Responsible Enterprise and Response to UN Sustainable Development Goals
Introduction
This essay aims at expounding on the meaning of responsible enterprise and strategies deployed by organizations when responding to the United Nations (UN) sustainable development goals. The essay follows a normal structure with an introduction, a discussion on the impact of business in society, and a definition of responsible enterprise response to the sustainable development goals. Additionally, the paper also incorporates a comparison and a contrast between the role of government, NGOs, and the society, with the last part as a conclusion, which is a synthesis of the findings and evaluations that would help conclude what is meant by a responsible enterprise. This essay incorporates the study of the climate action sustainable development goal. Climate change has been an area of concern to the United Nations due to the rising greenhouse gas emissions that are affecting the whole world. The UN aimed at taking positive action concerning the climate finance flows and how the national authorities can contribute towards planning and accelerated action that would solve this challenge and opt for adoption across the globe. The reason for this choice is that climate change has a direct impact on social, economic, and the environment as the three pillars that aid in reaching sustainable development. However, climate action is accompanied by various challenges that delimit its process of acceptance and adoption across the globe. The latter challenges are grouped as either social, economic, and environmental challenges. Social challenges arise as people in the contemporary world tend to live beyond their capacities, the problem is within the society itself and commonly result in homelessness and joblessness. Additionally, there is an environmental challenge that has resulted from people's actions that cause massive and irreversible harm to the surrounding environment, thus affecting their livelihoods and well-being. More importantly, the economic challenge that is our major area of concern is associated with instability, lack of control over the economic destiny as well as growing economic inequality and awareness. This essay presents a discussion on responsible enterprise and how responsible organizations respond to the UN sustainable development goals and the role of stakeholders in responsible business.
Impact of Business in the Society
The business organization has a critical role that it needs to play in its operation to ensure that it observes climate action. Organizations need to ensure that it adopts the guidelines that have been set by the UN organizations to ensure that the business meets the standards that would make the business become one of the responsible ones. The business operation takes place in the environment associating directly with the environment and people, therefore the operation can either impact the surrounding society positively or negatively. Additionally, some business operations are guided by the ethical code of conduct while others are unethical, which makes the overall operation irresponsible. Various bodies of operation engage in business are profit-oriented while other social enterprises are focused on the non-profiting operation and instead work towards giving back to society. In this section, we will discuss the role of business and theoretical positions in relation to the role of business in society. Additionally, this section incorporates ethical values and how different organizations use the response spectrum to achieve a competitive advantage and become responsible enterprises.
The business operation plays a significant role in meeting the world's increasing needs and desire for goods and services in order to satisfy their daily life. The primary focus of the business is to create and fulfill their customer’s demands in a cost-effective manner. Additionally, the business has been noted to perform a central role in providing financial prosperity to the countries and the entire globe. It has also been noted that most individuals forget the diversity of financial benefits that are associated with the business operation. The latter operations help in the remuneration of the organization's supply chain, and the support of the public services such as schools and hospitals roads that have been impacted positively through the taxations paid in numerous forms to the government tax collection bodies. Additionally, business operations find pensions and support savings through dividends and interests. More so, many individuals forget that every individual in the country might benefit directly from the business operation as either employee, consumers of goods and services, pensioners, savers, or even as voters. Besides, the workplace is also where most people spent much of their daily lives, it where employees get a platform to interact creating a sense of community where people congregate and familiarize themselves with others.
Perhaps, the ethical capital is achieved through moral virtues that attract the growing interests and the interests of customers that yield competitive advantage. The latter advantage is an economic asset that aids an organization or business to increase profitability and increase its survival chances. The ethical capital is linked to the five-level spectrum of responsibility, where the fifth level is the traditional and non-profiting bodies, and non-profiting with income-generating activities. Then ascending to the fourth level, which is the social enterprise, to the socially responsible business, level three to the corporation practicing social responsibility to the top at the spectrum as the traditional for profiting level. The second and third levels address the business’s social responsibility to society.
The sustainable development goal urges business operations to take urgent action to combat climate change and its impacts. Almost all business operations have an impact on the climate and in most cases, the effects are adverse making it harmful to the well-being of people. An excellent example to address is the automobile industry in the chase to achieve sustainability and ensure competitive advantage. Nevertheless, the organizations need to ensure that as much as it needs to keep competitive it should ensure that the enterprise ensures social responsibility. Businesses should, therefore, ensure that their operations are intended to achieve moral agency and create ethnic capital. Similarly, actively engage in blending of value to achieve social, economic, and ethical capital. The business operation now moves beyond corporate social responsibility and focuses on creating capital through ethical trading and competent management of business operations. More so, the moral agencies intend to create ethical capital through ethical reasoning, therefore making the organization responsible.
It is the role of the businesses to ensure that in its entire operation it keeps the environment safe. This is by ensuring that all its operations are in accordance with the set UN guidelines that are aimed at limiting environmental pollution. The latter pollution has been noted to result from the greenhouse gases in the atmosphere that have been noted to rise in recent days. Business operations need to adhere to the Paris Agreement adopted in 2015 that was aimed at empowering the global response to the threat of climate change (Assembly, 2015, p.338). The agreement was purposefully targeting to lower the global temperature that had risen resulting in high survival risks. Incorporation of the action in the business operation would ensure that the business operation does not harm the environment and makes it productive for society and sustainable.
Responsible Enterprise and Its Response to the Sustainable Development Goals
In the review of responsible enterprise, we need to get a clear understanding of various concepts. The latter concepts are used by organizations to respond to sustainable development goals. Some of the terms that we need to expound on include responsible enterprise, corporate social responsibility (CSR), corporate citizenship (CC), shared value, circular economy (CC), both in theory and in practice. When defining the responsible enterprise we cannot fail to mention all the concepts that are associated with business operation focusing on obtaining a successful business that meets the sustainable development goals and in this case observing climate action. This section presents the discussion of the differences and similarities between corporate social responsibility and shared value in theory and practice.
Some organizations believe that resources occupying the earth's surface belong to every individual. They have created a slogan that states that “this land is our land,” which now mandates that organization to take action and protect the resources for future generations. When we say that an enterprise is responsible we mean that the business regardless of size, ownership, legal status, structure, or sector’s operations have a positive contribution to the social, economic, and environmental progress within the countries within which they operate (Bule, and Less, 2016, p.121). On the other hand, the organization should also avoid or address the negative impacts that are associated with its operations. In this context the business operations to be responsible, it should take urgent action that would help in combating climate change and its impacts. At the end of this process, we would get an environment that is friendly to humans, economically productive, and an ample ecosystem.
When addressing the UN sustainability goals we cannot fail to mention corporate social responsibility (CSR). This is a business model that helps companies become socially accountable to themselves, the stakeholders, and most importantly to society. There are many scholars who have tried to give CSR various definitions, for instance, Carroll (1991) defined CSR using a pyramid. The latter pyramid was named as CSR pyramid where its base comprises of the economic responsibility as the foundations where all the other responsibilities rest (Carroll, 1991, p.39). This is the base from which the legal, ethical, and philanthropic responsibilities lie. Putting Carroll’s pyramid in real-life practice is by ensuring that the business operations are economically profitable, then adhere to the legal laws and business regulations, thirdly, ensure that the business operations observe ethical obligations, by being right, fair, and just, avoiding all forms of harm to the society. Fourthly, the organization should ensure Good Corporation with the citizens, focus mainly on contributing resources to the community that would help improve the quality of life.
Putting corporate social responsibility into practice is known as corporate citizenship (CC). It the understanding that the business operations or corporations have both social, cultural, and environmental responsibility to the society that it operates from. Additionally, it keeps organizations informed of their financial and economic responsibilities that aid in improving the community’s well-being and meeting sustainable development goals. According to Crane & Matten (2010), the CC is a new term that has developed in the management literature addressing the social role of the business. The term gives the business an extra obligation and operations to extend beyond the financial box and work towards shaping society. More so, the organization has to keep stakeholder responsibility to meet its responsibilities purposely to create and maintain a sustainable success for the organization and the society at large (Crane, Matten, and Moon, 2010, p.64).
Organizations, individuals, and governments have a responsibility to ensure that they can achieve resource sustainability. This is by ensuring that all their operations do not harm the environment and thus ensuring that the future planet would be able to support the population in the future. Thus circular economy is the evolution in environmental awareness that governs industrial operations to ensure that their activities do not harm the earth (Lacy, and Rutqvist, 2016, p.19). The introduction of the CE into the global perspective has made it possible for organizations to achieve the circular advantage and enable them to meet the sustainable development goals, more particularly, the 13th SDG that addresses climate change.
The success of business revolves around appreciating the role of shareholders and society. It is, therefore, the role of businesses to ensure that their operations and products make a positive influence on society. According to Porter et al. (2011), shared value is referred to “Policies & operating practices that enhance the competitiveness of a company while simultaneously advancing the economic & social conditions in the communities in which it operates.” Working towards creating a shared value we need to create a shared opportunity, which incorporates social needs, business opportunities, and corporate assets and expertise. Besides, the business needs to engage the stakeholders to help them achieve long-term sustainable value creation, and that their products remain relevant to their customers who have been found not to support any business whose operations harm the society’s well-being (Post, et al., 2011, p.31). Precisely, the shared value aims at creating laws and business principles that govern the business code of conduct that would ensure a protected future, thus achieving good nutrition, clean water, and rural development in the society where these organizations operate (Crane, et al., 2014, p.130). When companies get compliant, the result is sustainability, both socially, economically, and environmentally.
From the above information, we can state that CSR and shared values have commonness. Both, address how business organizations can ensure a positive contribution to the social, economic, and environmental well-being that aims at meeting the sustainable development goals. More importantly, creating a business world whose operations are guided by the social virtues and believes and improvement of life on the planet today and in the future. Both obligations focus on creating laws and business principles that control the business code of conduct in order to achieve sustainable business value. Although CSR and shared seem almost alike there are some differences between them. According to Kramer (2011), CSR is widely perceived as a cost center and not a profit center, while shared value creation focuses on new business opportunities that aim at creating new market opportunities that would improve profits and increase the business competitive advantage.
The Role of Government, NGO’s, and Customers in Society
In order to achieve a responsible enterprise, we cannot overlook the role of government, NGO’s, and customers. Business operations are aimed at producing goods and services that would help meet the consumers’ needs and desires. Their duty in the success of the business operation is greatly overweighed and most of the organization aims at harnessing the global pool of customers. The latter action results in unhealthy competition in the marketplace and turn lead to unsustainable health behavior. For companies to compete with their rivals, some of them have sought to escalate the executive bonuses, use of creative accounts, and use of child labor. An example of the companies that tried this is the Barclays bank, making some of its clients unhappy with the bank and left. The customers have a critical role to play when addressing the competition issue. One of the greatest tools that they possess is the voice and the wallet, customers do not need to struggle with what they can do is to reward responsible organizations by buying their products (Kotkin, et al., 2010, p.46).
Additionally, the customers are responsible for the modern structure of the economy that encourages unsustainable consumption. The consumption is in line with the products that have been produced by these businesses. According to Desjardins (2007), it has been noted that the modern economy encourages irresponsible behavior, much more the planned and perceived obsolescence has led to a decline in product conception and sometimes embarrassing. In conjunction with the sustainable development goals, the behavior has led to negative impacts on the environment where the e-waste is increasing limiting the ability to meet SDGs. Thus, diminishing the capacity of organizations to become responsible enterprise globally. Customers have an obligation to support new ideas such as recycling goods, to ensure that they will help businesses meet the sustainable development goals. Additionally, the consumers highlight materialistic society creating a problem for consumers, Soper creates a tipping point where the society redefines consumerism changing the whole community to enhance good life (Soper, 2017).
Moreover, the government plays a significant role in creating a responsible enterprise. Using various tools the government intervenes and regulates the entire business operations. The main aim is to ensure that no harm is evitable by running the business. When managing the business field the government uses six tools in its action towards intervention. The first tool is the regulation tool where the government implements and enforces norms that directly impact the behaviors of economic agents, precisely the government operates under command and control principles that monitor the business compliance (Giesler, and Veresiu, 2014, p.840). Secondly, the incentive tool is common with most governments to foster the growth of the business operation into the global market, the government provides terms that are friendly to investors attracting new businesses. More so, the government levy taxes to that, at times, discourage most of the business operation, when these terms are not friendly the rate of investment decreases. Another tool is the marketplace permits that control how businesses consume environmental resources and trade, such as carbon trade where all the operations of an organization are governed by a set balance that would help in protecting the environment (Porter, and Van der Linde, 1995, p.33). Additionally, the government provides awareness on how businesses can operate responsibly, as well as information on the policies and strategies on how the overall business activities should be conducted. It is through these policies and strategies that business investors decide whether they would put their operations in a region and not others. When all the stakeholders meet the set conditions and associate amicably the result would be the attainment of the sustainable development goals.
Conclusion
In conclusion, the sustainable development goals are significantly influenced by the responsible enterprise. This is because they impact the social, economic, and environmental pillars associated with sustainable development. In order to meet the SDGs and get a socially responsible business organizations to need to consider the sustainability spectrum and more proficiently address the climate action as well as maintaining the moral positions and ethical capital. Responsible enterprise, corporate social responsibility, and shared value, primarily consider businesses whose objectives are to ensure the well-being of the society and at the long last, help meet the sustainable development goals. However, the latter goals cannot be achieved without the hand of customers and the government who take charge of the most important activities in the business field. The customers, consume the products and services from the organization while the government regulates the entire process starting from the opening of a business, the manufacture of products, and the selling process among other obligations. However, I would state that a responsible enterprise is a business operation that sustainably performs all its activities, a business where its stakeholders do only it is right not bending to any action that can violate the sustainable development goals.
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