Chapter 4: Ethics and the

Environment

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After reading this chapter students
should be able to
Explain the different types of pollution
and resource depletions
Explain how ethics affect how firms
respond to concerns about the
environment

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Introduction
Protecting and preserving the environment is
an emphasized mindset for the 21st century
firm but is not necessarily the position of the
modern firm.
Some resources firms use for free, such as
air, are not always protected in favor of
making profits for the firm.
Firms must make decisions on how to utilize
resources and discard waste while maximizing
profits.
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Introduction continued
Environmental issues raise ethical questions for
businesses and for society such as how should firms
balance the demand for goods and services with
prolonging the health and life of the earth?
Managers are faced with short term needs and long
term implications regarding resources. This chapter
explores the ethics surrounding environmental
protection and our obligations to future generations
for a healthy earth versus the need for continued
economic growth

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Pollution and Resource Depletion
Environmental damage is damage or
harm done to the environment that
threatens the welfare of all living
beings.
Threats to the environment come from
two sources: pollution and resource
depletion.

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Pollution and Resource Depletion
continued
Pollution is the undesirable contamination of
the environment by the manufacture or use
of commodities.
Resource depletion refers to the consumption
of finite or scarce resources.
Pollution is a type of resource depletion as
contamination of air, water and land
diminishes their beneficial qualities.

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Air Pollution
Air pollution is a mixture of solid particles and
gases in the air.
Car emissions, chemicals from factories, dust,
pollen and mold spores may be suspended as
particles.
Ozone, a gas, is a major part of air pollution
in cities. When ozone forms air pollution, it's
also called smog.
The two main sources of air pollution are
automobiles and manufacturing plants.

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Water Pollution
Water pollution occurs when a body of water is
adversely affected due to the addition of large
amounts of materials to the water. When it is unfit
for its intended use, water is considered polluted.
Two types of water pollutants exist: point source and
nonpoint source.
Point sources of pollution occur when harmful substances
are emitted directly into a body of water. The Exxon Valdez
oil spill best illustrates a point source water pollution.
A nonpoint source delivers pollutants indirectly through
environmental changes. An example of this type of water
pollution is when fertilizer from a field is carried into a
stream by rain, in the form of run-off which in turn affects
aquatic life.

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Water Pollution, continued
The major sources of water pollution can be classified as municipal, industrial,
and agricultural.
Municipal water pollution consists of waste water from homes and commercial
establishments.
Agriculture, including commercial livestock and poultry farming, is the source of many
organic and inorganic pollutants in surface waters and groundwater. These
contaminants include both sediment from erosion cropland and compounds of
phosphorus and nitrogen that partly originate in animal wastes and commercial
fertilizers. Animal wastes are high in oxygen demanding material, nitrogen and
phosphorus, and they often harbor pathogenic organisms.
Industrial water pollution exist in the forms of petroleum, radioactive substances, and
heat. Petroleum often pollutes waterbodies in the form of oil, resulting from oil spills.
The previously mentioned Exxon Valdez is an example of this type of water pollution.
Radioactive substances are produced in the form of waste from nuclear power plants,
and from the industrial, medical, and scientific use of radioactive materials. Specific
forms of waste are uranium and thorium mining and refining. The last form of water
pollution is heat. Heat is a pollutant because increased temperatures result in the
deaths of many aquatic organisms. These decreases in temperatures are caused
when a discharge of cooling water by factories and power plants occurs.

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Noise Pollution
Noise is among the most pervasive pollutants today.
Noise from road traffic, jet planes, jet skis, garbage
trucks, construction equipment, manufacturing
processes, lawn mowers, leaf blowers, and boom
boxes, to name a few, are among the audible litter
that are routinely broadcast into the air.
Noise negatively affects human health and well-
being. Problems related to noise include hearing loss,
stress, high blood pressure, sleep loss, distraction
and lost productivity, and a general reduction in the
quality of life and opportunities for tranquility.

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Toxic Substances
Hazardous and toxic substances are defined as those chemicals
present in the workplace which are capable of causing harm.
In this definition, the term chemicals includes dusts, mixtures, and
common materials such as paints, fuels, and solvents.
The hazard of a chemical is the practical likelihood that the
chemical will cause harm. A chemical is determined to be a hazard
depending on the following factors:
• toxicity: how much of the substance is required to cause harm,
• route of exposure: how the substance enters your body,
• dose: how much enters your body,
• duration: the length of time you are exposed,
• reaction and interaction: other substances you are exposed to, and
• sensitivity: how your body reacts to the substance compared to others.

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Resource Depletion-Depletion of
species
Depletion of species is the destruction
or non renewal of plants and animal
species to the point of extinction. There
are three major causes of species
depletion: habitat loss and degradation,
exotic species, and over exploitation.

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Resource Depletion-Depletion of
Fossil Fuels
There are three main types of fossil fuels: coal, oil and natural
gas.
All three were formed many hundreds of millions of years ago.
They are called "fossil fuels" because they have been formed
from the fossilized remains of prehistoric plants and animals.
After food, fossil fuel is humanity's most important source of
energy.
Coal is used mainly to produce electricity. It provides light, motive
power from electric motors and many electronic devices.
Oil provides mobility for cars, planes, trains, trucks and boats.
Natural gas is used primarily to produce heat for buildings, hot
water, and industrial processes.

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Resource Depletion-Depletion of
Fossil Fuels continued
Fossil fuels provide around 66% of the world's
electrical power, and 95% of the world's total energy
demands (including heating, transport, electricity
generation and other uses). Coal provides around
28% of energy, oil provides 40% and natural gases
provide about 20%. A concern is that the fossil fuels
are being used up at an increasing rate, and that
they will soon run out. If these fossil fuels were to
run out now there would not be a suitable
replacement for them that is equally as efficient at
producing the same amount of energy.

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Resource Depletion-Depletion of
Minerals
According to Dr. Linus Pauling, winner of two Nobel
Prizes, you can trace every sickness, every disease
and every ailment to a mineral deficiency.
Nutrients such as vitamins, proteins, enzymes and
amino acids, are required for our bodies to function
properly. These nutrients are dependent upon
minerals. Minerals are predominantly obtained from
the food we eat, and the mineral content of that food
is dependent upon the mineral content of the soil it
grows in. Therefore, depleted soils create mineral
deficient food.

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Ecological Ethics
Ecological ethics, also known as green ethics, is
currently at the forefront of government and
business interests.
Because the parts of the ecology depend on one
another, a disruption in any part of the system
causes problems in the other parts.
For example, suppose there were no larger fish because
fisherman harvested the fish before more could be spawned.
Then there would be no fish to provide fish waste for the
organisms that depended on the fish waste. Nor would there
be no larger fish to control the population of the smaller
fish. The lake would then have an overabundance of smaller
organisms which could lead to a contamination of the lake.

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Ecological Ethics (continued)
If you think about the ecology of business systems, business
firms need the natural environment to be in balance. And not
just agriculture-based businesses either! Businesses need
water, electricity, minerals (yes that copper and iron in your
computer are minerals), humans (yes humans), are all needed.
And they also need new resources to replace those that are not
replaceable such as certain minerals (once all the coal, gas, and
oil is gone, it is gone…there are usually no natural substitutes).
Therefore, the environment is affected in many ways by
commercial activities. Unless managers recognize the
interrelationships and interdependencies of the ecological
systems within which they operate, we can not hope to deal
with the problems of pollution and depletion.

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Pollution Control and Conservation
Conservation refers to the saving or rationing of natural
resources for later uses. Conservation looks primarily to the
future and the need to limit consumption now to have resources
available for tomorrow.
Pollution control is one form of conservation. By minimizing
waste we need less land for landfills thereby conserving land for
homes and businesses in the future. The depletion of scarce
resources is a futuristic event. The depletion will be felt by
posterity and not by present generations. Resource depletion
forces two main kinds of questions on us: why we ought to
conserve resources for future generations, and how much
should we conserve?

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