Business and Natural Environment - Essay Example

Assignment Ref. No: Business Business and Natural Environment Introduction ‘Maximizing shareholders’ wealth’ is the core objective of all businesses, which face the remorseless forces of the market, and in turn device strategies and implement actions, even as they try to attain the core objective. In this situation of existence, survival and growth, businesses often make choices in tune with the market compulsions, and winking at the environmental issues. Thus, the fine line between a legitimate business need, and its social responsibility often gets blurred, in the pursuit for maximizing shareholders’ wealth at any cost. Unfortunately, as Mahatma Gandhi said, “This world has enough for everyone’s needs but not for everyone’ s greed.’ Fortunately now, the relation between economic growth and its adverse impact on natural environment has been widely recognized, and corrective steps are being taken. Impact of business on the environment Our environment is a complete natural system evolved over the ages and held in fine balance that promoted life on this planet. Human beings are but one part of this intricate ecosystem. All species of life, with the marked exception of human beings, follow the natural process of evolution to the extent the environment permits. On the other hand, the same environment that promoted the human race, has also given it the genius to explore and exploit it for a variety of reasons. People have basic needs in food, shelter and clothing and once these basic needs are satisfied, they aspire for higher needs viz., a better standard of living, leisure and recreation. Businesses meet these demands by exploiting resources found in nature. With the world Business 2 population rising continuously, the demand for goods and services is increasing faster than the can be sustained by the fragile ecosystem. While there is a limit to the exploitation of the natural resources, there appears to be no limit for the avarice. What started as a welcome industrial revolution in the 20th century, soon gave rise to the much-discussed environmental issues like pollution of air and water, ozone layer depletion, greenhouse gases, global warming, climate change etc. Every business impacts the environment in some way or the other; yet there is also no escaping from business growth. Here lies the dilemma of demand for goods and services from growing economies coupled with their lesser concern for environmental issues on the one hand, and, serious environmental concern from the developed countries, which is impacting their businesses! Issues The all-encompassing word for environmental issues is ‘sustainability’, which is currently recognized by one and all. Within this, one may identify five major issues – energy, health, water resources, climate & biodiversity and industries. “Sustainability refers to approaches that attempt to meet the needs of the present without compromising the environment for future generations.” (Press release, Univ. of Mich., 2006) and this definition can hardly be improved. These five issues are dealt below, briefly. Energy The major sources of energy that we presently use are thermal and hydel based. Thermal systems use fossil fuels like coal and petroleum products, and nuclear technology. Hydroelectric systems are comparatively more eco-friendly and based on renewable resources, but their contribution to the overall power needs is limited. Thermal systems meet bulk of the energy Business 3 demand world over, and are also identified as the main villains in environmental degradation and un-sustainability. Utility companies are producing ever more power for meeting the rising demand and this is being made possible by indiscriminately exploiting the limited resources of coal, natural gas and crude oil. Sooner than later, these resources would be exhausted; but that is not the issue here. From the point of mining to the point of using and throwing out waste products of combustion into the atmosphere, it is one long and sad story of recklessness. If we proceed at this rate of exploitation, we are likely to become extinct by the degradation of natural environment, before the natural resources are exhausted! Nuclear energy, though a proven and sustainable technology, has its own history of environmental disasters if one recalls the Three Mile Island or Chernobyl episodes. We have to develop alternative sources of energy that are sustainable and renewable, even as we tighten emission norms. Health Major concern on public health is due to environmental pollution – pollution of air, water and ground, caused by industrialization and expansion of services. Natural resources are metamorphosed into desirable goods irrespective of whether those goods, at the end of their useful life, can degrade to natural condition or not within reasonable time. Automobiles and plastics come to one’s mind immediately in this context. Air pollution caused by exhaust gases of motor vehicles, seen in the context of the millions of vehicles on the roads, has been identified as a major source of a number of respiratory, skin and other ailments. Practically all industrial plants, especially the mineral / metal processing and power plants release into the atmosphere huge quantity of particulate matter, oxides of carbon, sulfur, nitrogen other hazardous gases, leading to the phenomenon of acid rains. “From 1960 to 2000, we (in the USA) more than Business 4 doubled per person driving-- from 4,000 to close to 10,000 miles per year.”(Jackson, 2006, UCB College of Environmental Design). Improving fuel efficiencies, emission norms and commercializing new fuel technologies like electric / fuel cell batteries, hydrogen and natural gas for use in vehicles are expected to reduce dependence on fossil fuels, pollution and health concerns. Water resources While seawaters occupy more than two thirds of our planet, freshwater resources are severely limited. It is often said that the next major war would be fought over control of waters. Industrial as well as domestic wastes are polluting this elixir of life. Wastewaters from chemical, mineral processing, crude refining and power plants are a few of the major industrial sources that contribute to water pollution. In addition, this scarce resource is also being used up with free abandon due to rapid urbanization and over-exploitation of ground water. Net result is that many of the major cities and towns in the world today suffer insufficient supply of water and its quality is far below the standards laid down by the World Health Organization. In many countries today, bottled drinking water is more expensive than petrol! Climate and biodiversity Automobile emissions like carbon dioxide disturb the natural balance of greenhouse gases (water vapor, carbon dioxide, methane and nitrous oxide) in the atmospheric air. The result is global warming and other climatic changes with predictable damage worldwide. During the UN Conference on Climate Change in Kyoto in December 1997, the EU Member States agreed to reduce their greenhouse gas emissions by 8% between 2008 and 2012. (European Parliament Fact Sheets, 4.9.2 Air Pollution). Business 5 Reclamation of forest lands for human habitation, indiscriminate felling of forest trees by the lumber industry, major construction works across rivers with the resultant submergence of large tracts of natural habitat etc., are all contributing to the irreparable damage to biodiversity. Species of plant and animal life are being lost forever, upsetting the natural environment. Industry All the four issues discussed above are interconnected with business and industry. Evidently, industry can not sustain itself in the long run unless it realizes that environmental sustainability not only gives it a fresh lease of life – extended availability of resources and renewable resources – but also can lead to tangible benefits like public acceptability and improved market share, lower costs of clean up and / or litigation. The painful experience suffered by the Union Carbide in the ‘Bhopal Gas Tragedy’ and Exxon Valdez oil spill are cases in point and worth a brief review. The Bhopal gas tragedy The monumental disaster in Bhopal, India, towards end 1984 was caused by the leakage of methyl isocyanate gas from storage tanks in the pesticides plant, owned and run by Union Carbide India Ltd., a fully owned subsidiary of Union Carbide Corporation (UCC). The toxic gas leakage entered the atmosphere through a 30 m high chimney, which proved inadequate to dilute / disperse the gas that could have reduced the damage. In the immediate aftermath of the leak, over 2000 people died, about 300,000 were injured in varying degrees, and the survivors suffer the consequential effects of inhaling the gas, till date (Pratima, 1998). The impact on animal life was also very large. In the history of chemical industries anywhere in the world, this accident has Business 6 the dubious distinction of being the worst of its kind and has been nicknamed as, “Hiroshima of the Chemical Industry.” The event attracted the world media attention for more than one reason. The environmental disaster, the pathetic attempt by the top managers of UCC to evade responsibility, the hoards of legal eagles that flew from the US to India with a view to secure signatures from survivors for representing them in claim cases against UCC, the tragic negligence of relief / rehabilitation, and the prolonged litigation grabbed headlines for weeks together all over the world. The whole issue became so complicated that even two decades after the event, the victims were not compensated. UCC spent nearly $ 500 million in compensation and other measures, which in itself is a pittance compared to the liability it would have been forced to bear, had the disaster occurred in the USA or Europe. Exxon Valdez oil spill Exxon Valdez, a supertanker carrying 1.2 million barrels of crude, hit Bligh Reef near Alaska in March 1989, developed a huge hole in its hull and spilled nearly 265,000 barrels of crude into the ocean. The event hit world headlines for the environmental disaster caused by the spill, efforts to clean up the mess, costs and corporate accountability. The spill quickly spread over 4600 sq. km., across 5100 km. of coastline (Thinkquest). The environmental impact of the spill was of catastrophic proportions on marine life, with hundreds of thousands of birds killed, fish poisoned, large-scale death of other marine life like seals, sea otters and whales. Televisions across the world carried heart rending pictures of beautiful birds devastated in their thousands by the slime covering their bodies, barely able to stand up or open their eyes. Business 7 The incident brought world attention once again to environmental disasters occasioned by not individual acts of commission or omission but by the failure of even global scale businesses to foresee and prevent such occurrences. Oil spills like that caused by Exxon Valdez have been neither new nor isolated. It was just about 5% of the total oil spills that occurred in 1989, cost Exxon $ 2.2 billion in clean up operations, while the total cost was of the order of $ 4 billion (Thinkquest). Global oil trade runs into millions of tones each year and very large crude carriers (VLCC) of 500,000 t capacity or even more, move this commodity across the seas and potential for disasters is writ large into this business. The Exxon Valdez event led to the enactment of Oil Pollution Act of 1990. (Birkland, 1998) Both Bhopal gas tragedy and Exxon Valdez spill were environmental disasters occasioned by global business organizations. In both cases, the loss of image and the cost of clean up / compensation had been very high, highlighting the earlier statement that environmental compliance and care is cheaper and pays rich dividends, sooner or later. US Environmental Protection Agency (USEPA) The USEPA was set up during 1970 as a federal agency with a mandate to protect the health of US citizens by safeguarding the natural environment - air, water and land - from pollution and to consolidate and carry forward the existing environmental standards. It functions as the fountainhead of all the national standards of permissible emissions, which are implemented in close coordination with the state and local government bodies. It conducts extensive scientific studies, research and assessment work, which form the basis for its Business 8 recommendation of standards on the one hand and governmental legislation on the other. It works with industry and the other departments of the government in energy conservation and pollution prevention. EPA has the authority to enforce its standards and to punish violators. Administratively, it has its headquarters in Washington D.C., and has ten regional offices covering the entire country. Its activities also include protection and conservation of native Indian tribal lands. Some of its functions are delegated to the state governments and / or local bodies. Two major initiatives launched by EPA are the Energy Star program (1992) to promote energy efficiency and WaterSense (2006), to promote water utilization efficiency. Through its Air Quality Monitoring Group, EPA devises air quality models, dispersion models, atmospheric research work etc. to develop air quality standards. Legislation Efforts in the United States for protecting natural environment and controlling pollution have led to the following major enactments (EPA, 2006): The national environmental policy act (1969) The clean air act (1970) The clean water act (1977) The comprehensive environmental response, compensation and liability act (1980) The endangered species act (1973) The occupational safety and health act (1970) The oil pollution act (1990) The toxic substances control act (1976) The resource conservation and recovery act (1976) Business 9 These legislations lay down the policy, procedures, rules and regulations, administrative mechanisms to implement the policies and ensuring compliance. There are many more legislations at the federal as well as state levels. Al Gore’s accomplishments The former US Vice President, Al Gore has been a strong advocate for protecting natural environment and has to his credit a number of initiatives in this regard beginning in the mid 70s. He sponsored hearings on toxic wastes and global warming, wrote his book Earth in Balance and worked to enhance awareness among students. His debut in the documentary film ‘an Inconvenient Truth’ received accolades. Of late, he has been concentrating more on global warming, traveling and giving lectures to promote awareness and prevention. He has collected a team of specialists in the environmental field and is working to educate students, volunteers and community groups on his favorite subject namely, global warming, its effects and possible solutions. Conclusion Increasing populations and their insatiable demand for better quality of life is driving economic growth. Economic growth is growth in business and industry. The technologies and business practices of the past century are inadequate to meet the environmental standards that would ensure protection of natural environment. Sustainability is the key word that would determine the acceptability of any economic activity now and in future. Massive environmental Business 10 disasters like the Exxon Valdez oil spill and the Bhopal gas tragedy brought home the harsh truth that compliance is desirable and inexpensive compared to possible costs of clean up apart from loss of image. While the United Nations is pursuing efforts for securing collaboration of nations for controlling climate change caused by pollution, national organizations like the US Environmental Protection Agency are enforcing compliance based on extensive studies, research and dialog with the business and industry. Enlightened individuals and opinion makers like Al Gore and Prince Charles are chipping in with their efforts to spread awareness about environmental imperatives. Reference List Birkland, T.A., 1998, In the wake of the Exxon Valdez: how environmental disasters influence policy. Retrieved December 4, 2006 from http://72.14.235.104/p/articles/mi_m1076 Environmental issues, Al Gore. Retrieved from http://72.14.235.104/search? q=cache:gaIjhRyWzLMJ:en.wikipedia.org/ wiki/Al_Gore+Al+Gore+and+Environmental+issues&hl=en&gl=in&ct=clnk&cd=3 Environmental Protection Agency, About. Retrieved December 4, 2006 from http://www.epa.gov/ European Parliament Fact Sheets, Air Pollution. Retrieved December 4, 2006 from http://www.europarl.eu.int/factsheets/4 History, Exxon Valdez, Thinkquest, 2006. Retrieved December 1, 2006 from http://library.thinkquest.org/26026/History/exxon_valdez.html Jackson, R. J., 2006, Frameworks, UCB College of Environmental Design. Major environmental laws, EPA, 2006. Retrieved December 8, 2006 from http://www.epa.gov/epahome/laws.htm Natural resources and environment, Press Release 1, University of Michigan. Retrieved December 4, 2006 from http://www.snre.umich.edu/news/details.php?id=1138 Pratima, U., 1998, Bhopal Gas Tragedy: An analysis. Retrieved December 4, 2006 from http://72.14.235.104/search?q=cache:1cLHQrrlK9QJ:www.hu.mtu.edu/hu_dept/tc%40mtu/papers/bhopal.htm+bhopal+gas+tragedy&hl=en&gl=in&ct=clnk&cd=2 Read More