The economy of a nation does not run and function as a separate entity, but rater functions and obtains resources from nature (Crane & Matten 2007). When an economy is running, resources from nature are being utilized continuously, and, thus, do affect our environment. The environment needs to be sustained so that future generations will benefit from it. Environmental sustainability is the act of maintaining the nature’s wealth, which leads to sustainability of social and economic life. Production companies drive the economy forward; however, if the correct environmental policies are not put in place, the environmental resources used are quickly being depleted (Crane & Matten 2007).
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Environmental degradation has become one of the major challenges in recent years, affecting the well-being of people across the world. Business premises, such as companies, bear the greatest responsibility in the maintenance of the environment. Companies will gather raw materials from the environment, which they use to manufacture their products. These companies have the responsibility to ensure their resources are not depleted. Companies should be involved in tree planting programs to deal with the problem of deforestation (Falloux & Talbot 1993, p. 124). They should also device ways of manufacturing products which do not use much timber. This will ensure long-term maintenance of forests. Pollution is a component which is detrimental to environmental sustainability. Pollution from companies may be either water or air pollution. These companies need to control their wastes effectively to solve the problem of environmental degradation. It is clear that pollution, be it water or air pollution, endangers life. These resources are needed by these companies to continue regenerating the needs they provide, hence, the importance of conservation (Christiaensen 2007, p. 254).
Companies should also abide with the set rules relating to environment sustainability. If companies would follow the set laws on environment, they could make a huge step forward towards maintaining the environment. One example is the Kyoto protocol, which was adopted in 1997. This protocol set limits of green house gas emissions that industrialized countries can emit. If such statutes were to be followed, then problems of air pollution would be reduced. The sources of energy that companies use should be sustainable and friendly to the environment. Using fossil fuels as a source of energy leads to gas pollution effects on the environment, and companies should avoid using them (Conor 2004, p. 321). As opposed to this, companies should use eco-friendly sources of energy like solar power, wind power, geothermal, and Bio fuels.
The environmental is paramount for the survival of current and future generations. The resources provided by the environment are needed now and in future if the environment, social, and economic life is to be maintained.
5. The Four Most Important Drivers of Responsible Investment
Investment is the aspect of using money or capital to acquire assets with the intention of gaining profitable returns in form of interest or proceeds.
The prevailing market price is a main driver for investment. Any investor will do an extensive research on the prevailing market price before committing his resources to the investment. Before investing, the investor should know the expected future prices, wage rates, and cost of investment. When there is uncertainty on the above three factors, the investor will not invest. When current market prices are high, this is an indication of inflation, which impedes the investment (Crane & Matten 2007). Inflation will have an effect on the cost of production. It will raise the cost of production because prices of all products and services will be high. High prices also increase the interest rates and, therefore, raise the cost loans.
Investment cost must be low and reasonable if anyone is to be involved in meaningful investment. Inflation raises the investment cost and impedes the drive to invest. Uncertainty of future costs of investment will deter investment. The uncertainty may lead to increased prices, hence, inflation, which will raise the investment cost. On the other hand, low prices will mean low costs of investment, and this will encourage more investment. Future uncertainty on investment cost determines the quantity of investment a firm can undertake.
Market is another driver of investment worth noting. Investing aims at gaining some income or interest, and without a constant market, this may not be achieved. In areas where there is a constant market, there exists a high probability that people will invest. The markets need to be constantly available to drive the process of investment (Daniel 2009, p. 104). Availability of market will also depend on the real wage of the customers. High real wage will enable the customers to offer a good reliable market.
Investing requires a constant supply of the goods or services being offered in the market. For any reasonable investment to take place, there should be constant supply of good or services being delivered to the market. If the investor is the producer himself, there should be constant supply of raw materials to run the process of production.
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