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« A treat in store- Big Energy Week | Main | Buying the book »
Monday
Oct152012

Green companies

 By Today's Moderator.

This is part of the opposition speech made at a recent  Cambridge University debate on  the motion that This House Believes Too Many Companies Are Only Paying Lip-Service to the Green Agenda. What are your opinions?

...As a follower of Friedman, I would argue that a company's sole purpose should be to maximise its returns for its shareholders. Whether a firm is "socially responsible" or not is therefore of no consequence whatsoever. Although companies should clearly follow the laws of the countries in which they operate, beyond this they have no other obligation to society. So beyond any government legislation concerning the green agenda, firms have no reason to concern themselves with the environment whatsoever. Their only job should be to make sure that their shareholders receive the highest possible returns...

...While I agree that as individuals in society, people have an obligation to be socially responsible, which includes respecting and protecting the environment and our planet, the green agenda is not something which companies should care about. I would therefore argue that instead of too few companies committing themselves to the green agenda, there are rather too many!

http://www.huffingtonpost.co.uk/the-cambridge-union-society/this-house-believes-too-m_b_1918330.html

Click here for the debate result: http://twitter.com/cambridgeunion    on 27 September.

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Reader Comments (32)

A great big gab of green greasy gopher guts, and me, without a pen.
======================

Oct 15, 2012 at 7:17 AM | Unregistered Commenterkim

"Their only job should be to make sure that their shareholders receive the highest possible returns..."

May be true, but this does not mean that a company doesn't need to behave in an environmentally friendly manner.

For example, if a company ends up with its product being boycotted due to its behaviour, then clearly the non-green behaviour was directly against the shareholders interests.

An energy supplier may use its "green" credentials to maximise income, and thereby achieve the highest returns. Not a contradiction.

Oct 15, 2012 at 8:02 AM | Unregistered Commentersteveta

"environmentally friendly" is meaningless tosh.

If a company wants to sell more stuff to gullible people then that's fine in my book - but be careful who you suck up to.

I'm not even sure what "the environment" is. It seems to be an incoherent new deity that exists in some people's heads. It gets grumpy when I print off an email. It doesn't like me to hunt a deer - but it's OK if a lion hunts the same deer. It doesn't like me flying to Rio to meet some friends - unless I'm a greenie when it does like me flying to Rio to meet some friends.

It's a rich man's angst.

And please, no straw men. Nobody is arguing on behalf of pointless waste or excessive pollution.

Oct 15, 2012 at 8:24 AM | Unregistered CommenterJack Hughes

Look, serfs, this is Plato speakin', up on the hill, where the rarified air gives
a philosopher king, (me,) privileged insights into the reality behind appearance.*
Read my lips; 'Obey the Green Agenda.'

* Special representatives jet setting ter Climate Conference Bacchanales ='appearance.'
Environmentalist saving the world special missions = 'reality.'

Oct 15, 2012 at 9:02 AM | Unregistered CommenterBeth Cooper

I agree. Any business's prime responsibility is to make a profit otherwise there is no reason for it to exist at all. The argument is essentially a fallacious one since profit will only come if a company provides what its customers want at a price they can afford. Considerations of the ethics — environmental or whatever — only become relevant if they affect customer response.

Oct 15, 2012 at 9:04 AM | Registered CommenterMike Jackson

A company has a responsibility to behave rationally, as do we all! See what the philosophers have to say about "rational self-interest". Companies do not have the duty to follow every hare-brained scheme that some counsellors of perfection may promote as being beneficial. "Ethical concerns" are not always clearcut and are rightly subject to debate.

The Third World desperately needs jobs to provide employment for its ever-growing population and competitive advantage means that those jobs are often those the richer West no longer provides. There is a cycle in the development of economies and what WE consider dangerous and unpleasant jobs and industries seem to be the first step on the ladder for some and worth doing because there is nothing better available at this point in time.

However, companies should not break the law and neither should they behave with respect to the developing world, where the rule of law may be less effective, than they do in the jurisdictions where their behaviour is more effectively policed.

The best protection for all, companies or individuals, is the effective rule of law. The West has largely cleaned up its own domestic dirty and destructive industries and more recently has exported the last of them. It remains for the rest of the world to catch up with our environmental law. And it will, assuredly, catch up, given time so long as state functionaries remember their most important purpose is the protection of their citizens and not their exploitation.

The programmes about India currently on BBC2 are relevant to this matter. What an eye-opener!
http://www.bbc.co.uk/iplayer/episode/b01ncbyn/Welcome_to_India_Episode_2/ Demonstration that the "work ethic" is still alive and kicking in countries which lack a welfare state! If the grafters we saw are typical India deserves every economic success it is now reaping. The delicate sensibilities of westerners are perhaps no more relevant to the economic development of countries with hugely growing populations (12 children, the heroine of episode 2 had!) than they are to the concept of "ethical" business behaviour.

Oct 15, 2012 at 9:12 AM | Unregistered Commentermarchesarosa

ENRON in spades.

Oct 15, 2012 at 9:23 AM | Unregistered CommenterOtter

Heh, Enron was set to clean the clocks of all these Jack-in-the-Box come latelies, but a funny thing happened twixt the cup and the lip on the way to the bank.
================

Oct 15, 2012 at 9:31 AM | Unregistered Commenterkim

Of course the "green agenda" crap clouds the issue but getting back to basics for a moment, I'm not sure why the author quoted thinks that it is reasonable to expect an individual to behave responsibly yet a corporation can, and should, behave like a sociopath. Corporations are made up of individuals with more or less power over the direction of the company. If I ought to behave decently (however you want to define it) as an individual or a one-man company why should I behave any less decently as the CEO of MegaGlobalCorp Inc.?
Some might say that responsibility to the shareholders is the difference, but shareholders have the option of taking their money elsewhere and as long as you aren't falsely claiming to be the ruthless MegaGlobalCorp Inc. when actually behaving like PinkFluffyKittens Ltd. then they know what they are getting into and can make their investment decision accordingly.
(Personally I think that if shareholders are prepared to ruthlessly shaft everyone else then they deserve all they get in return, but that's another matter.)

Oct 15, 2012 at 9:39 AM | Unregistered Commenterartwest

I couldn't help but notice Marks and Spencers' "carbon neutral" BS bedaubed on the walls of some [all?] their shops and it may be that those ads are still there - this is a political and subliminal statement to their client shoppers - "we are super-dooper green" - which gets people thinking,
"oh that's nice", little realising, that they are the ones who are affording M&S's noble stance.

However you don't see that type of thing in Poundland - must be a class thing.

Commercial Carbon footprint legislation and carbon neutral enforcement is being introduced into British statutes - via the EU - this is no longer a voluntary arrangement.
Of course it is good PR for the big conglomerates - not so good news for the small and medium sized business - which also suits the suits of the crony capitalist cartels just fine - regulation and bureaucratic red tape is the life blood of big corporations, it stifles and kills off the [potential] competition.

Oct 15, 2012 at 9:39 AM | Unregistered CommenterAthelstan.

A company defines its purpose and methods in its 'articles of association', and these can be whatever the founders like, setting whatever (legal) limits on means they like. Shareholders then decide to invest or not invest in the business on that basis.

Thus, if a company declared itself to be 'Green', then it is a contractual obligation that it should be. If a company declares itself to be for profit, then again that is a legal obligation. And if 'Green' companies get more or less investors that 'for profit' companies, so be it.

What you can't do is set up a 'purely for profit' business, get shareholders on that basis, and then suddenly switch to being 'Green' with an impact on profits. That's a breach of fiscal responsibility.

Of course, most companies do have some sort of clause about social, moral, and environmental corporate responsibility in their articles - this gives them a get-out from being contractually forced into morally abhorrent practices, like persecuting minorities or doing business with police states. It's generally up to directors to make that call, and shareholders can get rid of them if they don't think their decisions are in accordance with their contract. So long as that hasn't happened, you could argue they're doing what they're supposed to, but it's a bit of a tricky argument, for various reasons.

It's a lefty stereotype that capitalism puts profit ahead of morals. You can set up and invest in moral capitalism if you want - it's your money. The issue, as always, is that different people have different moral systems, and (according to libertarian morals at least) you can't impose *your* morals on somebody else's company or investment.

Oct 15, 2012 at 10:02 AM | Unregistered CommenterNullius in Verba

It strikes me that the green lobby is trying to hitch a ride on the back of the tax avoidance debate – that (while tax avoidance is by definition perfectly legal and corporations have the legal duty to minimise taxes so as to maximise net profits for stockholders, who then pay another lot of tax on receipt of those profits) the lefties have always viewed this as morally repugnant - and this view now is gaining political traction.

The greenies are just trying to make the same case – all part of the same old left-wing agenda.

Oct 15, 2012 at 10:30 AM | Unregistered CommenterTimC

I believe that a public company is obligated to pay lip-service to green initiatives, so that it can drive up its prices while remaining apparently ethical, and hence maximise returns for its shareholders.

I only invest in companies with big 'stage scenery' green policies -- BP, Shell, British American Tobacco, Diageo, and so forth.....

Oct 15, 2012 at 11:20 AM | Registered Commenterrickbradford

It is not just companies that environmental activists are worried about, it is the capitalist system that they really want to change. Companies have one mission to strive for continual and unrelenting profit growth. Environmentalists hate growth – growth represents the rape of limited natural resources and the production of pollution. Companies that can cheaply convert natural resources into expensive desirable products may be commercially competitive but environmentalists think this is wasteful and unsustainable.

What do they really want? …a micro managed world. A world where everyone is treated 'equally', allocated a sustainable resource allowance and monitored 24 hours to ensure that they do not exceed their quota. A world where companies and competition are replaced by community projects and cooperation. Where trade is replaced by swapping. Globalisation replaced with localisation. Where we grow our own crops and where the limited range of our renewable powered electric transport ensures that we never leave our villages … ever. Very quaint - didn't we try this before?

Exactly who would be the ruling elite in this system? How would they be chosen given the insular, localised world that they would have us live in? Wouldn't this localism eventually lead to tribalism, suspicion and conflict? – or will the worker bees be pacified by the administration of world council approved sedation?

No.2: “Good day, Number Six.”
No.6: “Number what?”
No.2: “Six. For official purposes, everyone has a number. Yours is number 6.”
No.6: “I am not a number, I am a person.”
~The Prisoner.

...or...


The purpose of life, after all, is to live it, to taste experience to the utmost, to reach out eagerly and without fear for newer and richer experience.
~Eleanor Roosevelt

Oct 15, 2012 at 11:42 AM | Unregistered CommenterChairman Al

If they are responding to 'signal' then they will profit.
If they are responding to 'noise' then they will not.

Oct 15, 2012 at 11:58 AM | Unregistered Commenterssat

It should be argued that a company's social responsibility ends after employing people and paying the correct taxes and making a profit for the shareholders,ie. the owners. Going green will lower the bottom line reduce employment, reduce tax paid and lower shareholder profit.

Oct 15, 2012 at 12:18 PM | Unregistered CommenterJohn Marshall

Another way of looking at it is that an awful lot of companies, who know perfectly well how damaging windmillery and alarmism is to the country, but see profits in the subsidy industry, or at the very least, political favours for pretending to believe, are paying the lip service.

Indeed the wording of the motion appears to acknowledge that paying such lip service is financially worthwhile.

On this both sides appear wrong. Alarmists should acknowledge that business is alreadt doing more than free market economic considerations would require & Freedmanites should acknowledge that the profit maximising urge is leading business into being actively socially irresponsible to suck up to the corrupt political elite.

Oct 15, 2012 at 12:26 PM | Unregistered CommenterNeil Craig

not only M & S, but Walmart is greening up too, according to Mann!

4 Oct: Guardian: Jo Confino: Climate change may force evacuation of vulnerable island states within a decade
Michael Mann, director of the Earth System Science Center at Pennsylvania State University, said the latest evidence shows that models have underestimated the speed at which the Greenland and west Antarctic ice sheets will start to shrink...
"We know Arctic sea ice is declining faster than the models predict," Mann told the Guardian at the SXSW Eco conference in Austin, Texas...
"The models have typically predicted that will not happen for decades but the measurements that are coming in tell us it is already happening so once again we are decades ahead of schedule...
Mann, who is one of the primary targets for attacks by "climate deniers," said that there is still uncertainty about the speed of global warming as it is not clear what the impact of feedback mechanisms could be...
"If you look at the US, some of these things are unfolding ahead of schedule and we are already contending with climate change impacts that were once theoretical," he said.
"We predicted decades ago that this might eventually happen. We are watching them unfold and there are very real consequences to our economy and to our environment.
"The climate models tell us that what today are record breaking levels of heat will become a typical summer in a matter of 20-30 years if we carry on with business as usual. Not only will this become the new normal but we will have to change the scale because we will see heat and drought far worse than anything we have seen before."
The silver lining in all the bad news is that while the political system is gridlocked when it comes to confronting climate change, public attitudes are starting to change.
"It is going to take a little while to sink in," says Mann "but there is evidence of a dramatic shift in awareness and the public increasingly recognises climate change is real and if the public becomes convinced of this, they will demand action and they are connecting the dots because we are seeing climate change playing out in a very visible way.
"I think we are close to a potential tipping point in public consciousness and what will tip it, you never quite know, but another summer like the one we just witnessed we will see a dramatic shift in public pressure to do something about this problem."...
He said the tactics of those who question climate change was not only to intimidate scientists already in the public arena, but also to warn off others from taking part in the public discourse.
But Mann believes the power of the Koch brothers and others in the fossil fuel lobby, whom he believes have been responsible for poisoning the whole climate change debate, is on the wane.
"I am optimistic," he says. "The forces of denial will not go down with a whimper and as the rhetoric becomes more heated and the attacks become more concerted, we see the last vestiges of a movement that is dying...
***"There are an increasing number of companies like Walmart which are ideologically conservative but have a real commitment to sustainability as they realise that as people become more concerned, they will reward companies that are part of the solution."
http://www.guardian.co.uk/sustainable-business/blog/polar-arctic-greenland-ice-climate-change?newsfeed=true

Oct 15, 2012 at 12:39 PM | Unregistered Commenterpat

"However you don't see that type of thing in Poundland - must be a class thing."

I think it's more to do with money and wealth. It's only companies that have enough money that do the green thing, and in order to get that money they need customers who have the wealth to pay the premium that being green requires.

Oct 15, 2012 at 12:52 PM | Registered CommenterSalopian

pat; such people are either terminally stupid or bare-faced liars. There's absolutely no evidence of any CO2-AGW, or 'positive feedback'. The physics that predicts the former was debunked by Bohr and Angstrom: the Earth cannot radiate IR as if it were an isolated black body in a vacuum. The latter is an artefact of the perpetual motion machine in the climate models. Yes, it's that bad.

Oct 15, 2012 at 12:55 PM | Unregistered CommenterAlecM

Walmart in the US played the politics of green better than most. Liberals were united against Walmart due to their anti union activity. The company then publicly "greened" it's logistic operations focusing on agressivly reducing fuel use. They were quite successful earning them cudos from environmental liberals, saved a lot of money on fuel and diminishing the pressure of those who sought to unionize the workforce.

Oct 15, 2012 at 1:14 PM | Unregistered CommenterSean

Chairman Al

... we grow our own crops and ... the limited range of our renewable powered electric transport ensures that we never leave our villages … ever. Very quaint - didn't we try this before?
Yes, we did. The new name for it is "sustainability" which is what the UN is pushing as its preferred sequel to "global warming". It's also called "subsistence agriculture", also known as "poverty".
As someone pointed out recently, only two classes of people are in favour of subsistence farming: those who have never known anything else and those who have never tried it.
If implemented other medium-term effects would be a reduction in life expectancy of at least 50% and the inevitable increase in the birth rate consistent with poverty. This would be partially alleviated by an increase in deaths in childbirth and childhood due to the total absence of drugs made from chemicals — ie virtually all of them.

Oct 15, 2012 at 1:22 PM | Registered CommenterMike Jackson

No company and no person should have to follow the Green Agenda or pay lip service to it, instead the Green Agenda should be taken out and shot before it does any more damage.

Oct 15, 2012 at 4:17 PM | Registered CommenterDung

These are the posh idiots who have ambitions to/will go on to govern this country.

As a (science) graduate of the above university I met many of these arrogant twits.
Like me, most of the student body thought they were a*******s, but I guess the twits got the last laugh.

Oct 15, 2012 at 6:36 PM | Unregistered CommenterDon Keiller

Companies have nothing due toward the environment.

By the nature of their activities, almost any company can be deemed to be causing environmental 'damage'. Where does it stop?

Companies and corporation play along with the green game because (a) basically they are spineless (b) the threat of increasing regulations and costs is the pistol behind the coat in friendly interactions between environmentalists and businesses, (c) businesses think they can accept a smaller cost today and buy off environmentalistsm and, (d) they have little understanding of the underpinning of activist environmentalism, (e) they think they can greenwash their way through to profit, without actually developing worthy products

Oct 15, 2012 at 6:40 PM | Unregistered Commentershub

What is this "green agenda" ?

Is it what I think it is? Is it what they say it is? Is it what they imply it is? Is it what the politicians want us to believe it is?

Can I look it up on the web? Is someone custodian of it? Is it altogether a myth? Is it enlightenment? Can I learn it? Do I have it?

Oct 15, 2012 at 9:55 PM | Unregistered CommenterGreg Cavanagh

Greg

The green agenda is embodied in a 300 page ambition established at the UN Conference on Environment and Development held in Rio de Janeiro, Brazil, in 1992, called Agenda 21.

http://www.un.org/esa/dsd/agenda21/res_agenda21_09.shtml

There are significant suspicions that financial penalties on fossil fuels and western economies will provide the basis for perpetual funding of global 'environmental' governance by the UN.

Oct 15, 2012 at 10:24 PM | Registered CommenterPharos

Thanks Pharos. I've often read references to Agenda 21, but never looked into it.

I clearly do not have the "green agenda". Reading any paragraph at random of that document made me sick. Such blatant controlling propaganda masquerading as intelligence. I'm sorry, I just can't read it.

Oct 16, 2012 at 1:20 AM | Unregistered CommenterGreg Cavanagh

It think it can be safely agreed upon, that 'green' is different from environmentalism and one's love for nature.

Oct 16, 2012 at 2:56 PM | Registered Commentershub

I am a Friedman dude, too. But one of the rules of the road today is that if people don't like what the company is doing, compliance will soon BECOME the law.

Oct 16, 2012 at 3:01 PM | Unregistered CommenterRoberto

For anyone searching for the result
"More than 200 were in favour of the motion at the start, with around 70 against. At the conclusion, 153 registered in favour and 130 against."

- I had difficulty in finding any reports on this .. I guess if the result had been pro-green it would have been all over the net
Report from Cambridge News .. not really very interesting. Basically Green lobby won the vote by 7% whilst prior to the debate the green lead was 43% .. so quite a big conversion

Oct 19, 2012 at 8:54 AM | Registered Commenterstewgreen

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