Environmental policies in developing countries
Exploitation of the environment is one of the crucial topics in the field of business ethics. In today’s globalized world, many multinational enterprises operate in developing countries, where the protection of the environment is not deeply rooted in the legal system or the countries themselves may even intentionally lower the requirements for the protection in order to attract more foreign direct investments. Therefore, company’s presence in developing countries may pose significant challenges in terms of the environmental protection.
In the past, we have witnessed many cases of companies’ failures to meet their environmental responsibilities in developing countries, which resulted to contamination of the air, water or ground – the disaster Bhopal or Shell’s activity in Nigeria being just the most famous of them. However, in the beginning of the 21st the overall awareness of environmental issues raises and companies should show a more proactive approach towards the problem, since not taking the environment into account may pose various risks. It is not only a threat of litigation but also reputational risks, which may in the end of the day affect the bottom line significantly (as we have already seen in the case of consumer boycott of Nike products because of the labor conditions in factories or boycotts of BP gas stations after the disaster in the Gulf of Mexico). Therefore, an environmental policy is nowadays a must, especially in countries, with a week or totally absent legal framework. But what should be the role of managers in approaching this issue?
As a basis for the environmental policy can serve for example the principles of the UN Global Compact, which encourage businesses to support a precautionary approach to environmental challenges, undertake initiatives to promote greater environmental responsibility and encourage the development and diffusion of environmentally friendly technologies. OECD has also published very complex environmental guidelines for multinational enterprises, which include measures like environmental management systems, involvement of the general public, multistakeholder consultation, precaution, emergency preparedness, education, training and many more. The above mentioned sources can help the enterprises to design the basic structure of their own policies, but every company has to tailor the measures to its own needs and the needs of the country it operates in. The multinational enterprises cannot substitute the role of governments but by taking a proactive approach they may help to build a sustainable environment, which will in a long run positively affect their business. Therefore, the managers must exercise an adequate oversight in order to monitor, whether the adopted policies are well implemented and have the actual impact. In case they do not, they should be redesigned. Without a proper monitoring system and regular evaluation any environmental policy may turn into so called green-washing.
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