PRESSURE ON COMPANIES TO BE SOCIALLY RESPONSIBLE

Pressure on Companies to be Socially Responsible

Table of Contents

Introduction2

Literature Review3

Green Consumerism4

Triple Bottom Line4

Green Marketing5

Reasons for Corporate Social Responsibility5

Conclusion9

References10

Pressure on Companies to be Socially Responsible

Introduction

Industrialization and adoption of new technologies into their system has become a great need of every nation worldwide, resulting in to the coming up of several industries and companies. A growth of industrialisation has had a negative impact on the environment through global warming that is as a consequence of greenhouse gas emissions and a heavy dependence upon fossil fuels. That's why such changes are required by organisations that go beyond technological innovations for creating businesses more sustainable in addition to adoption of new strategies to respond to the opportunities and threats produced by serious environmental issues (Laszlo, 2005).

The increased sensitivity to, and understanding of, environmental and ethical issues have promoted the interests and concerns in the role of businesses in society. Several issues are of such importance that they are of matter of concern globally for instance, inappropriate treatment of workers, environmental problems, child labour, and consumer welfare (ADB, 2005). Since businesses are reliant upon natural and human resources, this obligates them to take liability for the outcomes of their acts in addition to make contributions to the societies. Today, throughout the world, business corporations identify this link, of the gains and harm of their actions, making corporate social responsibility a significant concept in the 21st century. Two main sources exert pressure on a business for social and environmental responsibility that are internal and external to the business. This paper is intended to explore how on energy consumption, companies can be socially responsible.

Literature Review

Milton Friedman argued in 1970, that “the business of business is business”, which implied that a business, since it was not a person, had no responsibility other than to fulfil the purpose for which it was created, that is, to maximize the return on shareholder investment. He equated efforts to improve society through the conduct of business with “pure and unadulterated socialism.” (Friedman, 1970) For economists worldwide, Friedman's views have turn into a mantra, who deem the only objective of a business is making profit.

Nonetheless, through the last decades, this perspective of business responsibility has been challenged by government initiatives, non- governmental organisations, political consumers and stakeholders who put pressure on companies to manufacture their service and products in a manner that fulfil both international and national standards, that their suppliers meet with international standards concerning environment and climate protection and human rights. As the counter statement is uttered by Grayson & Hodges (2004), portraying the essence of this development that “Today the business of business is everybody's business.”

Organizations are, at present, being coerced by different industries and groups to strategically incorporate and employ standards that are more socially responsible into their external and internal policies and practices: taking care of the physical natural environment by counterbalancing carbon footprints and making products that are energy-efficient and sustainable; reporting financial transactions transparently and in an ethical manner; buying ...