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Table of contents

1. Introduction ...............................................................................2

2. Ethics and Business .....................................................................2

2.1. Utilitarianism ............................................................................3

2.2. Ethical Dilemma ........................................................................4

3. Climate Change ............................................................................4

3.1. Sustainable Development ..........................................................5

3.2. Climate Change and Ethical Business .........................................5

4. Framework to trace ethical consideration of Climate Change .....6

5 . Conclusion .................................................................................7

6 . References ...................................................................................8
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1 Introduction
Business ethics is almost like a standard set by a company or industry to do business
without infringing the freedom or good living of others. The importance of business to be done
ethically is increasing nowadays with the increased significance of corporate social responsibility in
business management. Businesses are no longer considered as a separated piece of the society,
rather it is the vital driver of a society and even mankind. It drives the economy, deals with
interrelation management, nature enhancement initiatives and so on.
Global warming is considered to be one of the most serious issues faced to
nature in the last decades. Climate change is not necessarily because of company operations, and
many times it is due to uncontrolled human behaviour as well. The ozone layer depletion due to CFG
emission, effect of aerosols, radiation out of nuclear power plants and so on directly attack the
natural ecology system and lead to hindrance of a smooth way of living for the mankind and the
future generations. This paper aims at analysing and evaluating, whether climate change is to be
considered as an ethical problem in business or not.

2 Ethics and Business

Unethical way of doing things is considered to be a selfish track. Related to business, it
means deciding on and going forward with activities which adversely impact on the people or system
within or around the organisation. If a company follows ethical business track, they consider the
morality, happiness and welfare of the system and people in and around the organisation who can
be directly or indirectly affected by the day to day activities and decisions of the company. “How
selfish so ever man may be supposed, there are evidently some principles in his nature, which
interest him in the fortune of others, and render their happiness necessary to him, though he
derives nothing from it except the pleasure of seeing it… That we often derive sorrow from the
sorrow of others, is a matter of fact too obvious to require any instances to prove it; for this
sentiment, like all the other original passions of human nature, is by no means confined to the
virtuous and humane, though they perhaps may feel it with the most exquisite sensibility.“The
greatest ruffian, the most hardened violator of the laws of society, is not altogether without it”
(Adam Smith, 1976).
Another most import terminology which is to be considered in climate change and ethics is
the Utilitarianism principle.
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2.1 Utilitarianism
Utility is a principle which approves or disapproves of every action whatsoever, according
to the tendency which it appears to have to augment or diminish the happiness of the party whose
interest is in question… to promote or oppose the happiness‟ (Bentham). Hence this principle is
considered to be a process of balance between the pleasure and paint in doing an activity or after
doing the activity to the people doing it or around them. This principle is accepted worldwide in
business ethics when analysis their decisions and actions as ethical or unethical. Many companies try
to manage this balance by keeping the good facts of pleasure overtaking pain in their actions
planned, so that their activity is not adversely impacting the society within or outside the
organisation. When considering utilitarianism as a driver tool for ethical evaluation, the factors to be
considered are:
1. The consequences output by the actions or planned actions by the company or individual.
2. Balance of pain and pleasure where pleasure has a clear weightage over pain.
3. Maximalism or the best available action with the most favourable consequence is to be
taken.
4. The decision factor should be not individual or groups directly involved, but all the groups or
individuals who can be linked to company now or in future.
When considering climate change as an ethical issue for company, this can be considered as an Act
Utilitarianism, where the action is ethical only if it brings out pleasure overtaking the pain involved.
But if we consider the perspective of government or social welfare organisations, it is a Act
Utilitarianism, where the action is right only if it follows a set standard or set of rules which directly
brings out more pleasure than the negligible pains out of the decision by the company or individual.

2.2 Ethical Dilemma

Ethical dilemma is what caused by climate change to business. Business and
society are always related directly, because a business directly uses resources from the society,
including human labour, goods and services supplied by individuals or firms within the society and so
on. According to Sybille Van Den Hove Etal (2002), ethical dilemma occurs in business when the most
profitable consequence of a business activity necessitates a process that is detrimental to society.
This business ethics approach takes for granted that business aims at a profitable business
consequence. But it also includes procedural considerations of how the profit is being made for the
benefit of the company. It is not profit in itself that is ethical or unethical: it depends on how this
profit is made.
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It is a doubtless fact that business is all about making profit. But this profit should not
be just for the good of the people who do business, but also to the environment and society where
they do business in. This way of doing business avoids ethical issues, thereby allowing a company
run smoothly for longer period, reducing cost of disaster management and making a company
sustainable for the management and for future generations in the society.

As per Patz (2005) the human-induced warming that the world is now experiencing is already
causing 150,000 deaths and 5 million incidents of disease each year from additional malaria and
diarrhoea, mostly in the poor destinations. Death and disease incidents are likely to soar as warming
increases. Irrespectively of the precise numbers of such harmful events, it has become clear that
climate change is already compromising rights to life, liberty and personal security.

3. Climate Change
IPCC( Intergovernmental Panel for Climate Change)(2007) defines climate change as “ any
change in climate over time, whether due to natural variability or as a result of human activity. They
also noted that “the warming of climate is unequivocal, as it is now evident from observations of
increases in global average air and ocean temperatures, widespread melting of snow and ice and
rising global average sea level”. What comes to the mind of any individual or group in public is the
importance of the terminology Sustainable Development, when considering climate change as an
ethical issue. All these changes happen due to either activities by individuals or by groups or
businesses. To change an individual is tougher than changing a system or organisation which acts as
one. This is why nowadays climate changes are sought to be considered with an ethical goggle link it
to sustainability.

3.1 Sustainable Development

Sustainable development is development that meets the needs of the present without
compromising the ability of future generations to meet their own needs. It contains within it two key
concepts:
•Needs, and the essential needs of the world's poor in particular, to which overriding priority should
be given; and

•Limitations, imposed by the state of technology and social organization on the environment's
ability to meet present and future needs.
Climate change is affecting the people who live the life right now in this world, as well as
the future generations. The companies who do business can do a lot in reducing the impact of
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climate change and thereby doing the good for the present as well as the future life. The most
number of people affected due to climate change is the poor in the society. For example, if a disease
outbreak happens due to Ultraviolet radiation increase or nuclear power plant emission, all sections
in the population will be affected in the same scale. But the poor will be finding tough time to cure
the diseases, due to lack of money and access to the medical services. At the same time the middle
class and rich people can approach the best possible hospital and cure their disease as per the
availability of the treatment, medicines and doctors.
The major limitation of sustainability development decisions are the technological shortcomings
and the social organisation system prevailing at the time of strategic decision.

3.2 Climate Change and Ethical Business

Climate change and its impacts are surely an ethical issue to be considered as a
corporate social responsibility factor for any business in market. The world was not like what we see
hundreds of years ago. At that time the number of businesses, industries, technologies were less,
thereby avoiding harming the nature and the environment. Companies are highly responsible for
managing the climate change, because, 90 % reason for the impact is the organisations involved in
businesses. The next part of the paper plots how a company impacts the climate and global climate
change with its activities.
1. Employees – If the company work policies have no set standard of reducing the waste of
water or energy used by the machines and activities, then it directly impacts the climate. More
waste water, and more heat and carbon emission due to incorrect use of machines by employees,
leads to impact on nature at the end. And also company can generate a common awareness to all
their employees to lead an ethical life, without harming others, using more public transport by their
friends and family, keeping house and nature clean and so on. It will be more effective than some
social organisations or governments taking initiatives. As their life is revolving around the company
and activities, such company initiated awareness will be the most effective as employees are more
loyal towards the company who pays for their living.
2. Management and System - The company decisions like starting a new manufacturing plant
in a coastal area or agricultural region, using more flights to operate between destinations and so on
affect climate change adversely.
When a airline company plans to increase fleet size it means more carbon emission and
more pollution due to more landings at airports they operate with. This can be reduced by ordering
bigger air planes like Airbus 380 and Boeing Dreamliner, which uses light weight carbon fibre body
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reducing fuel consumption as well as reduced carbon emission. Along with that less number of
flights reduces pollution in air and ground near airports.
Same is with a company planning to start a new manufacturing plant. For example
BMW planned to start their first manufacturing plant in India in 2007 in a location in the state
Kerala. This was by utilising land which was once used paddy fields. The land was to be sold to BMW
because; they are not used for agriculture anymore. But the rich soil over there acts as a balance to
the eco system for years, and if it is digged and used to construct a manufacturing plant, soil will be
soiled, and also when started operation, the waste water will contaminate the lakes and rivers near
to the proposed location, which is the main source of water for most of the population in the city.
Moreover the use of waterways as a tourist attraction will be hindered if the water and air is
contaminated by the company. With this being forecasted, the social activists opposed the start of
the firm, and in the end, the government withdrew the plan of offering land and license to BMW,
who started the plant in Chennai in the state Tamil Nadu. Kerala government considered doing
business ethically and for that reason did not allow BMW to enter into the state. But the later
government was development and investment oriented and so ethical factor was less considered
and BMW was able to start operations.

4. Framework to trace ethical consideration of Climate Change

Figure 1 Framework for Climate change factors analysis

Considering global climate change as an ethical issue, the flow of link in the framework is clockwise
starting from the Socio-Economic section. As stated before, the company initiatives and government
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initiatives to create awareness on health, technology, trade and so on pave the foundation or root
driver of climate change and its impacts. The resulted actions after the actions and moves by the
government or companies, will lead to human activities including living life and work style. These
outputs emissions, aerosols and so on due to working style on machines, in the company offices and
factories, general population using public transport, wasting energy on televisions, buying CFC
(Chlorofluro Carbon) emitting electronic equipments, which damages the environment and thereby
causing climate change then or in the future. The final impact of these activities will be in the form of
health issues like disease outbreak, scarcity in water or fuel resources for use by future generation,
and food security.
Some extreme weather events have changed in frequency and/ or intensity over the last 50 years
(Based on IPCC report on Climate Change (2007):
 It is very likely that cold days, cold nights and frosts have become less frequent over most
land areas, while hot days and hot nights have become more frequent.
 It is likely that heat waves have become more frequent over most land areas.
 It is likely that the frequency of heavy precipitation events (or proportion of total rainfall
from heavy falls) has increased over most areas.
 It is likely that the incidence of extreme high sea level3 has increased at a broad range of
sites worldwide since 1975
The factor of human rights, that each individual should be offered a good living by the government
and the organisations into business. With sustainability in agenda for all business in today’s world,
businesses eye a long future where the world is a greener place to live. If this can be attained by the
companies operating now, the future generation will keep the brands as foundations of their lives to
be lived with pleasure.

5 . Conclusion
Climate change is usually considered to be a global issue treated as same as a natural disaster. But
this is not something unpredictable. Climate change happens because of human activities and so can
be controlled and if managed well can be reduced down to zero so that the future generation will be
offered a greener world to live in. In conclusion, climate change is a matter of ethical issue, which is
to be managed with the eye of an ethic strategist (strategy manager with business ethics knowledge)
and this is to be done collectively by government and all systems involved in the society, who make
money and receive money. A painted art work is not just static, it gives pleasure and energy to the
viewer and so is nature. “Take the actions and decisions to make the climate friendlier so that this
gives a sustainable pleasure and more resources for the future generation”.
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6 . References

1. IPCC. (2007). “ Climatic change 2007: Synthesis Report”. Spain, Intergovernal Panel on
Climatic Change.
2. John,B.R.(1995). “Ethics and the Conduct of Business”. (2nd Edition), Upper Saddle River,
Prentice Hall.
3. Mill,J.S.(1972).”Utilitarianism, On Liberty and Considerations on Representative
Government. London: Everyman’s Library.
4. Smith,A. (1976). “The theory of Moral Sentiments. Oxford. Clarendon Press.
5. Sybille,H., Marc,L.M., & Henri,C.B. (2002). “ The oil industry and climatic change: strategies
and ethical dilemmas”. Climate Policy, (2), pp 3-18.
6. Lecture notes and readings by Glen Whelan