Globalisation and technology have reshaped the corporate environment over the past decades. Will sustainability have a similar effect and what implications does this have for business?
In this essay argues that technological development, globalisation and sustainability are integral parts of the life cycle of technological change. However we have in the recent past witnessed n environmental sustainability issue of significance never previously witnessed. This is the problem of climate change. This essay claims that climate change is therefore likely to reshape the corporate agenda significantly and to a much greater extend than previous environmental and social problems have. The effects ...view middle of the document...
Policies and regulation to mitigate problems Corporate incentive to mitigate problem to meet consumer expectations, and attract and retain staff.
Progress: Efficiencies, wealth creation, economic growth Problems: Social- e.g.health, equity, inequality Environmental – e.g.pollution of rivers& air, climate change, resource depletion Economic- e.g. monopolies Public awareness of the problems leading to public pressure And behavioural shift.
Life cycle of technology innovation and globalisation
Figure 1 illustrates that technological change and globalisation on the one hand lead to progress, including increased efficiencies per man hour, wealth creation and economic growth, but on the other had can have various unsustainable environmental, social and economic consequences. Once the public becomes aware of these problems, public pressure leads to regulations and policies which aim to mitigate the problems. In addition to the policy incentives, behavioural change such as purchasing behaviour or employee behaviour (wanting to work for an ethical company) further provide incentives for business to develop more sustainable business practices. New breakthroughs may bring with them new (not currently understood) environmental, social or economic problems and so the cycle continues. Therefore I would argue that sustainability has always shaped the corporate agenda. However, the past two decades are characterised by an environmental problems of a new dimension never previously witnessed: climate change. Climate change is a problem of that cannot be locally confined, and is also of a scale that exceeds all previous environmental problems. Therefore international action, policy and regulation is required, which is arguable much harder to achieve, as more people are involved in the decision making process. There are two main outcomes to the problem of climate change for business: 1. International, national and local policies are put in place to avoid dangerous climate change This would mean reducing emission to the required levels and is likely to have a substantial cost to the world economy and the achievement of the emission reduction targets would significantly reduce the sum of all corporate profits in the near term. In the long term however, if Stern and the Hadley Centre researchers are to be believed, achieving the target would lead to sustained growth in the long term.
2. not meeting the challenge This is likely to lead to faster economic growth in the short term, and could have serious long term consequences for the corporate agenda, as far as leading to total economic collapse (Stern, 2006). For the purpose of this essay it is assumed that the challenge will be met. Therefore, due to climate change, sustainability may have a much greater implications for the corporate agenda than previously witnessed, with the following implications: 1. business can play a role in raising awareness on climate change, influencing the public...