Question

SUSTAINABILITY ETHICS:

REAL OR JUST A MARKETING PLOY?

As more and more companies announce sustainability as a key initiative in their operations, many consumers want to “go green” and are looking for opportunities to do so. Many companies have instituted plans to develop sustainability practices within their business models. In fact, some consumers are willing to pay a premium to contribute to environmental sustainability efforts if paying a little more will help curb global warming.

Unfortunately, many of the companies that are offering eco-friendly options are falling short on delivering on them. Many other companies are just creating marketing materials and have no immediate desire to change anything within their organizations. Others, however, are suspected of committing a new type of fraud—“greenwashing.” This refers to companies that make unsubstantiated claims about how environmentally friendly their products or services really are. These latter kinds of companies are just preying on people's goodwill. What is your understanding of the initiative? What companies have you seen that are doing this the right way, while the others are just creating a facade for this community action. Give examples to support your answer. How critical are these issues for strategic planning for companies and their corporate governance? Are there any legal requirements to be called 'sustainable'?

Answer 1

Sustainability has become one of the most important concepts nowadays in the business world. As people and the government has become more concerned about the environment and climate change, companies have started showing that they have adopted sustainable business practices. But, this fact cannot be denied that every organization is operating in the market to make handsome profit excluding non-profit organizations. Thus, most of the organizations are using sustainability as a marketing tool to gain the trust of the customers. However, it has also been identified that there are several organizations which are extensively focused on sustainability and they have not only promised to adopt sustainable business practices but also have adopted it effectively. For example, Air New Zealand is one of the organizations which have significantly focused on adopting and implementing sustainable business practices. The organization invests on sustainable business practices on a large extent. The organization has purchased fuel-efficient flights to reduce the emission of carbon in the environment. But most of the organizations adopt sustainability on paper only. In reality, their intention is to make a handsome profit keeping sustainability aside. For example, according to the Greenpeace Report Samsung, Netflix, and Oracles are the least sustainable organizations. They have promised to deliver sustainable business practices but have failed to fulfil it. Therefore, it can be said that most of the organizations less care for sustainability.

Such issues are very critical strategic planning for the organizations and their corporate governance. As people and government are seriously concerned about the environment and sustainability, such issues may create issues for the organization. If the organization cannot fulfil what it has promised, it will lose the trust of the people and public. The government can also take legal action against a particular organization. Considering the impact of businesses on the environment, it can be said that there are legal requirements to be called sustainable. The government should be more concerned about those organizations which do not keep their promise and use sustainability as a marketing tool and formulate some legal requirements so that all the organization can follow sustainable business practices.