Business and Government's Role in the Global Context: An Essay

This essay delves into the critical roles of businesses and governments in addressing the pressing issue of greenhouse gas (GHG) emissions within a global context. It begins by defining corporate social responsibility and recognizing the environmental hazards caused by GHG emissions. The essay explores the pressure on businesses to align with societal norms and highlights the importance of sustainable management practices. It examines the need for businesses to undertake greater social responsibility, while also analyzing the roles that governments and businesses should adopt to address GHG emissions. The essay also evaluates the benefits and drawbacks of incorporating non-economic goals into business practices, and argues for a voluntary approach to social responsibility. The essay further identifies tactical roles that businesses can undertake to reduce environmental impacts, such as managing environmental impacts, measuring environmental impact, environmental management, and implementing environmental responsibility. Additionally, the essay discusses the roles that governments can play, including imposing carbon taxes, implementing cap-and-trade systems, and promoting divestment and certifications. The essay concludes by emphasizing the importance of an electric approach to mitigating environmental impacts.

Student Name
INSTITUTIONAL AFFILIATION(S) |
Business and
Government in
Global Context
QUESTION NO. 2

P a g e | 1
Executive summary
Although social and environmental responsibility has been advocated increasingly since past
few decades and is generally employed by corporations worldwide, agreeing upon the fact
that how it should be handled or defined and implemented remains contentious topic for
debate among businesses, government and society. This gap has further increased pressure
among businesses to assume greater social and environmental responsibility where they are
forced to align with societal norms before generating economic returns. To remedy this issue,
the following essay have presented definition of social responsibility along with recognising
major environmental hazards occurring due to GHG emissions. In depth knowledge of the
issue will help in assuming which roles shall be handled by government and by businesses to
address the issue identified in essay. After underlining benefits and drawbacks behind
superimposing of non-economic goals in businesses, voluntary approach undertaken by
businesses for maintaining social responsibility shows more desirable in this essay.

P a g e | 2
Introduction
The trend towards managing and measuring greenhouse gas emissions (GHG) in an
international level is not reducing, even after several countries and environmental
managements are approaching the problem with diversified view points and different scale of
vigor in recent years. Along with a significant rise seen in managing and measuring GHG
emissions, many organizations around the globe are expected to envisage a superior level of
audit reports and independent declaration (Boyd, et al., 2013). The purpose of this essay is to
identify and discuss GHG emission issue for which businesses are been pressurized to
assume greater social responsibility while addressing environmental issues. Along with it,
this essay will present roles and responsibilities that must be adopted by businesses and
government to handle issues related to GHG emissions by giving sufficient reasoning behind
undertaking such roles. Leading organizations in every sector are undertaking critical actions
in both outside and inside their fences to reduce their own operational emissions to become
more robust in handling inevitable climatic impacts ( Yu & Lee , 2017). Nevertheless, to
assume that whether businesses must be expected to undertake arising GHG emissions issues
responsibility that are traditionally held by governments or it should be a voluntary step, this
essay will first evaluate GHG impacts on business practices and examine to what level does it
makes feasible to stick voluntarily approach or being held by government to meet sustainable
development (SD) and socially responsible actions.
Although the concept behind social responsibility has been well documented in
literature since past few decades and is usually employed by corporate organizations globally,
the gap has further created issues for organizations as they are continuously forced to align
with societal and environmental norms while operating for achieving economic goals. To find
an ultimate remedy for this issue, the following definition has been presented by Smith
(2011) “Corporate social responsibility is a business system that enables the production and

P a g e | 3
distribution of wealth for the betterment of its stakeholders through the implementation and
integration of ethical systems and sustainable management practices” (p. 04). Since post
World War II, many concepts and proposed definitions were highlighted amongst workplaces
by business practitioners and environmentalists. The outcomes seen in key segments like
production and wealth distribution along with maintaining sustainable development strategies
and ethical business operations validates that business practitioners have started accepting
their participation for undertaking social responsibility and steps for addressing
environmental issues.
The investments and initiatives undertaken by major countries and prominent
governmental laws includes UN’s Global Compact, EU’s mandatory CSR and Public
Transnational hard law that have been adopted by well-known private companies. While
showing significant concern towards investments made on socially responsible practices,
further defining the terms related to environmental issues as identified in the essay are also
important. The issues in environment and sustainability ranges from economic stability to
corporate profitability, organisational health and safety to preservation of ecology etc.
Environmental issues while performing organisational practices have intimately involved
itself into social practices due to highly multifaceted dynamic structures followed by
organisations (Baer, n.d.). These systems further make ensuing environmentally friendly
practices more complex due to inherited ambiguity in issues and societal considerations. For
instance, it becomes difficult to evaluate which industry generated harmful gases that requires
to be addressed or who will view the prevailing issues that effects a particular set of
environmental management guidelines. Nevertheless, Sheehy (2015) argues that this is more
complex discussion due to growing concern seen among various number of authorities in
recent years and society adds further to the complexity in issues. But, the author further
added that due to this complexity, political agendas arise along with awakening of social

P a g e | 4
responsibility among organisations that leads to more sustainable and environment friendly
business activities.
Social responsibility has been a slogan among top industries, as seen in past few years
due to which abundant debate has been made by authors and researchers concerning its effect
and how much responsibility is been undertaken by corporates actually. Besides, climatic
change and CO2 has indeed entered into global agenda lately despite of the fact that CO2 and
CSR are somewhat are not associated to each other scientifically. It is believed by Ballebye
(2008), that social responsibility and the role of businesses in considering GHG emissions
and CO2 will stay on public agenda even in upcoming years also and receive increased
attention among nation’s government due to arising climatic impacts. Some common
examples of GHG emissions form due to business operations includes water vapour, nitrous
oxide, carbon dioxide, methane and fluorocarbons. Although water vapour constitutes as an
abundant GHG, it remains relatively ineffective to the environment. Since the dawn of
industrial era in 1970’s, CO2 have increased by 40% that have become a concerning effect
constituting to global warming (Kulkarni, 2017). Therefore, governments and environmental
practitioners are on target to reduce GHG emissions by implementing socially responsible
and sustainability codes in businesses. According to a research made by United States
Environmental Protection Agency (EPA), in 2014 the largest CO2 emitters countries included
many developed and developing nations like US, China, India, Russia, Europe and Australia.
This information was presented after measuring GHG emissions from fuel combustions,
cement manufacturing units, gas flaring and plastic manufacturers who represented a huge
proportion in total GHG emissions. According to EPA, these emissions and sinks further
causes changes in land use where it was estimated that net global GHG emissions from
forestry, agriculture and other land were more than 24% of total GHG emissions made
worldwide (EPA.gov, 2017). Therefore, environmental issues concerning GHG emissions

P a g e | 5
demands businesses and government undertaking significant roles to reduce the GHG
emissions hazardous impacts on the environment.
Businesses nowadays struggle to comprehend how to implement sustainable strategies
so that environment related issues can be handled tactfully and before any issue appear in
their day to day work operations. To implement environmentally friendly and sustainability
strategies, business leaders need to understand the topic critically so that improved
frameworks grounded on theoretical model can be utilised while addressing environmental
issues present within their industry. Few initial stages have been recommended by Geurtsen
(2017) that includes: pre planning of scenario to eliminate risk, developing, measuring,
tracking and reporting capabilities, taking retooling initiatives to ensure products are designed
environmentally friendly and enhancing innovative management practices. These
recommendations can be clearly aligned while deciding upon roles undertaken by businesses
in delivering sustainable management practices by implementing environmental engineering
related activities in core business activities. Cautious business practitioners primarily focus
on short-term advantages that can be measured easily like reduction in energy consumption
and waste reduction. Scenario planning and financial management focuses on long term
benefits that even aligns with effective sustainability strategies, however, if taken alone may
not guarantee long term success and thus corporations must execute programs that build
corporate strategies into a broader environmental perspective (Rosen-Zvi, 2011).
Since this essay have identified an increasing environmental issue i.e. GHG
emissions, few tactical roles can be undertaken by businesses that can reduce environmental
impacts significantly. Primary role that must be handled by corporate firm is managing
‘environmental impacts’ that constitutes those activities which have direct impact on the
environment. Environmental impacts are usually referred to negative effects that occurs in
surrounding natural environment because of business activities ( Unruh & Ettenson, 2010).

P a g e | 6
Negative impacts of GHG emissions include emissions of global and hazardous gases that
further impacts climatic changes and deforestation etc. As many organisations activities
relates to environmental issues that transcends national boundaries even, businesses are
therefore actors of global environment. ‘Measuring environmental impact’ must be
considered as another role which considers measuring environmental impacts with the help of
input and output tables and models through which ecological footprints can be calculated and
life cycle can be accessed to ascertain levels of business activities. Ecological footprint
measures natural resources that are consumed by companies in a given year whereas life
cycle assessment measures assess to raw materials and waste disposal in environment from
beginning till the end of production cycle (Geurtsen, 2017).
‘Environment management’ is the third desirable role where organisations commit to
its natural surroundings responsibility. For this, a company needs to change its traditional
business model while performing for more environmentally oriented activities.
Environmentally friendly activities put more responsibility perspective that makes company
emphasise on resource productivity, cleaner and greener production along with active
interaction with stakeholders of the company. Many top companies have established an
environmental management function in their core business management that proves best basis
for desiring such responsibility (Diesendorf, 2014). This role can even guarantee quality,
safety and healthier environment if integrated within organisations. Lastly, implementing
‘environmental responsibility’ in first place while defining social responsibility of the
company shows an initiative for undertaking a critical responsibility towards environment.
Since industry reports show a considerable increase in GHG emissions especially in
manufacturing and supply chain channels, many companies are showing improvements in
their environmental practices that have benefitted the companies also in many ways
(Kulkarni, 2017). Due to the initiative, they have started utilising resources to the fullest

P a g e | 7
along with streamlining processes to minimise waste disposal and GHG emissions that have
further lowered operational costs. Furthermore, close monitoring of activities can not only
improve environmental performance, but also reveal other development points like material
loss and risk (Sharma, 2013).
Mitigating environmental impacts requires an electric approach as it has became a
complex dilemma which cannot get solved single sided. If government plays key role in
initiating the desired changes, major impacts can be reduced pointedly while promoting clean
energy economy. First role that government can undertake to address GHG emissions related
issue is imposing ‘Carbon tax’. Carbon tax refers to those taxes that needs to be paid by the
companies for excessive emissions of GHG due to their business operations. Like many other
taxes, it will act as incentives for individuals and business while cutting their GHG emissions
in their own preferable way and government can use these tax revenues for other environment
associated program and projects. ‘Cap-and trade’ is another role that can be handled by
government to create incentives for reducing GHG emissions through enhanced marketing
systems. California is a suitable example that can be presented where the government have
initiated cap-to-trade program since last two years. This initiative will help in promoting
greener environment by reducing overall GHG by giving organisations incentives if they
continue operating greenly and with their leftovers (Rosen-Zvi, 2011). ‘Divestment’ is
another way through which the present issue can be handled effectively by the government
where training and education can be provided to the companies concerning environment
related study. By educating companies as well as individuals, effective nationwide policy can
be enabled where GHG and other environment related issues can get handled in an effective
way.
Other than above mentioned roles, government can implement certifications to verify
whether industries comply according to defined criteria. The criteria set includes certified

P a g e | 8
adherence to follow basic business standards in favour of environment and nature. Hence, the
certified industries can be allowed to use certification labels to prove that they follow
standard principles. At present, some labels are offered in consumer brands like Organic and
Fairtrade while others like Global Gap are followed to enable trade among businesses only
(Ballebye, 2008). Carbon certifications, trade and offset standards are usually processed by
third parties who enables the uses of carbon label. These roles can be held by governments of
the countries who may further include carbon rating, carbon reduction and carbon intensity in
GHG emissions released from organisation’s activities. Some of the certifications and
offsetting can be made on voluntary or compulsory schemes basis where compulsory
schemes develops mechanisms or GHG emission in trade and businesses, voluntary schemes
include other standards like carbon fixing and waste management (Kleemann & Bokern,
2014). The practice of voluntary certification for businesses have been seen among many
countries in recent years where a recent report has identified that more than 400 certification
systems were implemented voluntarily amongst European country (Kleemann & Bokern,
2014).
The benefits of legislation and super-imposing non-economic goals on businesses are
backed up by Bonilla (2017) where the author believes that international institutions and
government can make businesses know easily what is expected from them by imposing a
compulsory approach. This will also help to impose penalties in those rogue companies who
do not follow environmental standards and comply with countries legislations. Besides,
Singhal (2014) also confirms that legislation and government interventions will enhance
balance between profitability, sustainability and economic growth of the country. Legislation
and government certifications will furthermore help in avoiding environmental exploitation
as businesses will be forced to consider consequences of their manufacturing, supply chain
and other business activities that effects environment negatively. Nevertheless, government

P a g e | 9
imposition and legislation cannot be associated with benefits only. Disadvantage can also be
stated through such an approach as one size does not fit all concept makes impossible for
handling environmental issue uniformly among every organisation. Social responsibility and
sustainability are an issue that covers various aspects and what proves efficient for one
company may prove destructive for the other. Albareda, et al. (2007), criticises substantially
that if non-economic goals are superimposed and are held by government in businesses while
expecting them to undertake traditional responsibility will be possible only if agreed
according to lowermost mutual denominators. This way superimposing might lead to lower
involvement by businesses as they will start believing to perform only what is required by
country’s law and nothing more than that. This may further establish additional bureaucratic
government system and increased cost of observance at the cost of state operations for the
government.
Conclusion
The above essay has attempted to assess whether voluntary approach to meet social
responsibility and sustainability is desirable or not by looking upon at other factors and roles
that must be handled by businesses and government while addressing environmental issues
related to GHG emissions. Interest of government and businesses have been examined and
analysed at international and local levels by making a close study of present literature and
books. The topic of social responsibility reflects complexity that calls for handling variety of
environmental issues and methods. In some cases, it was found that authors proved right
while claiming that governmental regulations and certifications leads in bringing
competitiveness among businesses by lowering production and resource costs. However,
others believed that government interventions are not associated with competitiveness. In
fact, the growing pressure on businesses to assume greater responsibility have made many

P a g e | 10
companies claim that opposite to it i.e. sticking to voluntary approach can make sense in long
run where they can indulge in social responsibility after looking upon those factors also that
remains unseen by government. Therefore, based on the analysis made in the above essay, it
can be concluded with no one size fits all concept to social responsibility as it seems to be a
complex issue where businesses must not be pressurised, rather allowed to take voluntary
steps in handling environmental issues.

P a g e | 11
References
Albareda, L., Lozano, J. M. & Ysa, T., 2007. Public Policies on Corporate Social
Responsibility: The Role of Governments in Europe. Journal of Business Ethics, 74(04), pp.
391-407.
Baer, H. A., n.d. Global Capitalism and Climate Change. In: s.l.:s.n., pp. 395-414.
Ballebye, M., 2008. CSR as a tool to reduce CO2- Is intervention necessary?. [Online]
Available at: https://projekter.aau.dk/projekter/files/14405544/Thesis__2_.pdf
[Accessed 12 10 2018].
Bonilla-Sanabria, F. A., 2017. Remarks on Corporate Social Responsibility, Company
Lawand Groups of Companies. Universities, Volume 134, pp. 21-58.
Boyd, W. . E., Exter, K. . A. d., Christidis, L. & Lloyd, D. . J., 2013. Current issues in
environmental management in Australia: what do people think?. School of Environment,
Science and Engineering, Volume 10, pp. 31-50.
Diesendorf, M., 2014. Corporate Efforts to Impede Renewable Energy. In: Chain Reaction.
s.l.:s.n., pp. 38-40.
EPA.gov, 2017. Global Greenhouse Gas Emissions Data. [Online]
Available at: https://www.epa.gov/ghgemissions/global-greenhouse-gas-emissions-data
[Accessed 12 10 2018].
Geurtsen, P., 2017. The Influence of Corporate Social Responsibility on the Valuation of
Greenhouse Gas. [Online]