Responsible Business for People and Planet

This article discusses the impact of business on society in relation to climate action goals. It explores the role of government, NGOs, and consumers in promoting responsible business practices. The article also highlights the importance of responsible business in achieving sustainable development goals.

RESPONSIBLE BUSINESS
FOR PEOPLE AND
PLANET

TABLE OF CONTENTS
INTRODUCTION & BACKGROUND..........................................................................................3
MAIN BODY..................................................................................................................................4
Impact of business in society with regard to climate action goal................................................4
Responsible business and sustainable development goals...........................................................6
Role of government, NGOs and consumers in a society.............................................................9
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION & BACKGROUND
Sustainable development goals are the blueprint to achieve a better and more sustainable
future for all and are collection of 17 interlinked goals. These are also known as global goals.
The purpose and structure of the report will include key global challenges with reference to
United Nations sustainable development goals (DU, C.R., 2016). Role and ethics of business in
society with regard to the chosen goal. Also, responsible business will be defined and why
responsible organization respond to the sustainable development goals. Lastly comparing and
contrasting the role of government, NGOs and consumer in society will also be briefed upon.
The sustainable development goals have been adopted by all the member states of the
United Nations, for the purpose of a universal call to action for protection of planet, ending
poverty and ensuring that everyone enjoys prosperity and peace by 2030. All the 17 goals are
integrated to maintain a balance of the three pillars of sustainable development. One of the goals
identified for the purpose of this essay is the UN sustainable development goal of Climate
Action, which is aimed at taking action for combating climate change and its impacts (Biermann,
Kanie and Kim, 2017).
The three pillars of sustainable development are social, economic and environmental
goals and also denote the idea of a socially responsible investment. The three pillars are also
known as people, planet and profits (Wilkins, 2008). The social pillar requires support from all
stakeholders, employees, community whenever the goals are being implemented. It takes care of
employees working conditions and remuneration, effect on supply-chain, community
engagement etc. The social challenge that underline this goal is if the people of the locality or
region are cooperative then the goal can be implemented effectively. Economic pillar addresses
the profitability of the businesses but is not about profitability at any cost. Under economic pillar
activities like risk management and corporate governance are addressed. Economical challenge
includes introduction of new technology to achieve this goal. The Environmental pillar consists
of the focus on reducing the carbon footprint, water usage, waste disposal, pollution and overall
affect on environment and planet. The environmental challenge underlying the goal of climate
Action determines that there is excessive environment degradation then this puts a challenge in
accomplishment of the goal (Dhahri and Omri, 2018).
3

MAIN BODY
Impact of business in society with regard to climate action goal.
Businesses of all types and sizes including multinational for profits organisations and
small business at local level have tremendous impact upon society. According to Miklian and
et.al, (2018) the positive impacts of business on society is evaluated by maintenance and building
of social capital by the business through core functions like the provision of services and goods,
activities of maintaining supply chain, running economy and providing employment. However,
Liu, (2017) states that aspects that are negatively impacted are people and environment due to
outcome of business activities like pollution, corruption, destruction of habitat etc. certain
products produced by MNCs can have adverse health effects on consumers, and tend to damage
social capital whenever regulations are not imposed and can also impact physical and
psychological aspects of employees through negligence of human rights and labour laws, unsafe
working conditions and unequal treatment to people.
In regards to the climate action goal set by UN, multiple MNCs have addressed to the
sustainable development goals. According to climate action summit of 2019, 28 companies who
have a total market capitalisation of approximately $1.3 trillion (USD) have given a commitment
to increase the company ambitions by alignment of their corporate governance and sustainability
goals like emission reduction targets with the climate action goals (Arroyo, 2018). Although
MNCs have committed to the Climate action strategies, the impact is limited when it comes to
other businesses due to the cost saving, profitability structure, value chain, less support from
governments etc.
Sustainability spectrum of Tesco and Energy saving trust
Understanding sustainability requires integrating multiple perspective and investigate
methods to explain multi-dimensional concepts (Seager, 2008). Tesco comes in economic
sustainability spectrum because it is and Energy saving trust comes under social sustainability
spectrum. Climate change is affecting every country and disrupting national economies and
affecting lives. Weather patterns are changing, sea levels are rising and weather events are
becoming more extreme. This climate change is expected to impact the agriculture, forestry and
fisheries sector (Eizenberg and Jabareen, 2017).
4

Figure 1: Sustainability Spectrum
Source: Alter 2004
Utilitarianism theory of ethics
Role of Tesco on society with regard to climate action
This theory says that the result or the consequences of an act is the real measure of
whether it is good or bad. It emphasizes on ends over means (Smart, 2020). Tesco, a
multinational global merchandise retailer, believes in the purpose of morality, therefore, the
activities undertaken by them in operating the business are aimed at enhancement of the quality
of life in the society (Duignan, 2020). However, if their activities give a negative result then it
will degrade the quality of life in society. Tesco has committed to reduce the direct and indirect
greenhouse gas emission. It has also invested huge amounts in energy and refrigeration
efficiency improvements to help cut its carbon footprint. Tesco is also embracing the switch to
renewable electricity as part of its overall effort to reduce emissions in this way society's
resources are used optimally (Qizilbash, 2016). All utilitarianism acts performed by Tesco
contributes to the welfare of others in the society by reducing the pollution level, proper waste
management, environment friendly policies which has impact on overall global warming. But if
Tesco uses renewable sources of energy and adopts those activities which harm the environment
then it will give a negative result and degrade the quantity of life in the society (Tang, 2016).
Role of Energy saving trust on society with regard to climate action
A non-profit organization is a social service organization working towards a better
society and their sustainability strategy includes commercial methods support social programs.
5

These organizations play an important role in society with regard to climate change and
environment as they perform the following activities: environmental monitoring and reporting,
protecting the environment, management of society's resources, creating awareness and
providing training, education regarding climate change (Marseille. and Kahn, 2019). They also
focus on biodiversity and wildlife conservation. As Energy saving trust promotes energy
efficiency, low carbon transport and sustainable energy used to address the climate emergency.
So, all their activities will contribute a positive result and it will enhance the quality of life in the
society and impacts the society in a positive way.
Responsible business and sustainable development goals.
A responsible business is one that has a positive impact on the society and the
environment in which it operates. Tesco often refers this as a practice of conducting business
with consideration for ethical, environmental and community goals in addition to being a good
employer and attempting to make a profit (Laasch and Conaway, 2014). Tesco believes that a
socially responsible company can bolster a company's image and build its brand.
Responsible business responds to these sustainable development goals as these are
important to both the businesses and the society. The businesses can also benefit from new
market opportunities and improved engagement with customers, stakeholders. And undertaking
these goals also builds Tesco’s brand image and can forge a stronger bond between employees
and corporates. Responding to sustainable development goals has become the duty of every
corporate or organization. And many companies include these goals in their CSR and CSV
activities which ultimately improves brand image of the organization (Freeman, 2017). Some
other reasons behind organization responding to sustainable development goals are:
Improving business operations and revenue generation by developing new products and
service that can meet sustainable development goals and through this Tesco can also achieve
operational efficiency. Tesco can also grow new markets by adopting other SDG. The second
reason behind responding to SDG is organizations can participate in policy developments,
contribute to stabilizing societies and markets and also address impact of development gaps on
business (Bull and et.al., 2010). The third reason is to enhance reputation and stakeholder
relations as adopting sustainable development goals can enhance the trust and reputation from
6

the society and employers. It also strengthens stakeholder relations as they also feel organization
is not only looking for profits but also for the environment and society.
Corporate social responsibility is a management concept and used to describe a
company's efforts to improve society in some ways. CSR is important to both the business and
the society It plays a vital role in attaining sustainable development goals as Tesco has a social
and moral responsibility towards protecting the environment. Shared values is a business strategy
designed to solve social issues profitability. Tesco shared value initiates a global platform for
leaders seeking to solve societal challenges through business solutions. Both the concepts have
the following (Safarzad, Farahnaki and Farahbakhsh, 2016).
Comparing and contrasting CSR and CSV using CSR pyramid theory
This CSR pyramid theory was given by Archie Carroll and is a framework that explains
the reason behind organizations taking social responsibility of sustainable development goals.
Corporate social responsibility or CSR refers to a business's behaviour that its economically
profitable, complies with the law, is ethical and is socially supportive while Corporate social
value or CSV means creating new opportunities and creating new value (Ali, Frynas and
Mahmood, 2017). Instead of being forced by the external factors Tesco is motivated internally to
pursue shared value creation. The following are the four component of Carroll's CSR pyramid:
Figure 2: CSR pyramid
Source: Carroll, 2016
7

Economic responsibility – In this component the responsibility of the business is to be
profitable and to provide their shareholders with a reasonable return on their investments. The
business survives and support society in the long term. Tesco adapt manufacturing processes to
be able to use recycled products and lower material costs. This gives Tesco benefits of increased
profitability and reduced ecological footprint. But CSV treats social issues as potentially
profitable and beneficial for the company (Carroll, 2016).
Legal responsibility – In this component Tesco operates in a consistent way in
accordance with government requirements and the law of different national and local regulations.
This includes meeting the regulations set by the food standard agency. Any case of sickness
could result in expensive legal proceedings and could destroy company's reputation. In CSV, the
role to law and government, in which law is confined to limiting the pursuit of exploitation,
unfair or deceptive practices (Ahmad, 2018).
Ethical responsibility – In this component Tesco embrace activities, standards and
practices that haven't necessarily been written down but still expected like undertaking certain
practices that helps in attaining sustainable development goals. Optimum utilization of non-
renewable resources and taking proper steps for waste management is the responsibility of Tesco
which can help in attainment of the SDG goal of climate change. The concept of CSV in terms of
ethical responsibility are the policies and operating practices that enhance the competitiveness of
the company while simultaneously advancing the economic and social conditions in the
communities in which it operates (Haski-Leventhal, 2018).
Philanthropic responsibility – This component includes the voluntary activities and
practices of business. These are guided by companies desire to take part in social activities that
are generally not expected in an ethical sense. Giving monetary donations and resources for the
purpose to reduce climate change is example of this responsibility. In CSV organization invest in
areas that are both responsive to community needs and complementary to their business
objectives (Carroll's CSR pyramid, 2020).
Similarities –
Both the concepts, corporate social responsibility and corporate shared value of Tesco are
responsible to society's problems. There is an existence of a commitment to take account of the
production program with the risks of the state. They both create the value by harnessing the
benefits of solving social, environmental and economic problems. Both CSR and CSV refer to
8

“doing well by doing good” and Responding to sustainable development goals, CSR and CSV
activities of the companies are enhanced.
Role of government, NGOs and consumers in a society
Government, NGOs and consumers have major influence of functioning of a responsible
business on regional, national and global levels as they enforce creation of a positive impact on
the environment where the business operates.
Role of government
Governments play a role in ensuring that the corporations adhere to the norms, rules and
regulations of the society and how large business have to incorporate ethical approaches in
conducting business. Governments have the authority to legislate, partner, foster with
corporations to endorse good practices for fulfilling the development and promotion of corporate
social responsibility. Corporate social responsibility, which initiates as a neo-liberal concept, is
where companies integrate environmental and social concerns in respective business functions
and interact with stakeholders periodically (Steurer, 2010).
Figure 3: Sustainable development across three societal domains
Source: Steurer, R., 2010
9

On a regional level, city government builds urban policies for engaging, incentivising,
managing and setting a regulatory framework to partner with business for enabling conditions for
the cities. They aim at designing wate and pollution urban system, materials to be kept in use,
regeneration of natural systems in the cities (Levers, 2019). Governments ae interested in
extending the impact of CSR by business as it helps to achieve policy objectives in relation to
protection of environment, sustainable development, foreign policy goals, development
assistance and human development. Governments play active role in defining CSR policies and
practices through non-binding initiatives.
In recent years the European governments have taken efforts in promotion and shaping
the CSR activities. Governments use various policy instruments like informational instruments
like campaigns, websites, trainings; economic instruments like taxes, awards, subsidies, tax
abatements; legal instruments like directives, regulations and laws; partnering instruments like
stakeholder forums, public-private partnerships, negotiated instruments; and hybrid instruments
like combination of government and CSR initiatives (Dentchev, Haezendonck and van Balen,
2017).
Role of Consumers
Consumers have impact upon how the businesses will focus on the responsible attitudes
towards society in general. Firms are motivated to invest more upon being socially responsible
when the perceptions of consumers regarding purchase behaviours drives the business practices.
The people even voice their concerns for change if a business performs in unethical ways.
Consumers can report upon the harmful practices via consumer forums to initiate and influence
changes in businesses (Ramesh and et.al., 2019).
From the standpoint of consumers, CSR activities that are impacted are the quality of
goods and services being sold and rendered, fair policies and regulations in case of labour
management are the primary elements. As per consumers charity is the least significant
indication of CSR effectiveness. Usually, on a regional and national level, the consumers are
highly aware about how responsibly businesses function as mass media is a highly efficient
channel for raising awareness in consumers regarding the social activities of the businesses
(Mihajlović, 2020).
10

Role of NGOs
Non-governmental organisations have a major role in keeping business in check in the aspects of
human rights, environmental impact, employee legislations and unions and other indexes which
governments don’t relate things on their own. NGOs have impact upon the interface of society-
government-business as they are considered the voice of society and raise questions whenever
the adverse impacts of businesses reach a harmful level and indirectly influence society and
government to take actions (Bastmeijer and Verschuuren, 2005).
Figure 4: Influence of NGOs on corporate social responsibility
Source: Asfaw, Botes and Mengesha, 2017
On the other hand, NGOs play a significant role in respect to the elements of regulatory
chain which consists of norm-setting, implementation, enforcement, controlling and monitoring
along with dispute resolution. In many instances, corporations and business take partnership
decisions. NGOs have direct influences upon corporations to adhere to there CSR practices and
influence companies to improve their environmental performance along with increasing their
environmental disclosure. NGOs not only engage in reacting to the damages caused by
multinational companies and their unsustainable business practices, but also proactively work
through collaborations with companies, other stakeholders and government (Asfaw, Botes and
Mengesha, 2017).
11

CONCLUSION
From the above findings and evaluations, it can be concluded that sustainable
development goals are significant in combatting the urgent political, environment and economic
challenges that the world is facing. The importance and challenges in respect to the three pillars
of sustainability was highlighted in respect to social, environmental and economic aspects which
aim for improvement people and planet and make businesses more responsible.
Recently, major MNCs have committed to sustainable development goals and improving
their climate action strategies by align their corporate objectives with UN goals. As per
sustainability spectrum and utilitarianism, MNCs like Tesco have engaged in environment
friendly policies such as reducing direct and indirect greenhouse gas emission and investment in
energy to help cut its carbon footprint. Non-profit organisation like Energy saving trust have
focussed on biodiversity and wildlife conservation, and are promoting energy efficiency, low
carbon transport and sustainable energy used to address the climate emergency.
According to the findings, responsible businesses refers to those businesses and
corporations which have positive impact on the society and the environment where they operate
According to the CSR pyramid theory, various elements like economic, legal, ethical and
philanthropic responsibilities have to be fulfilled by responsible organisations. The major reasons
why businesses respond to sustainable development goals is that they benefit from new market
opportunities and improve engagement with customers, stakeholders. Undertaking these goals
builds brand image and create stronger bond between employees and corporates. Responding to
sustainable development goals has become the duty of every corporate or organization.
The role of government, consumers and NGOs were compared and contrasted. It was
observed that government ensure corporations adhere to the norms, rules and regulations of the
society and incorporation of ethical approaches in conducting business by large companies.
Consumers impact on the business’s responsible attitudes towards society in general. NGOs have
impact upon the interface of society-government-business and are considered the voice of
society. They raise questions whenever the adverse impacts of businesses reach a harmful level
and indirectly influence society and government to take actions along with building up
partnerships with corporations to address the issues.
12

REFERENCES
Books and Journals
Ahmad, T., 2018. Carroll’s CSR Pyramid: An Epic Philosophy.
Ali, W., Frynas, J.G. and Mahmood, Z., 2017. Determinants of corporate social responsibility
(CSR) disclosure in developed and developing countries: A literature review. Corporate
Social Responsibility and Environmental Management, 24(4), pp.273-294.
Arroyo, V., 2018. The global climate action summit: increasing ambition during turbulent
times. Climate Policy, 18(9), pp.1087-1093.
Asfaw, T.S., Botes, V. and Mengesha, L.G., 2017. The role of NGOs in corporate environmental
responsibility practice: evidence from Ethiopia. International Journal of Corporate Social
Responsibility, 2(1), p.2.
Bastmeijer, K. and Verschuuren, J., 2005. NGO-business collaborations and the law:
Sustainability, limitations of law, and the changing relationship between companies and
NGOs.
Biermann, F., Kanie, N. and Kim, R.E., 2017. Global governance by goal-setting: the novel
approach of the UN Sustainable Development Goals. Current Opinion in Environmental
Sustainability, 26, pp.26-31.
Bull, M., and et.al., 2010. Conceptualising ethical capital in social enterprise. Social Enterprise
Journal.
Carroll, A.B., 2016. Carroll’s pyramid of CSR: taking another look. International journal of
corporate social responsibility, 1(1), pp.1-8.
Dentchev, N.A., Haezendonck, E. and van Balen, M., 2017. The role of governments in the
business and society debate. Business & Society, 56(4), pp.527-544.
Dhahri, S. and Omri, A., 2018. Entrepreneurship contribution to the three pillars of sustainable
development: What does the evidence really say?. World Development, 106, pp.64-77.
DU, C.R., 2016. Sustainable development goals.
Eizenberg, E. and Jabareen, Y., 2017. Social sustainability: A new conceptual
framework. Sustainability.9(1). p.68.
Freeman, R.E., 2017. The new story of business: Towards a more responsible
capitalism. Business and Society Review, 122(3), pp.449-465.
Haski-Leventhal, D., 2018. Strategic corporate social responsibility: Tools and theories for
responsible management. Sage.
Laasch, O. and Conaway, R., 2014. Principles of responsible management: Glocal sustainability,
responsibility, and ethics. Nelson Education.
Levers, U.P., 2019. City governments and their role in enabling a circular economy transition.
Liu, C.H., 2017. The relationships among intellectual capital, social capital, and performance-
The moderating role of business ties and environmental uncertainty. Tourism
Management, 61, pp.553-561.
Marseille, E. and Kahn, J.G., 2019. Utilitarianism and the ethical foundations of cost-
effectiveness analysis in resource allocation for global health. Philosophy, Ethics, and
Humanities in Medicine. 14(1). p.5.
13

Mihajlović, B., 2020. The role of consumers in the achievement of corporate sustainability
through the reduction of unfair commercial practices. Sustainability, 12(3), p.1009.
Miklian, J., and et.al., 2018. Business and Peacebuilding: Seven Ways to Maximize Positive
Impact. Business and Peacebuilding: Seven Ways to Maximize Positive Impact.
Qizilbash, M., 2016. Utilitarianism and some of its critics. Theorizing Justice. pp.75-91.
Ramesh, K., and et.al., 2019. Consumer's response to CSR activities: Mediating role of brand
image and brand attitude. Corporate Social Responsibility and Environmental
Management, 26(2), pp.377-387.
Safarzad, R., Farahnaki, E. and Farahbakhsh, M., 2016. Corporate Social Responsibility,
Theories and Models. Theories and Models (September 3, 2016).
Seager, T.P., 2008. The sustainability spectrum and the sciences of sustainability. Business
Strategy and the Environment, 17(7), pp.444-453.
Smart, J.J.C., 2020. Utilitarianism and its applications. In New directions in Ethics (pp. 24-41).
Routledge.
Steurer, R., 2010. The role of governments in corporate social responsibility: Characterising
public policies on CSR in Europe. Policy sciences, 43(1), pp.49-72.
Tang, S.W.S., 2016. Corporate Responses to Climate Change Reporting Requirements in the
UK (Doctoral dissertation, King's College London).
Wilkins, H., 2008. The integration of the pillars of sustainable development: a work in
progress. McGill Int'l J. Sust. Dev. L. & Pol'y, 4, p.163.
Online
17 Goals to Transform Our World, Sustainable Development Goals, United Nations, 2020,
Available through: https://www.un.org/sustainabledevelopment/sustainable-development-
goals/
Duignan, B., 2020. Utilitarianism, Available through:
<https://www.britannica.com/topic/utilitarianism-philosophy>
14