Sustainable Development & Bank Loans

The environmental movement that was initiated with Earth Day in 1970 (O'Riordan, 1995). This movement, thus, will be three decades old in the spring of this year (2000). Corporations, during the earlier years of this movement were characterized by a state of denial with respect to the impact of their operations on the physical environment. A series of ecological disasters led to the development of widespread public support for the strict government regulation of activities that hold the potential to harm the physical environment. By the mid-1990s, many corporations had recognized a responsibility to do no harm to the physical environment. This recognition was manifested in revised products and production processes that reduced the potential for environmental harm. Further, many corporations have found that it is not only possible but also feasible to reduce pollution and increase profits simultaneously (Hart, 1997).

Although many corporations have accepted a responsibility not to harm the physical environment, far more have either not accepted such a responsibility or have demonstrated little commitment to such acceptance of responsibility in actual practice. Further, although the essential premise of corporate social responsibility is the integration of business activity and the broader society, neither corporations nor government (representing society) have defined precise mechanisms to attach real accountability to a corporate social responsibility

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deration, and not just those who provide capital." Some of the world's innocents might be excused for thinking that the world in which business operates changed long ago, when the sweat shops of early-twentieth century industrial society were eliminated and when societies appeared to be making businesses act as good citizens whether or not they were in actual fact. While the innocents hopes for the best, however, the forces of reaction were busy attempting to undo whatever modicum of social responsibility had been introduced into the operation of businesses. At the close of the decade of the 1960s, when industrial societies were thought by some to be beginning to develop a strong social conscience, one of the ideas being incorporated into the expanded concepts of corporate social responsibility was that all institutions and organizations�including business firms, which derived benefit from being a part of and which individually or collectively affected the direction of a society�had responsibilities to that society which extended beyond self interests. American economist Milton Friedman (1970) and most business executives of the day, however, rejected this notion. Friedman (1970) said that a corporation should be free to act

Category: Economics - S