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Philosophy 223 Business and the Environment Climate Change and Sustainability

Business enviro ethics

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Business environment ethics

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Page 1: Business enviro ethics

Philosophy 223Business and the Environment

Climate Change and Sustainability

Page 2: Business enviro ethics

Environmental Responsibilities? The attempt to specify the nature and

force of business’ responsibilities to the environment faces a significant conceptual stumbling block: the lack of a consensus about the nature of environmental responsibilities in general.

If we can’t agree what the nature of an individual’s responsibilities to the environment are, how can we say anything about business’s?

Page 3: Business enviro ethics

Important Questions If we are going to achieve consensus

on the nature of environmental responsibilities we need to agree on answers to some basic questions. What counts as “the environment”? What are the possible sources of

responsibility to the environment? What is the force of such responsibility?

Page 4: Business enviro ethics

What Counts? The OED defines environment as “That which

environs; the objects or the region surrounding anything.”

Though this definition lacks the specificity necessary to help us, it does highlight an important fact: the environment is not something separate from human life and activity. We are part of the environment. We make a mistake when we treat the environment

as if it were something external to human concerns and activities.

Page 5: Business enviro ethics

What Counts? Humans are part of the environment, but

there are important differences between us and other environmental “agents.”

The differences are both quantitative and qualitative. Quantitatively, we need to acknowledge the scope

and consequences of our unique capacity to shape the world around us to satisfy our desires and interests.

Qualitatively, we need to recognize that we don’t just act, we have the capacity to reflectively assess our acts, and choose from amongst possibilities.

Page 6: Business enviro ethics

What Counts? When we consider the choices we’ve made

and those that confront us now, a range of issues that count as “environmental” become evident. Conservation of resources Preservation Pollution Use of agricultural adjuncts (pesticides,

fertilizers, genetically modified crops and livestock)

Moral status of non-human life; biodiversity Systemic impact of human life (global warning,

sprawl, population growth)

Page 7: Business enviro ethics

Sources of ResponsibilityGiven the force of these

questions, it is important to consider resources from which we may be able to secure responses.

There is a broad range of possible values from which a responsibility to the environment may emerge.

Page 8: Business enviro ethics

Sources of Responsibility The values in question include:

Prudence: it’s our environment; if we mess it up, we don’t have another.

Justice: It’s not just ours, it’s everyone's. If we make choices that limit other’s access to we act unjustly. This can be true of present others or future others.

Aesthetics: natural beauty is a great source of pleasure to humans and thus deserves to be preserved.

Religion: humans as stewards. Economics: growth requires an extensive range of

environmental goods; degradation limits growth.

Page 9: Business enviro ethics

A Conflict of Values?Clearly, not all of these values call

us to responsibility in the same way. Indeed, in many instances values

may conflict. Ex. Economic values conflicting with

Aesthetic values.How do we resolve these conflicts?

Page 10: Business enviro ethics

Another Complication The situation is rendered even more

complex when we note that these values don’t exhaust the possibilities.

After all, the list we considered all seem animated by human capacities and concerns, ignoring the question of the moral status of non-human nature.

A non-anthropocentric ethics is going to produce a much different list of values that would have to be considered.

Page 11: Business enviro ethics

Business and the Environment Where does business fit into this complicated

picture? Choices and activities engaged in by

businesses clearly impact the environment just like those of individuals.

If there are individual responsibilities to the environment, it seems reasonable to conclude that there are responsibilities that businesses have as well.

Page 12: Business enviro ethics

The Intersection of Theories A fruitful way to flesh out the account of business’

responsibility to the environment is to consider how the various theories of Corporate Social Responsibility we’ve examined would assess these areas of significance.

This consideration provides us with another context for assessing these theories.

Page 13: Business enviro ethics

The Classical Model and the Environment According the the classical model, a business’

responsibility is to maximize profit within the law. Optimal Pollution: level of pollution tolerable to

relevant parties, as specified by market mechanisms. Resource Use: Cornucopism (a combination of market

forces and human ingenuity means that in practice there is no limit to any particular type of resource).

Preservation: natural areas have no intrinsic value; relative value best determined by market.

Biological Diversity: non-human life has no intrinsic value; relative value best determined by market.

Page 14: Business enviro ethics

Criticisms of the Classical Model’s Analysis Criticisms of this account frequently point to

the sort of market failures we’ve analyzed this semester: externalities, absence of markets, and conflicts between individual and social interests.

A more fundamental criticism questions the appropriateness of employing economic categories to assess environmental responsibilities. Such responsibilities ultimately rest on beliefs and

values; economics can only address desires and preferences.

Page 15: Business enviro ethics

The Moral Minimum Model and the Environment According to the MM Model, some

goods/values are so fundamental they should be exempt from economic determination.

Such goods are appropriate objects of government regulation: Clean Air Act.

Beyond concern for the values thus protected, businesses have no specifiable environmental responsibilities.

Page 16: Business enviro ethics

Criticisms of the MM Model’s Analysis Are the laws really a reflection of the beliefs

and interests of the citizenry? Who has a greater capacity to shape legislation: industry or citizens?

Are consumer beliefs immune to influence by business? Why do businesses (and politicians) spend ~$200 billion a year on advertising?

Is the law sufficient to guide managerial discretion?

Page 17: Business enviro ethics

Environmental Pragmatism Many have argued that businesses should not be

put off by the complexity of the issues raised by talk of environmental responsibility.

The principle of environmental pragmatism suggests that while there is continuing disagreement about the source and force of such responsibility, there is general consensus amongst business people concerning the content of their responsibilities.

Theorists typically highlight four areas of particular significance: Pollution, Resource Use, Preservation, and Biological Diversity.

Page 18: Business enviro ethics

Bowie, “Morality, Money and Motor Cars”Bowie plays devil’s advocate and defends

a Friedman like view of corporate obligations to protect the environment whereby companies have no special obligations to protect the environment above what is required by law.

He notes two important qualifications: businesses should not lobby against the wishes of the people and should help educate consumers about the environment.

Page 19: Business enviro ethics

Does business have an obligation to protect the environment?

Bowie starts his discussion by considering what sort of responsibilities someone like Friedman would say businesses do have.Business has an obligation to obey the

law.Business has an obligation to avoid

negligent behavior.

Page 20: Business enviro ethics

An ArgumentBowie then considers the implications of the following claim: No one has a right to harm another person unless there is a compelling, overriding moral reason to do so.

Consider the example of automobiles: ~50,000 persons will die in wrecks this year in the U.S.. ~250,000 persons will be injured. Automobiles can be made much safer so as to significantly reduce the possibility of harm. Doing so would be very costly. Consumers are unwilling to pay for ultra safe cars.

Given the harm that would come from increasing safety and the unwillingness of the consumers to pay the price, businesses have no obligation to make cars safer. The corollary argument is that businesses have no obligation to protect the environment above the requirements of law.

Page 21: Business enviro ethics

Whose Job is it Anyway?Citizens determine environmental

laws.Consumers typically reject green

products as too expensive or too much trouble to use.

Businesses cannot be expected to oppose such consumer preferences.Therefore, businesses have no special

obligations to protect the natural environment above the law.

Page 22: Business enviro ethics

First QualificationBusinesses should not oppose

environmental legislation.Business escapes special obligations because it is

willing to respond to consumer preferences. Consumers often cannot express their preferences

in the market.The political arena is the only other viable forum in

which consumers express their preferences.Business lobbying interferes with the expression of

these preferences.Since point 4 is inconsistent with point 1, business

should not intervene in the political process.

Page 23: Business enviro ethics

Second Qualification Business has a special obligation to

educate consumers about environmentally responsible choices.Business has no problem leading

consumer preferences.Business has expertise about

environmental matters.Business would benefit from doing so if

appropriate legislation were the result.

Page 24: Business enviro ethics

Arnold and Bustos, “Business, Ethics, and Global Climate Change”

This essay provides factual background regarding global climate change. It then uses the case of global climate change as a basis for arguing against Bowie’s position.

Five main lines of argument are developed and the authors’ argue for specific obligations in the transportation and electricity center regarding carbon emissions abatement. Public policy recommendations are also made.

Page 25: Business enviro ethics

No To BowieArnold and Bustos consider and reject Bowie’s

position. They argue for the view that businesses have

moral obligations above and beyond the law regarding global climate change.

They develop five main arguments. The first three are based on concerns about consumers, the other two are grounded in fundamental moral concepts.

Page 26: Business enviro ethics

The Interests of ConsumersMany nations in which MNCs conduct business lack

democratic institutions, so those citizens have little recourse. (The preferences of U.S. citizens impact non-U.S. citizens, yet the preferences regarding harm to non-U.S. citizens remain unaccounted for.)

It is unreasonable to think consumers have an accurate understanding of the causes of global warming.

Consumer preferences are not always satisfied by businesses (e.g., hybrid mini-vans, use of renewable energy).

Page 27: Business enviro ethics

Harm to OthersPreferences typically entail a claim on

resources.Preference satisfaction of U.S. consumers

makes use of a per-capita disproportionate level of atmospheric resources, so the harm caused to non-U.S. citizens will be disproportionate to their use of atmospheric resources.

Harm to future generations is not considered.

Page 28: Business enviro ethics

FairnessIt is unfair to require others to

pay for the costs of benefits one has secured for oneself without their un-coerced consent.

The transportation and electricity generation sectors should be held accountable for their GHG emissions to date.

Page 29: Business enviro ethics

ConclusionsTarget goals for reduced emissions in

the transportation and energy sectors corresponding to past emissions.

Appropriate tax incentives for CO2 emissions reductions.

Significant penalties for failing to meet CO2 emissions targets.

Page 30: Business enviro ethics

What is sustainability?Sustainability is a hot topic in a number of

different areas right now, including business management.

As is the case with many new concepts, ‘sustainability’ is still a bit fuzzy.

Intuitively, the term refers to practices that don’t work at a loss, that can be perpetuated indefinitely.

Obviously, perpetuation is only one goal, market viability is another.

Page 31: Business enviro ethics

DesJardins, “Sustainability: Business’s New Environmental Obligation”

This essay defends the position that businesses have an ethical obligation to engage in sustainable development.

It also provides an economic defense of sustainable development.

Page 32: Business enviro ethics

A Choice of PossibilitiesWe confront a choice.

Either we assume that there are no biophysical limits to economic growth.

Deny the world’s poor a prosperous lifestyle.Pursue sustainable economic activity.

Bowie argues that business can act in an environmentally responsible way only if directed by consumers or the law.DesJardins argues that managers can do

much more.

Page 33: Business enviro ethics

Growth or Nature? Sustainable Development: Economic

activity that aims to meet the needs of the present without compromising the ability of future generations to meet their own needs.

Distinguished from mere economic growth, which seeks simply to increase the gross amounts of goods and services.

Page 34: Business enviro ethics

Types of Sustainable DevelopmentBiomimicry: Waste from production

cycle is recycled in a closed loop.Services rather than production

(e.g., Interface Corporation).Natural Capital: Harvest the

ecological “interest” not the “capital.”

Page 35: Business enviro ethics

Economic Rationales for SDThough DesJardins believes that

businesses have compelling moral reasons to develop sustainable processes, there are also strong economic reasons:Eliminating waste.Reducing operating expenses.Avoiding legal liability.

Page 36: Business enviro ethics

Cooley, “Genetically Modified Organisms and Business Duties”This essay focuses on the agricultural

production of Genetically Modified Organisms (GMOs).

Acknowledging that there are potential risks, Cooley discusses several versions of the precautionary principle (precaution must be appropriate to the risk) and defends most uses of GMOs based on reasonable person utilitarianism.

Page 37: Business enviro ethics

What Precautions?Absolute skepticism (Greenpeace

version) is too broad.No new products would enter the market.

European Union refers to a “reasonable person” standard.Still too broad, as “reasonable persons”

may not know the science.Cooley offers a modified reasonable

person standard.

Page 38: Business enviro ethics

Reasonable Person UtilitarianismCritics and defenders of GMOs use

consequentialist reasoning.Cooley recommends a reasonable

person utilitarianism whereby what ought to be done is what reasonable persons agree would promote overall welfare for persons.

Page 39: Business enviro ethics

Cooley’s CalculationAdding it up: GMOs.

Capacity to provide health benefits to prevent blindness, infections, and death.Increased crop yields.Prevents certain crops from going extinct and enhances genetic diversity.Enhances corporate profits.Reduces the need for pesticides.

Alleged harms of GMOs are mainly hypothetical and do not justify bans on their production or use.The risk doesn’t justify much precaution.