Social Issues Are Sometimes Affected by the Essay

Social issues are sometimes affected by the environmental and economic issues, but they often have a life of their own. The social environment is comprised of a number of factors, including demographics, trends, mores and norms, and social factors that affect the market such as health, education and social mobility (MindTools, 2014). Those factors will affect the economic power of consumers, but also other things like knowledge that will affect the bargaining power of buyers. So there is some overlap between social factors and economic. In recent years, the overlap between social factors and environmental ones has become stronger as well, as a push towards better environmental stewardship in the social dimension has resulted in more laws that create restrictions on some businesses and opportunities for others. The social environment is particularly important because it affects the likelihood of consumers or businesses wanting to buy a product. The economic environment affects their ability to do so, but a product is only going to succeed to the extent that it appeals to the market.

Among the many social issues that exist there are few that are probably important for any company to evaluate because they are fairly universal in their ability to affect the potential of a business. Income is one variable, and this variable is directly tied to purchasing power. Where there is a lack of income, there is a lack of purchasing power, and measure tends to be dollars per capita per annum. Another social factor that is important is the religious makeup of an area. For some businesses, this might be fairly irrelevant, but there are correlations that can be drawn between consumption of specific goods and religious affiliation. It is good to understand the behavioral traits and motivators for a given market, and this is one social variable that is important. Religion is a qualitative variable and one must understand how the different variables affect their business. Another is education, normally measured in years, and this is a variable that also affects buying power because of its impact on economic outcomes, but it also can reflect the degree of critical thinking that the audience has, important when tying education levels to a propensity to purchase specific products.

Technological change affects everything, so it is hard to general its impact on broad social measures. Technology affects how we communicate, how we make our living, it affects the efficiency of our production, how companies interact with their customers, how distribution channels and merchandising is managed and more. There is very little in most businesses that remains untouched by technology so all factors are going to be affected in some way.

Part II. The first thing that I should probably argue is that by definition social justice is not related to environmental justice. The word social specifically pertains to groups of humans, while environmental specifically refers to the natural environment. So these are two different forms of justice.

Social justice has its roots in the philosophy of John Rawls, building on the social contract theories of Locke, Rousseau and Kant (Wenar, 2012). The concept of social justice, therefore, reflects the terms of cooperation by which free and equal citizens agree to under fair conditions (Ibid). Operating under conditions where there is some scarcity of primary goods, all citizens would enter into some sort of mutual agreement about the distribution of goods and wealth within their society. Social justice as applied today typically reflects a desire on the part of self-styled social justice advocates to push, pull or drag society towards their vision of this social contract, away from its current position. The thinking is that society is not entirely equal and therefore the current status of social justice is not in a state of equilibrium with society's ideal state of social justice. As particularly manifested in America, there is a view that many underprivileged groups are not afforded sufficient opportunity to better themselves and therefore suffer outcomes that are disproportionally negative to what they should face given their specific abilities and contributions to society. Environmental justice is a more abstract version of this concept, removing the part about equal persons and replacing it with a notion of fairness to the environment or that there is a mutual desire in our society to retain a certain degree of balance between environmental health and economic output.

From an economic perspective, profit is, more or less, derived from exploitation. There is no more labor exploitation but we still exploit the resources in our environment, and those externalities are seldom costed out. We enjoy tremendous economic output as the result of fossil fuels, but have not paid much of the cost of extracting and burning those fuels -- most of those costs are probably still coming. So there is an element of mutual exclusivity between economic output and the environment. There need not be mutual exclusivity between social and economic progress, but often there is anyway.

Organizations have no hope of measuring either social or economic justice as these are abstract concepts that are impossible to quantify, if one intends to be honest about it. Organizations instead indulge in shorthand measures for social and environmental progress. There is no uniformity of these measures, which can range widely between organizations. Indeed, corporations seldom talk about social justice (the term does not seem to come up much in business journals), but rather about social responsibility, and have taken the liberty of each organization defining social responsibility under its own terms (Dahlsrud, 2008).

Part III. The CDP website publishes an annual Carbon Report (Fox, 2013). According to this report, carbon is measured in terms of metric tonnes of CO2 emitted into the atmosphere. The company sends out surveys to companies, especially those that are seeking to reduce their carbon footprint. These companies voluntarily report their carbon emissions and other data, and all of this data is used to compile the report. They also measure the expenditures on carbon reduction to compare companies with their peers in terms of carbon reduction. Oddly, they are polling hydrocarbon extractors and processors. These companies might reduce the amount of carbons used in their activities, but their activities inherently create carbon output -- they could shut down if they really were serious about reducing their carbon footprint. The method that different companies use to measure their carbon outputs is not outlined in any particular detail in the report -- presumably there is a common measure that firms in the industry can use.

The case that CDP tries to make it that by focusing on emission reduction, most companies will enjoy a strong ROI on carbon reduction investments. The ROI it cites is 33%, an average. Now, a 33% return still means that only one-third of the cost is recovered, but presumably that is just in the first year, and subsequent years will see the efforts at carbon reduction pay for themselves on a net present value basis. With that assumption, however, this probably does not have much impact on strategic decision making. This is a tactic, not a strategy. A strategy would be something like Wal-Mart's focus on cost leadership in general retailing, or Apple's focus on differentiation in consumer electronics. Strategies are high level and almost never include specific investment actions -- these are the tactics used to implement the strategy (Casadeus-Masanell & Ricart, 2009).

Part IV. Organizations are free to develop their own measures for their impacts on the environment, and many do. As there are tens of thousands of companies and a vast environment, there are probably tens of thousands of different measures in use to measure organizational impact on the environment. Indeed a quick search about environmental impact measures turns up nothing -- the question is not specific enough to get useful results. So we have to look a little deeper at what types of measures there are.

Often, the measures focus on emissions or outputs of some type. For air pollutions, emissions are usually measured in terms of tonnes or parts per million. For water pollution or waste generation, outputs are also measured. In some cases, the measures are consumption measures -- how much of a material is used by the corporation. Other measures used are source measures -- for example how much of the firm's energy usage is from renewable sources.

Organizations use this data in a number of different ways. One way is to use the data as a benchmark for organizational performance. It is a given that there is moral hazard in self-reporting, in terms of having outsiders hold the company accountable (Reynolds & Yuthas, 2008). They cannot do this when there are no firm rules about measurement and reporting (hence why the SEC insists on strict guidelines for financial reporting). There is something called the Global Reporting Initiative, though this is strictly voluntary and not particularly widespread (Hys & Hawris, 2011). So the internal data is only going to be truly useful if it is used internally. This means benchmarking. The data is…