Over recent decades, concern for the environment has risen up the agenda of the whole range of organisations, from large for-profit multi-nationals to small-scale, not-for-profit enterprises. Are some kinds of organisations more likely to take their environmental responsibilities seriously? If so, why? Can policies held dear during the start-up phase for environmentally concerned organisations remain in place when they become very large and successful international businesses? Are capitalist enterprises wholly at odds with environmental concerns?
- Professor Rob Gray’s videos on corporate behaviour and the environment (YouTube)
- Jason Clay: How big brands can help save biodiversity (TED talk)
Organisations can be entrepreneurial, not-for-profit and have concern for the environment at their core.
Transition University of St Andrews is part of the UK-based Transition initiative, which has been expanding worldwide over the last 5 years. Launched in 2009 by a group of students, Transition UStA has since gained momentum, with both academic and non-academic staff involved, as well as local residents.
They work within the University and local community to develop carbon reduction projects in response to the threats of climate change and peak oil. Through practical activities and events suggested by community members, they help individuals and groups minimise their impact on the planet, become more self-sustaining, and strengthen community ties.
Can for-profit organisations match not-for-profit enterprises? Some for-profit organisations are recognised for their environmental efforts. Others achieve some success against industry criteria, and are some of the greenest companies in the world. But organisations like Greenpeace have long campaigned to ensure that companies are held to stricter standards than those developed within industry itself.
Examples from history
The Body Shop was founded by Anita Roddick in 1976 in Sussex. It is often seen as a pioneering organisation in terms of building concern for the environment into core business. Its founding principles included using natural, sustainably sourced, ingredients that were not tested on animals (as most beauty products then were) and would not poison the environment on use. It also sought to develop fair trade contracts with suppliers in developing countries and to establish factories in depressed areas of the UK such as Easterhouse in Glasgow. Within the shops, the company developed a range of practices designed to help the environment e.g. it offered discounts for customers who brought their shampoo bottles in for refilling. As the company grew, Roddick became an outspoken critic, not just of the traditional beauty industry, but also ‘big business’ and ‘standard corporate practices’:
“I hate the beauty industry, it is a monster selling unattainable dreams. It lies, it cheats, it exploits women.”
In 1990, The Body Shop was awarded a ‘Lifetime achievement Award’ by the RSPCA in the UK.
Some commentators have long-questioned the company’s green credentials. An article by Jon Entine in 1994 accused the company of ‘greenwashing’ i.e. using environmental concerns as a marketing tool and deceiving customers and other stake-holders about the reality of the company’s environmental friendliness.
The Body Shop was taken over by L’Oréal in 2006. Shortly afterwards, Roddick defended this decision in an article in The Guardian claiming it meant her company’s principles would sneak into the mainstream industry via a ‘Trojan Horse’ effect.
Questions you might want to consider:
- Can highly successful, multi-national companies keep true to their green roots and credentials?
- How extensive is ‘greenwashing’?
- Can we realistically expect any companies to hit a range of responsible enterprise targets?
- Greenwashing Index: Help Keep Advertising Honest
- ‘Clean up your act, not your image’ (Greenpeace)
- What’s wrong with The Body Shop? (McSpotlight)
Major industrial accident (Bhopal)
In 2001 Dow Chemicals acquired an industrial plant/land in India that had formerly been owned by Union Carbide Corporation and has found itself embroiled in considerable issues related to the site. Some years earlier (in 1984) there had been a gas leak at the site during the night, which resulted in what is considered the worst industrial incident in the world. The plant produced pesticides and during the night gas leaked from the site and affected those living close to the site with considerable loss of life (at that time and since) as well as contaminating the area such that there has been continuing health issues arising from those exposed to the gas.
The human facts:
Estimates of loss of life: 3,000 – 4,000 lives lost immediately; up to a further 3,000 in the weeks that followed; a further approximately 8,000 since then. Indian Government figures suggest some 550,000 injuries were also suffered with considerable numbers of people temporarily (40,000) or permanently (4,000) disabled. Given the nature of the contamination, those exposed also went on to give birth to children with birth defects – thus prolonging the impact of the incident.
- It is undoubtedly the case that the loss of life would have been reduced if there had not been shantytowns around the plant. There are debates about who is responsible for the existence of these settlements. Some believe it was the responsibility of those who decided to settle there (and as such no compensation is due to them because they chose to live in a dangerous place illegally) and other that the Indian Government was responsible (for allowing the shanty towns to exist).
- The exact reason for the gas leak is contested with explanations ranging from the failure of individuals to operate the plant in accordance with company requirements through to the leak arising from an act of sabotage by an employee (this is the company’s official position on the cause of the leak). In addition, it has been alleged that there were sub-standard and unsafe plant operating routines occurring – that would not have been allowed by the company or by law in other countries (such as the UK and USA).
- This case is affected by competing claims as to what actually happened and a lack of information on some aspects of the case (for example, public health records were kept secret for the 10 years after the incident). Moreover, knowledge about the impact of the incident relies on the accurate gathering of data about the individuals affected. It is, however, claimed that some 10 years after the accident, 44% of the claimants had yet to be medically examined. This suggests that while some information might not have been released a considerable amount of information about who was affected and in what way was never gathered.
- Compensation has been paid to some of those affected by the incident through a series of legal rulings. The main vehicle by which compensation was negotiated was through the Indian government who representing the victims of the leak. This approach was taken so that the power differentials between the company and the victims might be less. Likewise, governments have duties to protect their populations.
- The site has since ceased to operate as a chemical plant but the site is still contaminated by the incident (and its use before and after 1984). Responsibility for land clean-up is not clear nor is the extent of the contamination – that is, whether or not it has polluted the ground or water supplies in the area. How to clean up the site is also contested in terms of what would be the most effective approach to take.
- Meanwhile, local Indian activists are stepping up the pressure. In 2008, victims of the disaster walked to Delhi from Bhopal to demand that toxic waste be removed, clean water be provided to area residents, and legal action be taken against Dow.
- The Bhopal Medical Appeal states that the responsibilities became the property of the Dow Corporation, following its 2001 purchase of Union Carbide. The deal was completed much to the annoyance of a number of Dow stockholders, who filed suit in a desperate attempt to stop it. These stockholders were surely aware that a corporation assumes both the assets and the liabilities of any company it purchases, according to established corporate law. However Dow has consistently and stringently maintained that it isn’t liable for the Bhopal accident.
Questions you might want to consider:
- What are the possible responsibilities Dow has in the context of the Bhopal site?
- On the one hand, Dow was certainly not responsible for the original industrial incident but on the other hand, Dow is now the current owner of the site and anything that remains unsafe there would be their responsibility.
- To what extent should national and international governments and agencies have stepped in to ensure the safety of the site and of the local citizens before a sale was permitted?
- To what extent should Dow Chemicals be allowed to profit from future use of the land without taking some financial responsibility for the effects of the disaster?
Case study prepared by Shona Russell and Lorna Stevenson, School of Management, University of St Andrews.
- Yes Men: full film (YouTube, around 90 minutes) or the specific excerpt (BBC, around 5 minutes)
- Dow Chemical: Liable for Bhopal? (Business Week)
- Dow Chemical puts blame for ongoing crisis in Bhopal at Indian government’s door (The Telegraph)