Final warning to the world: Is it finally time for corporations to become more responsible?

I had to take responsibility for writing the first post on our new blog. Deciding the topic has not been an easy task. I was looking for something that could be at the same time relevant and inspiring. A topic broad enough to let the spirit of our project emerge in its entirety. I got lucky, after all, it is not often that some 15,000 scientists issue an ultimatum to the humanity…

In 1992, the Union of Concerned Scientists (UCS), which is a non-profit science advocacy organization based in the United States, made a universal appeal to the world entitled World Scientists’ Warning to Humanity. The appeal was endorsed by some 1,700 scientists, 104 of which were Nobel laureates. The document stressed how, already twenty-five years ago, human beings and the natural world were on a collision course. This because of the irreversible damage to the environment and critical resources inflicted by human activities. In particular, the scientists focused on the intolerable level of air pollution, exploitation of world’s surface water resources, depletion of fish stocks in the oceans, degradation of soil productivity, deforestation, irreversible loss of living species, and overpopulation. As a result, the scientists pleaded with all countries (especially the developed ones) for reducing pollution, overconsumption, and in general the pressure on natural resources and the environment.

On the 13th of November 2017, a “Second Notice” of the warning was issued and published in the scientific journal BioScience (Volume 67, Issue 12, 1 December 2017, Pages 1026–1028). On this occasion, 15,364 scientists from 184 countries endorsed it.

In this second warning, the scientists have highlighted how, with the sole exception of the stratospheric ozone layer, which appears to be stabilized, since 1992 humanity “has failed to make sufficient progress in generally solving these foreseen environmental challenges, and alarmingly, most of them are getting far worse.

In particular, the scientists warned of the current trajectory of potentially catastrophic climate change due to the usage of fossil fuels, deforestation, and agricultural production, as well as of the mass extinction event we have triggered wherein many current life forms could be annihilated or at least committed to extinction by the end of this century. As they affirmed we “are jeopardizing our future by not reining in our intense but geographically and demographically uneven material consumption and by not perceiving continued rapid population growth as a primary driver behind many ecological and even societal threats.”

In this second notice, the scientists also included interesting examples of steps humanity can take to transition to sustainability such as: establishing well-funded and well-managed natural reserves for a significant proportion of the world’s habitats; halting the conversion of forests, grasslands, and other native habitats and at the same time restoring forests at large scales; reducing food waste; promoting dietary shifts towards mostly plant-based foods; promoting new green technologies and massively adopting renewable energy sources; and estimating a scientifically defensible, sustainable human population size for the long term.

We widely share such an approach. The danger is serious, and the scientists are no alarmists. Their perspective is based on the straightforward and long-recognized rule of sustainability, which was brilliantly explained by George Perkins Marsh in Man and Nature as long ago as 1864: “Everything that humans require for their survival and well-being depends, directly or indirectly, on the natural environment.”

Although in 1992 the scientists expressly asked for the help of the world’s business and industrial leaders, and in the Second Notice they affirmed that “to prevent widespread misery and catastrophic biodiversity loss, humanity must practice a more environmentally sustainable alternative to business as usual,” it seems to me that a major emphasis on irresponsible corporate behaviour is actually missing.

Pointing the finger at the humanity as a whole, the document has adopted a collective responsibility approach. Taking into consideration the nature of the report, this is of course understandable. However, we are duty bound to attribute to each major player – governments, consumers, and corporations – its own responsibilities.

It is true that government intervention through policies and regulations serves a fundamental role in establishing the playing field in which all business actors conduct their activities. It is equally true that theoretically speaking governments by themselves have the power to change things and direct our society towards a sustainable economy. However, one need not be an expert to realize just how far the reality differs from the theory. Governments in developed countries are increasingly being held hostage by corporations through lobbying practices, and this situation worsened in recent years in the wake of the historic US Supreme Court decision Citizens United v. Federal Election Commission, which prevents the government from setting limits on corporate spending for political advertising. In an inspiring speech published online by the New York Times on 9 October 2013, President Obama underlined how, as a consequence of the more aggressive corporate lobbying, “ordinary Americans are shut out of the [political] process” and stressed the reasons why “we have seen a breakdown of just the normal routine business done here in Washington on behalf of the American people.” Moreover, the lack of a political, economic and cultural homogeneity among the countries seriously hinders any initiative aimed at establishing a greater global sustainability. Suffice here to mention phenomena like the so-called “race to the bottom,” by which countries competitively undercut each others standards in order to attract foreign capital, the “resource curse,” by which many countries with an abundance of natural resources tend to have less economic growth, less democracy, and worse development, and the continuing reluctance of the most industrialized nations to give up part of their economic privileges (see for instance the decision of President Trump to withdraw from the Paris climate deal).

It is also true that many unethical practices that are adopted throughout the increasingly complex global supply chains are directly linked to careless consumer behavior. Taking into consideration the world population prospects issued by the United Nation’s Population Division (the world’s population, which numbered nearly 7.6 billion as of mid-2017, will amount to almost 10 billion in 2050) and the phenomenon of systemic overconsumption, which characterizes our societies (see the striking pictures published by the Guardian in that regard), we must work hard in order to change consumer behavior to benefit the environment. Whilst in America and Europe an increasing number of consumers has started to translate environmental preferences into purchasing behaviors (e.g., already in 2006 a survey in the U.K. showed that 83% of the interviewed consumers believed that a company’s social responsibility is an important consideration when they are purchasing a product or service), in Asia and, specifically, in China the translation of green purchasing intention to corresponding behavior is still ineffective. As a perfect example, suffice here to mention that, as the award-winning documentary “Revolution” has illustrated, due to the increasing consumer demand for shark fin soup in mainland China, sharks are teetering on the verge of extinction.

The arguments mentioned above cannot be used to de-emphasize the circumstance that irresponsible corporate behavior is the major cause of the global environmental degradation. Multinational corporations have acquired power and wealth that exceed that of many countries. Just to make an example, it is possible to mention that the sole US company Wal-Mart in 2016 generated some $486 billion US dollars in revenues whereas the GDP of Poland amounted to around 469 billion US dollars. At the same time, there is no doubt that companies and, in particular,  multinational enterprises play a crucial role in the environmental damage. Over the course of last two decades, too many corporations have not proved their worthiness to be responsible members of our societies. On the contrary, on many occasions, their direct involvement in unsustainable business practices has been unveiled. If we consider, for instance, the phenomenon of overfishing and its consequences (i.e., several fish species are currently on the brink of extinction), it has been underlined how just 13 companies control 40% of the largest and most valuable fish stocks. Keeping at bay corporate greed will be the most effective solution to save our invaluable marine life. After all, as a recent research has highlighted, it is far easier to improve fisheries management by involving a few dozen companies than by targeting millions of shoppers in consumer campaigns. Similarly, the massive use that corporations are making of palm oil in the food supply chain is at the root of serious problems like deforestation, threat to species survival, environmental damage, social impact on indigenous communities, and potential health risks.

Taking all the above into consideration, it is evident that to address the burning environmental issues that the humanity is currently facing, we have to change the way in which corporations conduct their business operations. Until they learn how to be morally reflective and responsible, we will be all at risk. In such a context, solutions based on corporate social responsibility and business ethics may play a key role and become a driver for change. After all, this is the reason that inspired us to create this blog.

7 thoughts on “Final warning to the world: Is it finally time for corporations to become more responsible?

  1. I agree with all of your analysis above Costa. I will like to point out that more than any corporations though, governments still have the overall machinery and responsibility to ensure the wellbeing, security and protection of all its citizens. The failure of corporations to do their part in what I call the ‘tripartite society’ of consumers, governments and corporations; is I believe a failure of strong governments. Do you not think that corporations if left to their own devices without appropriate regulations will always prefer the race to the bottom. Numerous examples abound. We have seen where corporations pay bosses wages beyond the wildest imaginations of their lowest paid employees and the government’s turn a blind eye; where corporations leave the West and commit atrocities of resource curse in mostly developing nations and their governments do not have adequate structures in place to combat the injustices but get intertwined in corruption and it’s attendant evils; where as you attested to, corporations bankroll elections knowing that politicians then have to do their bidding at the right time; where corporations monopolise consumers in advertising and leave little or no room for competition; where corporations instead of striving to attain the highest standards, wriggle around the rules and moan constantly about costs or even threaten society of taking their business elsewhere! All these issues are well within the capabilities of governments whether right, left or central! We just need the right individuals – woman, man, youth – who ever will stand, whoever will be just; who will be morally, politically, socially responsible and incorruptible! To summarise, I advocate not just Corporate Social Responsibility but Governmental Social Responsibility too!

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  2. Dear Lola,

    Thank you very much for your comment.

    You are right. As I wrote, theoretically speaking governments should be able to change things but unfortunately, politicians are becoming more and more vulnerable to lobbying. Moreover, only in a utopian society, you would have the majority of politicians that are “morally, politically, socially responsible and incorruptible.” The real world is different. It is not surprising that one of the definitions of “politician” from the Oxford Learner’s Dictionary is “a person who is good at using different situations in an organization to try to get power or advantage for himself or herself.” The virtues you are speaking about are really rare; if they were widespread, we would not have needed even to develop the business ethics and corporate social responsibility areas of law. Unfortunately, we have to deal with a reality that is very different from that… As it was brilliantly illustrated by the movie Wall Street: Money Never Sleeps, greed is the primary driver of our societies, not integrity. On many occasions, the very way in which our political systems are conceived leads to phenomena such as compromises and corruption… However, although it would be fascinating, any discussion on how we could fix our political systems falls beyond the areas of business ethics and corporate social responsibility and as such of the scope of this blog.

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  3. The role of the corporation in addressing climate change is a fascinating problem. Unlike a sovereign state, which seeks to preserve the welfare of government, citizens, and – presumably – its physical resources, corporations are focused upon the enrichment of their shareholders. This exclusive focus means that the corporate person exhibits, as Joel Bakan points out in The Corporation, many characteristics of the psychopath. Thus, it seems unlikely that corporations will voluntarily choose to forego short-term competitive advantage for long-term preservation of natural resources. They must be forced to do so. And, given the symbiotic (collusive?) relationship between lobbies and politicians to which you allude, it is hard to see this occurring in the immediate future. That is the worrying part. For by the time the effects of climate change are obvious, our ability to act in an ameliorative way will be limited. The IPCC forecasts suggest a world of increased temperature, sea rise, and wide-scale species extinction, but these are consensus documents: not the worst case scenario. The writing of other climate scientists are more terrifying. James Hansen’s APCD article, “Ice melt, sea level rise and superstorms: evidence from paleoclimate data, climate modeling, and modern observations that 2C global warming is highly dangerous,” reads apocalyptically. So, too, does James Lovelock’s Revenge of Gaia, which describes a parched earth that resembles the surface of Mars, the vestiges of humanity living in oases at the poles. The stakes are profound, and waiting for psychopathic personalities to police themselves is folly.

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    1. Dear James,

      Thank you very much for your comment. We deeply appreciate your active participation in the blog. Your criminological approach to corporate social responsibility allows us to enrich the multidisciplinary dimension of the discussion, which is a key element for success. I agree James Hansen’s (et al.) article is extremely interesting. Its main premise is sad but true – Humanity is rapidly extracting and burning fossil fuels without full understanding of the consequences – and corporations are playing a vital role in this context.

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  4. Powerful corporations such as Google, Starbucks and Amazon, with their tax avoidance have taught us that for them, profit is king. It means responsibility to the communities that serve them are, at best, secondary concerns.

    But current economics prove that functioning without any regard to the environment leads to the destruction of the ecological system, which leads to eventual collapse of the economic system. The social responsibility of business, therefore, is to protect the economic system and by implication the bigger socio-environmental system upon which it rests.

    Many governments in the world have the basic capacity for addressing the complex societal challenges such as global climate change, biodiversity loss, depletion of fisheries and forests, air and water pollution etc. As some governments have insufficient tools and resources to address them, I believe companies have to take a bigger role in this process and establish creative legal strategies that go beyond the command-and-control approach.

    Lastly, it should be in a company’s commercial interest to raise its standards mainly for defensive reasons. In most countries, the cost of disposing of toxic waste has been rising; the legal liabilities for pollution have become tougher; and companies are increasingly at risk of liability for past contamination.

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  5. I really hope all major corporation will adopt an ethical policy globally to make sure we are not damaging our planet. But in reality it is very different -in some cases corruption, politics and corporate greed are way more powerful than environmental or ethical consideration. More recently a Bangladeshi and Indian power plant project Rampal – a coal-based, technologically outdated project threatening the UNESCO world heritage, the world largest mangrove forest Sundarban which hosts endangered species such as river dolphins and Royal Bengal tigers which will see their habitat damaged if the plant becomes a reality. The project is located on the edge of Sundarbans – a vast, dense mangrove forest that straddles the Bangladesh-India border. Environmental groups claim the outer edge of the project is within a 14km radius of the forest, thereby breaking Bangladeshi forest laws! Each year, nearly 5m tonnes of coal will be burned to keep the power plant running will have a serious impact on the ecology. The outcry from the environment agencies, reports by NGO network Banktracks, anti-coal think-tank IEEFA and UNESCO claim was ignored, and a project is scheduled to be launched by 2020! I would love to see your analysis on this subject.

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    1. Dear Salim,
      Thank you very much for sharing the issue related to the Bangladeshi and Indian power plant project Rampal with us. It is very interesting and surely worth to be analyzed in terms of corporate social responsibility. Hopefully, we will soon focus on it in a future Blog post.

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