The the United Nations Sustainable Goals, specifically relating

The purpose of this essay is to effectively identify and explain the
role of business in society specifically focusing on responsible enterprise.

This essay will aim to identify the global challenges business faces in regards
to the United Nations Sustainable Goals,
specifically relating academic theory to Goal number 1, “No Poverty”.  Secondly it will then pay attention to the
role private business has on poverty and the actions of which they take.

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Finally, it will the conclude its findings and hence, evaluate what responsible
enterprise is.

 

Sustainability can be defined
by three crucial pillars. Economic, Environmental and Social. The UN has
adopted a set of 17 goals to ‘end poverty, protect the planet and ensure prosperity
for all’ explicitly mentioning that governments, the private sector and civil
society need to actively play a part. According to Geoff Mulgan “for the first
time ever, our enemies are no longer outside us. We’re well suited to battles
with foreign powers, evil businesses or heartless states. But now we face many
challenges where the enemy is us- our desires may be what stand in the way of
our survival”. The United Nations regognises that change will not come about if
these three pillars are not taken into account.

 

The first goal of seventeen; ‘Ending
poverty’ in all forms and dimensions everywhere, including extreme poverty can be
argued as the most important, imperative requirement needed for sustainable development.

One of the greatest challenges humanity is facing is poverty. Around the world
men, women and children face poor sanitations, lack access to clean drinking
water or inadequate food. Figures show that around 14% of men are likely to
live in households with incomes that are 60% below the national average (The
Guardian, 2003).

 

Finally, one of the main economic
challenges we face is the minimum wage argument. There are limitations to the argument
‘raising the minimum wage will lift families out of poverty’ as the poorest in
UK society tend to be those who are unemployed and on benefits therefore a rise
in the national minimum wage will go unaffected for those in society. On a global
scale, countries such as China and India have seen rapid growth in the last few
decades and as a result have lifted millions out of poverty but studies show
progress has been unequal (The UN).

 

National intentions need to
go beyond aiming to seek economic growth and employment but also need to help
tackle the social issues faced around poverty. Much misconstrued understanding
of poverty lies within the opinion of ‘getting a job’, many people’s idea of
poverty is people pulling themselves out of it by getting a job when the
reality is not that simple. Figures show that women are more likely to live in
poverty than men, this could be, in part down to inequal access to paid work
and the gender paid gap.

 

Africa and Sub- Saharan
Africa account for 80% of those living in poverty. About 60% of these depend on livestock for some part of
their livelihood (Thornton et al., 2002; Thomas & Rangnekar, 2004). Climate
change is bound to have devastating effects on these people, effects including
reduced water availability, over rainfed crops, reduced distribution of
important crops and consequently the rise of human diseases.

 

Business holds a very clear
responsibility with regard to poverty (Goal 1). Specific industries have taken
into account their moral code of conduct with business being a natural
generator of job creation, economic flourishment and a payer of taxes. As a result,
global institutions have incorporated the war on poverty into their corporate
social responsibility; the understanding of moral progress has almost become synonymous
with their own economic growth. Private enterprises as a whole, most notably
large multinational corporations have played a diligent role in tackling
poverty. For many of those living in poverty the need for employment means that
they have the right to build a sustainable livelihood for themselves, consequently
companies such as Levi’s are making this a reality for those, such as farmers
by training them in skills related to water harvesting and irrigation techniques
in developing countries such as Brazil, India and West and Central Africa. Following
on from this research conducted by Oxfam in Kenya found that horticulture is
crucial to the contribution to their economy with this particular sector being
the provider of over two million jobs, with a large amount of produce sold in
UK supermarkets ‘millions of individuals supply into them as small-scale
producer/growers or find employment in horticulture farms and packhouses.’
(Oxfam, 2013).

 

In focus, the Columbian mining sector has been deemed as a
major driver in the country’s development plan. Under the presidency of Alvaro
Uribe Velez, the agenda of Columbia to be seen as a ‘mining country’ was
certainly endorsed by the administration and has been since President Juan
Manuel Santos has come into power, thus thereafter favourable investments for multinational
companies have been put into place. ‘Mining companies operating in Columbia pay
an annual license fee for exploration and exploitation licenses’ thus further
adding to Columbia’s overall economic growth, further diminishing the growth of
poverty. According to the UK Government,
the UK is the second largest investor in Colombia, with recorded investments of
$6 billion over the last 10 years (UKTI).

 

Despite
this, Columbia’s poverty is still on the rise with one of the poorest parts of
people living in poverty rising from 64% in 2011 to 68% in 2012. Comparatively
while in the poorest part, Chocó 40.7% were living
in extreme poverty, the overall rate of extreme poverty was 10.4% (DANE 2013),
indicating the need for further development.

 

The same can be said for less
developing continents such as Africa. According to the Guardian World Bank data
shows that the number of those in Africa who are defined as living in poverty
(living on less than $1.25 a day) ‘increased from 411.3 million in 2010 to 415.8
million in 2011’. While evidently there are positive
links to the private sector and those who are living in poverty, certain
instances have emerged of businesses who have not been held accountable for the
impact of their actions.

 

Responsible enterprise is often described as a complex phenomenon, with
no single definitive answer of what it is exactly. Waddock
and Rasche, 2012, in their book ‘Building the responsible enterprise: Where
vision and values add value’ describe responsible enterprise as when
companies “engage their corporate responsibilities in all of their
strategies and business practices by developing relationships with stakeholders
and by working to expand sustainability of the natural environment.”

 

Responsible enterprise can be defined in a multiple of
different ways. The neo-classical approach believes that businesses function at
their best when a ‘successful environment is created’ only if the market in
which they operate is free. In doing so, people are free to choose how they
perform, without government intervention (Wetherly and Otter, 2014). Friedman (1970)
strongly supports this view, claiming ‘the social responsibility of business is
to solely increase profits’, anything of the contrary to this whereby companies
concern themselves with the wider community can lead to totalitarianism.

 

On the other hand, Carroll’s 1991 model of corporate social
responsibility encompasses four levels including discretionary, ethical, legal
and economic responsibilities. Fundamentally, this model believes that these
four elements are imperative to how a business should be run, believing that in
order to be profitable, corporations need to have a level of moral transparency.

However, critics of Carroll’s model include Griseri and Seppala (2010) who
state that the order of the pyramid in which the model is set, is not in chronological
order nor is it progressive as it is possible to meet the ethical importance
whilst failing to meet the legal obligations. Furthermore, the way in which the
diagram is set leads us to believe there is a certain hierarchical order in
which the four elements are placed, ergo, the higher the level the more
importance is placed. Yet, Carroll specifies that the “economic and legal
domains are the most fundamental, while philanthropic responsibilities are
considered less important.” (Schwartz, 2011:90).

 

Moreover, corporate citizenship also characterises
responsible enterprise in a way that is similar to Carroll’s views, notable
writers such as Crane and Matten 2010 have debated that it should be associated
with the corporation’s action towards governing the social, political and civil
rights towards citizens. Corporate Citizenship has reference to the people and
the state whilst being reflective of corporations having a duty to the
community also.

 

Business ethics “is the study of business situations,
activities and decisions where issues of right and wrong are addressed” according
to Raymond C Baumhart. In contrast to Corporate social responsibility, ethical egoism
is a term in which the perception for striving for one’s own personal gain is
right as opposed to the interest of others; which can be defined as altruism.

For example, the case of TOMS shoes, the company’s aim is to improve the lives
of others and as a consequence of that, has had tremendous success; together
with this the company’s founder Blake Mycoskie can potentially be seen as an
ethical egoist, in short, the best strategy to help your own capital is to capitalise
on the situations of others. A stark contrast can be drawn between ethical
egoism and selfishness; egoism is noted as putting your desires before others’,
selfishness is the refusal to see beyond your needs. For ethical egoists, working
collaboratively with others can be seen as a positive way to satisfy their own
desires with the outcome of satisfaction for the other person’s desires being collateral
of their own.

 

In many instances, the idea of ethics in business focuses on
the individual for example the CEO of a company. ”Many people, when discussing
business ethics, immediately raise examples of immoral or unethical activity by
individuals” Richard T DeGeorge. To illustrate, after a fire at his Malden
Mills factory, Aaron Feuerstein made the executive decision to carry on paying
all of his workers until he could rebuild and cited his Jewish faith as a
reason for the guidance.

 

Relating to poverty, shell is a company in which business
ethics and the lines between ethical codes of conducts have been blurred. Petroleum
oil was discovered in 1956 in Nigeria and since then companies such as Shell
have taken advantage of the poor area. There are multiple factors as to why
companies behave ethically including governmental power over corporations,
recent scandals or globalisation. Governments should treat communities in a way
that is mutually beneficial to corporations, the environment and the economy;
seeing the demand for sustainability allows governments to accommodate into an
economy that is more efficient.

 

Governments can use mechanisms like decentralisation as a
means for encouraging responsible enterprise. Decentralisation, systematically
distributes power and authority throughout the system (Sidana et al., 2015).

Ex-deputy prime minister Nick Clegg believed that “a radical shift of power from the centre
to citizens and communities would give more control and freedom back to people
to manage their own lives as they see fit” according to Gov.uk. This was
further put into place through the Localism Bill which materialised in 2011
with the aim of the Localism Act 2011 being ‘devolve greater powers to
councils and neighbourhoods and give local communities more control.’ As a result
of this, the governmental intervention in the last few years have marked the
importance of responsibly investing to meet its sustainable agendas.

 

We can see that
the UK government has attempted to encourage more responsible enterprise with
regards to Goal 1 ‘No poverty’, in 2012 under the coalition government, the minister
of state gave a speech on the private sector’s role in the development and
importance of fair trade. He stated, “we are developing new approaches to business
that generate profits and have strong developmental impact.” For example, JITA
which was once a rural sales programme that helped generate income for disadvantaged
women in Bangladesh has now been turned into a private company with the help of
the UK’s business innovation facility. The department for international
development, claims it is committed to raising standards, encouraging the
private sector to operate in developing countries in a socially responsible
way.

 

In conclusion, the
UN SDG of ‘No poverty’ has been linked to many different challenges such as rapid
growth in places like China and India lifting many people out of poverty but
the problem still remaining uneven. Threats such as conflict, drought and
climate change mean that more commitment than ever is needed to work towards
Goal 1. Poverty and Hunger and man-made injustices. People are kept in poverty
by global rules and egoistic behaviours that only benefit the 1%. The UN have
realised this thus putting into place the SDG rule of ‘No poverty’ in which we
can work together in order to build a more sustainable word, to irradiate
poverty. A more responsible form of enterprise has been defined by the European
Commission as “the responsibility of
enterprises for their impacts on society” however, responsible enterprise
requires the input and commitment of government as well. This essay has shown
that government intervention has enabled positive results but could possibly do
more such as put harsher sanctions on those who are found to be acting
unethically, force companies to be more transparent in their operations as
transparency is a crucial condition in implementing corporate social
responsibility.  Therefore, overall this
essay concludes that collaboration between business and government can contribute
to sustainability to approach the issues discussed in order to better the
challenges faced. 

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