E-LESSON-11

IDOL Institute of Distance and Online Learning ENHANCE YOUR QUALIFICATION, ADVANCE YOUR CAREER.

M.B.A 2 All right are reserved with CU-IDOL BUSINESS ENVIRONMENT AND REGULATORY FRAMEWORK Course Code: MBA605 Semester: First SLM UNITS : 11 E- LESSON NO : 8 www.cuidol.in Unit-8 (MBA605)

BUSINESS ENVIRONMENT AND 33 REGULATORY FRAMEWORK OBJECTIVES INTRODUCTION Student will be able to : The student will be able to understand the concept of green marketing. To get an idea of the meaning and dimensions of green marketing Discuss the relevance and growth of Gain knowledge about the Sustainable environmental technology Development and its impact on business environment. Elaborate the ecological implications of technology Learn the various sustainable measures Explain the meaning, principles and elements of sustainable development www.cuidol.in Unit-8 (MBA605) INSTIATlUl TrEigOhFt DarISeTrAeNsCeErvAeNdDwOitNhLCINUE-ILDEOALRNING

TOPICS TO BE COVERED 4 > Green Marketing. > Green Washing. > Sustainable Development. > 4Rs-Reduce,Reuse,Recycle,Regenerate. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

Green Marketing 5 ❖ According to the American Marketing Association, green marketing is the marketing of products that are presumed to be environmentally safe. ❖ Green marketing incorporates a broad range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising. ❖ Three assumptions: ➢ Consumers are aware of green products. ➢ Consumers perceive a societal and personal benefit in green products. ➢ Consumers are willing to pay a premium price for the ‘greenness’. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

Reasons for growth of Green Marketing 6 ➢ It is but one reflection of the growing environment friendliness of the society triggered by the realization of dreadful consequences of the increasing ecological problems. ➢ Willingness of a section of consumers to pay a premium price for green products. ➢ Eagerness of firms to take advantage of a growing green market. ➢ Government regulations that compel companies to take care of the ecological balance. ➢ Growing social orientation and good governance of companies. ➢ An image building strategy in a competitive environment. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

Role of Consumers 7 According to Linden et al., consumers have a vital role in sustainable development in at least three respects: (1) consumers’ preferences and demands are in a key position when producers consider whether it is worthwhile investing in environment-friendly products and production, (2) consumers’ own choices and lifestyles have a direct impact on the environment, (3) consumers’ attitudes are also taken as an important incitement of necessary political changes that give more weight to the environment as compared with other social tasks www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

Keys to Successful Green Marketing 8 Being genuine: Being genuine means that: (a) the marketer is actually doing what it claims to be doing in its green marketing campaign and (b) that the rest of the firm’s business policies are consistent with whatever it is doing that’s environmentally friendly. Educating the customers: Green marketing is not just a matter of letting the consumers know the firm is doing whatever it is doing to protect the environment, but also a matter of letting them know why it matters. Giving the customers an opportunity to participate: This means personalizing the benefits of the firm’s environmentally friendly actions, normally through letting the customer take part in positive environmental action. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

Green Washing 9 ❖ Green washing refers to misleading marketing about the environmental benefits of a product. ❖ It is “disinformation disseminated by an organisation so as to present an environmentally responsible public image.” ❖ “Green washing is the unjustified appropriation of environmental virtue by a company, an industry, a government, a politician or even a non-government organization to create a pro-environmental image, sell a product or a policy, or to try and rehabilitate their standing with the public and decision-makers after being embroiled in controversy.” www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

Risks of Green washing 10 ➢Well-intentioned consumers will be misled into purchases that do not deliver on their environmental promise. When this happens, the consumer’s trust is misplaced and the potential environmental benefit of his or her purchase is wasted. ➢Competitive pressure from illegitimate environmental claims will take market share away from products that offer legitimate benefits, thereby slowing the spread of real environmental innovation in the marketplace. ➢Green washing will lead to cynicism and doubt about all environmental claims. Consumers will give up on marketers and manufacturers, and give up on the hope that their spending might be put to good use. ➢The sustainability movement will lose the power of the market to accelerate progress towards sustainability. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

Establishing Credibility of Green Marketing 11 ➢Employing environmental product and consumer benefit claims that are specific, meaningful, unpretentious and qualified (i.e., compared with comparable alternatives or likely usage scenarios). ➢Procuring product endorsements or eco-certifications from trustworthy third parties, and educating consumers about the meaning behind those endorsements and eco certifications. Encouraging consumer evangelism via consumers’ online social networks with compelling, interesting, and/or entertaining information about environmental products. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

Environmental Technology 12 ➢ Developing New Technologies- have been developed to treat effluent water and other wastes from industries. ➢ Recycling waste into useful products, like recycling waste paper into useful products. Recycling will also reduce the exploitation of natural resources and help protection of ecology. ➢ Stimulus to eco-friendly agricultural and industrial activities ➢ Substitution electric power for petrol/diesel will reduce pollution caused by automobiles. ➢ Substitution of organic manures for chemical fertilizers has been advocated to maintain/improve the soil quality and to prevent soil degradation and other harmful effects. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

Factors Driving Growth 13 ❖Statutory requirements: A compelling factor driving the growth of the environmental technology business is the statutory requirements. Environmental regulations have grown in countries where such regulations were inadequate, particularly in developing countries, including India. ❖Public pressure: There has been growing public awareness of the compelling need for environmental protection across the world, including developing countries where environmental concerns were not strong. ❖Judicial interventions: Growing judicial interventions is a force necessitating governments to formulate regulations and implement them. A judicial proclamation referring to Article 21 of the Indian Constitution was one of the factors which prompted the Government to enact the National Green Tribunal Act and establishment of the National Green Tribunal in 2010. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

Factors Driving Growth 14 ❖International endeavours: The UN efforts in addressing climate change originated in 1992 with the adoption of the Framework Convention on Climate Change. The UNFCCC established a long-term objective, general principles, common and differentiated commitments, and a basic governance structure, including an annual Conference of the Parties (COP). In the years since, the regime has evolved in different directions www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

❖ Economic development of developing countries: Economic 15 development requirements of developing countries are going to All right are reserved with CU-IDOL enormously expand the market for environmental services. ❖ Human resource limitations: Manpower availability for many of the environment caring services is falling, calling for more mechanization/automation. It may be noted here that a startup by some engineering students in Kerala developed a robot for cleaning drainages. Environmental service is an area with enormous scope for innovation. ❖ Growing awareness of corporate responsibility: Companies in various industrial sectors ❖ are adopting Corporate Environmental Reporting. They range across wide spectrum of industries and service sectors. www.cuidol.in Unit-8 (MBA605)

Triple Bottom Line (TBL) 16 Triple Ps – people, planet, profit – is that protection of the planet is as important as profit and protection of interests of employees and other people. ❖ The connotation of the TBL is that companies should be preparing three different (and quite separate) bottom lines: ✓ The traditional bottom line of the profit and loss account. ✓ The bottom line of a company’s people account — a measure in some shape or form of how socially responsible the organisation has been in its operations. ✓ The bottom line of the company’s planet account — a measure of how environmentally responsible it has been. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

Future Scenario ➢ Technological innovation: A substantial share of the 17 environmental goods that will be in use in future do not currently exist. ➢ Quality and service performance: The ability to adapt to clients’ needs and to produce effective and easily managed products. ➢ Marketing and export strategies: These will need to respond to increasing globalisation and new market opportunities. ➢ Flexibility in production: As regulatory requirements are modified, rapid and low-cost changes in products will be required. Tailor-made solutions dependent on performance and innovation can be more important than price. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

Ecological Implications of Technology 18 ❖Harmful Effects of Agricultural Technologies: Technology is a double-edged weapon which cuts open growth with one edge and at the same time chops off future potential and cuts open streams of destruction. For example, fertilizer, pesticides, insecticides etc. used in agriculture reduces potential productivity of land causes land and water pollution, kills many living creatures, weeds upsetting the natural ecology and contaminates food with pesticides. Tubewells are depleting the ground water levels at alarming pace. ❖Ecological Implications of ICT : The proliferation of ICT usage can substantially reduce paper consumption, reducing the impact of deforestation, pollution caused by the manufacturing and distribution process of paper, pollution caused by dust and microorganisms due to huge piling up of files and documents and raw paper etc. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

Ecological Implications of Technology 19 ❖Ecological Impact of Energy Source and Consumption : Energy source (i.e., type of energy) and level of consumption impacts ecology. The switch from coal to diesel and electricity has reduced pollution. Hydel power, solar power and wind power need to get more importance. ❖Household Gadgets : Apart from the large demand for electricity/gas, they use large quantities of resource for their production and also contribute to solid waste, when old ones are discarded for new ones. ❖Travel and Tourism : The increase in travel has adverse impact on environment because of the different types pollution travel causes and in many cases consumption patterns which are not environment. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

❖Throwaway Society: ❖Plastics and other biologically non-degradable 20 packaging materials etc. cause serious damages to the environment. ❖Low Carbon Technology: Low carbon technology, which aims at offsetting the amount of emissions polluting the air by using renewable fossil fuels, can help reduce ecological damage. ❖Sustainable Development and Green Management : A redeeming thing is the growing popularity of sustainable development and green management. Technology is making advances in producing low energy products, products which economise resource use that will reduce the damage to the environment www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

Sustainable Development The UN’s World Commission on Environment and Development (WCED) defines sustainable development as 2 1 development that meets the needs of the present without compromising the ability of future generations to meet their own needs. ❖ It is stated that this definition contains within it two key concepts: ✓ The concept of ‘needs’, in particular, the essential needs of the world’s poor, to which overriding priority should be given; ✓ The idea of limitations imposed by the state of technology and social organization on the environment’s ability to meet present and future needs. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

Dimensions of Sustainable 22 Development ❖ Francis Cherunilam has pointed out in some of his books that there are three important dimensions of sustainable development: ✓ Economic dimension ✓ Ecological or physical dimension ✓ Social dimension ❖ Physical dimension or ecological dimension refers to the physical aspects, i.e., to the planet. ❖ The physical aspect implies that development activities should take care of the sustainability of the planet, i.e., the ecosystem. It means that the strategy, technology, methods etc. used for development shall ensure the wholesomeness of the plant. ❖ Social dimension refers to the humanitarian aspects of development, particularly which aim at taking care of the basic human needs of the poor and the socially underprivileged. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

❖ Development Plans/Strategies for Achievement of the Vision: Strategy is comprehensive master plan for the long term with time- 23 All right are reserved with CU-IDOL bound action plans and targets for different development components. ❖ Technology/Methods/Processes: Decision on and adoption of appropriate technologies/methods/processes are very important to achieve the pattern of development envisaged. ❖ Resources: An assessment of the resources required for the plans and decision on the financing strategies are essential elements of SD strategy. www.cuidol.in Unit-8 (MBA605)

❖ Principles of Sustainable Development : 24 We need to arrest the dangerous trends. The Legal Principles for All right are reserved with CU-IDOL Environmental Protection and Sustainable Development adopted by the UN’s World Commission on Environment and Development include the following General Principles, Rights, and Responsibilities, which are clearly indicative of the role of the Government. ❖ Fundamental human right : All human beings have the fundamental right to an environment adequate for their health and well-being. www.cuidol.in Unit-8 (MBA605)

Elements of Sustainable 25 Development Strategy ❖ Vision: ✓ A prerequisite for an effective sustainable development strategy is a proper vision, i.e., a long-term view of what the future scenario should be. ✓ The economic and ecological aspect of it involves: ✓ An assessment of the future requirements ✓ An assessment of available resources and resources that can be tapped Land use pattern considering the requirements of various sectors, segments and purposes Energy strategy. ❖ The social aspect involves: ✓ An assessment of the existing human development levels and the developments targets for the future. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

Elements of Sustainable 26 Development Strategy ❖ Polices : ✓ Policies are a very important element of the SD strategy like environmental demarcation of ecologically sensitive area (ESA), costal zone policy, agricultural policy, technology policy, industrial policy etc. ❖ Regulations: ✓ Regulations are required to implement the policies. Examples: Industries Development of Regulations Act, Pollution Control Acts etc., regulation of constructions, mining, agricultural activities in ESAs, coastal areas etc. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

❖Inter-generational equity: States shall conserve and use the environment and 27 natural resources for the benefit of present and future generations. ❖Conservation and sustainable use: States shall maintain ecosystems and ecological processes essential for the functioning of the biosphere, shall preserve biological diversity, and shall observe the principle of optimum sustainable yield in the use of living natural resources and ecosystems. ❖Environmental standards and monitoring: States shall establish adequate environmental protection standards and monitor changes in and publish relevant data on environmental quality and resource use. ❖Prior environmental assessments: States shall make or require prior environmental assessments of proposed activities which may significantly affect the environment or use of a natural resource. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

❖Prior notification, access and due process: States shall inform in a 28 timely manner all persons likely to be significantly affected by a planned All right are reserved with CU-IDOL activity and to grant them equal access and due process in administrative and judicial proceedings. ❖Sustainable development and assistance: States shall ensure that conservation is treated as an integral part of the planning and implementation of development activities and provide assistance to other States, especially to developing countries, in support of environmental protection and sustainable development. ❖General obligation to cooperate: States shall cooperate in good faith with other States in implementing the preceding rights and obligations www.cuidol.in Unit-8 (MBA605)

World Business Council for 29 Sustainable Development ❖ World Business Council for Sustainable Development (WBCSD) founded on the eve of the 1992 Rio Earth Summit to involve business in sustainability issues and Business Environment and Regulatory Framework give it a voice in the forum. ❖ The mission of WBCSD is to provide business leadership as a catalyst for change toward sustainable development, and to support the business license to operate, innovate and grow in a world increasingly shaped by sustainable development issues. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

World Business Council for 30 Sustainable Development ❖ The Council’s objectives are to: ✓ Be a leading business advocate on sustainable development. ✓ Participate in policy development to create the right framework conditions for business to make an effective contribution to sustainable human progress. ✓ Develop and promote the business case for sustainable development. ✓ Demonstrate the business contribution to sustainable development solutions and share leading edge practices among members. ✓ Contribute to a sustainable future for developing nations and nations in transition. Unit-8 (MBA605) All right are reserved with CU-IDOL www.cuidol.in

4R’s 31 Reduce: The scope for reducing resource use is enormous at the individual/household and organisational levels (particularly in the industrial and commercial sectors), like reducing the use of electricity and water; using steel cutlery instead of throwaway plastic and paper items; using reusable carry bags for shopping; reducing paper usage by digitalization; economizing material usage in product packaging; reducing (economies) input intensity in production, provision of service etc. and so on. Reuse: Kenneth Galbraith described affluent societies as effluent societies referring to the effluence caused by affluent consumption including use and throw products. Scope for reuse is plenty and encompasses clothing (including by mending), containers and household appliances (by proper maintenance and repairing, market for used products etc.). Composting and bio-gas generation using domestic waste is a very important area of reuse. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

Recycle: A lot of resource conservation can be achieved by recycling materials left over after the regular use of 3 2 materials commonly recycled included, paper and paper products, metals, plastics etc. There are recyclable materials in discarded products like electric fan, electric motor, battery etc. There is considerable scope for recycling water in many industries. Putting in place an efficient recycle system by organizations like local governments for effective collection and processing of the recyclable materials is important. In many places, NGOs and SHGs are involved in such systems. Regenerate: Regeneration has an important role in restoring destroyed/damaged ecology. It encompasses replanting; restoring pond/tank lake, river etc. to the original condition (at least to the extent feasible; replenishing water bodies with aquatic life subject to population shrinkage and doing same sort of things for birds, animals, flora etc. Projects for conservation of wild life may also be considered under this. Some paper manufacturing companies are replanting to make good for the wood they use. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

MULTIPLE CHOICE QUESTIONS 1) Which of the following is not a component of the 4Rs in sustainable development 33 A) Reduce C) Recycle B) Renovate D) Reuse 2) Green product means A) All agricultural products C) Environment friendly product B) Fresh product D) Fresh vegetables and fruits 3) Green washing refers to: A ) Misrepresenting a product as green product C) Removing environmentally harmful elements in a product B) Publicity for green product D) Marketing farm fresh products. 4) The Sustainable Development Goals 2015-2030 was proclaimed by: A) United Nations C) Planning Commission of India B) Government of India D) Niti Aayog Answer:1 (B) , 2 (C), 3 (A), 4(A) Unit-8 (MBA605) All right are reserved with CU-IDOL www.cuidol.in

SUMMARY ❖Green Marketing: Green marketing is the marketing of products that are presumed to be environmentally safe. 34 ❖Sustainable Development: Sustainable development as development that meets the needs of the present without compromising the ability of future generations to meet their own needs. ❖Ecosystem: An ecosystem is a community of living organisms in conjunction with the nonliving components of their environment, interacting as a system. ❖Sustainable Marketing: Sustainability marketing is a way to build relationships with consumers while letting them know that they are important and so are future generations. ❖ Green Washing: refers to misleading marketing about the environmental benefits of a product. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

FREQUENTLY ASKED QUESTIONS 35 Q1. Explain green marketing? Ans. Green marketing is the marketing of products that are presumed to be environmentally safe. For further detail refer to the SLM unit-11. Q2. What is green washing? Ans: Green Washing refers to misleading marketing about the environmental benefits of a product. For further detail refer to the SLM unit-11. Q3. Explain 4Rs with reference to sustainable development. Ans: Reduce, Reuse, Recycle and Regenerate. For further detail refer to the SLM unit-11. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

REFERENCES ❖ Baumel, W.J.,A.S. Blinder and W.M.Scarth (1985), Economics:Principles and Policy, Academic Press Canada, 3 6 Toronto, Chapters-26, 34, 38, 40 and 41. ❖ Planning Commission, (1997) Approach paper to the Ninth Five Year Plan, Government of India, New Delhi Chapter-1. ❖ Swamy, D.S. (1994), The Political Economy of Industrialization, Sage Publications, New Delhi, Introduction, Chapter-1, and Conclusion. ❖ Dasgupta, A and Sengupta, N.K. 1989 Government and Business, Vikas Pulishing House, New Delhi. ❖ Nadkarni, M.V., A.S. Seetharamu and Abdul Aziz, 1991, India – The Emerging Challlenges, Sage India. ❖ Krishna, Sumi, 1996, Environmental Politics, Sage India. www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL

37 THANK YOU For queries Email: [email protected] www.cuidol.in Unit-8 (MBA605) All right are reserved with CU-IDOL