CC BY
60
2014
Perm University Herald
ECONOMY
fourth issue
UDC 658: 338.266 LBC 65.30
THE INFLUENCE OF ECONOMIC INDICATORS ON THE ECOLOGICAL AND SOCIAL SUSTAIN ABILITY OF INDUSTRIAL ENTERPRISES
T.L. Lepikhina, PhD in Economics, Associate Professor of the Economics and Finance Department
E-mail: [email protected]
Perm National Research Poly technical University, 614990, Perm, Komsomol prospect, 29 E.B. Alikina, PhD in Economics, Associate Professor of the Economics Department
E-mail: alikina [email protected]
Perm State Humanitarian Pedagogical University, 614990, Perm, Sibirskaya str., 24
V.V. Lepikhin, Postgraduate student of the Department of Economics and Finance
E-mail: [email protected]
Perm National Research Polytechnical University, 614990, Perm, Komsomol prospect, 29
In modern conditions, sustainable development is the object of study in economic science. The study of this important issue is actual both at macro-, meso- levels, and at the enterprise level. Major problem is to achieve the balance between economic, social and environmental aspects of economic systems. Therefore, there is need for investigate the relationship and mutual indices characterizing the economic, social and environmental sustainability. The authors propose to use the method of correlation analysis to identify the relationships.
The concept of concepts of economic, social and environmental sustainability of the industrial enterprise is specified in the article, indicators by which it is possible to estimate the condition of three observed kinds of sustainability is proposed. Analysis of the key indicators was done on the basis of information given by the Territorial State Statistics Service. Correlation analysis was performed to show the influence of the economic indicators of industrial enterprises of the Perm region on their social and environmental sustainability.
As a result of analysis, it was found that the economic indicators characterizing economic growth at the enterprise level have a significant influence on social and enviromnental sustainability. It has been established that the economic well-being of companies, estimated by quantitative growth, financial performance and attractiveness to foreign investors, in general, has a positive effect on social stability. The impact of economic indicators on environmental sustainability is ambiguous: on the one hand - there are positive trends, which include reduction of emissions, decrease of electricity consumption; on the other hand there is the achievement of economic stability in contradiction with the use of such an important resource as the land.
Keywords: sustainable development; economic, social and environmental sustainability; correlation analysis.
The problem of high stability and sustainable development of socio-economic systems investigation is considered to be interdisciplinary in modern science and attracts enough attention in the fields of economy, ecology, anthropology, and sociology. In is stipulated with the fact that the modern Russian economy and society are characterized by economic, political and social instability, which puts forward one of the important tasks of the economic systems sustainability study at different levels.
The development of the world economy in recent decades was mainly focused on the fast economic growth that lias significantly depleted natural resources, thereby causing harm to the environment. Many countries have been faced with high level of consumption growth, which is impossible without natural resources utilization. Depletion and irrational use of the natural potential, the pursuit of economic growth threaten the desired state of the biosphere. In the process of thinking of this problem, an obvious conclusion about the relationship of economic development and deterioration of the enviromnent lias arisen. It necessitates therefore the need for reasonable
combination of interests in profit maximization, material well-being and enviromnental requirements [8, p. 60-63].
The transition of the most developed countries on the path of sustainable development is stipulated with the importance of preserving the environment not only for the present generation but also for future ones.
A unified methodological approach to the interpretation of the category "sustainable development" lias not yet fonned in the modern economic science and there is no unified system of its performance indicators. In this regard, it is important to systematize researches and experience of domestic and foreign scientists, to develop methodological guidelines related to the evaluation of sustainable development of socio-economic systems at different levels with the aim of making effective management decisions.
In accordance with the requirements of the sustainability the economy should provide the most complete satisfaction of social-ecological human needs in the long term along with the material welfare. It implies a balanced reproduction of the national capital.
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which includes the physical, natural and human capital. But unfortunately we observe, that in the society of consumer type for a long period of development, a steady values and criteria of production efficiency have been formed, which take into account mainly only the current economic interests. So changing of the social and environmental factors is still not sufficiently taken into account in the assessment of development results [6, p. 45].
The results of the research, as a rule, lead to the conclusion that in the modern economy, preference is given to the growth of physical capital at the expense of consumption of natural one [10, p. 54].
However, the scope and nature of environmental management has led to the fact that natural capital has become a critical element in the system of economic relations at the present stage of development. Ignoring environmental aspects of development has led to the fact that today limitation of natural resources becomes a critical factor that restricts the scope for further progress and can cause the collapse of the modern socio-economic system [7, p. 1].
Environmental behaviour of economic entities, which promotes the development of social production while maintaining generical properties of the environment, arises on the basis of ecological and economic interests and needs of values. The problem is that specific conditions are needed for sufficient formation of such needs, interests and behaviour, which provides economic stimules by state and municipal authorities to environmental-sector market participants.
Sustainable economic activities, i.e. effective activities from the point of environment protection at all levels of the hierarchy may be implemented on the basis of:
1) determination of the indicators set for the evaluation of the economic systems sustainability at different levels of hierarchy;
2) collection of indicators characterizing sustainability activities;
3) the establishment of relationships between sustainability indicators;
4) identify indicators that are largely determined resistance;
5) development of management decisions for improving stability of the economic system.
Characteristics of sustainable development in modern economic science are given from the point of view of different methodological approaches: conservative, systematic and evolutionary ones. Without belittling the importance of these approaches, from the authors' point of view it is more appropriate to use interlevel hierarchical approach [9]. The structure of economic systems sustainable development management should be based on the territorial and hierarchical principle with regard to the administrative division of the Russian Federation. It is advisable to consider the following levels:
- the Russian Federation;
- region (republics and regions within the Russian Federation;
- the level of area (administrative area, industrial area);
- municipal level (city/town, urban-type settlement);
- industrial object level (industrial, mining and others).
In modern conditions the sustainable development of industrial enterprises can be considered as the core of the economic policy.
For analysis of the industrial enterprise internal stability three components of equal weight which are interconnected were chosen: economic, social and environmental ones [13, p. 21].
Let's consider these types of sustainability. There are many definitions of the notion "economic sustainability". S. Anpilov determines economic sustainability as a sustainability providing profitability increase of the enterprise, increase of business activity, value investment activity increase and maintaining the level of solvency [1].
E.N. Vahramov and D.Y. Markaryan under economic sustainability understand the company's ability to produce the products in the volume and range given in plans in an emergency situation. The authors emphasize that economic stability is the stability and progressive increase in economic and financial activity with minimal anthropogenic impact on the natural environment [4]. N.A. Homyachenkova defines economic sustainability as sustainability of the company, including increase in profitability of economic, social, environmental and risk activity of the enterprise, business growth, maintaining the solvency, growth of investment activity in terms of acceptable risk [14].
Social sustainability of the enterprise depends on activity addressed to social development of the company's staff. The level of social sustainability is defined with qualitative and quantitative characteristics of personnel, as well as the conditions of its operation. The indices characterizing the social sustainability include working conditions (the presence of breaks and their duration, mode of operation), indicators of staff development (coefficient of turnover, turnover rate); the system of social benefits and payments (covering of transport costs, sick pay, payment of financial assistance); the level of remuneration and its dynamics; and others [3].
The very notion of "social sustainability" is quite a faceted one. Consider some of the definitions. According to E.C. Golovko social sustainability implies the involvement of staff in public processes, providing development and level of social security of its employees, promoting the welfare of the society [5].
S.M. Anpilov considers the following social factors: age and sex structure of employees, the level of skills and education of workers, wages, availability of the system of material and moral incentives, conditions and operating mode [2, p.55].
It should be noted that the social sustainability is one of the many components of sustainable
development of the enterprise, therefore, it plays important and indispensable role in the development of the enterprise.
The next component of sustainability is environmental one. To ecological sustainability scientists refer the interrelationship of economics with its environmental safety, minimization of harmful effects of production and economic activity on the environment. The company's development from the ecological sustainability point of view is provided with the following main indicators: coefficient of conservation activities, coefficient of resource-saving technologies, the factor of environmental pollution and the coefficient of nature use.
Scientists in economics and ecology have identified the most pressing challenges for effective eco-development, sustainability and the formation of concepts of sustainable development in modern challenges society. In many developed countries and most developing countries this situation shows the worsening imbalance of common socio-economic development model. The most reasonable way to solve the problem is to build a sustainable society with a balanced intake of all types of resources.
We can say that it is about to turn the territory into a particular socio-ecological-economic system, taking into account the needs of each individual in the established theoretically and empirically various standards for each of the natural regions
The experience of recent decades shows that industries which are more dependent on natural resources are more guilty of environmental pollution. The most intensive development of the industrial sector is marked in the developing countries, where there is an acute problem of life quality improvement, but at the same time, there are no feasible measures to reduce the impact of human destruction.
At the present stage of society development ecology, society and economics are intertwined closely to each other on such levels as local, regional, national and global ones.
In most developing countries international economic relations do not give opportunities to organize rational use of natural resources. In some cases gross national income is generated through such industries as agriculture and forestry, energy production and products of the extractive industry. These activities are certainly important to provide income and population employment, but cannot be considered as determination factor for development of the economy, because it generates the merciless exploitation of natural resources and in turn it leads to undermining the national security of the country.
However, scientists note that it is now widely recognized that the defense of the environment should be one of the priorities of economic activity. In recent years there have been visible positive changes manifested in the growing attention to environmental issues at the national, regional and municipal levels [15, p. 4].
So, the Swedish economist Yu. Norberg believes that the development of transnational corporations in general has a positive effect on
economic development. The view that Western firms will move their factories in poor countries, where environmental law is missing, and they will be able to get away with polluting the environment is erroneous from the scientist's point of view. According to Norberg the theories where "people having new opportunities, resources and technology use them to the detriment of the environment" do not correspond to reality. Moreover, with the shift of production from developed countries to less developed ones, the latter change their behaviour towards the environment, become to treat it more carefully. For example, Mexico after creating a free trade zone has changed traditions of full disregard for environmental issues, tightened environmental legislation. This example reflects a global trend. Worldwide environmental protection is enhanced parallel with economic development and rising of living standards in the country. It has occurred in Western Europe and is currently observed in the developing countries.
A global trend in the fields of environmental protection from the point of view of Y. The Norberg, do not recalls "sliding down an inclined plane", but on the contrary, reflects "the climbing to the top". The scientist called it the "California effect" (in the 70-ies of XX century in the state of California some laws on clean air which served as a positive example for other States were enacted [11, pp. 199-202].
According to some Russian researchers the problem of achieving sustainable economic development enlarges the sphere of human impact on the environment and intensifies the use of natural resources, which leads to more efficient use of secondary resources. The movement of society towards sustainable development is causing a positive process of change in which the exploitation of natural resources, direction of investments, orientation of scientific and technological development, personality development and institutional changes are coordinated with each other in order not to affect the environment and at the same time to have any negative impact on the economic prospects [12, pp. 53-54].
In this study an attempt to analyze the influence of performances characterizing economic growth at the enterprise level on environmental and social sustainability on the example of industrial enterprises in Perm region is made. Indicators of the three main subsystems of sustainability for the industry in general and for two main kinds of activities (mining and manufacturing) are considered.
Economic well-being of the company was assessed through quantitative growth, financial results and attractiveness for foreign investors.
The amount of pollutants emission, contaminants from stationary sources; the amount of energy consumed and the amount of deductions for land recultivation were considered as indicators of environmental sustainability. Social stability was assessed by indicators of the costs for occupational safety, health resource (number of employed persons first diagnosed with an occupational disease, the number of accidents, losses from morbidity) and income.
Table 1 presents correlation studies of volume of delivered goods of own production, works
involved environmental and social indicators with the and services.
Table 1
Correlation of environmental and social indicators with the volume of delivered goods of own production, works
and services
The volume of delivered goods of own production, works and services (current prices; million rubles) All activities Mining Manu factu rin g
Atmospheric emissions of pollutants, contaminants from stationary sources (tons) - 0,679 0,896 - 0,656
Energy consumption (million kilowatt hours) -0,337 0,892 -0,241
Deductions for land recultivation - 0,694 - 0,89 0,472
Funds spent on activities on labour protection (thousand rubles) 0,486 - 0,665 0,116
The number of persons first diagnosed with an occupational disease - 0,405 0,517 0,162
The number of man-days of disability among people with disability in 1 working day or more in accordance with the medical conclusion -0,797 0,084 - 0,536
The number of people injured in accidents in the workplace with a disability for 1 day and more - 0,904 - 0,264 -0,801
Average monthly nominal salary of employees 0,962 0,907 0,967
The analysis of the obtained coefficients of pair correlation allows to make a conclusion that in the field of extractive industries increase in production volumes causes an increase in the emissions of pollutants in the atmosphere as well as in the consumption of energy, while the dependence with recultivation of lands is negative. Among the social indicators a positive correlation is observed with wages, negative correlation with the number of victims from accidents in the workplace, accordingly, with the loss from disability. On the basis of this analysis it can be concluded that while economic growth has a
Correlation of environmental and ?
positive effect on social sustainability in this type of activity.
In manufacturing the growth of production volume causes a reduction of emissions into the atmosphere. It can be assumed that this trend is a consequence of the introduction of environmental technologies in this type of activity. A positive correlation is observed with the wage, negative - with the number of people injured in accidents in the workplace.
In general for all types of activities the results of correlation analysis similar to the results observed in manufacturing.
Table 2
The financial result (profit before tax) (in actual prices in million rubles) All activities Mining Manufacturing
Atmospheric emissions of pollutants, contaminants from stationary sources (tons) -0,541 -0,881 - 0,436
Energy consumption (million kilowatt hours) 0,044 - 0,916 -0, 261
Deductions for recultivation of land - 0,457 -0,881 0,292
Funds spent on labour protection (thousand rubles) 0,308 - 0,625 0,116
The number of persons first diagnosed with an occupational disease -0,27 0,33 0,335
The number of man-days of disability among people with disability in 1 working day or more in accordance with the medical conclusion -0,5155 0,017 -0,1286
The number of people injured in accidents in the workplace with a disability for 1 day and more - 0,743 - 0,447 - 0,465
Average monthly nominal salary 0,856 0,876 0,752
Correlation analysis of the financial results with environmental indicators allows to make the conclusion that there is a moderate inverse relationship in the whole for mining and manufacturing industries with air emissions. At the mining enterprises this relationship is strong (the correlation coefficient is equal to (- 0,881)). Also in the mine industry there is a strong inverse relationship of financial result and energy consumption (ratio equals to (- 0.916)) and deductions for recultivation of land (coefficient is -0,881). Thus, the more favorable financial result is, the less energy enterprises consume. Probably, it may be a consequence of the fact that the economic growth of the enterprise allows to implement more effective and less energy-consuming technology. But unfortunately, there is no positive relation of economic growth with
the cost of lands recovery (reclamation). It can be explained by the failure of the government measures to encourage industrial enterprises to do the recultivation of the earth.
Correlation analysis of the financial results with indicators of social stability allows to conclude that the financial prosperity of the industrial enterprises in Perm region has a positive impact on revenue growth of employees (dependence with wages is strong both in the whole, and in the extractive and manufacturing industries).
At the mining enterprises the relationship of the financial results is observed with number of people injured in accidents in the workplace with disability (coefficient of correlation equals to (- 0,743)).
The volume of foreign investments was the economic stability of the enterprises in the process
selected as the last analyzed parameter characterizing of this study .
Table 3
Correlation of environmental and social indicators with foreign investments
Flow of foreign investments by types of economic activity (thous. USD) All activities Mining Manu factu rin g
Atmospheric emissions of pollutants, contaminants from stationary sources (tons) -0,571 0,859 -0,64
Energy consumption (million kilowatt hours) -0,281 0,798 -0,261
Deductions for land recultivation - 0,625 - 0,707 0,611
Funds spent on labour protection (thousand rubles) 0,258 - 0,605 0,158
The number of persons first diagnosed with an occupational disease - 0,579 0,17 -0,154
The number of man-days of disability among people with disability in 1 working day or more in accordance with the medical conclusion -0,8 0,088 -0,757
The number of people injured in accidents in the workplace with a disability for 1 day and more - 0,878 -0,315 -0,878
Average monthly nominal salary of employees 0,937 0,925 0,935
Foreign investments rather decrease than increase the environmental sustainability of industrial systems in Perm region. This is particularly evident at the mining enterprises: the volume of foreign investments contributes to increased emissions of pollutants (coefficient equals to -0,859), to growth of energy consumption (coefficient is 0,798) and do not conduce to the preservation of the land (the coefficient is (- 0,707)).
Foreign investments impact positively on the social sustainability. Raising volume of investments increases both health resource of workers by reducing the number of people injured in accidents in the workplace with disability and the level of income.
Thus, the study allows to draw some conclusions
a relationship between economic sustainability indicators and environmental and social factors- in industry as a whole, and in separate kinds of activities is observed;
- economic growth at the enterprise level has at present both positive and negative impacts on environmental and social sustainability;
- in general the economic growth has a positive impact on the environment from the point of view of reduction of emissions and resources consumption (discussed on the example of energy consumption);
- achieving economic sustainability is at odds with the environmental security (enough attention isn't paid to the restoration of the land resource);
- improvement of economic sustainability causes the growth of social sustainability of the enterprise.
The enterprise is an element of the larger economic system at meso- and macrolevels. To move to a model of sustainable development in Russia it is needed to develop a system concept that will identify the conditions and possibilities for the new orientation of the country, to determine the structure and the path of optimal control not only at the federal and regional levels, but also at the enterprise level. This transition must have a long-term perspective, i.e. to create a model for socio-eco-development, in which it is necessary to elaborate new mechanisms of management processes and elements of this model.
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The date of the manuscript receipt: 06.10.2014.
Please cite this article in English as:
Lepikhina T.L., Alikina E.B., Lepikhin V.V. The influence of economic indicators on the ecological and social sustainability of industrial enterprises // Vestnik Permskogo universiteta. Seria Ekonomika = Perm University Herald. Economy. 2014. № 4(23). P. 93-98.
