Transforming Corporations

1
Transforming Corporations

• Chapter 10

2
The Case for Responsibility

• Only 1700 transnational corporations (TNCs) have
  taken steps to improve social or environmental
  issues such as pollution.
• Several responses to environmental issues brought
  lower waste output and reduced overall costs in
  companies.
• Companies that switch to ecosystem friendly
  habits attract more workforce, higher popularity
  rates (such as less boycotts of products), and
  higher customer satisfaction rates.

3
Some Early Leaders

• Companies that are focused on becoming more
  responsible are placing much of the effort on to
  reducing waste emissions or focusing on their
  workers, plants, or consumers.
• Eco-effectiveness in companies means that they
  have to redesign the way their company works,
  such as their goods and good productions. Means
  there is no waste or is biodegradable or
  reusable.
• Rohners, for example, called in a new company to
  help create an eco effective fabric, with earth
  friendly dyes that are non-toxic.
• Companies have started to switch to more earth
  friendly ways to manufacture their goods with out
  harming the environment, such as making
  recyclable shoes from Nike, to organic grapes in
  wine, by Fetzer Wines.

4
Barriers to Responsibility

• Even though steps have been taken to improve the
  environment, there are barriers that keep others
  from doing the same.
• Three barriers hold most companies back from
  manufacturing goods safely.
• One Shareholders are largely responsible for the
  doings that companies commit to. If a shareholder
  doesnt approve of an action taken, they will
  pull their money out from that stock. In turn,
  companies which rely on that money, are then be
  pressured to maximize goods production at the
  risk of the environment

5
Barriers to Responsibility Continued

• A second influence Actual environmental and
  social costs created from companies are not
  collected in accounting files or are include
  minor details. Companies do not have to pay for
  all external costs suck has injuries, medical
  care, and costs dues to pollution. If they were
  to, they would be paying over 3.5 trillion
  dollars a year.
• The last influence is corporations in society. It
  has been shown that corporations have a large
  influence on governments and the media, as well
  as others, to gain more consumers. Their sheer
  size and money made creates a pedestal of power
  over other institutions.

6
Engaging Stakeholders

• Stakeholders have a huge influence over companies
  and are usually investors, activists,
  communities, and labor unions.
• Stakeholders have come to realize the impact that
  companies have on the environment. They have
  started to work with these companies to adopt
  policies to help alter the drastic change in
  environment. For example New York City and
  California stakeholders with pensions fund
  companies have worked together to adopt policies
  that address long term risks.
• Resolutions are filed to companies from
  stakeholders when a company does not or chooses
  not to adopt a policy.

7
Engaging Stakeholders Continued

• Non Government Organizations ( NGOs) are one of
  the largest represented groups of stakeholders.
• In some cases, a company will seek out an NGO to
  work together to build or create health, labour,
  or environmental policies throughout its
  business.

8
Leveling out the Playing Field

• Governments are vital to companies because they
  create regulations that all companies have to
  follow, such as how much carbon emissions one
  factory can let off.
• However corporations are having more and more
  influence over the very body that creates its
  regulations
• Having proper price signals allows both small and
  large companies compete, or responsible companies
  vs. irresponsible companies. It levels the
  playing field so that prices do not get too high
  for one company and not another

9
Redirecting Corporate Influence

• If corporations plan to maintain their place as
  a dominant institution in society, they will need
  to be perceived as beneficial on the whole.
• Corporations have already started to change or
  influence their companies so that they can be
  more earth and social friendly being
  responsible.
• Working with stakeholders and other companies
  allows corporations to create new standards to
  follow both current government regulations and
  new regulations to help an ecosystem in need