Chapter 9Decision Making, Creativity, and Ethics 323OBAT WORKEnvironmental
Responsibility Is Part of the
Bottom Line
Going green makes good economic sense. The studies
reported in the Pointargument tend to overstate the cost
of environmental regulations.^112 They do not consider the
benefits to society of those regulations.
A closer look at a few companies that have devoted
efforts to being more environmentally friendly will illus-
trate the benefits of this approach. When the Quaker Oats
Company of Canada started working toward a “greener”
work environment, its plant in Peterborough, Ontario,
saved more than $1 million in three years through various
environmental initiatives.^113 As another example, Toronto-
based Inco spent $600 million to change the way it pro-
duces nickel at its Sudbury, Ontario, operations in order to
be less devastating to the local environment. Its smelting
process is one of the most energy efficient and environ-
mentally friendly in the world. Inco continues to work to
restore the appearance of Sudbury. Trees have grown
back, the wildlife has returned, and the air is clean.
Sudbury has even been listed as one of the 10 most desir-
able places to live in Canada. While Inco invested a lot of
money to change its production process, Doug Hamilton,
controller at Inco’s Ontario division in Sudbury, has said,
“Our Sulphur Dioxide Abatement Program was an awe-
some undertaking. Not only did this investment allow us
to capture 90 percent of the sulphur in the ore we mine,
but the new processes save the company $90 million a
year in production costs. That strikes me as a pretty smart
investment.”^114 London, Ontario-based 3M Canada
started a Pollution Prevention Pays (3P) program more
than 20 years ago.^115 The program emphasizes stopping
pollution at the source to avoid the expense and effort of
cleaning it up or treating it after the fact. The recycling
program at 3M Canada’s tape plant in Perth, Ontario,
reduced its waste by 96 percent and saved the company
about $650 000 annually. The capital cost for the pro-
gram was only $30 000.
The examples of Quaker Oats, Inco, and 3M show that
companies that are environmentally friendly have an
advantage over their competitors. If organizations control
their pollution costs better than their competitors, they
will use their resources more efficiently and therefore
increase profitability.Organizations Should Just
Stick to the Bottom Line
The major goals of organizations are and should be effi-
ciency, productivity, and high profits. By maximizing prof-
its, businesses ensure that they will survive and thus make
it possible to provide employment. Doing so is in the best
interests of the organization, employees, and stockhold-
ers. Moreover, it is up to individuals to show that they are
concerned about the environment through their invest-
ment and purchasing activities, not for corporations to
lead the way.
Let’s examine some of the reasons why it is not eco-
nomically feasible to place all of the burden of protecting
the environment on the shoulders of big business.
Studies show that environmental regulations are too
costly. The Conference Board of Canada has suggested
that environmental regulations cost Canadian companies
$580 million to $600 million a year.^109 The Fraser Institute
in Vancouver reported that all regulations, including those
designed to protect the environment, cost Canadian
industry $103 billion a year.^110 Environmental regulations
can also be harmful to jobs. In British Columbia, the Forest
Practices Code is said to have added $1 billion a year to
harvesting costs and resulted in a number of job cuts.
While businesses are concerned with the high cost that
results from environmental regulations, the general public
is not completely supportive of protecting the environ-
ment either, particularly if it will inconvenience them.^111
Companies would be better off sticking to the bottom
line, and governments should stay away from imposing
costly environmental regulations on business. Stringent
environmental standards cause trade distortions, and gov-
ernments rarely consider the cost of complying with regu-
lations. Companies should be allowed to take their lead
from shareholders and customers. If these constituencies
want businesses to pay for environmental protection, they
will indicate this by investing in firms that do so. Until
they do, the cost of environmental legislation is simply
too high.
POINT COUNTERPOINT