The natural environment poses a problem for economic theory. Even if we accept,

Question

The natural environment poses a problem for economic theory. Even if we accept, for the sake of argument, that the free market serves both employer and employee, buyer and seller, equally, the environment may be harmed by market transactions. The air and water can suffer. Economists calls this the problem of externalities. a. Do you think that companies are becoming green or must the government and consumer movements compel this to happen? b. What does "sustainable enterprise" mearn and are there any? (200 words for entire post) Works Cited (References)

Explanation / Answer

a) Earlier businesses found few incentives to invest in earth-friendly practices. But these days many small & big businesses have realised that they can reap huge benefits by undertaking sustainability initiatives. Also, Governments have provided financial incentives to help companies’ implement eco-friendlier practices and consumers have started to factor sustainability more into their purchasing decisions as there’s a growing awareness about the health and lifestyle benefits to being green. All these reasons are attracting companies towards going green. The benefits that businesses reap by going green are summarised as follows:

1) Earn goodwill: Businesses are able to earn goodwill by undertaking sustainability initiatives. If a business is more sensitive towards the environment & follows good environmental practices then it draws a positive attention and more customer loyalty to a business.

2) Savings for business: Initially sustainable business measures often come with upfront costs but the paybacks on many sustainability measures, whether lower energy bills or lower transportation costs, can save businesses a lot of money over the long run.

3) Attract skillful employees: Many people these days wants to be associated with organizations that are environment friendly, they seek to work with socially conscious employers. So, by being eco friendly a business can attract right people for its work. Also it boosts the morale of employees who are already associated with the business.

So all these benefits along with the support of government and environmentally conscious customers forces businesses to go green.

b) An enterprise that has minimal negative impact on the environment is called a sustainable enterprise. These enterprises integrate sustainable business practices into their corporate and brand strategies whilst seeking to address both shareholder and stakeholder interests within these strategies. These days Corporate Social Resposibility (CSR) is being gradually replaced by terms such as practices of sustainability. Earlier CSR focused on company’s marketing practices and communications, and also the impact of their operations on workers in their supply chain including their families and communities. These days such issues come under the purview of practices of sustainability. It is always important to check the effects of large corporations on society and the environment. Business practices should be eco friendly that is they should not harm the environment. It is very important for a business to be socially conscious. Sustainable enterprises have progressive environmental and human rights policies. Consumers growing concerns towards company's sustainability practices is striving businesses to become a sustainable enterprise. These days consumers consider company's sustainability practices while making their purchase decisions therefore, it is becoming increasingly important for businesses to incorporate sustainable business practices into their operations. By employing such business practices, a firm will prove beneficial for the environment as well as will be able to earn huge profits in the long run by attracting and retaining large number of customers.

For example, in order to become the most sustainable retailer, Marks & Spenser director Mike Barry worked with its suppliers and customers to deal with climate change, use of sustainable/green raw materials, cut down on waste, involve ethical trade practices and help people to adopt healthier lifestlyes. The director of the company was able to recognize that "the days of corporate social responsibility are over” and that CSR has been replaced by the larger and more strategic idea of sustainable business.

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