The Environment as a Stakeholder

While it may be difficult to understand the concept of the “environment” being a stakeholder under traditional notions of stakeholder theory, activists and indigenous groups formed around the purpose of protecting and preserving natural resources and fighting man’s activities that trigger climate change have been successful all around the world in shaping, delaying or defeating large, planned infrastructure projects and exposing damage to the environment caused by businesses. Responsibility to the environment is sometimes included among a company’s community responsibilities; however, it is useful to treat environmental matters separately since the scope of potential issues is so varied and can touch upon several different aspects of business operations. For example, certain lines of business require significant consumption of natural resources such as fresh water, minerals, oil and timber. Manufacturing processes can also have important and dangerous consequences for the environment and the safety of people living in proximity to the manufacturing activities (e.g., air, land and water pollution). In addition, operation of products sold by companies can create environmental hazards, such as the emissions from automobiles and the toxic waste from discarded electronic components. The production of products, including the raw materials that are used to create the finished products, and the eventual use of those products by consumers, each have a significant environmental impact. Responsible businesses understand their obligations to proactively reduce adverse environmental impacts throughout the life cycle of their products, either by their own actions or through steps taken to influence the behaviors of consumers once the products have passed into their hands. To the extent that companies rely on the actions, products and services of third parties in the production process, they also have a duty to monitor the environmental impact of the operations of such parties, at least to the extent of operations that are relevant to creating the inputs that those parties provide to the company