Monday, February 22, 2010

Pollution = Profit?

An unpublished study for the United Nations is reporting that an estimated one-third of profits of the worlds largest companies would be commandeered for environmental damage done in the process of running their businesses. For now, companies in this category are not currently held financially accountable for their emissions, but have ultimately contributed to the contamination of rivers, air, soil, and so on. The data has been compiled through a London-based consultancy called Trucost. They believe that the estimated damages near the likes of $2.2 trillion during their study in 2008 and could be considerably higher. The UN-backed Principles for Responsibility Investment initiative is looking into the practices of 3,000 of the largest companies world-wide in terms of their emission levels, output, efficiency, and waste levels.
Much of the concern is over who gets the blame for the damages as this is a very hard number to quantify. Presently, Trucost is evaluating costs of power, clothing, and aluminum industries as these are believed to be the biggest contributers to the emissions of GHG's (Green House Gases), VOC's (Volatile Organic Compounds), and water misuse. Though the figures presented do not include social impacts of energy use (appliances or waste). This is a collective action problem on a global scale and policy makers worldwide must find an appropriate tax/retribution that will justifiably hold the largest polluters financially accountable for their actions. Growing concern for environmental damage is reaching critical levels and the argument to abolish government subsidies in order to combat harmful practices in agriculture, energy use, and transportation are getting attention from the public. As stated before these damages are hard to quantify, but it is never to late to take action in fighting global climate change and resource destruction. The entire study will be published by Trucost this summer.


  1. Works Cited:

    Jowit,Juliette. The Guardian. Feb. 18 2010

  2. I think the study Trucost is conducting is very cool. However, it seems like it would be hard to blame any portion of environmental degredation on any one company. How does Trucost estimate the amount of environmental damage one company has contributed and assess a monetary value to this damage? I do think that once Trucost's study comes out in the summer, in which many companies will be blamed for their contribution to environmental degredation, that these companies will seek to improve the environment on their own or donate money to environmental organizations in order to improve their corporate social responsibility image and look responsible in the eyes of their stakeholders.

  3. In some of the other classes I have taken in which we have looked at large and small companies who pollute it seemed to make the most the sense to establish a cap and trade system which would ultimatley lead the smaller companies to become completely sustainable, and sell their polluting certificates to the larger companies who would not change their means of production too significantly. Although I personally believe that all companies, large and small, should take an active role in becoming more environmentally conscious, I think this would be a good step in the right direction.

  4. The amount of profit that would be offset if firms were held accountable for their emissions and environmental damages is startlingly high. Political regulations (whether they be command-and-control, emissions taxes, or abatement subsidies) seem like one of the most immediately viable and effective systems to begin holding firms accountable for their emissions.

  5. This is once again a case of the world's corporations failing to put a price on the environment's impact. We tend to just assume it is and putting in things/taking out things has no financial effect. This is an obvious logical phalacy. The fact that someone is trying to put these values down and hold companies response is a step in the right direction.


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