Going Green Turning Red: The Real Business Cost of Eco-Friendly Decisions
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The purpose of this paper is to evaluate and analyze the incremental costs of businesses becoming “green.” It answers the overarching question: are businesses becoming eco-friendly or eco-frenzy? Eco-friendly is defined as companies who strive to be environmentally active for the improvement of the environment and society. Companies who are eco-frenzy become environmentally active for the wrong reasons such as gaining an environmental reputation. With the increase in popularity, and the legal requirement related to environmental sustainability more businesses have incorporated the ideas of corporate social responsibility (CSR) into their strategic positioning. At the start of the 21st century a disclosure framework for sustainability was created and the guidelines of Global Reporting Initiative were put into practice. Hence, a new practice of environmental accounting and reporting has been implemented. These reports include the information of costs incurred and benefits and savings realized as a result of implementing the CSR strategy. Canon, IBM, Intel, and Texas Instrument’s 2008-2010 annual environmental reports were used as data for this study. The cost-benefit effects were analyzed and the conclusions drawn. The results reveal that IBM and Canon were eco-frenzy and Intel and Texas instruments were eco-friendly.