Arnulfo Almeniana: Divine Word College of Laoag, Philippines
20 May 2023
This article explores the ethical considerations surrounding the
use of renewable energy in business and management. The adoption of renewable
energy sources in production and manufacturing processes has become a key
strategy for businesses to reduce their carbon footprint and contribute to
sustainable development goals. However, the adoption of renewable energy in
business and management is not without ethical considerations. This article
aims to review existing literature on the subject and provide theoretical
frameworks, such as stakeholder theory, to analyze the potential impacts of
renewable energy adoption on different stakeholders, including employees,
customers, and local communities. While the adoption of renewable energy
sources can provide significant environmental benefits, businesses face several
challenges and barriers when implementing renewable energy strategies,
including cost and financing issues, regulatory and policy barriers, and
technical and operational challenges. The role of government and policymakers
in promoting ethical practices in business and management using renewable
energy will also be examined. The article will analyze policies and
regulations, that incentivize and encourage businesses to adopt renewable
energy sources. Ultimately, this article aims to provide a comprehensive
analysis of the ethical concerns and challenges that businesses face when
adopting renewable energy practices in production and manufacturing and to
provide recommendations for businesses and policymakers on how to promote the
ethical adoption of renewable energy in business and management.
Keywords: ethics in business, renewable energy management,
production, manufacturing
Introduction
The increasing global demand for sustainable business practices
has led to a growing adoption of renewable energy in production and
manufacturing processes. Renewable energy sources such as wind, solar, and
hydroelectric power offer an environmentally friendly alternative to
traditional energy sources and can help businesses reduce their carbon
footprint (Scherer & Palazzo, 2011). However, the integration of renewable
energy into business operations is not without ethical concerns.
This research article aims to explore the ethical considerations
associated with the use of renewable energy in business and management. The
article will focus on the social and environmental impacts of renewable energy
adoption, as well as the ethical implications of renewable energy production
and usage. As businesses increasingly adopt renewable energy practices in their
production and manufacturing processes, some significant ethical concerns and
challenges need to be addressed. The transition to renewable energy sources
raises questions about the responsibility of companies to mitigate their
environmental impact, while also ensuring the well-being of all stakeholders.
According to Collins et al. (2020), these concerns include issues related to
labour rights, fair trade practices, and social justice.
One other major ethical concern associated with renewable energy
is the social and environmental impact of the technology used to produce it.
While renewable energy is generally considered to be more environmentally
friendly than traditional sources of energy, the production of renewable energy
technologies can have negative impacts such as the displacement of local
communities, land-use conflicts, and habitat destruction (Kopits, 2018). For
example, the production of solar panels requires the use of rare earth metals
and toxic chemicals, which can lead to environmental pollution and worker
exploitation (Kopits, 2018).
The goal of this research is to provide a framework for
businesses to consider the ethical implications of renewable energy adoption in
their operations and to promote sustainable business practices that prioritize
social and environmental responsibility.
Renewable energy is becoming increasingly popular in the
business world as a way to reduce environmental impact and promote
sustainability. A growing body of literature has explored the ethical
implications of renewable energy adoption in business and management. This
section will review some of the key findings in the literature, along with
relevant theoretical frameworks.
One key framework for analyzing the ethical implications of
renewable energy adoption is corporate social responsibility (CSR). CSR
emphasizes the social and environmental impacts of business activities and
encourages companies to take responsibility for their actions. Several studies
have explored the relationship between renewable energy adoption and CSR. For
example, Sánchez-Braza et al. (2020) analyzed the impact of renewable energy on
CSR performance in Spanish firms, finding that companies with higher renewable
energy adoption had better CSR performance. Similarly, Rahman et al. (2021)
found that renewable energy adoption positively affected CSR performance in the
Malaysian context.
Another important theoretical framework for analyzing the
ethical implications of renewable energy adoption is stakeholder theory.
Stakeholder theory emphasizes the importance of considering the interests of
all stakeholders affected by business activities, including employees,
customers, suppliers, and the environment. Several studies have applied
stakeholder theory to the analysis of renewable energy adoption in business and
management. For example, Sadiq et al. (2021) conducted a systematic review of
empirical studies on renewable energy adoption and stakeholder perceptions,
finding that stakeholder engagement was critical to the success of renewable
energy projects. Similarly, Olsen et al. (2019) emphasized the importance of
stakeholder engagement in corporate sustainability initiatives.
The triple bottom line (TBL) approach is another important
framework for analyzing the ethical implications of renewable energy adoption.
The TBL approach emphasizes the importance of balancing economic, social, and
environmental considerations in business decision-making. Several studies have
applied the TBL approach to the analysis of renewable energy adoption. For
example, Parnell and Stirling (2017) argued that industrial policy could
achieve a triple-win outcome by reducing inequality, mitigating climate change,
and growing the economy.
Several studies have also explored the ethical considerations
associated with renewable energy adoption in specific industries. For example,
a study by Yadav and Yadav (2021) examined the ethical implications of
renewable energy adoption in the Indian textile industry, highlighting the
potential social and environmental benefits of renewable energy adoption as
well as the need for ethical considerations related to stakeholder engagement
and environmental impact assessments.
There has been a growing body of literature targeted at the
ethical dimensions of renewable energy in business and management over the
years. These studies have expanded on earlier works, providing additional
insights into the benefits and challenges of renewable energy and its
implications for ethical decision-making. In this section, we review some of
the more recent literature on this topic, with a particular focus on the
ethical considerations associated with renewable energy in business and
management.
One of the key contributions to the literature in recent years
has been the concept of energy justice, which emphasizes the importance of
ensuring that access to energy is equitable and sustainable for all (Sovacool
et al., 2020). This approach recognizes that renewable energy has the potential
to address social and environmental injustices, such as energy poverty and climate
change, as well as the need to ensure that the benefits of renewable energy are
distributed equally and that the potential negative impacts are reduced.
Another significant contribution to the literature is the
concept of responsible innovation, which emphasizes the importance of
considering the ethical, social, and environmental implications of
technological innovations (Stilgoe et al., 2013). This approach has been
applied to renewable energy, highlighting the need to consider the broader
social and environmental impacts of renewable energy technologies and the
importance of engaging with stakeholders in the development and implementation
of these technologies.
Several recent studies have also focused on the ethical
implications of specific renewable energy technologies, such as solar and wind
energy. Breyer et al. (2020), examined the ethical implications of scaling up
solar energy production and highlighted the need to consider the social and
environmental impacts of large-scale solar installations. Another study by
Shapira et al. (2021) examined the ethical implications of wind energy and
highlighted the importance of addressing issues such as noise pollution and the
impact on wildlife.
Other studies have highlighted the importance of CSR in
promoting ethical and sustainable business practices in the renewable energy
sector (Graafland et al., 2018). These studies have also emphasized the need
for greater transparency and accountability in the renewable energy industry to
ensure that CSR commitments are met and that the social and environmental
impacts of renewable energy are minimized.
Ethical Concerns in
implementing renewable energy
Implementing renewable energy strategies can bring about several
benefits to companies, such as cost savings, reduced carbon emissions, and
improved corporate social responsibility (CSR) performance. However, companies
may face various challenges and barriers when trying to adopt renewable energy
in their production/manufacturing processes. This section takes an in-depth review
of some of these challenges and barriers.
One major ethical concern that has been associated with the
adoption of renewable energy is its potential impact on employees. Businesses
may need to invest in new technology and training for employees to ensure that
they can effectively operate and maintain renewable energy systems. However,
this may also result in job losses if employees are not retrained or if the
business decides to outsource operations to third-party contractors. Therefore,
businesses must consider the social and economic impact of renewable energy
adoption on their employees and take steps to mitigate any negative impact.
While renewable energy technologies have been improving, the initial investment
required for their implementation can still be quite significant. Many
companies may not have the financial resources to invest in renewable energy
infrastructure, which can lead to slow adoption or abandonment of the projects
altogether (Praetorius et al., 2021). Moreover, accessing financing from
traditional lenders can be challenging due to the perceived high risk of
renewable energy projects.
Businesses also face several technical and operational
challenges when implementing renewable energy strategies. Renewable energy
technologies can be complex and require specialized skills and knowledge to
operate and maintain effectively. Integrating renewable energy infrastructure
with existing production processes can also be challenging, leading to
operational disruptions (Jouhara et al., 2020). Furthermore, the reliability
and intermittency of some renewable energy sources can create difficulties in
ensuring a continuous and consistent energy supply, which can affect production
processes' stability. For example, renewable energy sources such as wind and
solar are intermittent and require energy storage solutions to ensure a stable
supply of energy. The costs associated with energy storage systems may be
prohibitive for some businesses, making it challenging to fully adopt renewable
energy sources. Similarly, businesses must also ensure that their existing
infrastructure is compatible with renewable energy sources, which may require
additional investments.
Another ethical concern is the potential impact on local
communities. The adoption of renewable energy sources may require the
installation of new infrastructure, such as wind turbines or solar panels,
which could have visual and environmental impacts on local communities.
Businesses must ensure that they engage with local stakeholders and address any
concerns they may have regarding the impact of renewable energy adoption on
their community.
Furthermore, businesses may face regulatory and policy barriers
when adopting renewable energy sources. Policies and regulations that promote
fossil fuel use or discourage renewable energy adoption can create significant
hurdles for companies that want to invest in renewable energy infrastructure
(Zhu et al., 2019). Additionally, the lack of standardized and transparent
regulatory frameworks for renewable energy procurement can also create
confusion and uncertainty for companies, making it difficult for them to plan
their renewable energy strategies effectively.
Impacts of adopting
ethical practices in renewable energy
Renewable energy adoption in production and manufacturing
processes can have significant impacts on various stakeholders, including
employees, customers, and local communities. This section discusses some of the
potential impacts of renewable energy adoption on these stakeholders.
Firstly, employees can benefit from renewable energy adoption in
various ways. For instance, the shift towards renewable energy can create new
job opportunities in the renewable energy sector, which can contribute to job
creation and economic growth (ILO, 2020). Furthermore, renewable energy
adoption can improve the health and safety of employees by reducing exposure to
hazardous pollutants and reducing the risk of accidents associated with
traditional energy sources (Bhattacharya et al., 2020). Additionally, renewable
energy adoption can enhance employees' sense of pride and engagement in the
company's commitment to sustainable practices, which can lead to increased job
satisfaction and retention (Ehnert et al., 2016).
Secondly, customers can also benefit from companies' adoption of
renewable energy. Customers are increasingly conscious of the impact of their
purchases on the environment and prefer to buy from companies that demonstrate
a commitment to sustainability. Adopting renewable energy strategies can
enhance a company's reputation and attract environmentally conscious customers
(Kumar et al., 2016). Furthermore, renewable energy adoption can lead to lower
prices for customers, as companies can pass on cost savings from reduced energy
costs to their customers (Elnathan et al., 2020).
Thirdly, renewable energy adoption can also have a positive
impact on local communities. For instance, renewable energy infrastructure can
provide local communities with access to affordable and reliable energy, which
can contribute to poverty reduction and economic development (Kibert, 2019).
Additionally, renewable energy adoption can reduce air and water pollution,
leading to improved health outcomes for residents (Bhattacharya et al., 2020).
Moreover, renewable energy adoption can create opportunities for community
engagement and partnerships between companies and local communities, leading to
mutually beneficial outcomes (Levy et al., 2019).
Case studies of
companies promoting ethical practices
IKEA and Unilever are among the companies that have successfully
implemented renewable energy in their production/manufacturing processes while
addressing ethical concerns. These companies have demonstrated that it is
possible to integrate renewable energy into their operations while promoting
ethical and sustainable practices.
IKEA's commitment to renewable energy is grounded in its
corporate social responsibility strategy, which emphasizes sustainability and
social responsibility. The company has set ambitious targets to reduce its carbon
footprint and is committed to using 100% renewable energy by 2020. IKEA's
efforts to integrate renewable energy into its operations have been guided by
the triple bottom-line approach, which considers environmental, social, and
economic factors in decision-making (Elkington, 1998). The company has also
adopted a circular economy approach, which seeks to minimize waste and maximize
resource efficiency (Kirchherr, Reike, & Hekkert, 2017).
Unilever's commitment to renewable energy is also grounded in
its corporate social responsibility strategy, which emphasizes sustainable
business practices. The company has set a goal of sourcing 100% of its energy
from renewable sources by 2030 and has made significant investments in
renewable energy projects. Unilever's approach to renewable energy is guided by
stakeholder theory, which emphasizes the importance of considering the
interests of all stakeholders in decision-making (Freeman, 1984). The company
has also adopted a system thinking approach, which considers the complex
relationships between different components of a system (Senge, 1990).
These companies demonstrate that it is possible to implement
renewable energy in production and manufacturing processes while addressing
ethical concerns. By investing in renewable energy and making efforts to ensure
that their projects are ethical and sustainable, these companies have not only
reduced their environmental impact but have also demonstrated their commitment
to corporate social responsibility. Their efforts serve as a model for other
companies looking to adopt renewable energy responsibly and ethically.
The role of government and policymakers in promoting ethical practices in business and management
The government and policymakers have a significant role to play
in promoting ethical practices in business and management using renewable
energy. Renewable energy policies and regulations can incentivize and encourage
businesses to adopt renewable energy sources, leading to a cleaner and more
sustainable economy. One way the government can promote ethical practices is by
implementing a feed-in-tariff (FIT) system. FITs are policies that provide
financial incentives to businesses that produce renewable energy. This system
ensures that businesses have a stable and predictable revenue stream, which
reduces financial risk and encourages long-term investment in renewable energy
sources (Hughes & Lipman, 2012). Additionally, the government can provide
subsidies and tax credits for businesses that invest in renewable energy technologies.
Moreover, government policies can regulate the use of
non-renewable energy sources, such as coal and oil, by imposing taxes and
penalties on their use. This can incentivize businesses to shift towards
renewable energy sources, reducing their carbon footprint, and promoting
ethical practices. Policymakers can also encourage the development of renewable
energy infrastructure, such as the installation of charging stations for
electric vehicles, which can promote the adoption of renewable energy by businesses
and individuals.
As the world continues to grapple with the impacts of climate
change, the need for ethical business practices using renewable energy sources
has become increasingly important. Adopting renewable energy practices in
production and manufacturing not only reduces the carbon footprint of
businesses but also demonstrates their commitment to environmental
sustainability and social responsibility. While companies may face challenges
and barriers in implementing renewable energy strategies, such as cost and
financing issues, technical and operational challenges, and regulatory and
policy barriers, there are significant benefits to be gained. Renewable energy
adoption can lead to cost savings, improved stakeholder relationships, and an
enhanced reputation.
In addition to the benefits for businesses, renewable energy
adoption can also have positive impacts on stakeholders such as employees,
customers, and local communities. Improved air and water quality, reduced
health risks, and social responsibility can all be achieved through the
adoption of renewable energy practices. To achieve a sustainable future,
governments and policymakers play a critical role in promoting ethical
practices in business and management using renewable energy. The adoption of
renewable energy practices in production and manufacturing is crucial for
businesses to demonstrate their commitment to environmental sustainability and
social responsibility.
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