environmental stakeholders essay

Environmental Stakeholders Essay

This sample essay on Environmental Stakeholders Essay provides important aspects of the issue and arguments for and against as well as the needed facts. Read on this essay’s introduction, body paragraphs, and conclusion.

2.2 Stakeholder – Environmentalist

2.2.1 Introduction

Environment refers to the surroundings in which living beings live or operate. The environment is thus affected by the operations and activities performed by human beings, directly or indirectly. These activities can be beneficial and/or harmful to the environment. Thus, in order to protect the environment from the activities that can negatively affect it, a special individual or a group that plays a role in protecting the environment is referred to as Environmentalist.

The role of environmentalist is highly significant when it comes to the matter of construction of a tourism spot close to a marine body as it has a variety of effects on almost all elements of the environment. The Seaside Mall Construction will have direct and indirect repercussions on the environment of Dubai, which makes it a prime concern for the environmentalist bodies such as Emirates Wildlife Society (EWS) and Emirates Environmental Group (EEG).

2.1.2 Impact and Evidence

The construction industry will continue to impact the physical environment as long as the industry demands natural resources, and this will assume huge environmental significance with the rapid growth in population and the attendant implications for natural resources (Ebohon and Rwelamila, 2001; Ofori et al., 1999). The construction of a seaside mall can be considered as one of the most debatable scenario.

Proficient in: Pollution

“ Really polite, and a great writer! Task done as described and better, responded to all my questions promptly too! ”

It will be an economical success as it will be a project that will contribute to the economical growth of the nation. But there will be several other consequences of such a project on the environment, which will be a prime concern for the environmentalists and the government as a whole.

The seaside construction will lead to negative outcomes like Water Pollution and will cause damage to marine life. There are a large number of sources of water pollution on such construction sites, including diesel and other fossil fuels, paints, and toxic chemicals. Even minor chemical spills can seep into the ground and may enter water bodies through which they can toxify the water and harm aquatic life. More importantly, the construction requirements will require drilling, which is a major contributor to Noise Pollution. This noise pollution will not only affect the residents, but will also affect the marine habitats. Other than the mentioned negative effects, construction can also be considered as a major cause of Air Pollution. Almost all major construction projects result in emitting carbon dioxide, methane and other harmful chemical substances that harm the air and contribute to global climate change. Other effects include operations of heavy machinery during the construction, which also lead to carbon dioxide emissions. Not only during construction, but also after the construction of such a mall, there will be various ways in which it would harm the environment. Sewerage waste, food waste, chemical waste can be dumped into the water bodies during regular running of the mall, thus affecting the water body and harming the marine life.

Keeping in mind the “seaside construction project”, Emma Johnston comments that developments are also taking place in oceans and water bodies creating various problems such as destroying the coral reefs that nourish fisheries and protect the coastline from the harsher impact of the waves, and destabilizing many precious coastal ecosystems such as salt flats and mangroves in the context of Palm Jumeirah.

This project will also possess a threat to the ecological chain and will create an imbalance in the ecosystem. This point can be connected to the noise pollution factor. Construction near a coastal location can lead to adverse effects of noise pollution on marine habitants. According to Peng, Zhao, and Liu (2015), “noise pollution will not only pose a great threat to individual marine organisms but also may affect the composition, and subsequently the health and service functions of the ecosystem. For instance, some studies have shown that anthropogenic noise caused a reduction in the catch rate of some commercial marine species indicating a decrease in the service function of the ecosystem for providing fishery products.”

More importantly, building on, or near the sea can also cause natural damages. There are a few reports that highlight that Dubai’s Palm Jumeirah Island is actually sinking, though the government denied such claims. It poses a great threat to the reclaimed land situated in disaster-prone areas. The continuous shaking due to a calamity like earthquake can lead to a process called liquefaction, where the solid land sediments can liquefy. The earthquake in San Francisco of 1906 is a great instance of such a disaster caused by the same reason.

2.1.3 Discussion/Findings

After conducting various studies and research, the claim that construction affects the environment negatively is true. There are numerous direct ways in which such a project can affect the environment and degrades it. According to Ivano Iannelli, CEO of the Dubai Carbon, “Dubai doesn’t suffer from air pollution like some of the other metropolises do.” But projects such as construction of a seaside mall can directly contribute to polluting the environment. The government of UAE as a whole would not prefer to hamper the environment in any way. Thus, they will have to keep in mind the effects of such a construction on the environment and the residents. The claims of pollution and also the evidence of the process of liquefaction in San Francisco resulting in an earthquake will make the government consider the effect of such a project on the environment.

2.1.4 Conclusion and Recommendations

As conclusion, it is clearly evident that the role of an environmentalist is significant. Based on the research and survey conducted, the construction project causes a huge environmental issue. It affects almost all elements of the environments such as water, air, land, soil and also the living creatures that constitute the surroundings where the construction is taking place. Therefore the municipality should take an action keeping in mind these consequences of such a project.

Recommendations:-

The Ministry of Environment and Water (MEW) has published a number of regulations that have to be adhered in the UAE. These laws address the following areas:-

Environmental impact assessments Protection of the marine environment Pollution from land sources Soil protection Protection of air from pollution Handling hazardous substances and wastes

Also the municipalities and town planning departments also regulate certain areas including:-

Waste management Building regulation Pollution control Water treatment

The municipality must make sure that the project authorities adhere to the mentioned regulations and must impose appropriate fines if the project harms the environment in any way.

Cite this page

Environmental Stakeholders Essay. (2019, Dec 06). Retrieved from https://paperap.com/paper-on-stakeholder-environmentalist/

"Environmental Stakeholders Essay." PaperAp.com , 6 Dec 2019, https://paperap.com/paper-on-stakeholder-environmentalist/

PaperAp.com. (2019). Environmental Stakeholders Essay . [Online]. Available at: https://paperap.com/paper-on-stakeholder-environmentalist/ [Accessed: 23 Apr. 2024]

"Environmental Stakeholders Essay." PaperAp.com, Dec 06, 2019. Accessed April 23, 2024. https://paperap.com/paper-on-stakeholder-environmentalist/

"Environmental Stakeholders Essay," PaperAp.com , 06-Dec-2019. [Online]. Available: https://paperap.com/paper-on-stakeholder-environmentalist/. [Accessed: 23-Apr-2024]

PaperAp.com. (2019). Environmental Stakeholders Essay . [Online]. Available at: https://paperap.com/paper-on-stakeholder-environmentalist/ [Accessed: 23-Apr-2024]

• Dhl Stakeholders in Conjuction with Marks and Spencer Pages: 11 (3060 words)
• Is Wal-Mart's Mission and Vision the Same as Stakeholders? Pages: 3 (892 words)
• McDonalds Stakeholders Pages: 4 (1040 words)
• Stakeholders Of A Clothing Company Pages: 2 (404 words)
• Starbucks Primary Stakeholders Pages: 3 (607 words)
• Stakeholders Of Oxfam Ranking Issue Pages: 2 (599 words)
• How Do Sainsburys Communicate With Stakeholders Pages: 3 (807 words)
• Boeing Stakeholders Analysis Pages: 4 (1129 words)
• Royal Dutch Shell Stakeholders Pages: 5 (1397 words)
• Running Head: Stakeholders, Advocacy Lobbying Pages: 5 (1273 words)

Walmart Inc.’s Environmental Analysis and Stakeholders Essay

Introduction.

Walmart is a large international retail company, a worldwide industry leader, operating in various countries; however, many internal and external problems pose a danger to this position. Environmental analyses should be made to reveal its strong and weak sides. Globalization, the process of increasing its international presence, is actual for Walmart, which is a global company. It poses many threats that the company should consider if it wants to develop instead of losing its invested money. Lastly, the company’s stakeholders should be evaluated to see which parties have which influence on Walmart, and its corporate responsibility should be described to show whether there are any flaws.

Environmental Analyses: SWOT and PESTLE

Swot analysis.

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, which shows the company’s internal and external weak and strong sides, and the results of its application to Walmart may be seen in Table 1. The company’s strengths are based on its large size, presence, and high revenues, allowing it to have significant influence and possibilities. Its revenues are more than $550 billion and continue to growth; its physical presence is large as well (Statista Research Department, 2022b). Leadership position in the market, especially in the field of megamarkets, where it has a market share of over 70% ( Walmart Inc. – Company Profile , 2022). It keeps its prices lower than those of competitors by maintaining operating and keeping costs low (John, 2019). Customers are mostly satisfied with Walmart and its goods: the company has a generally high reputation worldwide (Smith, 2019). Thus, Walmart is a strong and large company with power and influence in the United States, it’s home country, and in other countries too.

Its weaknesses are lower innovation and international activity than competitors and violations of its workers’ rights. While the company actively uses the technologies, its technology usage is lower than those of competitors (BBC, 2020; Morgan, 2021). It has many employees safety concerns, such as a case when its worker died from COVID-19 and being infected in the workplace (Burke, 2020). The wages in the U.S. are low, starting only from $12/hour (Sainato, 2021). It is an overreliance on the United States market, as most of its income is from this region (Statista Research Department, 2022c). Lastly, it tried to bribe politicians in Mexico to make them issue policies good for Walmart, which is unethical and breaks its reputation (Debter, 2019). In that way, the company has a relatively low rate of innovations and unethical practices, which hinder its development.

Most opportunities and threats for Walmart are connected with globalization and technological progress. New technologies and emerging markets open many possibilities for growth and improvement, especially for the company such large as Walmart (Shen, 2020). It may improve its efficiency by using innovations and new technologies and conquering new markets, but it is highly susceptible to strong competition, governmental regulation, and possible calamities. Amazon, its closest competitor, experiences very quick growth, using innovations and new business models, and Walmart is clearly lagging behind it (Morgan, 2021; Statista Research Department, 2022a). Thus, both its threats and opportunities are connected with globalisation and should be studied in connection with it.

Table 1. A SWOT analysis of Walmart

PESTLE Analysis for the United Kingdom

PESTLE stands for Political, Economic, Social, Technological, Legal, and Environmental influences, which are to be evaluated using this framework; its structured results are shown in Table 2.

• Political factors, in the case of the UK, include its exit from the European Union, sanctions against certain countries, policies such as lockdowns during the COVID-19, and threats of terrorist attacks (CIPD, 2021). Walmart’s shops may be vulnerable to those factors when working in the UK.
• Economic factors are the amount of money available to customers and their desire to spend it in Walmart. A general decrease in the UK retail industry in 2021 should be considered, too (Office for National Statistics, 2021).
• Social factors, including consumer behavior and wage expectation in the UK should be researched carefully. Failure to do this may lead to the collapse of the whole of Walmart’s business, as customers will reject buying in its shops (Faithfull, 2020).
• Technological factors contribute to the active usage of technologies by customers and the necessity to provide efficient online sales, which is actual for UK customers (Morgan, 2021). More than 80% of households use online shopping regularly, and Walmart should make its business model more online-oriented if it wants to conquer the UK market successfully (Coppola, 2022).
• Legal factors include the minimum wage rate set by the British government, the necessity to keep its supply chain transparent, and the necessity to create a high-quality workplace, as described in the Taylor review (CIPD, 2021). High-quality workspaces should be provided, and workers are eligible to complain if their needs are not fulfilled (Health and Safety Executive, 2022). If Walmart does not provide the mentioned conditions while working in the UK, its business may be limited by the government.
• Environmental factors include the necessity to reduce waste, provide ecologically clean goods, and promote corporate responsibility and sustainability through ethical attitudes toward customers and employees (Neebe, 2020). Corporate social responsibility, such as ecological friendliness, diversity management, efficient supply chains, and supporting local communities, is actively promoted in the UK (Companies House, 2018). Walmart must align its shops to the UK government’s requirements and customer expectations.

Table 2. A PESTLE analysis of Walmart in the UK

Globalisation and Its Consequences

Yip’s globalisation framework.

Globalisation is a process of increasing connections number between various countries and industries. It increases with the technological growth that eases transportation and information exchange, facilitating the cargo transfer, travelling, and business establishment (Hollensen, 2019; Riesenberger et al., 2019). Yip’s framework was developed by George Yip and shows four main drivers of globalization: competition, cost, government, and market. This framework may be applied to Walmart to explore what drives the company to grow its international presence, and the results are shown in Table 3. To summarize, Walmart should keep its price low while maintaining quality, utilize innovations quicker than competitors, especially Amazon, and enter countries with friendly, stable, democratic, and open governments. Such a strategy will utilize all four drivers with maximum efficiency.

Table 3. A Yip’s globalisation framework for Walmart

Advantages and Disadvantages

A major advantage of globalisation is the opportunity to earn more money by increasing its presence worldwide. Walmart has already obtained large profits from its international presence, operating in all U.S. states and more than 23 countries, including the U.K., China, and India. For example, it bought a large Indian retailer, Flipcart, and started to sell goods under its label (Mintel News, 2018). Globalization creates many opportunities, but they should be used carefully, as there are many dangers as well.

The disadvantage of globalization is, at first, the danger of losing a lot of money in case of an unsuccessful entry. When Walmart sold its Asda share in 2020, it lost its large source of revenue, and its profits dropped by $20 billion (Jordan, 2020; Statista Research Department, 2022c). In Germany, there was a big failure in the 2000s when Walmart failed to predict customer behavior (Faithfull, 2020). Simply replicating its system, Walmart may lose its invested money and experience no growth or revenues (Shen, 2020). In that way, globalization poses new strategic challenges, requiring extensive research of emerging markets.

Another disadvantage is significant competition, which is usually present in global markets. Global markets are much larger; thus, more players are trying to conquer them (Hollensen, 2019). Amazon, for example, by using its business model as an online retailer, experienced unprecedented growth from less than $150 billion in 2016 to $470 billion in 2021 (Statista Research Department, 2022a). While the revenue of Walmart is still higher, being $567 billion in 2021, the growth rate is much higher for Amazon (Statista Research Department, 2022b). Therefore, the competition is not on Walmart’s side in the long term and poses a danger for it.

Lastly, the third disadvantage is a higher risk of human- or nature-based calamities. Examples of the former are wars, revolutions, and terrorist attacks, which may be highly destructive to Walmart shops (Hollensen, 2019). An example of the latter is the COVID-19 pandemic, which led to lockdowns and restrictions of both local and international interconnections. Thus, globalization is a quick, large, and risky process: it can give the company extreme growth and money but also may push it away from the market.

Walmart Stakeholders

Types of stakeholders.

Stakeholders are people with a share of interest in the company and some power over it. Their influence and the desire to use it defines how important they are to the company (Nguyen & Mohamed, 2018). Eight categories of stakeholders, crucial for Walmart to some extent, may be specified; they are shown in Table 4.

• Customers are people who buy goods in Walmart; they are interested in good quality and low prices of the goods and have low influence on the large company.
• Employees of Walmart are interested in good working conditions and, similarly, cannot directly influence it.
• Management includes middle and senior managers, the company’s board of directors, chairman, and the president; their power depends on their status and position.
• Walmart’s suppliers are companies that sell their goods to it; they are usually much smaller and cannot influence it.
• Shareholders have the part of Walmart’s assets, and their power to influence management decisions depends on the size of their shares.
• Governments issue policies that the company should obey if it wants to open its malls and shops on the country’s territory.
• Local communities are small organisations that may communicate with Walmart’s management in some instances.
• Media channels have low interest in the company, but their power depends on their size and the corresponding ability to influence people’s minds.

Table 4. A Walmart’s stakeholder list

Power/Interest Matrix

As mentioned, stakeholders may be classified by the amount of power they have over the company and their interest in it; based on those two metrics, four categories emerge, as shown in Table 5.

• People with high interest and power are key players for Walmart: large shareholders and high-level management.
• Stakeholders with high power and low interest have no direct interest in Walmart but may be able to influence its activity and, thus, should be kept satisfied. Those are massive influencers, such as large media and policymakers, such as governments.
• Those with low power, but high interest, should be kept informed about the company’s decisions and strategy; examples are Walmart’s low-level employees, such as cashiers and its customers.
• Stakeholders with low power and interest are the least important ones, and Walmart may make the least effort to work with them: those are various NGOs and communities and Walmart’s suppliers.

Table 5. Power/interest matrix for Walmart’s stakeholders

Walmart’s Corporate Responsibility

Corporate responsibility is the term used to describe the company’s action to serve its customers better and improve the world. Principles of sustainability are expressed in Walmart’s mission “to save people’s money so they can live better” (Neebe, 2020, p. 67). Still, the company sometimes breaks this culture, lowering wages, worsening working conditions in developing countries, and trying to bribe politicians (Debter, 2019; Sainato, 2021). The COVID-19 pandemic brought additional challenges to Walmart, as it should keep its workers safe and healthy; unfortunately, there were cases when it failed this task. In 2020, Walmart was sued by the brother of a Walmart worker who died from COVID-19, being infected while at work (Burke, 2020). Thus, the company has problems with unethical behavior, which may be classified as an abuse of power. To make the situation better, Walmart can use its large resources to improve the workers’ physical and mental health and adhere to high working standards in all countries, including developing ones.

To summarize, Walmart still has opportunities to retain its leadership position in the world as the largest retailer and one of the largest companies. However, globalisation, technology development, and innovative, successful competitors, such as Amazon, create many challenges for the company. Walmart is vulnerable to governmental regulations, which the company must obey, and social behavior, which should be considered. Calamities, such as wars and pandemics, are especially dangerous for it as well. In addition, the company’s internal flaws are ethical issues and overuse of its influence: it tried to bribe politicians and often violated its workers’ rights. Those issues prevent Walmart from modernizing and further developing and, in the future, may become a danger to its market leadership.

BBC. (2020). Walmart drops inventory robots from its stores . BBC News .

BBC. (2022). Terror attacks: UK threat level lowered to “substantial.” BBC News .

Burke, M. (2020). Walmart sued by family of worker killed by coronavirus . NBC News.

CIPD. (2021). PESTLE example for retail industry as at November 2021. In CIPD .

Clark, D. (2021). Topic: Earnings and wages in the UK . Statista.

Companies House. (2018). Our commitment to corporate social responsibility (CSR) . Gov.uk.

Coppola, D. (2022). E-commerce in the United Kingdom (UK) . Statista.

Debter, L. (2019). Walmart will cough up $282 million to put years-long bribery investigation behind it . Forbes.

Department for Business, Energy & Industrial Strategy. (2017). Good work: The Taylor review of modern working practices . Gov.uk.

Environment Act 2021 . (2021). Legislation.gov.uk.

Environment Agency. (2019). Environmental management: Waste . Gov.uk.

Faithfull, M. (2020). Whatever Happened To Walmart’s British Invasion? Forbes.

Health and safety regulation: A short guide . (2022). Health and Safety Executive.

Hollensen, S. (2019). Global marketing (8th ed.). Pearson Education Limited.

Jaganmohan, M. (2021). UK: Purchasing eco-friendly and sustainable products . Statista.

John, S. (2019). How Walmart keeps its prices so low . Business Insider.

Jordan, D. (2020). Asda bought by billionaire Issa brothers in £6.8bn deal . BBC News .

Mainwaring, H. (2022). Household total wealth in Great Britain – Office for National Statistics . Www.ons.gov.uk.

Mintel News. (2018). Thought Bubble: Walmart-Flipkart deal . Mintel.

Morgan, B. (2021). Who Wins The Battle Of Walmart Vs. Amazon? Forbes.

Neebe, K. (2020). Sustainability at Walmart: Success over the long haul . Journal of Applied Corporate Finance , 32 (2), 64–71.

Nguyen, T. S., & Mohamed, S. (2018). Stakeholder management in complex projects. The 7th World Construction Symposium 2018: Built Asset Sustainability: Rethinking Design, Construction and Operations , 497–506.

O’Carroll, L. (2022). Brexit led to 14% fall in UK exports to EU in 2021, trade figures say . The Guardian.

Office for National Statistics. (2021). UK Economy Latest – Office for National Statistics . Www.ons.gov.uk.

Riesenberger, J., Knight, G., & Cavusgil, S. T. (2019). International Business: The New Realities (5th ed.). Pearson Education Limited.

Sainato, M. (2021). “You can’t pay bills on $12 an hour”: Walmart employees left out of raises . The Guardian.

Shen, Q. (2020). The research of Walmart global expansion . Journal of Finance Research , 4 (1), 33.

Smith, D. (2019). Target, Walmart are giving customers more of what they want . Mintel.

Statista Research Department. (2022a). Annual net sales revenue of Amazon from 2004 to 2021 . Statista.

Statista Research Department. (2022b). Walmart’s revenue 2006-2021 . Statista.

Statista Research Department. (2022c). Walmart International: Sales by country 2019-2020 . Statista.

Walmart. (2022). Stakeholder engagement . Walmart ESG. Web.

Walmart Inc. – company profile . (2022). IBIS World.

• Chicago (A-D)
• Chicago (N-B)

IvyPanda. (2023, June 5). Walmart Inc.'s Environmental Analysis and Stakeholders. https://ivypanda.com/essays/walmart-incs-environmental-analysis-and-stakeholders/

"Walmart Inc.'s Environmental Analysis and Stakeholders." IvyPanda , 5 June 2023, ivypanda.com/essays/walmart-incs-environmental-analysis-and-stakeholders/.

IvyPanda . (2023) 'Walmart Inc.'s Environmental Analysis and Stakeholders'. 5 June.

IvyPanda . 2023. "Walmart Inc.'s Environmental Analysis and Stakeholders." June 5, 2023. https://ivypanda.com/essays/walmart-incs-environmental-analysis-and-stakeholders/.

1. IvyPanda . "Walmart Inc.'s Environmental Analysis and Stakeholders." June 5, 2023. https://ivypanda.com/essays/walmart-incs-environmental-analysis-and-stakeholders/.

Bibliography

IvyPanda . "Walmart Inc.'s Environmental Analysis and Stakeholders." June 5, 2023. https://ivypanda.com/essays/walmart-incs-environmental-analysis-and-stakeholders/.

• Benefits of Globalisation
• Impact of Globalisation on Labour
• Economic Inequality as a Result of Globalisation
• Supply Chains Globalisation
• Globalisation and Events Industry Relationship
• Globalisation and Cultural Homogeneity
• Counterreactions to Globalisation in Local Culture
• Globalisation of Logistics and Supply Chains
• World Health Organisation and Globalisation
• Globalisation and Labour Market
• Blockbuster LLC Failure: A Case Study Analysis
• Strategic Alignment of Starbucks
• Toyota Company Positive Sides and Analysis
• Chick-Fil-A and Its Market Success
• Premium Auto: Dodge and Chevy Analysis

Paper Information

• Paper Submission

Journal Information

• About This Journal
• Editorial Board
• Current Issue
• Author Guidelines

Resources and Environment

p-ISSN: 2163-2618    e-ISSN: 2163-2634

2015;  5(5): 146-151

doi:10.5923/j.re.20150505.02

The Importance of Stakeholders Involvement in Environmental Impact Assessment

Aloni C. , Daminabo I. , Alexander B. C. , Bakpo M. T.

Department of Social Sciences, Rivers State College of Arts and Science, Rumuola, Nigeria

Copyright © 2015 Scientific & Academic Publishing. All Rights Reserved.

Environmental issues and problems are being experienced in almost all countries of the world today, the extent or intensity of the issues and problems however differ from country to country, depending on the size and rate of growth of her population, the quality of and the technologies available to her people, the nature of the country’s environmental units and their characteristics, and the level of her socio-economic development which recently have awakened global fears and responses or reactions. To address the problems created by human urge to subdue his environment call for collective effort by all concerned. The level of involvement may vary, but it is important that all affected by resource exploitation, projects, and any activity on the environment be given opportunity to thinker the way forward. The local people stand better position to notice changes in their environment than any other person no matter how highly place the person might be. The neglect of stakeholders in EIA has led to waste of resources and man power. To avoid crisis, the stakeholder’s views should be recognized and amenities provided for areas in and around the project sites.

Keywords: Environmental impact assessment, Involvement, Stakeholders

Cite this paper: Aloni C., Daminabo I., Alexander B. C., Bakpo M. T., The Importance of Stakeholders Involvement in Environmental Impact Assessment, Resources and Environment , Vol. 5 No. 5, 2015, pp. 146-151. doi: 10.5923/j.re.20150505.02.

Article Outline

1. introduction, 2. what is environment, 3. environmental monitoring, 4. the need for environmental management system (ems), 5. stakeholders involvement in environmental impact assessment, 6. conclusions, 7. recommendations.

• Basics of Business Sustainability
• For Business Leaders
• For Researchers & Educators
• For Students
• For Public Sector
• For Sustainability Centres
• View full resource library
• Climate Change
• Circular Economy
• Sustainable Finance
• Sustainable Innovation
• Social Justice
• Sustainable Business Education
• Mission and activities
• Share an Idea
• SCC Workshop – June 2023

Show more results

Identify and Prioritize Powerful Environmental Stakeholders

• | August 26, 2020

3 kinds of outsiders affect your company’s environmental actions. These stakeholders are wealthy, environmentalists, and/or living in dense areas.

Stakeholders can affect your company’s resources and decisions about the environment. Stakeholders are those who affect (and are affected by) business activities. Stakeholders can be inside the organization — e.g. employees — or outside: e.g. community members and advocacy groups.

Research shows that three kinds of stakeholders outside companies are linked to improvements in firm environmental performance. Firms have better environment performance when their nearby stakeholders stakeholders are wealthy, care about the environment, and/ or live in densely populated areas.

Researchers George Kassinis and Nikos Vafeas studied three of the most polluting U.S industries: chemicals, primary metals, and electric utilities. They looked at toxic releases at 5,133 plants, using the Environmental Protection Agency’s Toxics Release Inventory database.

“There’s a wide variation in toxic emissions from plant to plant, even when facilities operate in the same region and belong to the same industrial sector,” the authors write. “We wanted to understand why.”

To understand what kind of stakeholders affected emissions, the researchers studied the populations around specific plants. Specifically, they examined community income level and population density (at the county level), and environmental action or preferences (measured by state-level membership in environmental groups).

They found that plant pollution levels are lower when per capita income is higher, when population density is higher, and when more residents are members of environmental groups.

Why specific groups drive company action on emissions

While the research couldn’t prove causality, researchers Kassinis and Vafeas see 3 plausible explanations for the results.

Wealthy groups use their resources and power to demand better environmental performance from companies. Their influence may be especially strong locally. “In poor, minority neighborhoods, residents lack the political and financial resources, and hence the power, to challenge corpo rate polluters,” the researchers note. (Ambien)

Politically active groups that care about the environment have an impact. Even relatively minor involvement by individuals – e.g. membership in an environmental organization — can be influential. Organized groups are better able to influence the public policy process, the researchers note, and thus to indirectly affect firms.

In denser areas, more people are affected by pollution, and so may be particularly motivated to pressure companies.

Positive outcomes for companies

Companies respond to environmental pressures from key stakeholders by reducing toxic emissions. For companies in these industries, pollution brings large costs. Improving environmental performance can positively affect financial performance and competitiveness.

How to use environmental stakeholder pressure

Pay attention to groups with power to influence environmental decisions, such as those identified here. Monitoring these groups allows your company to respond effectively, the researchers note. Some companies respond defensively: lobbying against requirements or investing in end of pipe technologies. Others act more proactively, looking toward pollution prevention.

You can also think about these considerations as stakeholder “ materiality .” Materiality relates to a company’s most significant economic, social, and environmental impacts.

This article was originally published in 2012 and updated in 2020 by NBS staff and the researchers. “The findings are still valid today,” commented lead researcher George Kassinis. 

Read the article: Kassinis, George, & Vafeas, Nikos. (2006). Stakeholder Pressures and Environmental Performance. Academy of Management Journal, 49(1): 145-159.

Share this post:

Powered by WP LinkPress

Add a comment.

You must be logged in to post a comment.

This site uses User Verification plugin to reduce spam.  See how your comment data is processed .

Join the Conversation

• Categories: Articles , Other

View all posts

Related Articles

What Is a “Just Climate Transition” for Africa?

African countries can thrive amidst climate change. But the international community needs to support a Just Transition. Climate expert Eunice Sampson explains.

Which Government Policies Accelerate the Low-Carbon Transition?

The right government policy can trigger a transition away from fossil fuels. Learn best practices for low-carbon policy.

Sustainability Resources

Engage with us.

• Opportunities

• Terms of Service
• [email protected]

Partner with NBS to grow our impact

The Environment as a Stakeholder? A Fairness-Based Approach

• Published: January 2000
• Volume 23 , pages 185–197, ( 2000 )

Cite this article

• Robert A. Phillips 1 &
• Joel Reichart 2  

3167 Accesses

154 Citations

3 Altmetric

Explore all metrics

Stakeholder theory is often unable to distinguish those individuals and groups that are stakeholders from those that are not. This problem of stakeholder identity has recently been addressed by linking stakeholder theory to a Rawlsian principle of fairness. To illustrate, the question of stakeholder status for the non-human environment is discussed. This essay criticizes a past attempt to ascribe stakeholder status to the non-human environment, which utilized a broad definition of the term "stakeholder." This paper then demonstrates how, despite the denial of stakeholder status, the environment is nonetheless accounted for on a fairness-based approach through legitimate organizational stakeholders. In addition, since stakeholder theory has never claimed to be a comprehensive ethical scheme, it is argued that sound reasons might exist for managers to consider their organization's impact on the environment that are not stakeholder-related.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price includes VAT (Russian Federation)

Instant access to the full article PDF.

Rent this article via DeepDyve

Institutional subscriptions

Similar content being viewed by others

Reporting reliability, convergent and discriminant validity with structural equation modeling: A review and best-practice recommendations

Gordon W. Cheung, Helena D. Cooper-Thomas, … Linda C. Wang

Ethical Decision-Making Theory: An Integrated Approach

Mark S. Schwartz

What is Qualitative in Research

Patrik Aspers & Ugo Corte

Baier, A.: 1990, ‘For the Sake of Future Generations’, in Tom Regan (ed.), Earthbound: Introductory Essays in Environmental Ethics (Waveland Press, Prospect Heights, Ill.).

Google Scholar  

Berlin, I.: 1969, ‘Two Concepts of Liberty’, Four Essays on Liberty (Oxford University Press, New York), Reprinted in Sandel, M. J. (ed.): 1984, Liberalism and Its Critics (New York University Press, New York), pp. 15–,36.

Berry, W.: 1993, Sex, Economy, Freedom & Community (Pantheon Books, New York).

Boatright, J. R.: 1994, ‘What's So Special About Shareholders’, Business Ethics Quarterly 4 (4), 393–408.

The Body Shop: 1996, Annual Report .

Brenner, S. N. and P. Cochran: 1991, ‘The Stakeholder Theory of the Firm: Implications for Business and Society Research’, Presented at the annual meeting of the International Association of Business and Society, Sundance, UT.

Burton, B. K. and C. P. Dunn: 1996, ‘Feminist Ethics as Moral Grounding for Stakeholder Theory’, Business Ethics Quarterly 6 (2), 133–148.

Carroll, A. B.: 1993, Business and Society: Ethics and Stakeholder Management , 2nd ed. (South-Western Publishing Co., Cincinnati, OH).

Chappell, T.: 1994, The Soul of a Business (Bantam Books, New York).

Clarkson, M. B. E.: 1995, ‘A Stakeholder Framework for Analyzing and Evaluating Corporate Social Performance’, Academy of Management Review 20 (1), 92–117.

Clarkson, M. B. E.: 1994, ‘A Risk-Based Model of Stakeholder Theory’ (University of Toronto Working Paper), p. 9.

Clarkson, M. B. E.: 1991, ‘Defining, Evaluating, and Managing Corporate Social Performance: A Stakeholder Management Model’, in J. E. Post (ed.), Research in Corporate Social Performance and Policy (JAI Press, Greenwich, CT), pp. 331–358.

Colburn, T., D. Dumanoski and J. P. Myers: 1996, Our Stolen Future (Dutton, New York).

Donaldson, T.: 1989, The Ethics of International Business (Oxford University Press, New York).

Donaldson, T. and L. E. Preston: 1995, ‘The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications’, Academy of Management Review 20 (1), 65–91.

Eckersley, R.: 1992, Environmentalism and Political Theory: Toward an Ecocentric Approach (State University of New York Press, Albany).

Evan, W. M. and R. E. Freeman: 1988, ‘A Stakeholder Theory of the Modern Corporation: Kantian Capitalism’, in T. Beauchamp and N. Bowie (eds.), Ethical Theory and Business , 3rd ed. (Prentice Hall, Englewood Cliffs, NJ), pp. 97, 101–,105.

Feinberg, J.: 1980, Rights, Justice and the Bounds of Liberty (Princeton University Press, Princeton, NJ).

Freeman, R. E.: 1994, ‘The Politics of Stakeholder Theory: Some Future Directions’, The Journal of Behavioral Economics 19 (4), 337–359.

Freeman, R. E.: 1984, Strategic Management: A Stakeholder Approach (Boston: Pitman Publishing Inc.).

Freeman, R. E. and W. Evan: 1990, ‘Corporate Governance: A Stakeholder Interpretation’, The Journal of Behavioral Economics 19 (4), 337–359.

Goodpaster, K. E.: 1978, ‘On Being Morally Considerable’, The Journal of Philosophy 75 , 308–325.

Hart, H. L. A.: 1955, ‘Are There Any Natural Rights?’, Philosophical Review 64 (April).

Hill, C. W. L. and T. M. Jones: 1992, ‘Stakeholderagency Theory’, Journal of Management Studies 29 , 131–154.

Jones, T. M.: 1995, ‘Instrumental Stakeholder Theory: A Synthesis of Ethics and Economics’, Academy of Management Review 20 (2), 404–437.

King, R. J. H.: 1991, ‘Caring about Nature: Feminist Ethics and the Environment’, Hypatia 6 (1), 75–89.

Mitchell, R. K, B. R. Agle, and D. J. Wood: 1997, ‘Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts’, Academy of Management Review 22 (4), 853–886.

Norton, B. G.: 1994, ‘Environmental Ethics and Weak Anthropocentrism’, Environmental Ethics 6 (2), 131–148.

Nozick, R.: 1974, Anarchy State, and Utopia (Basic Books, New York).

Phillips, R. A.: 1997, ‘Stakeholder Theory and a Principle of Fairness’, Business Ethics Quarterly 7 (1), 51–66.

Phillips, R. A. and M. P. Bezold: 1996, ‘Organizations as the Object of Stakeholder Activism’, in J. Logsdon and K. Rehbein (eds.), Proceedings of the International Association of Business and Society , pp. 596–601.

Real Goods: 1997, http://www.realgoods.com/whoweare/mission.html .

Regan, T.: 1983, The Case for Animal Rights (University of California Press, Berkeley, CA).

Rolston, H., III: 1994, Conserving Natural Value (Columbia University Press, New York).

Rowley, T. J.: 1997, ‘Moving Beyond Dyadic Ties: A Network Theory of Stakeholder Influences’, Academy of Management Review 22 (4), 887–910.

Sepänmaa, Y.: 1993, The Beauty of Environment , 2nd ed. (Environmental Ethics Books, Denton, TX).

Simmons, A. J.: 1979, Moral Principles and Political Obligations (Princeton University Press, Princeton, NJ).

Singer, P.: 1975, Animal Liberation (Review Books, New York).

Singer, P. (ed.): 1985, In Defense of Animals (Basil Blackwell, Oxford).

Starik, M.: 1995, ‘Should Trees Have Managerial Standing? Toward Stakeholder Status for Non-Human Nature’, Journal of Business Ethics 14 , 207–217.

Stone, C. D.: 1974, Should Trees Have Standing? Toward Legal Rights for Natural Objects (Tioga Publishing Company, Portola Valley, CA).

Taylor, P. W.: 1986, Respect for Nature (Princeton University Press, Princeton, NJ).

Warren, K. J.: 1990, ‘The Power and the Promise of Ecological Feminism’, Environmental Ethics 12 , 125–146.

Westra, L.: 1994, An Environmental Proposal for Ethics: The Principle of Integrity (Rowman & Littlefield Publishers, Lanham, MD).

Wicks, A. C., D. R. Gilbert, Jr. and R. E. Freeman: 1994, ‘A Feminist Reinterpretation of the Stakeholder Concept’, Business Ethics Quarterly 4 (4), 475–498.

Wood, D. J.: 1990, Business and Society (Scott, Foresman & Co., Glenview, IL).

World Commission on Environment and Development: 1987, Our Common Future (Oxford University Press, Oxford).

Download references

Author information

Authors and affiliations.

School of Business, Georgetown University, Washington, DC, 20057, U.S.A.

Robert A. Phillips

Graduate School of Business Administration, Fordham University, Faber Hall, 3rd Floor, Bronx, NY, 10458-9993, U.S.A.

Joel Reichart

You can also search for this author in PubMed   Google Scholar

Rights and permissions

Reprints and permissions

About this article

Phillips, R.A., Reichart, J. The Environment as a Stakeholder? A Fairness-Based Approach. Journal of Business Ethics 23 , 185–197 (2000). https://doi.org/10.1023/A:1006041929249

Download citation

Issue Date : January 2000

DOI : https://doi.org/10.1023/A:1006041929249

Share this article

Anyone you share the following link with will be able to read this content:

Sorry, a shareable link is not currently available for this article.

Provided by the Springer Nature SharedIt content-sharing initiative

• Economic Growth
• Stakeholder Theory
• Broad Definition
• Organizational Stakeholder
• Sound Reason
• Find a journal
• Publish with us
• Track your research

• Contributors
• Mission and Values
• Submissions
• The Regulatory Review In Depth

ESG and “Stakeholderism”

Melissa bredbenner.

Lisa Fairfax explains how stakeholder concerns play a role in FINRA regulation, corporate governance, and ESG.

In a recent discussion with The Regulatory Review , Lisa Fairfax, Presidential Professor at the University of Pennsylvania Carey Law School and a public governor on the Board of Governors of the Financial Industry Regulatory Authority (FINRA), offers insight into timely corporate governance topics such as environmental, social, and governance (ESG) and “stakeholderism.”

She discusses, for example, how a broad range of stakeholder views helps to advance FINRA’s broader mission of serving the investing public through its oversight of brokerage firms. She also describes how the goals of ESG are sometimes misinterpreted as a tool to advance unrelated political goals. Fairfax argues that ESG is supposed to ensure that businesses consider a wide range of potential factors that may affect their financial performance.

In addition to teaching at the University of Pennsylvania Carey Law School, Fairfax co-directs the Institute for Law & Economics at Penn Carey Law, serves on the boards of the Institute for Law and Economic Policy and the Securities and Exchange Commission (SEC) Historical Society , and is a member of the American Law Institute and the Advisory Group for the American Law Institute Restatement of Law, Corporate Governance.

She has been awarded the Outstanding Mentor Award by the Business Associations Section of the American Association of Law Schools and the Trailblazer Award by the Minority Group Section of the American Association of Law Schools.

Prior to joining the University of Pennsylvania Carey Law School, Fairfax was the Alexander Hamilton Professor of Business Law at the George Washington University Law School , where she directed the George Washington Corporate Law and Governance Initiative . She also served on the Investor Advisory Committee of the SEC, was a member of the National Adjudicatory Council of FINRA, and served on the Committee on Corporate Laws of the Business Law Section of the American Bar Association.

The Regulatory Review is pleased to share the following interview with Professor Lisa Fairfax.

The Regulatory Review : Can you explain the role of FINRA and how it works with the SEC to regulate brokerage firms and exchange markets?

FINRA has been around for 85 years under a framework created by Congress. It regulates one critical part of the U.S. securities industry—brokerage firms doing business with the public. FINRA oversees about 3,600 brokerage firms and 630,000 registered individuals. FINRA’s mission is investor protection and market integrity. It provides education and compliance tools to investors and firms, writes rules governing day-to-day brokerage operations that augment the investor protections of the federal securities laws, and examines member firms for compliance with those rules and securities laws.

FINRA is a not-for-profit organization funded by industry fees, not by taxpayer dollars. FINRA leadership is not appointed by the government, but FINRA is closely supervised by the government and, in particular, by the SEC, which has a number of different programs that oversee FINRA’s operations and rulemaking. The SEC has a particular office dedicated to overseeing FINRA on an ongoing basis.

TRR : What do you see as some of the biggest challenges that financial regulatory or oversight organizations, such as FINRA, face today?

Most financial regulators are faced with challenges presented by an accelerated pace of change in markets, investment products, and how investors are communicating and consuming information. Fortunately, FINRA’s status as a self-regulatory organization has given it the ability to keep up with these changes and prepare for emerging risks.

As new markets have taken shape with an influx of new investment products, regulators must constantly reassess and adapt their rules and guidance, supervision, and enforcement. FINRA, for example, seeks to enhance its regulatory capabilities and expertise related to crypto assets, a $1 trillion market that attracts many first-time and young investors.

Meanwhile, FINRA is also undertaking efforts to safeguard investors amid changes in how investment scams are committed and how bad actors are victimizing investors, particularly senior investors. FINRA, for instance, introduced several new safeguards, including the first uniform, national standards to protect seniors.

TRR : What is the role of a “public governor” at FINRA? How is your role different from that of an industry member on the FINRA Board?

The FINRA Board oversees and provides advice and guidance to management in its administration of FINRA’s affairs. We review and approve all rulemaking proposals, FINRA’s budget, and other matters. All governors, whether public or industry, have the same duties—to act in FINRA’s best interest.

As a self-regulatory organization, FINRA is able to involve stakeholders more directly in its deliberations and benefit from their expertise, including expertise on different firm business models and how they operate, the complex and rapidly evolving securities markets, and the concerns of a wide range of investors. The same is true at the Board level. We bring our different perspectives to the same task of guiding FINRA’s pursuit of its mission to protect investors and ensure market integrity. When discussing a proposal, you would never know who is “public” or “industry”—we all advocate for the interests of the investing public and a vibrant industry.

TRR : You have written about stakeholderism, or the shift of corporate focus from shareholders to a broader set of stakeholders. How might a shift to stakeholderism affect the regulatory approach of organizations such as FINRA?

Stakeholderism is an important topic when applied to FINRA because the agency has always served the interests of a diverse group of stakeholders, including the firms they regulate, the investors they serve, and the government that oversees its operations. FINRA’s investor protection and market integrity mission means that FINRA must focus not only on broader societal issues that impact financial markets, but also on recruiting, retaining, and promoting a diverse array of employees who are essential to ensuring that FINRA can carry out its mission. FINRA has served these stakeholders over a period of decades and has done a lot in that time to ensure it works in the interest of all its stakeholders. That “public” versus “industry” split of the Board of Governors is one example. Its rulemaking process is also specifically designed to welcome the views of all stakeholders.

TRR : ESG considerations have become a point of increasing salience in recent years. Can you describe ESG and the impact it may have on corporations, investors, and the regulatory landscape?

Unfortunately, describing ESG and its impact is difficult because there is considerable confusion about the meaning of ESG—some people are convinced that ESG is about pushing corporations to advance political or social issues unconnected to legitimate business matters, while others insist that ESG is inextricably linked to long-term financial sustainability.

Those who coined the term ESG viewed it as a tool to assess material financial risks and opportunities. ESG is designed to capture the notion that because groups beyond shareholders and issues beyond short-term profits impact financial performance, corporations must consider and respond to those groups and issues to better ensure long-term financial sustainability. In other words, ESG matters to our corporate ecosystem because ESG issues, ranging from climate, the health, safety, and diversity of the workforce, and corporate governance, all have an impact on corporations, investors, and the regulatory landscape.

TRR : You have argued for the inclusion of mandatory disclosure requirements for ESG matters. You have also stated that regulatory bodies have historically not included disclosure requirements for corporations on important issues related to ESG. What do you see as the key contours of the debate today over requiring corporate disclosure of ESG issues? What are the strongest reasons for mandatory ESG reporting?

One of the most important aspects of the ESG debate is the need to clarify the importance of ESG for corporations and investors. I do not believe that ESG is about corporations pushing a political agenda. Instead, ESG aims to recognize the impact of environmental and social issues on financial performance. This means that ESG is linked to materiality and financial concerns.

For example, in addition to tragic loss of life, studies show that weather-related events—such as those currently occurring in the United States, which are growing in severity and frequency—have significant economic impact, including destroying physical and capital assets, disrupting supply chain and labor markets, undermining employee mobility and opportunity, and reducing overall economic activity and growth. As a result, the failure to consider and understand these economic impacts is both a risk and a lost opportunity.

This is why so many investors are interested in getting disclosure around ESG. Mandated disclosure is important for creating a baseline, facilitating cross-company comparisons, and increasing accuracy and accountability. Voluntary disclosure, however, is also important, especially for allowing greater flexibility and experimentation, and gap-filling. Thus, as I have written , the debate about voluntary versus mandatory disclosure represents a false choice because both are important to a robust disclosure landscape.

The Sunday Spotlight is a recurring feature of  The Regulatory Review  that periodically shares conversations with leaders and thinkers in the field of regulation and, in doing so, shines a light on important regulatory topics and ideas.

Related Essays

Private Enforcement of Corporate Climate Pledges

Scholars propose a new means of holding corporations accountable for emissions reduction pledges.

Equitable Artificial Intelligence

Experts recommend a two-pronged approach to help ensure artificial intelligence systems achieve equity.

The Strange Bedfellows of Climate Change and Corporate Fraud

Scholar recommends implementing ESG standards to fight climate change and avoid criminal charges.

Finished Papers

Gombos Zoran

Experts to Provide You Writing Essays Service.

You can assign your order to:

• Basic writer. In this case, your paper will be completed by a standard author. It does not mean that your paper will be of poor quality. Before hiring each writer, we assess their writing skills, knowledge of the subjects, and referencing styles. Furthermore, no extra cost is required for hiring a basic writer.
• Advanced writer. If you choose this option, your order will be assigned to a proficient writer with a high satisfaction rate.
• TOP writer. If you want your order to be completed by one of the best writers from our essay writing service with superb feedback, choose this option.
• Your preferred writer. You can indicate a specific writer's ID if you have already received a paper from him/her and are satisfied with it. Also, our clients choose this option when they have a series of assignments and want every copy to be completed in one style.

We never disclose your personal information to any third parties

Reset password

Email not found.

Customer Reviews

Finished Papers