Today’s businesses continually contribute to the degradation of the earth’s ecosystem through excessive emission of harmful pollutants and over-consumption of the planet’s resources. Stakeholders and society at large have raised concerns regarding the effects of environmental degradation, such as climate change. As such, organizations face external pressure to ensure their business activities showcase some desirable environmental accountability (Zelazna et al., 2020). Notably, making profit is the primary objective of all business organizations. Consequently, some scholars have argued that businesses should prioritize economic goals over ethical and environmental concerns (Carroll, 1979). On the contrary, modern organizations have a huge social responsibility and influence in society, which means prioritizing environmental issues over economic gains to promote sustainable development.
Corporate Social Responsibility
Corporate social responsibility (CSR) is a term that has gained popularity in the recent debate surrounding businesses, society, and environmental issues. Zelazna et al. (2020) defined CSR as the notion of conducting profitable business activities while adhering to the set laws and voluntarily factoring in operations' environmental impact during business decisions. As such, CSR not only includes cutting down on the production of hazardous pollutants but also finding solutions that reduce environmental degradation at all production stages. Notably, some people may question whether businesses have an additional role in society beyond profit-making. As Baden (2016) observed, the effects of environmental degradation, such as climate change, result in catastrophes such as flooding, which affect businesses. Further, organizations can not foster fast, economic gains at the expense of exploiting the available natural resources, given that the society is responsible for the preservation and conversation of available resources for future generations (Zelazna et al., 2020). Thus, CRS imposes an ethical responsibility for organizations to ensure environmental conservation.
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Profit Making Versus Environmental Conservation
Business executives currently face a new challenge of balancing their economic goals with the ethical expectations the society has for their organizations. Carroll (1979) stated that CSR included “the economic, legal, ethical, and philanthropic expectations that society has of organizations at a given point in time” (p. 500). For the author, the primary objective of a company should be making profit. As a consequence, the scholar added that the concept of replacing businesses' economic objectives with social goals is irrational. Conversely, Baden (2016) presented an alternative view where she prioritized legal and ethical responsibilities over economic goals. For the scholar, contemporary multinational corporations (MNC) have gained a more significant role and power relative to the government, which grants them additional social responsibility. For that reason, scholars such as Caroll (1979) had failed to account for the changing business environment. Baden (2016) added that prioritizing profits was the root cause of business ethical scandals in Enron and Arthur Andersen. In Baden’s view, organizations should accept ethical responsibilities and refrain from hazardous activities in their operations as a foundation for making more sustainable profits. Baden’s ideals are a reflection of the modern business environment, especially for MNC’s. As such, today’s business should build their business models on the foundation of social responsibility to achieve sustainable profits.
Pros of Eco-Friendly Solutions
Notably, most businesses view environmental issues as entirely new business risks. However, as various scholars have observed, environmental issues also present some business opportunities. For one, organizations that keep up with their environmental responsibilities develop a positive public image, which is beneficial for business growth. For instance, Vikhanskiy and co-authors (2012) conducted a study to evaluate the impact of adopting eco-friendly solutions at two Russian companies Baikalsk TsBK and UC RUSAL. Baikalsk TsBK had adopted a re-circulated water supply system, which gained the company recognition from government authorities and local communities for its environmental efforts. On the other hand, UC RUSAL had adopted eco-friendly technologies to reduce pollution and resource consumption. As a result, the company gained a positive brand image from international organizations, investors, and the local community (Vikhanskiy et al., 2012). Further, the company gained a competitive advantage and gained efficiencies, such as cost reduction. In support, Zelazna et al. (2020) stated that firms that adopt environmental protection could enhance their financial standings by lowering the costs of amenities such as raw materials and energy. Therefore, businesses stand to gain economically through the utilization of sustainable development that favors social responsibilities over economic gains.
Conclusion
Contemporary organizations have a huge social responsibility and influence in society, which means they should prioritize environmental issues over economic gains to promote sustainable development. Traditionally, the role of enterprises in society was entirely profit-making. However, in the modern world, environmental issues, especially climate change, have raised many concerns regarding the future of our planet. Further, globalization has enabled the development of MNCs, which have gained enormous power and influence in society. As such, morality dictates that they should develop an increased social responsibility. Notably, most organizations may avoid eco-friendly approaches as they may be expensive to implement, which affects their profits. However, as observed above, environmental consideration also presents some business opportunities. In particular, companies tend to improve their brand image in society. Consequently, businesses should prioritize social responsibility for profit-making.
References
Baden, D. (2016). A reconstruction of Carroll’s pyramid of corporate social responsibility for the 21st century. International Journal of Corporate Social Responsibility , 1 (1), 8. https://doi.org/10.1186/s40991-016-0008-2
Carroll, A. B. (1979). A Three-Dimensional Conceptual Model of Corporate Social Performance. Academy of Management Review, 4 (4), 497–505
Vikhanskiy, O., Churkina, N., & Zaverskiy, S. (2012). Business response to environmental challenges: three cases of Russian industrial companies. Oñati Socio-Legal Series , 2 (3).
Żelazna, A., Bojar, M., & Bojar, E. (2020). Corporate Social Responsibility towards the Environment in Lublin Region, Poland: A Comparative Study of 2009 and 2019. Sustainability , 12 (11), 44-63. doi:10.3390/su12114463.
