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.
Highlights
Companies frequently state their intention to integrate sustainability into their business strategy
We propose an ethical analysis as a method for better understanding the extent to which business decisions reflect a genuine commitment to sustainable development
This paper proposes an ethical analysis as a method to evaluate the extent to which a particular business decision is aligned with sustainable development
Summary
Companies frequently state their intention to integrate sustainability into their business strategy. We apply the method to a decision made by the company that has been granted the preliminary concession to prepare the feasibility studies for a large-scale hydropower project in the Peruvian Amazon, including the Environmental Impact Assessment (EIA). The EIA is the key regulatory tool “to ensure that development options under consideration are environmentally and socially sound and sustainable” [7]. In this specific setting in Peru, the type and scope of the EIA is at the discretion of the project proponent, who chooses, monitors, and pays the consultants to conduct the study. Given the current regulatory environment in Peru, a corporate project proponent is free to choose an EIA with more or less commitment to sustainable development
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