Sustainable Development - Essay Example

Running Head: SUSTAINABLE DEVELOPMENT Summary Sustainable development has been an issue of discussion for about two decades now. It is an issue that is related to the social responsibility on the part of businesses, both regionally and internationally. This business report covers the principles of sustainable development in BAT like prevention of child labour, ensuring of safety to workers, contributions to charity, prevention of smoking among minors, and also contribution to the governments’ tax revenue among others. A critique is also provided together with a comparison with a similar business (in this case, Japan Tobacco International). JTI sustainable development principles are also seen to be similar. For instance; prevention of minors from smoking, working towards reduction of risks involved in smoking, separation of smokers and non-smokers, respect of local cultures and norms of countries where they do business, and they also openly discuss the risks caused by smoking like diseases. Lastly, a conclusion is provided and the recommendations. The recommendations include putting away of advertisements from the reach of minors, banning of advertisements, making of cigarettes a luxurious commodity, redefining of the function of sustainable development in businesses, spending of CSR should be health oriented, also smoking in public places should be banned in totality and tobacco companies should not sponsor social functions. Introduction The past two decades have had people arguing that the existing models of development are unsustainable. That people are living way beyond their own means. This has been the case since proponents of sustainable development believe that the consumption pattern and human activities are heavily depleting the best part of the environment and the climate alike. Sustainable development is defined as the development that meets the present needs without reducing the ability of the generation of the future from meeting the then needs of their own. It is an expression that can be used in place of Corporate Social Responsibility. (Directgov, 2008) This is a report that is set to analyse the details of sustainable development in a business, to which the choice is British American Tobacco Company. The report will try and answer the question, “Which are the issues of sustainable Development evident in BAT Company?” further, a similar company will be brought to light and a comparison presented of the two companies. The events of the discussion will not overlap but will take the procedure below: Review of literature Body Analysis of sustainable development issues of BAT Analysis of a similar Company’s sustainable development issues Significance of the findings Conclusion of the investigation Recommendations Review of Literature Sustainable development, as stated earlier, is used synonymously with the expression Corporate Social Responsibility. Other scholars had the following views which consist of the literature review of this study; William in his book writes that Corporate Social Responsibility is a process of creation of sustainable wealth. His arguments are that it revolves around the making of commodities by a business that can be socially sustainable and those that are friendly to the environment as well as those that gain the support of the entire society. The writer goes on to state that to the management the issue is a complex one since it calls for the balance between what the stakeholders want and the competing interests of the society. This calls for a very strategic decision making process and thus, the coming up of the strategic CSR. (Werther, 2006) Corporate Social Responsibility and businesses development have to go together nowadays. In the past the obligation to ensure the society is satisfied lied with the government of the day, buy today it has shifted to the businesses big and small. Therefore, if the corporations need a society that is functioning well and one where they can do their business, the business has to work in unity with the society. This calls for accountability in corporate governance. These are the views of Hopkins in his book about corporate social responsibility. (Hopkins, 2007) Ethically, the function of Corporate Social Responsibility is believed not to be an upcoming one. In fact, it has been in existence for long. The big issue about it is complexity of the undertaking by businesses. Philosophically, under applied ethics, it is believed just to be a modern myth in the corporate world. It is viewed from different perspectives like describing the society business relationship and also interaction between the two. (Malachowski, 2001) The issue of CSR or sustainable development has become more than a national one to a regional or even International concern. Globally, it applies to Multinational Corporations. Further, identifying the best principles of CSR is a very simple process, but not so the implementation. Coalitions are called for due to the fastness of the growth and complexity of the corporate world. A more sophisticated synergetic system is needed both globally and within the regional stretches. (Lara and Palacious, 2007) Discussion and the Critique Before going to the specifics of the companies, it is good to understand the function of sustainable development according to various views by scholars. A corporate’s values can be coupled with its society’s impact to increase and improve its productivity as per the words written by Willard. A research was taken on whether the employees consider the issue of sustainable development as an important one. They said that they would rather work in a socially responsible organisation and still have their wages cut and of the interviwed, they were about 50%. Therefore, this matter of social responsibility on the part of companies should be taken seriously. Willard further says that a company can achieve the goals of helping people earn their daily bread while at the same time achieving their daily meaning. This was more so made a more concrete idea since European students in 14 countries at the university level put the issue of environment protection at the epitome of their prioritised agendas. About 68% were ready to incur a cost so long as the environment was made better. (Willard, 2002) In the shareholder value model, it’s believed that the body corporates of today are in the process of change in terms of their behaviour. Porritt says that what looks today as the CSR will not in any way resemble the looks of the future’s sustainable development behaviour. (Porritt, 2006) Barr recognises different models of sustainable development, but according to him the most common one is the ‘harmonisation’ model. It is sometimes called the model of ‘three rings’. This is since it has three players in it, namely; the society, businesses and the environment. The priority given to the three segments is equal. However, there are conflicts that occur among the three segments of the model. This is often due to the differing interests by each of the segments. Accordingly, there are alternative kinds of sustainable development to satisfy the needs of the existing relationships. These kinds fall under the categories of social, economic and political. (Barr, 2008) BAT is arguably the most international corporation that centers on Tobacco business. According to the BAT website it is quoted as the second biggest quoted group that deals with tobacco in the entire globe. Its brands are sold in about 180 nations in the world. It has well beyond 300 brands in its portfolio. Its factories are located in 40 countries and they are 47 in number. The giant tobacco company is also an employee of about 53,000 people in its entire business. The company also involves itself in tobacco growing by its well established collaborations with farmers in the world. The shareholders of the company are 58,030 with a reported profit of Euro £2,287 million for the year 2007. On matters pertaining sustainable development, the company is without limited information in the public domain. The company claims to be meeting the principles concerning sustainable development and it has its presentation of credentials to support the same. The BAT, website states that in the countries where it does business, it always ensures that there is social as well as economic development. BAT claims to do its business in a hardworking way toward the balancing of social, economic and the environmental concerns and ensuring sustainable development as well. To this, they say that they work to ensure that child labour is eliminated together with labour governments and organisations, to ensure the skills of their employees are developed, to make sure that there is fair employment and to offer the highest payment standards and benefits globally Further, they argue that they are committed to standards that are world class concerning matters like the environment, safety performance, occupational health and even that they are committed to programmes of corporate citizenship. They have also written that they work towards developing efficient markets, to open up trade that is fair, to make sure that consumer satiations are qualitative and consistent and to deliver to their business partners’ as well as suppliers’ returns and finally, to initiate new technologies. BAT believes that international trade that’s fairer and freer promotes prosperity. Their take on this is that involvement in negotiations with the governments which they do, present opportunities to negotiate for the improvement of markets’ access, elimination of barriers of trade, monopoly power break-up and also encourage competition. They say that taxes from tobacco products form a vital revenue source for most governments in the globe. Examples are Sri-Lanka where excise and corporate taxes generate about 10% of the total revenue to the government and also in Brazil and Kenya the contribution stands at about 6%. British American Tobacco have also some printed principles as well as standards to form the basis upon which its business should be run regarding responsibility. They have a three-fold principle of doing business which are; Responsible Product Stewardship, Mutual Benefits and Good corporate conduct. In their support to human rights, they have the following to say: that they respect and support the internationally proclaimed rights to humans and their influence as well and that they also make sure they don’t condone abuse of human rights. There is also social responsibility in the process of tobacco production. To this they ensure technical support and training of the independent farmers and they claim the programme to be reaching well over 280,000 of their suppliers of leaf. They also run sensitising programmes to help avoid underage smoking and they also stick to their marketing standards in the international domain. And lastly, towards social responsibility to other citizens, the management recognise their company as citizens as well and they support charitable projects and local communities. BAT has a programme of Corporate Social Investment. (BAT.co.uk, 2007) What probably the BAT have not done to their vision in their sustainable development is to mention much about the costs of health. The costs of health due to use of their products like smoking and secondary smoking, are vast. For example, smoking costs about 1.5 billion per annum to the National Health sector of U.K, it also causes around 92,000 deaths per annum (bbc news, 1998). Further, still in their programmme, they don’t consider the costs incurred by tobacco farmers due to the chemicals used. Organic farmers compared to chemical farmers are more likely to have breasts cancer and even abnormality in their spermatozoa. (Lomborg, 2001) Another business similar to BAT in their undertakings is JTI. JT International have their headquarters in Switzerland. Recently, they also acquired Gallaher group, which operates in the U.K. JT International are a Tobacco international company which is believed to be the world’s third biggest. They have a world market share of about 11%. According to their website, they bought Gallaher for G.B 9.4 billion. JTI refers to the sustainable development function as Corporate Social Responsibility. However, they are not mistaken since according to Brown in his book ‘the sustainable Enterprise’, the expression sustainable development has been used interchangeably with the CSR-Corporate Social Responsibility. (Brown, 2001) Towards ensuring that JTI sticks to the upholding of CSR, the following are the findings: they recognise and openly show the risks associated with smoking like telling about the diseases caused by smoking. They also are transparent about the contents of their products to the smokers. JTI have been working on ways to reduce the risks involved in smoking and they understand that these risks cannot be wiped out in entirety. Smoking among the minors is highly prohibited by JTI and they also call for the rest of the society to help achieve these goals. Further, they are also advocates of the separation of the smoking and the non-smoking groups. Lastly, JTI go on to make sure that they respect the local cultures and norms on the views about smoking. (JT International, 2008) From these findings it’s really evident that the Tobacco industry is making a great effort toward sustainable development, but still a lot is still not done concerning the bigger issue. This is since the industry is in the point of view that doesn’t want to compromise on the profitability of their businesses while putting sustainable development issue in consideration. In June2004, a conference was held at Dublin in Ireland by the WCCO- World Conference for Cancer Organisations. Their main discussion entailed the fact that the tobacco industry is by far out of touch with the civil society. The speakers especially challenged the firms that sell tobacco to rid of themselves the gains from the sales revenue, to minors, to the world’s tobacco control community. Chapman, a professor of public Health from the University of Sidney, who was a speaker at the conference, made a presentation to BAT containing their core values. His take from these values was that the tobacco companies were giving the information, that they felt was right to them, but not so to the entire society. In fact, they argued it to be a paradox that they (the tobacco industry players) discourage children from smoking yet their very survival depends upon them. In Australia alone, new smokers who were also young were 1.9 million in the period covering 1965-2003, smoking about 9.7 billion packs in the 38 years. Another speaker Dr. Yussaf, said that tobacco has created a state of international emergency in the sector of health. This is due to the fact that it’s known that smoking is a leading cause of cancerous deaths. A person dies in every half a minute due to the smoking-caused cancer. Therefore, even though the tobacco industry is said to be socially responsible the only credit should go to the UICC. The UICC is the International Union against Cancer and which is a non-governmental organisation. It is exclusively dedicated to the world control of the killer disease cancer. Of the 280 known cancer fighting organizations, they are the biggest. Their mission is to rid the world of cancer which is a renowned killer disease. (International Union Against Cancer, 2004) Conclusion The most fitting conclusion after the findings from the two tobacco industry firms (the BAT and JTI), is that they have done much towards fulfillment of the requirements of sustainable development. However, more still remains undone. The arms, nuclear and the tobacco industry can be said to be the most popularly know industries especially because of their reaping high levels of profits. They are the most dreaded, through, citing their impact on people and on the world at large. The tobacco industry continues to try to convince the majority of humanity that they do really care. For example; BAT sold about 807 billion sticks of cigarettes in the year 2001. Despite its big fortune, it was really a paradox since they presented their report on caring for the society, yet their main business is a killer product. The point at which one can be conclusive that the tobacco industry has failed in totality, is the advertising of the products to underage persons. The logic here is that if they concentrate on the already existing smokers who are adults they would be sure to close business in a short moment. A company like JTI involves itself in preventing minors from smoking through provision of funds to projects and companies in the same context. Also the function of corporate social responsibility is seen as negatively correlated to the firms’ value growth and thus the shareholders may not encourage it. This is since CSR is seen as away of incurring further expenses and may even lead to loss of business. (Lewis, 2001) The findings also show that less is taken into account as regards the effects of smoking on the environment like pollution and even the causing of bushfires by careless smokers. Yet still, no comment in the two companies’ CSR-measures and principles, has been put across to cater for those people who suffer from secondary smoking, yet they constitute a significant number. Recommendations Since most advertisements are supposed to be far away from children, they should not be done when the children are awake, but rather at night. Banning of tobacco advertisements should go further than the magazines, billboards and newspaper bans to even radios and televisions in the U.K. and also in the rest of the world. Cigarettes should be made a luxurious good by making them more expensive to avoid inclusion of minors into the bandwagon. The function of sustainable development should not be in conflict with the purpose of the business and therefore, if the products from these companies kill, it should be straight forth in their advertisements. This function of sustainable development should also be used not to market the bad product. It should be seriously taken and any business in a controversial undertaking should not use it as a reputation building factor. Most of their spending on CSR should be health oriented for them to be seen to be headed for the right direction since it’s the most controversial position the companies are in. All public places should also be made no-smoking zones to reduce the levels of secondary smoking. Through, this health costs set aside for the purpose of sick people from smoking will decline. Total ban should be imposed on sponsorship of social functions by tobacco companies. Reference list: Barr, S. 2008. Environment and Society: Sustainability, Policy and the Citizen. Ashgate Publishing, Ltd. BAT.co.uk, 2007. Sustainable Development. Retrieved February 11, 2009 http://www.bat.co.uk/group/sites/uk__3mnfen.nsf/vwPagesWebLive/43C281E79 9C3E21EC1257314004EF60F?opendocument&SKN=3 Bbc news, 1998. Cost of Smoking. Retrieved February 11, 2009 http://news.bbc.co.uk/1/hi/health/background_briefings/smoking/86599.stm Brown, C. S. 2005. The Sustainable Enterprise: Profiting from Best Practice. Kogan Page Publishers. Directgov, 2008. Sustainable Development. Retrieved February 11, 2009 http://www.defra.gov.uk/sustainable/government/what/index.htm Hopkins, M. 2007. Corporate Social Responsibility And International Development: Is Business the Solution? Earthscan. International Union Against Cancer. 2004. Corporate Social Responsibility. Retrieved February 12, 2009 http://www.uicc.org/index.php?option=com_content&task=view&id=15924&Ite mid=38 JT International. 2008. Corporate Social Responsibility. Retrieved February 12, 2009 http://www.jti.com/cr Lara, J.J.P. and Palacios, J.J. 2007. Multinational Corporations and the Emerging Network Economy in Asia and the Pacific. Routledge. Lewis Ellen, 2001. Tobacco Industry. Retrieved February 12, 2009 http://www.brandchannel.com/features_effect.asp?pf_id=158 Lomborg, B. 2001. The Skeptical Environmentalist: Measuring the Real State of the World. Cambridge University Press. Malachowski, A. R. 2001. Business Ethics: Critical Perspectives on Business and Management. Taylor & Francis. Porritt, J. 2006. Capitalism as If the World Matters: As If the World Matters. Earthscan. Werther, W.B. and Chandler, D. 2006. Strategic Corporate Social Responsibility: Stakeholders in a Global Environment. SAGE. Willard, B. 2002. The Sustainability Advantage: Seven Business Case Benefits of a Triple Bottom Line. New Society Publishers. Read More