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Answered) 5 Environmental and Corporate Challenges Medioimages/Photodisc/Thinkstock Learning Objectives After reading this chapter, you should be able to:...

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Read Apply Your Knowledge: Solutions to Environmental Issues at the end of Chapter 5, Section 5.3, in your text. In a two-page paper (not including the title and reference pages) you must:

  • Select a community with which you are familiar.
  • List the three most significant environmental issues facing the community. Cite your sources when referring to websites or articles.
  • Describe how these environmental issues affect the health of individuals in the community. Cite your sources.
  • Describes and identifies the major causes of these health problems.
  • Provide several significant steps that could be taken at a corporate level to reduce the impact of the environmental problem.

You must use at least one scholarly source in addition to the text and your paper must be formatted according to APA style guidelines as outlined in the Ashford Writing Center.  Note: Title must appear on the first page of text; headings must be used in all APA essays; and, the final heading of your paper must be the word

5 Environmental and Corporate
Challenges Medioimages/Photodisc/Thinkstock Learning Objectives
After reading this chapter, you should be able to:
1. Describe global warming, suspected causes of global warming, and the environmental challenges of air
and water pollution and ozone depletion. 3. Explain how processes such as cradle-to-cradle design, biomimicry, and net zero construction provide
tools to innovate, mitigate risk, gain organizational efficiency, reduce waste, and reduce environmental
impact. 2. Compare and contrast environmental management systems and the ISO 14001 standards and describe
how both foster organizational efficiency, reduce waste, and reduce environmental impact. © 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 5.1 Environmental Issues Pretest Questions
1. The major energy companies such as ExxonMobil and Shell claim that global warming is
not a concern. T/F
2. An environmental management system is part of every company’s strategic plan. T/F
3. Cradle-to-cradle is a process mapping tool that helps identify waste. T/F
Answers can be found at the end of the chapter. Introduction
In 2006, environmentalist and author Bill McKibben published a book titled The End of
Nature, which received significant attention from management scholars. McKibben does not
argue that the end of nature equals the end of the world; rather, he argues that the ecosystem
may be experiencing the end of the “self-healing” period. McKibben argues that as humans
have developed products like the pesticide DDT—which killed 40% of the birds in the United
States—their footprint has been so large and so ominous that the only way for the natural
world to persist is for humans to manage it. He says people can no longer wait for nature to
heal itself; nor can we ignore the significant environmental problems we collectively face.
McKibben’s book was another urgent warning about the impact humans have on the ecosystem and the precarious future we face if we do not change.
This chapter clarifies that no employee, corporation, citizen, or government stands outside
of nature, the ecosystem, and the environment. It argues that the impact of human activity
on water, air, the protective ozone layer, and global warming are not reversible. It then examines new conceptualizations that allow corporations to see the environmental impact of their
operations, and work to mitigate damage. It introduces new conceptual tools such as environmental management systems (EMSs), ISO 14001, cradle-to-cradle, and the ideal of net zero
construction as ways corporations can turn the tide of environmental degradation. Essentially, it discusses the need for humans to manage the earth’s ecosystems, with the corporation playing a significant role. This chapter fits neatly with Chapter 6, which discusses the emerging efforts of governments
and other advocacy groups to regulate and reduce environmental impact. In this discussion
we begin to see that government and self-regulation can have a positive impact on the environment—a key goal of social responsibility. 5.1 Environmental Issues
This chapter uses the term environment to refer to the natural ecosystems that include air,
water, land, and the life forms in, on, around, and dependent on them. One problem with
environmental issues is that they manifest themselves on varying scales for different living
organisms. For example, suppose Jim fails to maintain his car’s engine. It will become less © 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Environmental Issues Section 5.1 efficient, use more gas, emit more pollution, and cost more to run each month. Perhaps the
global impact from Jim’s car is negligible. However, if Jim’s car is one of 100,000 cars in the
community that have similar problems, then air pollution in his area might worsen. Over
time, residents’ health might be affected, and there may be impacts on wildlife, water quality,
and tourism. Less efficient engines mean more fuel will be consumed, which in turn means
that fewer fossil fuels are available in aggregate. More pollution impacts the neighborhood’s
plant growth. If these behaviors are practiced by communities around the world, the ozone
layer will be depleted and there will be an increase in global temperatures due to the greenhouse effect. Thus, one individual’s behavior, negligible on a personal level, has a potential
cumulative effect when multiplied by the rest of the planet’s population.
The same issues apply to corporations, which have both the disadvantage and advantage of
size. The disadvantage relates to how negative corporate actions are more likely to have a
larger, more measurable, and more significant impact on the environment. On the other hand,
responsible corporate behavior can also make a significant difference in the community and
the larger ecosystem. This section covers the primary environmental issues, which include
global warming, climate change, water pollution, and air pollution. Global Warming and Climate Change
One view of environmental health suggests that the world’s climate is changing, and even
major oil companies agree that carbon dioxide emission is the primary cause. The Royal Dutch
Shell (2016) website says: “Our lives depend on energy wherever we live. But in order to prosper while tackling climate change, society needs to provide much more energy for a growing
global population while finding ways to emit much less CO2 [carbon dioxide]” (para. 1). Carbon dioxide released by burning fossil fuels is one of the major likely causes of the buildup
of gases that caused the greenhouse effect and led to global warming. The greenhouse effect
occurs when carbon dioxide and other gases trap the earth’s heat and keep it from dissipating.
While politicians and others argue about the cause of the change, there is less debate that
the planet is heating up—a phenomenon known as global warming. Global warming refers
to the fact that the earth has warmed between 0.6 and 0.9°C over the last century, or about
1.8°F. The Intergovernmental Panel on Climate Change claims the increase is most likely due
to human-generated greenhouse gases (Intergovernmental Panel on Climate Change, 2016).
One of the deadliest types of pollution, and the other major source of greenhouse gases contributing to global warming, is black carbon. Black carbon is partially combusted black smoke
created by diesel engine and wildfires, and it is full of particulate matter (pollution). The
majority of people in developing nations create black carbon because they, for a variety of
reasons, rely on inefficient fuel sources to heat their living spaces and cook their food (Dons
et al., 2011). For example, in China the vast majority of low-income workers use large charcoal bricks to provide heat and as a cooking source. In much of India and Africa, people burn
charcoal or use dangerous kerosene stoves. As a result, many of the cities in these places are
too smoggy to see the sky (in fact, some athletes refused to participate in the 2008 Beijing
Olympics due to pollution concerns). The smoke, and the effect of the smoke on health, is
overwhelmingly negative for humans and the planet (Dons et al., 2011). © 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Environmental Issues Section 5.1 Another possible cause of global warming comes from deforestation. Half of all the original
forests on earth have been cut, burned, and turned into farmland (Malhi et al., 2008). Burning
forests releases carbon into the atmosphere in the form of smoke. It also eliminates the forest
as one of the atmosphere’s natural air filters. Deforestation efforts have multiple short-term
economic benefits that can be difficult for developing nations to resist. Trees are cut to burn
as fuel (sometimes to make the charcoal that creates black carbon) or lumber. But instead of
adopting a reforestation program, land is cleared as pasture for livestock or for plantations
and farms. Cutting trees without growing them back causes erosion, a loss of biodiversity,
and increased atmospheric carbon dioxide (Angelsen & Kaimowitz, 1999; Malhi et al., 2008).
Sometimes deforested areas are cleared to raise cattle and produce beef. This is another probable source of increased atmospheric carbon dioxide and global warming. Methane, which is
a by-product of digestion from animals such as cows, is a significant greenhouse gas. The
average cow produces from 100 to 250 pounds (70 to 120 kg) of methane gas every year.
According to the Food and Agriculture Organization of the United Nations, methane produced
by cows contributes to almost 18% of all greenhouse gases (Time for Change, n.d.). With these and other sources of carbon continuing unchecked in parts of the world, some
predict the earth will warm by as much as 6.4°C, or 11.5°F, by the year 2100. The World Bank
(2016) says developing nations will be hardest hit because populations in those countries
have less resiliency to cope with the multitude of changes that such an increase will herald.
Some political organizations that oppose environmental regulations concede that the climate
is changing, but they argue it is not necessarily because of human activity. Despite this, U.S.
government agencies, governments of many coastal cities, the United Nations, the World
Bank, and the vast majority of scientists, including those from energy companies, believe that
the major cause of climate change is human activity. This relates to CSR because more executives now consider climate change to be a corporate risk and use CSR budgets and initiatives
to measure and address climate-related activities. Some climate-related risks relate to pollution, waste, and water supplies and use. Water Pollution and the Scarcity of Clean Water
In the late 1990s, just prior to the terrorist attacks of September, 11, 2001, the National Security Study Group made two dire predictions. The first was that the United States was vulnerable to a large-scale terrorist attack. The second prediction, which went largely unnoticed,
stated that future geopolitical conflicts would not be fought over land, riches, or oil, but rather
fresh water supplies and rights (U.S. Commission on National Security, 1999). While water covers the vast majority of the world, fresh water that can be used for drinking
and to irrigate crops is becoming increasingly scarce. Only about 1.5% of the water on earth
is fresh, and much of that is locked in icy glaciers in the North and South Poles (U.S. Environmental Protection Agency [EPA], 2016d). In other regions of the world, fresh drinkable (potable) water is becoming increasingly difficult to find because of both organic and chemical
pollution. It is estimated that over 500 people die every day in India from water pollution–
related illnesses (United Nations Children’s Emergency Fund, 2013). China reports that 90%
of the water in its cities is polluted, leaving half a billion Chinese with no access to safe drinking water (“China Announces,” 2015). However, the problem of safe drinking water and © 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Environmental Issues Section 5.1 polluted water supplies is not limited to just
developing countries. In the United States
about 45% of all streams and lakes are polluted. Consider the 2016 crisis in the city of
Flint, Michigan, where numerous citizens
became sick due to the local municipality’s
failure to ensure safe drinking water supplies for the city (CNN Library, 2016). The Organisation for Economic ­Co-operation
and Development (OECD) predicts that by
2030, 780 million people will lack access
to safe drinking water (OECD, 2012). Such Pollution is compromising clean water sources
numbers represent almost half of the world’s throughout the world.
population. The same report says that corporations and factories now use three times
more water than they did 50 years ago. Certainly, human and economic development remain
curtailed when clean water is scarce or unavailable, as mortality rates, illness, and disease
(as well as malnutrition and death) result. Also, many industrial processes and agricultural
activities rely on water for viability; less water means less viable crops and a more fragile
food supply.
Pollution affects more than just municipal and freshwater sources; oceans are also affected
by pollution. The UN estimates that 87% of all marine fisheries in the world are overfished.
The Nature Conservancy estimates that at the current rate, 70% of all coral reefs in the world
will be gone in the next 50 years. The effect of global warming is also being felt in the delicate
ocean ecosystem. Seawater is absorbing carbon dioxide, which then becomes acid, and acidsensitive species are dying out (Food and Agriculture Organization, 2012). It is not just the
water’s pollution that causes concern. As polar ice caps melt, there is an increase in sea levels,
too. Oceans are rising, making life difficult in coastal areas such as New Orleans and the Netherlands, where people live at or below the current sea level. Rising oceans also threaten entire
countries, such as the island nation of Kiribati (McGrath, 2015).
Water pollution poses threats to individual countries and communities, but it also threatens
global safety, health, and business (some businesses use water as an input, such as beverage
industries, while others use water to clean facilities or cool equipment, such as electronic
component manufacturers). Thus, water pollution and continued access to clean water and
sanitation are CSR issues that overlap with strategy and public health. Whether firms are
motivated to focus on water use and pollution out of concerns for safety, CSR, community
engagement, or sustainability (or another reason), the topic overlaps with CSR and sustainability at many levels. Air Pollution
Like other sources of pollution, air pollution stems from both natural and human-made
activities. Exposure to polluted air indoors or outdoors can cause serious health problems.
All populations, but particularly children, pregnant women, and the elderly, can develop diseases from being exposed to air pollution. Daily and prolonged exposure to air pollution also © 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Environmental Issues Section 5.1 reduces people’s ability to be active and exercise, and it increases their susceptibility to infection (National Institute of Environment Health Sciences, n.d.). All nations deal with air pollution, though some cities have geographic features to help—for
example, some nations have mountains that trap bad air, while others may be on the coast
where prevailing winds push polluted air away. In the United States, the Centers for Disease
Control and Prevention (CDC) claims that air pollution has generally been declining since
about 1990. This is largely due to pollution controls on cars and stricter regulations for factories. Still, the CDC (2016) cautions that air pollution can account for increased cancer rates,
birth defects, and even heart disease. This data relates to CSR in two ways: It reinforces the
value of past CSR efforts (and past legislation regarding factory emissions) and also suggests
that firm managers need to continue to monitor emissions and other possible contributions
to pollution. Ozone Depletion
The ozone is a thin layer of gas that floats in the stratosphere between 9 and 28 miles above
the planet. Although mildly poisonous to humans, it is critical to life on earth because it
absorbs ultraviolet light from the sun. Excessive ultraviolet light causes skin cancer, damages the eyes, and reduces our ability to resist disease. Historically, chlorofluorocarbons,
or CFCs, formerly used in refrigerants, solvents, and propellants, were impacting the upper
atmosphere and depleting the ozone layer over the earth. In 1987 world leaders negotiated
the Montreal Protocol, a multinational treaty that banned CFCs and other ozone-depleting
chemicals from being manufactured and sold. Countries have until 2030 to phase out all CFCs.
Still, the existing and prior damage to the ozone remains. Scientists believe it will take until
the middle of the 22nd century for the ozone layer to completely recover (United Nations
Environment Programme [UNEP], 2014).
Regarding air pollution, data indicates that worldwide, the combination of government regulation and corporate care (self-regulation) helps reduce pollution. For example, in 2014 the
UN under-secretary-general and United Nations Environment Programme (UNEP) executive director Achim Steiner announced progress had been made in terms of the ozone layer’s
recovery. (UNEP, 2014). The Montreal Protocol is the world’s most successful environmental
treaty. It provided significant protections for the stratospheric ozone layer that kept unhealthy
levels of ultraviolet radiation from reaching the earth’s surface. But Steiner also says, “The
challenges we face are still huge. The success of the Montreal Protocol should encourage further action not only on the protection and recovery of the ozone layer but also on climate” (as
cited in UNEP, 2014, p. 1).
The topics of air pollution, ozone layer damage, and water pollution (including a discussion
of carbon dioxide and methane) relate to CSR because businesses and communities rely on
access to water for basic operations. Ensuring the viability of people and communities, as well
as ensuring continued access to basic services, is thus both a CSR and a strategic issue. © 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 5.2 Finding Solutions 5.2 Finding Solutions
Solutions to environmental issues require considering and cooperating with stakeholders,
and achieving CSR and sustainability comes with challenges. For example, in the past 10 years,
the state of California has considered building a high-speed rail system between Los Angeles
and San Francisco. Such a system would reduce the congested traffic on the freeway between
the two giant cities and also make each trip between the cities have less of a carbon footprint.
However, farmers from the San Joaquin and Hanford parts of California took a not-in-my-backyard (NIMBY) approach to the issue, which is when local residents oppose a project that will
likely hurt their community. Residents oppose the rail system on the grounds that it will take
too much farmland out of production and pollute their neighborhoods (California High Speed
Rail Authority, 2012). As with many large projects developed for greater efficiency, a negative
impact on some can have a positive impact on many.
For these and myriad other reasons, environmental issues remain complicated. The changing and improved science and the debates around causes, complications, and impacts of different types of pollution cause disagreement in governments, consumers, regulatory bodies,
and between corporate stakeholders. The questions of scale associated with environmental
issues add another complicated dimension to their consideration. These include: Can a single
country make a difference if leaders and businesses within that country change their behavior? Can a single corporation or single industry impact a global environment? Can individual
behaviors make any difference at all?
Recall how business leader Ray Anderson of Interface Carpet (described in Chapter 1), suggested that only individual action can make a significant difference. As CEO of his company, he
realized that he needed to take local action in order to make global impact. CSR and Sustainability in Action: Interface Carpet, Part 2 When Ray Anderson reinvented himself, his company, and his industry, the carpet
business was one of the most polluting industries on the planet. Most carpet was made
using chemicals created from petroleum. Old carpet was dumped in landfills. The industry
was known for its high impact on the environment. But Anderson saw a different way to
conduct business. He said:
Distancing ourselves from the wellhead requires that we reimagine the
antiquated, linear, take-make-waste industrial system of which we are all
a part; it requires us instead, to become part of a thoughtful, cooperative,
cyclical system that mimics nature in the way that we design, source,
manufacture, sell, install—and eventually reclaim and recycle—our
products. This ambitious undertaking requires new technology, new inputs,
and new thinking. (as cited in Anderson & White, 2009, p. i) (continued) © 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Finding Solutions Section 5.2 CSR and Sustainability in Action: Interface Carpet, Part 2
(continued) Interface adopted a sustainable design approach that opened the company to innovation
and creativity and made it more profitable. Interface’s accomplishments since 1994 are
impressive. In terms of waste and pollution, Interface has taken the following steps:
• • • • • • Cut greenhouse gas emissions by 94 percent
Cut fossil fuel consumption by 60 percent
Cut waste by 80 percent
Cut water use by 80 percent
Invented and patented new machines, materials, and manufacturing processes
Increased sales by 66 percent, doubled earnings, and raised profit margins.
(Interface, 2016, para. 3) The creation of an Interface European plant has been even more impressive. A recent
press release reports, “As of January, the plant is operating with 100% renewable energy,
using virtually zero water in manufacturing processes and has attained zero waste to
landfill” (Interface, 2016). Interface Carpet’s environmental achievements does not mean it was always easy for Anderson or his company. Interface spent some years “in the red” (meaning it was financially
unprofitable) and faced years of change and internal organizational issues. The Interface
story showcases how being a green company comes with challenges as well as distinct benefits. In most years, the bottom line grew and the company’s profile changed for the better.
The company is now recognized as an environmental leader. The journey of Interface Carpet, Ray Anderson, and similar companies was even more impressive because of the era in which it took place. When Ray Anderson started his environmental
journey in the early 1990s, the tools were not in place to do what he wanted. By his own
admission, Anderson spent a great deal of time inventing and creating processes. He discovered that all around him, new tools were emerging from companies and organizations facing
the same challenge.
Today most companies can identify, understand, and manage their environmental footprint
by using an EMS to track the impact an organization has on natural systems. An EMS offers
a basis for understanding waste and pollution generation, as well as for finding ways to
increase efficiency and be intelligent about resource flows. The sections that follow discuss
the benefits of an EMS and examine the ISO 14001 EMS standards. These standards form the
foundation of the life cycle assessment detailed in Chapter 6. An extension of such tools is the
net zero ideal, which refers to the goal of eliminating all wasted energy and materials. © 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Finding Solutions Section 5.2 Environmental Management Systems
An environmental management system (EMS) is the set of systems and routines that firms
use to identify and manage waste and pollution and to understand how natural resources
are used and allocated. With an EMS, a corporation does not just manage the manufacture
of product or service; it systematically manages its total environmental impact, including
waste, carbon footprint, transportation costs, and product disposal. An EMS can range from
informal and simplistic to formal and extremely complex. A system can be managed in-house
or assigned to an outside vendor. In some firms, staff members may already be managing
purchasing activities, maintenance work, or other key functions with an eye toward stewarding resources, but they may not call the system they use for this work a formal EMS. Thus,
in some firms, formalizing the process simply requires giving current activities a name and
more structure. In other firms, starting an EMS requires building new systems and structures.
The U.S. Environmental Protection Agency (EPA) offers a clear definition and a set of processes
to develop an EMS for businesses of any size, including local, state, and federal agencies.
An EMS provides a systematic way of managing an organization’s environmental impact in a
manner that can be regularly reported and tracked. Sometimes an EMS results in an extensive
document that reflects analysis and results from an external third-party organization—such
a document serves as a benchmark to make...


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