Ethical Dimensions Of Leadership Group Environmental Sciences Essay

Coal is a valuable and available natural resource that provides an cheap energy beginning. The Appalachian Coal Region, comprised of southern Pennsylvania, western Maryland, West Virginia, eastern Kentucky, eastern Tennessee, southwesterly Virginia and northern Alabama, is one of three major coal belts in the United States where active excavation takes topographic point. The coal industry has historically been and continues to be a major subscriber to the economic system in southwesterly Virginia [ 1 ] . Much of the Appalachian coal is used locally and regionally, but some is distributed nationally and globally every bit good [ 2 ] . Locally, there is a coal-powered works on the Virginia Tech campus that uses 46,000 dozenss of coal per twelvemonth and supplies about 30 % of the energy demands of the campus [ 3 ] . Virginia Tech is actively involved with research about the coal excavation industry seeking to do it more efficient, cleaner and safer.

Coal is used globally as an energy beginning with China, the United States, India, Russia and Germany being the five leaders in coal ingestion. Coal ingestion in the universe has risen about 50-55 % since 2000 [ 4 ] . The United States is a manufacturer every bit good as consumer and has experienced a 25 % addition in exporting domestic coal since 2010, its highest degree of exportation in about two decennaries [ 5 ] . Coal is a comparatively cheap beginning of energy, is readily available ( already has the substructure in topographic point for entree ) , and will last another 100-125 old ages at the current production/consumption rate in the United States. Natural gas has become an cheap rival for supplying energy, but its militias are being tapped with patterns that damage the environment and that industry does non hold the substructure to run into the increasing demand for energy ; hence, coal remains a feasible beginning for energy production at this clip [ 6 ] .

Ethical Issues Confronting the Coal Industry

Coal, by its really nature, solicits contention in that it is a non-renewable beginning of energy, but when adding the immense planetary, national, and regional dependance ( on coal ) into the mix, the consequence is an industry characterized by intense examination from assorted stakeholder groups. Although the array of ethical issues faced by this industry is huge, many of the issues can be funneled into two chief countries of concern – the extraction procedure, and the burning procedure. The extraction procedure – mining the coal itself – nowadayss several controversial issues environing the environment and sustainability, wellness and safety of the mineworkers, and employment tendencies impacting the regional communities. Harmonizing to the U.S. Department of Energy, approximately 90 % of U.S. coal ingestion is used for bring forthing electricity ( U.S. Department of Energy, 2012 ) . Because of important trust on one category of consumer, combustion of coal at power workss provides an extra platform for societal and ethical issues to emerge. When coal is burned, legion drosss are released into the ambiance which is controversial in footings of both planetary heating, and its effects on public wellness ( Raask, E. , 1985 ) .

Issues in Extraction Process

Extracting coal from the Earth ‘s surface is a really risky procedure, in footings of both the environment, and working conditions. The natural environment is disrupted by big machines that uproot many beds of stone and soil and with no optimum receptacle for hive awaying this waste, it can ooze into the H2O ways impacting the aquatic life and environing communities ( Coil, McKittrick, & A ; Higman, 2010 ) . Not merely does the waste pollute waterways, in some instances, deluging can happen, destructing places and life styles in the procedure ( Brown, 2002 ) .

Coal excavation as a profession presents several occupational hazards to the single mineworker. When working in belowground mines, workers are susceptible to mine prostrations ensuing in premature decease or other fatal hurts. In Virginia entirely, there were 990 reported coal-related accidents between the old ages of 1986 and 2009, with 90 of those ensuing in human deaths ( Coal in Virginia: Equity, 2011, p. 4 ) . Mining conditions besides expose workers to risky toxins which can lend to lasting damages and worsening wellness, given drawn-out exposure. Coal dust has been faulted for lending to many respiratory unwellnesss, of which black lung disease is the most common ( Berkes, 2012 ) .

Surface excavation, or mountain top remotion, is the predominating extraction method in the Appalachian coal part. This method has proved good to char companies in that it has increased production ( in footings of dozenss of coal produced per mineworker ) ensuing in reduced costs, nevertheless these technological promotions enable coal companies to wash up the coal seams much faster, every bit good as contribute to unemployment ( Virginia Coal, 2012 ) . Last summer, several coal companies announced programs to put off over 850 workers in the Appalacian part entirely, in add-on to shuting down multiple mines due to hapless market conditions ( Kukendall, 2012 ) . These layoffs desolate the little town economic systems that depend on the industry for their economic wellbeing. Not merely are the workers and their households impacted, but besides the surrounding concerns that rely on the grosss mining workers bring in to the local economic system

Issues in Combustion

The other country presenting ethical concerns is the burning of coal at coal-burning power workss to bring forth electricity. The smokestack emanations generated from power workss have come under great examination because of the possible branchings on both planetary heating and on public wellness. In footings of planetary heating, about a 3rd of the United States ‘ C dioxide emanations are attributable to coal-burning power workss ( The U.S. EPA, 2012 ) . Sulfur dioxide and N O are besides introduced into the ambiance which can bring forth in acerb rain and smog. ( The U.S. EPA, 2012 ) . ) The presence of these airborne atoms enlarge the range of ethical concerns beyond merely those experienced by provider and consumer, and extends into the quality of life experienced by the general population as a whole. The combination of particulate affair and other toxic substances produced have identifiable effects on human wellness, lending to several prima causes of decease in the United States. Respiratory illnesses, lung harm, redness, developmental upsets, every bit good as other signifiers of malignant neoplastic disease are some of the known effects to society of coal burning, and these impacts are merely predicted to decline with continued long-run exposure. ( Lockwood, Welker-Hood, Rauch, & A ; Gottlieb, 2009 )

Pressures confronting the industry

Corporate Social Responsibility Activities

Our end in measuring the coal industry is to supply Virginia Tech investors with the necessary cognition required to make up one’s mind whether or non to put in this industry. However, in order provide a comprehensive mentality for investors ; we must farther research the issues antecedently mentioned to measure the responses of houses as a consequence. In order to make this, several of the most influential coal companies were selected for rating and comparing. Our analysis centres on the activities these industry leaders are set abouting in order to better the societal impacts of their operations, by researching and comparing the CSR enterprises of five peculiar coal companies. In order to do our comparing more meaningful, we have chosen the companies from the blue french friess which largely have an equal public presentation with respect to fiscal returns. This will ease a stronger comparing of the houses based on CSR enterprises entirely, instead than falsifying our rating with fiscal public presentation steps.

As Table 1 illustrates, we have chosen four American domestic companies – Arch Coal ( ACI ) , Alliance Resource Partners, L. P. ( ARLP ) , CONSOL Energy ( CNX ) and Peabody Energy ( BTU ) . The lone international company we have chosen is China Shenhua Energy Co. Ltd. ( CSUAY ) , the biggest and most profitable coal company in China. In order to be more specific in CSR comparing, we have developed six standards other than the employment graduated table, which include the house ‘s stance on safety engineering, safety policy, land Restoration, recycling and waste direction, R & A ; D on clean coal engineering and public duty. Based on our research, many of the companies preformed about the same on several dimensions ( as noted by the spaces within the tabular array ) , nevertheless the cheque Markss indicate the countries to which certain houses have made important parts, and are carry oning themselves beyond their duties.

Some cardinal research findings are listed below:

As for safety engineering, Alliance is committed to the promotion and use of safety engineering in the excavation industry. Representing as an industry leader, Alliance is the first company to put in trailing and communicating systems in front of the agenda specified in the MINER Act in 2007 [ 1 ] . It showed in one of the 2010 Mine Safety & A ; Health Administration study that merely 8 per centum of all belowground excavation operations are utilizing communicating and tracking systems [ 1 ] . China Shenhua, harmonizing to its CSR study, invested a big part of money in safety production. Merely for 2011, the sum invested on safety production was RMB 4.23 billion [ 2 ] . A sum of 56 safety review squads were established to carry on uninterrupted safety review at of import times and on major units and cardinal countries [ 2 ] .

As a excavation bring forthing company, safety policy will ever be an of import portion when puting their organisation policy. Been the 5th twelvemonth to carry on the “ Absolute Zero Value ” value system, which portions the premiss that ZERO accidents is normal and that any accident is inconsistent with the company ‘s values, CONSOL ‘s accident rate in the past five old ages has been worsening twelvemonth by twelvemonth [ 3 ] .

When it comes to environmental duty in coal industry, land Restoration is a important concern. In this standard, each of the five companies all did a great occupation in land Restoration. Take Alliance for illustration, in Western Kentucky ‘s Hopkins County Coal mines, Alliance impacted 660 estates of hardwood wetlands, nevertheless, returned 1800 estates of land in 2009 as a consequence [ 4 ] . They have besides been involved in contaminated H2O intervention in Eastern Kentucky where the land has non impacted by Alliance at all [ 4 ] .

Peabody is making an outstanding occupation in recycling and waste direction. In its Metropolitan Mine in Australia, the company successfully implemented a coal waste stone recycling undertaking [ 5 ] . They are the first company in the state to recycle coal waste stone [ 5 ] .

Research and development on clean coal engineering is another of import standard we develop to measure how the company performs in future engineering invention. After comparing, we select CONSOL and Peabody as function theoretical account in this country. CONSOL holds the largest private R & A ; D installations which entirely concentrating on coal and energy use and production [ 6 ] . They besides offer the proficient expertness of its staff and its specialised installations to clients from a broad scope of private and public organisations [ 6 ] .

All the five companies have done a great occupation in transporting out public duties in both charitable giving and catastrophe alleviation. Take Peabody Energy as a peculiar illustration, it has generated about 16 billion dollars direct and indirect economic benefits to the community in a individual twelvemonth of 2011 [ 7 ] . They besides invested 9.5 million in the Robust charitable giving plan — – a 37 per centum addition from the anterior twelvemonth, to lend straight to the community it serves [ 5 ] . Peabody has besides engaged in catastrophe alleviation, donating both 250,000 US dollar to assist with Australians Queensland inundation, Nipponese Tsunami and the Earthquake in Haiti [ 5 ] .

Social and Ethical investing policy recommendations

When it comes to investing determinations, Virginia Tech should see both corporate societal duty ( CSR ) and the ethical issues environing the industry as of import rating factors. While at the same clip, we can non disregard the fact that fiscal return is besides a major constituent in footings of investing intent. Therefore, a great trade of consideration is required in finding comparative weight of each standard, as it influences the way of the investing policy. To develop a comprehensive investing policy for Virginia Tech, we began with the University ‘s mission statement. The investing policy should see the encompassing nucleus values of the entity it represents, and hence Virginia Tech ‘s mission statement is foundational to determining the nucleus values environing policy determinations [ 1 ] .

Harmonizing to Virginia Tech ‘s mission, the establishment is dedicated to functioning the state and the universe community, progressing societal and community development, and bettering the quality of life1. Hence, the investing policy we propose is to first evaluate houses based on comparable fiscal returns ( guaranting that each house under consideration has a history of bring forthing first-class returns ) , and so filtrate companies out of this initial list utilizing CSR factors and ethical concerns in order to get at appropriate investing options for the University. It is indispensable for institutional investors to see non-financial facets of investings in order to stay consistent with the socially responsible nature of the mission. For illustration, even though some industries ( or houses ) , such as the baccy industry or the ammo industry may convey huge fiscal returns, our policy would urge Virginia Tech to avoid puting in these types of industries. To be more specific, Virginia Tech should hold a multifaceted attack to sing see impacts these industries have on society as a whole, and assess whether or non the industry ( or company ) is compatible with the guideline of Virginia Tech ‘s mission, at the operational degree ( citation- Mission and Vision Statements ) .

What should Virginia Tech invest, other than capital, in order to maximise fiscal public presentation? We believe that Virginia Tech can put many other resources into the industry, apart from capital entirely. Virginia Tech, as a research establishment, is unambiguously positioned to offer it ‘s endowments, research ability, and partnership experience to the industry leaders selected by the investing policies purposed supra. The subsequent paragraphs explore these extra investing mediums.

Endowments: Virginia Tech engages learning, larning, research, and find. For illustration, Virginia Tech has the Mining and Mineral Engineering Department which is dedicated to developing the hereafter endowments for the coal industry. Furthermore, non merely does the section provide professional development plans for pupils, it besides addresses the ethical issues determining and specifying the industry they are fixing to come in.

Research: Virginia Tech commits to bring forthing groundbreaking research. Harmonizing to VT Research Magazine, Doctor Roe-Hoan Yoon – member of the National Academy of Engineering and Professor of Mining and Mineral Engineering – developed four methods to divide ultrafine coal atoms from clay and H2O for the excavation industry. These four methods: microcel floatation engineering, dewatering AIDSs, a hyperbaric extractor, and another novel procedure which cut down the waste when we exploit coal ( commendation – Virginia Tech Research Magazine Winter 2012 ) . Furthermore, Virginia Tech is besides place to the Virginia Center for Coal and Energy Research. This organisation coordinates Virginia Tech to carry on coal and energy researches and presently manages $ 33 million research undertakings ( citation- Virginia Tech ‘s Michael Karmis Receives Mining Society ‘s First Award ) .

Partnership: On May 30th 2012, Alpha Natural Resource appointed Michael Karmis, Virginia Tech ‘s Stonie Barker Professor ofA Mining and Minerals Engineering, as one of three managers to administrate its new foundation whose end is to better mine wellness and safety ( citation- Virginia Tech ‘s Michael Karmis Receives Mining Society ‘s First Award ) . Therefore, we believe that Virginia Tech can farther use this partnership experience to the coal industry and other companies to assist them go better participants in this industry.

Industry Investment Recommendation

Sing the ethical issues and force per unit areas confronting the coal industry, and following our suggested investing policies, the Virginia Tech Foundation is faced with two of import inquiries. First, should it put in the coal industry? Second, if yes, how should the best house or corporation be selected?

One can see that the coal industry has a comparatively long and promising hereafter compared to other energy resource industries such as oil, gas or atomic power. Harmonizing to the Catapillar Global Mining, coal comprises 60 % of the universe ‘s available dodo fuel militias and is projected to be available for about 250 old ages. Conversely, crude oil gas and oil will be depleted by the twelvemonth 2060. Furthermore, the coal industry generates a big figure of occupations and significant gross, which help the national and international economic systems. In the US there are about 170,000 occupations in and related to the coal industry, confirming that the coal industry is one of the most appealing industries in which to put from a long-run fiscal position ( SourceWatch ) .

Another ground the VT Foundation should take this industry is because of the alone chance to assist progress the industry in engineering and safety through Virginia Tech ‘s many research plans. Figure 2 shows the proposed mutual relationship that could be between the coal industry and Virginia Tech.

By puting in the coal industry houses, Virginia Tech will harvest fiscal benefits in the signifier of dividends, but because of the research and development ties, research grant money, pupil scholarships and instruction gifts would besides be likely. Therefore, the Virginia Tech Mining Engineering Department and the Virginia Center for Coal Energy Research can go on valuable research to better safety, efficiency, and engineering that will straight profit the coal company. Additionally, Virginia Tech is developing pupils to go valuable industry employees. These cardinal factors, extremely skilled and educated employees, safety betterments and technologic promotions, will ensue in higher fiscal returns for all of the stakeholders, including the Virginia Tech Foundation. Therefore, we strongly recommend puting in the coal industry.

Once the Virginia Tech Foundation accepts our recommendation to put in the industry, it must make up one’s mind how to take the best house. That decision/selection procedure should be a balanced attack of analyzing corporate fiscal public presentation ( CFP ) and corporate societal public presentation ( CSP ) for each company. Both factors should play a function in the determination procedure.

To guarantee that the Virginia Tech Foundation is puting in profitable companies, it should utilize CFP standards to include stock monetary values, company growing rate, earnings/share, concern length of service, etc. and so place “ bluish bit ” companies with a solid fiscal base and history. These “ bluish bit ” companies should be farther evaluated for their CSP. Figure 3 shows the standards and criterions for the CSP rating procedure. The CSP rating takes into consideration the ethical dimensions and challenges and how the company uses recommended corporate societal duty ( CSR ) activities to turn to these issues.

Based on our research, Arch Coal, Alliance, Consol and Peabody are four of the top coal houses to be considered for investing by the Virginia Tech Foundation based on both CFP and CSP. Consol is the figure one pick for a domestic company and Peabody is the figure one pick for an international investing company.

An extra factor to be considered when taking between companies that meet the stated CFP and CSP demands is whether or non Virginia Tech has an bing relationship with the company in the countries of research, scholarship sponsoring, gifts, and alumni hiring. Preference should be given to those companies with an bing relationship of the willingness to construct a relationship.

While we have focused chiefly on recommended specific coal mine companies, it is of import for the Virginia Tech Foundation to see puting in the accessory back uping industries of the coal industry. This investing scheme adds diverseness to the overall portfolio and provides support for the industry. For illustration, the transit industry ( hauling, rail, ship ) , the excavation equipment fabrication companies ( e.g. Caterpillar ) , and the power companies ( e.g. Dominion, Appalachian Electric ) would all be industries critical to the success of the coal industry. Similar ratings for CFP and CSP should be done for these accessory industry corporations before doing concluding investing determinations.

Table and figures

Table 1: CSR Comparison

Figure 1: Virginia Tech ‘s relationship with the Coal Industry

Figure 2: CSP Evaluation Criteria and Standards