Abstract
This chapter is organised into three sections. The first two sections outline the conceptual framework and the empirical procedure used in this project to evaluate the environmental risk generated by the firm. Risk is defined as the result of combining potential hazard, vulnerability and exposure. The framework suggests that the gap separating real – or managed – risk and potential – or evaluated – risk widens with less uncertainty and greater governability. The third section provides a description of the governability of environmental impact in Latin America, where the divide between real and potential risk is low, and where, therefore, methodologies that evaluate potential risk may also be appropriate for interpreting the extent to which evaluated risk is being managed.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Due to the differential characteristics of governability of the environmental impact in Spain, where the regulatory, social and corporate context is markedly different from other Ibero-American states, this chapter does not analyse the Spanish situation, which will be dealt with in Chapter 7.
- 2.
Otwin Renn (1992) identifies seven approaches to the concept and evaluation of risk: (1) Actuarial Approach: Application of the calculation of probabilities, statistics and financial mathematics to predictions of risk and insurance, (2) Toxicological and epidemiological approach (including ecotoxicology), (3) Engineering approach (including probabilistic risk evaluation), (4) Economic approach (including risk-profit comparison), (5) Psychological approach (including psychometric analysis), (6) Social Theories of Risk, and (7) Cultural Theory of Risk (using ‘gris-group’ analysis).
- 3.
As an example, we can take Yapa (2002)’s work, who documented the social and environmental consequences of the introduction of genetically modified rice in Sri Lanka. Yapa argues that the increase in expenses due to the use of pesticides and to treating the diseases they provoked actually made the farmers poorer, as well as degrading their means of subsistence and eclipsing cheaper and more sustainable crop techniques.
- 4.
Adger et al. (2004) define biophysical vulnerability as the result of combining four factors: (a) the nature of the hazard to which the system is exposed (for instance the duration of a flood or the likelihood of it recurring), (b) the probability of a hazard occurring, (c) the degree of exposure to the hazard (d) the intrinsic sensitivity or incapacity of the system to resist the adverse effects of the hazard to which it is exposed (this is equivalent to the concept of social vulnerability). Yapa (2002) makes the distinction between intrinsic social vulnerability, which is not a function of the hazard to which the system is exposed, and relative social vulnerability, which refers to the characteristics of a system that make it more vulnerable to certain types of hazard. For instance, the construction of housing below the flood elevation in areas susceptible to flooding increases the vulnerability to flooding, but not to industrial atmospheric pollution.
- 5.
Number of firms implementing ISO 14001 standard is often used as an indicator of voluntary environmental responsibility, therefore the more firms implementing the standard, the higher the governability of a country. CO2 emissions data used here represent the mass of CO2, a potent greenhouse gas, produced during the combustion of solid, liquid, and gaseous fuels, as well as from the manufacture of cement (CO2 is produced as a byproduct as cement is calcined to produce calcium oxide) and gas flaring. Environmentally aware industries will endeavour to reduce their CO2 emissions per unit of GDP.
- 6.
People in situation of poverty live in households with an aggregated income which is not enough to meet their basic food and non-food needs (housing, education, health). People living in extreme poverty or indigents are defined as persons whose household has an income so low that they cannot buy enough food to adequately cover their nutritional needs (ECLAC 2010).
- 7.
This is the most commonly used measure of inequality. The coefficient varies between 0, which reflects complete equality and 1, which indicates complete inequality (one person has all the income or consumption, all others have none).
- 8.
ISO 14001 is a voluntary standard for environmental management based on principles of compliance with national legislation and continuous improvement. Companies with ISO 14001 certification use their own management systems but must have external audits to assess their environment performance.
References
Adger, W., Brooks, N., Bentham, G., & Eriksen, S. (2004). New indicators of vulnerability and adaptive capacity. Tyndall Centre for Climate Change Research, Technical Report 7.
Afsah, S., Laplante, B., & Wheeler, D. (1996). Controlling industrial pollution: A new paradigm. Policy Research Department, World Bank: Working Paper N° 1672.
Aguilera, R., Rupp, D., Williams, C., & Ganapathi, J. (2008). Putting the S back in corporate social responsibility: A multi-level theory of social change in organizations. Academic of Management Review, 32(3), 836–863.
Allen, K. (2003). Vulnerability reduction and the community-based approach. In E. Pelling (Ed.), Natural disasters and development in a globalising world (pp. 170–184). London: Routledge.
Araya, M. (2006). Exploring Terra Incognita: Non-financial reporting in corporate Latin America. Journal of Corporate Citizenship, 21, 25–39.
Archer, D., Crocker, T., & Shogren, J. (2006). Choosing children’s environmental risk. Environment and Resource Economics, 33, 347–369.
Beck, U. (1992). Risk society. Toward a new modernity. London: Sage.
Becker, G. S. (1968). Crime and punishment: An economic approach. Journal of Political Economy, 76, 169–217.
Birdsall, N., & Wheeler, D. (1992). Trade Policy and industrial pollution in Latin America: Where are the pollution heavens? In P. Low (Ed.), International trade and the environment (pp. 117–126). Washington DC: World Bank.
Cardona, O. D. (2005). Indicators of disaster risk and risk management. Summary Report. IDB/IDEA Program on Indicators for Disaster Risk Management. Inter-American Development Bank, Sustainable Development Department Environment Division: Washington, DC.
Chudnovsky, D., Pupato, G., & Gutman, V. (2005). Environmental management and innovation in Argentine industry: Determinants and policy implications. Buenos Aires: CENIT, mimeo.
Crichton, D. (1999). The risk triangle. In J. Ingleton (Ed.), Natural disaster management (pp. 82–98). London: Tudor Rose.
Dasgupta, S., Hettige, H., & Wheeler, D. (2000). What improves environmental performance? Evidence from the Mexican Industry. Journal of Environmental Economics and Management, 39(1), 39–66.
Dasgupta, S., & Wheeler, D. (2001). Small plants, industrial pollution and poverty. In Hillary (Ed.), Small and Medium-sized firms and the environment (pp. 289–304). Sheffield: Greenleaf Publishing.
Deegan, C. (2002). The legitimizing effect of social and environmental disclosures – A theoretical foundation. Accounting, Auditing & Accountability Journal, 15, 282–311.
Dilley, M., Chen, S., Deichmann, U., & Lerner-Lam, L. (2005). Natural disaster hotspots: A global risk analysis. Washington, DC: World Bank.
Downing, T. E, Butterfield, R., Cohen, S., Huq, S., Moss, R., Rahman, A., et al. (2001). Vulnerability indices. Climate change impacts and adaptation. UNEP Policy Series. Nairobi: UNEP.
Dryzek, J. S. (1997). The politics of the earth. Oxford: Oxford University Press.
Du Toit, A. (2004). Social exclusion’ discourse and chronic poverty: A South African case study. Development and Change, 35(5), 987–1010.
Eakin, E., & Lemos, M. C. (2006). Adaptation and the state: Latin America and the challenge of capacity-building under globalization. Global environmental change, 16(1), 7–18.
ECLAC. (2010). Statistical yearbook for Latin America and the Caribbean, Economic Commission for Latin America and the Caribbean.
Edelstein, M. (1987). Contaminated communities. The social and psychological impacts of residential toxic exposure. Boulder, CO: Westview Press.
Erickson, K. (1994). A new species of trouble. Explorations in disaster, trauma, and community. New York: W. W. Norton.
Eskeland, G. S., & Jimenez, E. (1992). Policy instruments for pollution control in developing countries. The World Bank Research Observer, 7(2), 145–169.
Filgueira, C., & Peri, A. (2004). América Latina: los rostros de la pobreza y sus causas determinants. New York: United Nations Publications.
Funtowicz, S., & Ravetz, J. (1993). Epistemología Política, ciencia con la gente. Colección Fundamentos Ciencias del Hombre, Buenos Aires: CEAL.
Gallopin, G. (2006). Linkages between vulnerability, resilience, and adaptive capacity. Global Environmental Change, 56, 293–303.
Giddens, A. (1990). The consequences of modernity. Cambridge: Polity.
Giddens, A. (1991). Modernity and self-identity self and society in the late modern age. Cambridge: Polity Press.
Giddens, A. (1992). The transformation of intimacy. Cambridge: Polity Press.
Grynspan, R., & Kliksberg, B. (2008). Corporate social responsibility in Latin America. Not a waste of time or money. Foreign Policy, July/August, 167–169.
Guidi, M. (2008). Rethinking corporate social responsibility. A case study in Argentina from the point of view of the Civil Society, Nómadas. Revista Crítica de Ciencias Sociales y Jurídicas, 19(3) Downloadable at http://redalyc.uaemex.mx/redalyc/pdf/181/18101919.pdf
Hart, S. L. (1995). A natural-resource-based view of the firm. Academy of Management Review, 20, 986–1014.
Haslam, P. A. (2004). The corporate social responsibility system in Latin America and the Caribbean. FOCAL Policy Papers, FPP-04-1. March. Downloadable at http://www.focal.ca/pdf/csr_04.pdf
Hasnas, J. (1998). The normative theories of business ethics: A guide to the perplex. Business Ethics Quarterly, 8, 19–42.
Heyes, A. (1998). Making things stick: Enforcement and compliance. Oxford Review of Economic Policy, 14(4), 50–63.
Hochstetler, K. (2002). After the boomerang. Environmental Movement and Politics in the La Plata River Basin. Global Environment Politics, 2, 35–58.
Jagnicke, M (1985) Preventive environmental policy as ecological modernisation and structural policy. Berlin: WZB.
Leach, M., Bloom, G., Ely, A., Nightingale, P., Scoones, I., Sha, E., & Smith, A. (2007). Understanding Governance: pathways to sustainability, STEPS Working Paper 2. Brighton: STEPS Centre.
López Cerezo, J. A., & Luján-Lopez, J. L. (2000). Ciencia y política del riesgo. Madrid: Alianza.
Marris, P. (1996). The politics of uncertainty. Attachment in private and public life. London/ New York: Routledge.
Martínez-Alier, J. (2002). The environmentalism of the Poor. A study of ecological conflicts and valuation. Cheltenham: Edward Elgar Publishing.
Minujín, A. (1999). ¿La gran exclusión? Vulnerabilidad y exclusión en América Latina. En D. Filmus (Ed.), Los noventa. Política, sociedad y cultura en América Latina (pp. 53–77). Buenos Aires: FLACSO/EUDEBA.
Morduch, J. (1994). Poverty and vulnerability. American Economic Review, 84, 221–225.
Natenzon, C. E. (2003). Inundaciones catastróficas, vulnerabilidad social y adaptaciones en un caso argentino actual. Cambio climático, elevación del nivel medio del mar y sus implicancias. Climate Change Impacts and Integrated Assessment EMF (Energy Modeling Forum) Workshop IX. Stanford University, Snowmass, CO, July 28–August 7, 16.
Newell, P., & Muro, A. (2006). Corporate social and environmental responsibility in Argentina. The evolution of an Agenda. Journal of Corporate Citizenship, 24, 49–68.
Peinado-Vara, E. (2006). Corporate social responsibility in Latin America. Journal of Corporate Citizenship, 21, 61–69.
Perrow, C. (1984). Normal accidents. Living with high-risk technologies. New York: Basic Books.
Porto de Souza, M. F. (2007). Uma ecologia Politica dos Riscos. Rio de Janeiro: Editora Fiocruz.
Porto de Souza, M. F., & Freitas, C. M. (2003). Vulnerability and Industrial Hazards in Industrializing Countries. An Integrative Approach. Futures, 35(7), 717–736.
Pratt L., & Fintel, E. (2002). Environmental management as an indicator of business responsibility in Central America. In P. Utting (Ed.), The greening of business in developing countries. Rhetoric, reality and prospects (pp. 41–57). London: Zed Books in association with UNRISD.
Prieto-Carron, M., Lund-Thomsen, B., Chan, A., Muro, A., & Bhushan, C. (2006). Critical perspectives on CSR and development: What we know, what we don’t know, and what we need to know. International Affairs, 82, 977–987.
Pumpim de Oliveira, J. A., & Gardetti, M. A. (2006). Analysing changes to prioritise corporate citizenship. The Journal of Corporate Citizenship, 21, 71–83.
Quinn, J. J. (1997). Personal ethics and business ethics: The ethical attitudes of owner/managers of small business. Journal of Business Ethics, 16(2), 119–127.
Renn, O. (1992). Concepts of risk. A classification. In S. Krimsky & D. Golding (Eds.), Social theories of risk (pp. 53–79). Westport, CT: Praeger Publishers.
Ruiz-Tagle, M. T. (2003). New approaches to environmental regulation in less developed countries. The case of Chile, PhD. Dissertation, University of Cambridge.
Scherer, A. G., & Palazzo, G. (2007). Towards a political conception of corporate responsibility: Business and society seen from a Habermasian perspective. Academy of Management Review, 32(4), 1096–1120.
Schmidheiny, S. (2006). A view of corporate citizenship in Latin America. Journal of Corporate Citizenship, 21, 21–24.
Scoones, I., Leach, M., Smith, A., Stagl, S., Stirling, A., & Thopson, J. (2007). Dynamics systems and the challenge of sustainability, STEPS Working Paper 1. Brighton: STEPS Centre.
Scott, L. (2006). Chronic poverty and the environment. A vulnerability perspective, Chronic Poverty Research Centre, Working Paper 62.
Siegel, D. (2009). Green management matters only if it Yoelds more green: An economic/strategic perspective. The Academy of Management Perspectives, 23(3), 5–17.
Siegel, P. B., & Alwang, J. (1999). An asset based approach to social risk Management: A conceptual framework: Discussion Series No 9926 Social Protection. Washington, DC: World Bank.
Torres-Baumgarten, G., & Yucetepe, V. (2009). Multinational firms leadership role in corporate social responsibility in Latin America. Journal of Business Ethics, 85, 217–224.
UN/ISDR. (2004). United Nations/international strategy for disaster reduction, living with risk: A global review of disaster reduction initiatives. Geneva: United Nations.
Vazquez-Brust, D. A., & Liston-Heyes, C. (2008). Corporate discourse and environmental performance in Argentina. Business Strategy and the Environment, 17, 179–193.
Vazquez-Brust, D. A., Liston-Heyes, C., Plaza-Úbeda, J., & Burgos-Jiménez, J. (2010). CSR, stakeholders’ management and stakeholders integration in Latin-America. Journal of Business Ethics, 91(2), 171–192.
Vazquez-Brust, D. A., Plaza-Úbeda, J. A., Natenzon, C. E., & Burgos-Jiménez, J. (2009). The challenges of businesses intervention in areas with high poverty and environmental deterioration: Promoting an integrated stakeholders approach in management education. In C. Wankel & J. Stoner (Eds.), Management education for global sustainability (pp. 175–206). New York: Information Age Publishing.
Vives, A. (2006). Social and environmental responsibility in small and medium enterprises in Latin America. Journal of Corporate Citizenship, 21, 39–50.
Wheeler, S. (2004). Planning for sustainability. New York and London: Routledge.
Wisner, B., Blaikie, P., Cannon, T., & Davis, I. (2004). At risk: Natural hazards people’s vulnerability and disasters. London: Routledge.
Wynne, B. (1992). Uncertainty and environmental learning – Reconceiving science and policy in the preventive paradigm. Global Environmental Change, 2, 111–127.
Yapa, L. (2002), How the discipline of geography exacerbates poverty in the third world. Futures. The Journal of Forecasting and Planning, 34, 33–46.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2012 Springer Science+Business Media B.V.
About this chapter
Cite this chapter
Vazquez-Brust, D.A., Natenzon, C.E., de Burgos-Jiménez, J., Plaza-Úbeda, J.A., López, S.D. (2012). Evaluating the Firm’s Environmental Risk: A Conceptual Framework. In: Vázquez-Brust, D., Plaza-Úbeda, J., de Burgos-Jiménez, J., Natenzon, C. (eds) Business and Environmental Risks. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-2742-7_2
Download citation
DOI: https://doi.org/10.1007/978-94-007-2742-7_2
Published:
Publisher Name: Springer, Dordrecht
Print ISBN: 978-94-007-2741-0
Online ISBN: 978-94-007-2742-7
eBook Packages: Earth and Environmental ScienceEarth and Environmental Science (R0)