Business, Ethics, and Society: A moral justification for Corporate Social Responsibility

In the past, the traditional business attitude toward the environment was viewing it as something that was free and unlimited. This view permitted corporations to exploit and degrade natural resources, disregarding the well-being of the environment, and its inhabitants. Business was driven by profit, and the self-pursuit of power and wealth. Due to this, there are many environmental issues presently occurring.

When dealing with problems that require moral or ethical decisions, such as environmental issues, business leaders sometimes rely on moral principles. Utilitarianism is one of those principles that is commonly used, and what this theory of morality advocates for is the improvement of society as a whole. In a sense, directly contrary to the concept of the tragedy of the commons. When discussing the tragedy of the commons, shared resources are exploited for personal gain, but with utilitarianism, shared resources are utilized to maximize the well-being of society.

I will formalize and argue a justification for greater responsibility placed on corporations regarding environmental impact mitigation, using the utilitarian moral theory.

Utilitarianism and Corporate Environmental Responsibility

The utilitarian moral theory holds that an action is correct and permissible if it promotes happiness for everyone affected by it. As a major driving force behind the economy, businesses hold a great amount of power regarding actions that can potentially negatively or positively affect a large number of people. With that being said, corporations also hold an even larger amount of responsibility to conduct operations in ways that maximize happiness and well-being for not only individuals, but the environment as well. If corporations want to continue to benefit from environmental resources, considering the massive corporate exploitation of natural resources that has already occurred, then they must bear the greater responsibility for environmental impact mitigation.

An effective solution to the problem of environmental responsibility will take into account the responsibility, as well as benefit.

Corporations are a greater benefactor from natural resources, so it is valid to argue that they bear the greater responsibility for environmental stewardship. An example of an opposing argument to the utilitarian moral theory is; since there has already been so much damage caused to the environment by business operations, isn’t it worthless to try to mitigate that damage? To be clear, the utilitarian notion of corporate environmental responsibility does not mean that a certain degree of global ‘sustainability’ is achieved. What it does imply though, is that the responsibility of using power, capital, and capabilities to maximize the well-being of the environment and society lies within the ones that have benefited the most from the resources of the environment. Following that logic, corporations are at a greater responsibility than individuals.

Individual and Corporate Responsibility

Most individuals, and businesses, would agree that it is morally irresponsible to completely degrade the environment in a way that subsequent generations are not able to inhabit it. But, there is disagreement regarding who should bear the responsibility - and costs, associated with mitigating the environmental damage that has already been done. Some argue that corporations profit the most from treating the environment as limitless, and therefore should bear the majority of the costs.

But, others would contend that consumers have also contributed to the problem by creating a demand for resource-heavy/intensive products and services.

Combined with a rapidly growing population, and accelerated urbanization, along with rising affluence, this increasing demand for tangible goods has put a massive strain on the environment. But again, the question arises of who is required to carry the burden of lifting that strain. As Milton Friedman said, “the people who use electricity are responsible for the smoke that comes out of the stacks of the generating plants”. Friedman also famously stated that the social responsibility of business is to increase its profits. What that leaves society with is, a disconnect between businesses and the natural environment where products are sourced from, and an accompanying disconnect between consumers and the source of the products they buy.

If there is no one to take responsibility for sustainable development, future - and quite possibly, current generations, will not get to enjoy the resources that we are enjoying. I believe that because corporations significantly depend on the natural environment for all aspects of business, and greatly benefit from the various natural resources, they should bear the greater responsibility for ensuring that the environment is sustainable. Any equitable solution to the problem of who should bear the costs of environmental protection and restoration must recognize that all of us in some way contribute to the problem.

Our obligation to future generations

A complex, but related, subject within the utilitarian notion of corporate environmental responsibility, and a supporting argument for a greater responsibility placed on corporations, is the question of our obligation to future generations. Going back to the definition of utilitarianism, actions that maximize happiness for everyone involved, it is important to consider the well-being and happiness of our future descendants.

Future generations have a right to a habitable planet, and even though these descendants do not exist yet, it is immoral to squander and degrade their chance at a sustainable future. Critics of this view of current generational obligations to future generations contend that nature has no intrinsic value. This is known as the human-centered assumption. While this is an understandable thought-process, it is quite radical and unrealistic. Many people value nature/environmental resources for various reasons (e.g., historical, diversity, spiritual values), not only for materialistic purposes.

For example; The Grand Canyon. While it is true that people care about the Grand Canyon, that care doesn’t stem from solely selfish or greedy intent. Meaning that, there is value in the Grand Canyon simply because it exists as the Grand Canyon, not because humans gave value to it. If the name was changed to the ‘Large Canyon’ it would still be as appreciated, although maybe not as marketable. There are too many potential varying factors that make placing quantifiable or qualitative values on nature a difficult task, therefore, nature has a value for what it is, not for what it can do or produce.

In Conclusion…

An analysis of the current state of the environment shows that ecosystem health, air, water, and land quality, and social/cultural matters are not in an adequate place to sustain current and future generations.

These existing circumstances stem from a past disregard and deterioration of the environment by individuals, and extensively, by corporations. Because business as a whole benefits more from natural resource consumption, it is valid to say that they should assume greater responsibility regarding environmental stewardship.

Following the utilitarian moral justification, actions should be taken that maximize happiness for everyone involved. That includes future generations as well, as they will undoubtedly be involved, and impacted, in the future. With that being said, corporations have the most power and resources, when compared to individuals, to take actions that can mitigate environmental damage that has already occurred, and therefore, increase happiness for society as a whole. Forward-thinking companies are already incorporating sustainability initiatives into day-to-day business operations, to foster company longevity, and hit their bottom line. But more importantly than the profit bottom line, are the environmental and social bottom lines. Utilizing utilitarian principles when dealing with environmental/social issues is an effective method, due to the positive social consequences and the opportunity to right environmental wrongs.