• Internal Code :
  • Subject Code : HC2121
  • University : Holmes Institute
  • Subject Name : Comparative Business ethics

Comparative Business Ethics and Social Responsibility 

The Australian Gas Limited Company is the largest electricity generator in the continent of Australia operating for more than 180 years now. It generates almost 10,412 MW of electricity which is 19.8% of the total electricity produced in Australia (AGL, 2019.). As a huge electricity producer it is the responsibility of the AGL to comply with the ethical regulations on making a negative impact on the environment. The Australian Center for Co-operate Social Responsibility has pushed a shareholder vote for the levels of pollution emitted by the organization. The voting will be done and a decision will be made on the cost of implementing stricter norms for pollution control measures. The ACCR claimed that Australia is not meeting the obligations of OECD like the other member nations such as the European Union, China. The amount of gas emitted by Australia is way more than that of China. According the director of ACCR the AGL must ensure sound measures to control pollution given the importance it gives to its social license to operate. AGL has made it clear that it is in constant touch with the ACCR on improving the situation and is willing to take the environment seriously. 

The article lays out the focus on environmental ethics. Environmental ethical issues are basically the human interaction with the nature. In the business sense it is the moral duty of an organization to protect the environment in which it operates. The importance of protecting the environment we work in is stated in every theory one can study. It is the moral duty of a human being to not to harm the environment. An organization damages the environment when it takes resources from it and dumps its waste on the environment in return like air pollution, sewage waste, noise pollution. The Organization for Economic Co-operation and Development is an organization that looks into the matters of economic, social and environmental issues prevailing for the business in a particular region. There are guidelines for operating in different countries comprising of measures for specific pollution and waste levels. Environmental sustainability is important for any business as depleting natural resources, rising global warming, ozone layer depletion all such factors are leading to rising importance of such organizations and activities to protect the environment and keep a check on businesses that whether they are violating the ethical code of conduct or not (Environmental Science, n.d.).

Businesses are entitled to protect, conserve and recycle the resources they are using. They must keep their carbon emissions low so as to avoid any legal dispute as in the case of AGL, Australia. The Environment Offence and Penalties Act, 1989 lays down the penalties for environment pollution in Australia. Wasteful disposal if disposed off without legal authority and permission then it is considered as an environmental offence. The maximum penalty to be imposed is $1 million for corporation and $2,50,000 or imprisonment for 7 years (Australian Pollution Laws and offences, n.d.). Ethical decisions of an organization are made by the organization’s culture, what it believes in, what is aims to attain. The bigger the role the greater the amount of resources acquired from the environment and greater the responsibility of the organization to adhere to the laws and regulations and protect the environment. A code of conduct of business ethics can help an organization to clearly state its objectives, priorities and values. The ethical code of conduct helps in deciding what values are important and what are the limits the business wont cross. Setting the right moral and ethical code of conduct can help the organization grow the way it wants to be grown by setting procedure and structure for new employees who might join in future (Inc 5000, 2010.). In forming the ethical code of conduct the organization should involve the employees as well to have a broader view and a large pool of ideas and suggestions. 

Moral philosophies of a business includes responsibility to customers in a manner that follows the laws and establishes social responsibility towards the customers. The product offered should meet the quality standards, safety standards, price standards of the consumers. 

Responsibility to the supply chain because the organization is dealing with the suppliers of raw materials, distributors, retailers and the organization must be honest in all the transactions. 

Responsibility towards the environment is also equally important as the organization is taking out resources from the environment and it is the moral duty of the business to give it back to the environment by protecting it, not polluting it. 

AGL Australia has been claiming to meet the ethical standards. The Board has formed 4 committees to keep a check on the issues that are prevailing in the business. The committees discussed the performance of the past 12 months and claimed that were able to meet the standards set. There has been a delay in the proposed gas terminal of AGL in the Western Bay has urged the organization to reduce its gas emissions with an immediate effect. The closed loop system required to heat up the liquefied gas will help  AGL avoid the dispose of millions of toxic an chlorinated water into the Western Bay. Even if the organization is able to adapt to a closed loop system even then it wont be able to escape from the damage from liquefying and transporting gas. The solution for the organization might be to reduce the gas consumption altogether which would not damage and pollute the environment.  The Organization is facing a dilemma in the form of pressure from the activists and the shareholders to bring ahead the closure of their coal power plants which are emitting a large amount of gas in the atmosphere. As the greatest producer of electricity the AGL has assured to shut down its oldest coal generator by the end of 2022. The organization understands the importance of environment protection and is ready to take the issue seriously. 

As a huge organization the AGL must ensure that it takes quick and serious action against the violation of the environmental ethics. By not doing so it is setting a bad example for the society, competitors as well as for the employees. The employees will not take the company’s ethical code of conduct seriously and start violating it on individual basis as well which might result in a poor work culture at a later stage within the organization. Other firms in the same sector might as well do the same thing by getting to notice that the government and the concerned authorities are not taking any action against AGL. The shareholders also have a duty towards the organization in telling them what is right and what is not.

As owners of the company they have the full right to the information and the logic of the think tank of the organization. They are entitled to the explanation of the issue and the cost of doing such a thing is applicable. It can be concluded that the ethics, social and environmental responsibility are crucial for any enterprise. It forms the basis of working and following the right code of conduct. If the company is able to follow the right code of conduct then it will be appreciated by the customers, stakeholders. Violation of any ethical responsibility can also result into decline in the share price of AGL which went down by 0.05% (Australian Stock Exchange, 2019.). 

The country also loses out on its reputation in the world diplomacy and economic unions when an organization is not able to meet the standards. Hence, meeting the business ethics, environment and corporate social responsibility is as important for a business as to make profits to survive. 


Hannam, P. 2019. Shareholder activists push AGL to clean up coal-fired power plants. [Online]. Available at: https://www.smh.com.au/business/companies/shareholder-activists-push-agl-to-clean-up-coal-fired-power-plants-20190719-p528wo.html  [Accessed on: 22 August, 2019].

Chron. n.d. Environmental Business Ethics. [Online].  Available at: https://smallbusiness.chron.com/environmental-business-ethics-64692.html  [Accessed on: 22 August 2019]. 

Science, E. n.d. What is Sustainability and why  is it important? [Online]. Available at: https://www.environmentalscience.org/sustainability [Accessed on:: 22 August 2019]. 

Norberry, J. n.d. Australian Pollution Laws and Offences, Penalties and Regulatory agencies. [Online]. Available at: https://aic.gov.au/sites/default/files/publications/proceedings/downloads/26-norberry.pdf [Accessed on: 22 August 2019].

Josh, S. 2010. Code of Ethics for Business. [Online]. Available at: https://www.inc.com/guides/how-to-write-a-code-of-ethics.html  [Accessed on: 22 August 2019]. 

Victoria, E. 2019. AGL gas import delay highlights need to focus reducing gas consumption. [Online]. Available at: https://environmentvictoria.org.au/2019/06/28/agl-gas-import-delay-highlights-need-to-focus-on-reducing-gas-consumption/  [Accessed on: 22 August 2019].

Bianca, A. 2018. What are ethical responsibilities of an organization. [Online].  Available at: https://yourbusiness.azcentral.com/ethical-responsibilities-organization-11604.html  [Accessed on: 22 August 2019].

Chappell, D. & Norberry, J. 1992. Critical issues environmental offences and the police. Paper presented at the 1992 Australiasian Crime Conference and Seminar, Canberra, November 16. 

Lipman, Z. 1991. Criminal liability and the amended Environmental Offences and Penalties Act 1989 (NSW). Journal of Environment and Planning Law, 8(4), pp. 322-337. 

Smith, A. 2019. AGL faces renewal heat over plant shutdown. [Online]. Available at: https://www.afr.com/companies/energy/agl-faces-renewed-heat-over-plant-shutdown-20190717-p527z5  [Accessed on: 22 August 2019]. 



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