external environment - business and the environment
Richard Bowett discusses how businesses increasingly have to consider and respond to the effects of their activities on the environment.
Introduction
This has become an enormously important area, and businesses are under increasing pressure to change their behaviour in environmentally less damaging ways.
1. Much more is now known about environmental damage.
2. Many people now take an interest in environmental matters; it has become fashionable.
3. People are better informed, better educated and more questioning than they used to be.
4. Higher living standards means more waste and more business activity. Higher populations mean the same thing, except that populations in developed economies are fairly stable. However, increasingly dense populations in some areas means the problems can be concentrated in certain areas (eg big cities).
There is no doubt that the environment is a very important issue. On the other hand, the debate, to which business is subject, is very confused and often based on half-truths. Consumption produces waste eg human waste, and production to meet that consumption also produces environmental damage. The only way to remove environmental damage entirely is to stop producing and consuming.
1. One problem is the scale at which we produce and consume. This is a direct consequence of more wealth and higher living standards. That is what being ‘better off’ means. The environment is very good at absorbing and re-cycling even quite nasty waste if it is given time, and if the scale isn’t too large. Unfortunately, the scale of waste production is always rising due to more consumption and (in some parts of the world) more people. The problem is worse if it is concentrated in certain areas, as it usually is around centres of high population.
2. Another part of the problem is the kinds of goods and services we demand. Some products create more environmental damage in their production and consumption than others. Some medical treatments, for example, produce radio-active waste. Using energy produces large amounts of CO2. In Germany, for example, businesses are now responsible for the packaging they use. So packaging is now returned instead of ending up as litter. We can change these choices to less damaging products if we choose to.
See, for example
http://news.bbc.co.uk/1/hi/business/843186.stm
http://news.bbc.co.uk/1/hi/business/1146664.stm
3. A third part of the problem is the way in which we choose, as a society, to produce goods and services. There is no good reason for animal-testing on cosmetics (as opposed to medical products) and businesses are stopping it more and more. There is no strict need for so much car travel as opposed to travel by less polluting trains, provided we chose, as a society, to make the necessary changes to the way we ‘produce’ travel ie fewer roads and more trains.
4. A fourth part of the problem is the power and professionalism of ‘pressure groups’. Groups like Green Peace are very good at choosing their targets, and stimulating public sympathy. Combined with the world-wide spread of the media, they can soon put a business under enormous pressure to make changes. Senior executives don’t like being asked awkward questions, or contacted at home, and at a purely human level they may choose the quiet life and make the changes asked of them.
5. The science underlying an understanding of the environment is still disputed by scientists. For example, there is no doubt that global warming and climate change exists. However, some scientists say it is due to industrial pollution, and others are equally convinced it is all due to very long-term climate changes which are entirely natural and completely unstoppable. There are many examples like this.
6. This science is misunderstood by many members of society, business people, pressure group members and the general public. For example, a few years ago Shell needed to dispose of the ‘Brent Spar’ which was a North Sea oil rig which had come to the end of its useful life. Shell employs good scientists, and their advice was that sinking it in a very deep part of the North Sea was the least environmentally harmful option. As they were towing it to the sinking spot, Green Peace whipped up a storm of protest. In Germany angry customers boycotted Shell petrol stations and sales plummeted. Shell bowed to the pressure and agreed to Green Peace’s demand that the Brent Spar be towed to a Norwegian fjord for dismantling and land burial. Later, and rather more quietly, Green Peace agreed it had got its science wrong and deep sea burial was indeed the best option.
7. Government legislation is often ineffective. For example, fines for water pollution may be a few thousand pounds, which is a lot less than the cost of removing the waste safely. Unsurprisingly, water businesses have rather a lot of ‘accidents’ and then plead guilty at the enquiry.
But it is not a doom and gloom. For example, the West End of London has been the ‘posh’ end for centuries. This is because the prevailing wind comes from the west and blows the polluted air over the poor of the East End. But today the air of London is cleaner than it has been for 150 years. In the 1950s the Thames was almost dead. Now it abounds with fish. So improvements are possible despite the problems.
Technology offers great hope for future solutions, although technology is sometimes very expensive. Scrubbers can be fitted to chimneys, such as those of power stations, and remove almost all of the pollutants. Catalytic converters make car exhausts much cleaner, and work is now well-advanced on the fuel cell engine which uses H & O2 to power the car and which produces H2O as a waste product. Genetic engineering is producing varieties of cabbage which can lift pollutants out of contaminated soil through the root system and into the leaves where it can be removed safely.
Pressure Groups
These are part of the political system. They are groups of people united by a common interest in a ‘single issue’. There are lots of them, although only a few are large, well-financed and well-organised such as Green Peace, the National Trust and the Consumer’s Association. Some are formed specifically to fight one, temporary, issue and then disappear again, such as the group currently opposing the expansion plans for Stanstead Airport. Their job is to ‘lobby’ government to do some things (such as ban fox-hunting) and not do other things. They also mobilise public opinion. They can give businesses a hard time if they choose, and the best of them are as well-informed, as well-financed and as well-organised as business (which wasn’t always true); sometimes more so. The Internet now makes it quicker and easier to set up a protest group, and to collect and spread information. There are, for example, specific sites where unhappy customers complain about businesses that won’t sort out their problems with a product. These are very embarrassing for a business, and it usually means the problems are sorted out more quickly.
Pressure groups are much more powerful than they used to be. Businesses ignore them at their peril.
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