Climate Change Strategy: The Business Logic Behind Voluntary Greenhouse Gas Reductions - Case Study Example

Article Summary: Climate Change Strategy: THE BUSINESS LOGIC BEHIND VOLUNTARY GREENHOUSE GAS REDUCTIONS of Synopsis Of late, there is a much increased concern on the level of emissions that companies release into the environment. In the article, the first concern is drawn on perhaps the biggest polluters, the USA, Russia, China and India. President Vladimir Putin signed a treaty to ratify the Kyoto protocol. Much as Russia is signing the treaty, America is seen to retreat from the same treaty citing two issues; the economic burden would be too large to bear and that the treaty excludes the important participation of developing countries. There is also belief that if china, Brazil and India are excluded from the treaty, then the efforts from the developed nations would absolutely be futile. Withdrawals or continued co-operation in the Kyoto protocol is an issue that companies in the market would like forgotten because it creates uncertainty in the global market. The withdrawal by the US has given her companies a lot of power and ability in maintaining their production regardless of whether there is harm to the environment or not. These companies have however come together in what is apparently seen as an ethical aspect to create self-regulations on the amount of emissions made to the atmosphere. The article comes to the aspect of “Business Logic and Voluntary Greenhouse Gas Reductions” there is much emphasis on regulations of the emissions given that the USA companies have to try and practice self-regulation. There are many reasons for adopting the necessary Green House Gas (GHG) reduction levels by the companies. First, the ownerships of the companies are varied depending on a collection of factors. Some are public, some are private, some are multinationals…whichever case, and each company has adopted a given level of reduction level. Some companies adopted aggressive reduction levels such as overseeing the reduction by 25% in the few years to come while others have adopted a less formidable policy of just 1% reduction level in a given period of time. Therefore, understanding the aspect of the emissions requires a shift from the complexity of the company structures to the actual strict environmental issue. Climate change requires a transition. A transition that tries to unify the regions of the world in terms of their level of pollution as opposed to concentrating on the Kyoto protocol and the level of structures of the companies. This is because companies that are tied by the protocol must always practice a lot of caution in terms of their dealings as opposed to those that are not bound by the protocol rules. Creating a transition therefore brings with it a lot of involvements in the development of complex and critical challenges. There will be winners and losers, opportunities and implications, resistance and avoidance as is already seen by some of the countries. The differences between these two groups and the lines being created revolves around a very complex cost-benefit analysis where a company either does something or it does nothing. It is therefore logical that not all companies will benefit from the voluntary reduction. This reduction is just based on the aspect of business logic and not tough laws as far as the places not affected by the Kyoto protocol are concerned. This is where the article introduces very important features based on this benefit benefits (Hoffman, 2005). Important Features Companies have sought strategic benefits as a result of practicing self-regulation and these are the factors that are presented in the article as very important features. These features show that despite the fact the companies have chosen self-regulation, they still stand to benefit from their trade. The features are: Improvement in operations Anticipated climate change regulations Assess of new capital sources Improved risk management Elevation of the corporate reputation Identification of new opportunities in the market Enhancement of human resource development. Article Reflection Right from the start, the aspect of inclusive participation of all stakeholders in the making of laws to regulate greenhouse emissions is not moving on well. The USA secludes itself from the global aspect of greenhouse emission and grants its companies the liberty to pollute the environment as they wish. However, in what is apparently seen as an ethical issue, the companies are trying to create regulation on their own and keep the environment clean. A closer look at how they intent to benefit from the self-regulation, as indicated in the key issues in the company indicates the will to fight for a clear and dependable environment. For instance, a look t the first aspect which deals with improving the operating sees the companies considering dematerialization of the production processes and optimization of the production process. In this regard, all the companies are set to benefit from the regulation as well as maximizing their profit provisions. The USA government and all the countries that do not support the Kyoto protocol need to follow in the footsteps of these companies and see that there can still be profit maximization and still keep the environment clean. It is also the differences in the preservation procedures that have kept the regulation bodies away from the company structures and developed a constructive use of the environment itself. This is because all the countries have complicated the aspect of the company management and developed a useful idea on the use of the effects on the environment to challenge the operations of the polluters. Case Summary: Fiji Water and Sewerage Company. The Fiji water company had a big role and controversy to hand i the market. There are both positive and negative assertions about the very existence of the company in the market. Some people say that the company is interfering with the water table while others contend that the company is producing the best for the communities that it serves. The big challenge in the whole saga surrounding this company is the energy and carbon multiplication in the world. In this regard, the company is trying to convince the public that it is wholly responsible for the carbon footprint disclosure. This spurred protests against the Fiji water in the USA and the UK put the company under a lot of pressure. The company was singled out as a company that promotes ‘water insanity’. In 1993, Fiji’s artesian water got the attention of an investor and Canadian born business man David Gilmour who wanted to extract the water and transport it both locally and internationally as a trade commodity. With the high demand of the Fiji water, a more complex state of the art bottling complex was constructed and made to develop a process that would see the bottles being manufactured and filled with the water at the same plant. The company was sold in 2004 to Roll International Corporation and the headquarters moved to Los Angeles. The global market for the bottled water has always been on the drastic change over the years. With 90% of the water exported, the global demands of the water were a paramount issue as it grew from one level to the next. The drink was exported all over the world with countries experiencing an increase in the sales over the years. Countries as far east as the UAE had a big stake in consumption of that water. In 2007, Europe and North America had the biggest available markets for the Water. With the above love in the market for the Fiji water, the USA market was an inevitable venture. The water landed in the US market in 1997 and a gradual roll out were followed by this expansion. The company used its strong market conditions to develop itself into a strong force in the USA market. In 2007 however, the company, in need to protect its image for once and all, decided to strategies and implement a new marketing campaign. This was aimed at communicating the core and key benefits of the water from Fiji Company. With the challenges that the company had gone through, it created a campaign theme called “untouched” where there was a very aggressive campaign to generate and acclimatize the market with its new and useful look. The company used direct marketing, combined advertisements, product placements and PR to generate fame for the water in the market. That is why the company decided to expand in 2007. The expansion to the Australian market saw the product being introduced to a given number of hotels and restaurants as a pilot scheme. This increased its fame and when there was a need to generate a progressive furthest move, the company reported a war with the authorities and given stakeholders in the market. The conservationists had not been impressed by the fact that Fiji water had announced that it was going carbon negative when it was still using plastic bottles to pack the water. However, that was expected and it is because of this that the company remained strong and steadfast. In the similar conditions of operations, the company developed a system where it helped bring foreign exchange into the government of Fiji through the international sales. To encourage its contribution to the economy of the Fiji, the company was given a tax holiday by the company for 13 years. An unethical issue arose in the 2008 financial year when the company was accused in what comes to be called transfer pricing by selling water to the los Angeles market at a lower than expected price. As a social responsibility to the community, the company employed most of the people from the local community and promoted their welfare. Moreover, there is need to focus on the government and create a relationship to be able to operate effectively. Relevant Stakeholders The most important stakeholders in the market were the management of the company, ownership, and then there are the consumers and the environmentalists. The political leaders virtually dictated how the company would run the market and the local community was also a very important aspect. It was from this local community that the company got its workers. Key Ethical Issues in the Case Public awareness through rampant campaigns on the importance of keeping good the environment despite using plastics bottles. The corporate social responsibilities to the customers and the community Employment of the local people especially in the areas of operation. Serious development of the works of the employees. Perspectives That May Be Contributing To the Conflict There are points of conflict in the piece of work indicated. The first one is the aspect of the company pleasing the customers and there are other groups such as the politically instigated protests. Some of the protests are based on a political strife on what the government wants. This however is not supposed to be evaluated from the consumer point of view because the three are also environmentalist groups and conservationist groups. Another point of controversy between the company and the other stakeholders is that Fiji Water Company had owners who would dictate ownership of issues and yet the company has employed social workers from the community around. It therefore to mind that aspects of the company are associated more with the local stuff and that makes the two. The company, because of that, can raid a section of the company for some dealing. What actions would you recommend and why? I would highly recommend that there would be a truce between the conservation groups, the government and the company so that issues of misunderstandings do not occur. When conservationist groups demonstrate, they are most likely dictated by the management, consumers and the groups. Group dynamism is lacking and there is a school everywhere (Stec, 2014). References Hoffman, A. J. (2005). Climate Change Strategy:THE BUSINESS LOGIC BEHIND VOLUNTARY GREENHOUSE GAS REDUCTIONS. CALIFORNIA MANAGEMENT REVIEW, 47(3), 21-45. Stec, M. (2014). Fiji Water and Corporate Social Responsibility. Ontario: University of Western Ontario. Read More