Is the natural environment a stakeholder? Of course it is (no matter what the Utilitarians might say)!

Woodward, David G. (2002) Is the natural environment a stakeholder? Of course it is (no matter what the Utilitarians might say)! Critical Perspectives on Accounting Conference, New York, USA. 24 - 26 Apr 2002.

Abstract

The idea of there being an inherent responsibility on the part of an organisation towards its stakeholders is hardly a novel concept, although there is both agreement and disagreement on what precisely is involved. Agreement takes the form of there being little dispute that some stakeholders are able to wield more power than others; disagreement pervades the debate regarding the precise formulation of the underlying model of responsibility extant, such that a ‘contingency’ approach would suggest every organisation faces a unique set of stakeholder demands. In all of this it is obviously apparent that one issue has hardly been touched upon at all. This concerns the place of the natural environment[i] in stakeholder analysis i.e. is it a valid corporate stakeholder or not?

Freeman’s (1984, p. 25) oft-quoted stakeholder definition (“any group or individual who can affect or are affected by the achievement of a corporation’s performance”) suggests stakeholders have to be human – either as individuals or collectivities. But some authors, particularly Starik (1995) and Carroll (1993) have persuasively argued that the natural environment should be considered a stakeholder in its own right. This would appear to go against the basic tenet of utilitarianism (as espoused by such as Bentham and J S Mill) of “the greatest good for the greatest number,” long accepted as a driving force of corporate ambition; and the philosophy/ethics of such as Kant, who viewed human duty (and organisations are, after all, merely collectivities of individuals) being exclusively towards other members of its own species. Both approaches probably explain why the natural environment has consistently been abused by business since the onset of the Industrial Revolution, although to the undoubted financial benefit of some stakeholders, principally owners, employees and suppliers.

But even those stakeholder theorists that give credence to the natural environment as a stakeholder have nevertheless still failed to address the obvious point that flora and fauna, the biosphere, mountain ranges and the oceans cannot themselves give expression to the matters of concern about corporate activity that would most distress those elements could they but articulate such concern. So the question then becomes: “Who is best able to speak for the environment?” Are Greenpeace, Friends of the Earth and other environmental pressure groups best qualified – or do they merely think they are? Who has granted them the mandate they have so obviously assumed? And is there a better way?

Thus the paper’s objective is to develop proposals for the explicit incorporation of the natural environment into organisations’ stakeholder management processes such as to then allow interactions with it as a recognised stakeholder then to be negotiated. This, it is considered, represents ‘stakeholder engagement’ carried to its logical conclusion.

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