Politicians who support the green movement often argue that it is profitable for firms to pursue...

Politicians who support the green movement often argue that it is profitable for firms to pursue a strategy that is “environmentally friendly” (for example, by building factories that do not pollute), because workers will be willing to work in environmentally friendly factories at a lower wage rate. Evaluate the validity of this claim. (15 points)

Expert Solution

The above mentioned claim can be supported and evaluated on the basis of green movement role. As we know that the green movement focuses on environmental conservation, restoration and overall improvement to the current health of the environment. Now these days, most of the companies are taking advantage as many financial rewards of taking their business in an eco-friendly direction. As eco-friendly company can save from eco-friendly practices, cost-effective, benefit from tax breaks, government subsidies and can become popular as a role model of corporate social responsible firm.

Yes, it will be not wrong to say that it will be profitable for firms to pursue a strategy that is “environmentally friendly”. The eco-friendly firms can build factories without government intervention which can lead to maximize profits of the firm. Green companies can get benefits from the popularity of eco-friendly goods & services which they are providing to their customers. People are more health conscious nowadays which lead to increase in the demand of natural and organic products. For these products, firms make savings and cost-effective practices such as use of water harvesting, energy conservation, recycling of product material, use of solar power and energy-efficient equipment helps the firm to maximize their profits. Further, the production and designing process of these eco-friendly products are non-toxic or use less toxic materials which are less hazardous to construction workers. If we talk about non-eco friendly firm' where materials use during production of products directly pollute the indoor air quality which affects hazardously on workers health. As it is job where health is on risk for the workers, so as for compensate this the firm set higher wage to their workers (such as health insurance) which lead to increase the cost of the firm. Even as we said earlier people are health conscious now, the same way the employee are ready to leave more hazardous job where they risk their health and life. So, these workers start to shift towards eco-friendly factories and willing to work at lower wages without compensating differential where their job is less risky. They provide safe work environment where worker willing to work at lower wage. Hence, the good health environment will increase the working effiiciency of workers and which directly leads to increase in the productivity of the firm.

Rahul Sunny answered 6 months ago

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