Chapter 10 – Environmental Issues – Summary
Although the scope of the natural environment is quite broad, we define the term as the
physical world, including all biological entities, as well as the interaction among nature
and individuals, organizations, and business strategies. In recent years, companies have
been increasingly incorporating environmental issues into their business strategies.
Air pollution arises from stationary sources such as factories and power plants;
mobile sources such as cars, trucks, planes, and trains; and natural sources such as
windblown dust and volcanic eruptions. Acid rain results when nitrous oxides and sulfur
dioxides emitted from manufacturing facilities react with air and rain. Scientists believe
that increasing concentrations of greenhouse gases in the atmosphere are warming the
planet, although this theory is still controversial. The Kyoto Protocol is a treaty proposed
among industrialized nations to slow global warming.
Water pollution results from the dumping of raw sewage and toxic chemicals into
rivers and oceans, from oil and gasoline spills, from the burial of industrial waste in the
ground where it may filter into underground water supplies, and from the runoff of
fertilizers and pesticides used in farming and grounds maintenance. The amount of water
available is also a concern and the topic of political disputes.
Land pollution results from the dumping of residential and industrial waste, strip
mining, and poor forest conservation. How to dispose of waste in an environmentally
responsible manner is another issue. Deforestation to make way for agriculture and
development threatens animal and plant species. Urban sprawl, the result of changing
human development patterns, consumes wildlife habitat, wetlands, and farmland.
Deforestation, pollution, and urban sprawl threaten wildlife, plants, and their
habitats and have caused many species to become extinct or endangered. Genetic
engineering involves transferring one or more genes from one organism to another to
create a new life form that has unique traits. However, the long-term impact of this
technology is not known, and many people fear its use.
The U.S. Environmental Protection Agency (EPA) is an independent regulatory
agency that establishes and enforces environmental protection standards, conducts
environmental research, provides assistance in fighting pollution, and assists in
developing and recommending new policies for environmental protection. The Clean Air
Act regulates atmospheric emissions from a variety of sources, whereas the Federal
Insecticide, Fungicide, and Rodenticide Act regulates the distribution, sale, and use of
pesticides. The Endangered Species Act protects threatened and endangered species as
well as the habitats in which they live. The Toxic Substances Control Act empowered the
EPA to track, test, and ban industrial chemicals. The Clean Water Act authorized the
EPA to establish effluent standards and to set water quality limits for all contaminants in
surface waters. The Emergency Planning and Community Right-to-Know Act required
most manufacturers to file Toxics Release Inventories detailing their releases of
chemicals into the air, water, and land. The Pollution Prevention Act focused industry,
government, and public attention on pollution reduction efforts. The Food Quality
Protection Act changed the way the EPA regulates pesticides by applying the same
standard to all pesticides used in food products.
Businesses are applying creativity, technology, and business resources to respond
to environmental issues. Some firms have created a new executive position, vice
president of environmental affairs, to help them achieve their business goals in an
environmentally responsible manner. Green marketing refers to the specific development,
pricing, promotion, and distribution of products that do less harm to the environment.
There is growing agreement among environmentalists and businesses, however, that
companies should work to protect and preserve the natural environment by implementing
a number of goals: (1) eliminate the concept of waste, (2) rethink the concept of a
product, (3) make the price of products reflect their true costs, and (4) seek ways to make
business’s commitment to the environment profitable. Many organizations engage in
recycling, the reprocessing of materials—especially steel, aluminum, paper, glass, rubber,
and some plastics—for reuse. To combat air pollution and the threat of global warming,
many companies are striving for greater efficiency, waste reduction, and the reduction of
greenhouse-gas emissions. Socially responsible buying initiatives are another way that
companies incorporate environmental responsibility into their business strategies.
Businesses have responded to the opportunities and threats created by
environmental issues with varying levels of commitment. A high-commitment business
develops strategic management programs, which view the environment as an opportunity
for advancing organizational interests. Stakeholder analysis requires a process for
identifying and prioritizing the many claims and stakes on its business and for dealing
with trade-offs related to the impact on different stakeholders. Risk analysis tries to
assess the environmental risks and trade-offs associated with business decisions.
Organizations that are highly committed to environmental responsibility may conduct an
audit of their efforts and report the results to all interested stakeholders. Such
organizations may use globally accepted standards, such as ISO 14000, as benchmarks in
a strategic environmental audit.