Bernardo M. Villegas
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Rebalancing Strategy
published: Mar 31, 2017

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Addressing Environmental Sustainability for Business (Part III)

           Environmental PR can evoke two opposite reactions.  Activists often draw a distinction between the messaging done by firms that they perceive to be genuine and those simply paying lip service to the issue in their communications.  The latter practice is often referred to as “greenwashing,” playing on the term whitewash.  Kevin Tuerff, a pioneer in green marketing based in Austin, Texas defines greenwashing as “when a company or organization spends more time and money claiming to be ‘green’ through advertising and marketing than actually implementing business practices that minimize environmental impact.”  Only self-reflection and sincerity with the public can a company draw the line between being transparent about its activities and merely engaging in a public relations campaign, although the two are not mutually exclusive.

          Then there is engagement, which is used to describe those organizations making an earnest effort to understand and work with the issues involved in environmental sustainability.  The distinction between engagement and environmental PR has to do with the breadth, and depth, of the response to environmental issues by senior management.  Engagement is used to describe a set of actions that clearly go beyond good communication and has both an internal and external component.  Internally, companies become engaged when they look at the environmental footprint across the firm and take active steps to reduce that footprint.  Externally, firms which are engaged in environmental sustainability make it a point to reach out and engage with a wide variety of stakeholders and also partner directly with environmental interest groups.  Instead of starting with a confrontational mind set, it is hoped that resource-based firms in the Philippines will do their best to have continuing dialogues with the new officials of the DENR. I have gotten the distinct impression that President Rodrigo Duterte wants to foster bilateral talks between his government and the private sector concerning the issues of environmental sustainability.  The first order of the day is for all stakeholders to try to come to a consensus about the definition of “responsible mining.”

          The final mode of response can be termed “transformation and renewal.”  This refers to those firms that, whatever their motivations, have chosen to fully embrace the challenges owed by environmental problems and turn them into opportunities by re-inventing the firm itself.  One possible model of transformation and renewal is Gamesa, a wind energy company based in Spain, which was founded in 1976 to develop industrial machinery and equipment for the automotive industry.    Over the next 20 years, Gamesa branched out into other areas such as robotics and aerospace. In 1994, Gamesa began making wind turbines under license from Vestas, the Danish company that still leads the sector.  In 1995, Gamesa started developing its own wind farms and in 2001, the company went public and focused its activities almost exclusively on the wind energy business, where it now enjoys a global presence and is ranked number six in the world.

          These six responses have been presented as a check list of what can be done by companies in the ASEAN region in the area of environment sustainability.  Ethically speaking, some are definitely better than others.  As already mentioned above, one of them, i.e. “cover up”, can be unequivocally classified as unethical because it would involve an outright lie or at best, what is known as “mental reservation,” which has no place in a company that is serious about good governance.  Denial could be morally justified if management sincerely is of the belief that the socio-economic benefits conferred by the operations of the company greatly outweigh costs of the damage to the environment.   Companies may choose from among the remaining modes of response depending on the value that management and the board of directors assign to maximizing the value to the stockholder, protecting the welfare of the consumers of their goods and services, ensuring the continued employment and other benefits to their workers, and protecting the environment for future generations.  Addressing environmental sustainability for business has to ultimately grapple with the very nature of economic science:  using scarce resources of the planet to attain multiple socio-economic objectives across time and space.  For comments, my email address is