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Corporations benefit from being socially responsible as this helps them to increase sales, labor and trust in the company as a whole, especially when government regulation over their activities has reduced and they need to compete for customers. Moreover, businesses need to secure a sustainable growth for their companies in a responsible Way because they have obligations to its owners/shareholders and stakeholders. Companies who are socially responsible are more attractive for potential and recent employees as many studies show that people prefer to work for a company that aligns with their own personal values.

However, all the above mentioned conditions and situations could not always e met in a free market systems due to the number of reasons. For example, lack of necessary information for accurate decision-making: consumers are not always aware of what products they buy or what services they get (vaccination, GM food etc. ). 2. Green taxes Environmental taxes, or green taxes, are considered to be powerful economic policy instruments for improving negative externalities.

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Furthermore, they can help to enhance ecological situation and result in overall gains for the whole society by cutting down redundant pollution (Aid, 201 0; Chou&Segerson, 2012). Green taxes are frequently expected to bring a bubble dividend: both environmental benefit from ecological improvement and commercial benefit from utilization of the revenue from “pollutant taxes” in order to decrease the burden of other taxes such as capital, income or sales (Chou&Segerson, 2012). These environmental taxes are historically more common in Europe.

However, nowadays in the USA several states have adopted environmental taxes in order to reduce budget shortfalls, at both the federal and state levels, and raise tax revenue. When considering the question regarding the reduction of green taxes for companies with environmentally friendly approach, the answer seems to be obviously positive: as the companies pollute less, their burden of taxes should be decreased. Furthermore, green taxes raise the cost to a polluter of creating pollution and force companies both to develop innovations and adopt already existing ones.

F-or example, fossil fuel taxes created a stimulus for automobile makers to develop and produce alternatively powered vehicles and for customers to adopt them. However, there are several limitations that make it quite complicated to accomplish this straightforward consent ounce (less pollution-less taxes). First of all, it is rather difficult to define the correct green tax rate, even though it is evident that taxes commensurate with the marginal social damage from pollution. Moreover, measuring emissions is not easy and the results could vary even for companies who are polluting similarly, but in different locations.

Governments may not be interested in reducing green taxes as, for example, carbon dioxide emission tax is a meaningful source of country’s revenue and they would not want to lose it. However, despite mentioned above limitations green taxes play an important role in handling environmental challenges. Governments should aim to make these taxes properly designed, transparent and set at an adequate rate, so companies will be motivated to reduce their polluting activities. 3. A Code of Conduct (British Petroleum Ltd. S an example) British Petroleum Ltd whose reputation was seriously damaged after the disaster in the Gulf of Mexico in 201 0, nowadays takes enormous steps to earn back people’s trust as a reliable, honest and ethical company. Their Sustainability Review demonstrates that the company seriously focuses on environmental and social directions of CARS. The problem of sustainability is stated to be their pop priority, therefore the company is funding the Energy Sustainability Challenge, “a consortium of academics that is analyzing the complex relationships between energy and natural resources” (Bp, 2013).

The company’s social responsibility reports state that they have achieved good results in the field Of employee’s safety, the lowest injury frequency, ongoing improvements in environmental impact through implementation of different measures and finally, good progress in the development of people, in 2012 it was recorded the highest in the history number of women in group and management leadership (Bp, 2013). However, the critics (Burrton, 2013; Chosen-Bootees&Samkin, 2013) argue that, though the company is on the right path towards the better world, they continue to be a fossil fuel giant, and fossil fuels cannot be sustainable by definition.

Moreover, the company tries to lead the business ethically and responsibly, but that is not the same as sustainable. So, Bp needs to focus on long term and invest more in renewable sources because our future lies with the development of the new fuels. Summing up all the above, it is considered that working out and adopting a ode of conduct by a company is an extremely important step towards establishing a socially responsible business, however, that is not enough. The rules and principles are important, but what is much more essential is that they should not stay only on the paper, but followed.

For instance, BP adopted the Code of Conduct before 2009, nevertheless it did not help the company to avoid Departed Horizon accident in 2010. One more example of unethical behavior is a well-known story with Wardroom Inc. , a company that interpreted their corporate code of ethics in a totally different way, opposite o socially responsible. Conclusion This assignment has explained the central importance of Corporate Social Responsibility (CARS), green taxes in improving negative externalities and the influence of a code of conduct on establishing socially responsible business practice.

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