Transforming Corporations Chapter 10

The Case for Responsibility Only 1700 transnational corporations (TNCs) have taken steps to improve social or environmental issues such as pollution. Several responses to environmental issues brought lower waste output and reduced overall costs in companies. Companies that switch to ecosystem friendly habits attract more workforce, higher popularity rates (such as less boycotts of products), and higher customer satisfaction rates.

Some Early Leaders Companies that are focused on becoming more responsible are placing much of the effort on to reducing waste emissions or focusing on their workers, plants, or consumers. Eco-effectiveness in companies means that they have to redesign the way their company works, such as their goods and good productions. Means there is no waste or is biodegradable or reusable. Rohners, for example, called in a new company to help create an eco effective fabric, with earth friendly dyes that are non- toxic. Companies have started to switch to more earth friendly ways to manufacture their goods with out harming the environment, such as making recyclable shoes from Nike, to organic grapes in wine, by Fetzer Wines.

Barriers to Responsibility Even though steps have been taken to improve the environment, there are barriers that keep others from doing the same. Three barriers hold most companies back from manufacturing goods safely. One: Shareholders are largely responsible for the doings that companies commit to. If a shareholder doesn’t approve of an action taken, they will pull their money out from that stock. In turn, companies which rely on that money, are then be pressured to maximize goods production at the risk of the environment

Barriers to Responsibility Continued A second influence: Actual environmental and social costs created from companies are not collected in accounting files or are include minor details. Companies do not have to pay for all external costs suck has injuries, medical care, and costs dues to pollution. If they were to, they would be paying over $3.5 trillion dollars a year. The last influence is corporations in society. It has been shown that corporations have a large influence on governments and the media, as well as others, to gain more consumers. Their sheer size and money made creates a pedestal of power over other institutions.

Engaging Stakeholders Stakeholders have a huge influence over companies and are usually investors, activists, communities, and labor unions. Stakeholders have come to realize the impact that companies have on the environment. They have started to work with these companies to adopt policies to help alter the drastic change in environment. For example: New York City and California stakeholders with pensions fund companies have worked together to adopt policies that address long term risks. Resolutions are filed to companies from stakeholders when a company does not or chooses not to adopt a policy.

Engaging Stakeholders Continued Non Government Organizations ( NGOs) are one of the largest represented groups of stakeholders. In some cases, a company will seek out an NGO to work together to build or create health, labour, or environmental policies throughout its business.

Leveling out the Playing Field Governments are vital to companies because they create regulations that all companies have to follow, such as how much carbon emissions one factory can let off. However corporations are having more and more influence over the very body that creates its regulations Having proper price signals allows both small and large companies compete, or responsible companies vs. irresponsible companies. It levels the playing field so that prices do not get too high for one company and not another

Redirecting Corporate Influence “ If corporations plan to maintain their place as a dominant institution in society, they will need to be perceived as beneficial on the whole.” Corporations have already started to change or influence their companies so that they can be more earth and social friendly; being responsible. Working with stakeholders and other companies allows corporations to create new standards to follow both current government regulations and new regulations to help an ecosystem in need