Business Ethics

&
Environment
Ethics and the Environment
Business and Environment
• Global Warming
• Overpopulation
• Natural Resource Depletion
• Waste Disposal
• Loss of Biodiversity
• Deforestation
• Water/Air Pollution
• Urban Sprawl
• Public Health Issues
• Why should we care for the environment?
• Should we care about the species that are disappearing (panda)?
• Is it right to force household cleaners into the stomachs of animals or
squirt chemicals into their eyes or spraying hairsprays into their lungs
for testing?
• What about micro-organisms?
• What about plants?
• How do we draw the line?
Environment & Business: Traditional View
• Environment (e.g., air and water) treated as free goods. As no one
owns them, they can be used by businesses as free goods.
• Environment seen as an unlimited good.
• Each firm’s contribution of pollution to these resources seems
relatively small and insignificant.
• Businesses vs Consumers
• Consumers are also responsible
Ecological Ethics
• Anthropocentric View: Concern for environment based on how it
affects interests of humans.

• Should we care for nonhumans?

• Is nature something that is there to serve us?

• Or does it have a value in its own self?

Ecological Ethics

• Ecological Systems: An ecological system is an interrelated and

interdependent set of organisms and environments.

• Business firms and humans are part of a larger ecological system.

Ecological Ethics

• Deep Ecology: The ethical view that nonhuman parts of the

environment deserve to be preserved for their own sake, regardless
of whether this benefits human beings.

• Non-humans have intrinsic value.

• The Last Man Argument

• Asks us to imagine a man who is Earth’s last survivor.

• We recognize it is wrong for the last man to destroy all nohumans.

• So we must recognize some nonhumans have intrinsic value apart

from human
• Is the pain experience by an animal as great an evil as the pain experienced
by a human?
• Singer: Pain experienced by an animal is as great an evil as a comparable
pain experienced by a human being.
• Humans may be more sensitive to pain so an animal’s pain may have to be
more intense to be comparable to a human’s pain.
• If it is morally wrong to inflict pain on a human, it is equally wrong to inflict
the comparable pain on an animal.
• A form of speciesism (prejudice against other species).
Deep Ecology
• Broader versions of ecological ethics extend our duties to plants.
• It is arbitrary and hedonistic to confine our duties to creatures that
can feel pain.
• Plants also deserve consideration.
• In addition to plants, natural structures like lakes, mountains and
entire biotic community have an intrinsic value and a right to
integrity, stability and beauty
• Members of Earth First! Have driven nails into randomly selected
trees of forest areas scheduled to be logged so that power logging
saws are destroyed when they bite into the spiked trees in order to
protect forests.

• Members of Sea Shepherd Conservation society have sabotaged

whale processing plants, sunk several ships, and otherwise imposed
costs on the whaling industry to protect whales.
Environmental Rights
• Is possession of a livable environment a fundamental human right?
• Should this moral right overrise people’s right to do business free
from any regulation?
• Humans have a right to fulfill their capacities as free and rational
beings and a livable environment is essential to such fulfillment.
• So humans have a right to a livable environment and this right is
violated by practice that destroy the environment.
• Relies on Kantian Ethics
• Such environmental rights can lead to absolute bans on pollution
even when the costs far outweigh the benefits.
Virtue Ethics
• Respect for nature an integral part of being a morally virtuous person.
Cost of Environmental Ethics
• May incur significant costs on the industry.
• The decision of US Fish and Wildlife Service to bar timber industry
from logging old-growth forests of California to save the habitat of
dark-brown northern spotted owl cost the industry millions of dollars
and workers as many as 36,000 jobs.
Critique
• Extreme forms of ecological ethics hard to justify according to some
authors.
• If something is alive, why it ought to be alive?
• Why do we have a duty to keep it alive?
• Why does a river or a mountain ought to exist in the same way?
• How can we say animals or plants have rights or intrinsic value?
Critique
• The problem with rights perspective:
• How much pollution control is really needed?
• Should we have an absolute ban on pollution?
• At what point is the environment “safe enough” for us to be able to
live a healthy life?
• US standard (between 1 in a million to 3 in 10,000 deaths).
• How is that fair?
• Who should pay for it?
Private and Social Costs

• Private Cost: The cost an individual or company must pay out of its
own pocket to engage in a particular economic activity.

• Social Cost: The private internal costs plus the external costs of
engaging in a particular economic activity.
Markets and Pollution
• Total costs of making a product include a seller’s internal private costs
and the external costs of pollution paid by society.
• A supply curve based on all costs of making a product lies higher than
one based only on sellers’ internal private costs.
• The higher supply curve crosses the demand curve at a lower quantity
and a higher price than the lower supply curve.
• When sellers’ costs include only private costs, too much is produced
and price is too low.
• This lower utility, violates rights, and justice
Why it is not a just society?
• First, allocation of resources in such markets is not optimal because more commodity is
being produced that society would demand if it had to pay the actual cost.
• Second, producers ignore these costs and make no attempt to minimize them like they
minimize their other costs.

• Third, goods are no longer efficiently distributed to consumers. Some end up paying
more than others (medical bills etc.)
• Fourth, the consumer rights protected in a free market are nor protected anymore.

• Fifth, capitalist justice is not being achieved.

Pollution and Distributive Justice
• If a firm pollutes, its stockholders benefit.
• The consumers of the product also potentially benefit.
• Those who cannot afford (or do not use) the product bear the
external costs of pollution.
• External costs of pollution are borne largely by the poor and the
minorities.
• The poor are more likely to live in polluted neighborhoods.
• The internalization of costs of pollution, therefore, helps achieve
distributive justice by shifting the costs to the wealthy.
Internalization of the costs of pollution
• Absorption of external costs by the producer, who then takes them into
account when determining the price of goods.
• One way is for the polluting agent to pay to all of those being harmed,
voluntarily or by law, an amount equal to the costs the pollution imposes
on them.
• When several polluters are involved, not easy to determine share of
everyone.
• Stop pollution at the source by installing pollution-control devices.
Pollution and Distributive Justice
• Retributive justice requires that the costs of pollution control should
be paid by those who cause pollution and who have benefited from
pollution activities
• Compensatory justice requires that the benefits of pollution control
should flow to those who have had to bear the external costs of
pollution.
• If a firm makes basic goods for which the poor must allocate a larger
portion of their budget, then internalizing costs may place a
proportionately greater burden on the poor than on the affluent.
• If costs of pollution rise so high that unemployment rises, the poor
again disproportionately suffer.
Costs & Benefits
• But the question remains. How do we decide the right level of pollution?

• Suppose the pollution from a certain firm causes $100 worth of

environmental damage, and that the only device that eliminate this
pollution would cost the firm at least $1,000.

• What would a utilitarian have us do?

• Should pollution removal be based on cost-benefit analysis?

Optimal Level of Pollution Removal
• Costs of removing pollutants rise as benefits of removal fall.
• Optimal level of removal is point where its costs equal its benefits.
• When costs and benefits are not measurable, utilitarian approach
fails.
• How do you measure the cost of damages to human health & life?
• What if risks are uncertain?
• How much weight to give to a risk of a new technology in C-B
analysis?
• Suppose society currently accepts a 0.01 risk of death associated with driving. Does it
follow that society should also be indifferent to accepting a risk of 0.01 of death from
introduction of a new technology?
• Cloning, AI
• Suppose the government decides to go ahead with this technology after a C-B analysis
even though the public disagrees. Is that fine?
• What if the public doesn’t understand the costs & benefits adequately and media
biases their opinion? What should the government do in such a case?
• C-B analysis ignores the question whether the costs involved are voluntarily accepted
by those who must bear them or whether they are unilaterally imposed on them by
others in violation of their rights. Nuclear waste for example.
• When costs and benefits are subjective, this is an important distinction.
Social Audit
• That is the problem with social audit (a report of the social costs and
benefits of a firm’s activities).
• Generally nothing more than qualitative descriptions of what firm is
doing.
When Utilitarianism fails
• When costs and benefits are not measurable, utilitarian approach
fails.
• Precautionary principle: If a practice carries an unknown risk of
catastrophic and irreversible consequences, but it is uncertain how
large that risk is, then the practice should be rejected until its certain
the risk is nonexistent or insignificant.
• Strong version: burden of proof on those who want to adopt the
technology
• Weak version: burden of proof on those want to reject the
technology.
When Utilitarianism fails
• Others suggest when risks cannot be assessed, justice requires we
identify those who are most vulnerable and who would have to bear
the heaviest costs if things should go wrong
• Choose the option that will protect them from having to bear these
costs.
• Maximin Rule: First
assume the worst is
going to happen and
then choose the
option that leaves us
best off when it
does happen.
• For example, in
greenhouse gas
emissions.
Alternatives: Social Ecology
• Cost-benefit and rights-based theories are based on a calculative way of
thinking that is responsible for environmental crisis in the first place.
• Such thinking will generally lead to the more degradation because of
inherent valuation of humans more than non-humans.
• The environmental crises we face are rooted in the social systems of
hierarchy and domination that characterize our society. (Social Ecology)
• Unless these are abolished, nothing is going to change.
• Our culture encourages domination in many forms, including the domination
of nature.
• Success is associated with domination: The greater the number of people
who work for a person, the greater that person’s wealth, power, and status,
and the more successful the person is deemed to be.
Alternatives: Social Ecology
• Success becomes dominating nature through science, technology, and
agriculture.
• The ideal society is one that rejects all domination and in which all
power is decentralized.
• Activities restricted to those that allow us to live in harmony with
nature.
Alternative: Ecofeminism
• The root of our ecological crisis lies in a pattern of domination of
nature that is tightly linked to the social practices and institutions
through which women have been subordinated to men.
• The logic of dominations sets up dualisms that are used to
characterize men and women.
• Masculine-feminine, reason-emotion, artificial-natural, mind-body,
objective-subjective.
• Masculine characteristics seen superior to feminine and used to
justify subordination of women to men.
• Women seen closer to nature (“mother nature”) whereas men as
conquerors of nature.
Alternative: Ecofeminism
• Nature has often been presented as the feminine object which was
somehow to be disciplined by the masculine scientist.
• As Bacon (in)famously noted, the pursuit of scientists as “the true
sons of knowledge” was to try to “find a way at length into [nature’s]
inner chambers” (Bacon, 1858, p.42 as cited in Walters, 2017, p.62-
63).
• Bacon went on to suggest that nature had a “female body to
penetrate and violate by male reason for the pursuit of knowledge”
(Walters, 2017, p.62).
Alternative: Ecofeminism
• Stewards, not masters, of nature.
• Creation of an androgynous culture that eradicates traditional gender
roles and does away with the distinction between feminine and
masculine that justifies destructive domination of nature.
• Alternative women’s culture based on revaluing, celebrating and
defending what patriarchy has devalued, including the feminine,
nonhuman nature.
Ethics of care
• Applying ethics of care towards nature.
• “When my caring is directed to living things, I must consider their
natures, way of life, needs, and desires. And, although I can never
accomplish it entirely, I try to apprehend the reality of the other.”
• Nature must be seen as an “other” that can be cared for and with
which one has a relationship that must be nurtured and attended to.
• Nature must not be seen as an object to be dominated controlled,
and manipulated.
Ethics of Conserving Depletable Resources
• Conservation:
• Saving or rationing of natural resources for later uses.
• Pollution reduction is a form of conservation.
• Pollution consumes pure air and water and reducing pollution conserves
them.
• Applies more to natural resources that might be depleted father in future.
• Pollution primarily concerns “renewable” sources while resources are
primarily “non-renewable.”
• We should conserve resources for future generations? How much should
we conserve?
Rights of Future Generations
• Do future generations exist now? Will they exist?
• First, future generations do not have rights because they do not exist.
• I may be able to think about them but I can’t hit them, punish them,
treat them wrongly.
• Since they don’t exist, they don’t possess rights.
• How are our future generations different than future AI generations?
Rights of Future Generations
• Second, if they do have rights, we might be led to the absurd
conclusion that we must sacrifice (even our entire civilization) for
their sake.
• Suppose that all future generations (potentially infinite) have equal
right to world’s supply of oil. Should we try to divide oil equally
among them?
• If we equally divide oil among them, our share would be a few quarts
at the most.
Rights of Future Generations
• Third, we can say that someone has a certain right only if we know
that he or she has a certain interest which that right protects.
• But we don’t know the interests of future generations.
• Science might come up with technologies for creating new products
from other raw materials in abundance (minerals in seawater) or they
might find potentially unlimited energy sources such as nuclear
fusion.
• We also do not know which resources might be important with future
technologies.
Justice to Future Generations
• Rawls: Original position and veil of ignorance.
• Leave the world no worse than we found it.
• Care Ethic: We at least have a relationship of care with the next
generation (our children).
• Leave our children a world no worse than we received.
• Utilitarian: Each generation must leave for future generations a world
whose output capacity is no less than that generation received from
previous generations.
Justice to Future Generations
• We at least have an obligation to avoid those practices whose harmful
consequences for the generation that immediately follows us are
certain to outweigh the beneficial consequences our own generation
derives from them.
• Our responsibility for more distant generations is diminished as no
way for us to meaningfully know the impact of our actions, their
needs and technology.
• Unlikely to happen in a competitive market. Why?
Justice to Future Generations
• Businesses try to consume resources quickly before competitors.
• Businesses have short time horizons.
• Future is difficult for businesses to predict.
• Businesses tend to ignore externalities.
• Adoption of voluntary or legal ways to prevent resource depletion.
Sustainability
• The capacity something has to continue to function into the future.
• Environmental sustainability: The capacity of the natural
environment to continue to meet the needs of present generations
without compromising the ability of future generations to meet their
needs from that environment.
• Three (interdependent) pillars of sustainability
• Our economic activities
• Our social activities
• Our environmental activities
Sustainability
• Our economic activities
• Pursue economic growth through manufacturing processes that
rapidly deplete our natural resources and pollute the world.
• Our social activities
• Our life style, the number of children we have, etc.
• Our environmental activities
• Renewable resources should not be depleted at a rate that is greater
than their rate of replacement.
• Emission rate of pollution should not exceed the capacity of the
environment to cleanse and assimilate that pollution.
• Non-renewable resources should be depleted at a rate no greater
than the creation of renewable alternatives.
Environmental sustainability
• Non-renewable resources should be depleted at a rate no greater
than the creation of renewable alternatives.
• Technology Optimists: Science will find substitutes so sustainability
requires neither conservation nor reducing consumption.
• Technology Pessimists: Science will not find substitutes for all
renewable resources. So we must conserve.
Economic growth
• It will lead to environmental degradation.
• Is there a point where we stop?
• Club of Rome Predictions
Post-colonialism & Business Ethics
• Systemic
• What kind of ideologies the society espouses?
• Corporate
• What kind of ideology we serve as an organization? Framing organizational
identity.
• Individual
• Who is an ideal employee?
Key Concepts
• Mimicry:
• Copying the colonizing culture, behavior, manners and values by the
colonized.
• Ultimate ideal: Be like the master.
• Oh look at the way s/he speaks English! Etc.
• Underlying assumption: You can mimic but not “become”
• Hybridity:
• Fusion of two traditions creating double identities or hybrids.
• Idea of the “desi liberal” “katha angraiz” etc.
Key Concepts
• Ambivalence
• Simultaneous abhorrence and adoration.
• Disruption through tools of the master.
• Third Space
• Neither here nor there.
• Multi-nationals
• West or Saudia?
• Al-Bakistan
• What about LUMS?
Key Concepts
• Positivism/Universalism
• The view that Western experiences, values, and knowledge claims are
standards for all humanity.
• Forecloses possibility of original thought in the proverbial orient.
• Orient as the passive other which simply receives knowledge from the
colonizers.
• Hierarchy of identities
• Recent incidents: Dress codes, moral purity, gender relations etc.
• Nostalgia
• The nostalgic vs the angraiz vs the molvi
• Restorative vs reflective
• Mental health: Carving out identity in a hybrid space.
Key Concepts
• Mimicry: Education
• Hybridity
• Ambivalence
• Third Space: Multi-nationals
• West or Saudia?
• What about LUMS?
• Positivism and Colonialism
• Recent incidents
• Mental health: Carving out identity in a hybrid space.