ETHICAL CONCERNS IN BUSINESS AND MANAGEMENT: A CASE STUDY OF

RENEWABLE ENERGY IN PRODUCTION/MANUFACTURING

[Student Name]

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 Abstract

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 analyse 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 analyse 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

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 Table of Contents
Abstract......................................................................................................................................2

Introduction................................................................................................................................4

Theoretical Framework..............................................................................................................4

Review of Related Literature.....................................................................................................5

Ethical concerns in implementing renewable energy.................................................................6

Impacts of adopting ethical practices in renewable energy........................................................7

Case studies of companies promoting ethical practices.............................................................8

The role of government and policymakers in promoting ethical practices in business and

management...............................................................................................................................9

Conclusion..................................................................................................................................9

References................................................................................................................................10

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 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, there are significant ethical
concerns and challenges that 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 prioritise social and environmental responsibility.

Theoretical Framework

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 analysing the ethical implications of renewable energy adoption is
corporate social responsibility (CSR). CSR emphasises 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) analysed 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.

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Another important theoretical framework for analysing the ethical implications of renewable
energy adoption is stakeholder theory. Stakeholder theory emphasises 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)
emphasised the importance of stakeholder engagement in corporate sustainability initiatives.

The triple bottom line (TBL) approach is another important framework for analysing the
ethical implications of renewable energy adoption. The TBL approach emphasises 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.

Review of Related Literature

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 emphasises the importance of ensuring that access to energy is equitable and
sustainable for all (Sovacool et al., 2020). This approach recognises 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 emphasises 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.

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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 emphasised 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
specialised 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.

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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 standardised 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 local 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).

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 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 emphasises 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 minimise waste and maximise resource efficiency
(Kirchherr, Reike, & Hekkert, 2017).

Unilever's commitment to renewable energy is also grounded in its corporate social

responsibility strategy, which emphasises 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 emphasises 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 in a responsible and ethical manner.

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.

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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.

Conclusion

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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