Business Ethics and Environmental Fraud : Improper Competitive Advantage in the Age of Green

As environmental legislation grows more stringent in response to the escalating climate crisis, some of the world’s largest corporations have adopted fraudulent mechanisms to keep their margins of profit, and achieve improper competitive advantage. Such mechanisms can lead to problems in the supply chain, a decrease in market value, diminished trust in brands, increased surveillance of companies, as well as damage to the environment. This book offers a holistic view of the nature and consequences of environmental fraud, bringing together practical examples, empirical research data, and management theory. It will be of interest to academics working in the fields of sustainability management, business ethics, and corporate social and environmental responsibility. Preface 6 Acknowledgments 8 Contents 9 Abbreviations 11 List of Figures 13 List of Tables 14 1: Business Ethics 15 1.1 Business, People, and Ethics 15 1.2 Why Should We Care? 16 1.3 Why Do Businesspeople Behave the Way They Do? 19 1.3.1 Greed 20 1.3.2 Professional Ambition 22 1.3.3 Emotions 23 1.3.4 Pathologies 24 1.3.5 Corporate Culture 26 1.3.6 Opportunism 27 1.3.7 Natural Inclinations 28 1.3.8 Competitive Environments 30 1.4 How Should Businesspeople Behave? 31 1.5 The Role of the Law 36 1.6 Business Ethics Versus Ethics 39 1.7 A Model for Business Ethics 44 1.8 Historical Development 45 1.9 Business Ethics in Practice 47 1.9.1 Modern Slavery 47 1.9.2 Child Labor 50 References 52 2: Environmental Fraud 60 2.1 Fraud, Criminology, and Corporate Crimes 60 2.1.1 Environmental Fraud and Crime 64 2.1.2 Environmental Fraud and Corporate Criminology 68 2.2 Fraud and Environmental Fraud 70 2.3 Differences Between Environmental Fraud and Greenwashing 72 2.4 Impacts of Environmental Fraud 73 2.4.1 Consequences to the Environment 73 2.4.2 Impacts on Public Health 75 2.4.3 Consequences to the Company 76 References 77 3: Improper Competitive Advantage 80 3.1 Competition and Environmental Fraud 80 3.2 Competitive Advantage: Wide Usage and Main Theoretical Currents) 84 3.2.1 SWOT Analysis 86 3.2.2 Industry Structure 87 3.2.3 Resource-Based View 92 References 95 4: The Age of Green 100 4.1 Definition 100 4.2 Philosophical Roots 101 4.3 Recent History 103 4.3.1 Blueprint for Survival (1972) 104 4.3.2 Stockholm Conference (1972) 105 4.3.3 World Commission on Environment and Development (WCED) (1987) 108 4.3.4 Bergen Declaration on Sustainable Development (1990) 109 4.3.5 The United Nations Conference on Environment and Development (1992) 109 4.4 Sustainable Consumption 111 4.5 Points of Attention 113 References 114 5: The Automotive Industry Under Suspicion 117 5.1 Early Developments 117 5.2 Economic Organization 124 5.3 Car Culture and Society 127 5.4 A Harsh Competition 132 5.4.1 Internal Rivalry 134 5.4.2 Threat of New Entrants 134 5.4.3 Threat of Substitutes 135 5.4.4 Bargaining Power of Suppliers 135 5.4.5 Bargaining Power of Customers 136 5.5 The Automotive Industry as a Scapegoat 137 References 139 6: Dieselgates: VW, FCA, Renault, and PSA 143 6.1 The Volkswagen Dieselgate 143 6.1.1 The Dieselgate in America 144 6.1.2 Settlements in the United States 148 6.1.3 The Dieselgate in Europe 151 6.1.4 General Outcomes of the Dieselgate 154 6.2 Fiat Chrysler Automobiles (FCA) 156 6.3 Renault and PSA (Opel) 160 6.4 General Considerations 161 References 164 7: Not a “Privilege”: Environmental Fraud Beyond the Automotive Industry 170 7.1 Initial Thoughts 170 7.2 Environmental Fraud in Fast Fashion 171 7.2.1 Organic Cotton 175 7.3 Food and Beverage Industry 177 7.4 Logistics 181 7.4.1 Amazon 185 7.4.2 UPS 186 7.5 Electronics 187 References 189 8: The Intangible Costs of Environmental Fraud: Impacts for Brands, Trust, Corporate Identity, Image, Credibility, and Reputation 195 8.1 Constructs 195 8.2 Brand 197 8.3 Trust 200 8.4 Corporate Identity 205 8.5 Corporate Image 207 8.6 Corporate Credibility 209 8.7 Corporate Reputation 210 References 213 9: Your Fraud, Our Country: Impacts on National Brands and Reputations 217 9.1 The “Made In” Brand 217 9.2 National Image, National Identity, and Stereotypes 222 9.3 National Tribalism 226 9.4 Final Considerations 228 References 232 10: Impacts on Market Value 238 10.1 Market Value and Value 238 10.2 What Affects Market Value 242 10.2.1 The Role of Expectations 243 10.2.2 Operational Incapacity, Technological Transition, Impact on Intangible Resources, and Legal Costs 246 Operational Incapacity 247 Impact on Intangible Resources 247 Technological Transition 250 Legal Costs 252 References 254 11: Is Diesel Dead? 259 11.1 Brief History of Diesel Technology 259 11.2 Sustainable Alternatives? 263 11.2.1 Natural Gas 267 11.2.2 Electric Cars 269 11.2.3 Sources of Energy 272 11.3 Diesel Is Not Dead 277 References 278 12: Lessons Learned, Future Research and Tendencies on Environmental Fraud 286 12.1 Lessons Learned and Future Research 286 12.2 The Future of Environmental Fraud: Green Finance Under Suspicion 297 References 300 Index 301