Corporate Environmental Responsibility in the 21st Century Thesis

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Corporate Environmental Responsibility in the 21st Century

Presently, the financial world is recoiling from a collapse of the public's faith. The global population has been made intimately aware of the ecological consequences of unrestrained human economic expansion. Corporations play a massive role in the creation of carbon emissions and greenhouse gases. Furthermore, these organizations are morally responsible for the tremendous negative ecological effects that their daily operations have upon both local communities and the global ecosystem (e.g. destruction of rivers, aquifers, oceans etc.) This paper intends elicit an understanding that an urgent and operative synthesis of green accounting methods and scientifically sound sustainability practices are an absolute necessity for the survival of the global economy and our global civilization as a whole. This paper will further discuss the options of the Corporate world as it adopts a new environmental and ecological ethic in the 21st Century.

An Overview of Corporate Environmental Responsibility:

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Mazurkiewicz noted that environmental protection has traditionally been considered to be 'in the public interest'. As such, governments have primarily assumed responsibility for environmental management. Government has focused on creating and preserving the environment; however, recently, they have begun to direct the private sector to adopt environmentally responsible behavior. This direction has come through a variety of regulations and sanctions, as well as the occasional incentive. The public sector also has born the primary responsibility when environmental problems have arisen, mitigating environmental damage. For this reason, some have surmised that the unrestricted behavior of the private sector has been the basis for the 'environmental problem'.

Thesis on Corporate Environmental Responsibility in the 21st Century Assignment

In recent years, the roles of environmental custodian have been changing. The private sector, and corporate America in particular, has become an active leader in environmental protection. Both government and business are coming to the realization, according to Mazurkiewicz, that economic growth and environmental protection do not have to be mutually exclusive to one another. The Brundtland Report, published in 1987, was the catalyst for business and management scholars to consider how and why businesses should incorporate concerns for the environment, with their business strategies. This has led to a business initiative movement, where many have pledged to do no harm to the environment. What began as strict regulations mandated by the government has been transformed into an era where corporations self-regulate and adopt voluntary environmental responsibility initiatives.

Corporate environmental responsibility is a significant part of corporate social responsibility. It is "defined as the duty to cover the environmental implications of the company's operations, products and facilities; eliminate waste and emissions; maximize the efficiency and productivity of its resources; and minimize practices that might adversely affect the enjoyment of the country's resources by future generations" (Mazurkiewicz 2). Thanks to 24/7 media coverage, including the advancement of the Internet, corporations are now not only judged on their products and services, but their environmental stewardship as well. Companies like Patagonia, Saturn and Starbucks have utilized their dedication to environmental responsibility as part of their marketing strategy, helping them differentiate themselves from their competitors while protecting the environment in the process.

Green Accounting Methods:

With the increased media-induced public focus on corporate environmental responsibility, it has become necessary for businesses to be able to measure and report the cost associated with the adoption of environmentally responsible strategies, as well as the costs associated with failing to adopt these strategies. With this desire to monitor costs, a framework needed to be developed to identify and measure the environmental variables associated with these strategies. This development of "green accounting" methods not only enhance control of managerial planning and decision making, but also allow management to assess the financial impact of environmentally responsible strategies on the company's bottom line (Jeffers).

The framework of green accounting includes a variety of variables. These include: "costs and outflows as well as inflows such as revenues, tax credits, incentives, grants/subsidies, regulatory costs avoided and other cost savings" (Jeffers 72). Green accounting builds on the concepts that are found in traditional cost accounting, combined with a variety of other factors. Whether the reasons behind the adoption of environmentally responsible business strategies are altruistic, seeking economic benefits, or simply following other corporations' leads, the need for green accounting is real.

According to Jeffers, the costs associated with environmental stewardship initiatives are part of the costs that corporations incur while producing their products or services and therefore should be included in production cost figures. This can be either as direct labor, direct materials, and/or manufacturing overhead. Although these costs can be difficult to place a value on, they must be accounted for otherwise the company's costing of its products and services would be improper, which would lead to an improper measurement of the organization's income and the valuation of their balance sheet components. The relevant variables and measurement of their corresponding costs must be included, which can then facilitate managerial decision making, as well as decision making by others who utilize the company's financial statements.

Poor corporate governance has been a significant factor in the recent challenges corporate America has faced, that has led to public's loss of faith. For this reason, the public is looking even harder at corporations. Corporate governance includes the structure and relationships that determine the organization's direction, as well as their performance. Along with the organization's executive management and its relationship to others such as: customers, suppliers, employees, and creditors, corporate governance also depends on the institutional, regulatory and ethical environment. As Jeffers noted, with the recent rash of corporate scandals, proper financial statements are central to corporate governance and foster investor confidence. For this reason, it is evermore critical that environmental protection costs are included in a green cost accounting model.

Countries around the world are adopting green accounting practices, as they understand the value in measuring this valuable data. China is considered the leader of the green accounting movement, with their highly developed program. India has adopted green accounting to help facilitate their exponential economic growth. Sweden too has adopted green accounting with the concern of pollution on the general population. Regretfully, the United States is lagging behind in the adoption of green accounting practices. In 1995, official national green accounting efforts was halted by Congress, which instead commissioned a National Environmental Sciences (NES) study. The NES concluded that there was a clear need for green accounting, and created a set of accounts for the American timber industry. Although these measures may be able to be extended to other natural resources industries, guidelines for other industries in America have yet to be established (Jeffers).

Environmentally and Ecologically Ethical Alternatives for the Corporate World in the 21st Century:

There are a variety of alternatives that are environmentally and ecologically ethical that corporations can adopt, in the 21st century. Developing and implementing processes that meet the needs of businesses today without compromising the needs of the future generations is the key to corporate environmental responsibility, with sustainability being the buzzword of the green movement. Green building practices are one alternative for corporations today. The U.S. Green Building Council developed the Leadership in Energy and Environmental Design (LEED) Green Building Rating System. This voluntary certification program rates the design, construction and operation of green buildings. With buildings accounting for 39% of the nation's carbon dioxide emissions, 71% of America's electricity consumption, 12% of water use, and 65% of waste output, corporations choosing green building alternatives can make a significant impact ("Greener'").

Alternatives for energy usage can also be employed by organizations, to promote environmentally responsible initiatives. The first step in this process is to conduct an energy audit, which identifies energy conservation opportunities and the ability to minimize energy costs. For organizations who utilize equipment, incorporating variable frequency drives and using high efficiency motors can minimize the amount of energy used by some equipment. Corporations should ensure that energy and water systems that have been installed are performing properly. A best-practices systems maintenance and operation plan should be established, and employees should be trained annually on how to implement the plan. Simple things like thermostat set-backs in office areas can conserve a significant amount of energy. For every one degree of change to a building's heating/cooling system, over a twenty-four hour period, organizations typically experience a 2 to 4% savings. Installing metering equipment can help organizations measure and verify energy use, allowing them to fine tune their energy saving initiatives. Using green power or on-site renewable energy systems are another environmentally and ecologically ethical alternative, for corporations in the 21st century. Heat recovery systems from compressors can be used for service or process water, for further savings ("Greener'"). Each small change can add up to make a big impact.

Even a corporation's external environment finds alternatives that can be used to promote environmentally and ecologically responsible strategies. Painting the building's roof white or using a vegetated roof can minimize the impact on microclimate and human and wildlife habitat. A white roof reflects the sun's rays, minimizing the heat absorbed by the building. Popular in Europe,

vegetated roofs, also known as green roofs,… [END OF PREVIEW] . . . READ MORE

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