Unit 9: Environmental issues and ethics in business

Environment issues notes

1. Q) What are areas that businesses need to consider in terms of the environment?

ACTIVITY 1:

Research your chosen company for your Final Report:

• Consider environmental issues of either AIR, LAND or WATER that need to be addressed and identify sustainability initiatives created by the business/organisation.

What SPECIFICS can you say about the initiative. A few questions to help:

1. When did/will the initiative start?
2. Is it global, local, regional?
3. How big is the problem being addressed – be specific?
4. How successful has it been?
5. What model of sustainability do you think the initiative following – Market, Regulatory or Sustainability approach? Explain
6. Which stakeholders least benefit from the initiative?
7. Can you think of any (potential) unintended consequences?

Write a brief feedback responding to the various questions (and more you might raise) and include useful links found.

Submit to Moodle or review during class

ARTICLE:    Eco- Business – Could the coronavirus outbreak be sustainability’s big break?

 https://www.eco-business.com/opinion/could-the-coronavirus-outbreak-be-sustainabilitys-big-break/

VIDEOS:

• Facts about global water usage (3mins) https://youtu.be/fqPGCphSi0s
• Sustainable development goals (10 mins) https://www.un.org/sustainabledevelopment/sustainable-development-goals/
• The Economist Global Compass looks at sustainability (Global) 15mins (variety of videos but the one below is about a circular economy) https://www.youtube.com/watch?v=xaK452BF3Cw&list=PL0KWoY2XZKw61aKKwAmbFWTz8p73KSeYT
• Moving towards a circular economy (Europe) 10mins https://youtu.be/URLP6a6a_wA

ACTIVITY 2:

Marketing to the Base of the Pyramid

In his landmark book business scholar C. K. Prahalad details the business opportunities that exist for firms that are creative and resourceful enough to develop markets among the world’s poorest people. Done correctly, marketing to the 4 billion people at the base of the global economic pyramid would employ market forces in addressing some of the greatest ethical and environmental problems of the 21st century.

Obviously, helping meet the needs of the world’s poorest people would be a significant ethical contribution. The strategy involves another ethical consideration as well: A market of this size requires environmentally sustainable products and technologies. If everyone in the world used resources and created wastes at the rate Americans do, the global environment would suffer immeasurably. Businesses that understand this fact face a huge marketing opportunity.

Accomplishing such goals will require a significant revision to the standard marketing paradigm. Business must, in Prahalad’s phrase, “create the capacity to consume” among the world’s poor. Creating this capacity to consume among the world’s poor would create a significant win–win opportunity from both a financial and an ethical perspective.

Prahalad points out that the world’s poor do have significant purchasing power, albeit in the aggregate rather than on a per capita basis. Creating the capacity to consume among the world’s poor will require a transformation in the conceptual framework of global marketing and some creative steps from business. Prahalad mentions three principles as key to marketing to the poor: affordability, access, and availability.

Consider how a firm might market such household products as laundry soap differently in India than in the United States. Marketing in the United States can involve large plastic containers, sold at a low per-unit cost. Trucks transport cases from manufacturing plants to wholesale warehouses to giant big-box retailers where they can sit in inventory until purchase. Consumers wheel the heavy containers out to their cars in shopping carts and store them at home in the laundry room.

The aggregate soap market in India could be greater than the market in the United States, but Indian consumers would require smaller and more affordable containers. Prahalad therefore talks about the need for single-size servings for many consumer products. Given longer and more erratic work hours and a lack of personal transportation, the poor often lack access to markets. Creative marketing would need to find ways to provide easier access to their products. Longer store hours and wider and more convenient distribution channels could reach consumers otherwise left out of the market.

So, too, can imaginative financing, credit, and pricing schemes. Microfinance and microcredit arrangements are developing throughout less developed economies as creative means to support the capacity of poor people to buy and sell goods and services. Finally, innovative marketing can ensure that products are available where and when the world’s poor need them. Base-of-the-pyramid consumers tend to be cash customers with incomes that are unpredictable. A distributional system that ensures product availability at the time and place when customers are ready and able to make the purchase can help create the capacity to consume. Prahalad’s approach—tied to moral imagination discussed previously—responds both to the consumers and to the corporate investors and other for-profit multinational stakeholders.

1. Do you think that business firms and industries have an ethical responsibility to address global poverty by creating the capacity to consume among the world’s poor? Do you think that this can be done?
2. What responsibilities, ethical and economic, do firms face when marketing in other countries and among different cultures?
3. Imagine that you are in the marketing department of a firm that manufacturers a consumer product such as laundry detergent or shampoo. Describe how it might be marketed differently in India.

For each question, where appropriate consider:

• What are the key facts relevant to your judgment?
• What ethical issues are involved in a firm’s decision to market its products among the world’s poor by creating the capacity to consume?
• Who are the stakeholders?
• What alternatives does a firm have with regard to the way in which it markets its products?
• How do the alternatives compare; how do the alternatives you have identified affect the stakeholders?

ACTIVITY 3: OPTIONS

1. Research corporate sustainability reports. How many corporations can you find that issue annual reports on their progress toward sustainability? Can you research a company that does not and explore why not (perhaps through its critics), or whether it has plans to change?

2. Investigate what is involved in an environmental audit. Has such an audit been conducted at your own college or university? In what ways has your own school adopted sustainable practices? In what ways would your school need to change to become more sustainable?

3. Do you believe that business has any direct ethical duties to living beings other than humans? Do animals, plants, or ecosystems have rights? What criteria have you used in answering such questions? What is your own standard for determining what objects count, from a moral point of view?