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#1
11-01-2006, 07:19 AM
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Why it is in a Company\'s Best Interest to Reduce Environmental Waste
A company's goal is to maximize profit (or shareholder wealth), not to reduce environmental waste. Therefore the government must provide them with an incentive (a large fine for non-compliance) in order to make it in their economic interest to do so.
Rather than discuss the unintended negative consequences of such a policy (however, others can feel free to do so [img]/images/graemlins/smile.gif[/img], I'd like to talk about why it is generally in a company's best interest to be environmentally friendly, even absent government regulation. Financial performance and environmental performance are not mutually exclusive. In fact, they often go hand-in-hand. -In 1998 UPS redesigned its service packaging, making it lighter and reusable. This change not only saved UPS $1.6 million annually, but also "conserved enough energy to light 20,000 light bulbs for a year, eliminated 550 tons of solid waste, and saved more than 2,200 tons of trees." Furthermore researchers found that "when companies are mentioned in the media for positive environmental events, their stock price is stronger than the broader market" (Klassen and McLaughlin, 1996). For companies whose environmental policies are criticized in the media, the opposite is true. In addition, some companies not only hold themselves environmentally responsible, but also do so for their business partners. For example, Disney "maintains a "Code of Conduct for Manufacturers" that dictates business practices, social performance, and environmental performance requirements that all Disney suppliers must follow." In order to maximize profits, companies desire to eliminate all waste, be it related to inventory, product defects, or the environment. There is however one "company" that doesn't have a profit-based incentive to operate efficiently and reduce waste. Also, this company has sovereign immunity, and thus cannot be sued for environmental infractions. I'll let you guess who this company might be. 
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#2
11-01-2006, 09:15 AM
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Re: Why it is in a Company\'s Best Interest to Reduce Environmental Was
Is it that dastardly Bill Gates 51% of the world company? I hate those guys!
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#3
11-02-2006, 06:54 AM
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Re: Why it is in a Company\'s Best Interest to Reduce Environmental Was
Iplayboard,
Your post gives a whopping one example of a company which simultaneously helped the environment (slightly) while eeking out some extra profit. It then pointed to a study which showed that companies would only be environmentally friendly given external pressure to do so. Sure, this can come in the form of market forces. However, in order to generate the market forces necesssary (in this particular case, public opinion) you generally need to spend some money doing studies and ad campaigns. I'll leave it as an excercise to see where that money comes from. The best part of your post however is: [ QUOTE ] In order to maximize profits, companies desire to eliminate all waste, be it related to inventory, product defects, or the environment. [/ QUOTE ] Way to use the word "waste" in two different ways and imply otherwise.
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#4
11-02-2006, 06:58 AM
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Re: Why it is in a Company\'s Best Interest to Reduce Environmental Was
[ QUOTE ]
[ QUOTE ] In order to maximize profits, companies desire to eliminate all waste, be it related to inventory, product defects, or the environment. [/ QUOTE ] Way to use the word "waste" in two different ways and imply otherwise. [/ QUOTE ] He's not. Efficient technology is clean technology.
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#5
11-02-2006, 07:10 AM
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Re: Why it is in a Company\'s Best Interest to Reduce Environmental Was
[ QUOTE ]
He's not. Efficient technology is clean technology. [/ QUOTE ] You should look into making millions of dollars explaining this to CEOs world wide. Think of the monies. Ah free market, what can't you fix?
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#6
11-02-2006, 07:12 AM
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Re: Why it is in a Company\'s Best Interest to Reduce Environmental Was
Not to mention that it's just absurdly wrong. Say a company produces waste because it's simply not technologically feasible not to. The company can either pay a lot of $ to dispose of it cleanly, or pay less $ and dump it.
Now as a math major, I've learnt that a lot of $ > less $, but clearly I am misguided.
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#7
11-02-2006, 07:35 AM
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Re: Why it is in a Company\'s Best Interest to Reduce Environmental Waste
Sure, sometimes it is profitable to come up with an environomentally friendly innovation. Most of the time it is not; and obviously on day to day activities it's cheaper to not clean, dump it off, etc.
The shortsightedness of companies is a re-occuring problem in the market (Not at all surprising when CEOs are changing companies every couple of years-their ability to get another job will be based on how well they did in those two years, not the long term); even without the problem of fast management turnover, companies often won't invest on projects that are two risky or take too long to turn a profit, even if the potential for long, large term gains in human well-being exist. [ QUOTE ] There is however one "company" that doesn't have a profit-based incentive to operate efficiently and reduce waste. Also, this company has sovereign immunity, and thus cannot be sued for environmental infractions. I'll let you guess who this company might be. [/ QUOTE ] Could it be the one that operates on democratic accountability in a country in which the vast majority of citizens are concerned about environmental waste?
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#8
11-02-2006, 08:23 AM
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Re: Why it is in a Company\'s Best Interest to Reduce Environmental Was
You just have to look at the environmental record of companies where there is no government (hint: Africa, SE Asia, Brazil) to see how strongly the free market seeks to be environmentally friendly.
 The actual data, as opposed to a handful of flimsy examples (2200 tons of wood - lol), shows that profits and the environment rarely go hand in hand, especially for those likely to do the most polluting. It's worrying when someone is prepared to sacrifice the truth to make a political point.
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#9
11-03-2006, 05:00 PM
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Re: Why it is in a Company\'s Best Interest to Reduce Environmental Was
[ QUOTE ]
You just have to look at the environmental record of companies where there is no government (hint: Africa, SE Asia, Brazil) to see how strongly the free market seeks to be environmentally friendly. The actual data, as opposed to a handful of flimsy examples (2200 tons of wood - lol), shows that profits and the environment rarely go hand in hand, especially for those likely to do the most polluting. It's worrying when someone is prepared to sacrifice the truth to make a political point. [/ QUOTE ] None of the countries you listed have a history of any type of capitalism. The idea of successful anarchocapitalism presupposes that the society in question accepts that capitalism is the best system. you're not the first person to think that though From Borodog- [ QUOTE ] I've posted on this subject many times. The absence of a state does not set a society on the road to utopia. The key to anarchocapitalism is not really the "anarcho" part; it is the "capitalism" part. The West's history of capitalism and culture of property rights is what has made it wealthy, not the form of government. There can be no capitalism without property rights. The Third World is the way it is, in both Somalia (which has government, by the way; it has 4 the last time I checked), and in well over a hundred countries around the globe because there is little culture of property rights, no systems in place for establishment of title of property (ownership), or peaceful systems of resolving title disputes. Because of this, capital cannot be leveraged, there is little investment, hence most of the population stays very close to subsistence because productivity is low. Why invest in something or save if you are uncertain that you will be able to keep what you've saved or produced? There's precious little capitalism in the Thrid World, and hence there can be no anarchocapitalism, including Somalia. Asserting that Somalia is anarchocapitalistic is simply a canard. [/ QUOTE ]
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#10
11-04-2006, 02:39 PM
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Re: Why it is in a Company\'s Best Interest to Reduce Environmental Was
Fair point, although I disagree with it. Look at the destruction of the Amazon by corporations hell bent on making a profit. I'm pretty sure Brazil has a good capitalist system and decent property rights.
There are two points in your OP, one being that it's in a corporation's interest to be environmentally friendly (which is generally true, over the long long term). However, the existence of competition, limited competencies, multiple ownership rights and finite resources over the shorter term pretty much eliminate this consideration. This can be seen in many countries around the world, where companies get leases (either privately or publicly owned) or buy land, to develop, mine or harvest wood. If one corporation doesn't do it, another will, and so capitalism is selecting for lowest common denominator, and the quickest money maker. Examples of this can be seen in state managed forest in Australia (which are managed for the long, long term, due to the state's ability to do what it wants), as compared to privately owned land which is often woodchipped like crazy and destroyed for a quick buck (even though the owner would be better off over the very long term maintaining the forest). Another example is the horrible destruction of Indonesia's forests post WWII by American corporations. The other point to note is that corporations don't consider all uses and alternative. They have cores of expertise, and markets to fill, which demand product x now while prices are good. For example, the Amazon has tremendous wealth potential if it's preserved and managed for the long term, but a company whose business is mining or logging really isn't going to think that way. It's simply not what they do. So I think you're missing the practical side of this discussion.
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