Helping You Build Wealth With Honest Research
Since 1996. Try Now

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  


Is industrialization a social evil?
Tue, 20 Sep Pre-Open

It would not be completely wrong to say that growth and corporate social responsibility are two ends of the same river. More often than not growth (industrialization) comes at the cost of sacrificing environmental obligations. For companies, both profits and costs are material in nature. Thus, in the greed to increase their tangible worth the intangible costs associated with violating social obligations (towards society) are ignored. However, if the repercussions of these ecological imbalances are not taken into consideration our next generation will have to pay a huge price for it.

Nonetheless, off late quite a few companies have started paying heed to this evil by turning eco-friendly. In fact, World Economic Forum (WEF) has identified many companies from emerging markets that are giving due consideration to environmental issues while making any business decisions. And knowing the fact that environmental regulations in emerging markets are not as explicit as compared to the western world the efforts certainly become noteworthy.

Take the case of Shree Cement for example. It may be noted that the company had been facing water shortages for long. Resultantly, it developed the most water-efficient technology in the world for making cement. While here necessity (to save water) was the prime factor behind the invention of the technology (which saves water) there have been many instances where companies have imposed a self-regulation on themselves for environmental protection.

Further, considering that bureaucracy in emerging markets is rigid, so trying to lobby regulators to shape up the environment in one area in order to compensate for the damage undertaken in another becomes all the more difficult.

However, it is really encouraging to see that companies from the emerging world have enlarged their motto from "only profits" to "profits after social costs". Do not forget the fate of companies like Hindustan construction company (HCC) and JSW Steel that tried disrupting ecological balance. While growth and environment both assume equal importance it becomes very difficult to play around with both these ideologies. Corporate's that can balance both will have a big role to play in shaping the future of their respective countries.

While being environmentally active does not make the company successful per se, it does add to the marketability factor. With environment protection being the top most agenda for many countries now the "going green slogan" would certainly help them garner visibility. And this would be beneficial to both - Societies as well as Corporate's.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary


Equitymaster requests your view! Post a comment on "Is industrialization a social evil?". Click here!

1 Responses to "Is industrialization a social evil?"

HARSHAD PANDYA

Sep 19, 2011

YES,NOW FOR INDIA ITS SOCIAL EVIL.YET NOW REQUIRE BOOST TO ONLY AGRICULTURE UPGRADATION.

Like 
  
Equitymaster requests your view! Post a comment on "Is industrialization a social evil?". Click here!