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Ethical Analysis for Evaluating Sustainable Business Decisions: The Case of Environmental Impact Evaluation in the Inambari Hydropower Project

Author

Listed:
  • Julian Rode

    (Department Environmental Politics, Helmholtz-Centre for Environmental Research—UFZ, Permoserstraße 15, Leipzig 04318, Germany)

  • Marc Le Menestrel

    (Department of Economics and Business, Universitat Pompeu Fabra, Ramon Trias Fargas 25-27, Barcelona 08005, Spain)

  • Luk Van Wassenhove

    (INSEAD, Social Innovation Center, Boulevard de Constance, Fontainebleau Cedex 77305, France)

  • Anthony Simon

    (Avenue du Golf 61, 1640 Rhode-St-Genese, Belgium)

Abstract

We propose an ethical analysis as a method to reflect on how companies’ decisions promote sustainable development. The method proceeds by first identifying the choice according to financial business interests, and by then scrutinizing this choice according to consequentialist and deontological ethics. The paper applies the method to the choice of an Environmental Impact Assessment (EIA) that a consortium of Brazilian companies (EGASUR) delivered as part of their project proposal for the realization of the Inambari hydropower dam in the Peruvian Amazon. We show that if an EIA is chosen based on the attempt to maximize the financial bottom line, it raises ethical issues both from a consequentialist perspective by involving negative consequences for various stakeholder groups, and from a deontological perspective by not complying with relevant rules, guidelines, and principles. The two ethical perspectives hence reveal where the consortium faces impediments to a genuine commitment to sustainability. Building on stakeholder interviews, observations of the project developments, and the executive summary of the actual EIA, we provide indications that EGASUR has indeed made a choice that resembles a decision based on financial interests.

Suggested Citation

  • Julian Rode & Marc Le Menestrel & Luk Van Wassenhove & Anthony Simon, 2015. "Ethical Analysis for Evaluating Sustainable Business Decisions: The Case of Environmental Impact Evaluation in the Inambari Hydropower Project," Sustainability, MDPI, vol. 7(8), pages 1-22, August.
    • Handle: RePEc:gam:jsusta:v:7:y:2015:i:8:p:10343-10364:d:53677
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    References listed on IDEAS

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    1. Rode, Julian & Le Menestrel, Marc, 2011. "The influence of decision power on distributive fairness," Journal of Economic Behavior & Organization, Elsevier, vol. 79(3), pages 246-255, August.
    2. Gary E Bolton & Jordi Brandts & Axel Ockenfels, 2005. "Fair Procedures: Evidence from Games Involving Lotteries," Economic Journal, Royal Economic Society, vol. 115(506), pages 1054-1076, October.
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    4. Anand, Paul, 2001. "Procedural fairness in economic and social choice: Evidence from a survey of voters," Journal of Economic Psychology, Elsevier, vol. 22(2), pages 247-270, April.
    5. Linda Babcock & George Loewenstein, 1997. "Explaining Bargaining Impasse: The Role of Self-Serving Biases," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 109-126, Winter.
    6. Thomas Dyllick & Kai Hockerts, 2002. "Beyond the business case for corporate sustainability," Business Strategy and the Environment, Wiley Blackwell, vol. 11(2), pages 130-141, March.
    7. Marc Le Menestrel & Sybille van den Hove & Henri Claude de Bettignies, 2001. "Processes and consequences in business ethical dilemmas: The oil industry and climate changes," Economics Working Papers 591, Department of Economics and Business, Universitat Pompeu Fabra.
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    Cited by:

    1. Rode, Julian & Le Menestrel, Marc & Cornelissen, Gert, 2017. "Ecosystem Service Arguments Enhance Public Support for Environmental Protection - But Beware of the Numbers!," Ecological Economics, Elsevier, vol. 141(C), pages 213-221.
    2. Catherine Le Roux & Marius Pretorius, 2016. "Conceptualizing the Limiting Issues Inhibiting Sustainability Embeddedness," Sustainability, MDPI, vol. 8(4), pages 1-22, April.
    3. Catherine Le Roux & Marius Pretorius, 2016. "Navigating Sustainability Embeddedness in Management Decision-Making," Sustainability, MDPI, vol. 8(5), pages 1-23, May.

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