Corporate Environmental Strategy

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Corporate Environmental Strategy

• Creating the Culture/Values
• Paul Hawken notes, "We are far better at making
  waste than at making products. For every 100
  pounds of product we manufacture in the United
  States, we create at least 3,200 pounds of waste.
  In a decade, we transform 500 trillion pounds of
  molecules into nonproductive solids, liquids and
  gases."

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Corporate Environmental Strategy

• Why Pursue Environmental Strategy?
• Risk management (reduce potential losses)
• Compliance assurance
• Contingency management and corrective action
• Process management (reduce relative costs)
• Cost control
• Improving yield

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Corporate Environmental Strategy

• Why Pursue Environmental Strategy?
• Corporate image management (improve reputation)
• Stakeholder communications
• Corporate environmental reporting
• Market advantage (increase sales)
• Product attribute

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Corporate Environmental Strategy

• Why Pursue Environmental Strategy?
• Strategic sustainability (improve longevity)
• Environmental condition assessment
• Life cycle impacts

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Corporate Environmental Strategy

• Why Pursue Environmental Strategy?
• Based on a study by business researchers, not
  environmental researchers.
• Looked at cross section of firms in UK and Japan,
  which had ecologically responsive initiatives

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Corporate Environmental Strategy

• Why Pursue Environmental Strategy?
• Three general motivations arose, none surprising
• Competitivenessimprove long-term profitability
• Legitimationcomplying with established norms
• Social responsibilityconcern for social
  obligations and values

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Corporate Environmental Strategy

• Why Pursue Environmental Strategy?
• Competitiveness (7 companies)
• Green marketing, products
• Process intensification

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Corporate Environmental Strategy

• Why Pursue Environmental Strategy?
• Legitimacy (24 companies)
• Regulatory compliance
• Network with environmental interest groups
• Impression management

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Corporate Environmental Strategy

• Why Pursue Environmental Strategy?
• Environmental responsibility (4 companies)
• Donations to environmental causes
• Life cycle analysis
• Unpublicized initiatives

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Corporate Environmental Strategy

• History of Corporate Environmental Strategy
• Generation 1
• Driver Compliance
• Objectives Risk management
• Primary audiences Sr. Management, environmental
  staff
• Indicators Regulated emissions, hazardous
  wastes, violations fines
• When Mid 70s to mid 80s

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Corporate Environmental Strategy

• History of Corporate Environmental Strategy
• Generation 2
• Driver Stakeholder management, process
  management, pollution prevention
• Objectives Drive continuous improvement,
  communicate eco-efficiency targets progress
  (image), avoid costs, preempt regulations, gain
  competitive advantage
• Primary audiences Stakeholders, line
  management, regulators
• Indicators Resource efficiency, emissions
  waste, financial, implementation
• When Mid 80s to mid 90s

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Corporate Environmental Strategy

• History of Corporate Environmental Strategy
• Generation 3
• Driver Stakeholder partnership, sustainability,
  life-cycle management
• Objectives Strategic effectiveness, credibility,
  business sustainability, product friendliness
  (DfE, LCA)
• Primary audiences Broad stakeholder set
• Indicators Balanced scorecard, environmental
  condition, resource efficiency, toxicity
  reduction, products
• When 2000 and beyond

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Corporate Environmental Strategy

• Corporations pursuing Sustainability
• Proctor Gamble
• Dow Chemical
• ABB Asea Brown Boveri
• Shareholders pressing Social and/or Environmental
  Issues
• Interfaith Center for Corporate Responsibility
• Portfolio 21

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Corporate Environmental Strategy

• Environmental Management Systems (EMS)
• An EMS is a continual cycle of planning,
  implementing, reviewing and improving the
  processes and actions that an organization
  undertakes to meet its business and environmental
  goals.

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Corporate Environmental Strategy

• Most EMSs are built on the "Plan, Do, Check, Act"
  model.

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Corporate Environmental Strategy

• Environmental Management Systems
• This model leads to continual improvement based
  upon
• Planning, including identifying environmental
  aspects and establishing goals plan
• Implementing, including training and operational
  controls do
• Checking, including monitoring and corrective
  action check and
• Reviewing, including progress reviews and acting
  to make needed changes to the EMS act.

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Corporate Environmental Strategy

• Environmental Management Systems
• ISO 14001 requires implementation of an
  Environmental Management System (EMS) in
  accordance with defined internationally
  recognized standards (as set forth in the
  ISO14001 specification).
• establishing an environmental policy,
• determining environmental aspects impacts of
  products/activities/services,
• planning environmental objectives and measurable
  targets,
• implementation operation of programs to meet
  objectives targets,
• checking corrective action, and
• management review.

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Corporate Environmental Strategy

• Environmental Management Systems
• Firms using ISO 14001
• International Business Machines
• Baker Hughes
• Number of ISO 14001 registrations by country

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Corporate Environmental Strategy

• Life Cycle Analysis
• Taking a holistic environmental view of a product
  or service, from raw material through production
  to distribution and final disposal.

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Corporate Environmental Strategy

• Stages of Life Cycle Analysis
• 1. Definition of Goals and Scope
• 2. Life Cycle Inventory Analysis measure
  materials and energy used and environmental
  releases that arise along entire continuum of the
  product or process life cycle
• 3. Life Cycle Impact Assessment examine actual
  and potential environmental and human health
  effects associated with use of resources and
  materials and with the environmental releases
  that result.
• 4. Life Cycle Improvement Assessment
  systematically evaluate and implement
  opportunities to make environmental improvements
  based on previous assessments.

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Sustainable Development as Corporate Strategy

• Applying Corporate Environmental Strategy to the
  Value Chain
• IKEA identified five key areas to focus the task
  of integrating environmental criteria and
  awareness into its business operations
• 1. The Environmental Adaptation of the Product
  Range
• first, to identify what material is being used
  today and,
• second, which materials they will need to
  eliminate over both the short and long term to
  improve environmental performance.

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Sustainable Development as Corporate Strategy

• Applying Corporate Environmental Strategy to the
  Value Chain
• IKEA
• 2. Sustainable Forestry Approximately 75 percent
  of the raw material for IKEA's products,
  packaging and catalogs comes
• from forests. IKEA's ultimate goal is to use
  wood products sourced only from sustainably
  managed forests.

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Sustainable Development as Corporate Strategy

• Applying Corporate Environmental Strategy to the
  Value Chain
• IKEA
• 3. Environmental Work with Suppliers IKEA
  directly manufactures less than 10 percent of the
  products it sells. The balance is produced by
  some 2,300 suppliers in more than 60 countries.
  Many suppliers, particularly in Eastern Europe
  and Southeast Asia, have lower environmental
  standards than in Western Europe or North
  America. IKEA is encouraging its suppliers to
  institute environmental management systems in
  their operations and many suppliers have already
  fulfilled the requirements according to ISO 14001

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Sustainable Development as Corporate Strategy

• A peek in to the future
• Fuel cell technology at Toyota