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CHAPTER 11

Social Responsibility and Business. 4 TH EDITION. FERRELL • THORNE • FERRELL. CHAPTER 11. Sustainability Issues. Sustainability.

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CHAPTER 11

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  1. Social Responsibility and Business 4TH EDITION FERRELL • THORNE • FERRELL CHAPTER 11 Sustainability Issues

  2. Sustainability • Sustainability is the potential for long-term well-being of the natural environment, including all biological entities, as well as the interaction among nature and individuals, organizations, and business strategies. • Sustainability includes the assessment and improvement of business strategies, economic sectors, work practices, technologies, and lifestyles while maintaining the natural environment.

  3. Global Environmental Issues • Natural environment • The physical world, including all biological entities as well as the interaction among nature, individuals, and organizations • Protection of air, land, biodiversity, water, and renewable natural resources Increasingly, companies are incorporating environmental issues into their overall business strategies.

  4. Atmospheric Issues • Air pollution arises from three different sources: • Stationary sources (factories and power plants) • Mobile sources (cars and trucks) • Natural occurrences (windblown dust) • Acid rain occurs when nitrous oxides and sulfur dioxides emitted from manufacturing facilities react with air and rain. • Global warming occurs when carbon dioxide and other gases collect in the earth’s atmosphere, trapping the sun’s heat like a greenhouse and preventing the earth from cooling. • Cap-and-Trade program sets carbon emissions limits (caps) for businesses, countries, or individuals.

  5. World Energy-Related Carbon Dioxide Emissions

  6. U.S. Global Climate Change Initiative

  7. Water Issues • Water pollution • Results when dangerous chemicals seep into rivers and oceans • Sources include: • Disposal of raw sewage and toxic chemicals • Oil and gas spills • Burial of industrial wastes • Fertilizers and pesticides used in farming

  8. Water Issues (cont.) • Water quantity • Water usage is increasing. • Increased use changes environmental conditions. • The global water supply is being depleted; and by 2030, almost half of the world’s population will live in areas with major water stress.

  9. Land Issues • Land pollution • Dumping of residential and industrial waste, strip mining, and poor forest conservation • Waste management • Disposing of waste in an environmentally responsible manner • Deforestation • Destruction of natural habitats, such as the rain forest • Urban sprawl • Cities and surrounding areas become too congested, chaotic, and dispersed

  10. Deforestation of the United States

  11. Biodiversity • Deforestation, pollution, development, and urban sprawl have put increasing pressure on wildlife, plants, and their habitats. • Many ecologists believe that the loss of species threatens the success of entire ecosystems.

  12. Genetically Modified Foods • Genetic engineering involves transferring one or more genes from one organism to another to create a new life form that has unique traits. • Often results in insect and virus immunity

  13. Genetically Modified Foods (cont.) • The long term health impact of genetically modified products is not known. • Health, safety, and environmental concernshave prompted consumers around the world (especially Japan and Europe) to boycottgenetically modified products.

  14. Environmental Protection Agency (EPA) • The most influential regulatory agency that deals with environmental issues and enforces environmental legislation • Protects Americans from significant health risks in their work environment • Manages environmental risks • Is an integral part of U.S. policy • Contributes to diverse, sustainable, and economically productive communities and ecosystems • Enforces laws and provides information • Plays a leadership role in dealing with other countries’ environmental policies

  15. Goals of the EPA

  16. Environmental Legislation • Clean Air Act • Federal Insecticide, Fungicide, and Rodenticide Act • Endangered Species Act • Toxic Substances Control Act • American Clean Energy Act

  17. Environmental Legislation • Emergency Planning and CommunityRight-to-Know Act • Toxic Release Inventory • Pollution Prevention Act • Food Quality Protection Act

  18. Alternative Energy • Alternative energy sources reduce global carbon emissions and our dependence on traditional energy sources. • These sources include Wind power Geothermal power Solar power Nuclear power Biofuels Hydropower

  19. Business Response to Environmental Issues • Green marketing is specific development, pricing, promotion, and distribution of products that produce less harm to the environment. • Many products are certified as “green” by environmental organizations. • Consumers are increasingly being confused by green marketing claims. • Companies should strive to minimize waste, and should rethink what constitutes a “product.” • Product pricing should reflect true costs.

  20. Positive Links Between Environmental and Economic Performance

  21. Recycling Initiatives • Reprocessing of materials for reuse • Steel • Aluminum • Paper • Glass • Rubber and some plastics • Over 50% of products sold in stores are packaged in recyclable paperboard

  22. Green Marketing • Strategic process involves stakeholder assessment to create meaningful long-term relationships with customers, while maintaining, supporting, and enhancing the natural environment. • Products may be certified as “green” and carry a special logo identifying them as such. • Greenwashing involves false or exaggerated claims that a product is environmentally friendly.

  23. Other Environmental Initiatives • Emissions reduction • Reduces the threat of global warming • Socially responsible buying • Attempts to take into account the public consequences of organizational buying

  24. Strategic Approaches to Environmental Issues

  25. Stakeholder Assessment • A process requiring acknowledging and actively monitoring the environmental concerns of all legitimate stakeholders • Identifying and prioritizing stakeholder claims • Conducting research, assessing risks, and communicating with stakeholders about their respective concerns • Requires accepting the fact that not all stakeholders have equal interests

  26. Risk Analysis • An analysis performed by a company to identify environmental issues that relate to manufacturing, marketing, consumption, and usage patterns associated with its products • Industry and government research support identification of risk areas • Enables an organization to measure the cost/benefit relationship of environmental decisions

  27. The Strategic Environmental Audit • Organizations conduct an independent audit and report the results to all interested stakeholders. • Organizations developed ISO 14000 as a comprehensive set of environmental standards that encourage a cleaner, safer, healthier world. • ISO 14000 promotes a common approach to environmental management and helps companies attain and measure improvements in environmental performance.

  28. Strategic Sustainability Audit

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