Assessment Of Business Ethics And Sustainability In Energy Generation And Supply Industry: A Case Study On Lanka Electricity Company Private Limited

Theoretical/conceptual approaches

This report is aiming to critically assess the energy generation and supply industry from the perspective of business ethics as well as sustainable development goals implementation. Here the Lanka Electricity Company Private Limited (LECO) is been chosen as the organization to be assessed for the energy sustainability worldwide.

The LECO is the greatest electricity distribution company of Sri Lanka with market shares of about 20 per cent. The company controls all major functions related to energy distribution as well as energy smart meter manufacturing in Sri Lanka. LECO is an ethical as well as renewable energy supplier. The LECO Company is committed towards building an energy generating, supplying entity which consumers willing to stay with long time-period. LECO is promising to be transparent and fair because they want to bring back the public’s trust in the energy production as well as supplying industry. For achieving above, LECO supply their consumers safely and efficiently; listen to them as well as offer good personal consumer service.

Thus, the report is emphasizing on critically assessing the energy production and supplying industry in which the LECO operates from the perspective of business ethics or Corporate Social Responsibility (CSR). Furthermore, the report will also evaluate the extent of the organisation’s efforts considering environmental, social as well as economic aspects. Additionally, two of the United Nations Sustainable Development Goals (SDGs) will be discussed so that recommendations on how the LECO could improve further in those discussed SDGs areas can be provided (United Nations, 2018).

Energy generating and supplying companies, especially those are producing from fossil fuels: oil, coal, natural gas, are prone to attack by the ecologists as well as their supporters in the media. Although people criticize the conventional sources using energy companies for disastrous pollution yet attacking these companies is not suggested because ultimately they generate fossil fuels, without which people cannot survive for heating their home; producing our food; powering cars, trains and buses (Nelder, 2009). People use conventional resources as fuel for electrical power that people need for lighting as well as for all the information technology they use on daily basis, from our mobile phones to computers. Thus, world cannot stop those companies from generating energy and supplying it to their consumers just because they are using a lot of fossil fuels or conventional natural resources. On the other hand, one thing which can be done is that we can imply business ethics strictly over all energy supplying as well as generating companies. Society can contribute by eating more slowly, travel locally through energy saving alternative vehicles, and relish only entertainment and recreation which requires minimal or no utilise of fossil fuels (Union of concerned Scientists, 2018).

Environmental, Economic and Social aspects of LECO

Moreover, any energy generating and supplying company can be considered an ethical one, when they aim to help thousands of peoples for having a meaningful association with the clean energy projects. Further, there are many aspects through which business ethics and morality of an energy supplying company can be assessed:

• Company should effort to deliver an encouraging return for their investors while having a worthwhile connection to renewable energy considering an environmental and social impact.
• The business shareholders must be capable to trust the company for doing well.
• The way company conducts the business lies in their core values as well as gives a moral scope for running as a company.
• To be ethical during business, the company must be transparent as well as strive for to actively engaging with their investors from published statutory or voluntary communications (Williams, 2014).
• The energy company should adopt the governance as well as ethics code.
• The company must be contributing to the evolution to a smarter and cleaner energy system.

Social impacts of LECO are as follows:

• Successful operation of LECO will eliminate social inequality, for example the arrangement of distributed renewable energy sources (RES) motivates rural areas for their overall development. LECO will supply energy to all of the consumers in a way that they can become the owner of their own energy; this idea will greatly influence rural areas as they can access clean and adequate energy with the help of LECO.
• By creating a modern as well as efficient distribution network in Sri Lanka LECO is affecting society in a positive way and ultimately the world will grow because of generating energy from renewable resources and supplying it into needed areas.
• The LECO’s objective of lighting up Sri Lanka is achieved above the expectations while evaluated post 29 years of operations which is showing that company has done a lot for the Sri Lankan society.
• The LECO is modelling new energy culture for the energy future worldwide.
• LECO being an energy supplier, will enhance energy security of houses greatly because the company aims to make the households consumers their own energy supplier and wants to get the trust of them.

Environmental impacts of LECO are as follows:

• Carbon emissions
• NOx, SOx, PM10, PM2.5 emissions which cause negative effects on human health
• Landscape and biosphere Interference
• Amount of waste generating through energy generation
• Risk of accident/failure for example: worst accidents of nuclear reactors
• Environmental contamination due to long-time storage of radioactive materials
• Efficiency of the resources in the economy (World Bank, 2015).

Economy impacts of LECO are as follows:

• GDP growth
• Land requirement: due to less efficiency, total energy produced per unit land occupied is less for most of the renewable energy sourced technologies
• LECO will encourage balanced development of various regions
• Trade balance
• Unemployment rate: if there will be a significant imbalance in the labour market then this rate will increase.
• Innovativeness and competitiveness of economy will be increased
• Energy security of public sector and enterprises will be enhanced (Nelder, 2009).

In this way, LECO’s social, environmental as well as economic aspects has been evaluated and summarized from the perspective of business ethics and sustainability. Ethical responsibilities of this energy generating and supplying company include following: There should be no harm to the natural resources while harnessing them for supplying energy purposes. Energy generating process must not include any excessive harnessing of fossil fuels. Renewable resources must be utilized as much as possible. There should be limitation over making business from supplying energy to the human society as people cannot live without using energy and its use is mandatory hence it should be accessible and economic. Policy framework made for electricity supply industries have been followed strictly by the LECO (Griggs et al., 2013). In this context, LECO is a renewable and ethical energy supplier because of the reason that LECO effectively sells gas and electricity to their customers. The energy in LECO derived from the renewable resources of solar, wind, hydro and tidal. It is well-known that National Grid is a big bucket with generators filling it up from electricity through lots of distinct sources as well as energy suppliers so that electricity can be distributed to their consumer’ homes.  Hence LECO supplies only that electricity which is generated by renewable sources only and this way, they only utilize renewable sources (United Nations Development Programme, 2015).

Moreover, in monetary terms LECO is providing profit to the nation of Sri Lanka in many ways as it is working and earning revenues in three major areas of energy industry include generation, distribution as well as smart energy metering. Therefore, the company is having direct, democratic effect on the economy and GDP growth of the company. In terms of business ethics, LECO adopted a wholly transparent way for salaries, accounting and business decisions and even they publish minutes as well as salaries on their website. Thus, it is running in total ethical way for developing world and Sri Lanka as well in the area of energy supplying and generating (Pearce et al., 2013).

Analysis

In this context, below figure is showing the energy generation in Sri Lanka from the various sources like Hydropower, Thermal-oil, Thermal-coal as well as other renewables.

Coming to the LECO’s analysis from the sustainable development goals implementation point of view, two of the United Nations Sustainable Development Goals (SDGs) have been selected and they will be utilised for providing recommendations on how the LECO could improve further in these areas (Schaltegger et al., 2017).

LECO is a Company established in the year of 1983 for supplying electricity in Sri Lanka. Moreover, formation of LECO was done through acquiring assets of local authorities for creating a modern as well as efficient distribution network in Sri Lanka. In terms of SDG-7 and SDG-12, objectives have been achieved by the company even far above the expectations as evaluated post 29 years of its operations in Sri Lanka. In this way, LECO being a utility is benchmarked high in the South East Asian region.

The two SDGs are as follows:

The LECO is already working in the direction of providing affordable as well as clean energy to all. SDG-7 is about ensuring affordable, sustainable, reliable and modern energy access for all amid the year 1990 and 2010 (Sachs, 2012), as per the results of this SDG, 1.7 billion peoples accessed electricity which is a progress to be proud of. Yet the globe’s population is continuously rising, hence more people will require clean, cheap energy for lighting their homes as well as streets, using mobile phones and computers, as well as doing their day-to-day business. LECO should work to get addressed that energy issue, because fossil fuels as well as greenhouse gas emissions are creating extreme changes in our global climate which is leading to huge critical problems on every continent worldwide (United Nations Development Programme, 2018). Hence, LECO can make our system more energy-efficient and finance into clean energy sources like solar and wind so that more affordable sustainable energy can be produced and accessed (United Nations, 2018). Here, few recommendations are quoted for the LECO to provide more clean and affordable energy to more peoples for longer time in order to achieve SDG-7 effectively:

• LECO must try to meet increased electricity demands in a cost-effective way as well as protect the environment
• Use of solar energy is not been done from the LECO yet, which is must be added to the process of acquiring energy for the supplying process (Lu et al., 2015).
• Use of biomass energy is not been seen through LECO yet, biomass has an enormous capacity to provide affordable energy; hence it must be utilised (Watson et al., 2010).
• Geothermal energy is enormously available in the nature which needs to be extracted by efficient methods so that power system can be improved with more renewable energies, thus LECO should use geothermal energy effectively.
• LECO can use waste of many biological processes to generate electricity and hybrid systems of renewable energy generation can be further utilised for the affordable energy distribution (Birol, 2018).

All attempts of LECO in past 29 years have been seen dedicated towards producing responsible production as well as consumption of energy among all the public of Sri Lanka. In this way, LECO is very well working to initiate this way of consuming and generating electricity on-premises. Still, there are many more recommendations for the LECO to help the nation for achieving the SDG-12 effectively (Dresner, 2008).

SDG-12 is about ensuring sustainable consumption as well as production patterns all over the world (Reports Shell, 2017). As it is well-known that few peoples use a lot of energy, and on the other hand few people use very less energy as they are not able to do so (Sustainable Development Goals, 2018). In fact, a huge portion of the world’s population is utilising very less energy for meeting even their basic requirements (United Nations Development Programme, 2015). Hence, an attempt of equally distributing the energy all over the world so that a globe where each and everyone gets whatever they require to thrive and survive (Bass & Dalal-Clayton, 2012). Therefore, few recommendations for the LECO to help for achieving the SDG-12 effectively are as follows:

• LECO should motivate public for consuming energy in a way that protects our natural resources for our children and other upcoming peoples, and their children in future (Kaygusuz, 2012).
• LECO should manage the natural resources more proficiently as well as dispose toxic waste in better way to preserve the environment
• LECO can help in cutting per capita food waste globally by providing cooking fuel at low prices to all urban as well as rural public
• LECO can motivate businesses as well as consumers for reducing and recycling waste of their daily life for producing less waste per day so that environment can be saved (Nilsson et al., 2016).
• By providing energy at low costs to the industries which are utilising energy wisely and responsibly, responsible consumption can be achieved.
• By hiking prices of energy for those customers who consumes more than required energy more often, responsible consumption can be achieved
• Furthermore, responsible consumption initiates the responsible energy production for the energy generation companies.
• By utilising more kinds of renewable resources from the nature, LECO can help those countries which have normally not consumes a lot of energy for moving in the direction of more responsible consumption arrangements (World Bank, 2015).

According to global CSR standards and practice, LECO developed Sri Lanka in following ways:

• LECO has improved the relevance and quality of education at all possible levels.
• LECO has enhanced access to education; through providing equitable, high quality, cost effective, modern as well as sustainable health care services all over Sri Lanka.
• LECO has helped the nation of Sri Lanka while structuring high standard, modern and well-organised infrastructure and services in order to improve access to well-built roads, railways, power, ports and safe drinking water (Tilakasiri, 2013).
• Through manufacturing smart energy meters LECO has promoted the application of R&D as well as modern technologies in order to enhance competitiveness worldwide.
• LECO has modernised the legal as well as regulatory framework for promoting the business environment (Tilakasiri, 2013).

Conclusion 

In conclusion, there are countless profits of switching to LECO. LECO is a transparent, affordable, green energy provider to people by the peoples who actually care about the community.

LECO operate through putting renewable energy straight into the national grid, and the more peoples utilise them for their provider, the more renewable energy is being directed into the grid, and hence the very less amount of energy is utilised from fossil fuels. In this way LECO is doing a lot in the direction of achieving sustainability in the area of energy, education, health as well as economic development. Although the company has set all the required vision and mission for achieving energy sustainability yet there are some areas left behind from paying attention for the further improvement. The above discussion has proved that suggested recommendations to the LECO for further improvement are really essential for the effective establishment of 17 SDGs for the global public. LECO is using renewable energy resources like wind, nuclear and tidal, in an efficient form to provide affordable, clean and accessible energy for all. Furthermore, extension of using renewable energy sources can be easily implemented through introducing solar, geothermal and biomass energy source for generating electrical energy into our system. As SDGs are the drivers for the overall development of the nation and world hence all the people must work together in order to achieve each and every SDG by the year 2030. In whole, it can be concluded that business ethics are most important while obtaining sustainability in every sector. Additionally, energy supplying industry is ought to be ethical so that world can survive during the upcoming future. Therefore, replacing fossil fuels usage with the renewable energy resources can eliminate many development problems and address energy issues of the whole world. Moreover, energy sustainability is the key to world’s sustainability in each and every area of the community.

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