Article Review and Response

docx

School

Chuka University College *

*We aren’t endorsed by this school

Course

100

Subject

Business

Date

Nov 24, 2024

Type

docx

Pages

Uploaded by Georgeokongo

1 Accounting and Sustainability Article Response Student’s Name University Affiliation Course Name and Code Professor’s Name Date

2 Accounting and Sustainability Article Response Businesses operate with the primary objective of increasing shareholders' wealth. However, business revolution and dynamics like corporate social responsibility management make corporations responsible for maximizing profits for their shareholders and socially and environmentally responsible. Friedman’s idea about a business's sole purpose to maximize profit for its shareholders has not conquered the test of time since business success today is influenced by various factors, such as environmental management and involvement in issues generating social wellbeing in society. Global stewardship among businesses not only results in environmental and social benefits to the world but also creates value for the businesses and helps them enjoy a competitive advantage over companies not aligned to such principles. I do not entirely agree with Friedman's statement that the "sole purpose of business is to "Maximize Shareholder's Wealth" since the generation of such wealth must consider the environmental and social impacts. Today companies which have integrated corporate social responsibility into their management have committed to reducing their carbon emission or footprint as an environmental integrity measure. O'Leary & Valdmanis (2021) asserts that companies should inculcate transparency in environmental sustainability measures such as waste elimination or recycling to inhibit invoking bad faith among other stakeholders. To mitigate against the adverse effects of climate change and global warming, companies are reducing their carbon and other greenhouse gases emission to the atmosphere by using clean energy that reduces the output of CO 2 into the atmosphere. Instead of using unsustainable energy like coal and oil, which have high carbon emission potential, businesses are embracing renewable and green energy like wind and solar power to drive their operations. Also, companies like Coca-Cola are minimizing CO 2 content in

3 their beverage packages. The article highlights that in 2016, Coca-Cola scaled down the volume of CO 2 in its soft drink cans by 14% (“Accounting and Sustainability,” n.d). Furthermore, companies using clean energy sources and reducing their carbon footprint draw some benefits, enhancing their cost-efficiency. Using clean energy like solar energy is inexpensive compared to coal and helps businesses save such costs (“Accounting and Sustainability,” n.d). Also, reducing carbon footprints helps such companies reduce their insurance costs associated with natural or environmental calamities since adverse impacts of climate change are mitigated. It can help attract new investors with shared environmental integrity ideals or principles. Despite operating to maximize profit to shareholders, businesses are responsible for improving workers' welfare and workplace equity. Companies should promote occupational safety in their workplaces by eliminating risks or hazards in their environment to reduce employees' exposure to injury, stress or mortalities. Therefore, the sustainability concept helps businesses integrate corporate social responsibility policies to address workplace safety for their staff. Also, they must create an effective working hours schedule to inhibit the exploitation of employees by working for long hours without adequate compensation for extra hours at work. Furthermore, companies are integrating equity policies like workplace diversity, fair promotion and equal and fair pay for all employees regardless of gender or age. O'Leary & Valdmanis (2021) suggest that Costco emphasize increasing its staff compensation to $16 per hour. These social responsibility measures should also be embedded in companies contracting or sourcing policies to ensure their suppliers apply sustainable labour policies. In return, businesses benefit from improved staff productivity, low turnover rate, and enhanced company image. Finally, companies are also responsible for supporting philanthropic or charitable courses which alleviate community suffering or help other sustainability processes. After accruing more

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

4 revenue to their shareholders, companies should plough some of their income into community services through charity. However, the charity funds contributed by businesses should be accounted for and invested in sustainable processes to produce positive impacts. Reicin (2021) asserts that accountability in implementing ESG principles by companies can help inhibit the falsified communication about the integration of environmental and social sustainability in business operations by some companies. Some companies are investing in charitable exercises involving supporting education through sponsoring vulnerable children, building classrooms, buying books, supporting school feeding programs, or building other relevant educational infrastructures to improve society's educational outcomes. Other philanthropic endeavours could include supporting the healthcare system of communities, such as free diagnosis and management of conditions such as HIV/AIDs, cancer, liver conditions, and eye disorders, among other ailments. Companies can also offer financial support to alleviate community households' economic status by investing in economic strengthening programs. Therefore, businesses can accrue benefits, such as endearing themselves to the community, increased customer base, and building a solid brand image in return for philanthropic acts. Overall, Friedman's assertion that the "sole purpose of business is to "Maximize Shareholder's Wealth" has not stood the test of time because of the current trend involving corporate social responsibility and business sustainability adoption by corporates. Today, companies pursue their quest of maximizing profits but embed environmental and social integrity policies in their operation and production processes. Businesses are currently using clean energy to minimize harmful carbon emissions and reduce costs associated with using non-renewable energy and environmental restoration or impacts. Improving workers' welfare is another sustainability concept presently embraced by businesses to motivate staff, improve their safety

5 and enhance workplace equity. Philanthropic work is a crucial facet of firms' policy to give back to the community through sustainable and impactful activities, such as healthcare, environment and education programs. Finally, these processes positively impact businesses by attracting investors, enhancing brand image, improving staff productivity, reducing operation costs, and endearing them to the community.

6 References Accounting and Sustainability. (n.d). O'Leary, M., & Valdmanis, W. (2021). An ESG Reckoning Is Coming. Harvard Business Review . https://hbr.org/2021/03/an-esg-reckoning-is-coming . Reicin, E. (2021). Businesses Should Be Held Accountable For Their ESG Claims. Forbes . https://www.forbes.com/sites/forbesnonprofitcouncil/2021/03/23/businesses-should-be- held-accountable-for-their-esg-claims/?sh=1340c79e5679 .

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Related Documents

poiy.docx

697479608_Supply_Activity.docx

Strategic Management- Draft Recommendation 3.docx

simple_graphing_with_excel_tutorial__2020-2021_.docx

LM Ética en negocios.docx

Wk6Assgn-WMBA-6695-StimulationResults.docx

b101-1.pdf

SITXCOM010___Assessment_THEORY_5e81b898af48c501ed35c9f66ffb5adb.docx.pdf

Bed bath.edited.docx

6582933_1482410031_6721696436182.docx

M.Brooks_Ethics Discussion Paper.docx

COSMINA SAUCIUC RBT2 ( new tabel original ).docx

Recommended textbooks for you

Foundations of Business (MindTap Course List)

Marketing

ISBN:9781337386920

Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Publisher:Cengage Learning

Marketing

ISBN:9780357033791

Author:Pride, William M

Publisher:South Western Educational Publishing

Foundations of Business - Standalone book (MindTa...

Marketing

ISBN:9781285193946

Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Publisher:Cengage Learning

Principles of Management

Management

ISBN:9780998625768

Author:OpenStax

Publisher:OpenStax College

SEE MORE TEXTBOOKS

Recommended textbooks for you

Foundations of Business (MindTap Course List)
Marketing
ISBN:9781337386920
Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:Cengage Learning
Marketing
Marketing
ISBN:9780357033791
Author:Pride, William M
Publisher:South Western Educational Publishing
Foundations of Business - Standalone book (MindTa...
Marketing
ISBN:9781285193946
Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:Cengage Learning
Principles of Management
Management
ISBN:9780998625768
Author:OpenStax
Publisher:OpenStax College