Republic of the Philippines
Sorsogon State University
Sorsogon Main Campus
PROGRAMS AND POLICIES IN ENTERPRISE DEVELOPMENT
MODULE 7: Ethical and Sustainability Considerations
This module will cover the following topics:
▪ Social responsibility in enterprise development policies
▪ Sustainable entrepreneurship and environmental policies
▪ Balancing economic growth with social and environmental impacts
INTRODUCTION
Sustainable tends to refer to environmental impact whereas ethical refers to the
human one.
Sustainability is the balance between economic growth, environmental care, and social
well-being because it consists of fulfilling the needs of current generations without
compromising the needs of future generations, while ensuring a balance between
economic growth, environmental care and social well-being.
. SOCIAL RESPONSIBILITY IN ENTERPRISE DEVELOPMENT POLICIES
What is sustainability considerations?
Sustainable practices support ecological, human, and economic health and vitality.
3 Pillars of Business Sustainability
▪ Environmental (Planet) focuses on the value of non-human nature, or the living
and non-living qualities within nature.
▪ Social (People) in sustainability focuses on the actions, attitudes, beliefs, cultural
traditions, and decisions that an individual makes.
▪ Economic Demand (Profit) can be closely attributed with social ethics as many
ethical economic decisions are based off the social consequences or costs
associated with that economic activity or decision.
What is Social Responsibility?
Social responsibility means that businesses, must act in a manner benefiting
society, not just the bottom line of making profits. Social responsibility has become
increasingly important to investors and consumers who seek investments that not only
are profitable but also contribute to the welfare of society and the environment. Social
responsibility means that individuals and companies must act in the best interests of
their environment and society as a whole.
Besides maximizing shareholder value, businesses should operate in a way that
benefits society. Being socially responsible, companies should adopt policies that
promote the well-being of society and the environment while lessening negative impacts
on them. Companies can act responsibly in many ways, such as by promoting
volunteering, making changes that benefit the environment, engaging in ethical labor
practices, and engaging in charitable giving. Consumers are more actively looking to
buy goods and services from socially responsible companies, hence impacting their
profitability. Social responsibility is known as corporate social responsibility (CSR) and
is becoming a more prominent area of focus within businesses due to shifting social
norms.
Enterprise Development Policies
A variety of tactics are included in enterprise development policies with the goal of
fostering economic development and corporate expansion. These regulations often
consist of:
1. Financial Support: Providing grants, loans, or tax incentives to foster capital
investment and innovation.
2. Skill Enhancement: Offering training and educational programs to enhance workforce
skills and entrepreneurial capabilities.
3. Infrastructure Development: Investing in infrastructure like transportation,
communication, and utilities to support business operations.
4. Regulatory Framework: Establishing business-friendly regulations that simplify
processes and reduce bureaucracy.
5. Market Access: Facilitating access to local and global markets through trade
agreements and export support.
6. Innovation Promotion: Encouraging research, development, and innovation through
incentives and grants.
7. Support for Startups: Creating incubators, accelerators, and mentorship programs to
nurture new businesses.
8. Sustainability Initiatives: Promoting environmentally conscious practices and
sustainable growth.
9. Intensifying and expanding programs for training in entrepreneurship and for skills
development for labor.
10.Assuring them access to a fair share of government contracts and related
incentives and preferences.
11. Making the private sector a partner in the task of building up MSMEs through the
promotion and participation of private voluntary organizations, viable industry
associations, and cooperatives.
12. Assuring a balanced and sustainable development through the establishment of a
feedback and evaluation mechanism that will monitor the economic contributions as well
as bottlenecks and environmental effects of the development of MSMEs.
Customers Matter
Embracing socially responsible policies goes a long way toward attracting and retaining
customers, which is essential to a company’s long-term success. Furthermore, many
individuals who know that part of a company's profits will be channeled toward social
causes near and dear to them will gladly pay a premium for goods. Companies can
likewise witness increased foot traffic if they're committed to supporting the local
community. For example, banks that dispense loans to low-income households are apt
to see an uptick in business as a direct result.
Community Support and Customer Loyalty
Social responsibility works as a platform for companies and consumers alike to make a
positive impact on local and global communities. Businesses that implement a social
responsibility initiative that’s in line with their values have the opportunity to increase
customer retention and loyalty. Research shows that 87% of American consumers are
more likely to buy a product from a company that advocates for an issue they care
about, and 76% would refuse to purchase a product if they found out a company
supported an issue contrary to their beliefs. Community-oriented companies often enjoy
a leg up on their competition as well, thanks to superior brand imaging. For example,
Tesla Inc. (TSLA) CEO Elon Musk has successfully attracted environmentally-minded
consumers with his line of cutting-edge electric cars and green automotive products.
How Can a Company Be More Socially Responsible?
Even the smallest initiative can have an impact on a community. Donating money or
resources to charities can make a huge difference, although small companies and
startups may not have the ability to do so. Companies can start by organizing small
fundraising events, encouraging volunteering, establishing a social mission and clear
goals, implementing education programs for employees, or joining efforts with
businesses with a similar mentality and also by means of using reusable or renewable
materials and energy to conserve resources.
What Are the Benefits of Corporate Social Responsibility?
Embracing CSR increases customer retention and loyalty, increases employee
engagement, improves brand imaging, attracts investment opportunities and top talent,
and makes a difference for bottom-line financial. Socially responsible companies
cultivate positive brand recognition, increase customer loyalty, and attract top-tier
employees. These elements are among the keys to achieving increased profitability and
long-term financial success.
1.Better brand recognition.
2.Positive business reputation.
3.Increased sales and customer loyalty.
4.Organizational growth
EXAMPLE OF CSR
RESPONSIBILITY TOWARDS SHAREHOLDERS:
-Increasing their assets.
-Request suggestions.
-Providing relevant information
RESPONSIBILITY TOWARDS EMPLOYEES:
-Fair wages and salary.
-Opportunities for training and education.
-Worker’s participation in decision making.
RESPONSIBILITY TOWARDS CUSTOMERS:
-Regular supply of goods.
-Charge reasonable price.
-To ensure product has no adverse effects on consumers.
RESPONSIBILITY TOWARDS GOVERNMENT:
-To abide the laws of the land.
-To pay taxes honestly.
-To encourage fair trade
RESPONSIBILITY TOWARDS SOCIETY:
--To help the weaker and backward sections of society.
-To protect the environment to conserve natural resources.
-To generate employment
II. SUSTAINABLE ENTREPRENEURSHIP AND ENVIRONMENTAL POLICIES
Sustainable Entrepreneurship or what is being termed “Sustainopreneurship” aims at
the protection of nature, life support and community in the pursuit of perceived
opportunities to bring into existence future products and processes with both economic
as well as non-economic gains to individuals, the economy and society.
Some important aspects of sustainable entrepreneurship include:
1. Environmental Consideration: Sustainable entrepreneurs aim to lessen the
harm of their business to the environment. This could involve using eco-friendly
materials, reducing waste, and adopting renewable energy sources.
0. Social Responsibility: They focus on benefiting society as a whole. This might
entail fostering job opportunities in vulnerable areas, promoting diversity and
inclusion, or supporting local communities.
0. Long-Term Vision: Sustainable entrepreneurs consider the long-term
consequences of their actions. They aim to create businesses that can thrive and
make a lasting positive impact on the environment.
0. Innovation: Finding creative solutions to societal and environmental challenges
is a key part of sustainable entrepreneurship. It often involves thinking outside
the box to develop new products or services.
0. Triple Bottom Line: This concept emphasizes three bottom lines: people,
planet, and profit. Sustainable entrepreneurs aim to balance all three rather than
focusing primarily on financial gain.
0. Collaboration: Many sustainable entrepreneurs work together with various
stakeholders, including Non-Governmental Organization (NGOs), government
agencies, and other businesses, to address complex issues effectively.
In addition, sustainable entrepreneurs, along with businesses of all types, are being
challenged to introduce a human rights lens to their activities and operate their
businesses and conduct their business relationships with the explicit goal of respecting
human rights and reducing adverse human rights impacts. (Gutterman 2020)
Key characteristics of sustainable entrepreneurship, which can be applied to both
startups and mature firms:
● Purpose-Driven. Sustainable entrepreneurs put purpose before profits, first
deciding how they will create value for stakeholders by producing profitable
solutions to problems of people and plant and then acting with the understanding
that profits are not the purpose of their endeavors but rather the consequence of
a well-run sustainable business.
● Innovative Disruption. Sustainable entrepreneurs generate innovative
sustainable products, services, production processes, techniques and
organizational modes which establish competitive advantage by replacing
existing conventional, unsustainable solutions and substantially reducing adverse
social and environment impacts.
● Shared Value. Sustainable entrepreneurs contribute solutions to societal and
environmental problems by pursuing business strategies that focus on
simultaneously creating social and business value.
● Respect for Human Rights. Sustainable entrepreneurs do not profit from
inflicting harm on people and respect human rights by proactively managing and
mitigating potential and actual risks of adverse impacts on the rights and dignity
of people caused by, or contributed to through, their own activities or business
relationships.
EXAMPLES OF SUSTAINABLE BUSINESS PRACTICES
1. Partner with Nonprofit Organizations
Many organizations interested in embracing sustainability stop short of implementing
any concrete initiatives simply because it’s new to them, and the learning curve can be
quite extensive. An employee or sustainability board tasked with generating a
sustainability plan for the organization can quickly become overwhelmed, leading to
inaction.
2. Educate Your Employees
Often, the businesses with the most impactful sustainability initiatives are successful
because they educate their employees about the issues and include them in the
process.
This is important for multiple reasons. First, educating your employees increases buy-in
throughout the organizational chart, making it less likely that you’ll slip back into old
ways. Second, it empowers your employees to do their part, which can go far in
boosting morale and helping everyone realize they have a role to play.
3. Encourage Volunteerism
Another excellent means of involving your employees in the sustainability process is to
take steps that encourage volunteerism. There are many strategies you might pursue to
achieve this goal.
For example, you can consider organizing a company-wide volunteer drive or day of
giving, wherein your employees are encouraged to volunteer at local charities or for
causes they’re passionate about.
4. Rethink Your Supply Chain
If your business produces and sells a physical product, analyzing your supply chain has
the potential to illuminate significant opportunities to embrace sustainability, such as:
● Sourcing materials responsibly: If you source raw materials or individual
components from outside vendors, do you know how these materials are
procured? The simple act of ensuring that your partners follow fair labor
practices, such as disavowing child labor or embracing fair-trade agreements,
can have a lasting impact on your company’s social footprint.
● Reducing consumption of natural resources: While it may not be obvious at
first glance, there may be significant opportunities to reduce the number of
natural resources your company consumes as a part of doing business. For
example, rethink your packaging or streamline your manufacturing process to
reduce plastic waste.
● Reducing carbon emissions: Likewise, there are many ways you might reduce
your organization’s carbon emissions. Installing smart sensors within your
facilities can ensure that heating, cooling, and electricity are automatically shut
off when it isn’t necessary. Moving the production of physical goods closer to the
end customer can significantly reduce transportation-related emissions. On-site
solar- or wind-power installations can allow you to replace some, if not all, of your
electrical needs.
An organization's environmental policy describes how it controls and tracks the
environmental impact of both its internal operations and those of its supply chain. It
needs to serve as a basis for any environmental changes you make for your company.
ADVANTAGES OF AN ENVIRONMENTAL POLICY
● Helping you to stay within the law
● Keeping employees informed about their environmental roles and responsibilities
● Improving cost control
● Reducing incidents that result in liability
● Conserving raw materials and energy
● Improving your monitoring of environmental impacts
● Improving the efficiency of your processes
Put your environmental policy into practice: It's important to bear in mind that these
benefits are unlikely to be achieved simply by having an environmental policy in place.
What your environmental policy should contain: The content of your policy should
be based on the results of your assessment, which should have identified the key
environmental issues that apply to your business.
In addition, your environmental policy should contain brief statements on the following:
● The business mission and information about its operations. Bear in mind that if
your business activities or operations change significantly, you may need to
amend the policy.
● A commitment to continually improve your environmental performance.
● A commitment to prevent pollution and effectively manage your significant
environmental impacts.
● The expectations that your business has in relation to external parties such as
suppliers and contractors.
● Recognition that you will comply with relevant environmental legislation as a
minimum level of performance.
● Education and training of employees in environmental issues and the
environmental effects of their activities.
● Monitoring progress and reviewing environmental performance against targets
and objectives on a regular basis (usually yearly or in the first six months
initially).
● A commitment to communicate your business' environmental aims and objectives
to all staff, as well as to customers, investors, and other external stakeholders.
III. Balancing Economic Growth with Social and Environmental
Impacts
What is Economic Growth?
Economic growth is defined as an increase in the value of an economy's goods
and services, which generates more profit for firms. As a result, stock prices climb. This
provides organizations with funds to invest and hire more personnel. Incomes rise when
more jobs are created. Consumers have more money to spend on extra goods and
services, which drives stronger growth. As a result, all countries desire positive
economic growth.
1. Economic growth is an increase in the production of goods and services in an
economy.
2. It increases in capital goods, labor force, technology, and human capital can all
contribute to economic growth.
3. Economic growth is commonly measured in terms of the increase in aggregated
market value of additional goods and services produced, using estimates such as
GDP.
4. The four phases of economic growth are expansion, peak, contraction, and
trough.
In economics, growth is commonly modeled as a function of physical capital,
human capital, labor force, and technology. Simply put, increasing the quantity or quality
of the working age population, the tools that they have to work with, and the recipes that
they have available to combine labor, capital, and raw materials, will lead to increased
economic output.
SOCIAL IMPACT
Social impact encompasses all issues that affect people, directly or indirectly.
A convenient way of conceptualizing social impacts is to look at whether there
are effects on one or more of the following:
● People’s way of life: how they live, work, play, and interact with one another on a
day-to-day basis. Their culture, their shared beliefs, customs, values, and
language or dialect.
● Their community: its cohesion, stability, character, services, and facilities
● Their political systems: the extent to which people can participate in decisions
that affect their lives, the level of democracy in place.
● Their health and wellbeing: health is a state of complete physical, mental, social,
and spiritual wellbeing and not merely the absence of disease or infirmity.
● Their personal and property rights, particularly whether people are economically
affected or experience personal disadvantage which may include a violation of
their civil liberties.
● Their fears and aspirations: their perceptions about their safety, their fears about
the future of their community, and their aspirations for their future and the future
of their children.
ENVIRONMENTAL IMPACT
When organizations’ decisions and day-to-day operations affect and influence:
● People’s environment: the quality of the air and water people use, the availability
and quality of the food they eat, the level of hazard or risk, dust, and the noise
they are exposed to, the adequacy of sanitation, their physical safety, their
access to and control over resources…
● Larger ecosystem: disruption of the rain cycle, increase in land temperature,
destruction of ecosystems, fauna, and flora, acidification of the oceans.
The social and environmental components are increasingly being included in the
scope of impact measurement by organizations. They are widening the scope of impact
assessment, which has historically concentrated on economic impact and financial
rewards.
By environmental impact to balance the economic growth they should bring in social
and environmental policies.
To have an economic growth which is balanced and have a healthy impact on
both environment and society, environmental policies and societal policies must be in
consonance with the long-term goals.
Social Policies and its Importance
When discussing social policies in connection with economic growth is the social
equity. Social Equity encompasses the fair distribution of resources, opportunities, and
benefits within society. It recognizes that sustainable development cannot be achieved if
certain segments of society are left behind. Social policies should aim to reduce
poverty, inequality, and social exclusion, ensuring that the benefits of development are
equitably shared.
Environmental Policies must care and preserve the environment. These may include the
following:
● Reduce production cost using renewable energy like solar, wind and geothermal
energy.
● Increase in productivity using alternative, sustainable and environmentally
friendly fertilizers and innovative ideas that lessen carbon emissions.
● Decrease in the use of one-time plastic materials.
● Environmental protection and its economic implications: Environmental protection
involves preserving ecosystems, reducing pollution, and mitigating climate
change.
In economic growth both social and environmental sustainability is important. The
dimensions of growth, equity, and environmental sustainability are interconnected. For
example, promoting social equity can contribute to more inclusive and sustainable
economic growth. Example is the Country of Canada it opened its door to foreign
workers and gave them access with tax free medical benefits and gave permanent
residency to foreign workers. Similarly, environmental protection can generate new
economic opportunities and enhance the well-being of communities. Recognizing and
harnessing these inter linkages is essential for developing effective economic policies
that promote sustainable development.
With the interconnections and potential conflicts between growth, social equity,
and environmental protection, policymakers can design and implement economic
policies that strike a balance between these dimensions. This conceptual framework
provides a foundation for addressing the complex challenges and opportunities
associated with achieving sustainable development and the balance of economic
growth.
How can we have balance between environment and
economic growth?
Those two can be balance through Prudent Economic Policies: Economic policies such
as rationalization of price subsidies, the clarification of property rights, facilitation of
technology transfer may help in achieving environmental sustainability. Rationalizing
subsidies will save money, improves efficiency and can significantly lower pollution.
How are economic growth and environmental impact
related?
The environmental impact of economic growth includes the increased consumption of
nonrenewable resources, higher levels of pollution,
global warming and the potential loss of environmental habitats. However, not all forms
of economic growth cause damage to the environment
