Accounting for the Environment. Is the natural environment a stakeholder?Stakeholder: to affect or be affected by the activities of the business organizationThe environment is clearly affected by the activities of the business organizationWhy should non-humans
1. The Natural Environment MGMT 491
Management Ethics in a Global Environment
Jeffery D. Smith
3. Accounting for the Environment Is the natural environment a stakeholder?
Normative Stakeholder vs. Derivative Stakeholders (see Phillips, Stakeholder Theory and Organizational Ethics, 2003)
The protection of the natural environment is morally important because it is a means to protecting the interests of other normative stakeholders
Does this adequately account for the moral value of the natural environment?
4. The moral value of the natural environment?
I reject the proposition that we ought to respect the “balance of nature” or to “preserve the environment” unless the reason for doing so, express or implied, is the benefit of man. I reject the idea that there is a “right” or “morally correct” state of nature to which we should return. The word “nature” has no normative connotation.
Baxter, William. (1974). People or Penguins: The Case for Optimal Pollution. New York: Columbia University Press, p. 8.
5. The moral value of the natural environment?
Environmental harm and resource use should be optimized so that human interest satisfaction is maximized.
Too little resource use can thwart interest satisfaction; too much environmental harm can lead to interest dissatisfaction.
6. The moral value of the natural environment?
Animals are sentient creatures
Species and Ecosystems have interests
7. Corporate Responsibilities to the Environment Narrow View
Corporations only have an ethical responsibility to comply with environmental laws. They do not have a responsibility to avoid harm or conserve resources beyond was is required by the law.
Corporations have an ethical responsibility to comply with environmental laws and take steps to protect the natural environment and conserve resources when it is technologically and financially feasible to do so.
8. Narrow view defended… Corporations have an entitlement to sell products and services in response to market demand.
Sometimes there is market demand for environmentally harmful products and services.
Environmental protection that goes above and beyond the law reduces the competitive position of corporations.
4. Governments have a responsibility to protect individuals and society from market activity that results in environmental harm by instituting laws and regulations.
5. Therefore, it is not the responsibility of corporations to protect the environment from harm when it is part of legal market activity.
12. 3 Pillars of Sustainable Development Economic
meeting the material needs of current and future generations (income, employment, nutrition)
meeting the material needs of current and future generations without harming the ability of the biosphere to sustain ecosystems and life
meeting the material needs of neglected, disadvantaged or poor individuals and groups (health, education, housing)
13. Natural Capitalism Amory Lovins and Paul Hawken (1999, May-June). A Road Map for Natural Capitalism. Harvard Business Review, 145-58.
*Increase Productivity of Natural Resources
*Biological Models of Production
*Service-leasing Business Model
*Reinvest in Natural Capital
14. Interface, Inc. Recyclable Flooring and Fabric Innovations
Eliminate waste through reuse and collaboration with customers, suppliers and industry members (closed loop production)
Minimize energy use that is not renewable
Compensate for environmental costs of doing business
19. Ritter Sport 1996 Involvement with Eco-Audit Regulation
Efficient, on-site power generation technology (solar, geothermal, co-generation)
Funding of recycling initiatives across Germany
Principle: “We introduce energy-saving measures whenever they do not increase our operating costs by more than 10%”
Cocoa growing initiative in Central America