Business Ethics and Sustainability Quiz

Business Ethics and Sustainability

• Sustainability is related to ethical decision-making and social responsibility, maximizing positive and minimizing negative impacts on stakeholders.
• Ethical awareness involves recognizing issues or dilemmas related to principles, values, and appropriate behavior in business decisions.
• Stakeholders will judge business decisions regarding sustainability.
• Corporate social responsibility (CSR) reports can improve stakeholder perception.
• Socially responsible activities can create a competitive advantage.
• Information about products and organizations is more easily accessible, both positive and negative.
• Businesses can use products and brand identity to enhance social value and consumer loyalty.
• Companies use sustainable practices to differentiate and promote their products.
• Sustainability encompasses the triple bottom line: people (social performance), planet (environmental performance), and profit (economic performance).
• People (social responsibility) focus on social impacts on employees, customers, suppliers, and the community.
• Planet (environmental responsibility) emphasizes minimizing ecological footprints.
• Profit (economic value) is essential for sustainability, even with an expanded definition.

Defining Sustainability

• Sustainability refers to long-term well-being for nature, including all biological entities, and interactions between nature and individuals, organizations, and businesses.
• Sustainable development is about meeting contemporary needs without compromising the ability of future generations to meet their own needs, focusing on the natural environment.

Global Environmental Issues

• Atmosphere: Air pollution originates from stationary sources (factories, power plants), mobile sources (cars, trains), and natural sources (dust, volcanoes). Climate change is long-term variations in average weather. Kyoto Protocol is an international treaty to control greenhouse gas emissions. Some countries use cap-and-trade systems for coal emissions.
• Water: Water pollution is a major contributor to illnesses, especially in developing countries. Some corporations are focusing on the sustainability of water resources, and global water quantity concerns are growing.
• Land: Land pollution involves dumping residential and industrial waste, strip mining, and poor forest conservation. Waste management is crucial, with electronic waste being a significant problem. Deforestation and biodiversity are also major concerns as forests decline and pressure on wildlife, plants, and their habitats increases. Genetically modified organisms (GMOs) play a role by manipulating plant and animal DNA.

Environmental Legislation

• The EPA (Environmental Protection Agency) aims to protect human health and the environment, using scientific information for efforts to reduce environmental risks.
• Federal legislation related to environmental protection should be administered fairly and effectively.
• Natural resources, human health, and economic growth are factors in environmental policy.
• Relevant regulations include the Clean Air Act (atmospheric emissions), Endangered Species Act (endangered species), Toxic Substances Control Act (industrial chemicals), Clean Water Act, Pollution Prevention Act, Leadership in Energy & Environmental Design (LEED), and the Food Quality Protection Act.

Alternative Energy Sources

• Wind Power: Wind energy has gained popularity, with experts predicting it could power 20% of the nation's needs. However, the cost of turbines and limitations of outdated power grids slow widespread adoption.
• Geothermal Power: Geothermal energy harnesses the Earth's internal heat, extracted from steam beds. This method provides a constant heat source, reliable energy, and reduced carbon emissions compared to coal-powered plants but can be expensive. Geothermal drilling sites are not everywhere available.
• Solar Power: Solar power converts sunlight to energy, or heat. Solar power is renewable but can be expensive. Furthermore, large-scale solar production infrastructure is not yet present everywhere.
• Nuclear Power: Nuclear power uses nuclear reactions, typically fission. It's pollution-free and relatively cost-competitive but has safety concerns related to meltdowns and waste disposal.
• Hydropower: Hydropower generates energy from moving water, often the largest renewable energy source, with reduced greenhouse gas and air pollution but can damage wildlife and aquatic life.

Business Response to Sustainability Issues

• Businesses use ESG (environmental, social, and governance) factors for reporting air, land, and water sustainability issues.
• Better environmental performance can boost revenue through better market access, product differentiation, and the sale of pollution-control technology.
• Companies have environmental initiatives like carbon reduction (shifting to renewable energy, energy efficiency) and sustainable product design (recycled materials, easier repair/recycling).
• Social responsibility often includes fair labor practices (improving working conditions and wages) and community engagement (positive community impact).
• Governance and transparency involve using transparent practices to improve governance and ensure accountability, including ESG reporting (examples: Unilever, Starbucks).
• Stakeholders' interests are now more considered for sustainability than just profit.

Sustainability Reporting and Certifications

• Green certifications (like LEED) demonstrate a company's commitment to sustainability for building and operations.
• ESG reporting provides transparent sustainability performance.

Challenges of 100% Sustainability

• Achieving full, 100% sustainability is incredibly challenging for companies across all aspects (environmental, social, economic, and governance).

Why 100% Sustainability Is Difficult? and Strategic Approaches to Environmental Issues

• Difficulties include complex supply chains, carbon emissions, resource usage, sourcing materials, transportation emissions, energy use, and waste management.
• Strategic approaches vary from minimal engagement with current problems to a high level of commitment, which involves:
  • Dealing only with existing problems;
  • Limited plans for anticipated problems;
  • Lack of stakeholder consideration;
  • Operating without long-term environmental concerns.
  • Attempting to comply with environmental laws. -Dealing with public relations issues.
• Viewing environmental issues tactically.
• Viewing the environment as a threat versus an opportunity.
• Strategic programs to address environmental issues.
• Viewing the environment as an opportunity to improve business strategy.
• Consulting with stakeholders on environmental concerns.
• Environmental audits of performance to align with international standards.

Strategic Implementation of Environmental Responsibility

• Recycling initiatives include reprocessing materials (steel, aluminum, paper, glass, rubber), using food waste for renewable energy/recycling and encouraging water recycling.
• Stakeholder assessment involves accepting and monitoring the environmental concerns of legitimate stakeholders and determining trade-offs for the impact on these parties.
• Risk analysis can identify environmental issues related to manufacturing, marketing, consumption, and use patterns. Risk analysis helps to assess environmental risks from business decisions.
• The Strategic Environmental Audit involves auditing environmental efforts and reporting results to stakeholders; using accepted standards (like ISO 14000); and evaluation of the firm’s environmental, social, and governance (ESG) programs.

Green Marketing and Greenwashing

• Green marketing is a stakeholder-centric approach that involves meaningful long-term relationships to maintain, support, and enhance the natural environment.
• Greenwashing is misleading consumers into believing a product or service is more environmentally friendly than it actually is.