Environmental Analysis & Business Ethics

An environmental analysis sometimes exposes concerns about a company's business ethics.

A firm might perform an environmental analysis to determine the effects of business or manufacturing processes on an ecosystem or geographical region. Such an analysis sometimes reveals unethical practices that could affect a company's financial health or reputation.

Effects

If environmental analysis reveals that a company negatively affects the natural environment in which it operates, the company faces harsh fines and the task of cleaning up and restoring that environment. Although the discovery of harmful environmental effects can damage the public's view of a company's ethics, a valiant effort to fix the problem can restore that business' reputation.

Considerations

When conducting an environmental analysis, companies must consider the way its results may influence their ethical standards. A business appears proactive and raises industry standards by conducting an environmental analysis; this may yield a positive public image.

Rationale

A company may choose to conduct an environmental analysis to improve its corporate image and demonstrate strong business ethics. Business owners sometimes need assurance that they are operating in an environmentally responsible manner to meet society's increasing expectations regarding corporate social responsibility.

References

• General Electric: Hudson River Cleanup
• "Business Roundtable Institute for Corporate Ethics: Environment, Ethics, and Business"; R. Edward Freeman, Jeffrey G. York, Lisa Stewart; 2008