Chapter Ten

Business’s Environmental
Responsibilities
 Classic View of Ethics in Business
Environment
• Maximize profit within the law
• Utilitarian
– Greater overall good of optimally satisfying
consumer preference
 William Baxter
• Search for optimal level of pollution that
would best serve society’s interests.
– Caveat Emptor (protect consumer safety and allow
for individual bargaining
– No perfect “state of health”
– Allow market to balance risk and benefits
• Air safe enough to breath water safe to drink without
costing to much
 Julian Simon
• Allow for human ingenuity and incentives to work
• Allow the market to work to balance supply and
demand for resources
• Natural objects have no value but that placed on
them by humans. The term “nature” has no
normative connotation
• Preserving biological diversity is appropriate if it
satisfies more consumer preference than the
alternative
 Market serves four environmental
goals
• Reducing pollution
• Conserve resources
• Preserve natural areas
• Support biological diversity
 Market Failures
• Cost of such things as pollution are borne by third
parties
• No market exists to create a price for important
social goods (protection of animals versus using
threatened animals – Rhinoceros, tigers,
elephants
• Buying is an individual decision consequences are
borne by group
• Market does not respond until there is a major
screw up
 Mark Sagoff – The Economy of the
Earth
• Environmental issues not economic issues
– Confusion between wants/preferences:
• What one is willing to pay handled through a cost-
benefit analysis
– Beliefs and Values
• Purely personal and subject
• Conflict resolved non-rational means
– Dialog and democratic processes
• Ignores the individual role of being both a
consumer and a citizen
 What is business to do?
• Business needs to meet “Moral minimum”
• Bowie – cause no harm to humans, obey the
law and refrain from unduly influencing
environmental legislation
– Citizen are free to create laws and exercise
consumer preference
 Issue with this Rx
• Underestimate business ability to influence
law making
• Underestimates business ability to influence
consumers
• Law is a crude tool
• Models used to deal with corporate social
responsibility underestimates managerial
discretion
• Critical flow model ignores the cost of resources
and waste generation
• Daly’s model
– Recognizes business is part of a subsystem with
Earth’s biosphere
– Recommends long-term consumption of resouces
– Manage waste
– Manage energy and recognize the losses we are now
generating
– Limit grow using a biophysical perspective
Pillars of Sustainable Development
• Economically, environmentally and socially satisfactory
• Meet the needs of those future generations
• Meet the needs of those who lack food, water, and
other necessities
• Hawken, Lovins – Natural Capitalism
– Productivity of natural resources
– Redesign to utilize a model biological process (cradle to
grave
– Model business as a provider of services (light, floor
covering)
– Invest in natural captial