Impacts Global Business on Environmental - Term Paper Example

Impacts Global Business on Environmental 1. Introduction The impacts of business on the environment can have many forms and levels. In certain cases, the damages caused by business activities in the environment worldwide are extremely severe leading to permanent alteration of local ecosystems. Firms that operate in the global market have tried to adopt environment-friendly policies aiming to minimize the effects of their activities on the environment. The environmental reporting guidelines produced by multinational corporations annually can guarantee the limitations of the effects of corporate activities on the environment. However, these reports have to be part of a broad environmental strategy. If used as unique tools for the promotion of sustainability across the organization then their chances for success are limited. This is the case of British Petroleum. The firm’s activities are highly influenced by sustainability; in fact, an integrated plan on sustainability has been developed across the organization. However, the measures taken by the firm in regard to the protection of the environment have been proved to be inadequate: the environmental accident of 2010 (Gulf of Mexico) in which BP has been involved, has revealed the inability of the firm to control the effects of its operations on the environment. 2. Environmental reporting guidelines in the global market and accountability of firms for their environmental impacts The failures of the businesses to promote the necessary plans for the protection of the environment from their activities have been identified by governments and organizations worldwide. Appropriately customized legal frameworks have been introduced aiming to ensure the protection of the environment from global business activities. The Environmental reporting guidelines is such framework. UK has been the country, which initially established the Environmental reporting guidelines (in 2001) as obligatory for firms operating across its territory. Other countries in the international community followed the same practice. The establishment of the World Business Council for Sustainable Development, in 1995, verified that the enforcement of Environmental legal rules in businesses worldwide would be appropriately monitored (Blowfield et al., 2008, p.195). In practice, this target has not been achieved – the environmental accidents in which BP and other international companies have been involved during the last decade prove the failure of the international organizations and governments to enforce the environmental legal rules in the global market. In accordance with Richardson (2002, p.263) the Environmental Reporting guidelines is a scheme introduced in order to ensure the alignment of global business strategies with the environmental law. The above scheme was thought as an appropriate tool for introducing common environmental standards for all firms operating in the global market. In this way, the risks resulted from the coexistence of different environmental rules and standards in countries worldwide would be minimized. However, the introduction of regulatory framework is not the appropriate way for reducing the effects of international business activities on the environment. It is necessary to establish a mechanism that will monitor the performance of each international firm in the particular sector. Such mechanism does not exist – the existing ones are incapable of effectively monitoring the impact of international business activities on the environment (Rikhardsson, 2005, p.3). It is for this reason that the Environmental Reporting Guidelines scheme has been left idle. The development of sustainable plans by modern firms has been proved to be rather a communication/ marketing tool than an effective mechanism for the promotion of sustainability across their corporations. 3. The practices used by BP for the limitation of its environmental impacts – presentation and evaluation British Petroleum is a global competitor in the oil industry. The firm has developed a detailed sustainable plan (see corporate website, 2010) aiming to ensure that all its activities are aligned with the current Environmental standards and relevant legal rules. The firm’s activities worldwide are well expanded – as proved through the sites in which the firm currently operates (Milmo, 2007). In the past, indications appeared regarding the inability of the firm to control the impact of its activities on the environment – referring to the accident in Texas in the BP’s facilities. In 2010, the firm got involved in a major environmental damage – the oil spill in the Gulf of Mexico can be characterized as the most severe environmental damage of the last decades both as of its duration and as of the damages caused to the environment (Washington Post, 2010). The accident revealed the following failures of the firm: a) lack of appropriate safety measures in the relevant site, b) lack of appropriate mechanism for controlling the development of the damage, c) lack of necessary authorization for working in the specific area; in the specific case, all warnings regarding the potential risks of drilling in this area had been ignored, d) lack of sense of responsibility; actually it took moths for the firm’s managers to accept their responsibility. It has been proved that even if detailed Sustainable plans have been in place – on which money have been invested (Kerber, 2010) still the firm failed to avoid damaging the environment. As for the international community, it was proved that existing legal framework for the monitoring of global business activities is extremely weak, not being able to prevent major environmental damages, as in the case of BP. 4. Conclusion The efforts of British Petroleum regarding the alignment of its activities with the principles of sustainability have been common with those introduced in most firms operating in the global market. The severe environmental accidents in which the firm was involved has proved that the sustainability plans developed by multinational firms are inadequate to ensure the protection of the environment from these firms’ activities. On the contrary, through these policies the organizations in the international community that monitor the performance of global firms in terms of sustainability are given the false impression that these firms have taken all necessary measures for the protection of the environment. Under these terms, no Legal Framework can ensure the limitation of the effects of global business activities on the environment. Moreover, it is made clear that all existing environmental standards and rules- including the Environmental reporting guidelines - would be appropriately updated in order to control effectively the environmental effects of global business activities. References Blowfield, M., Murray, A. (2008) Corporate responsibility: a critical introduction. Oxford University Press Lyons, K. (2000) Buying for the future: contract management and the environmental challenge. Pluto Press OECD (2003) Annual report on the OECD guidelines for multinational enterprises: enhancing the role of business in the fight against corruption: 2003. OECD Publishing Richardson, B. (2002) Environmental regulation through financial organisations: comparative perspectives on the industrialised nations. Kluwer Law International Rikhardsson, P. (2005) Implementing environmental management accounting: status and challenges. Springer Sharon Beder, 'BP: Beyond Petroleum?' in Battling Big Business: Countering greenwash, infiltration and other forms of corporate bullying, edited by Eveline Lubbers, Green Books, Devon, UK, 2002, pp. 26-32. Online sources Barley, S. (2009) BP brings 'green era' to a close. BBC News, online, available from http://news.bbc.co.uk/2/hi/science/nature/8040468.stm BP, Environment and Society, 2010, available from http://www.bp.com/sectionbodycopy.do?categoryId=2311&contentId=7060022 BP, Safety in Shipping, 2010, available from http://www.bp.com/productlanding.do?categoryId=9052&contentId=7036624 Kerber, R. (2010) Environmental funds battled BP for years. Reuters, online, available from http://www.reuters.com/article/idUSTRE6525O420100603 The Washington Post (2010) Gulf of Mexico oil spill creates environmental and political dilemmas, online, available from http://www.washingtonpost.com/wp-dyn/content/article/2010/04/26/AR2010042604308.html Read More