Business Ethics: A European Review
Small firm environmental ethics:
how deep do they go?
Fiona Tilley
Introduction: ethics, business and the
environment
Businesses, large and small, have been subject to
greater public scrutiny than ever in the final
decades of the 20th century. The 1960s saw the
emergence of the social, political and environ-
mental movements that began to challenge the
orthodoxy of profit maximisation as the sole
purpose of business. It is becoming far more
difficult for business to legitimise its behaviour to
the rest of society on the basis of economic
principles alone. The increasing size and power of
business in society places an even greater obli-
gation upon it to be socially responsible for its
actions than in earlier industrial times (Sethi
1981). Consequently, business ethics, being the
systematic study of the moral perspective of
business, has become a justifiable and readily
accepted subject of study.
Some commentators suggest that for ethics to
have any relevance and meaning in the workplace
it needs to be considered as an integral working
concept, rather than an abstract academic concept
(Tombs and Smith 1995, Giacalone and Knouse
1996).
`If we are to change the core values of industrialists
then a sterile discussion of moral philosophy will
have little, if any, impact upon behaviour. By
couching the discussion in terms of strategy and
competitive advantage we immediately contextualise
it within the frame of reference of those corporations
that need to take the concepts on board.' (Tombs
and Smith 1995: 136)
This may be so, but in order for concepts such as
corporate social responsibility, environmental
# Blackwell Publishers Ltd. 2000. 108 Cowley Road, Oxford OX4 1JF, UK
and 350 Main St, Malden, MA 02148, USA.
ethics or sustainable development to have prac-
tical value it is necessary to develop their
theoretical underpinnings. As will be shown
below, the lack of a strong ethical theory within
environmentalism compounds the belief that these
concepts are amorphous and nearly impossible to
operationalise due to nebulous definitions and
irreconcilable aspirations (Buchholz et al. 1991).
Environmental ethics is, like business ethics, a
new field of inquiry within the wider discipline of
ethics. Until very recently any student of philos-
ophy embarking on a course in ethics would be
concerned only with human ethics and morality
(Fox 1996). Only 50 years ago Aldo Leopold
claimed:
`There is as yet no ethic dealing with man's relation
to land and to the animals and plants which grow
upon it. Land, like Odysseus' slave-girls, is still
property. The land-relation is still strictly economic,
entailing privileges but not obligations.' (Leopold
1968: 203)
There are two approaches to environmental ethics
(see Table 1 for a summary). The first of these
reflects the dominant paradigm that governs the
conventional discourse in ethics (Dobson 1995).
Theorists in this camp are seeking to define a code
of conduct for environmental ethics. The environ-
ment is valued from a human-centred perspective,
and the moral justification for protecting and
respecting the environment is made in terms of the
human cost of not doing so, rather than because
of any intrinsic value or rights that may belong to
the non-human environment.
The second perspective reflects the work of deep
ecology theorists, who have sought to highlight
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 Volume 9 Number 1 January 2000

the inadequacies of conventional ethical discourse environment, for the standard of living of a select
(Naess 1986). They argue that an ecologically few in the world? Or is society and business pre-
sound ethics will only emerge from a new pared to rethink the pathway in which the world is
paradigm, a new perception of sustainability. developing to build a more sustainable society?
However, attempts to interpret deep ecology and
its bio-ethics or biological egalitarianism in terms
of the conventional ethical discourse have proved Small firms, ethics and the environment
difficult. In response to these difficulties a number
of environmental ethicists have abandoned their Small firm ethics and corporate social responsi-
efforts to unpack the intrinsic value theory of deep bility emerged in the business literature in the
ecology, and have instead promoted the need for a USA during the 1970s and 1980s. In the beginning
new worldview (Fox 1994). They favour a new this literature was mainly concerned with moral
ecological consciousness, or state of being, from issues of employee behaviour and other areas of
which an ecological ethics based on people's social responsibility (Spence 1999). The late 1990s
beliefs and experience will emerge to govern the have seen some early explorations into the
way people value and behave toward the environ- environmental ethics of small firms, although the
ment. Even in this new ecological consciousness predominant focus of the business ethics literature
tension will still exist between people and the in general has been and remains the activities of
environment. However, the important difference larger organisations. Research suggests this may
between the present and new paradigm is that the be because
locus of justification shifts from the person who
wants to preserve the world to the person who & small firms are perceived as lacking sufficient
wants to disrupt or interfere with it (Fox 1990). resources;
The ethics of deep ecology still has some way & research methodologies created for large firms
to go before it can be said to have transformed are not readily adapted to small firms;
mainstream business thinking. Current business & more information is accessible to research large
thinking is governed by the code of conduct firms;
approach to environmental ethics, thus framing & large firms have a higher public profile which
environmental issues from a shallow ecology generates more interest in the theories and
philosophical perspective. It is this conventional research about large firms and their corporate
ethical discourse that informs much of today's social responsibility (Thompson and Smith
business response to the environment. Industry 1991).
has provided many useful goods and services, but
at some cost to nature and human health. The Interestingly, similar reasons are given to explain
question facing society is this; will it continue the relatively low research interest in the relation-
to pay this price, in terms of damage to the ship between small firms and the environment

...........................................................................................................................................................................................................
Table 1: Environmental Ethics: Summary Characteristics of theTwo Main Approaches

Code of Conduct State of Being

Dominant Worldview New Worldview

Shallow ecology Deep Ecology
Conventional ethical discourse New ethical discourse
Hierarchical Systemic
Individualistic/Atomistic Holistic
Anthropocentric Ecocentric
...........................................................................................................................................................................................................

32 # Blackwell Publishers Ltd. 2000

 Business Ethics: A European Review
(Tilley 1999). It may be argued that small firms are
a less worthy, less needy or less relevant research
subject compared to larger firms. There are three
arguments to counter this viewpoint.
The first argument is based on the premise that
small firms are significant to the UK in economic
and environmental terms. According to the latest
government statistics, small firms1 constitute
approximately 99% of all business in the UK
(Department of Trade and Industry 1998). In
1996, of the 3.724 million firms in the UK, 3.693
million employed less than 50 employees. Even if
you discount the self-employed from this number
this still leaves 1.176 million firms contributing to
the UK economy, which accounts for 32.3% of
total employment.
Nor should the potential environmental impact
of the small firms sector be underestimated. Even
though there is little quantitative data available
that measures the environmental impact of in-
dividual small firms, it is estimated that the
cumulative environmental impact of the sector as
a whole could be quite considerable. As measures
of environmental impact and sustainability indi-
cators become more prevalent it will be possible to
calculate with greater accuracy the precise envir-
onmental impact. Until that time estimates must
be relied upon. It has been suggested that small
firms cumulatively could contribute as much as
70% of all industrial pollution (Hillary 1995). As
this is an unsubstantiated figure it should be
interpreted with some caution. Nevertheless, it is
possible to conclude that small firms can no longer
be viewed, individually or collectively, as an
insignificant component of the economy or the
environment.
The second argument concerns the quality and
quantity issues which arise when a subject such as
small firms is under-researched. Small firm re-
search has in recent times come in for some
criticism for its lack of theoretical rigour and
conceptual development (Goss 1991). There has
also been much debate as to what constitutes a
small firm. In addition, the emerging literature on
small firms and the environment has also been
accused of insufficient analytical inquiry, and of
relying too heavily on anecdote (Geiser and Crul
1996). There is therefore a need to direct more
# Blackwell Publishers Ltd. 2000
research toward investigations of small firm
environment ethics in order to contribute to this
important, yet neglected subject.
The final argument to support the importance
of small firm environmental ethics research is
based on the premise that theory generated for
large firms cannot necessarily be applied in the
case of small firms. It has been noted that small
firms often differ from larger firms in their
management style, organisational structure and
in the characteristics of the owner-managers
(Dandridge 1979). Small firms often lack re-
sources; they have difficulties in accessing finance
and labour, and in finding the necessary time to
manage environmental matters (Welsh and White
1981). Small firms are not little big firms. They
need their own unique ethical understanding of
the difficult environmental problems they face.
For the above reasons small firms ought not to be
overlooked by business or environmental ethics.
Research in this area has emphasised the
barriers between small firms and ethical issues
in general. Vyakarnam et al. (1997) warned that
the rise in environmental and social issues on the
business agenda of larger firms has not been
matched in the small firm sector. A small firm
survey investigating the perceived gap between
business goals, professed values and their actual
behaviour found `that ethical codes alone are
insufficient to change either attitudes or behaviour
because they have been notoriously difficult to
implement' (Russell 1993: 3). The same study
concluded that the four most common attitudinal
barriers to ethics among small firms are:
& Ethics and business don't mix;
& It doesn't pay to be ethical;
& If it's legal, it's ethical; and
& Compared to others this company is ethical
(Russell 1993).
The dominant theme in the small firm ethics
literature has been social responsibility. For
example, studies have investigated the ethical
relationship between small firms and their custo-
mers (Humphreys et al. 1993), and the difference
between small firm ethics and the ethics of the
owner-manager (Vyakarnam et al. 1997, Quinn
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 Volume 9
1997). Thompson and Smith (1991: 42) concluded
that whilst:
`. . . [corporate social responsibility] research is lim-
ited to big business, it can only be inferred that
similar practices occur in small or medium-sized
businesses . . . the inclusion of small business within
the existing theoretical framework for corporate
social responsibility could yield valuable contribu-
tions to the CSR theory and research by broadening
its scope and its applicability to big and small
businesses alike.'
Although this research agenda is making a modest
contribution to the business ethics literature,
there have been very few studies reporting on the
environmental dimension of small firm ethics.
Two recent studies have reported the low accept-
ance of the environment as a business issue among
small firms (Tilley 1999, Rutherfoord and Spence
1998). The reasons for this behaviour are complex,
but Joyce et al. (1996) suggest that the continued
separation of issues of social responsibility from
business performance may generate a small firm
business culture that has difficulties integrating
non-economic responsibilities into the business.
Small firm environmental ethics is an under-
researched area of study. In view of the widening
societal concern for environmental issues (Dunlap
1997), the impact of sustainability upon the
activities of public sector organisations (Grubb
et al. 1993) and the increasing environmental
regulation likely to affect the behaviour of
business (James 1998), the environmental ethics
of small firms is an important issue that needs to
be explored in greater depth. A better under-
standing of small firm environmental ethics may
help to explain the problems many small firms
encounter when embarking on activities to im-
prove the environmental performance of the
business.
`Despite the proliferation of industry initiatives on
the environment and environmental laws and
regulations, accompanied by a wealth of research
projects and publications during the 1980s and
1990s, research indicates that management, and
SMEs in particular, have been slow to progress
from a reactive to a proactive response to environ-
mental pressures.' (Hutchinson and Hutchinson
1997: 305)
34
Number 1 January 2000
Small firm environmental ethics: some
empirical findings
The empirical findings presented below have been
extracted from a much larger investigation de-
signed to explore the perceived gap between
environmental attitudes and behaviour of small
firms in the mechanical engineering and business
services sectors in Leeds (Tilley 1998). The two
industrial sectors were chosen because of their
importance to the economy of Leeds. The purpose
of the research was to gain greater understanding
of the underlying processes and their meaning
rather than to give a description of the problem.
For this reason a qualitative approach was taken,
keeping the sample size low in order to attain
information-richness. A total of 60 semi-struc-
tured interviews were completed (29 mechanical
engineering small firms and 31 business services
small firms).
Environmental regulation was a major theme of
discussion during each interview. The interview
data on environmental regulation is used to draw
out the ethical concerns of the small firm owner-
managers and to identify the dominant environ-
mental ethic held by the small firms. The analysis
of owner-managers responses reveals their
thoughts on the moral rights and wrongs of their
environmental behaviour and the methods they
employ in controlling their environmental prac-
tices. Although these responses do not provide a
complete picture of the environmental ethic
exhibited by small firms, they do begin to make
an important contribution to our understanding
of an emerging area of inquiry.
Environmental regulation refers to the means by
which the environmental behaviour of business is
controlled. At one end of the spectrum is state
regulation (such as case/statue law and other
forms of market intervention), and at the other
end of the spectrum is self-regulation (such as
voluntary codes of practice). The relationship
between business ethics and the law is the subject
of much debate. It would be wrong to assume that
the author is implying that business ethics can
singularly be interpreted as legal compliance.
Nevertheless, it can be argued that `the domain
of ethics includes the legal domain' (Trevino and
# Blackwell Publishers Ltd. 2000
 Business Ethics: A European Review
Nelson 1995: 15). The merit of state-regulation
compared with self-regulation is also a contested
issue. State-regulation and self-regulation should
not be viewed as mutually exclusive, since it is
possible to argue that there is a value and a need
for both forms of environmental regulation
(Schokkaert and Eyckmans 1994).
Self-regulation
Is the small firms sector capable of self-regulation
in the area of environmental responsibility? Self-
regulation ought to appeal to owner-managers
because it bestows on the business community the
autonomy to interpret and regulate their own
acceptable standards of environmental behaviour.
Experiments in the use of voluntary schemes to
`green' business practices and cut pollution
damage have become attractive politically be-
cause, it is argued, voluntary schemes have proved
popular among business because they have saved
businesses money and led to greater resource
efficiencies (Cairncross 1995).
It is therefore surprising that self-regulation, as
a means of controlling the environmental practice
of small firms, was not well supported among the
owner-mangers interviewed. A considerable pro-
portion of the sample remarked outright that self-
regulation would not work, although there was
some recognition that voluntary agreements may
form part of the regulatory mix, simply because of
the onerous resource demands needed to admin-
ister and enforce state regulation. A solicitor in a
firm of general practitioners explained:
`[We] have got to rely on self-regulation to some
extent because of the financing of it. I'm sure that
the government doesn't have the funds to regulate it
themselves. Which is why we have to rely upon
business . . . I think it is certainly a good start but
I think it maybe does need to be monitored perhaps
by government as well. They can't rely solely on
businesses to do it themselves. At the end of the day
businesses are in business for the money. If making a
hell of a lot of money is the option as opposed to
looking at an environmental issue, I reckon 9 out of
10 businesses will ignore the environmental issue.
I think they would do something about it at second
choice.'
# Blackwell Publishers Ltd. 2000
The reasons given by owner-managers as to why
self-regulation could not be relied upon as a means
of controlling the environmental performance of
small firms were varied. The small firms recog-
nised that in general they were not best placed to
identify what actions they needed to take in order
to manage their environmental responsibilities in
an acceptable manner. Although owner-managers
may have expert knowledge in the industry in
which they trade, this does not necessarily mean
they also have the requisite environmental ex-
pertise. Low standards of eco-literacy2 are com-
mon among small firm owner-managers and
employees, which in turn reduces their awareness
of environmental issues. The typical small firm in
this sample displayed limited internal motivation
to take steps to reduce the environmental impact
of their operations. The proprietor of a company
that supplies equipment to businesses operating in
the petroleum industry explained:
`Self-regulation wouldn't work in our industry.
Although we do certain self-regulation things, a lot
of companies, because they are small to medium
sized, don't move to carry out certain matters until it
is imposed upon them because of cost. Plenty of
people say they would like to do this, but we really
can't afford it.'
The environment thus remained relatively low
down the business agenda of the small firms,
largely because of an economic system, which as
the owner-managers described it, rewarded self-
interest over collective interest. Environment-friendly
policies then become a burden that restricts
competitiveness. For the typical small firm there
is still a great deal of tension between what is
economically appropriate behaviour and environ-
mentally acceptable behaviour. It is not that the
owner-managers in this study did not value the
environment. But in any given situation economic
priorities will come out on top if a choice has to be
made. The economic system and business climate
is operating as a dominant resistant force prevent-
ing many of the small firms in this study from
voluntarily taking steps to behave with greater
environmental responsibility than their competitors.
Self-regulation, in the minds of many of the small
firm owner-managers, fosters and encourages
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 Volume 9 Number 1 January 2000
`cowboy' activities and the emergence of what
economists term `free-riders' (Hardin 1983). The
owner-managers claimed they could not trust a
`certain element' to uphold the principles laid
down by self-regulation. Self-regulation offered
them little protection from `cowboy' operators
who, by flouting voluntary agreements, could gain
a competitive advantage over more responsible
firms acting in good faith. Clearly there appears to
be a problem of trust within the business commu-
nity. The Managing Director of a company
manufacturing mechanical handling equipment
remarked:
`I don't think it [self-regulation] will work one
little bit. It is not workable. I don't trust people
that far, particularly financial people. The respon-
sible companies are not necessarily the large ones.
I think there is an awful lot of irresponsible action
going on.'
This argument provides further evidence to
explain why the small firms believed themselves
to be unable to self-regulate their environmental
behaviour. To overcome the problem of self-
interest the small firms suggested a role for
government, which supposedly represents the
good for all sections of society not just business.
The Managing Director of a company manufac-
turing tanker vehicles for the waste handling
industry stated:
`Self-regulation clearly does not work. In an ideal
world okay, but it lets the government off the hook.
The government should be an agency that takes a
long-term view of the environment for the whole
country.'
Commoner (1990) supports this opinion, suggest-
ing that pro-environmental behaviour, such as
investing in cleaner technology, can conflict with
short term profit maximising goals, so that social
responsibility must be implemented at the political
level. This is further supported by research on the
UK retail sector that concluded:
`Where environmental criteria match economic
criteria so that pro-environmental change yields
positive benefits, environmental ethics are incor-
porated into retailer's ethics.' (Eden 1993: 105)
36
State regulation3
The small firms in this study demonstrated a
preference for external forms of regulation, as
opposed to self-regulation, as a means of control-
ling the environmental behaviour of businesses.
However, the opinions of the small firms in this
study need to be set against the fact that many of
the owner-managers knew little about their own
regulatory obligations, nor did they believe their
activities were worthy of regulatory control. This
attitude inevitably fuels low standards of compli-
ance. This problem is further compounded by a
perception that enforcement is low, and that the
penalties imposed on companies prosecuted under
environmental law are inadequate. This view is
reflected in the comment by the senior partner of a
chartered accountancy practice:
`The cowboys that produce things more cheaply by
cutting corners, by leaving debris, will prosper
against those who have a public conscience. There
have to be penalties to put cowboys out. Once you
have the penalties you have changed people's
approach. It then becomes not just a virtue but a
business advantage to be environmentally sound.'
The small firms recognised that passing more and
stricter legislation was not a panacea. The Mana-
ging Director of a company manufacturing
effluent and water treatment equipment noted:
`We see legislation affecting business significantly in
the water sector, but the water companies have not
been spending money. The legislation is not
regulated strictly enough. People pay lip service.
You can't prevent this attitude as it is built in to the
bureaucratic system.'
Despite these problems the small firms still
expected state regulation to play an important
role in governing the environmental activities of
small firms in order to counter the problems
associated with self-regulation. The analysis of the
interview data indicated that the small firms look
to institutions, particularly government depart-
ments, to provide clear environmental guidelines
and set standards that they and other businesses
should be expected to follow, because Govern-
ment can take a longer view than business and
represents the wider interests of all members of
# Blackwell Publishers Ltd. 2000
 Business Ethics: A European Review
society. The Managing Director of a company
designing computer systems claimed:
`I don't genuinely believe it [the environment] can be
left as a discretionary issue for businesses to address.
You have to have fairly strong leadership backed up
by legislation. There is legislation but it is so difficult
to get it in to processes.'
The small firms also held the view that legislation
provides a level playing field, establishes a
minimum acceptable standard of behaviour, and
provides a source of external pressure that has
arguably been lacking to date. The proprietor of a
newspaper cutting company remarked:
`We need the Government to make a stronger lead in
guiding environmental standards. Businesses need
clear unambiguous guidelines which are specific and
actionable.'
In summary, the typical small firms from this
study did not support the principle of self-
regulation as the primary mechanism of governing
their environmental behaviour. In contrast an
external `state' imposed regulatory framework was
seen to be a fairer system of control. It was
perceived to be the Government's responsibility to
communicate environmental values, to establish a
code of environmental conduct and to provide a
benchmark of acceptable environmental standards
for the business sector. The Government was
expected to take a leadership role concerning the
environment. The results of the study indicated
that the typical small firm lacked a clear apprecia-
tion of sustainability and environmentalism, and
in consequence they found it difficult to connect
what they knew of their business practices with
specific environmental issues presented in the
media.
Discussion
The analysis of the interview data indicates that
most small firms are operating within an ethical
system derived from the conventional ethical
discourse, and they therefore regard the environ-
mental challenge from a shallow ecology perspec-
tive. They are seeking a code of conduct to govern
their environmental behaviour, rather than a new
# Blackwell Publishers Ltd. 2000
perception of the role and structure of business
organisations in society today. The other salient
point to draw from the analysis is the lack of trust
the small firms have in each other to behave in a
responsible manner without the threat of external
regulation to restrain their behaviour. Since the
owner-manager has a low awareness of environ-
mental issues combined with a low level of eco-
literacy, small firms must rely on external experts
to guide their decision-making processes and
to provide them with appropriate solutions to
environmental problems. If small firms are to
change their environmental attitudes and be-
haviour and become more environmentally re-
sponsible, they need in the first instance to become
more explicitly aware of their business culture,
values and ethics. The owner-managers inter-
viewed in this study acknowledged the important
influence that ethics and moral conscience can
play in motivating and shaping their environmen-
tal behaviour and business practices.
The value system of most small firms is driven
by the goal of economic prosperity. It has been
claimed that the environment is possibly now
accepted as a first-order value, resulting in a new
relationship between environmental values and
the other first-order values, namely, social justice
(equity), economic prosperity, national security
and democracy (Paehlke 1995). Small firms do not
operate in isolation; they are influenced and
affected by the value systems of the individuals
and organisations in their supply chain, their
immediate stakeholder network and more distant
societal networks. The problem is that most of the
small firms interviewed in this study have not yet
been sufficiently motivated, or are still unwilling,
to integrate their own personal environmental
values or the values of others into their businesses.
The longer this continues, arguably the more out
of touch small firms will become with the ethics of
the rest of society.
Another explanation for the failure of small
firms to integrate their own individual environ-
mental values with the environmental values of
society is their inability to identify a clear
environmental vision emerging from the collection
of different, often competing, environmental value
systems. Environmental problems do not always
37
 Volume 9 Number 1 January 2000
have simple, clear-cut undisputed solutions. This
predicament does not absolve small firms from
the responsibility of tackling these difficult value-
based environmental issues. Paehlke (1995) sug-
gests that the authoritative allocation of values is
the primary function of politics. The question is;
are our political representatives circumnavigating
the ethical, value-based component of environ-
mental decision-making by pursuing environmen-
tal solutions that are narrowly technology- and
economy-orientated?
`There are competent scientists on both sides of
almost every contentious environmental issue. Their
views are crucial to understanding what ought to be
done, but science in and of itself is not sufficient to
the task. Environmental policy decisions in almost
every case involve a value as well as a scientific
component. Scientists can usefully contribute to the
value discussion as informed citizens, indeed they
should do so, but their views are not the only views
that must be heard. Technocracy and environment-
alism are in many ways opposite poles.' (Paehlke
1995: 131)
Environmental policy in the UK has arguably
been overly dependent on scientific knowledge,
hence its preference for technical solutions (De-
partment of the Environment 1990).
It is questionable to what extent the environ-
mental ethics of deep ecology has shaped solutions
being offered to small firms. Environmental
initiatives targeted at small firms have tended to
take the `code of conduct' approach to environ-
mental ethics by framing solutions within the
existing paradigm. The focus has been placed on
the benefits to people and business from `bottom
line' savings associated with environmental im-
provements. Those environmentalists that follow
a deep ecology approach to business ethics are
more likely to see the value system as the root
cause of the `ecological dilemma' with the solution
requiring social or political restructuring rather
than an economic or technological fix.
However, to date there has been little attempt to
join-up the ethical theory of deep ecology to
practice. The exception is a guiding philosophy
developed by Schumacher (1973). Schumacher
proposed the bringing together of opposites,
finding the `middle way' between economics and
38
ecology. Other attempts to join ethical theory and
practice have taken a more shallow ecology
approach. Berry (1990, 1993), for example, has
made efforts to develop a code of practice based
on the concepts of stewardship and sustainability.
He cites the work of the International Chamber of
Commerce (1991), the Institute of Business Ethics
(Burke and Hill 1990), and the Coalition for
Environmentally Responsible Economies (CERES)
as examples of the business response to the need
for an environmental ethic to guide practices.
Until the theoretical debate is opened up for wider
discussion it is more than likely that small firms
will continue to seek and be influenced by
environmental ethics within the conventional
discourse, rather than by the challenging prin-
ciples of deep ecology thinking.
Conclusion
The typical small firm in this study has yet to
become fully engaged in the environmental
debate. Without institutional reform and restruc-
turing of the economic system in the public
domain, it is unlikely that there will be widespread
deepening of environmental ethics among small
firms. There is only so much individual owner-
managers and small firm employees can do. If
Friedman (1970) is to be believed, business must
play within the rules of the game. The rules in this
context are established by environmental regu-
lations that are being framed using a shallow
ecology ethic. However, in the UK small firms too
often fall below or outside the compliance
requirements of environmental regulation. Conse-
quently, small firms are not required by law to
take responsibility for the environment to the
same extent as larger businesses.
The shallow ecology strategy promotes ethical
and environmentally responsible behaviour to
business on the basis that it is `good business'
(Hoffman 1993). This is interpreted as a `win-win'
situation that increases profits by saving costs or
improving the efficiency of the business. This
message may effectively attract small firms to take
the first step to enhance their environmental
performance and behave more responsibly, but
# Blackwell Publishers Ltd. 2000
 Business Ethics: A European Review
what happens once the low hanging fruit has been
plucked from the tree of eco-efficiency? Once small
firms are confronted with environmental problems
that do not save them money, in fact the reverse,
the solutions require investment that may not
provide a financial return, the environmental ethic
comes into conflict with `good business'. The small
firm is then no longer in a `win-win' situation.
Over-simplifying environmental ethics to the
small firm sector in this way has its attractions
because it directly appeals to the profit motive of
the owner-manager, but it also has dangers and
limitations. This is why it is so important to build
a new small firm environmental ethic that will be
able to guide small firm environmental behaviour
in all circumstances, including those where the
financial or economic costs are outweighed by the
environmental benefits. The discipline of small
firm environmental ethics is in an embryonic state.
Much work still has to be done to develop better
ethical tools and to connect new theories to small
firm practice. These are early days, and the
challenge ahead is an important one. Better and
more appropriate solutions are needed to enable
small firms to become fully-fledged participants in
the development of sustainable societies. Here is a
cautionary warning to people who work outside
the field of environmental philosophy, but who
use its tools:
`. . . treat these tools ± these limited, often flawed,
and, yet, nevertheless indispensable tools! ± with a
degree of caution. No one has the answer yet ± even
though we need it yesterday ± and to act as if one
of these approaches is the answer is to forget that
``for every complex problem there is a solution that's
simple, neat ± and wrong''.' (Fox 1996: 19)
Notes
1. Defining small firms has often been an arbitrary
exercise. In the context of this paper the definition
used is that which classifies firms employing less
than fifty employees as small.
2. In this context eco-literacy is defined as the under-
standing of the principles of ecology and the
environment and an ability to use these principles
to create sustainable business organisations.
# Blackwell Publishers Ltd. 2000
3. Regulation includes legislation and other market
interventions to control environmental behaviour.
In this study most of the small firms limited their
comments to the role of legislation.
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