimated that by 2050, the world population will be approximately 9.8 billion. By 2100, the world population is expected to increase to approximately 11 billion.
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Global Warming Text Alternative
At the top left side of the illustration, there is an image of the sun. The Earth is positioned in the bottom right corner of the illustration. Within the image of the Earth, there is text that reads greenhouse gases are carbon dioxide, methane, nitrous oxides, and chlorofluorocarbons (CFCs).
An arrow arises from the sun labeled infrared energy. The arrow then hits a layer that covers the Earth, labeled atmosphere, and bounces back toward the sun.
At the top right section of the illustration, there is text that reads as follows:
Infrared energy from the sun reflects off the Earth’s surface and is trapped in the atmosphere by greenhouse gases, warming the surface.
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