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Climate Change and Corporate Responsibility
The problem of climate change is not new, but it becomes more and more crucial nowadays. The first changes in climate were observed during the industrial period, from the 1750s (Hegerl et al., 2019, p. 1). However, a major rise in greenhouse gas concentrations was noticed in the second half of the twentieth century. At present, climate change and global warming are the subjects of corporate responsibility and sustainability. Modern corporations try to manage their resources effectively to minimize the negative impact of manufacture and production on the environment. Nevertheless, some companies still believe that corporate social responsibility is a voluntary action, and they do not feel responsible for dealing with climate change (Unsworth et al., 2016, p. 1). Therefore, the question arises whether climate change is an ethical and social responsibility of corporations or not. Although some companies remain climate blind, other corporations demonstrate a strong leadership role in global climate action, ensuring that climate change is an ethical responsibility of all businesses and taking steps to reverse it.
Background Information
Different factors influence the Earths climate, including both internal dynamics of the environment and external factors. During the last 100 years, the impact of external factors on climate change increased due to industrialization and rising concentrations of greenhouse gases (GHG). Such factors as habitat loss, pollution, overexploitation, and invasive species negatively affect climate change (Cuervo-Robayo et al., 2020, p. 2). According to Cuervo-Robayo et al. (2020), the world mean temperature of surface has increased around 0.85°C in the last 130 years (p. 2). Although this number may seem negligible, its effects are noticeable and negatively influence the whole planet. Thus, it is important to examine the causes and consequences of climate change within the last one hundred years and find some solutions and recommendations.
Timeline of Climate Change
In the 1850s-1890s, the mean global temperature was about 13.9°C ( The Discovery of Global Warming, 2021). First Industrial Revolution, with its coal, railroads, and land clearing, led to increased gas emissions. In the 1870s-1910s, the Second Industrial Revolution began, and people began to use fertilizers, chemicals, and electricity, leading to climate change ( The Discovery of Global Warming, 2021). In 1958, scientists discovered that a greenhouse effect raises temperature of the atmosphere of Venus far above the boiling point of water ( The Discovery, 2021). Since that moment, researchers began to examine and analyze the harmful impact of GHG emissions on global climate.
When looking at the time series of global temperature changes from 1884 to 2020, one can see that the years 2020 and 2016 were the warmest years since 1880 (Shaftel et al., 2021). According to NASAs Jet Propulsion Laboratory, global temperature increased by 2.1°F since 1880, and the CO2 (carbon dioxide) level grew by 416 parts per million, being at the highest within the last 165,000 years (Shaftel et al., 2021a). One can see that the hottest years have occurred since 2000, and one of the explanations for such changes was corporate irresponsibility. Thus, in 2000, Global Climate Coalition dissolved as many corporations grappled with threat of warming, but oil lobby convince[d] US administration to deny the problem ( The Discovery, 2021). During the next few years, books, films, and different art projects began to represent global heating as a multinational problem. China becomes the worlds major emitter of CO2, overtaking the United States in 2006 ( The Discovery, 2021). The situation worsens, and various disasters and natural cataclysms occur as a response to global warming. In 2018, IPCC (Intergovernmental Panel on Climate Change) report mentioned that if society wants to avoid disastrous warming, it should sharply decline global gas emissions by 2030 ( The Discovery, 2021). Nowadays, the situation is critical, and corporations should take some steps to improve it.
The Role of Corporations in Climate Change
Corporations are accountable for climate change since they contribute to GHG emissions and other pollutions, which cause an increase in surfaces temperature. According to Alibaai (2018), corporations may suffer from global heating since it may cause fluctuations in energy supply, transportation disruptions, negative effect on human resources, and higher taxes and insurance premiums for establishing businesses in particular parts of the planet (p. 1). If the global economy is under hazard, all corporations, either small or huge, will suffer. Therefore, they should reconsider their contribution to climate change and become more sustainable and environmentally friendly in the nearest future.
Interestingly, a relatively small number of corporations can influence climate change. Thus, according to Riley (2017), only 100 companies have been the source of more than 70% of the worlds greenhouse gas emissions since 1988 (para. 1). Such corporations as Suncor, Husky, Petrobras, Lukoil, Rosneft, Canadian Natural, Marathon Oil, Occidental, and many others are responsible for rapid climate change because they produce the largest amount of fossil fuels and carbon dioxide emissions (Griffin, 2017, p. 6). The majority of these corporations are investor-owned and state-owned companies, while some part of them are private investor-owned and state producers (Griffin, 2017, p. 5). These 100 fossil-fuel manufacturers produce 52% of global industrial greenhouse gases since the industrial revolution (Griffin, 2017, p. 5). However, many corporations do not understand the effects of fossil fuels productions or do not want to admit their role and responsibility in global warming. Therefore, other companies united to act oppositely and show that corporations can be environmentally responsible.
Environmentally responsible companies try to diminish the amount of trash and contamination they produce and utilize renewable energy as an alternative to fossil fuel in their manufacture. For instance, companies such as Google, Apple, Facebook, Ikea have dedicated to 100% renewable energy under the RE100 initiative, and Volvo announced that it would produce only electric cars in the future (Riley, 2017). Nowadays, many companies are leading in reversing climate change. The most sustainable companies are Unilever, Patagonia, Nestle, Tesla, and the corporations mentioned above (Kottasova, 2018). For example, Unilever tries to ensure that all its agricultural products and components are sustainable (Kottasova, 2018). Patagonia uses organic materials to make clothes, while Nestle uses 100% responsibly sourced palm oil in its manufacture (Kottasova, 2018). All these companies realize that climate change will have a disastrous effect on the world economy if they refuse to resist it immediately.
Sustainable Development Goals
Modern businesses realize that they should participate in sustainable development goals to fight against climate change and save the economy and humanity from its negative consequences. According to van der Waal and Thijssens (2020), the 17 Sustainable Development Goals, developed by the United Nations in 2015, encourage private business owners to use their creativity and innovation to reduce poverty, eradicate hunger, and protect biodiversity (p. 2). However, only 40% of the worlds largest corporations pay attention to these goals in their reports, while other companies remain silent (van der Waal & Thijssens, 2020, p. 3). Thus, it will be a complex task to create shareholder value and encourage other corporations to share sustainable development goals.
Sustainable Engagement
Sustainable employee engagement is the first step to drive the companys sustainability strategy. If all employees are engaged in sustainability strategies, the company will attain innovation, increased productivity, better retention, higher employee morale, and other benefits that will help achieve sustainability. According to Simon and Zhou (2018), when the employees perceive corporate sustainability positively, they demonstrate better job satisfaction, well-being, feeling of meaningfulness, and improve behavior (p. 286). When the employees are engaged in business sustainability, they will positively influence the companys profitability and increased shareholder value. The entire company will work in the right course to ensuring a better world to live and work in (Simon & Zhou,2018, p. 289). Moreover, sustainable engagement helps develop collaboration and integration and cultivate employees trust and commitment, positively affecting the company and the environment.
Paris Climate Change Agreement and EPA
When climate change affected many businesses globally, something had to be done to stop or decrease global warming. Thus, in 2015, the Paris Agreement to the United Nations Framework Convention on Climate Change (UNFCCC) was adopted at the Conference of Parties (COP) 21 ( The Paris Agreement, n.d.). Under this agreement, all parties had established collective goals aimed to decrease their greenhouse gas emissions, foster climate resilience, limit the global average temperature increase to 1.5°C, and increase the ability to adapt to the negative outcomes of global climate change ( The Paris Agreement, n.d.). The Paris Agreement has 191 parties, and their progress on the goals achievement will be evaluated every five years. Recently, the United States of America rejoined the Paris Agreement to turn out to be a part of the global climate change solution.
The Paris Agreement is important because it establishes a framework for policies and actions the world should take to mitigate and adapt to global warming. According to this document, the participants have to provide transparent and accountable plans to achieve sustainability and report their progress toward the emissions-reduction targets (Denchak, 2021). Moreover, the developed countries should offer monetary support to developing countries to alleviate and adjust to global heating. For example, it is essential to eliminate poverty in India and decrease GHG emissions by enhancing renewable energy. Although developed countries are not legally obliged to help developing nations, such initiatives are highly encouraged because they will have to achieve one common goal.
In addition, Paris Agreement is important because it unites all nations around a single subject of climate change. With this document, all leaders from worldwide approved that climate change is caused by human activity, and global action is required to halt these changes (Denchak, 2021). Human-generated emissions, deforestation, and forest degradation contribute to global warming. Consequently, global warming leads to various environmental problems, such as sea levels rise, coastal erosion, changes in lifecycles and migration patterns, longer growing seasons, water scarcity, and natural disasters.
Moreover, climate change leads to problems with human health. Thus, hotter temperature contributes to cardiovascular deaths, respiratory diseases, water-borne diseases, and other illnesses (Denchak, 2021). Besides, extreme weather conditions and natural disasters may destroy houses, roads, infrastructure, and normal ways of life. Nowadays, many millions of Americans suffer climate changes wrath, and this is a wealthy nation (Denchak, 2021). In developing and underdeveloped nations, the situation is much worse. That is why it is essential to address this problem and take global actions immediately.
Ethical Aspect of the Problem
Climate change is an ethical issue for modern societies and businesses. Since many companies have unsustainable activities and processes, they cause injustices in community health and the nature. The problem is ethical because GHG emissions produced in one part of the Earth negatively affect distant places in other parts of the world (Dahlmann et al., 2019, p. 1). Therefore, huge corporations and small industries are equally accountable for climate change and should mitigate their impacts by reducing GHG emissions.
Climate Change as a Challenge to Ethical Actions
Climate change is a subject that brings several challenges to ethical actions for the entire planet. First, it is a global phenomenon, and everyone agrees that greenhouse gas emissions have negative climate effects in all parts of the world (Dahlmann et al., 2019, p. 1). The problem is that collectively all countries agree that they need to reduce emissions, but each country continues to emit individually without limitations. The ecologist Garrett Hardin called this issue the tragedy of the commons (as cited by Battersby, 2017, p. 7). Although countries admitted climate change, they acted selfishly and delayed taking real actions to address the issue (Battersby, 2017, p. 8). Fortunately, recent research showed that tragedy is not inevitable, and the world can find a way out of this situation.
The second challenge is that existing emissions have an intergenerational effect. Even if corporations take action today, climate change will affect future generations, which is unfair in relation to children and youths (Sanson & Burke, 2020, p. 346). Such a temporal diffusion of global warming results in an ethical collective action problem, making cooperation between generations impossible or hardly possible. If some businesses continue emitting greenhouse gases without changes and new companies use only renewable sources and reduce their emissions, the effect will be minimal.
The third challenge is the underdevelopment of theoretical tools in different areas. For example, intergenerational ethics is still underdeveloped, and its theories are not strong enough to persuade people of their credibility. In addition, the questions about the moral value of nonhuman nature are also unanswered. Thus, it is unclear whether humans are obliged to protect animals and nature, and if they are obliged to do it, what forms such obligations take. On the other hand, if humans have a responsibility toward other humans, who are weaker and suffer more, the question arises of whether they can use natural resources to help these people (Garcia & Sanz, 2018, p. 72). The authors mean whether it is moral to use, for example, fossil fuels or cut down forests to assist the poor and those who suffer most. All these questions pose challenges to ethical actions and cannot be addressed without further considerations.
Corporate Responsibility
Corporations are responsible for climate change because they produce goods and sell them to make profits as one of their collective goals. Corporate responsibility can be social and moral, and both focus mostly on the relationship of business towards society and other stakeholders and enterprises (Hormio, 2017, p. 315). Hormio (2017) argues that corporate moral responsibility (CMR) is about what has to be done, while corporate social responsibility (CSR) focuses on what could be done (p. 315). In any case, corporations are responsible for their products not only in the context of the supply chain but also in a wider concept, such as the ways products and services are designed, manufactured and marketed climate wise (Hormio, 2017, p. 321). If companies want to be held responsible for climate change, they will have to be climate-friendly and think about mitigating global warming.
The style of leadership has a great impact on corporate responsibility. The company that will be analyzed further as one of the companies that focus on sustainable development and corporate responsibility is Unilever. The CEO of the company, Paul Polman, utilizes a transformational leadership style to inspire the employees with his vision of sustainable development and encourage them to achieve this vision. In his interview with Forbes, Polman says, Business needs to be part of the solution, not the problem (Schawbel, 2017). Business cannot be successful if it contributes to inequality, poverty, and climate change. Thus, Polman believes that it is Unilevers corporate obligation to address global warming and other challenges.
The leaders of Unilever developed a strategy to address climate change. The Unilever Sustainable Living Plan (USLP) is a great example of corporate responsibility and sustainability ( Planet & Society, 2021). According to this plan, the company is taking climate action, protects and regenerates nature, reduces and recycles waste to achieve a waste-free world, promotes positive nutrition, raises living standards, promotes equity, equality, and inclusiveness, and builds partnerships with other companies, which have similar views on sustainability ( Planet & Society, 2021). The leaders of Unilever decided to fight the climate crisis, taking the following steps. Thus, Ben & Jerrys leaders initiated reducing GHG emissions from dairy farms. Seventh Generation propagated clean energy for all departments, and Knorr decided to support farmers to grow food more sustainably (Macmillan, 2020). All these actions positively impact climate change and allow the company to preserve resources for the next generations and leave the planet the way it was before.
Company That Has Taken Steps to Better the Better
Although many corporations have already taken steps to mitigate climate change effects and reduce emissions, some companies are leading this fight against global warming and demonstrate successful results in this fight. As it was already mentioned, one of such companies is Unilever, the owner of such brands as Dove and Ben & Jerry (Kottasova, 2018). The corporations Climate Transition Action Plan (CTAP) is a perfect example of sustainable business leadership and corporate responsibility (Eccless, 2021, para. 1). Unilever plans to achieve net zero by 2039, which means that they want to reduce emissions, not balance them with carbon credits or offsetting (Andersen & Jope, 2021, p. 47). The corporation aims to reduce Scope 1 and 2 emissions by 70% by 2025 and by 100% by 2030 against a 2015 baseline (Andersen & Jope, 2021, p. 5). Scope 1 means direct on-site emissions, and Scope 2 means indirect on-site emissions, like purchased electricity (p. 6). Scope 3 emissions include upstream or downstream emissions in the value chain outside a companys own operation, and the company plans to attain net zero emissions fully covering this Scope and other two Scopes by 2039 (p. 7). Unilever makes right steps in reducing emissions because of its direct control of all activities and processes.
Having analyzed Unilevers Climate Transition Action Plan, the question arises: how is the company going to achieve its targets? First, it will reduce emissions from its own operations because it has direct control over them (Andersen & Jope, 2021, p. 15). Then, Unilever will encourage its providers to establish their personal targets and work with logistics partners whose transport will be more sustainable along its value chain. Third, the company is going to redesign its brand products to decrease waste and emissions and develop novel lower emission constituent replacements (p. 15). Finally, Unilever is planning to influence wider society, encouraging other stakeholders and producers to reduce emissions and achieve the Paris Agreement goals. All these steps will help the corporation achieve its net zero plan and 100% renewable grid electricity, thus mitigating climate change and promoting sustainability.
Ethical Theories Used to Address the Ethical Dilemma of Climate Change
Although Unilever has taken many steps to address the ethical dilemma of climate change, it still requires some changes to be made. If the company uses the principles of utilitarianism, it will need to focus on the well-being of the majority (Marques, 2016, p. 42). According to this theory, Unilever should ensure that its needs and desires correspond with the needs and desires of other stakeholders and do not violate corporate sustainability plans. Having analyzed the companys leadership style and its leaders actions to develop sustainability, one can conclude that utilitarianism is a suitable approach to address the ethical dilemma of climate change. Since the company aims to satisfy all stakeholders and preserve the environment, it will eventually achieve the common good, i.e., sustainability and net zero plan (Marques, 2016, p. 42). However, the problem may occur with this approach if the companys leaders change their perception of the common good. If, for example, Unilevers leaders believe that animal testing can be preserved in their business because it brings more benefit to the consumers than harm to animals, their decisions will be unethical. Thus, the theory of utilitarianism has some limitations and should be carefully used when addressing climate change issues.
Another ethical approach to climate change that is more frequently used nowadays is universalism. The most known universalist approach is Kantian theoretical philosophy. The key principles of this approach are respecting other people and acting in a way a person wants all people on the Earth to act (Marques, 2016, p. 37). The main strength of this ethical theory is its consistency. From the perspective of sustainability and climate change, corporate leaders who use less fortunate people as mere means toward their ends might change their actions (Marques, 2016, p. 37). In the case of Unilever, one can see such changes in its sustainable development goals. The company understands that it must stop deforestation because forests help regulate climate ( Planet & Society, 2021).
In addition, the company began developing a waste-free strategy, transitioning to a circular economy and recycling and reusing as many materials as possible ( Planet & Society, 2021). Unilever understands that the world suffers from a rampant use of natural resources, and if people do not stop creating tones of waste materials, plastic, metal, and concrete will outweigh the natural biomass of the earth ( Planet & Sustainability, 2021). Moreover, Unilever promotes sustainable nutrition, encouraging its suppliers to produce healthier and affordable foods. One can see that the companys moral values reflect sustainability principles and encourage other stakeholders to act similarly.
Recommendations and Conclusions
Climate change is affecting and will continue to affect all businesses, especially the bottom lines of businesses. Even though a company has a strong corporate responsibility, achieves net zero, utilizes only renewable energy, and is climate-friendly, there are other members of society whose actions or inefficiency will contribute to global warming. However, since corporations and businesses are the major producers of greenhouse gas emissions, they should understand that they are ethically and socially responsible for climate change, and they should take some steps to mitigate its effects.
The first step each company can take is measuring and analyzing its greenhouse gas emissions (GHG). If a company knows its GHG, it will be able to analyze which activities and processes are the biggest pollutants. Moreover, companies should decrease their energy consumption in daily routine processes. For instance, employees should take all devices off when they do not use them or switch off the light when no one is in the room. Another step is to use renewable energy whenever it is possible. Companies should also reduce and recycle waste, choose environment-friendly equipment, optimize employees transportation, and work with sustainable suppliers. Raising awareness among workers, customers, and other stakeholders and promoting climate-friendly ways of working are also good steps toward climate change mitigation. Finally, companies should promote corporate social and moral responsibility and involve politicians and public actors in creating new environmental regulations and sharing them with people. These steps will allow corporations to reduce their negative impact on climate and help achieve the Paris Agreement goals.
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