CH14 - The environment and business responsibilities

Question 1

aspects of the corp confronted by environmental issues

Answer 1

virtually all aspects of the corp, from:
- input if resources to the manufacturing process
- workplace conditions through the way products are packaged and sold

Question 2

commons + tragedy of the commons

Answer 2

commons = any resource used as though it belongs to all
tragedy = situation in which individuals with access to a public resource (also called a common) act in their own interest and, in doing so, ultimately deplete the resource.

Question 3

Environmental ethic def

Answer 3

the set of values or principles that govern a corporation’s practices relating to the environment

Question 4

sustainable development def

Answer 4

development ensuring that the use of resources and the impact on the environment today does not damage prospects for the use of resources or the environment by future generation
(contains environmental protection and enhancement; social progress; economic development)

Question 5

business sustainable development

Answer 5

according to the IISD, “adopting business strategies and activities that meet the needs of the enterprise and its stakeholders today while protecting, sustaining, and enhancing the human and natural resources that will be needed in the future.”
(profit + people + planet)

Question 6

environmental concerns in business and society

Answer 6

• acid rain
• air pollution
• ecosystems
• energy production and consumption
• nature and wildlife
• ozone
• pollution
• waste management
• water quality

Question 7

acid rain and air pollution

Answer 7

acid rain = precipitation that contains and abnormally higher concentration of sulphuric and nitric acid. Industrial activities create general gas emissions that combine with water to form the acids
air pollution = air quality is affected by various pollutants resulting from the burning of fuels, emissions from industrial sites, and emissions from transportation vehicles. Smog is one form of air pollution.

Question 8

Ecosystems + nature and wildlife def

Answer 8

ecosystems = biological community interacting organisms and their physical environment. It is recommended that industry take an ecosystem approach to the environment - recognize the interrelationship among land, air, water, wildlife, and human activities
nature and wildlife = concern for the harm caused to birds, mammals, fish and plants by the operations of business. Endangered species are of particular concern

Question 9

energy production and consumption def

Answer 9

the generation of energy is usually damaging to the environment, as are the pollutants released when the energy fuel is used. Industry is responsible for many of the problems created, but so are consumers. Business has been emphasizing the efficient use of energy through the development of new technologies for itself and consumers

Question 10

Ozone and pollution

Answer 10

ozone = naturally occurring gas, formed from normal oxygen, that protects Earth by filtering out UV radiation from the sun. The thinning of the ozone layer in the upper atmosphere has resulted in increased UV radiation
pollution = involved any form of contamination in the environment. Business is under pressure to reduce its polluting

Question 11

Waste management and water quality

Answer 11

waste management = “disposal, processing, controlling, recycling and reusing the solid, liquid, and gaseous wastes of plants, animals, humans and other organisms.” Wastes often are hazardous, making the process more challenging, Recycling is described by the four Rs : reduce, reuse, recycle, and recover

water quality = determined by the presence of contaminants affecting its chemical and bacterial composition. Supply of safe drinking water is a concern in Canada. Corporations take on different environmental projects, as illustrated by Royal Bank’s decision to focus on fresh water.

Question 12

Climate change (global warming) def

Answer 12

def = according to Environment Canada, it is “the result of human activities altering the chemical composition of the atmosphere though the build-up of greenhouse gases that trap heat and reflect it back to the Earth’s surface.”

Question 13

Greenhouse gases (GHG)

Answer 13

Gases that absorb and trap heat in the atmosphere and cause a warming effect on Earth. Some occur naturally in the atmosphere, while other result from human activities. Greenhouse gases include carbon dioxide, water vapour, methane, nitrous oxide, ozone, etc,

Question 14

How does the gov get involved

Answer 14

• public policy formulation and regulation of all aspects of the natural environment
  => Canadian environmental protection act, Canadian environmental assessment act, Kyoto protocol

Question 15

Environmental non-governmental organizations (ENGOs)

Answer 15

groups that hold shared values or attitudes about the challenges confronting the natural environment and advocate for changes to improve the condition of the environment
-> influence corps though protests, blockades, boycotts, and annual shareholder meetings
ex. wwf, greenpeace, david suzuki foundation

Question 16

how do ENGOs select corporations to target

Answer 16

• firms is source of the environmental impact
• extent of the consequences of the firm’s actions
• denser relationship among firm’s ENGOs
• larger the firm
• greater influence of the firm within their industry
• previous interactions with ENGOs
• closeness of the firm to consumers in the supply chain
• firm’s brands are well known

Question 17

standard environmentalism def

Answer 17

government regulation is necessary remedy for the market’s failure to provide enough environmental amenities

Question 18

market environmentalism def

Answer 18

economic incentives creates by market are more effective at protecting the environment than government interaction

Question 19

market factors influencing environmentalism

Answer 19

• economic growth
• free trade
• property rights

Question 20

differences between standard and market environmentalism

Answer 20

Economic Growth
S : viewed as destructive, producing more = more env harm
M: world is dynamic, 2 forces counteract harm (increased income - demand for more environmental quality + stimulation of innovation)

Free Trade
S: part of the problem, prevents countries from following their own higher levels of protection, belief that rich countries exploit poor
M: forces ind. to be more competitive, accelerating adoption of cleaner tech

Property Rights vs Regulation
S: faith in gov to solve problem for the public good
M: powerful too for protecting cuz ownership incentive creates stewardship incentive and gives indiv. power to protect the env.

Question 21

carbon pricing def + 3 ways

Answer 21

(market driven)
financial instrument that businesses and governments are using to reduce carbon emissions, which can be done in one of 3 ways:
1. cap-and-trade: govs cap total carbon emissions and then give or sell companies carbon permits that add up to the cap
2. carbon pricing: govs impose a fee on carbon
3. output-based price system: instead of paying the charge on fuels that they purchase, industrial facilities in the system will face a carbon price on the portion of their emissions that are above a limit

Question 22

offsets (emissions-reduction credits) def

Answer 22

credits purchased from other corps or orgs to mitigate greenhouse gases released into the environment
-> the funds generated used to finance undertaking that will result in the red

Question 23

examples of offset providers

Answer 23

Tree Canada - planting and nurturing trees

coolAction.com - helps individuals and companies reduce their global emissions of greenhouse gases

Bullfrog Power - green electricity retailer (hydro generators)

Question 24

Carbon capture and store (CCS)

Answer 24

carbon emissions are captures and injected into underground formation
-> referred to as carbon sequestration and geosequestration
-> can be expensive and difficult to implement

Question 25

4 approaches / business responses to environmental concerns

Answer 25

1. token response: focuses on damage control as problems arise and attempts are made to fix them
2. compliance with laws and regulations: concern about lawsuits and prosecution has motivated managers and executives to adopt strategies of compliance
3. comprehensive environmental management: management that seeks to gain a competitive advantage by taking an active stance on environmental issues
4. sustainable development: corps integrate concepts of sus. dev. into their business strategies and env. policies

Question 26

Environmental management systems (EMS)

Answer 26

• ensure that environmental practices become an important component of the corp’s overall strategy
  EMS helps corps to:
• reduce costs
• respond to investor demands
• facilitate regulatory approaches and mitigating operational risk
• hire best employees
• meet consumer demand for “green” product and services

Question 27

financial management

Answer 27

includes consideration of environmental factors and involves many aspects:
- accounting guidelines
- “eco-insurance” products available
- environmental assessments necessary to determine influence on financial performance and liability
- investments being screened for environmental performance
- shareholders unhappy with a corp’s environmental policy may hurt its financial performance

Question 28

green marketing def

Answer 28

selling environmentally friendly goods and services to consumers
-> consumers are increasingly considering eco-labels, third-party certification is occurring
-> are consumers willing to pay the increased prices often necessary for many green products?

Question 29

practices to have a green workplace (employees in office)

Answer 29

• recycling program
• conserving energy
• reducing consumption
• encouraging employees to be more eco friendly
• pesticide-free green landscape
• reducing emissions
• purchasing renewable energy credits
• reducing travel (virtual meetings)
• using natural lighting
• investing in community env. initiatives
• requiring suppliers to be green
• publicly disclose sustainability initiatives
• providing incentives
• organizing employee committees

Question 30

3 main areas of activity for eco friendly processes

Answer 30

• pollution reduction
• waste management and recycling
• energy conservation

Question 31

environmental sustainability measures and standards

Answer 31

• Coalition for Environmentally Responsible Economies (CERES)
• International Organization for Standardization (ISO 14000)
• International Institute for Sustainable Development (IISD)
• Canadian Sustainability Indicators Network (CSIN)
• Environmental and Sustainable Development Indicators Initiative (ESDI)

Question 32

criticisms of sustainability for businesses

Answer 32

• concept difficult to define and understand
• means stopping or constraining economic development
• implies capitalism is unsustainable and morally lacking
• lacks of understanding of markets and moralistic system of markets
• executives are being misled into responding to it as a social issue

Question 33

Linear vs Reuse vs Circular economy

Answer 33

Linear -> raw materials used to produce goods that are used and not recycled or may be even non-recyclable

Reuse -> after use, some goods are recycles and reused in production but the remainder is still waste

Circular economy -> restorative and regenerative by design so materials constantly flow around and a closed loop system preserving value (extender producer responsibility (ERP) and life cycle thinking)