Corporate Social Responsibility and Climatic Change Essay

Corporate Social Responsibility and Climatic Change - Essay Example The effects of climate change are disrupting business operations and transportation, for example, in the UK; high-sided vehicles are increasingly at risk of accidents from floods and gale force winds. Such disruptions have the effect of reducing customer demand and purchasing power (Dudek and Wiener 1996, Romm 1999), as products and services become less available due to erratic supply. These disruptions also restrict the ability of the business to grow, as the sales revenues will be insufficient to generate profit for investment purposes. Climate change therefore poses a risk to businesses, and the onus is on re-evaluating corporate social responsibility in a bid to gain efficiencies, and to reduce the businesses contribution to the climate change problem. Climate change is commonly associated with industrial factories churning out smoke from cooling towers, however, non-industrial organisations contribute to climate change through their carbon and greenhouse emissions generated by their operations and product/service lifecycle (Grubb 1989, Cantwell 1995, ICTSD 2005). Whilst this represents an element of change and uncertainty, climate change-focused corporate actions can have benefits for the organisation in the way of new products and new markets (Mendelsohn 2000, Richards 2001, Lawrence 2002, Jochem and Madlener 2003). Climate change strategies are also perceived as risky due to the large scale, renewable energy investments that are associated with reducing the carbon footprint (McCarthy et al 2001, Egenhofer et al 2004). For instance, if fossil fuels ran out, Shell, BP and other large fuel providers would have to invest large amounts in alternatives, which BP has started doing with its Autogas even though it is not widely availabl e. The transport industry also contributes to climate change and global warming through vehicle emissions and businesses in this sector are beginning to take notice, and accepting responsibility for the part they play. For instance, in September 2006, Sir Richard Branson, founder of the Virgin Group donated three billion dollars over ten years from his organisation to fund the development of low carbon energy sources such as wind turbines, cleaner aviation fuel and ethanol (BSR 2006). This demonstrates the levels of commitment expected from businesses, and Virgin have acknowledged their role especially as they run train services and flights that contribute to global warming. Corporate social responsibility in United States is now recognised as the fifth largest venture capital investment category after biotechnology, software, medical and telecommunications (CSM 2001, Raynard and Forstater 2002). The market for clean technology is set to expand and is already worth an estimated $40 billion (Raynard and Forstater 2002). This is not surprising considering that the United States is responsible for a significant proportion of global emissions. This is also representative of the increasing market and customer awareness of their environment, and businesses in this region are already capitalising on this. This also demonstrates that businesses are adopting strategies that are action and adaptation oriented to focus on the energy efficiency aspects and renewable energy sourcing (Burton 1996, Adger 2003, Hertin et al 2003, Berkhout et al