The relation between the business and climate change

Case 1:

In December 2015, representatives from 195 nations gathered in Paris and signed an international agreement to address climate change, which many observers called a breakthrough for several reasons. First, the fact that a deal was struck at all was a major accomplishment, given the failure of previous climate change talks. Second, unlike previous climate change accords that focused exclusively on developed countries, this pact committed both developed and developing countries to reduce greenhouse gas emissions. However, the voluntary targets established by nations in the Paris climate deal fall considerably short of what many scientists deem necessary to achieve the stated goal of the negotiations: limiting the global temperature increase to 2 degrees Celsius. Furthermore, since the established targets are voluntary, they may be lowered or abandoned due to political resistance, short-term economic crises, or simply social fatigue or disinterest. In fact, in June 2017, the US President, Donald Trump, withdrew the US from the Paris agreement.

Questions:

• Given the imminent and severe threat of anthropocentric driven climate change, should an individual business self-impose the goals of the Paris climate deal? Why?
• What about when doing so lowers profits? Why?

Guidelines for Answering the Questions:

• Keep in mind that there’s no enforcement of the agreement from the UN or even pressure from the US government that could guarantee that your competitors will make the same financial sacrifices.
• In addressing this issue, apply the decision-making model with an emphasis on identifying stakeholders, the relevant ethical issues, and whether the company’s moral responsibility calls for self-imposing substantial environmental regulations on itself.

Case 2:

You work for a chemical company that currently gets rid of waste solvents by paying a waste disposal company to dispose of the solvents in a special landfill site. The board of directors has given you the task of finding ways to reduce the cost of disposing of said solvents. One alternative that you’ve discovered is purchasing equipment that will allow for recycling the solvents, which would drastically reduce the amount of solvent being discarded, and in turn reduce the costs of disposing them in a special landfill site. After consulting with two industry sources for estimates of the costs savings for your company, you found that they disagreed about expected future costs for disposal of hazardous waste solvents. The lower estimate of cost savings predicts that the recycling equipment would increase net income but decrease the return on investment due to the expensive nature of the equipment. The higher estimate of costs savings predicts that the recycling equipment would increase both net income and return on investments. You’re uncertain about what analysis to present to the board. You care deeply about environmental issues and believe that the company should make a commitment to recycling to reduce the amount of waste solvents put into the landfill. While the solvents don’t currently pose a threat, a natural disaster could result in the landfill contaminating resources that the local community relies on. Moreover, you think the analysis that has a higher estimate of costs savings is more likely to be right, but you also recognize that this could be due to your own bias. You believe that if you present both analyses to the board, they won’t approve purchasing the recycling equipment. But if you only present the analysis that has the higher estimate of costs savings, they would approve of the recycling option.

Questions:

• What is the right thing to do in this case and why? In other words, should you present both analyses or should you just present the higher estimate of cost savings analysis, thereby ensuring that the board will approve the recycling equipment? Why?
• Might there be a subtle alternative between merely presenting one or both analysis?

Guidelines for Answering the Questions:

• In offering an answer, apply decision making model to this case, with an emphasis on identifying stakeholders, the ethical issues, and what moral obligations you have.