Environment Sustainability at Barratt Development Plc

Introduction

Barratt Development Plc is a key player in the residential property development industry in the U.K. The company has been constructing quality homes since and is currently identified as the builder of excellent houses nationally. It has 27 divisions spread across the country that operate in selling new buildings to various clients. The analysis reveals that the firm runs in a sector with considerable effect on the environment, suggesting the importance of considering its corporate social responsibility (CSR) and ethical standards by the management. As a consultant at Greenleaf, I have performed a critical examination of the company’s sustainability plan. Although it has a policy in place, it has limitations, including failure to address climate change, indicating the need for improvements. The report includes recommendations for its leaders to implement a comprehensive CSR policy.

Responsible Management and CSR

Corporate social responsibility has attracted the attention of academics and practitioners, leading to its extensive discussion and application in business settings. Nonetheless, the concept remains controversial and the most misunderstood for various reasons, including its view as a form of charity, giving back to the community, challenges in getting legitimacy, and problems obtaining natural resources to support organisational strategies. Managers still consider CSR as having a peripheral role and not an important part of their operations. They fail to comprehend the essence of the concept and regularly overlook its potential benefits for the company and the local community (Gligor-Cimpoieru & Munteanu 2015, p.1). At the same time, even when the advantages  of the practice are identified it remains an optimistic view without considering the associated risks and costs (Gligor-Cimpoieru & Munteanu 2015, p.1). Therefore, implementers should consider the benefits and drawbacks of adopting CSR.

Managers should develop a precise definition of CSR to integrate it into their business practice. However, the concept lacks a standard meaning since authors have described it differently (Sprinkle & Maines 2010, p. 445). The most commonly used characterization of the term is a situation in which companies incorporate social and environmental concerns into their operations (Sprinkle & Maines 2010, p. 445). Firms should work in such a way that they promote the welfare of the people and protect the ecology in areas where they function. Implementing CSR is also beneficial to the organization since  it serves the interests of the firm while operating to meet the needs of the stakeholders (Crane & Matten 2016, p. 49). As a result, companies such as Barratt Development Plc should have a plan to achieve the CSR objective.

Businesses benefit  by integrating CSR principles into their operations. Firstly, they gain long-term revenues when customers perceive them as being socially responsible. Secondly, they reduce cost by saving energy and reducing waste and inefficiencies. Thirdly, firms may manage risks and uncertainty by ensuring greater compliance with local and national standards and being viewed positively by the important stakeholders (Crane & Matten 2016, p. 49). Socially responsible companies experience safety in their operations since suppliers and customers are attracted by positive reputation. Fourthly, companies adopt the practice to appeal to stakeholder groups (Sprinkle & Maines 2010, p. 447). Lastly, they maintain their social license when they gain the trust of their employees, communities, and authorities (Crane & Matten 2016, p. 49). The most critical benefit is positive image that is necessary for the success of all businesses. Firms require a good reputation as one  the most important ingredients  to increase profitability. Consequently, they should aim at improving their operations to enhance public relations and meet their expectations (Gligor-Cimpoieru & Munteanu 2015, p. 1). Basically, CSR is the tool that businesses require to become competitive and productive.

However, Barratt Development Plc’s managers should consider the various costs associated with implementing CSR. Some experts criticise the idea for being narrow and its ideal not necessarily serving the interests of the society or protecting the environment (Księżak 2016, p. 62). The critics further argue that companies profess the notion while engaging in corporate abuses and ecological damage. Such businesses have an illusion of CSR, while in reality they use it as a public relations campaign. While the management team can account the amount of time used in volunteering within the community, the duration  cannot reveal the impact of the actions on the affected people (Księżak 2016, p. 62). Additionally, the desire to increase shareholders’ value does not always result in a win-win situation due to the tendency of companies to buy the goodwill of the society without much  concernon their welfare (Księżak 2016, p. 63). Another perspective is looking at the cost associated when  implementing the plan, including the raw cash flows (Sprinkle & Maines 2010, p. 448). Therefore, the analysis should evaluate the effects of the company’s CSR plan on the society and the environment.

Values Underpinned by Ethics

Regardless of the criticism, the business can gain considerable benefits and also increase the value and goodwill to the community by implementing the CSR ideals. The principles allow the coordination of all stakeholders’ needs, suggesting an improvement in the company’s reputation (Księżak 2016, p. 63). Barratt Development Plc owes it to their investors, customers, suppliers, and the community to operate in a socially responsible manner considering the input of these groups into its success. Research identifies instances where the concept is applied for self-interest, making it a profit maximisation project and not a CSR approach (Crane & Matten 2016, p. 49). Situations arise where businesses only consider the way social responsibility can work for the company by improving its self-image for the revenue. On the contrary, an ethical firm will consider the impact of the principles on the community.

Utilitarian theory is one of the frameworks that can be used in explaining CSR. As it relates to the practice, the approach considers the idea of maximising stakeholder value (Garriga & Melé 2004, p. 53). Therefore, while other objectives of the behaviour might apply, the primary goal should be focused on the interests of the individuals and groups affected by the business operations. The management team should always evaluate particular corporate social actions for the impact on the society (Garriga & Melé 2004, p. 53). For example, when the management acts honestly and ethically, the outcome is positive for the stakeholders, includingsuppliers, investors, and customers. The business should not only consider its welfare when implementing the plan as the outcome will not benefit the majority.

The common good approach is the second theory that applies to CSR in the business setting. While the method considers the stakeholder value in implementing the plan, the focus is on the society’s common good as the preferential significance. The theoretical framework is developed from Aristotelian tradition related to business morals (Garriga & Melé 2004, p. 62). The model refers to the responsibility of the business since it is important to the society within which it operates. Hence, its work should not cause harm to the community or environment, but should be a positive contributor to its wellbeing. The ethical duty includes wealth creation, goods, and services provision, respect for the surroundings, and protection of basic human rights (Garriga & Melé 2004, p. 62). The organization should commit to sustainable development that includes preventing ecological damage.

The theories have implications for Barratt Development Plc’s management team due to their responsibility to the various stakeholder groups. Although the business is created for profits, moral decision-making should be the guiding force (Fisher, Lovell & Valero-Silva 2013, p. 11). Conventionally, the company faces a conflict between self-interest and public benefits. However, the managers would be acting unethically if they always operate responsibly when their financial interests coincide with the social duty. Research shows that companies that act morally have better returns in the long-run compared to  those which do not (Fisher, Lovell & Valero-Silva 2013, p. 12). Barratt Development Plc should be perceived by the people in the community to work ethically to attract more customers and investors. The leaders should consider ways to improve the self-image to remain competitive in the U.K. market.

Exploring the Issue

Problem Identification

Barratt Development Plc has a CSR plan that it documents in a report titled “Barratt Corporate Social Responsibility Report,” which covers its approach to the practice. The information focuses  on the company’s governance and management of risks related to social responsibility (Barratt Development Plc 2008, p. 1). Environmental protection is one of the important parts of the CSR policy. However, the firm’s plan does not include its commitment to addressing climate change issue. Many regions are already experiencing the negative effects of the increase in the atmospheric temperatures, making individuals and organisations responsible for reversing the situation (Allen & Craig 2016, p. 1). However, while companies recognise the need for dealing with the problem, they have not integrated their climate change policy into the CSR plan. For instance, Barratt Development Plc has a program outlining its compliance with the local, national, and international standards for climate change, but the initiative  is not part of the general CSR program.

The Significance of the Issue

Firms such as Barratt Development Plc are the greatest contributors of the greenhouse emissions, especially due to their construction activities. As a result, they should take the leading role in changing their activities that contribute to the negative effect. The situation challenges the management team to redefine the prevailing attitude on CSR from considering environmental protection in general to considering particular aspects such as climate change. The stakeholders should view the organisation as being considerate of their wellbeing by committing to changing the global environmental situation. Climate change is challenging business-as-usual and disrupting people’s lives (Allen & Craig 2016, p. 1). Therefore, the main contributors to the challenge should focus on transforming their activities to avoid further harm. Barratt Development Plc is an example of the firms that should work with the society to address the problem by including the efforts in its CSR plan. Its management team should follow the available standards to improve responsibility in solving the crisis.

The Current Status of the Company

Barratt Development Plc’s management team has revealed a commitment to protecting the environment and working for the common interest of the affected society. However, the company has a limitation in its CSR due to the failure to consider climate change as an important part of the plan. The leaders cannot effectively address the situation without making it a core part of its social responsibility. Although the company is focused on sustainable buildings, it does not clearly inform the stakeholders on its duty towards the climate change problem that presents the most pressing challenge for business organisations in the building and other industries (Allen & Craig 2016, p. 2). Research reveals that the society expects the company to consider and mitigate its effects on the environment, including the global warming issue (Unsworth, Russell & Davis 2016, p. 1212). As a result, the firm fails the community by failing to integrate the challenge into its CSR plan and indicating steps towards addressing it.

Examples From Other Companies

Local and multinational corporations have benefited from incorporating climate change into their CSR initiatives. For example, Tesla’s management team recognised the need to create a sustainable solution to reduce the level of pollution from the transportation sector. Its “Secret Tesla Motors Master Plan” played a role in protecting the environment (Marcus & Malen 2018, p. 260). While for-profit organisations face challenges in the area of ethical business, they can also work towards promoting their social image by being responsible to the community. For instance, multinational operate in a challenging environment, but they can incorporate moral business models into their practices. GM is another example of the way positive values can be incorporated into decision-making to grow its profitability (Goodpaster, 1991, p. 55). The most important step is identifying the various stakeholder groups and ensuring that their needs are met. Top of F)))((((wBottom of Form

Stakeholder Map

Barratt Development Plc’s decisions affect various individuals and groups, including suppliers and contractors, employees, customers, national and local government, and nongovernmental organisations (NGOs) (Goodpaster 1991, p. 55). The company’s operations involves the stakeholders differently depending on their relationship with it. One can map the stakeholders using a matrix depending on their influence and interest. As a result, the managers can use the tool in painting a picture of the level of involvement of the different groups and determining how to engage them. They should win them by understanding their motivators. The figure shows a stakeholder map for Barratt Development Plc.

 Advising the Company

Barratt Development Plc has a CSR plan and a separate climate change policy. Therefore, the company has an excellent place to begin when making the necessary changes to incorporate the two under one program, making it more ethical and socially responsible. Currently, the stakeholders cannot consider the company as a highly committed firm to protecting the environment from the dangers of carbon emissions due to the isolated actions. The managers should review the CSR policy to address the identified limitation and make it stronger. Importantly, the leaders should note the importance of the change as a risk mitigation process (Księżak 2016, p. 57). The stakeholders consider the firm’s efforts to protect the environment when making decisions to associate with it. Therefore, the management team should make the a comprehensive policy.

The organisation’s CSR plan should meet the national and international standards. Additionally, the leadership should move away from the traditional idea of the practice as considering the welfare of the society. It should assume an active role in reducing the carbon footprint to support climate change mitigation efforts. Although the U.K. government does not support the zero carbon homes policy (Oldfield 2015, para 1), the company can strive to make the buildings as green as possible and the commitment should be part of its CSR plan. Barratt Development Plc has a social contract with the people to respect the environment and ensure the safety of the members of the community (Unsworth, Russell & Davis, 2016, p. 1212). As a result, it should design a comprehensive plan that incorporates climate change mitigation into the corporate social responsibility plan.

Besides developing the CSR plan, the managers should create an effective communication strategy to reach all the stakeholders. The company should send the message to ensure support and mobilise, achieve buy-in, and agree through consensus (Allen & Craig 201, p. 7). Although the firm uses reports to communicate significant changes to the policy,  usual mode can be applied as long as they deliver information about the new commitment to addressing climate change. Evidence from other companies such as Tesla reveals that Barratt Development Plc would benefit from a positive image once the stakeholders learn about the significant change. For example, more clients desire greener houses to reduce the carbon emission into the atmosphere. As a result, they are most likely to buy houses or involve the company’s services because of the compliance.

The company should incorporate ethical decision-making models into its management processes. The leaders should implement a person-situation interactionist approach where the moral judgement depends on, among other things, the particular environment where it operates (James, Jr. 2015, p. 3). They should consider the fact that their decisions affect various stakeholder groups. As a result, they should focus on more than profit maximisation. While the emphasis could benefit the investors, it might hurt the members of the community. However, they can make decisions that balance the interests. For example, a focus on meeting the needs of the society could create a team of satisfied customers to play a role in increasing sales revenue (Crane & Matten 2016, p. 49). Therefore, the firm should implement a more effective decision-making approach on the basis for ethical considerations. As a result, it will relate better with the members of the community and other stakeholders for mutual advantage.

Conclusion

Barratt Development Plc is an important player in the building and development industry in the U.K. Firms in this sector is the leading contributors of carbon emissions into the atmosphere, hencecontributing to the climate change problem. The issue is one of the ethical dilemmas facing companies in various markets around the world, although many are making efforts to act morally. Barratt Development Plc has a CSR plan that guides its decision-making, especially when dealing with its primary stakeholders.  Additionally, it has a climate change policy to help in reducing the global problem. However, the two strategies are isolated, making their implementation a challenge. The management team should address the issue by integrating the two policies to be adopted together. As a result, they will make the company morally and socially responsible, therefore appealing to all stakeholders. The leaders should also communicate the change to the affected individuals and groups to enhance the firm’s self-image and reputation for higher profitability.

Reference List

Allen, MW & Craig, CA 2016, ‘Rethinking corporate social responsibility in the age of climate change: a communication perspective’, International Journal of Corporate Social Responsibility, vol. no.1, pp. 1-11.

Barratt Development Plc 2008, Corporate Responsibility Report 2008. Available from: http://www.barrattdevelopments.co.uk/~/media/Files/B/Barratt-Developments/documents/cr-report-2008.pdf. [18 August 2018].

Crane, A & Matten, D 2016, Business ethics: Managing corporate citizenship and sustainability in the age of globalization, 4^th edn, Oxford University Press, Oxford.

Fisher, C, Lovell, A & Valero-Silva, N 2013, Business Ethics and Values 4^th edn., Pearson, London.

Garriga, E & Melé, D 2004, ‘Corporate social responsibility theories: Mapping the territory’, Journal of business ethics, vol. 53, no. 1-2, pp. 51-71.

Gligor-Cimpoieru, DC & Munteanu, VP 2015, ‘CSR benefits and costs in a strategic approach’, Annals of the University of Craiova, Economic Sciences Series, pp. 1-10

Goodpaster, KE 1991, ‘Business ethics and stakeholder analysis’, Business Ethics Quarterly, vol. 1, no. 1, pp. 53-73.

James, Jr. 2015, ‘Why Do Good People Do Bad Things in Business? Lessons from Research for Responsible Business Managers’, in Issa, T & Wolf, R (eds), International Business Ethics and Growth Opportunities, IGI Global, Hershey, PA.

Księżak, P 2016, ‘The Benefits from CSR for a Company and Society’, Journal of Corporate Responsibility and Leadership, vol 3, no 4, pp.  53-65

Marcus, A & Malen J 2018, ‘Techniques for navigating the risks of investing in cleaner energy technologies’, in McIntyre, JR, Ivanaj, S & Ivanaj, V (eds), CSR and Climate Change Implications for Multinational Enterprises, (page range required)Edward Elgar Publishing, Cheltenham.

Oldfield, P. 2015, ‘UK scraps zero carbon homes plan’, The Guardian, 10 July.

Sprinkle, GB & Maines, LA 2010, ‘The benefits and costs of corporate social responsibility’, Business Horizons, vol. 53, no.5, pp. 445-453.

Unsworth, KL, Russell, SV & Davis, MC 2016, ‘Is dealing with climate change a corporation’s responsibility? A social contract perspective’, Frontiers in Psychology, vol. 7, pp. 1212-1221.

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