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Chapter 11 - Ecology and Sustainable Development in Global Business

CHAPTER 11
ECOLOGY AND SUSTAINABLE
DEVELOPMENT IN GLOBAL BUSINESS
INTRODUCTION
The world community faces unprecedented ecological challenges in the 1
st

century! "any political and business leaders have embraced the idea of sustainable
development# calling for economic growth without destroying the natural environment or
depleting the resources on which future generations depend! $et the concept has remained
controversial# and implementation has been difficult! The tas% for government policy
ma%ers and corporate leaders will be to find ways to meet both economic and
environmental goals in the coming decades# without sacrificing either!
PREVIEW CASE
World Summit on Sut!in!"l# D#$#lo%m#nt
Could the worlds governments, businesses, non-governmental organizations, and
individuals, working together, meet the ecological challenges of the 21
st
and put the
global economy on a more sustainable course?
T#!&'in( Ti%) Pr#$i#* C!#
The preview case provides an assessment on the world&s
progress in achieving the goals of the 'orld Summit on
Sustainable Development# an important international
conference on development and the environment first held
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Chapter 11 - Ecology and Sustainable Development in Global Business
in 1((! This material introduces students to the global
dimension of many current ecological issues# as well as to
the challenge of balancing environmental and economic
goals# a central theme of this chapter! Students may be
as%ed) 'hat were some of the central environmental
problems considered by the delegates* +n what respects
had progress been made since the original conference* +n
what respects had progress faltered* Students may note
that emissions of gases that cause global warming had
increased# destruction of species-rich tropical forest had
continued# and aid to developing nations had been ma%e in
efforts to restore the health of the o,one layer! The global
business community had also become increasingly active in
promoting environmentally sound management practices!
-ew loan review processes for 'orld Ban% loans were in
place! Thus# the world community had made progress on
addressing some environmental issues# but not others!

Chapter 11 - Ecology and Sustainable Development in Global Business


CHAPTER OUTLINE
I+ ECOLOGICAL CHALLENGES
A+ T'# Glo"!l Common
T#!&'in( Ti%) T'# Blu# Pl!n#t
The video .The Blue /lanet#. originally produced in
1(( in +"01 2wide screen3 format by 4oc%heed
Corporation# uses -0S0 video footage shot from the
space shuttle to show the earth as seen from space! The
video contains a useful introduction to several of the
ecological issues covered in Chapter 11 and helps
students visuali,e .spaceship earth!. .The Blue /lanet.
runs for 5 minutes and is available from 6inley-7oliday
6ilm Corp!# 'hittier# C0 (8981# 1-:88-;5<-9=8=! +t
may be used to begin a discussion of Chapter 11!
B+ Sut!in!"l# D#$#lo%m#nt
T#!&'in( Ti%) Sut!in!"l# D#$#lo%m#nt
The definition of sustainable development is development
>that meets the needs of the present without compromising
the ability of future generations to meet their own needs!?
This concept appears# on its face# to embody a contradiction!
7ow can society meet its own pressing needs today# without
damaging or depleting the ecosystem on which future
generations will depend* Students may be as%ed to e@plore
this Auestion!
T#!&'in( Ti%) T'# N!tur!l St#%
E@hibit 11!0 describes The -atural Step# a method for
promoting sustainability! 0s a way to begin to thin% about what
sustainable development might mean for business# students may
be encouraged to identify companies that have adopted T-S
methodology and to describe the action they have ta%en!
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Chapter 11 - Ecology and Sustainable Development in Global Business
C+ T'r#!t to t'# E!rt', E&o-t#m
T#!&'in( Ti%) T'# Blu# Pl!n#t
The video# >+ntroduction to Bur Global Environment?
2'orld Cesources +nstituteD 18 minutes3 may be used to
introduce this segment! The video gives a short survey of
several of the maEor threats to the earth&s ecosystem#
including air and water pollution# global warming# to@ic
pollution# and declining biodiversity! Students may be
as%ed to consider the Auestion) Based on your reading for
today# the video# and any other information you may
have# what do you personally thin% are some of the
leading environmental problems or issues facing the
business community and the world today*
.W!t#r R#our&#
./oil /u#l
.Ar!"l# L!nd
D+ /or&# o0 C'!n(#
.T'# Po%ul!tion E1%loion
.World In&om# In#2u!lit-
.Indutri!li3!tion
E+ T'# Limit to Gro*t'
T#!&'in( Ti%) E&olo(i&!l /oot%rint
Stud#nt m!- "# !4#d to &!l&ul!t# t'#ir o*n
#&olo(i&!l 0oot%rint 5! &on&#%t #1%l!in#d in E1'i"it
11+B6+ A &!l&ul!tor i !$!il!"l# !t
http)FFwww!myfootprint!org+ T'# 0oot%rint &!l&ul!tion
'o* in ! dr!m!ti& !nd %#ron!l *!-7 'o* t'#
r#our&# u# o0 mot indi$idu!l in !d$!n&#d o&i#ti#
(r#!tl- #1&##d t'# #!rt', &!rr-in( &!%!&it-7 (i$#n
%r##nt t#&'nolo(-+
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Chapter 11 - Ecology and Sustainable Development in Global Business
II+ GLOBAL ENVIRONMENTAL ISSUES
A+ O3on# D#%l#tion
B+ Glo"!l W!rmin(
T#!&'in( Ti%) Glo"!l W!rmin(
The Gyoto /rotocol went into effect in 88<# after countries representing << percent of
the world&s carbon emissions had ratified it! Students may chec% the current status of
ratification at http)FFunfccc!int! 0lthough the Hnited States had not ratified the agreement
as of 889# several H!S! states# including California# had ta%en initiative to curb
greenhouse gases! Students may be as%ed to research these efforts!
T#!&'in( Ti%) Glo"!l W!rmin( Vid#o
/aul Solman reports on voluntary business participation in an emerging mar%et in
greenhouse gas >credits!? The segment includes interviews with a dairy farmer who
captures methane from manure to power electrical generators# the chair of the /residentIs
Council on Environmental Juality# the founder of the Chicago Climate E@change# and
the former 0dministrator of the E/0! The segment may be used with the discussion of
global warming in Ch! 11!
K The video segment is from the /ublic Broadcasting Services&s >-ews 7our with Lim 4ehrer? and is
available on the +nstructor&s Cesource "anual DMD that accompanies the te@tboo%# available upon reAuest
from the publisher!
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Chapter 11 - Ecology and Sustainable Development in Global Business
C! D#&lin# o0 Biodi$#rit-
D! T'r#!t to M!rin# E&o-t#m
T#!&'in( Ti%) M!rin# E&o-t#m
>6ish Ban%s# 4td!? is an e@cellent simulation that may be
used to help students understand the impact of
unsustainable fishing practices on marine ecosystems! +t
may be ordered from www!sustainer!org!
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Chapter 11 - Ecology and Sustainable Development in Global Business
III+ RESPONSE O/ THE INTERNATIONAL BUSINESS COMMUNITY
A+ World Buin# Coun&il 0or Sut!in!"l# D#$#lo%m#nt
B+ Volunt!r- Buin# Initi!ti$#
T#!&'in( Ti%) Sut!in!"l# D#$#lo%m#nt
Students may be challenged to thin% about what the
principle of sustainable development would mean when
practiced at the level of an individual business! Bne way
to do this is to as% students to select a business with
which they are familiar and to determine what %inds of
changes that business would need to ma%e in order to
operate sustainably! +s it possible for a single business to
operate sustainably# or does sustainable management
reAuire a coordinated effort by many companies#
governments# and international agencies*
GETTING STARTED
8EY LEARNING OB9ECTIVES
1+ D#0inin( ut!in!"l# d#$#lo%m#nt+
"any world leaders have supported the idea of sustainable development N economic
growth without depleting the resources on which future generations will depend!
:+ Und#rt!ndin( t'# o"t!&l# to d#$#lo%in( t'# *orld, #&onom- to m##t t'# n##d
o0 t'# %r##nt *it'out 'urtin( 0utur# (#n#r!tion+
0chieving sustainable development remains a challenge# and the community of nations
has not yet wor%ed out who will pay!
;+ A#in( t'# m!<or t'r#!t to t'# #!rt', #&o-t#m+
"aEor threats to the earth&s ecosystem include depletion of nonrenewable resources such
as oil and coal# air and water pollution# and the degradation of arable land!
=+ R#&o(ni3in( t'# *!- in *'i&' %o%ul!tion (ro*t'7 in#2u!lit-7 !nd
indutri!li3!tion '!$# !&&#l#r!t#d t'# *orld, #&olo(i&!l &rii+
/opulation growth# income ineAuality# and rapid industriali,ation in many parts of the
world have contributed to these ecological problems! The limits to growth hypothesis
maintains that if human society continues to e@ceed the carrying capacity of the earth&s
ecosystem# dire conseAuences will follow!
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Chapter 11 - Ecology and Sustainable Development in Global Business
:
Chapter 11 - Ecology and Sustainable Development in Global Business
>+ E1!minin( &ommon #n$ironm#nt!l iu# t'!t !r# '!r#d "- !ll n!tion+
6our environmental issues N o,one depletion# global warming# declining biodiversity#
and threats to the marine ecosystem N are shared by all nations! +nternational agreements
addressing these issues# although more remains to be done!
?+ An!l-3in( t'# t#% t'# *orld "uin# &ommunit- &!n t!4# to r#du&# #&olo(i&!l
d!m!(# !nd %romot# ut!in!"l# d#$#lo%m#nt+
Global businesses have begun to put the principles of sustainable development into action
through such innovative actions as life-cycle analysis# industrial ecology# design for
disassembly# and technology cooperation!
8EY TERMS AND CONCEPTS USED IN THE CHAPTER
biodiversity# 5
carrying capacity# ;:
commons# ;
ecology# ;
eco-efficiency# 5<
ecological footprint# ;:
global warming# 51
industrial ecology# 5=
Gyoto /rotocol# 5
life-cycle analysis# 59
limits to growth hypothesis# ;(
marine ecosystems# 55
"ontreal /rotocol# 58
o,one# 58
sustainable development# ;;
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Chapter 11 - Ecology and Sustainable Development in Global Business
INTERNET RESOURCES
www!ipcc!ch +ntergovernmental /anel on Climate Change
www!epa!govFdocsFo,one Environmental /rotection 0gency o,one site
www!unep!org Hnited -ational Environmental /rogram
www!unfccc!int Hnited -ations 6ramewor% Convention on Climate
Change
www!wbcsd!ch 'orld Business Council on Sustainable
Development
DISCUSSION CASE
DAMMING THE YANGT@E RIVER
Discussion Questions
1+ W'!t t!4#'old#r *ill "# '#l%#d "- t'# T'r## Gor(# D!mA W'!t t!4#'old#r
*ill "# 'urt "- itA
he hree !orges "am will arguably help many stakeholders# Construction of a
dam on the $angtze %iver will aid the economic development of China by providing vast
amounts of hydroelectric power# he dam will permit the electrification of rural areas of
the country that currently do not have power, aiding farmers who live there, and will
supply power to industry# he pro&ect will provide &obs, both directly in its construction
phase and indirectly in businesses that draw electric power from the dam after its
construction# he reservoir and locks created behind the dam would open markets in
central China to ocean-going ships# he government also hoped that the dam would end
the disastrous floods that had inundated the region in the past, saving potentially
hundreds of thousands of lives# he dam could result in lower air pollution, thereby
saving lives lost to lung disease#
'n the other hand, many other stakeholders will be hurt# (any Chinese living in
rural towns along the river, will have to re resettled# )ertile farmland and
archaeological sites would be flooded# he pro&ect will also inundate a scenic area# *nd
the environment will be harmed, as discussed in the answer to the following +uestion#
T#!&'in( Ti%
This case provides an opportunity to discuss the Auestion) is the
environment itself a sta%eholder* The sta%eholder model presented in
Chapter 1 does not include the environment as a sta%eholder! 6or a
counter argument 2that the environment should have sta%eholder
>standing?3# see "ar% Stari%# Business and Society Ceview# v! ;;# O1#
0pril 1((5# >Ceflections on Sta%eholder Theory#? pp!:(-(<!
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Chapter 11 - Ecology and Sustainable Development in Global Business
:+ Ho* do# &ontru&tion o0 ! d!m on t'# Y!n(t3# Ri$#r r#l!t# to t'# iu# o0
(lo"!l *!rmin(7 "iodi$#rit-7 !nd *!t#r %ollution di&u#d in t'i &'!%t#rA
(ost of China,s energy is now supplied by coal-fired power plants# he hree
!orges "am will provide hydro-electric power, a form of energy that is less polluting
than burning coal# he dam will thus have the effect of reducing, or at least slowing the
growth of, carbon dio-ide, sulfur dio-ide, and nitrous o-ide emissions# his will reduce
global warming#
.owever, the dam pro&ect will also flood the hree !orges, radically
transforming the ecology of the $angtze %iver# (any plants and animals adapted to the
river habitat would die out, reducing biodiversity# he pro&ect will also worsen water
pollution, since no provisions have been made to treat industrial and municipal sewage
e-pected to flow into the reservoir or to relocate e-isting landfills and dumps#
hus, the dam pro&ect can be said to have mi-ed environmental effects# /n some
respects it helps solve environmental problems discussed in Chapter 10, and in other
ways it helps make them worse#
;+ Do -ou !(r## *it' t'# d#&iion o0 t'# C'in## (o$#rnm#nt to &ontru&t t'# T'r##
Gor(# D!mA W'- o0 *'- notA
1tudents may argue either for or against the decision of the Chinese government#
*rguments for the dam will emphasize the stakeholders that will benefit from the pro&ect,
as discussed in the answer to +uestion 1, and the potential for reducing global warming
and acid rain# *rguments against the dam will emphasize the stakeholders that will be
hurt and the negative effects of the pro&ect on biodiversity and water pollution#
=+ W'!t tr!t#(i# do -ou "#li#$# *ould "#t %romot# #&onomi& d#$#lo%m#nt in
C'in! *it'out d#tro-in( t'# #n$ironm#nt!l r#our&# on *'i&' 0utur# (#n#r!tion
d#%#ndA
1tudents should be encouraged to think creatively about strategies for promoting
sustainable economic development# /n particular, the class may wish to focus on the
problem of supplying energy to developing economies# /n the case of China, would it be
possible to promote the use of cleaner sources if energy 2such as hydroelectric power3
without incurring the potentially very serious negative conse+uences of the hree !orges
"am? 1ome observers, for e-ample, have called for construction of a series of smaller
dams at various points along the $angtze that would produce hydroelectric power
without such vast disruption# 'ther students may wish to argue for greater reliance on
solar, wind and nuclear power# *nother approach would be to advocate the transfer of
sophisticated technologies to reduce emissions from coal-fired power plants advanced
nations to China, as a form of foreign aid#
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Chapter 11 - Ecology and Sustainable Development in Global Business
T#!&'in( Ti%
Students should be encouraged to use the +nternet to learn how the
Three Gorges Dam proEect has evolved since publication of the te@t!
This proEect has generated many web sites# e@pressing conflicting
views! Bf particular interest to students will be opinions e@pressed by
Chinese observers!
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