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Environmental Strategy

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Environmental Strategy

Environmental Strategy

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  • 1. ENVIRONMENTAL STRATEGY Wali Memon Wali Memon
  • 2. CORPORATE ENVIRONMENTAL STRATEGY Creating the Culture/ValuesPaul Hawken notes, "We are far better at making waste than at makingproducts. For every 100 pounds of product we manufacture in theUnited States, we create at least 3,200 pounds of waste. In a decade,we transform 500 trillion pounds of molecules into nonproductivesolids, liquids and gases." Wali Memon
  • 3. CORPORATE ENVIRONMENTAL STRATEGYWhy Pursue “Environmental Strategy”? Risk management (reduce potential losses) • Compliance assurance • Contingency management and corrective action Process management (reduce relative costs) • Cost control • Improving yield Wali Memon
  • 4. CORPORATE ENVIRONMENTAL STRATEGYWhy Pursue “Environmental Strategy”? Corporate image management (improve reputation) • Stakeholder communications • Corporate environmental reporting Market advantage (increase sales) • Product attribute Wali Memon
  • 5. CORPORATE ENVIRONMENTAL STRATEGYWhy Pursue “Environmental Strategy”? Strategic sustainability (improve longevity) • Environmental condition assessment • Life cycle impacts Wali Memon
  • 6. CORPORATE ENVIRONMENTAL STRATEGYWhy 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 “ecologicallyresponsive initiatives” Wali Memon
  • 7. CORPORATE ENVIRONMENTAL STRATEGYWhy Pursue “Environmental Strategy”? Three general motivations arose, none surprising: • Competitiveness—improve long-term profitability • Legitimation—complying with established norms • Social responsibility—concern for social obligations and values Wali Memon
  • 8. CORPORATE ENVIRONMENTAL STRATEGYWhy Pursue “Environmental Strategy”? Competitiveness (7 companies) • Green marketing, products • Process intensification Wali Memon
  • 9. CORPORATE ENVIRONMENTAL STRATEGYWhy Pursue “Environmental Strategy”? Legitimacy (24 companies) • Regulatory compliance • Network with environmental interest groups • Impression management Wali Memon
  • 10. CORPORATE ENVIRONMENTAL STRATEGYWhy Pursue “Environmental Strategy”? Environmental responsibility (4 companies) • Donations to environmental causes • Life cycle analysis • Unpublicized initiatives Wali Memon
  • 11. 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 Wali Memon
  • 12. Corporate Environmental StrategyHistory of Corporate Environmental StrategyGeneration 2 Driver: Stakeholder management, process management, pollutionprevention Objectives: Drive continuous improvement, communicate eco-efficiencytargets & progress (image), avoid costs, preempt regulations, gaincompetitive advantage Primary audiences: Stakeholders, line management, regulators Indicators: Resource efficiency, emissions & waste, financial,implementation When: Mid 80s to mid 90s Wali Memon
  • 13. Corporate Environmental StrategyHistory of Corporate Environmental StrategyGeneration 3 Driver: Stakeholder partnership, sustainability, life-cycle management Objectives: Strategic effectiveness, credibility, business sustainability, productfriendliness (DfE, LCA) Primary audiences: Broad stakeholder set Indicators: Balanced scorecard, environmental condition, resource efficiency,toxicity reduction, products When: 2000 and beyond Wali Memon
  • 14. CORPORATE ENVIRONMENTAL STRATEGYCorporations pursuing “Sustainability” Proctor & Gamble Dow Chemical ABB Asea Brown BoveriShareholders pressing Social and/or Environmental Issues Interfaith Center for Corporate Responsibility Portfolio 21 Wali Memon
  • 15. CORPORATE ENVIRONMENTAL STRATEGY Environmental Management Systems (EMS)An EMS is a continual cycle of planning, implementing, reviewingand improving the processes and actions that an organizationundertakes to meet its business and environmental goals. Wali Memon
  • 16. CORPORATE ENVIRONMENTAL STRATEGYAct" model.Most EMSs are built on the "Plan, Do, Check, Wali Memon
  • 17. CORPORATE ENVIRONMENTAL STRATEGY Environmental Management SystemsThis model leads to continual improvement based upon: Planning, including identifying environmental aspects and establishinggoals [plan]; Implementing, including training and operational controls [do]; Checking, including monitoring and corrective action [check]; and Reviewing, including progress reviews and acting to make neededchanges to the EMS [act]. Wali Memon
  • 18. CORPORATE ENVIRONMENTAL STRATEGY Environmental Management SystemsISO 14001: requires implementation of an Environmental ManagementSystem (EMS) in accordance with defined internationally recognizedstandards (as set forth in the ISO14001 specification). establishing an environmental policy, determining environmental aspects & impacts ofproducts/activities/services, planning environmental objectives and measurable targets, implementation & operation of programs to meet objectives & targets, checking & corrective action, and management review. Wali Memon
  • 19. CORPORATE ENVIRONMENTAL STRATEGY Environmental Management SystemsFirms using ISO 14001: International Business Machines Baker Hughes Number of ISO 14001 registrations by country Wali Memon
  • 20. CORPORATE ENVIRONMENTAL STRATEGYLife Cycle Analysis • Taking a holistic environmental view of a product or service, from raw material through production to distribution and final disposal. Wali Memon
  • 21. Wali Memon
  • 22. CORPORATE ENVIRONMENTAL STRATEGYStages 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. Wali Memon
  • 23. SUSTAINABLE DEVELOPMENT AS CORPORATE STRATEGY Applying Corporate Environmental Strategy to the Value ChainIKEA identified five key areas to focus the task of integrating environmentalcriteria 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 longterm to improve environmental performance. Wali Memon
  • 24. SUSTAINABLE DEVELOPMENT AS CORPORATE STRATEGY Applying Corporate Environmental Strategy to the Value Chain IKEA2. Sustainable Forestry: Approximately 75 percent of the raw material for IKEAsproducts, packaging and catalogs comes from forests. IKEAs ultimate goal is to use wood products sourced only fromsustainably managed forests. Wali Memon
  • 25. SUSTAINABLE DEVELOPMENT AS CORPORATE STRATEGY Applying Corporate Environmental Strategy to the Value Chain IKEA3. Environmental Work with Suppliers: IKEA directly manufactures less than 10 percent of theproducts 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 environmentalstandards than in Western Europe or North America. IKEA is encouraging its suppliers toinstitute environmental management systems in their operations and many suppliers have alreadyfulfilled the requirements according to ISO 14001 Wali Memon
  • 26. QUESTIONS! Wali Memon