Pollution in International Businesses

There are several ethical issues that arise in the environment of international businesses. We can
easily find a business doing ethical violations such as the child labor, pollution, manipulating
earnings and funds etcetera. From my perspective, the most important ethical issue is the
pollution. Environment of earth is changing; the temperature of earth will increase up to 4
Celsius by 2021. The major reason behind that rise is the ozone layer depletion caused by the
emissions at the factories. Top firms in the worlds are causing environmental damages that are in
the trillions of dollars (Jowit, 2010). The recent studies had shown that about 18 to 37 percent of
the total emissions in the china are caused by the businesses that are multinational (Conversation,
2017). We can see the examples of Volkswagen and Shell. Recently in Nigeria, during oil
extraction a pipe burst caused a huge amount of oil mix-up with water. Apparently shell was
responsible of this pollution but they were not fined. Government of the host countries has taken
several steps in order to reduce the emission rates but companies still have options to pollute the
environment. As it is written in the case study of Volkswagen in textbook, the scandal of
emission gate started in the September 2015. They were polluting the air by their contaminating
diesel engines. In the 2015, their sales were about 10 million units. A study stated that their
diesel engines were releasing 40 times more nitrogen oxide than the permitted limit. It means
their engines were poisoning the planet. But, the most unfortunate thing is their denial of these
allegations. They decided that CSR didn’t matter. The only priority of them is to increase sales.
This is the dark side of a multinationals. They were unethically violating the emissions laws.

In the EU, there is a law named as emissions trading scheme that is used by the companies to
purchase the right to pollute. Firms that are producing fewer emissions can sell their rights to the
firms that are polluting more (Callum, 2009). According to the John Rawl’s veil of ignorance
theory, there should be equal rights for every individual. We can see that in the developing
countries, they allow multinationals to pollute the environment just for the sake of FDI to boost
their economy whereas local firms are not allowed to pollute the environment at the same level.
We can say this action as the social inequality as per John Rawl’s perspective. The governments
of these countries are under the veil of ignorance and didn’t focus on the consequences of these
actions.
It is the ethical and social responsibility of the international businesses to protect environment.
The main reason behind these ethical violations is the cost associated with the measurements that
a firm may take to reduce environmental damages. According to a report, if the world’s top
multinationals were held financially accountable for the pollution caused by them, it would wipe
out the one third of their total earnings. As a business manager, there are two perspectives
regarding to the shareholders concern. Stockholders may fell socially responsible to invest in a
firm that is actively taking part in the reduction of emissions. It will increase the reputation of the
firm in the mind of their customers, society, and shareholders. But, at the same time shareholders
may fear of their dividends. A huge amount from the revenues will be excluded from net income
to pay for the emissions that will cause a less dividend distribution among the shareholders. We
can say that this is an ethical dilemma under the veil of ignorance. But, people should be more
concerned about the environment in which they are living instead of the money they are
generating unethically by avoiding environment safety measures.

Works Cited
Callum. (2009, 03). Ethical Issues in International Business. Retrieved 06 12, 2019, from Blogspot:
http://callum-ethical-issues.blogspot.com/2009/03/pollution-in-international-business.html

Conversation, T. (2017, 05 19). When some US firms move production overseas, they also offshore their
pollution. Retrieved 06 11, 2019, from The Conversation: http://theconversation.com/when-
some-us-firms-move-production-overseas-they-also-offshore-their-pollution-75371

Jowit, J. (2010, 02 18). World's top firms cause $2.2tn of environmental damage, report estimates.
Retrieved 06 11, 2019, from The Guardian:
https://www.theguardian.com/environment/2010/feb/18/worlds-top-firms-environmental-
damage