Do businesses have a duty to promote sustainable consumption?

Greetings fromPear Tree Barn. A few thoughts on this weeks topic...

Let’s start with some definitions…
My Little Oxford English Dictionary defines duty as “meeting legal or moral obligations”…
I’ll view sustainable consumption as enabling “development that meets the needs of future generations without compromising the ability of the present generation to meet their needs”…
And for the purposes of this blog I’m taking a business to be a joint stock limited liability company (which accounts for the majority of businesses in terms of turnover and employment in most developed countries) rather than, say, a partnership or mutual.
So, first up let’s consider businesses and their legal obligations…

In most instances businesses do not have a legal obligation to promote sustainable consumption…
The fundamental purpose of today’s joint stock company and the reason it exists is to maximise the financial return it generates for shareholders (through a combination of dividend payments and appreciation in the value of the stock or equity).
It has no legal obligation to promote sustainable consumption unless there is a clause in the company’s Memorandum of Association (a document which, among other things, sets out what businesses the company may operate in) which defines promoting sustainable consumption as one of its activities.

…but it may make business sense to have sustainable consumption as part of your strategy
Businesses only generate long-term shareholder value by satisfying the needs and demands of other stakeholder groups such as customers, management and staff, suppliers, governments and regulators, and the communities in which they operate. Hence companies will include elements of the sustainable consumption agenda if one or more of these groups put pressure on it to do so, and if doing so helps improve the company’s competitive position (and hence it’s ability to generate shareholder value). So, we see businesses ‘green’ the products and services they sell, stress their ‘green’ credentials in their brand positioning, highlight their CSR activities and take actions that are environmentally friendly that also reduce operating costs.
Equally, if a ‘green’ action no longer makes financial sense there is a strong possibility that the company will stop it. I recently heard about a major plc that as part of it’s CSR/green agenda had been buying it’s energy from and eco-friendly supplier. However, it has recently stopped doing so because the government has removed or reduced subsidies in this area meaning it no longer makes financial sense to buy green energy!!

Do businesses have a moral obligation to promote sustainable consumption?
This is a really interesting question!
Businesses are no more than legal entity that has been created to allow individuals to conduct commerce.
Therefore, I’d argue that what a business does in terms of promoting sustainable consumption is a function of a) the values of the people managing and working within the business and b) their interpretation of what the owners of the business want.
So do the owners of the business and those managing it on their behalf have a moral duty to promote sustainable consumption?
I’d argue very strongly that they do as, like the rest of society, they have a moral duty to manage the resources of the planet in a way that allows future generations to be able to meet their needs. However, this needs to be set against the other demands on shareholders and managers. For example, many shareholders are pension funds who need to ensure that there investments are generating an adequate financial return so that yours and my pension obligations can be met.

Some closing thoughts…
As discussed above, businesses have already started down the road in terms of greening their products, services and processes and initiatives in these areas will generate real environmental benefits.
Further progress is very dependent upon whether shareholders, managers and employees believe they have a moral duty to promote sustainable consumption and how they set this against the other (often financial) goals and objectives they have.
‘Bye for now
Kev