Environmental Engineering Reference
In-Depth Information
Given this, it is important to make a distinction between the fiduciary rights of
shareholders from the moral and social rights of stakeholders. Max Clarkson (1995)
defines stakeholders as persons and/or groups who have, or claim, ownership, rights
or interests in a corporation and its activities, past, present or future. He distinguishes
between:
•
primary stakeholders
- including shareholders, investors, employees, customers;
•
suppliers, government and communities
, without whom business infrastructure,
markets, laws and regulations would not exist; and
•
secondary stakeholders
- including the media and a wide range of social interest
groups, who may affect or influence the work of the business or corporation.
CSR, often shortened to CR and explicitly incorporating environmental and wide-
ranging sustainability concerns, addresses the putative rights, interests and expectations
of the stakeholder. It becomes imperative to see the business of business as being
far more than the 'bottom line', although the bottom line ultimately colours everything
a corporation does. Consequently, Hart (1997, 2005) writes of the need for
corporations to go beyond cosmetic greening by creating a vision for sustainability
that will include product stewardship, clean technologies and pollution prevention.
For Hart, there is a difference between being eco-efficient and eco-effective. The
latter means that corporations will simultaneously deliver economic, social and
environmental benefits to the whole world. To do this, corporations must become
indigenous to the places where they are located, developing 'native capabilities' that
respect local culture, and address the broad sustainability challenge and natural
diversity. Apart from technological advances, new adaptable business models and
innovations are required that go beyond continuous improvements to search for,
foster and develop new markets, new (unconventional) partners and new emerging
technologies. Hart writes of the 'great leap to the bottom', which essentially means
that corporations can meet the needs of the world's poor and make a good profit
in the process. As C.K. Prahalad (2009) and Prahalad and Hammond (2002) have
written, it is misleading to write of the 'global poor', as together they constitute a
significant and untapped global market. By 2015, nearly 1,300 cities in Asia, Africa
and Latin America will have populations of over 1 million. A total of 27 cities will
have populations in excess of 8 million, half of whom will be 'bottom of the pyramid'
(BOP) consumers. In Rio de Janeiro, Johannesburg and Mumbai, the poor have a
purchasing power of around US$1.2 billion. Slums in these cities have their own
ecosystems, informal economies and range of different businesses. Some companies
are adopting a shared access model, where poor people hire or lease their computers,
fridges, Internet connections, mobile phones, cars, and so forth, on a pay-per-use
basis from the providers of such services, who gain considerably more revenue per
investment dollar than they would normally. Obviously, new skills, new synergies
and new management practices are required to make this work, but, as Prahalad
shows, the benefits are real and tangible. In certain circumstances, consumption can,
and does, alleviate poverty:
Consider healthcare. If you are legally blind with cataracts, you can't work and
neither can the family member who cares for you. But if you get access to
inexpensive cataract surgery, now you can see and both of you can work. Have
