Indeed, the business of business is making profit by creating value to customers, rewarding the stockholders, employing strategies that will allow the firm to achieve its targets, and the most important one, adhering to ethical principles as well as practices as it operates in the market.
Nature plays a very important role in our day-to-day lives, especially in firms that rely heavily on it for raw materials—resource inputs that are needed in order to produce a certain product. Having acknowledged the important role of nature in business, a lot of companies now expand their corporate social responsibility (CSR) programs to include efforts to lessen the negative impact of their respective operations on the environment and work in a more environmentally sustainable way. These include, among many others, using renewable energy, adopting/developing a value chain that would reduce wastes and carbon emissions, and creating products and services that would sustain people especially from small or rural communities.
With changes in our climate becoming more and more apparent, there are now deliberate actions by firms to safeguard the environment and its natural resources, and maintain an ecological support system for generations to come. There is no question that our natural resources are already depleted and our economic, political and social well-being is compromised and impermanent. These firms recognize that the productivity of natural environmental assets lies in its ability to support and enrich human life, as well as in its capacity to assimilate and render waste produced by the business. Thus, the risks and costs to society of a “business as usual” way of running the business are too large to ignore.
One approach that firms can do in order to have a more robust CSR program to protect the environment and utilize scarce natural resources is economic valuation. The problem right now is the economic invisibility of nature and the benefits we get from it that are often underpriced, which then get ignored in decision making. The market only counts the obvious or tangible products and services produced by the firm, and not the building blocks that produce them (i.e., ecosystem services). Different decision-making groups such as policy makers, local managers and business firms need different types of information and guidance in making economic choices that involve tradeoffs in using, allocating, conserving and protecting natural resources. Economic valuation allows us to capture, demonstrate, and recognize the value, expressed in monetary units, of benefits we get from the environment and what we lose when we pollute it.
Therefore, natural resources can be managed better if we and business firms learn to put greater value on the loss of these resources, thereby giving more importance to preserving the environment to be used, appreciated, and experienced by future generations and foregoing short-term gains in productivity and profit.
Julius B. Lunar is the Grants Officer of World Vision Philippines where he provides leadership and technical support in the organization’s fundraising strategies on local and international grants acquisition. He is also a part-time lecturer from the Management and Organization Department of the Ramon V. Del Rosario College of Business, De La Salle University where he teaches Strategic Management. He may be contacted via e-mail at firstname.lastname@example.org.