Analyzing Challenges, MNCs, and Responsible Enterprise Essay

This essay delves into the concept of responsible enterprise, examining its various aspects in relation to sustainable development goals (SDGs), particularly SDG 7 concerning energy consumption. The essay analyzes the challenges faced by private enterprises, the significant role of multinational corp...Read More

Responsible Enterprise
12/11/2018
Student’s Name

Responsible enterprise 1
Contents
Introduction and Background..........................................................................................................2
Impact of MNCs in Society.............................................................................................................3
Responsible Enterprise....................................................................................................................4
Spectrum of responsible Enterprise.................................................................................................5
Role of government in society.........................................................................................................5
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

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Introduction and Background
As the name implies Sustainable, Development Goals (SDG) have been developed to ensure the
sustainable development while ending poverty, protecting planet, consuming energy effectively
and by doing other helping tasks. In the presented essay, focus will be made upon challenges for
private enterprise in respect to the chosen goal, role of MNCs, aspects related to responsible
enterprises and role of government in society. The purpose of this essay to develop an
understanding on the role of private enterprises and government while dealing with sustainable
development goals. For the presented essay, the selected SDG is number 7, which is related to
effective energy consumption.
Three pillar of sustainability are defined there. The same are social, environmental, and
economic pillars. More often, they can be understood as people, planet, and profit. If any of the
pillars is weak then the whole system cannot be termed as sustainable. It means in order to
become a sustainable enterprise, an organization need to make a good, ethical, and reasonable
balance among these three factors. Focusing on one and ignoring others can create an issue.
Behind the development of this goal, many of the challenges acted as a force or it may say that
many of the challenges were there which underlie this goal. Behind the development of the
subjective SDG i.e. SDG 7 too, there were certain social, economic and environmental
challenges which the private enterprises were facing.
The primary challenge behind the development of the goal is that the energy is regarded as the
central element of the various functions and the opportunities of the world today. It is essential
for not only the jobs, food production, climate balance, but also for the overall economic
development of a region. The goal is significant on the lines that it links various other sustainable
development goals with each other. In general, terms, the challenge that underlies the
development and work towards the goal is that universal access to energy is essential together
with the increased efficiency and use of the renewable energy. This is because these are further
necessary to combat the issues of climate change and creating more sustainable communities. In
the words of Martin Freer, the director of the Birmingham Energy Institute at the University of
Birmingham, the greatest challenge that lies with the use of the energy resources is “cooling”
(Gray, 2017).
In terms of the economic challenges, the scarcity of the energy resources lead to the scenarios
like economic disruption at international, national, and local levels; price rises, balance of
payments problems in terms of the international trade, hurdles in the availability of capital and
many more (Schandl et. al, 2016). The oil shocks of the 1973 and 1979 are some of the examples
of the economic disturbances caused by the energy resources use.
In terms of the political challenges, the lack of control over the energy resources has highlighted
the major challenge for the nation to be self-sufficient in terms of the energy resources.
The social challenges of the energy use arise from the three main reasons namely the want of the
nations of higher living standards, economic booms in the large regions and the increasing
numbers of population at national and international levels. As the energy resources aid in the

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activities like the agriculture, mining, commerce, manufacture and industry; the lack of the same
leads to the social issues namely the poverty, urbanization, economic declines for women,
lifestyle issues and demographic transitions (Sorrell, 2015).
Impact of MNCs in Society
Business plays their significant role in the society. The role becomes more vital and important
when such businesses are multinational companies. According to business dictionary, a multi
nation company is an organization that operates it is business in more than one nation. For any
society, businesses are the important tool as they provide goods and services and use the natural
resources in a commercial manner. Further businesses plays central role in granting financial
prosperity. In order to check the impact of multi-national companies in society in relation to
SDG 7 this is to be stated that these companies are bringing negative impacts to the society.
Businesses are useful for many groups of the society as they provide benefits to all of them. For
instance, businesses provide employment to the citizens of a nation, dividend, and interest to
shareholders and lastly revenue to governments in the forms of taxation. These private business
works according to shareholder theory. It means they only consider SDG 7 ensures the access
to reliable, affordable, sustainable, and modern energy of all (Sustainabledevelopment.un.org,
2018). This goal makes it focus on the effective energy consumption of industries. The
multinational corporations are usually of private sector and profit-making organization that only
focuses on the economic side and in order to make number one among the competitors ignore the
SDGs. According to this goal, it becomes the responsibility of organizations to consume the
energy in an effective energy and to leave the same for the uses of others. Nevertheless, the
private sector ignore the same their access to energy is not sustainable.
However, this would wrongful to state that multinational companies bring negative impacts in
relation to SDG 7 always. Apart from the traditional corporations, some socially responsible
corporations are also there. These corporations have their defined strategies and being a multi
nation operating organization, they usually consider SDG in their plans and policies (Iisd.org,
2018). With the local business, there is often an issue of lacking of financial resources. This is
the reason that the local business cannot comply with the SDG even when they want to. Here the
MNCs bring important impacts. In addition to this, these corporations are preparing
sustainability report in which they provide the level of achievement with the SDGs. By doing
this, private sector businesses including MNCs are fulfilling the requirements of SDG 7. These
responsible steps taking by them are bringing positive impacts on the societies of different
nations. In conclusion, this is to mention that earlier MNCs were ignoring the SDG 7 and they
were only focusing on profit. In such a manner, the same were putting the adverse impacts on the
society by making ineffective use of energy but now the situation is different.
Responsible Enterprise
In respect to the meaning of responsible enterprise, many of the interpretations are there. As the
name implies itself, in the general sense, a responsible enterprise can be understood as a business
that considers some aspects such as business ethics, sustainability development and corporate

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social responsibility in it is dealings (Edgeman, Neely and Eskildsen, 2016). Different authors
have suggested different feature of a responsible enterprise. According to Oliver Laasch and
Roger N Coneway, sustainability is one of the features of a responsible enterprise. Suitability is a
balancing act. Further, two more authors named as Andrew Crew and Dirk Matten focused on
different terms such as corporate citizenship and business ethic in their book titled Business
Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization”.
For the purpose of compare and contrast, the selected concepts are corporate social responsibility
and corporate citizenship. Many of the scholars and writers find similarities between these two
concepts and therefore treated them as a single term, but the same is not correct. There are some
differences between both of them. Firstly, in order to understand the meaning of corporate social
responsibility, this is to mention that it is a management related concept where an organization
considers the interest of society and environment in it is operations (Unido.org, 2018). On the
other side, corporate citizenship is a concept that treats an organization as a natural
person/citizen. According to this concept, a business can be a good citizen or a bad citizen
(Jhingan, 2018). Corporate citizenship can be defined as a way in which a company exercises it
is rights, privilege, obligations, and overall corporate social responsibility. It may say that where
CSR focuses on the policies, corporate citizenship is more about practices. Corporate citizenship
is limited and only considers the welfare of community at a local level. This is necessary to
mention that the lead concepts of CSR are to ensure the practices which are responsible towards
the society. However the lead elements of corporate citizenship is not so much different from the
concepts of CSR as the same consist social obligations, legal requirements, voluntary actions and
integrated ethics. In order to define the lead difference between CSR and CC, this can be stated
that not similar to CSR, CC does not make it is focus of environmental factor and sustainability
as much. As mentioned earlier that under corporate citizenship concept, a company is treated as
natural person, certain problems are there. In such cases, the rights of the corporates are
protected but their responsibility remains unrestricted. This is also necessary to mention that a
corporation can only be treated as a person as far as legal status is concerned. Moving towards
the similarities between the two discussed concepts, this is to mention that both of these concepts
adhere to good practices and can be understood as a feature of responsible enterprise. Both of
these concepts faces the issue of “managerial capture”. Managerial capture is a situation where
the managers of an organization show their reluctance to set the profits aside in order to become
a responsible enterprise.
Spectrum of responsible Enterprise
Kim Alter (2007) had worked towards the development of the sustainability spectrum (Ridley-
Duff and Bull, 2015). This spectrum was a further extension of the Dees’ model that led to the
understanding of the social enterprise. The Alter’s spectrum states six gradations that separates
the “traditional for profit” and the “traditional not for profit” enterprises. According to the said
model, social enterprises are nothing but a cross section where the economic exchanges are used
to create the increased opportunities for the creation of the social values.
On application of the sustainability spectrum, the ethics of the responsible enterprise can be
stated to be as follows. Such enterprises are capable of fulfilling their obligations not only

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towards stakeholders like the shareholders, investors, suppliers and employees; but also towards
the use of the resources. These are further engaged in transparent reporting practices as required
by the applicable regulatory framework. The reports demonstrate the amount of consumption of
resources, the saving of the same and the steps taken for efficient utilization. These enterprises
are accountable for their actions and policies adopted and thus engage in various agreements on
the lines of the resource and energy use, transport planning, environmental product responsibility
and the pollution and waste management.
The fact that their ethics go beyond the mere provision of quality services and products and earn
the economic returns, is what makes them different from the private businesses (Cramer, 2017).
Thus, the success is not only limited to the numerical figures, but also in the form of an overall
impact on the environment and contributing towards the national and social issues. The
responsible enterprise achieve their social goals either on their own, or by entering into
partnerships with the government, local communities, non-governmental NGOs and also
involving the various stakeholders. Thus, the priority is on creation of the long term meaningful
relationships with the environment, society and stakeholders.
Role of government in society
During the years 1970s to 1980s, a number of codes and legislations were passed on to transform
the relationship between an organization and its constituents, i.e. the employees, investors and
the natural environment. The Cadbury Committee laid down the first code best practice in the
UK for the companies in the year 1992, which laid down the base for the company’s
responsibilities towards the preservation of resources. The Environment Protection Act 1995 was
an important move towards the up gradation of the corporate responsibilities towards the
surrounding environment as well. Thus, the government has been playing an empirical role since
the historical times towards issuing the guidance and stating the importance of the conservation
and effective utilization of the natural resources and corporate social responsibilities of the
enterprises. The agencies developed under the Environment Protection Act have been
responsible for the monitoring and the enforcement of the European Union’s Integrated Pollution
and Prevention Control (IPPC) Directive. According to this, the companies are required to
conserve energy, recycle to the maximum extent possible and use natural resources in the best
manner possible.
In this series, the government agencies like the Department for Environment, Food and Rural
Affairs (Defra) and the Department of Trade and Industry (DTI) have also supported the
businesses towards the formulation and the implementation of the guidelines for different
industries for achieving sustainability and improving conservation of natural energy resources
(Fawcett and Parag, 2017). On the above lines, the Office of gas and electricity markets (Ofgem)
which regulates the electricity and the gas industry in the UK develops a yearly plan for the
execution of the environmental and social objectives (Hall and Roelich, 2016). Thus, the
government takes the assistance from the Ofgem in the form of development of action plan in the
areas namely the energy efficiency commitment, energy services, energy efficiency, renewables,
and others.

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Another important role of the government is highlighted by the fact that government can levy
taxes on the uses of energy resources. For instance, the UK government climate change levy is a
significant move in terms of levying the use of the energy for the domestic purposes. Thus, it can
be stated that role of the government is comprehensive and includes policy formulation,
development of support agencies, implementation of necessary levies and incidental roles, for the
conservation and efficient utilization of energy resources. The above role leads to the monitoring
of activities of organizations and thus the facilitation of the responsible enterprises.
Conclusion
As per the discussions held in the previous parts it can be stated that business leave a deep
impact on the society and overall national development. This is because they not only use the
resources of the society, but also because the practices and policies adopted by the enterprises
make them accountable towards the various stakeholders. The work explored the importance and
challenges underlying the sustainable development goals as laid down by the United Nations and
the same are required to be followed by the enterprises while carrying on the business operations.
The work considered the sustainable goal number 7, i.e. based on the use of the energy. In
addition, the work further explored the meaning and the roles of the responsible enterprises in the
light of the globally essential concepts like corporate governance and the corporate social
responsibility. Further, the work also shed light on role of the regulators or the government in
overseeing the activities of the organizations and the use of the resources of the nation. Thus, it
can be stated that in order to succeed at global and national level in terms of the conservation of
resources and societal development, the enterprise, the government and the stakeholders must
align their goals and actions.

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References
Cramer, J. (2017) Corporate Social Responsibility and Globalisation: an action plan for
business. UK: Routledge.
Edgeman, R., Neely, A. and Eskildsen, J. (2016) Paths to sustainable enterprise
excellence. Journal of Modelling in Management, 11(4), pp. 858-868.
Fawcett, T. and Parag, Y. (2017) An introduction to personal carbon trading. In Personal Carbon
Trading. UK: Routledge, pp. 329-338.
Gray, R. (2017) The biggest energy challenges facing humanity. [online] Available from:
http://www.bbc.com/future/story/20170313-the-biggest-energy-challenges-facing-humanity
[Accessed on 19 December 2018].
Hall, S. and Roelich, K. (2016) Business model innovation in electricity supply markets: The
role of complex value in the United Kingdom. Energy Policy, 92, pp. 286-298.
Iisd.org. (2018). Business strategies for sustainable development. [online] Available
from: https://www.iisd.org/business/pdf/business_strategy.pdf [Accessed on 16 December 2018]
Jhingan, U. (2018) Corporate Social Responsibility and Corporate Citizenship – Analyzing the
difference. [online] Available from: https://blog.ipleaders.in/corporate-social-responsibility-and-
corporate-citizenship/ [Accessed on 18 December 2018]
Ridley-Duff, R. and Bull, M. (2015) Understanding social enterprise: Theory and practice. UK:
Sage Publications.
Schandl, H., Hatfield-Dodds, S., Wiedmann, T., Geschke, A., Cai, Y., West, J., Newth, D.,
Baynes, T., Lenzen, M. and Owen, A. (2016) Decoupling global environmental pressure and
economic growth: scenarios for energy use, materials use and carbon emissions. Journal of
Cleaner Production, 132, pp. 45-56.
Sorrell, S. (2015) Reducing energy demand: A review of issues, challenges and
approaches. Renewable and Sustainable Energy Reviews, 47, pp. 74-82.
Sustainabledevelopment.un.org. (2018). Sustainable Development Goal 7. [online] Available
from: https://sustainabledevelopment.un.org/sdg7 [Accessed on 16 December 2018]
Unido.org. (2018) What is CSR? https://www.unido.org/our-focus/advancing-economic-
competitiveness/competitive-trade-capacities-and-corporate-responsibility/corporate-social-
responsibility-market-integration/what-csr [Accessed on 18 December 2018]

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TOTAL WORD COUNT: 2490 WORDS