Corporate Environmentalism: Still in the shadow of suspicion & guilt

It is widely acknowledged that industrial and business activities have impacts on the environment and they are one of the major sources of environmental pollution. There are overwhelming empirical evidences which suggest that it is true. Traditionally, the corporate manifesto is making money & growth is good while ignoring to protect the nature poses the greatest danger and for many it is the greatest threat on humanity. Supplying natural raw materials and producing waste while maintaining the biodiversity and quality of life is being increasingly undermined since the Industrial revolution.

Industrial revolution in 18^th & 19^th century was a major turning point for human civilisation, which brought profound changes in agriculture, mining, transport and manufacturing sector, in turns it had effects on socio-economic & environmental conditions not only in Britain but also other modern capitalist economy. Consequences of the industrial revolution were using stream that provided power to pump water and machineries. Steam engines and steam turbines required steam boilers, which was one of the major sources of air pollution. In the manufacturing sectors hand worked replaced by machine works and production of goods increased rapidly. More goods had been produced by the industries than before for human consumption and it also created more pollution by burning coal and further utilisation of raw materials, which were significantly needed for the production processes.

Economic growth inspired by the new technologies, growth of capitalism, improved working condition and wellbeing for people had a price to pay by unsustainable growth that eventually resulted in pollution of water, air and soil. Significant pollution also released to environment by industrial accidents over centuries. There are countless examples; in our recent memories we still bare the scar of disaster of Chernobyl in Ukraine, 1979 Three Mile Island in the US, 1984 Bhopal gas tragedy in India, 1952 London smog disaster, Italian dioxin crisis in 1967, BP oil spill in the Gulf of Mexico 2010 and many more.

Above description is undoubtedly rather frightening, however my intention is not to enter into a detailed description on how industries have been major contributor to the damage to our environment. On the contrary, I would argue that there have been major changes in corporate attitude towards environmental responsibility and business sustainability as a whole for over a quarter of century. Yet public perceptions have not been changed even though industries have shown far better responsibilities towards environmental protection. Big businesses are still being demonised by their legacy and in many cases needs uphill struggle to win hearts and minds of their customers.

Lets go back to late 80’s when the United Nation’s Bruntland Report; also know as ‘Our Common Future’ was published. This report alerted the whole world that economic growth could be maintained without destroying the environment and provided a key statement on ‘Sustainable Development’ as ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs.’ Since this report, the role of industries in achieving a sustainable future had become more and more attractive to the policy makers through out the world. It was a turning point for industries who had realised that ‘business as usual’ was not an option any longer. They needed to change their business strategies aimed at moving companies towards sustainable development.

But in reality, why have there been huge changes of attitude? Where the business benefits and pressures come from?  Many businesses have been ‘doing the right thing’ in terms of reducing their environmental impacts primarily to minimise the costs e.g. through increased energy efficiency or waste minimisation. Businesses have realised that there are scopes to increase financial bottom-line, which eventually has triggered businesses to change their attitudes towards environment. Also, new market opportunities have been opened up whilst improving environmental performance of businesses, for example growth of recycling businesses in China and other countries. The United States exported $22 billion worth of recycled materials to 152 countries in 2007 (The New York Times, March 11, 2009). Furthermore, many customers feel and value environmental products and this kind of sales of environmental products can also increase company’s profits.

Businesses community have rightly understood that not only environmental protection to be handled but also wider issues of sustainable development need to be tackled to avoid problems such as liability claims, escalating insurance costs, prosecution, loss of markets and planning problems arising from lack of community goodwill (UK Round Table on Sustainable Development, 1999). Consumers are increasingly taking account of environmental character of products. Because of public concern about environmental issues, promoting environmental care can enhance a company’s image. When a company builds environmental benefit into products, it creates direct values to the consumers. Any false green claims from the company about their products, it will be very quickly found out and that will be a severe consequence upon the company in terms of their selling and rebuilding the reputation (Welford and Gouldson, 1993).

Companies need to make sure that their product manufacturing operations are green, simultaneously it is important to ensure that the suppliers they use who have green credentials such as having an ISO14001 Environmental Management System. Companies are worried about being held liable, environmental damage or found negligent for accidents as over the last two decades health and safety issues and safe working practices have become norm, also plethora of legislations were developed around it.  Employers and employees together have indicated the preferences to work for a good and safe environment and this has become as a major incentive for them to stay within the company (Groundwork, 1995).

Environmental regulations have also been an important driver towards business sustainability. Businesses are now complying with many environmental laws and regulations than they used to comply even a decade ago. Businesses have realised that the consequences of not complying with regulations would often be closure of their businesses (NetRegs, 2003). The European Union (EU) has been an important driver for the promotion of the sustainable development and the single European Act and the Fifth environmental Action Programme towards sustainability, required environmental consideration to be incorporated into all EU policy. Many initiatives from EU for example eco-taxes, the EU eco-labelling scheme and the Eco-management and Audit Scheme (EMAS) have complemented with more voluntary and industry-led approach (Hillary, 2000). European Union (EU) regulations will continue to underpin basic minimum requirements for more sustainable development both now and the future. Therefore, there would be a continuous pressure on the businesses to act responsibly and businesses will constantly monitor existing and likely future environmental and legislative trends, which might influence their business performances (Hillary, 2000).

Reducing costs from the environmental impacts from business activities not only save money but this can be the first step to overall environmental improvement which can later lead to adopt an environmental management system (Welford and Gouldson, 1993). Many experts have suggested that this could be run very efficiently alongside with health and safety (ISO18001) and Information Security (ISO27001) and quality system (ISO9001). All these system could be incorporated within one system which is called Integrated Management System. Big businesses have already started to upgrade their existing systems to Integrated Management System.

Finally, it is often discussed that corporations are locked into a destructive mode of corporate interests, politics and ideologies which could drive how they treat the environment.  More and more corporations are waking up with their moral responsibilities and self-awakening process to flush out so called the ‘old habits’, more specifically ideologies to ignore and many cases obliterate environmental issues. I’m not in any cases advocating that big businesses have suddenly become all green saints, but they should be praised and encouraged when necessary for their good environmental performances. Guilty should be brought to justice if they violate the human rights, health and environmental protection. It’s not helpful at all trying to shift the overall blame onto one section of society for environmental degradation. Society needs them to help to protect the environment, we should stay away from win/lose situation or we-versus-them.