The Natural Environment MGMT 491 Management Ethics in a Global Environment Jeffery D. Smith

Accounting for the Environment Is the natural environment a stakeholder? Stakeholder: to affect or be affected by the activities of the business organization The environment is clearly affected by the activities of the business organization Why should non-humans “count” from the ethical point of view?

Accounting for the Environment Is the natural environment a stakeholder? Normative Stakeholder vs. Derivative Stakeholders (see Phillips, Stakeholder Theory and Organizational Ethics, 2003) The protection of the natural environment is morally important because it is a means to protecting the interests of other normative stakeholders Does this adequately account for the moral value of the natural environment?

The moral value of the natural environment? I reject the proposition that we ought to respect the “balance of nature” or to “preserve the environment” unless the reason for doing so, express or implied, is the benefit of man. I reject the idea that there is a “right” or “morally correct” state of nature to which we should return. The word “nature” has no normative connotation. Baxter, William. (1974). People or Penguins: The Case for Optimal Pollution. New York: Columbia University Press, p. 8.

The moral value of the natural environment? Environmental harm and resource use should be optimized so that human interest satisfaction is maximized. Too little resource use can thwart interest satisfaction; too much environmental harm can lead to interest dissatisfaction. Environmental Harm/Resource Use Human Interest Satisfaction

The moral value of the natural environment? Animals are sentient creatures Species and Ecosystems have interests Aesthetic

Corporate Responsibilities to the Environment Narrow View Corporations only have an ethical responsibility to comply with environmental laws. They do not have a responsibility to avoid harm or conserve resources beyond was is required by the law. Broad View Corporations have an ethical responsibility to comply with environmental laws and take steps to protect the natural environment and conserve resources when it is technologically and financially feasible to do so.

Narrow view defended… 1.Corporations have an entitlement to sell products and services in response to market demand. 2.Sometimes there is market demand for environmentally harmful products and services. 3.Environmental protection that goes above and beyond the law reduces the competitive position of corporations. 4. Governments have a responsibility to protect individuals and society from market activity that results in environmental harm by instituting laws and regulations. 5. Therefore, it is not the responsibility of corporations to protect the environment from harm when it is part of legal market activity.

BUSINESSHOUSEHOLDS labor, land, capital, natural resources payments wages, rents, interests, profits consumer goods and services CIRCULAR FLOW MODEL

BUSINESSHOUSEHOLDS labor, land, capital and natural resources payments wages, rents, interests, profits consumer goods and services BIOSPHERE Waste Energy Natural Resources Energy Natural Resources Energy SOLAR ENERGY

Toxicity? Halogenated compounds Chlorodifluoromethane chlorotrifluoromethane dichlorodifluoromethane chloromethane chloroethane trichlorofluoromethane dichloroethylene Freon 113 methylene chloride chloroform trichloroethane carbon tetrachloride trichloroethylene chloropentane dibromochloromethane tetrachloroethylene dichloropropene chlorobenzene chlorohexane iodopentane 3-methyl-1-iodobutane chloroethylbenzene dibromodichloromethane dichlorobenzene chlorodecane trichlorobenzene Aldehydes acetaldehyde methyl propanal n-butanal methyl butanal crotonaldehyde n-pentanal n-hexanal furaldehyde n-heptanal benzaldehyde n-octanal phenyl acetaldehyde n-nonanal methyl furaldehyde n-decanal n-undecanal n-dodecanal Ketones acetone methyl ethyl ketone methyl propyl ketone methyl vinyl ketone ethyl vinyl ketone 2-pentanone methyl pentanone methyl hydrofuranone 2-methyl-3-hexanone 4-heptanone 3-heptanone 2-heptanone methyl heptanone furyl methyl ketone octanone acetophenone 2-nonanone 2-decanone alkylated lactone phthalide Other Oxygenated Isomers C4H6O C4H8O C5H10O C6H8O C6H10O C4H6O2 C6H12O C7H12O C7H10O C7H14O C6H6O2 C8H14O2 C8H16O C7H8O2 C7H10O2 C9H18O C8H6O2 C10H12O2 C10H14O C10H16O C10H18O C10H20O C10H22O C9H8O2 C11H20O C10H10O2 Alcohols methanol isopropanol 2-methyl-2-propanol n-propanol 1-butanol 1-pentanol à-furfuryl alcohol 2-ethyl-1-hexanol phenol 2,2,4-trimethylpenta-1,3-diol à-terpineol Acids acetic acid decanoic acid Sulfur compounds sulfur dioxide carbon disulfide dimethyl disulfide carbonyl sulfide Nitrogen compounds nitromethane C5H6N2 C5H8N2 C4H4N2O methyl acetamide benzonitrile methyl cinnoline Esters vinyl propionate ethyl acetate ethyl-n-caproate isoamyl formate methyl decanoate ethyl decanoate Esters dimethyl ether dihydropyran Epoxides 1,8-cineole Furans furan tetrahydrofuran methyl furan methyl tetrahydrofuran ethylfuran dimethylfuran 2-vinylfuran furaldehyde 2-n-butylfuran 2-pentylfuran methylfuraldehyde furyl methyl ketone à-furfuryl alcohol benzofuran Alkanes C3H8 C4H10 C5H12 C6H14 C7H16 C8H18 C9H20 C10H22 C11H24 C12H26 C13H28 C14H30 C15H32 Alkenes C3H6 C4H8 C5H10 C6H12 C7H14 C8H16 C9H18 C10H20 C11H22 C12H24 C13H26 isoprene Alkynes C5H8 C6H10 C7H12 C8H14 C9H16 C10H18 C12H22 Aromatic benzene toluene ethylbenzene xylene phenyl acetylene styrene benzaldehyde C3-alkylbenzene isomers C4-alkylbenzene isomers methyl styrene dimethyl styrene C5-alkylbenzene isomers naphthalene C6-alkylbenzene isomers Cyclic cyclopentane methyl cyclopentane cyclohexane ethyl methyl cyclohexane C10h14 isomers C10h16 isomers (other) limonene methyl decalin à-pinene camphene camphor

3 Pillars of Sustainable Development Economic meeting the material needs of current and future generations (income, employment, nutrition) Environmental meeting the material needs of current and future generations without harming the ability of the biosphere to sustain ecosystems and life Social meeting the material needs of neglected, disadvantaged or poor individuals and groups (health, education, housing)

Natural Capitalism Amory Lovins and Paul Hawken (1999, May- June). A Road Map for Natural Capitalism. Harvard Business Review, *Increase Productivity of Natural Resources *Biological Models of Production *Service-leasing Business Model *Reinvest in Natural Capital

Interface, Inc. Recyclable Flooring and Fabric Innovations Eliminate waste through reuse and collaboration with customers, suppliers and industry members (closed loop production) Minimize energy use that is not renewable Compensate for environmental costs of doing business ISO 14001

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Ritter Sport 1996 Involvement with Eco-Audit Regulation Efficient, on-site power generation technology (solar, geothermal, co-generation) Funding of recycling initiatives across Germany Principle: “We introduce energy-saving measures whenever they do not increase our operating costs by more than 10%” Cocoa growing initiative in Central America