Moral values are extremely important in any human society. Moral values may originate from the family institution, society, religion, culture or self. There are a number of moral virtues that are not only important for a person’s well being, but also in ensuring an individidual’s success in academic, political or business pursuits. Honesty makes people respectable. Compassion makes people sympathetic to others. Courage gives people the bravery to overcome life’s challenges. Modesty keeps people focused and humble. Forgiveness allows people to be emotionally stable because they don’t hold onto anger and displeasure. These attributes are significant in reducing the stress and distress that typifies human existence as well as ensuring peace and harmony. The bonds that form with others will also be more fulfilling because they live their life according to honesty, compassion, courage, modesty and forgiveness.
These moral values are also important in the present day as a consequence of globalization and the increased diversity that characterizes modern day work environments.
While morals are usually discussed in view of their importance to individuals or the groups to which they belong in society, moral principles are also of very great significance in commercial organizations. According to utting (2005, p. 375) the concept of corporate social responsibility emerged in the 1980s and was mobilized by both commercial and civil society players. The UN Global Compact is a policy that was formulated to ensure that business committed to the concept of corporate social responsibility have a document with sets of ten universally accepted principles that act as guidelines in the pursuit of social corporate responsibility. These ten principles are divided into the labor, environment, human rights and envionment categories. This paper will incline towards a discussion of the environment category.
In spite of the fact that there are many scholars and business executives who are convinced of the unsuitability of corporate social responsibility for corporations that exists in modern day competitive commercial realms, this paper argues that commercial organizations, particularly multinational ones that operate on a large scale, should embrace the responsibility of considering and redressing the environmental impact of their business activities.
2.0.0 Environmental Corporate Social Responsibility
According to Medarevic (2012, p. 2) the primary rsources that commercial organizations depend on for energy are limited and expected to be exhausted in years to come. Based on the present trends of energy consuption, experts estimate that the world has “approximately 15,637 days worth of oil, 152,234 days of coal and 61,064 days of gas remaining” (Medarevic, 2012, p. 2). Moreover, Medarevic (2012, p. 5) purports that it has already been established that greenhouse gases, for instance carbon dioxide, play a great role in depleting the ozone layer and causing climate change and global warming. Globing warming in turn brings about calamitous environmental events such as hurricanes, increased desertification and melting ice caps which increase sea levels.
According to Medarevic (2012, p. 5) these happenings are not only catastrophic for the Australian population but also the whole world. The actions by businesses and industries around the world such as deforestation, water pollution and the production and emission of carbon dioxide through the combustion of fossil fuels for energy contribute to the problem of global warming.
These identified risks have caused environmental movements all over the world to emphasize the role that commercial organizations and business all over the world play in depleting and damaging the environment. Corporations have thus been encouraged to adopt responsible business strategies through incorporating corporate social responsibility; this would not only be beneficial for the businesses in the long run, but also for the environment (Medarevic, 2012, p. 2). Corporate social responsibility is described as the deliberate action by a commercial organization to adopt a number of “voluntary” initiatives aimed at enhancing the commercial organizations environmental, social and human rights record (Uttah, 2005, p. 275).
The UN Global Compact policy is a policy initiative regarding corporate social responsibility that has the largest number of members in the world (Rasche and Kell, 2010). This policy is comprised of an estimated 8,700 corporate players and affiliates from a projected 130 nations around the world. In addition to conventionalizing its ten principles in all the commercial organizations of the world, the UN Global Compact policy also endevors to mobilize the business institutes of the world to declare their commitment and support of UN goals, particularly the Millenium Development Goals. Rasche and Kell (2010) state that in regard to the issue of commercial organizations’ environmental corporate social responsibility, the UN Global Compact has described three principles that are expected to guide the activities of business institutes. Principle 1 in the environment category of the UN Global Compact policy states that “Business environments should support a precautionary approach to environmental challenges”.
The second principle states that business institutes committed to the concept of corporate social responsibility should “undertake initiatives to promote greater environmental responsibility”. The third, and last, principle in the UN Global Compact policy regarding corporate social responsibility states that commercial organizations should “encourage the development and difussion of environmental friendly technologies” (Rasche and Kell, 2010).
Lyon and Maxwell (2008, p. 1) posit that in the modern day an bigger number of commercial organizations have increasingly indicated their aspiration to be “green”. In Australia the Australian Centre for Corporate Social Responsibility has been very active in helping corporations establish lasting value through the adoption of responsible business strategies and associations with stakeholders. Nevertheless, Deegan and Rankin (1996, p. 50) argue that Australia is characterized by a lack of legislative decrees demanding that companies report on their environmental initiatives or performance.
Companies such as Toyota, Dell Computer, Nike and Bank of America are amongst the companies in America that have embraced the concept of corporate social responsibility. Others such as BP, GE and Alcoa have even gone a step further to form the US Climate Action Partnership aimed at lobbying for the American government to regulate emissions of greenhouse gases. Lyon and Maxwell (2008, p. 1) points out that the most common actions of corporate social responsibility include the formulation and application of environmental management systems, principles of occupational health and safety, codes of conduct to govern the behavior of those affiliated to the commercial organizations as well as engaging different stakeholders in dialogue.
A commercial organization that is committed to the values of corporate social responsibility also commits itself to supporting development schemes as well and any other productive initiatives in the communities where they operate.
3.0.0 Corporations have a Responsibility Towards the Environment
There are a number of arguments that have been forwarded by scholars in support of the claim that corporations have a responsibility to consider and redress the environmental impact of
their business activities.
Moral Minimum of the Market Arguement
According to Mendes (2007, p. 5) the description of corporate social responsibility by any commercial organization has a propensity to interweave the components of cost benefit analysis indicators as well as value based pointers (Mendes, 2007, p. 5). According to this perspective the evaluation of corporates should not only incline towards the analysis of a business’s performance in terms of its financial gains and improvements in share value but also on its social and environmental indicators. Powers et al (1972) claims that “moral minimum” implies that regardless of the manner in which one decides to restrict the concept of social respinsibility, there will always be a negative injuction in society and its morality of evading and redressing any social damages that are caused to the environment.
Corporates are expected to demonstrate a certain level of ethical conduct so as to ensure that the corporate’s business operations flow smoothly. The moral minimum of the market argument regarding corporate social responsibility on the environment indicates that business corporations should not emphasize economics and commercial gains at the expense of realities in the their social and environmental sorroundings. Corporations ought to adhere to the fundamental requirements of civility and morality; these include issues of respect, justice, trust and good faith. The moral minimum of market argument also indicates that corporations should assume responsibility for occupational health and consumer safety by ensuring that they cause no personal or social damages in the communities in which they operate. In addition to this, commercial organizations should also ensure that they do not pollute or harm their environment in any way; in the event that they do, they should make sure that they come up with strategies of cleaning up.
Increased Size of Modern Day Corporations
Another reason why corporations have a responsibility to consider and redress the environmental impact of their business activities as indicated in the values and principles of corporate social responsibility is the fact that the modern day corporations have increased greatly in size. As a consequence of the fact that corporations that have become increasing large and powerful, government regulations and market forces are not longer effectual in ensuring that commercial orgabizations are effectively regulated so that they do not damage or pollute the environments in which they exist.
Corporations should commit themselves to principles of corporate social responsibility regarding the environment due to the fact that corporate power in the modern day has increased to such levels that market forces can no longer restrain the activities of such commercial organizations. According to Davis (1975, p. 19) social responsibility is perceived as emanating from the social power that the society awards a business organization. Davis (1975, p. 50) argues that “in the long run, those who do not use power in a manner which society considers responsible will tend to lose it”. This is referred to as the iron law of responsibility.
Supporting the Government
Another major argument in favor of commercial organizations adopting policies of corporate social responsibility in regard to the environments in which they operate is that by doing so they offer a helping hand to the involved government. According to the classical approach, corporations should be inclined towards ensuring that people in the society are well off financially while the government and other non-financial agencies cater for the society’s social needs. Nevertheless, this perspective is ignorant of the fact that the governments in many nations participate irreversably in their financial systems. It is therefore impracticable to draw hard distinctions. As a consequence of this, commercial organizations should be pursuaded to offer a helping hand to the government as indicated in mutually agreed upon policies.
Powers et al (1972) indicate a number of criteria that may be utilized towards this end. The first criteria is the importance and necessity of the need in question. In this regard, protecting the environment is amongst the top priorities on the agendas of many nations especially as a consequence of global warming and climate change. It is therefore very important that commercial organizations take up their roles of corporate social responsibility very seriously. The second criteria proposed by Powers et al (1972) is the proximity between the commercial organizations and the need. Presently a great number of corporations, particularly the multinational ones investing in Africa, Latin America and Asia have been accused of being responsible for the water and air pollutions experienced in these regions.
A third criteria that may guide the collaborative effort between commercial organizations and the relevant governments is the capacity that a commercial organization possesses to effectively redress the issue in question. Finally, Powers et al (1972) claim that another vital criteria that may be applied by commercial organizations in their collaboration with the government is the prospect of the need in question not being met unless the commercial organization takes particular action.
CRS is Beneficial for Corporations
Another major reason why corporations have a responsibility to consider and redress the environmental impact of their business activities is the fact that such an act is very advantageous for a commercial organization. A corporation that is reputed as having a good corporate social responsibility history is not only a focus for the best talent in the present day competitive market arena, but it will also attract customers that are conscious of corporate social responsibility principles and their importance in safeguarding the environment. Good corporate social responsibility is also very effective in lessening the incidence of law suits against corporations that adopt such policies. More over, when a commercial organization embraces and practices the principles of corporate social responsibility, it prevents any form of government intervention in its commercial operations.
4.0.0 Counter Arguement
It is however noteworthy that there are a number of counter agruements that have been raised against the adoption of corporate social responsibility by corporations, particularly in regard to environmental issues. To a number of scholars, such as Milton Friedman (1962), corporate social responsibility is actually a very “dangerous” idea. Friedman (1962, p. 133) states that “Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than making as much moeney for their stakeholders as possible”. In refuting the iron law of responsibility, opponents of corportate social responsibility by commercial organizations argue that social legitimacy in the modern day is not a major problem for a majority of the large corporations in the world.
This is more so in the western nations where there are seldom any protests against the activities of such large commercial organizations. This allegation makes it even more important for the administrators and managers ib large commercial organizations to take a leading role in embracing policies of corporate social responsibility and implementing its principles.
Other opponents of corporate social responsibility argue that the phenomenon is simply one more public relations maneuver or strategy by commercial organizations that are bent on enhancing their reputation and image in the eyes of their current and potential customers. As a matter of fact, it is argued that any talk or practice of social corporate responsibility is just aimed at screening the desctructive ramifications of capitalism on the environmental and social sorroundings of the communities in which these commercial organizations operate. Lyon and Maxwell (2008, p. 1) refute this by arguing that the overall ramifications of environmental corporate social responsibility are determined by the contexts within which corporate social responsibility occurs. As a matter of fact, the endorsement of “green products” is not only beneficial for the business but also the community in which it operates.
Another pessimistic view regarding corporate social responsibility is the fact that although the practice has a number of benefits for society, it is a very difficult practice to institute in the commercial arena. This is due to the fact that commercial organizations are configured in a manner that makes them solely directed towards engagement in commercial or/and economic activities. Corporations are perceived as not being structured in a manner that allows then to respond effectively to social problems. More over, the fact that business executives are not in elected offices implies that they have no legitimacy to involve themselves in such issues. As a consequence, it is argued that allowing business executives in commercial organizations the authority and power to influence social issues is dangerous due to the likelihood of the executives structuring social issues in ways that will benefit them and their business institutes as opposed to the greater good of the communities in which they exists. Allowing business executives social responsibilities is tantamount to threatening the concepts of democracy and freedom.
This paper has argued that commercial organizations, particularly multinational ones that operate on a large scale, should embrace the responsibility of considering and redressing the environmental impact of their business activities. There are many environmental issues in the present day that are of concern in different regions of the world; these include the issue of climate change and global warming. Increased studies on the causes of global warming have indicated that human activities, such as those carried out by industries and corporations, play a major role in polluting the environment and bringing about adverse climate transformations. Environmental corporate social responsibility ensures that commercial organizations have a liability to consider and redress the environmental impact of their business activities.
This paper has discussed the moral responsibility that corporations have towards redressing social and enviromental issues in the communities where they operate. In addition to describing the different ways in which corporations harm the environment in Australia, America and other parts of the world, this paper has also elucidated upon the phenomenon of corporate social responsibility. The argument in support of businesses adopting and ratifying principles corporate social responsibility, as well as the counter argument regarding the issue in question, have also been illustrated clearly.
6.0.0 Work Cited
Davis, K., (1975), “Five Propositions for Social Responsibility”, Business Horizons, Vol. 18, No.
3, pp. 19-24
Deegan, C. and Rankin, M., (1996), “Do Australian Companies Report Environmental News
Objectively?: An Analysis of Environmental Disclosures by Firms Prosecuted Successfully by the Environmental Protection Authority”, Accounting, Auditing and Accountability Journal, Vol. 9, Issue 2, pp. 50-67
Friedman, M., (1962), “ Capitalism and Freedom”, Chicago: University of Chicago Press
Powers, C. W., Simon, J. G. and Gunnemann, J. P., (1972), “The Ethical Investor: Universities
and Corporate Responsibility”, Yale University
Lyon, T. P. and Maxwell, J. W., (2008), “Corporate Social Responsibility and the Environment:
A Theoretical Perspective”, Review of Environmental Economics and Policy Advance Access, Vol. 1, pp. 1-22
Medarevic, S., (2012), “Environmental Corporate Social responsibility and the Carbon
Economy: A Case for CRS, the Triple Bottom Lime and Obliquity”, Corporate Governance Journal, Bond University, pp. 2-5
Mendes, E. P., (2007), “The Moral Argument Against the Business Case for Corporate Social
Responsibility: A Call for A New Moral and Spiritutal Approach”, University of Ottawa, pp. 1-14
Rasche, A. and Kell, G. (Eds.) (2010), “The United Nations Global Compact: Achievement,
Trends and Challenges”, Cambridge/New York: Cambridge University Press
Utting, P., (2005), “Corporate Responsibility and the Movement of Business”, Development in
Practice, Vol. 15, No. 375- 384