Companies Caring for the Environment - Essay Example

?Although Continued Industrial Development is Important and Inevitable, Companies Must Take Care of the Environment in the Process INTRODUCTION Industrialization has the capability to help achieve a variety of social objectives such as employment, poverty abolition, employee standard, gender equality and greater access to education and healthcare. At the same time, it can be affirmed that industrial process also imposes negative environmental impacts in terms of climate change, loss of natural resources as well as air and water pollution among others. This can threaten the global environment as well as economic and social welfare responsibilities of an organization to a considerable extent. Environment protection is the method of preserving the natural environment regarding the interests of the stakeholders, including customers, employees, government and the other influencing bodies with utmost priority. It has often been argued in this regard that the pressure of over-population (allegedly encouraged by business sector growth within a given region) and continuous industrial development acts as the main determinants of environmental degradation (Tamazian and Rao 4-6). Subsequently, such external pressures in terms of the social responsibilities of the corporate bodies have recently been motivating them to go greener by lessening their rate of environmental degradation and at the same time, ensuring continuous growth to meet the customer demand to achieve economic development. Hence, a two way prolonged approach has to be followed in parallel by companies in the modern era. By following steps like switching from non-renewable sources of energy to renewable sources, targeting cleaner and hygienic production procedures, reusing wastes and implementing strategies that focus on environment friendly product designing, an organization can easily maintain the sustainable growth (Koh, Ghazoul, Butler, Laurance, Sodhi, Mateo-Vega and Bradshaw 67-71). THESIS STATEMENT As can be observed from the above discussion, companies are certainly witnessing pressure to consider environmental sustainability with almost equal and even at times with more importance than their profitability concerns, in the advent of continuous industrial development. This thesis will correspondingly, aim at assessing the need for taking environmental care measures by companies and the associated challenges, by synthesizing on the argument that “Although continued industrial development is important and inevitable, companies must take care of the environment in the process”. NEED FOR ENVIRONMENTAL CARE FOR COMPANIES IN CONTINUED INDUSTRIAL DEVELOPMENT The series of debates emphasizing industrial development implications on the natural environment in the forms of deforestation, climate change as well as air and water pollution has apparently contributed to the need for environmental care within the modern organizations (Esty & Winston 7-12). From a generalized point of view, it has been argued in the recent era that as a consequence of industrial development at a rapid and a continuous rate, need for resources among companies have also increased manifolds. In order to suffice this growing need for resources, especially energy resources and natural ingredients, companies have been sourcing large amounts of these assets from the environment. Such extractions have further resulted in various environmental challenges, majorly attributed in the form of climate change, unsustainable minimization of natural resources and imbalances in the biological cycle on earth (Esty & Winston 35-40). For instance, Geist and Lambin argues that the major proximate causes of environmental degradation through deforestation as a consequence of industrial development are unplanned agricultural expansion, irresponsible wood extraction and infrastructural expansion through building roadways and city areas in support of urbanization as observable in Africa, Asia and Latin America (5-15). Subsequently, these risk factors have been inhibiting the stability of the environment, which at large also affects the long-run sustainability interests of the companies apart from that of its stakeholders in correspondence (Geist and Lambin 5-15). Again, taking the example of the mining industry, it can be affirmed that continuous extraction of natural resources have not only minimized the soil fertility and ecological balance of many countries such as Ghana, Peru and Argentina, but has also disrupted the sustainable growth of the natives in these regions by negatively affecting their economic structure (Bloch and Owusu 9-20; Campbell 1-6; Vintro and Comajuncosa 32-37). These particular facts evidently advocate the need for environmental care as an essential measure to be taken by companies when following the trend of inevitable industrial development. Owing to such negative effects of unplanned industrial development and irresponsible attitude deciphered by companies, governmental and non-governmental concerned bodies have been continuously stressing on the need for environmental care with respect to the sustainability strategies applied by modern companies. Such regulatory pressures from the societal and political factors have also made it necessary for companies to take due strategic measures towards ensuring adequate environmental care (Lin 193-221; Parmigiani, Klassen and Russo, 212-223). Subsequently, sustainability has taken shape of a necessary and strategically differentiating agenda of every leading company, which today not only contributes to better stakeholder confidence, but also rewards the company with greater competitive advantages. It is worth to be noted that apart from the above mentioned motivational factors, the market drivers such as climate change, commodity stress and resource scarcity, have been causing severe impacts on the changing consumer attitudes inclined towards developing new and more sustainable business models. Now that the customers have a clearer understanding of impact of industrialization on the environment and eventually on their health as compared to the early decades of industrialization (i.e. in 18-19th century), this particular group of stakeholders have also been pressurizing companies to take due measures concerning environmental care (Deloitte LLP, “Business- does the environment care”). Going green has become the main initiative for forward looking companies such as Toyota, Wal-Mart, Sainsbury, Dupont, Tesco, Unilever, Marks and Spencer and General Electric, as customers and investors in the global corporate world decipher more favorable interests towards environmentally responsible companies in comparison to others. For example, GE targets to reduce its energy intensity by 50% by 2015 investing heavily on its Eco-imagination project as an environmental care measure. Similarly, Tesco announced as committed to reduce its emission from stores and distribution centers by 50% as on 2020. Wal-Mart also announced that it will reduce the total carbon emission by 20 million metric tones by 2015. Correspondingly, Toyota, in its Fifth environment Action Plan, aimed to enhance the fuel efficiency of the car by 25 % in all regions by 2015 (Keivan, “Why companies should care about the environment”). CHALLENGES FACED BY COMPANIES WHEN INCORPORATING ENVIRONMENTAL STRATEGIES With the increasing competition in the global industries, companies have begun to understand the growing needs of environmental protection as a differentiating and trust gaining measure from stakeholders, including customers as well as investors. Customers nowadays demand for better environment being much aware of the negative influences caused by continuous industrial development. With emphasis on environment protection and a focus on cost effectiveness, substantial pressure is being exerted upon modern organizations to seek cost reduction in all material-oriented processes including disposal. Debate on environmental protection usually focuses on the industries dealing with chemicals, petrochemicals, mining and semiconductors. From a common realization, most of the managers are of the view that large amount of environmental risk can originate in every company’s supply chain. The realization highlights that there is an increasing need for environmental protection. However, in consequence to this rising pressure, companies have to face challenges in terms of managing the traditional dimensions of cost, quality, delivery responsibilities and technology integration with parallel significance to their decision on the environment. Such aspects further raise challenges by essentializing the implementation of a proactive approach that again requires better management of resources by way of minimizing environmental impacts. However, this emphasis requires the sourcing functions of companies to be developed, resulting in the need for complete re-structuring of the business model (Hand?eld, Sroufe and Walton 1-19). The proactive environmental management has found its existence way back in 1990s that emphasized the impacts of industrial operations on the environment. A critical evaluation to the matter revealed that pollution prevention is far less costly than the expenditure required to be incurred by companies owing to regulatory compliance (Berry and Rondinelli 38-50). With reference to the inferences drawn in Berry and Rondinelli (38-50), it has been observed that from the past 25 years the cost of complying with environmental laws has easily exceeded US $ 1 trillion. About US $120 billion is spent annually on pollution eradication and control. It is worth mentioning in this context that well enforced regulations have brought tremendous progress in reducing air and water pollution and toxic hazards in the US and other countries. But the overhanging regulatory systems have made the environmental protection measures required to be practiced by companies, more expensive and less effective for both the business and the governments (Berry & Randinelli 38-50). From a critical perspective, it can thus be argued that significant value can be credited to proactive and environmental performance when aligning environmental exposure due to industrial development and strategic decision taking challenges faced by companies. Under such circumstances, it is recommendable that companies should be prepared to anticipate the stakeholder’s expectations. Accordingly, companies need to understand the evolving regulatory and enforcement trends in compliance with industrial development needs. A strategic and structured approach will also be crucial to balance growth objectives and sustainability for companies. It shall effectively help the companies to meet the stakeholder’s and governmental expectations concerning environmental impacts caused by rapid industrial developments. Another suggestible best practice focuses on implanting environmental considerations in due course of capital planning and budgeting. A fresh approach to capital budgeting decisions emphasizing the possible environmental effects while investing in technologies and processes, shall therefore aid in reducing unnecessary resource consumptions and wastes generation, which will in turn improve the overall return on investment for the companies rewarding it with sustainability in the long-run. To be summaries, a methodical, organized and enterprise-wide approach to measure environmental risks and opportunities may increase the focus of the companies on the application of sustainable activities and will accordingly generate a higher return on invested capital (Dow Jones & Company, Inc., “Incorporating Environmental Issues’ Impact into Strategic Decisions and M&A”). CONCLUSION Considering from a general point of view, environmental sustainability can justifiably be noted to play a key role towards assuring the well-being of human kind, which in turn influences organizational sustainability needs on the whole. Based on the above discussion, it becomes apparent that companies must perform their strategies responsibly towards the society where the company has been performing its business operations. Such a value consideration shall in turn assure high returns, better response and satisfaction from stakeholders, making the company efficient enough to build its market presence stronger in the current competitive environment of the 21st century context. Conclusively, when emphasizing the need for companies to care for the environment, the answer this argumentive statement can be observed to be simple yet powerful, which indicates alignment of economic and environment footprints. Notably, the major incentives obtained by a company when strategically focusing on environmental care initiatives is its ability to prevent physical waste, improve resources productivity, improve profitability, create brand awareness and subsequently, enhance competitiveness. Evidently, these incentives suffice the need for companies to take environmental care measures in the recently flourishing competitiveness in the global industrial realm. Works Cited Berry, Michael A., and Dennis A. Randinelli. “Proactive Corporate Environmental Management: A New Industrial Revolution.” Academy Of Management Executive, 12.2 (1998): 38-50. Print. Bloch, Robin, and George Owusu. “Linkages in Ghana’s Gold Mining Industry: Challenging the Enclave Thesis.” MMCP Discussion Paper No. 1. Campbell, Bonnie. “Corporate Social Responsibility And Development In Africa: Rede?ning The Roles And Responsibilities Of Public And Private Actors In The Mining Sector”. Resources Policy, (2009): 1-6. “Business- does the environment care”. Deloitte LLP. 2013. Web. 28 Nov. 2013. Esty, C. Daniel and Andrew S. Winston. How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage. Canada: Yale University Press (2009). Print. Geist, Helmut J. and Eric F. Lambin. “What Drives Tropical Deforestation?: A meta-analysis of proximate and underlying causes of deforestation based on sub-national case study evidence.” LUCC Report Series No. 4. Hand?eld, Robert, Robert Sroufe and Steven Walton. “Integrating Environmental Management and Supply Chain Strategies.” Business Strategy and the Environment, 14(2005): 1-19. Koh, Lian Pin, Jaboury Ghazoul, Rhett A. Butler, William F. Laurance, Navjot S. Sodhi, Javier Mateo-Vega, and Corey J. A. Bradshaw. “Wash and Spin Cycle Threats to Tropical Biodiversity.” Biotropica, 42.1 (2010): 67–71. Lin, Justin Yifu. “New Structural Economics: A Framework for Rethinking Development.” The World Bank Research Observer, 26 (2011): 193-221. Parmigiani, Anne, Robert D. Klassen and Michael V. Russo. “Efficiency meets accountability: Performance implications of supply chain configuration, control, and capabilities.” Journal of Operations Management, 29 (2011): 212–223. Tamazian, Artur, and B. Bhaskara Rao. “Do Economic, Financial and Institutional Developments Matter for Environmental Degradation? 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