Sustainability: Ethical and Social

Responsibility Dimensions
By- Group 7
Aindrila D.(08/131) | Affan A. (08/026) | Shubham B. (08/080)
Dipam S. (08/229) | Suraj C. (08/119) | Preeti S. (HR02/ 012)
 Sustainability
• Sustainability from a strategic business perspective is the potential for the
long-term well-being of the natural environment, including all biological
entities, as well as mutually beneficial interactions among nature and
individuals, organizations, and business strategies. Sustainability includes the
assessment and improvement of business strategies, economic sectors, work
practices, technologies, and lifestyles in the maintaining of the natural
environment.
 Sustainable Development
• Sustainable development has become a top concern for many businesses as it
involves meeting the needs of the present without compromising the ability
of future generations to meet their own needs.
• The Brundtland Report developed by the United Nations World
Commission on Environment and Development views sustainable
development in terms of environmental, economic, and social well-being for
both current and future generations. These differences make it complex for
businesses to determine what to evaluate when investigating ways to increase
the sustainable impact of their organizations.
 Sustainability x Ethical decision making
1. Stakeholder Impact: Sustainability involves maximizing positive and minimizing negative impacts on
stakeholders. Ethical decision making is essential in assessing and addressing the interests and concerns of
various stakeholders affected by sustainable business practices.
2. Risk Assessment: Ethical considerations play a crucial role in evaluating risks associated with sustainability
initiatives. Organizations must make ethical choices to mitigate potential adverse consequences of their
actions on the environment and society.
3. Legal Compliance: Sustainable practices often involve adherence to environmental regulations and laws.
Ethical decision making ensures that organizations are committed to fulfilling legal obligations and avoiding
misconduct within the environment.
4. Corporate Culture: Incorporating sustainability into corporate culture requires ethical values and principles.
An ethical culture supports and reinforces an organization's commitment to sustainability and responsible
practices.
5. Long-Term Stakeholder Responses: Embracing sustainability as part of ethical decision making can foster
positive and long-lasting relationships with stakeholders. Transparency and commitment to sustainability can
generate trust and loyalty among stakeholders.
 Sustainability x Social Responsibility
1. Broad Social Impact: Sustainability initiatives extend beyond environmental concerns and impact various social
responsibility areas such as consumer protection, corporate governance, and employee well-being.
2. Meeting Stakeholder Expectations: Stakeholders expect organizations to address sustainability issues, such as energy
usage, pollution control, and recycling efforts. Demonstrating social responsibility through sustainable practices can meet
these expectations.
3. Competitive Advantages: Sustainable business practices can create competitive advantages for companies. By
incorporating social responsibility, firms can enhance consumer loyalty, positive brand identity, and market knowledge.
4. Power of Stakeholders: In an interconnected society, stakeholders hold more power and can influence the success of
companies. Responding to social responsibility concerns allows organizations to maintain positive relationships with
stakeholders.
5. Creating Social Value: Socially responsible decisions, such as using organic materials, can create social value and
consumer loyalty. Such initiatives can promote the company's products and differentiate it in the market.
6. Differentiation and Financial Performance: Social responsibility, including sustainability, is becoming a tool for ethical
decision making and financial performance. By responding to multiple stakeholders, firms can tap into valuable resources
and establish enduring relationships of strategic importance.
 Ethical Decisions affect Sustainability as a
component of Social Responsibility

Social Issues
Employee Well-Being
Legal Responsibilities
Ethical Issue Awareness Sustainability Decisions
Philanthropy
Consumer Protection
Corporate Governance
 Global Environmental Issues
• Atmospheric – Air Pollution, Acid Rain, Global Warming
• Water – Water Pollution, Water Quantity
• Land – Land Pollution, Waste Management, Deforestation, Urban
Sprawl, Biodiversity, Genetically Modified Organisms
 Environmental Protection Agency(EPA)

• Created in 1970. It deals with environmental issues and enforces environmental legislation.
• Goals of EPA:
Goal Long-Term Outcome
1 Reduce air pollution
2 Improve access to clean and safe water
3 Promote materials management, waste management, and clean sites
4 Enhance joint preparedness for environmental response
5 Enhance compliance assurance and environmental stewardship
 Environmental Regulations
Laws protecting the Environment
Clean Air Act, 1970 Established air quality standards; requires approved state plans for
implementation of the standards
Endangered Species Act, 1973 Program for the conservation of threatened and endangered plants and
animals and the habitats in which they are found
Toxic Substances Control, 1976 Requires testing and restricts use of certain chemical substances to protect
human health and the environment
Clean Water Act, 1977 Requires to set water quality limits for all contaminants in surface waters.
Illegal to discharge any pollutant into navigable waters directly.
Pollution Prevention Act, 1990 Focuses on reducing the amount of pollution through cost-effective changes
in production, operation, and raw material use
Food Quality Protection Act, 1996 Includes a safety standard- reasonable certainty of no harm- that must be
applied to all pesticides used on foods
Energy Policy Act, 2005 Addresses the way energy is produced in the US in terms of energy efficiency,
renewable energy, oil and gas, coal, Tribal energy, nuclear matters etc.
 Alternate Energy Sources
Energy Source Description
Harnessing the kinetic energy of wind to generate electricity through wind turbines. It is
Wind Power
renewable, produces no emissions, and can be harnessed onshore and offshore.
Utilizing heat from the Earth's core to generate electricity or for direct heating purposes. It
Geothermal Power
is a reliable and low-emission energy source, primarily feasible in geologically active regions.
Converting sunlight into electricity using photovoltaic cells or solar thermal systems. It is
Solar Power
abundant, sustainable, and has minimal environmental impacts during operation.
Generating electricity through controlled nuclear reactions (fission). It provides a significant
Nuclear Power amount of continuous, low-carbon electricity but comes with waste disposal and safety
concerns.
Extracted from organic matter like plants, and waste, biofuels can be used as an alternative
Biofuel
to fossil fuels for transportation and energy generation, reducing greenhouse gas emissions.
Generating electricity from flowing or falling water by using turbines. It is a renewable and
Hydropower
established source but requires suitable water resources and environmental impacts.
Business Response to Sustainability
Issues

• Businesses have adopted a triple-bottom approach as a response to

sustainability which is taking into consideration social and
environmental performance variables in addition to economic
performance.
• Businesses have found that improving a company’s environmental
performance is not just for goodwill from stakeholders and
customers but it has a direct effect on the revenues as well.
• Two interesting things evolved through this response -
Green Marketing - the practice of promoting products services that are
environmentally friendly or have a positive impact on the planet
Greenwashing – Misleading a consumer into thinking that a product or
service is more environmentally friendly than it is.
Strategic implementation of environmental responsibility

Recycling Initiatives

Stakeholder Assessment

Risk Analysis

The Strategic Environmental Audit

 Case 1: An Ethical Dilemma
Q1) Describe the ethical dilemma Jared faces?
• Jared faces an ethical dilemma concerning environmental responsibility and
the well-being of local communities. He must decide between reporting
improper waste disposal and initiating a cleanup effort to protect the health
and environment of the rural villagers or following his supervisor's advice to
avoid potential financial consequences for the company.
Q2) How does Jonathan rationalize his reasons for not reporting the pollution?

• Jonathan rationalizes his reasons for not reporting the pollution based on
concerns about cleanup costs, potential fines for the company, and the belief
that such practices are more accepted in the local context. He also questions
the impact of DCC's cleanup efforts considering other companies in the area
might be polluting the river.
 Q3)How might the water pollution impact different stakeholders?

• Rural Villagers: Water pollution poses health risks to the rural villagers who use the river for drinking water and
depend on it for their livelihoods, such as fishing.
• Local Environment: The pollution adversely affects the local ecosystem, potentially harming fish populations and
other aquatic life.
• DCC Employees: The employees at the plant may face moral dilemmas, knowing that improper waste disposal
practices are harmful but hesitating to raise concerns due to potential consequences or pressure from superiors.
• DCC as a Company: The company's reputation could be at risk, and there may be legal and financial repercussions,
including fines and penalties.
• Local Authorities and Government: Addressing the pollution issue would challenge local authorities and the
Chinese government in balancing economic growth and development with environmental protection and public
health concerns.
 Case 2: Smith's Soda
Keisha, a marketing professional at Smith's Sodas, is leading a campaign to
promote the company's new biodegradable soda bottle. However, a local
reporter's investigation reveals that the plastic only degrades under certain
conditions, raising concerns about the accuracy of the marketing claims and
potential greenwashing. Keisha's manager, Louis, dismisses the issue, stating
that it's not their responsibility to prove the packaging's biodegradability and
shifts the responsibility to consumers for proper disposal. Keisha is left
questioning the ethics of the marketing campaign and its claims.
Q1) Are Smith's Sodas' marketing claims accurate and truthful?

• Smith's Sodas' marketing claims about their biodegradable plastic soda

bottles may be inaccurate as the bottles only degrade significantly under
certain conditions, contrary to the company's promotion. The concern is
whether the campaign borders on greenwashing, but the manager dismisses
the issue, placing the responsibility on consumers for proper disposal.
Q2)Discuss the justifications Louis uses to argue for the
truthfulness of the company's marketing claims.

• Louis justifies the truthfulness of the marketing claims by citing reliance on

the supplier's claims about the biodegradable plastic and the vagueness of the
term "biodegradable." He argues that the company is not being deceitful, and
it's up to consumers to dispose of the packaging properly for biodegradation
to occur. Louis also points out that many companies rely on supplier claims
and sees no need to change their marketing strategy based on the reporter's
findings. However, these justifications raise ethical concerns about
transparency and potential greenwashing in the marketing campaign.
Q3) Assume there is a news story questioning the sustainability of
Smith's Sodas packaging. How should Keisha respond?

• Keisha should respond to the news story by acknowledging the concerns and
providing accurate information about the packaging's biodegradability. She
should explain the specific conditions required for proper degradation and
commit to continuous improvement in sustainability. Openly engaging in
dialogue with the public, being transparent about actions taken, and
highlighting other eco-friendly initiatives will demonstrate the company's
dedication to addressing the issue and building trust with consumers.