‘Current business strategies are the dominant drivers of environmental change’ 

Strategy is a set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors (Rothaermel, 2021). Whilst environmental change can be interpreted as either progressive or regressive, for the purpose of this essay I consider businesses’ impact on the environmental change to be regressive. To prove current business strategies are dominant drivers of environmental change, impact analysis will focus on three areas: pollution (para 1), linear economy and its resultant consequences (para 2), and deforestation and loss of biodiversity (para 3).   

One-way business strategy has impacted environmental change is through increasing pollution levels. Increasing pollution levels are a consequence of overproduction. Overproduction has occurred due to changes in global consumption trends and changes in affluence levels. The growth in affluence has increased the use of resources, as the affluent households are more likely to consume more than those are who are less wealthy. This is because people now have more disposable income, spent on housing, oversized vehicles, and sometimes on wasting food. Consumers have also changed their lifestyles by buying more luxury goods. Because of this increasing trend, businesses have capitalized on this through marketing. businesses marketing has increased dramatically in the last 50 years, proved by the fact that we see more advertisements in one year than people of 50 years ago saw in a lifetime (Story of Stuff, 2021). This advertising increases demand which in turn increases production. Production as previously mentioned increases emissions. In the last 25 years, 100 companies have been responsible for more than 70% of the world’s greenhouse emissions. A focused example of this is coco-cola, The Coca-Cola Company is one of the worst offenders for plastic pollution, producing approximately three million metric tons of plastic packaging annually around the world(Coca-Cola’s GHG emissions worldwide 2020 | Statista, 2021),  It pursues a differentiation strategy with the aim of increasing its user base, drinking from their classic red cans. The impact of their strategy on the environment is as follows: The release of sulfur dioxide and other hazardous gases into the air causes warming and acid rain; which in turn lead to increased temperatures, erratic rains, and droughts worldwide. (Rinkesh) As a result of this nations record the cost of maintaining the physical capital but they do not consider natural or social capital, businesses today need to start focusing on taking care of the natural capital and not focusing on their earnings and profit for the future generations to keep living (MAYER, 2021). The above demonstrates that business strategy built on increasing consumption trends has led to increasing pollution levels which cause environmental change.

 In addition to the above, the linear economy plays a huge part in businesses’ being the dominant drivers of environmental change. The linear economy revolves around a buy, use, dispose culture and it is this culture, that many businesses facilitate.  Businesses such as Primark mass produce which results in the throwing away culture and endless consumption which is a strategic tactic used by many businesses. This embodies colon Mayer’s ideas of not accounting for the environment, rather businesses count their financial and material assets but not some of the vital ones that help us breathe, further demonstrating how business strategies have taken an impact on the environment (MAYER, 2021). The fast fashion industry is a prime example of this. The fast fashion industry is a very rapidly developed industry in which you need to keep up with trends to give your company a competitive advantage, for example, Primark is a prime example as they need to keep up with the latest fashion trends to survive and be ahead of its competitors. This leads to fast fashion, which is extremely popular, as fashion creates 20% of all the water wasted in the economy. Fashion is responsible for 10% of all carbon emissions., if you have fast fashion, you end up throwing that stuff away of which 75% ends up in landfills creating tons and tons of plastics getting broken down and destroying the earth as it leaks into the soil. (Lecture 3 notes) For example, every year iPhone brings out a new model, many resources are taken out of the earth to make the iPhone, many of the old resources to make the old iPhone ended up going to waste. By these companies repeatedly throwing away has led to being high levels of waste. Some of these resources are not renewable or regenerate either which is putting the environment at risk as harmful chemical substances are used when extracting raw materials in a very polluting way for example burning fossil fuels.   The present economic system today is linear and is based on constantly extracting material, manufacturing, producing, distributing, buying, and ultimately discarding. This has led to many having a lifestyle built around endless consumption and endless acquisition which is what businesses these days are trying to achieve (Consumer society and the environmental impact on the planet, 2021). Ultimately many businesses do not account for nature nor pay for the damage that is being done, making them a thrive not survive industry in which they only care about the financial rewards no matter the cost it will have on nature’s survival. 

Businesses have played a huge part as to why there have been high levels of deforestation and loss of diversity. Deforestation is the cutting down of trees and shrubs, and this is normally to collect resources to make products. Businesses that have a cost-leadership strategy, that is be the leading competitor in terms of low prices, will desire low factor inputs.  A business called black rock which has grown to become the world’s largest investment management company (Topic: BlackRock, 2021) has also taken a huge impact on the amazon rainforest as it is also the “world’s largest investor in deforestation” (Piven, 2021).  Deforestation has also taken an effect on biodiversity and nature, as businesses are also destroying habitats at the same time. For example, Since the 1970’s, 41 percent of all UK species studied have declined, there are even some groups faring worse than others, for example, 26% of the UK mammals are at very real risk of becoming extinct, while 22% of seabird species studied have declined in the last 5 decades. (Lecture notes). There have also been high deforestation rates for example, in the Amazon rainforest with it having the highest rate in over a decade and in 2020 Brazil had the largest primary forest loss in the world amounting to 2 million hectares (Statista, 2021) This has impacted biodiversity significantly and taken a toll on nature’s chances of surviving. This is significantly impacting our environment because our survival is dependent on other animals and plants. Furthermore, due to interconnectivity, other species dependant on the threatened species may also be adversely affected. Thus, Businesses should widen and modify their strategy to promote sustainable methods and alternative inputs that ultimately culminate in positive environmental change.

To conclude, the way businesses have strategized has been a global problem for decades and has been the biggest factor as to why environmental change has been happening. Through constant pollution, overconsuming, overproducing, and deforestation businesses have been global leaders in driving negative environmental change. Therefore, businesses are having more of a negative on the environment than a positive and should, therefore, should start to change their strategy to help the environment instead of damaging it. They could do this by giving back to the environment and investing in green technology or changing their business models and considering renewable factors of production. Businesses don’t necessarily need to stop how much they are taking but need to return as much as they give. One example of this planting new trees or creating new habitats. Businesses need to help the environment not only for the survival of future species but for our planet as well. 

BIBLIOGRAPHY

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