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Nature and concept of corporate social responsibility
Nature and concept of corporate social responsibility
Effect of industrialization
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The term of environment was used at the beginning of the 19th century which provides the meaning of natural surroundings with living souls and defined as a space inhabited and influenced by man (Rakos & Antohe, 2014). In this modern industry, environmental problems have increased enormously due to the negative side effects of the industrial expansion. Environment impact is a trendy topic nowadays because people are much more conscious to the way of organizations affect the world we live in. Furthermore, the environmental issues caused by industrialization are accepted because environment is a source of production factors to a company and may become polluted and exhausted over a period of time.
A question that crosses everyone mind is: Why should
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The companies which set the pace on environmental issues will be seen as the leader of the corporate sector. In response to the possible ways of companies to think about their business sustainability and responsibility to the people around the world, a new form of accounting has been developed which known as environmental cost management. Environmental cost management is identified as a positive approach to reduce the detrimental impacts of company’s activities on the natural environment and at the same time contribute to competitive advantage in the …show more content…
When harmful substances are released into the air, water or land, the resulting pollution used to be considered a cost (Murphy, 2010). In a real life case, the Deepwater Horizon oil spill and also known as Gulf of Mexico oil spill in year 2010 was the largest accidental marine oil spill in the history of petroleum industry. The estimated volume of leaked oil was approximated 4.9 million barrels and the oil flowed for about 87 days. The recovery cost from the oil leak into the ocean was definitely high due to clean up costs, compensations, testing cost for marine habitats, sea creatures and etc. Thus, environmental cost management aims to incorporate with both economic and environmental
Smith Jr., Lawrence C., L. Murphy Smith, and Paul A. Ashcroft. "Analysis Of Environmental And Economic Damages From British Petroleum's Deepwater Horizon Oil Spill." Albany Law Review 74.1 (2011): 563-585.Academic Search Complete. Web. 17 Feb. 2014.
Environmental – External environmental factors are forces or trends that can affect a business whether it is an opportunity, threat, or constraint. They can be divided into three interrelated subcategories of remote, industry, and operating environments. The remote environment includes factors beyond a company’s operating situation such as the economic, social, political, technological, and ecological factors. The industry environment includes factors that have more of a direct influence on a company’s business such as entry barriers, competitor rivalry, the availability of substitutes, and the bargaining power of buyers and suppliers.
The problem with pollution prevention is that it requires people to understand more than the intimate details of the production process; they must also understand the technical possibilities. Many corporations have environmental managers, which are generally responsible for helping corporations comply with the law. According to the case study, the work of environmental managers often expose them to many pollution prevention solutions, but they often have trouble getting access to production areas. Production often sees Environmental Managers as "the compliance police".
Management Accounting emphasizes on supporting managers of a company in their aim to improve both shareholder and customer value (Mongiello, 2015). In any case, companies are progressively recognizing the wider information needs of a broader array of stakeholders. For example, a triple bottom line reporting technique is being used by many Australian companies to communicate the social, economic and environmental aspects of their activities to the shareholders. A lot of information is required by companies to implement environmental management. Triple bottom line reporting takes 3 aspects into consideration when evaluating performance; Financial, Social and Environmental. The Triple bottom line reporting caters to many stakeholder
The intensification of environmental pollution and waste produced from industries has led to an increase of governmental and private sector implementing policies that aim to diminish the rapid destruction to the non renewable resources and the ultimate negative impact it would ha...
In conclusion, I have to say that there is a solid invisible relationship between impacts of businesses on environments, profitability of sustainable business, and responsibility of business. When one of these ones changes, it will effect to others. When a business adapts efficient and sustainable system, it will reduce negative externalities and increase positive externalities to environment. Once the business adapted efficient business model, it will reduce cost and maximize its profits. Obviously, the sustainable and efficient business model will make the business social more responsible to environments.
The next part of Audit process is to understand the business environmental aspects of the company. As part of the marketing audit project the author is going to analyze and provide detailed information on the following key environmental aspects
The manner by which the environment is being harmed is much different now than it was in the 1400's. Production byproducts rather than the actual production are the cause of current environmental degradation. However, economic analysis has proven that environmental protection is a normal good. A normal good or service in economic terms means that the demand for such items increases as income increases. As such, for the sake of the poor as well as the environment, policy makers with the aim of environmental protection should also consider their effects on the resulting, generally decreased level of production.
Technological change, change in economic climate, natural occurrences and such-like are matters that concern the macro-environment of a business. These external, uncontrollable, influences can and will impact hugely on the success or failure of a business. One of the tools that are applicable in considering these factors is PESTLE. Political; Environmental; Social; Technological; Legal and Economic considerations will need to be engaged in order to prepare the business for macro-environmental influences. For this reason, PESTLE will be the most appropriate tool to use to identify and outline the main macro-environmental factors that may affect my business.
Despite the fact that it has been proposed that assimilated financial records contained ecological and social data, it was evident in the article that the genuine mix merits consideration among the stakeholders. Sustainability segments in yearly reports among numerous cases were isolated, albeit incorporated; similarly, applies to corporate administration segments in connection to sustainability. At the same time, when the corporate administration and sustainability turn out to be truly connected and reported together, these offered new doors for integrative methodologies in expansion to the bookkeeping
The 1992 earth summit agreed on the concept of sustainable development as the base standing on the three pillars of economic viability, environmental sustainability, and social equity. However, the pillar of economic has always been stronger compared to the other two pillars. The emerging discipline of environmental economics helps to design a much better base by giving equal importance to all the three pillars. The subject of environmental economics seek to capture the essence of environment and the various services, and intends to offer many sensible way of dealing with changing conditions.
Environmental analysis is a strategic tool. It is a process to identify all the external and internal elements, which can affect the organization’s performance. The analysis entails assessing the level of threat or opportunity the factors might present. These evaluations are later translated into the decision-making process. The analysis helps align strategies with the firm’s environment. The importance of Environmental Analysis lies in its usefulness for evaluating the present strategy, setting strategic objectives and formulating strategies.
Environmental accounting is employed with clear understanding of the objectives upon involving in environmental accounting. The objectives must comply with the company’s policies for environmental considerations together with their environmental objectives and action plans.The following items concerning the implementation of environmental accounting are the target period, aggregate scope, environmental conservation cost measuring guidelines, environmental conservation benefits measuring guidelines and economic benefit associated with environmental activities measuring guidelines.
Environmental factors cater for the protection of the environment. A business must carefully be able to look at its surroundings to see for benefits and ensure that its daily production does not interfere with society.