Apart from making profits, business should care about the environment and the

community.Discuss the above statement and your answer by means of examples.

School of Business Management and Finance

BSc (Hons) Management (General)

Cohort: BMANG/17B/PT

Module: Governance and Ethics (MGMT1126)

Lecturer: Mr Seewoolall Prakashsingh

Submitted on 31 August 2020

Student name: Aurelie Lieutier

Student ID: 170939

 ACKNOWLEDGEMENT

I am really grateful because I managed to complete our Governance and Ethics assignment given
by my lecturer Mr Seewoolall.

A special thanks to my lecturer ,who gave me the opportunity to have my own perception of the
topic and was always there, when needed and kept giving me advice and guidance for me to
achieve my goal.

Lastly but not least, I would like to express my gratitude to my friends and family for the
support and continuous encouragement.

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 TABLE OF CONTENTS

I. Introduction ……………………………………………………………………………. 3
II. How does the natural environment affect the business? ………………………………. 4
III. Why should companies care about the environment and the community? …………..... 5
IV. Benefits of corporate social responsibility …………………………………………….. 6
V. Conclusion ……………………………………………………………………………... 7
VI. References ……………………………………………………………………………… 8

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 I. INTRODUCTION

Business affects the local environment, both natural and social. Ethical businesses try to keep the
impact of their operations on the environment to a minimum.

We live in such an unusual period that big changes, sudden and rapid developments take place.
In fact no one can anticipate in the least, the solutions of the past emerge as the problems of
today. Climate that got out of control, poverty across the planet and scarness of natural resources,
extinct species, ethical dilemmas that we are exposed to at any time and disbelief towards the
business world are only a part of many social and environmental problems in the world.

Hence,it is seen that today conscious consumers prefer companies that are responsible for the
natural and social environment. To continue their existence and grow profitably, companies
should meet client’s changing preferences.

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 II. HOW DOES THE NATURAL ENVIRONMENT AFFECT THE
BUSINESS?

Natural factors such as climate, soil, forests, minerals, rivers and ocean have tremendous
influence on the functioning and growth of commerce and industry. The impact of natural
environment of business may be described under the following examples :

1) The power of sun and wind to create energy has spawned an entire industry.

2) Rising sea levels force companies to change the geographical locations where they conduct
their business.

3) Natural disasters temporarily affect the ability of companies to distribute products to retailers,
for example, hurricanes and tornadoes prevent trucks and trains from carrying products into
certain locations.

4) The natural environment also affects the demand for goods. For example, in places where
temperatures are high, the demand for coolers and air conditioners are high. Similarly, weather
and climatic conditions influence the demand pattern for clothing building materials for housing
etc. Natural calamities like floods, droughts, earthquakes etc, are devastating for business
activities.

5) The availability of non-renewable goods, especially popular one like oil or natural gas, can
vastly change the market. Should the supply of these goods drop (as is currently happening),
prices might grow higher, greatly affecting businesses that use fuels in any significant amounts,
like industrial or logistical ones.

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 III. WHY SHOULD COMPANIES CARE ABOUT THE ENVIRONMENT AND
THE COMMUNITY?

More consumers than ever are demanding that companies change the way they do business,
become more transparent, and take an active role in addressing social, cultural, and
environmental issues. Corporate Social Responsibility (CSR) has taken its place in today’s
corporate world, and businesses that ignore it do so at their own peril.

Corporate Social Responsibility means that a company takes steps to ensure there are positive
social and environmental effects associated with the way the business operates.Hence, CSR is all
about compensating for its effect on the environment and community. And it can exist in an
array of initiatives- from reducing the company's carbon footprint with clean energy solutions to
being proactive about labor laws and benefits, or donating to local or global charities.

Businesses that ignore corporate social responsibility run a risk to their bottom line and their
brand. Having a bad reputation socially and environmentally can create serious negative effects
on the overall profitability and success of a company, as nowadays consumers want to spend
their money on products and services that they believe in, and engage with companies that follow
ethical practices that meet their own beliefs.

Socially responsible companies tend to attract employees who are eager to make a difference in
the world—in addition to simply collecting a paycheck. With large companies, there is strength
in numbers, where collective employee efforts can achieve substantial results, which increases
workplace morale and boosts productivity.

Community-oriented companies often enjoy a leg up on their competition, as well, thanks to

superior brand imaging. For example, Tesla Inc. (TSLA) CEO Elon Musk has successfully
attracted environmentally-minded consumers, with his line of cutting edge electric-powered cars
and green automotive products.

In short, companies care about social responsibility because customers do. In this electronic age,
consumers are far more savvy and can search for a company’s record and labor practices any
time they want. Then, they’ll take to social media to talk about it -- using those platforms as a
powerful tool to spread the word, positive or otherwise.

Additionally, companies are using social responsibility as a recruiting tool, and prospective
employees name a company’s stature in the community as the second most important driver of
employee engagement.

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 IV. BENEFITS OF CORPORATE SOCIAL RESPONSIBILITY

Corporate social responsibility is a mutual way for companies to benefit the society while
benefiting them in the process.

❏ Benefits for the society

CSR initiatives can be the best way to contribute to the society and its people. Through local or
national charitable contributions businesses can help the society. Businesses can get involved in
the society and help it to progress by taking social initiatives on behalf of the company such as
investing in education programs for the poor and street children and homeless care activities for
homeless people or refugees. They can support a local charity making financial contributions in
effective charitable projects. If you are a restaurant owner you may provide food to local
homeless groups or to orphanages free of cost.Businesses can pay attention to material
recyclability, develop better product durability and functionality and use more renewable
resources at lesser costs to keep the environment as clean as possible and contribute to the
ecology of the country.Moreover, seeing that corporations care for communities’ good makes
everyone feel safer and significantly decreases corruption within society. Responsible behaviours
of companies may inspire people in their surroundings to do the same. Thus, social activation
enables them to experience emotional benefits from being involved in helping other people. CSR
actions about health increase awareness in society and influence its behaviour, convincing people
to go to their medical examinations and teaching them that prevention is always better than
treating. These activities result in a healthier and better educated society.

❏ Benefits for the business

Avoiding, reducing, reusing and recycling can lower your costs. For example, a few simple
changes to how you deal with paper can involve your staff in environmentally friendly processes
while saving you money.

CSR is also a means of distinguishing a business from others. Through presenting itself as a
precursor of responsible attitude, a company can stand out of the crowd and thus induce
customers into buying its products and supporting it in other ways.Furthermore, an increasing
number of investors seek responsible companies to invest in. Ethical values of a business can
attract wealthy businessmen that would like to contribute to the company’s success and gain
profits.

Perry and Towers (2013) also see clear conscience of corporations as one of the advantages of
CSR. They claim that the desire to “do good” lies deeply in every human and is a driver to
charity actions, leaving the management and other employees with a feel of satisfaction.

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Gołaszewska-Kaczan (2009) claims that companies have an ethical obligation to compensate for
the impact they cause. Perry and Towers (2013) also mention better motivation of employees as
an effect of CSR. Workers are also a part of social responsibility, and as such, they are provoked
to further activity, above all at their job.Multiple innovations a company needs to implement to
be in check with CSR rules may lead to better quality of products and services.Through
eliminating any errors at the stage of sourcing, production, transport and selling of a product and
thanks to closer cooperation within the supply chain, a business’s chance to deliver the best
product for customers’ expectations is much higher.Furthermore, some governments offer tax
benefits for companies that behave in a socially responsible way, which also helps save money.
Therefore, it can be stated that CSR policy improves a company's financial performance.

V. CONCLUSION

John Mackey said that social responsibility of businesses is to their stakeholders: “ customers,
employees, investors, communities and environment.”Corporate social responsibility is an
admirable notion that should be followed by modern businesses. I believe that businesses have a
responsibility with respect to the environment. They should conserve the environment, not just
using it as a tool to help them make profit. They should conserve the environment in the sake for
our future generations given that humans cannot live without environment.

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 VI. REFERENCES:

1. https://usgreentechnology.com/businesses-environmental-sustainability/
2. https://www.business.qld.gov.au/running-business/environment/environment-business/be
nefits
3. https://www.business.com/articles/can-you-make-a-profit-and-be-socially-responsible/
4. http://blog.bunited.com/blog/2016/12/14/finally-a-feel-good-study-about-big-companies/
5. Carrol and Buchholtz, 2008
6. https://pdfs.semanticscholar.org/
7. https://www.transparenthands.org/