Small firm environmental ethics:how deep do they go?FionaTilley

Introduction: ethics, business and theenvironment

Businesses, large and small, have been subject to

greater public scrutiny than ever in the final

decades of the 20th century. The 1960s saw the

emergence of the social, political and environ-

mental movements that began to challenge the

orthodoxy of profit maximisation as the sole

purpose of business. It is becoming far more

difficult for business to legitimise its behaviour to

the rest of society on the basis of economic

principles alone. The increasing size and power of

business in society places an even greater obli-

gation upon it to be socially responsible for its

actions than in earlier industrial times (Sethi

1981). Consequently, business ethics, being the

systematic study of the moral perspective of

business, has become a justifiable and readily

accepted subject of study.

Some commentators suggest that for ethics to

have any relevance and meaning in the workplace

it needs to be considered as an integral working

concept, rather than an abstract academic concept

(Tombs and Smith 1995, Giacalone and Knouse

1996).

`If we are to change the core values of industrialists

then a sterile discussion of moral philosophy will

have little, if any, impact upon behaviour. By

couching the discussion in terms of strategy and

competitive advantage we immediately contextualise

it within the frame of reference of those corporations

that need to take the concepts on board.' (Tombs

and Smith 1995: 136)

This may be so, but in order for concepts such as

corporate social responsibility, environmental

ethics or sustainable development to have prac-

tical value it is necessary to develop their

theoretical underpinnings. As will be shown

below, the lack of a strong ethical theory within

environmentalism compounds the belief that these

concepts are amorphous and nearly impossible to

operationalise due to nebulous definitions and

irreconcilable aspirations (Buchholz et al. 1991).

Environmental ethics is, like business ethics, a

new field of inquiry within the wider discipline of

ethics. Until very recently any student of philos-

ophy embarking on a course in ethics would be

concerned only with human ethics and morality

(Fox 1996). Only 50 years ago Aldo Leopold

claimed:

`There is as yet no ethic dealing with man's relation

to land and to the animals and plants which grow

upon it. Land, like Odysseus' slave-girls, is still

property. The land-relation is still strictly economic,

entailing privileges but not obligations.' (Leopold

1968: 203)

There are two approaches to environmental ethics

(see Table 1 for a summary). The first of these

reflects the dominant paradigm that governs the

conventional discourse in ethics (Dobson 1995).

Theorists in this camp are seeking to define a code

of conduct for environmental ethics. The environ-

ment is valued from a human-centred perspective,

and the moral justification for protecting and

respecting the environment is made in terms of the

human cost of not doing so, rather than because

of any intrinsic value or rights that may belong to

the non-human environment.

The second perspective reflects the work of deep

ecology theorists, who have sought to highlight

Business Ethics: AEuropean Review

# Blackwell Publishers Ltd. 2000. 108 Cowley Road, Oxford OX4 1JF, UKand 350 Main St, Malden, MA 02148, USA. 31

the inadequacies of conventional ethical discourse

(Naess 1986). They argue that an ecologically

sound ethics will only emerge from a new

paradigm, a new perception of sustainability.

However, attempts to interpret deep ecology and

its bio-ethics or biological egalitarianism in terms

of the conventional ethical discourse have proved

difficult. In response to these difficulties a number

of environmental ethicists have abandoned their

efforts to unpack the intrinsic value theory of deep

ecology, and have instead promoted the need for a

new worldview (Fox 1994). They favour a new

ecological consciousness, or state of being, from

which an ecological ethics based on people's

beliefs and experience will emerge to govern the

way people value and behave toward the environ-

ment. Even in this new ecological consciousness

tension will still exist between people and the

environment. However, the important difference

between the present and new paradigm is that the

locus of justification shifts from the person who

wants to preserve the world to the person who

wants to disrupt or interfere with it (Fox 1990).

The ethics of deep ecology still has some way

to go before it can be said to have transformed

mainstream business thinking. Current business

thinking is governed by the code of conduct

approach to environmental ethics, thus framing

environmental issues from a shallow ecology

philosophical perspective. It is this conventional

ethical discourse that informs much of today's

business response to the environment. Industry

has provided many useful goods and services, but

at some cost to nature and human health. The

question facing society is this; will it continue

to pay this price, in terms of damage to the

environment, for the standard of living of a select

few in the world? Or is society and business pre-

pared to rethink the pathway in which the world is

developing to build a more sustainable society?

Small firms, ethics and the environment

Small firm ethics and corporate social responsi-

bility emerged in the business literature in the

USA during the 1970s and 1980s. In the beginning

this literature was mainly concerned with moral

issues of employee behaviour and other areas of

social responsibility (Spence 1999). The late 1990s

have seen some early explorations into the

environmental ethics of small firms, although the

predominant focus of the business ethics literature

in general has been and remains the activities of

larger organisations. Research suggests this may

be because

& small firms are perceived as lacking sufficient

resources;

& research methodologies created for large firms

are not readily adapted to small firms;

& more information is accessible to research large

firms;

& large firms have a higher public profile which

generates more interest in the theories and

research about large firms and their corporate

social responsibility (Thompson and Smith

1991).

Interestingly, similar reasons are given to explain

the relatively low research interest in the relation-

ship between small firms and the environment

...........................................................................................................................................................................................................

Table 1:Environmental Ethics: Summary Characteristics of theTwoMain Approaches

Code of Conduct State of Being

Dominant WorldviewShallow ecologyConventional ethical discourseHierarchicalIndividualistic/AtomisticAnthropocentric

NewWorldviewDeep EcologyNewethical discourseSystemicHolisticEcocentric

...........................................................................................................................................................................................................

Volume 9 Number 1 January 2000

# Blackwell Publishers Ltd. 200032

(Tilley 1999). It may be argued that small firms are

a less worthy, less needy or less relevant research

subject compared to larger firms. There are three

arguments to counter this viewpoint.

The first argument is based on the premise that

small firms are significant to the UK in economic

and environmental terms. According to the latest

government statistics, small firms1 constitute

approximately 99% of all business in the UK

(Department of Trade and Industry 1998). In

1996, of the 3.724 million firms in the UK, 3.693

million employed less than 50 employees. Even if

you discount the self-employed from this number

this still leaves 1.176 million firms contributing to

the UK economy, which accounts for 32.3% of

total employment.

Nor should the potential environmental impact

of the small firms sector be underestimated. Even

though there is little quantitative data available

that measures the environmental impact of in-

dividual small firms, it is estimated that the

cumulative environmental impact of the sector as

a whole could be quite considerable. As measures

of environmental impact and sustainability indi-

cators become more prevalent it will be possible to

calculate with greater accuracy the precise envir-

onmental impact. Until that time estimates must

be relied upon. It has been suggested that small

firms cumulatively could contribute as much as

70% of all industrial pollution (Hillary 1995). As

this is an unsubstantiated figure it should be

interpreted with some caution. Nevertheless, it is

possible to conclude that small firms can no longer

be viewed, individually or collectively, as an

insignificant component of the economy or the

environment.

The second argument concerns the quality and

quantity issues which arise when a subject such as

small firms is under-researched. Small firm re-

search has in recent times come in for some

criticism for its lack of theoretical rigour and

conceptual development (Goss 1991). There has

also been much debate as to what constitutes a

small firm. In addition, the emerging literature on

small firms and the environment has also been

accused of insufficient analytical inquiry, and of

relying too heavily on anecdote (Geiser and Crul

1996). There is therefore a need to direct more

research toward investigations of small firm

environment ethics in order to contribute to this

important, yet neglected subject.

The final argument to support the importance

of small firm environmental ethics research is

based on the premise that theory generated for

large firms cannot necessarily be applied in the

case of small firms. It has been noted that small

firms often differ from larger firms in their

management style, organisational structure and

in the characteristics of the owner-managers

(Dandridge 1979). Small firms often lack re-

sources; they have difficulties in accessing finance

and labour, and in finding the necessary time to

manage environmental matters (Welsh and White

1981). Small firms are not little big firms. They

need their own unique ethical understanding of

the difficult environmental problems they face.

For the above reasons small firms ought not to be

overlooked by business or environmental ethics.

Research in this area has emphasised the

barriers between small firms and ethical issues

in general. Vyakarnam et al. (1997) warned that

the rise in environmental and social issues on the

business agenda of larger firms has not been

matched in the small firm sector. A small firm

survey investigating the perceived gap between

business goals, professed values and their actual

behaviour found `that ethical codes alone are

insufficient to change either attitudes or behaviour

because they have been notoriously difficult to

implement' (Russell 1993: 3). The same study

concluded that the four most common attitudinal

barriers to ethics among small firms are:

& Ethics and business don't mix;

& It doesn't pay to be ethical;

& If it's legal, it's ethical; and

& Compared to others this company is ethical

(Russell 1993).

The dominant theme in the small firm ethics

literature has been social responsibility. For

example, studies have investigated the ethical

relationship between small firms and their custo-

mers (Humphreys et al. 1993), and the difference

between small firm ethics and the ethics of the

owner-manager (Vyakarnam et al. 1997, Quinn

Business Ethics: AEuropean Review

33# Blackwell Publishers Ltd. 2000

1997). Thompson and Smith (1991: 42) concluded

that whilst:

`. . . [corporate social responsibility] research is lim-

ited to big business, it can only be inferred that

similar practices occur in small or medium-sized

businesses . . . the inclusion of small business within

the existing theoretical framework for corporate

social responsibility could yield valuable contribu-

tions to the CSR theory and research by broadening

its scope and its applicability to big and small

businesses alike.'

Although this research agenda is making a modest

contribution to the business ethics literature,

there have been very few studies reporting on the

environmental dimension of small firm ethics.

Two recent studies have reported the low accept-

ance of the environment as a business issue among

small firms (Tilley 1999, Rutherfoord and Spence

1998). The reasons for this behaviour are complex,

but Joyce et al. (1996) suggest that the continued

separation of issues of social responsibility from

business performance may generate a small firm

business culture that has difficulties integrating

non-economic responsibilities into the business.

Small firm environmental ethics is an under-

researched area of study. In view of the widening

societal concern for environmental issues (Dunlap

1997), the impact of sustainability upon the

activities of public sector organisations (Grubb

et al. 1993) and the increasing environmental

regulation likely to affect the behaviour of

business (James 1998), the environmental ethics

of small firms is an important issue that needs to

be explored in greater depth. A better under-

standing of small firm environmental ethics may

help to explain the problems many small firms

encounter when embarking on activities to im-

prove the environmental performance of the

business.

`Despite the proliferation of industry initiatives on

the environment and environmental laws and

regulations, accompanied by a wealth of research

projects and publications during the 1980s and

1990s, research indicates that management, and

SMEs in particular, have been slow to progress

from a reactive to a proactive response to environ-

mental pressures.' (Hutchinson and Hutchinson

1997: 305)

Small firmenvironmental ethics: someempirical findings

The empirical findings presented below have been

extracted from a much larger investigation de-

signed to explore the perceived gap between

environmental attitudes and behaviour of small

firms in the mechanical engineering and business

services sectors in Leeds (Tilley 1998). The two

industrial sectors were chosen because of their

importance to the economy of Leeds. The purpose

of the research was to gain greater understanding

of the underlying processes and their meaning

rather than to give a description of the problem.

For this reason a qualitative approach was taken,

keeping the sample size low in order to attain

information-richness. A total of 60 semi-struc-

tured interviews were completed (29 mechanical

engineering small firms and 31 business services

small firms).

Environmental regulation was a major theme of

discussion during each interview. The interview

data on environmental regulation is used to draw

out the ethical concerns of the small firm owner-

managers and to identify the dominant environ-

mental ethic held by the small firms. The analysis

of owner-managers responses reveals their

thoughts on the moral rights and wrongs of their

environmental behaviour and the methods they

employ in controlling their environmental prac-

tices. Although these responses do not provide a

complete picture of the environmental ethic

exhibited by small firms, they do begin to make

an important contribution to our understanding

of an emerging area of inquiry.

Environmental regulation refers to the means by

which the environmental behaviour of business is

controlled. At one end of the spectrum is state

regulation (such as case/statue law and other

forms of market intervention), and at the other

end of the spectrum is self-regulation (such as

voluntary codes of practice). The relationship

between business ethics and the law is the subject

of much debate. It would be wrong to assume that

the author is implying that business ethics can

singularly be interpreted as legal compliance.

Nevertheless, it can be argued that `the domain

of ethics includes the legal domain' (Trevino and

Volume 9 Number 1 January 2000

# Blackwell Publishers Ltd. 200034

Nelson 1995: 15). The merit of state-regulation

compared with self-regulation is also a contested

issue. State-regulation and self-regulation should

not be viewed as mutually exclusive, since it is

possible to argue that there is a value and a need

for both forms of environmental regulation

(Schokkaert and Eyckmans 1994).

Self-regulation

Is the small firms sector capable of self-regulation

in the area of environmental responsibility? Self-

regulation ought to appeal to owner-managers

because it bestows on the business community the

autonomy to interpret and regulate their own

acceptable standards of environmental behaviour.

Experiments in the use of voluntary schemes to

`green' business practices and cut pollution

damage have become attractive politically be-

cause, it is argued, voluntary schemes have proved

popular among business because they have saved

businesses money and led to greater resource

efficiencies (Cairncross 1995).

It is therefore surprising that self-regulation, as

a means of controlling the environmental practice

of small firms, was not well supported among the

owner-mangers interviewed. A considerable pro-

portion of the sample remarked outright that self-

regulation would not work, although there was

some recognition that voluntary agreements may

form part of the regulatory mix, simply because of

the onerous resource demands needed to admin-

ister and enforce state regulation. A solicitor in a

firm of general practitioners explained:

`[We] have got to rely on self-regulation to some

extent because of the financing of it. I'm sure that

the government doesn't have the funds to regulate it

themselves. Which is why we have to rely upon

business . . . I think it is certainly a good start but

I think it maybe does need to be monitored perhaps

by government as well. They can't rely solely on

businesses to do it themselves. At the end of the day

businesses are in business for the money. If making a

hell of a lot of money is the option as opposed to

looking at an environmental issue, I reckon 9 out of

10 businesses will ignore the environmental issue.

I think they would do something about it at second

choice.'

The reasons given by owner-managers as to why

self-regulation could not be relied upon as a means

of controlling the environmental performance of

small firms were varied. The small firms recog-

nised that in general they were not best placed to

identify what actions they needed to take in order

to manage their environmental responsibilities in

an acceptable manner. Although owner-managers

may have expert knowledge in the industry in

which they trade, this does not necessarily mean

they also have the requisite environmental ex-

pertise. Low standards of eco-literacy2 are com-

mon among small firm owner-managers and

employees, which in turn reduces their awareness

of environmental issues. The typical small firm in

this sample displayed limited internal motivation

to take steps to reduce the environmental impact

of their operations. The proprietor of a company

that supplies equipment to businesses operating in

the petroleum industry explained:

`Self-regulation wouldn't work in our industry.

Although we do certain self-regulation things, a lot

of companies, because they are small to medium

sized, don't move to carry out certain matters until it

is imposed upon them because of cost. Plenty of

people say they would like to do this, but we really

can't afford it.'

The environment thus remained relatively low

down the business agenda of the small firms,

largely because of an economic system, which as

the owner-managers described it, rewarded self-

interest over collective interest. Environment-friendly

policies then become a burden that restricts

competitiveness. For the typical small firm there

is still a great deal of tension between what is

economically appropriate behaviour and environ-

mentally acceptable behaviour. It is not that the

owner-managers in this study did not value the

environment. But in any given situation economic

priorities will come out on top if a choice has to be

made. The economic system and business climate

is operating as a dominant resistant force prevent-

ing many of the small firms in this study from

voluntarily taking steps to behave with greater

environmental responsibility than their competitors.

Self-regulation, in the minds of many of the small

firm owner-managers, fosters and encourages

Business Ethics: AEuropean Review

35# Blackwell Publishers Ltd. 2000

`cowboy' activities and the emergence of what

economists term `free-riders' (Hardin 1983). The

owner-managers claimed they could not trust a

`certain element' to uphold the principles laid

down by self-regulation. Self-regulation offered

them little protection from `cowboy' operators

who, by flouting voluntary agreements, could gain

a competitive advantage over more responsible

firms acting in good faith. Clearly there appears to

be a problem of trust within the business commu-

nity. The Managing Director of a company

manufacturing mechanical handling equipment

remarked:

`I don't think it [self-regulation] will work one

little bit. It is not workable. I don't trust people

that far, particularly financial people. The respon-

sible companies are not necessarily the large ones.

I think there is an awful lot of irresponsible action

going on.'

This argument provides further evidence to

explain why the small firms believed themselves

to be unable to self-regulate their environmental

behaviour. To overcome the problem of self-

interest the small firms suggested a role for

government, which supposedly represents the

good for all sections of society not just business.

The Managing Director of a company manufac-

turing tanker vehicles for the waste handling

industry stated:

`Self-regulation clearly does not work. In an ideal

world okay, but it lets the government off the hook.

The government should be an agency that takes a

long-term view of the environment for the whole

country.'

Commoner (1990) supports this opinion, suggest-

ing that pro-environmental behaviour, such as

investing in cleaner technology, can conflict with

short term profit maximising goals, so that social

responsibility must be implemented at the political

level. This is further supported by research on the

UK retail sector that concluded:

`Where environmental criteria match economic

criteria so that pro-environmental change yields

positive benefits, environmental ethics are incor-

porated into retailer's ethics.' (Eden 1993: 105)

State regulation3

The small firms in this study demonstrated a

preference for external forms of regulation, as

opposed to self-regulation, as a means of control-

ling the environmental behaviour of businesses.

However, the opinions of the small firms in this

study need to be set against the fact that many of

the owner-managers knew little about their own

regulatory obligations, nor did they believe their

activities were worthy of regulatory control. This

attitude inevitably fuels low standards of compli-

ance. This problem is further compounded by a

perception that enforcement is low, and that the

penalties imposed on companies prosecuted under

environmental law are inadequate. This view is

reflected in the comment by the senior partner of a

chartered accountancy practice:

`The cowboys that produce things more cheaply by

cutting corners, by leaving debris, will prosper

against those who have a public conscience. There

have to be penalties to put cowboys out. Once you

have the penalties you have changed people's

approach. It then becomes not just a virtue but a

business advantage to be environmentally sound.'

The small firms recognised that passing more and

stricter legislation was not a panacea. The Mana-

ging Director of a company manufacturing

effluent and water treatment equipment noted:

`We see legislation affecting business significantly in

the water sector, but the water companies have not

been spending money. The legislation is not

regulated strictly enough. People pay lip service.

You can't prevent this attitude as it is built in to the

bureaucratic system.'

Despite these problems the small firms still

expected state regulation to play an important

role in governing the environmental activities of

small firms in order to counter the problems

associated with self-regulation. The analysis of the

interview data indicated that the small firms look

to institutions, particularly government depart-

ments, to provide clear environmental guidelines

and set standards that they and other businesses

should be expected to follow, because Govern-

ment can take a longer view than business and

represents the wider interests of all members of

Volume 9 Number 1 January 2000

# Blackwell Publishers Ltd. 200036

society. The Managing Director of a company

designing computer systems claimed:

`I don't genuinely believe it [the environment] can be

left as a discretionary issue for businesses to address.

You have to have fairly strong leadership backed up

by legislation. There is legislation but it is so difficult

to get it in to processes.'

The small firms also held the view that legislation

provides a level playing field, establishes a

minimum acceptable standard of behaviour, and

provides a source of external pressure that has

arguably been lacking to date. The proprietor of a

newspaper cutting company remarked:

`We need the Government to make a stronger lead in

guiding environmental standards. Businesses need

clear unambiguous guidelines which are specific and

actionable.'

In summary, the typical small firms from this

study did not support the principle of self-

regulation as the primary mechanism of governing

their environmental behaviour. In contrast an

external `state' imposed regulatory framework was

seen to be a fairer system of control. It was

perceived to be the Government's responsibility to

communicate environmental values, to establish a

code of environmental conduct and to provide a

benchmark of acceptable environmental standards

for the business sector. The Government was

expected to take a leadership role concerning the

environment. The results of the study indicated

that the typical small firm lacked a clear apprecia-

tion of sustainability and environmentalism, and

in consequence they found it difficult to connect

what they knew of their business practices with

specific environmental issues presented in the

media.

Discussion

The analysis of the interview data indicates that

most small firms are operating within an ethical

system derived from the conventional ethical

discourse, and they therefore regard the environ-

mental challenge from a shallow ecology perspec-

tive. They are seeking a code of conduct to govern

their environmental behaviour, rather than a new

perception of the role and structure of business

organisations in society today. The other salient

point to draw from the analysis is the lack of trust

the small firms have in each other to behave in a

responsible manner without the threat of external

regulation to restrain their behaviour. Since the

owner-manager has a low awareness of environ-

mental issues combined with a low level of eco-

literacy, small firms must rely on external experts

to guide their decision-making processes and

to provide them with appropriate solutions to

environmental problems. If small firms are to

change their environmental attitudes and be-

haviour and become more environmentally re-

sponsible, they need in the first instance to become

more explicitly aware of their business culture,

values and ethics. The owner-managers inter-

viewed in this study acknowledged the important

influence that ethics and moral conscience can

play in motivating and shaping their environmen-

tal behaviour and business practices.

The value system of most small firms is driven

by the goal of economic prosperity. It has been

claimed that the environment is possibly now

accepted as a first-order value, resulting in a new

relationship between environmental values and

the other first-order values, namely, social justice

(equity), economic prosperity, national security

and democracy (Paehlke 1995). Small firms do not

operate in isolation; they are influenced and

affected by the value systems of the individuals

and organisations in their supply chain, their

immediate stakeholder network and more distant

societal networks. The problem is that most of the

small firms interviewed in this study have not yet

been sufficiently motivated, or are still unwilling,

to integrate their own personal environmental

values or the values of others into their businesses.

The longer this continues, arguably the more out

of touch small firms will become with the ethics of

the rest of society.

Another explanation for the failure of small

firms to integrate their own individual environ-

mental values with the environmental values of

society is their inability to identify a clear

environmental vision emerging from the collection

of different, often competing, environmental value

systems. Environmental problems do not always

Business Ethics: AEuropean Review

37# Blackwell Publishers Ltd. 2000

have simple, clear-cut undisputed solutions. This

predicament does not absolve small firms from

the responsibility of tackling these difficult value-

based environmental issues. Paehlke (1995) sug-

gests that the authoritative allocation of values is

the primary function of politics. The question is;

are our political representatives circumnavigating

the ethical, value-based component of environ-

mental decision-making by pursuing environmen-

tal solutions that are narrowly technology- and

economy-orientated?

`There are competent scientists on both sides of

almost every contentious environmental issue. Their

views are crucial to understanding what ought to be

done, but science in and of itself is not sufficient to

the task. Environmental policy decisions in almost

every case involve a value as well as a scientific

component. Scientists can usefully contribute to the

value discussion as informed citizens, indeed they

should do so, but their views are not the only views

that must be heard. Technocracy and environment-

alism are in many ways opposite poles.' (Paehlke

1995: 131)

Environmental policy in the UK has arguably

been overly dependent on scientific knowledge,

hence its preference for technical solutions (De-

partment of the Environment 1990).

It is questionable to what extent the environ-

mental ethics of deep ecology has shaped solutions

being offered to small firms. Environmental

initiatives targeted at small firms have tended to

take the `code of conduct' approach to environ-

mental ethics by framing solutions within the

existing paradigm. The focus has been placed on

the benefits to people and business from `bottom

line' savings associated with environmental im-

provements. Those environmentalists that follow

a deep ecology approach to business ethics are

more likely to see the value system as the root

cause of the `ecological dilemma' with the solution

requiring social or political restructuring rather

than an economic or technological fix.

However, to date there has been little attempt to

join-up the ethical theory of deep ecology to

practice. The exception is a guiding philosophy

developed by Schumacher (1973). Schumacher

proposed the bringing together of opposites,

finding the `middle way' between economics and

ecology. Other attempts to join ethical theory and

practice have taken a more shallow ecology

approach. Berry (1990, 1993), for example, has

made efforts to develop a code of practice based

on the concepts of stewardship and sustainability.

He cites the work of the International Chamber of

Commerce (1991), the Institute of Business Ethics

(Burke and Hill 1990), and the Coalition for

Environmentally Responsible Economies (CERES)

as examples of the business response to the need

for an environmental ethic to guide practices.

Until the theoretical debate is opened up for wider

discussion it is more than likely that small firms

will continue to seek and be influenced by

environmental ethics within the conventional

discourse, rather than by the challenging prin-

ciples of deep ecology thinking.

Conclusion

The typical small firm in this study has yet to

become fully engaged in the environmental

debate. Without institutional reform and restruc-

turing of the economic system in the public

domain, it is unlikely that there will be widespread

deepening of environmental ethics among small

firms. There is only so much individual owner-

managers and small firm employees can do. If

Friedman (1970) is to be believed, business must

play within the rules of the game. The rules in this

context are established by environmental regu-

lations that are being framed using a shallow

ecology ethic. However, in the UK small firms too

often fall below or outside the compliance

requirements of environmental regulation. Conse-

quently, small firms are not required by law to

take responsibility for the environment to the

same extent as larger businesses.

The shallow ecology strategy promotes ethical

and environmentally responsible behaviour to

business on the basis that it is `good business'

(Hoffman 1993). This is interpreted as a `win-win'

situation that increases profits by saving costs or

improving the efficiency of the business. This

message may effectively attract small firms to take

the first step to enhance their environmental

performance and behave more responsibly, but

Volume 9 Number 1 January 2000

# Blackwell Publishers Ltd. 200038

what happens once the low hanging fruit has been

plucked from the tree of eco-efficiency? Once small

firms are confronted with environmental problems

that do not save them money, in fact the reverse,

the solutions require investment that may not

provide a financial return, the environmental ethic

comes into conflict with `good business'. The small

firm is then no longer in a `win-win' situation.

Over-simplifying environmental ethics to the

small firm sector in this way has its attractions

because it directly appeals to the profit motive of

the owner-manager, but it also has dangers and

limitations. This is why it is so important to build

a new small firm environmental ethic that will be

able to guide small firm environmental behaviour

in all circumstances, including those where the

financial or economic costs are outweighed by the

environmental benefits. The discipline of small

firm environmental ethics is in an embryonic state.

Much work still has to be done to develop better

ethical tools and to connect new theories to small

firm practice. These are early days, and the

challenge ahead is an important one. Better and

more appropriate solutions are needed to enable

small firms to become fully-fledged participants in

the development of sustainable societies. Here is a

cautionary warning to people who work outside

the field of environmental philosophy, but who

use its tools:

`. . . treat these tools ± these limited, often flawed,

and, yet, nevertheless indispensable tools! ± with a

degree of caution. No one has the answer yet ± even

though we need it yesterday ± and to act as if one

of these approaches is the answer is to forget that

`̀ for every complex problem there is a solution that's

simple, neat ± and wrong''.' (Fox 1996: 19)

Notes

1. Defining small firms has often been an arbitrary

exercise. In the context of this paper the definition

used is that which classifies firms employing less

than fifty employees as small.

2. In this context eco-literacy is defined as the under-

standing of the principles of ecology and the

environment and an ability to use these principles

to create sustainable business organisations.

3. Regulation includes legislation and other market

interventions to control environmental behaviour.

In this study most of the small firms limited their

comments to the role of legislation.

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