1.-INTRODUCTION:
Without doubt the XXI century has changed our priorities, especially when it comes to the way we do business. Popular sustainable business models, as advertised in the media, have evolved into much more than a moral obligation or an external requirement to generate money. Essentially, are forcing companies to reinvent the systems and approaches with which they generate value and profitability to the company.
Important companies like Shell, DuPont, BP has been reorganised to generate profits from this green market of goods and services. In this sense, it may sound altruistic, "the sustainability", the logic of profitability and competition is what will determine the ability of companies of the future to meet the changing needs of consumers.
This premise of "sustainability" as a necessary quality to be competitive, it falls short, according to Bryan Walsh of Time magazine . In a 2007 article, the expert shows how "sustainable" is helping to drive out competition, given the approach taken by companies to become more efficient, flexible and cutting waste, which helps them provide better products and reduce costs.
Companies that refuse to accept that they will face a strict and demanding environment. The most talented human capital companies that do work to care for natural resources, the regulation will raise the cost of not using resources properly, consumers will demand products and environmentally friendly. In short, choosing between sustainability and growth is not an option.
2.-GREEN BUSINESS:
It is important to understand clearly what a Green Business is and what makes a Business Green (Friend et al, 2009 p.2):
o Reduces negative environmental impacts
o Compiles with environmental regulations
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...of a signature automatically associate the goods or service generated a load of sense, in this case, social concerns and environmental awareness, which people respond positively valued and know.
In recent years, business or green business was no longer an option to become an obligation. Companies started to change their mindset and values to develop new environmental proposals, for example launching second ecological lines.
However, the abuse of this trend is causing some fatigue and distrust among consumers, especially when certain product categories are falling far short of what the consumer is expecting.
One of the clearest cases is found in the positioning of the cars. The dominant discourse is green in the category linking the consumer with Less eco / more efficient and less CO2, when what is expected of the marks are engines with alternative energy.
...onetary value, but in the end would make them fully sustainable. Third and finally, by continuing to offer financing and capital for new green energy sources and other companies to improve sustainability would not only help them reach their own green goals, but provide others with the ability to be fully sustainable.
With forward movement in society, it is important to consider not just what will propel most toward success, but also what will help to sustain the environment along the way. What may have been considered appropriate decades ago, may no longer be socially acceptable due to the changes observed in both the business world and the environment (Fiske, 2010). Therefore, it is important for organizations thriving in today?s economy to consider how they may capitalize most effectively from their product or service of choice while minimizing or eliminating any damages along the way (Knoke, 2012).
An enterprise can be defined as an entity that operates to seek profit and provide goods and services to the community at large. The business community consists of many different enterprises. Each enterprise is characterized by the type of goods and services that it aims to provide for its consumers. Through these processes, certain inputs and commitments are made to ensure the deliverance of goods that certify consumer needs. Throughout the years, the realization that businesses and the basic paradigm of trade and commerce have certain externalities that tends to render socio-economic progress on an economic, social and environmental standpoint. Academically characterized as having a sustainable business model, companies have been trying to find synergies between; profit making, social integration as a business and the preservation of the environment. The retail industry contributes to a significant amount GHG to the atmosphere. As a middleman between the
In relation to sustainability, more and more this aspect is becoming very important for a company’s bottom line and for them to differentiate themselves from their competition that fails to establish a sustainability program. In a macro sense, it ethically responsible to establish a sustainability program to identify ways that the firm can make a difference globally and reduce their overall expense and
The way that many corporations around the world have been doing business has changed in past three decades. In 1969, the United States was the first country to implement environmental sustainability policies according to the Environmental Protection Agency. After this event, other countries started to create policies as well. What did this mean for business? As more policies were created, people slowly started to become more aware about environmental issues. Especially in the late 70’s to early 90’s, when governments started to create more policies and people started to create environmental movements. As people started to care more about environmental problems, they started to demand more sustainable practices by business. According to Nick Feinstein ...
Companies all over the nation are trying to become an environmental friendly during their day-today operations. Going green has become a significant trend within the United States. When a company goes green, the business will more than likely benefit from their actions. Going green makes perfect business sense although it can be costly (Crootof, 2014). Global warming damages a business because pollution can affect the price of product and services. A company that has followed the green transformation is AmerenUE's real power company. AmerenUE has officially been cleared by the Center for Resource Solution (CRS) to be green-e certified (“AmerenUE's Pure Power,” 2007). Ethically, a company should run a good, clean, and efficient business. Another company that displays great “green” attributes is New Belgium Brewery. New Belgium brewery focuses on cost effective ways of operating that cause no hard to the environment (Ferrell & Hartline, 2014).
In recent years, there has been a push for companies to look further than the traditional bottom line. While profit metrics such as net income seem to have some of the strongest reaction in the market, firms have now begun to see that their value should extend past that. As a KPMG report on corporate sustainability defined, “…corporate sustainability is defined as: ‘adopting business strategies that meet the needs of the enterprise and its stakeholders today while sustaining the resources, both human and natural, that will be needed in the future.” (pg.12) It shouldn’t be taken to mean that corporate sustainability is simply a “green”, or environmentally friendly, strategy. It encompasses more than the natural environment. Rather it creates long-term consumer and employee value by taking into consideration the social, economic, and cultural environment in which the firm operates. As more companies begin to adopt these sustainable business practices, studies are being released showing how positively significant the effects are on the firms earnings due to increased profitability and cost reductions. This paper will attempt to explain the overarching concept of sustainability, the widespread adoption of sustainable business practices, the effects on profitability for these firms, and finally the controllership function in directing this new revolution.
In conclusion, I have to say that there is a solid invisible relationship between impacts of businesses on environments, profitability of sustainable business, and responsibility of business. When one of these ones changes, it will effect to others. When a business adapts efficient and sustainable system, it will reduce negative externalities and increase positive externalities to environment. Once the business adapted efficient business model, it will reduce cost and maximize its profits. Obviously, the sustainable and efficient business model will make the business social more responsible to environments.
Sustainability is broadly characterized as addressing the present generation’s needs without jeopardizing the future generations to address their own issues. Sustainable procedures are those that outcome from an establishment's commitment to environmental, social and economic, or the "triple bottom line." The term "sustainability," is the advancement of a procedure or management framework that serves to maintain economy and high standard of life while regarding the need to maintain natural resources and secure the nature.
Bigger companies nowadays will only collaborate with suppliers that are going green and also demand that corporate sustainability initiatives be part of request for proposal (RFPs), which is the reason why companies now have no choice but to develop an environmental purchasing strategy that aims to reduce the environmental impact of their own and their suppliers’ operations, products and
Many companies are able to accept a win-win strategy towards adopting environmentally friendly practices, because of the positive correlation between environmental actions and financial returns (Frankel, 1998). A company can save costs by looking for eco-efficiencies; where companies decrease their environmentally harmful inputs and outputs. In 2009, Canadian Tire introduced the right-fit packaging program, which would reduce the amount of unnecessary packaging. While Canadian Tire was curtailing their environmental impact, 320 packaging changes between 2010-2011 saved the company $6.3 million in costs (Elm & Tyler, 2012). Eco-efficiencies clearly yields profit, while reducing the company's environmental impact. Furthermore, creating a product or service that offers unique environmental benefits for consumers is another way that environmental actions lead to financial gain. By creating an environmentally beneficial product, a company separates themselves from competition and will be able to capitalize on these environmental opportunities. Consumers are willing to pay a premium for greener goods: goods being made in an environmentally friendly way or by a company who is greener (Reinhardt, 1999). Besides capitalizing on environmentally differentiated products, companies can also achiev...
...blic awareness of environmental issues. Most of it does benefit the environment, but inevitably this has a financial impact on businesses both large and small. One recent example is the regulation requiring that a specific minimum proportion of all packaging should be recycled. A less enthralling example is the current political objective to reduce pollution by imposing high taxes on road fuel; this may seem environmentally friendly but as fuel prices increase motorists naturally look for the lowest prices. These lower prices are typically found in service stations run by the multinational oil companies and the major supermarket chains, against whom small local independent garages cannot compete. Environmental issues and regulations are unlikely to go away, so only those businesses which take a proactive stance and prepare to work with them will eventually survive.
Prakash (2002) article seems indicates that going green should not be inducted in firms as a management strategy because its ‘still in its infancy’ stage, its effectiveness is unknown (Prakash 2002 p. 295). Any strategy taken by the management should add value to a firm but unfortunately, Prakash outlines that the green strategy infantry stage subjects’ managers to go green due to lack of a suitable option to mitigate the pressure they are subjected to by institutions (environmental) and stakeholders who threaten to sabotage firms operations. In most cases, going green comes with added costs that should also be recovered and one way of recovering such costs is by changing prices or the product but still, this does not work as consumers are not ready to pay extra costs for green products or rather consumers’ attitudes (environmentalism) do not go hand in hand with their behavior (purchasing green products). Therefore, this makes Prakash discredit managerial efforts towards going green ‘promote products by employing environmental claims either about their attributes or about the systems, policies and processes of the firm that manufacture or sell them’ (Prakash 2002 p. 285).
The majority of companies nowadays have caught up on the environmental inclination; subsequent, they have come out with a movement of eco-friendly products. Knowing that being “green” has become extremely popular and understandably so, they need to find a way to pursue and attract consumers to buy products that may appear eco-friendly to the public, when it might not be the case.
The sustainability of ecosystems on which the global economy depends must be guaranteed. And the economic partners must be satisfied that the basis of exchange is equitable” (World). This quote demonstrates the complexities of sustainability. Another thing corporations should focus on when trying to be sustainable is their environmental impact. Annie Leonard in her book The Story of Stuff says that companies can significantly reduce their toll on the environment by changing their design. The design determines “the amount of energy used in making and using the product,” “the length of the product’s life span” and “its ability to be recycled” (Leonard). All these things determine the amount of resources a company must use, so simply changing a product’s design is one way a company can have a large impact on the sustainability of the environment in which it operates. One example of this is that “Wal-Mart attributed more that $100 million of its 2009 revenue to a decision to switch to a recyclable variety of cardboard in shipments” which it sells to a recycler instead of paying to send it to a landfill