Business and Government in the Global Context
Business and Government in the Global Context
This report is based on the environmental challenges with importance to corporations all over the world. A brief introduction highlights the key areas the report is to handle. The report is then divided into sections each with its own theme for clarity. The issue of greenwashing has been handled singly and where relevant, connections to some key issues provided. This report also looks at some of the examples tied to different topics discussed. The positive responses to climate change and general environmental changes, as well as greenwashing, have been explored. Most importantly, this report also looks at the implications of these responses together with the challenges that are faced by corporations and governments while addressing the environmental challenges.
Environmental changes have become a global issue with different bodies and individuals showing interest. From lobbying to setting policies, the business environment has slowly embraced the need to address climate change differently. Greenwashing remains to be the greatest challenge that businesses are facing to an extent that the consumers have changed their perceptions. Business and the environment remain related, meaning that greenwashing has some impacts on the environment as it has on consumers. Positive responses by corporations also differ but are aimed at improving the environment in one way or the other. Some of the responses are through energy generation from waste, embracing alternative energy, use of electric vehicles and corporate social responsibilities. The significance of the positive responses cannot be underscored. However, there are challenges that are currently being faced by organizations in their course of action. The connection of business to the environment, positive responses and corresponding impacts and challenges forms the core of this paper.
Businesses operate within the environment and are therefore in one way or another affected or affect the environment. As businesses continue to leverage on Industrialization that has led to positive environmental growth, it is notable that the businesses have contributed to the degradation of the environment either directly or indirectly (Bassi, 2011). Currently, there are a plethora of challenges that face businesses on the degradation of the environment (Blair and Hitchcock, 2010). There are many ways in which businesses have affected the environment. First off, the widespread issue of air emissions has been recorded in most literature owing to the various impacts it has had on the earth and the ecosystems in general (Sviva.gov.il, 2015). Some of the emissions from different business operations include sulfur dioxide, nitrogen oxides, and carbon monoxide as well as carbon dioxide gasses all which have far reaching effects on the environment (Epstein and Rejc, 2014; Blair and Hitchcock, 2010). The ultimate evidence of such releases has been the perturbation in climate, depletion of the ozone layer, increased ocean coverage and the greenhouse effects that forms the gist of most research.
Businesses have a link to the issue of poor waste water that could be treated and untreated that is released into the water bodies (Bassi, 2011). The compounds found in the waste waters have are linked to associated with pollution of underground water reservoirs and increase in minerals in the soil leading to infertility of land (Blair and Hitchcock, 2010). Businesses are involved in the transport of goods from one location to other locations through various transport systems (Epstein and Rejc, 2014). While transporting the goods leakages within the vessels used have led to land and water pollution (Blair and Hitchcock, 2010). Some of the leakages contain toxic and harmful substances that affect the balance of diverse ecosystems (Sviva.gov.il, 2015). There are businesses that operate using raw materials that contain or emit radioactive substances leading to the degradation of the environment and deterioration of health of the species and people on earth (Sviva.gov.il, 2015). Last but not least, the use of energy that is key in many businesses has is associated with escalated amounts of greenhouse gas emissions.
Greenwashing is a concept that has gained ascendancy in most literature and is also a key focus in most public and scholarly domains (Allora et al., 2008). Greenwashing has mostly been discussed in marketing literature and is currently a trending issue among consumers and management of corporations. Put simply, greenwashing refers to falsity in claims by organizations that they are green or that they are actively engaged in the protection of the environment through their activities (Allora et al., 2008). Some literature argues that greenwashing is a descriptive term for advertisements and labels that have environmental friendly messages contrary to what is really true. Corporations that use greenwashing show higher margins in terms of profitability and market share. Most of the consumers in the contemporary business world are more aware of the environmental challenges and are willing to spend their money on products that adhere to the sustainability standards that are set by the governments all over the world (Delmas and Burbano, 2011). The exorbitant increase in the demand for green products is to blame for the rise of greenwashing adopted by most companies. Organizations, companies, and individual businesses use channels such as advertisements, products, packaging, corporate websites, speech, video clips and recently the social media in propagating greenwashing (Delmas and Burbano, 2011).
There are a plethora of challenges or impacts that are posed by greenwashing. First off, greenwashing stirs confusion within the public domain. Through this confusion, the consumers are ill-advised and end up consuming products that have significant impacts on the environment. Secondly, greenwashing has been associated with health issues (de Vries et al., 2013). Most companies use green advertisements to mask the potential harms that a product may cause. Not even the innocent customers are spared; rather they are misled into purchasing products that do not conform to the standards required by the consumer insights and protection bodies (de Vries et al., 2013). Secondly, some of the corporations intentionally leverage the greenwashing strategies through adverts, in getting an edge over the others in the same niche. In this way, the penetration of better products in the market is hampered as consumers will go for what is lucrative and promising.
Greenwashing also has far-reaching effects on the consumers and the investors alike, after realizing the truth behind greenwashing, a customer or an investor, who are the key stakeholders in the market, might shy off from rewarding companies that are truly sustainable (Dahl, 2010). The other potential impact of greenwashing is that even the companies that are sustainable are affected by the reception of the products and services reduce due to spoilt reputation by the companies that engage in greenwashing (Dahl, 2010). However, viewing greenwash from another point, it aids in sounding an alarm for the need of sustainable solutions in favor of the environment rather than profits. Most organizations both governmental and non-governmental have mushroomed to combat the global threat of greenwashing that is a widespread phenomenon (Przychodzeń, 2013). Research reveals the significant contribution of greenwash to environmental damage (Przychodzeń, 2013). Organizations that engage greenwash are immune to regulations yet their operations degrade the environment.
An example of greenwashing that recently flooded the headlines is the greenwash that has been propagated and leveraged on by the Volkswagen Company for quite some years (Plungis, 2015). Following regular emission checks conducted by the government, it has been revealed that Volkswagen actually installed in the vehicles produces in the 1900s to now some cheating software and sensors that would bypass the set standards in favor of the business and market share of the company (Plungis, 2015). Consequently, Volkswagen has been in the limelight for producing vehicles that had the so-called cheating systems especially the 1973-74 models. US Environmental Protection Agency supposes that from the period between which the devices were installed till now, about 100000 tons of carbon emissions have been added onto the earth surface (Plungis, 2015).
There are many positive responses that have been taken by businesses in response to environmental challenges and most so the issue of greenwashing. Decades back, environmental protection was considered by businesses as a burden and the only way to comply with the strict government regulations. Governments undertook the role of ensuring proper environmental management in order to curtail climate change and other environmental challenges that currently impact on the economies. The government through regulations, sanctions, and fines, as well as incentive, has been able to have a commendable step in response to environmental change. However, currently, most businesses have embraced the need to slot in environmentally friendly policies and actions into their schedules and budgets voluntarily. Most corporations have turned to a variety of ways in response to environmental challenges such as carbon emissions through the implementation of policies that assure sustainability of such corporations.
Most organizations are slowly responding to the issue of greenwashing through a variety of measures. Of course, the measures are meant to protect the reputation of such corporations being that it is a key booster of competitive advantage (Zheng, 2012). Most organizations are currently walking the talk. Companies that are sustainable and have sound policies in matters concerning the environment are envisioned as ethical and thus preferred by consumers (Martínez-Ferrero and Frías-Aceituno, 2013). The most leadership of the organizations shows initiative towards a response to climate change issues in a number of ways (Zheng, 2012). First off, the leadership in such organizations set the pace for the environmental response strategies of the organization (Martínez-Ferrero and Frías-Aceituno, 2013). Secondly, the leadership also engages the employees on how to embrace green technology, respond to climate change and participate in green consumer behaviors (Zheng, 2012). As a move to fight various environmental challenges, organizations have embarked on reducing emissions through the use of renewable sources of energy (Martínez-Ferrero and Frías-Aceituno, 2013). Some of the common used renewable sources of energy include solar wind and wave energy that is meant to reduce emissions that result from the use of electricity.
The carbon footprint within the transport sector is very significant. Corporations and auto manufacturers have embraced innovation in order to cut the emissions of carbon into the atmosphere. Hybrid and electric vehicles have proven successful in taking care of the environment a greater deal. Compared to the conventional cars that use fuel, electric cars are efficient in nature and have little to no impact on the earth surface (Ayalon, Flicstein and Shtibelman, 2013). Most organizations have cut their budgets by conventional vehicles and invested more in electric vehicles.
Electric vehicles or EVs are powered by electricity that is produced either from geothermal stations, hydroelectric plants or from the combustion of natural gas or coal. Despite the latter two having a commendable level of carbon footprints, electric vehicles are only charged in designated locations compared to conventional gasoline vehicles that pollute the environment when in motion. As a matter of fact, with respect to pollution from vehicles, conventional cars continuously consume fuel and thus emit gasses while the only form of pollution for the electric vehicle occurs in electricity production and transmission pipeline (Ayalon, Flicstein and Shtibelman, 2013). Most of the car manufacturers have been able to redesign their vehicles and are slowly embracing electric vehicles. Additionally, some of the corporations have been subsidized by the government in order to have access to electric vehicles that are efficient and less destructive to the environment. Electric vehicles are advantageous in that they reduce the carbon footprint within the transport industries (Ayalon, Flicstein and Shtibelman, 2013). Secondly, EVs also ensure the sustainability of the companies that produces as well as those that use them for various purposes. Lastly, unlike the conventional vehicles, the maintenance and costs of the EVs are lower in the long run given that the environment is also catered for in their design.
Waste from processes within the production and operation of organizations are no longer considered a threat is owing to their usefulness in the generation of energy (Isaac and Norton, 2011). Clean energy can be recovered from waste in a variety of technological processes. In the process, the waste is first sorted and the recyclable lot recovered and reused or recycled (Fratzscher, 2004). The non-recyclable waste then undergoes a number of processes that end up releasing energy that can be utilized for various purposes (Isaac and Norton, 2011). There are different technologies that are applied in the generation of energy from waste (Zheng, 2012). The most known method is combustion at very high temperatures such as 800 0C and the energy either recovered as electricity or heat (Fratzscher, 2004).
When recovered as heat, the heat can be used to further heat water that turns turbines further aiding in the generation of electricity (Isaac and Norton, 2011). The second method applied in waste management is pyrolysis and gasification where the waste materials are heated in the absence of oxygen to produce a gas that can further be used in the generation of electricity (Fratzscher, 2004). The other method used in the extraction of energy from waste is anaerobic digestion where microorganisms are used to digest the organic waste into biogas that can be combusted at a larger scale to produce electricity (Zheng, 2012). The advantage of energy generation from waste is that it reduces dependence on energy from other forms that are non-renewable (Fratzscher, 2004). Secondly, it reduces the impacts of wastes in landfills as well as the emission of greenhouse gasses (Zheng, 2012). Thirdly, waste recycling and reuse in the process create sustainability in the environment (Fratzscher, 2004). Last but not least, electricity generated from waste is generally easier to control compared to that from coal that involves emissions of carbon into the atmosphere.
The other positive response strategy to greenwash and other environmental challenges that are being embraced by most businesses and organizations as well as corporations is a corporate social responsibility. Corporate social responsibility, abbreviated as CSR, is an umbrella term that has long been perceived differently by corporations, civil societies, and the private sector (Cragg, Schwartz and Weitzner, 2009). In a nutshell, CSR is just a framework that governs how a corporation or a business behaves towards the community and most importantly its contribution to the environmental well-being. Most corporations have been in the forefront when it comes to using CSR. As a matter of fact, it has been an ethical practice of most companies to report on their CSR activities when integrating their annual reports.
Corporations have also responded to environmental changes through policies. A number of corporations have environmental policies meant to cut the costs of resources and institute energy saving. The key aim of these policies is to comply with the set minimum standards in order to reduce the ecological risks as well as reduce the environmental fines should such corporations breach the standards. Most corporations have therefore responded to climate change in different ways. First off, there are companies that have practices meant to reduce the consumption of energy. For instance, some companies engage the use of renewable sources of energy in driving their operations (Cragg, Schwartz and Weitzner, 2009). Still, other corporations are actively being involved in the process of recycling and reusing waste products from their production pipelines. The impact of such policies has been the reduction of emissions by corporations. Corporations have also embraced green technologies and sustainable practices in response to environmental changes (Kotler and Lee, 2010). Where possible, some companies use solar-powered systems to supplement their electricity needs while at the same time taking care of the environment.
Companies also have active ecological policies that in a way have been described as reputation builders (Kotler and Lee, 2010). Companies like Shell Corporation have long identified their vulnerability to fines and have in place emission reduction strategies including having a presence in the carbon market. In response to climate and general environmental changes, corporations have also embraced environmental innovation (Kotler and Lee, 2010). Environmental innovation in the context of corporations has been instituted through sustainable product development (Kotler and Lee, 2010). Companies like Toyota Corporation have active innovation channels that are meant to produce green products for consumers. Notably, the design and marketing of hybrid cars is one of the best decisions that Toyota Corporation is using to curtail the carbon footprint that is rampant in the auto industry (Kotler and Lee, 2010). These hybrid vehicles use hydrogen gas that has no impact on the environment compared to crude oil and natural gas that is widespread in the auto industry.
The actions by governments and corporations are very significant. Firstly, through coming up with policies to institute sustainable practices, corporations, and the governments have been able to reduce the emissions. Secondly, businesses have been able to build their reputation as sustainable and green businesses thus having a competitive advantage over the others. Thirdly, through the generation of electricity from waste businesses have been able to reduce twofold the issue of landfills that have been the key agenda in an environmental response program. The actions have also set the pace for some of the companies that is new in some industries thus ensuring that the process of environmental conservation is well balanced. Last but not least, the impacts of climate change that were almost overwhelming the previous actions have been solved effectively.
The process of addressing environmental challenges is not smooth but has some few challenges. The first challenge is the costs of implementing the policies and acquiring technologies that ensure sustainability. Secondly, the policies of most organizations are limited by government directives, the boundaries the business operates and the global regulatory frameworks, making it hard to measure the progress of such actions (Puritt, 2015). Thirdly, when implementing CSR, some corporations have been faced with a legal suit and resistance either internally or externally. Additionally, some of the senior management team also have some resistance to sustainability programs especially if they are profit oriented (Puritt, 2015). Fourthly, the processes involved in policy development must engage different stakeholders and is always tedious and time-consuming (Puritt, 2015). Even so, some of the policies risk being outdated owing to the dynamic legal and business environments.
Some of the consumers are also so ignorant to inquire about the products they consume. Lastly, socialist associations also tend to fight even the slightest issues within an organization thus risking its existence. It is also noteworthy that the capitalistic view is to blame for the challenges being faced in addressing environmental challenges since a lot of foci is on profits rather than the social and environmental good (Kotler and Lee, 2010). Furthermore, neo-capitalistic move by major players such as politicians remains a challenge in addressing climate and general environmental changes in the business arena (Kotler and Lee, 2010).
Business and the environment are two entities that coexist. Recent focus has been accorded by businesses and the governments to environmental changes that have far-reaching effects on the earth surface. From storms, floods and desertification to hurricanes, the repercussions of climate change have been experienced. However, the good news is that the governments and businesses are acting proactively despite the outstanding challenges discussed above. Greenwashing is an issue that has been in the business literature especially the ones dealing with ethical marketing. It is noteworthy that there are impacts of greenwashing both to consumers and the environment. A positive response to environmental changes despite the challenges has proved successful. There is a need for cooperation between relevant regulatory bodies as well as more research, to enable corporations to respond effectively to climate change issues.
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