2. Business & Environment
• Receiving increased attention
• Focus is more on manufacturing companies
• Environmental impacts of service companies is
also significant
• Companies also offer environmental services
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4. Environmental Management and Profitability
Financial Performance
ROI, ROE
ROA, EPS
The Triple Bottom Line
Minority% of workforce, Hazardous chemical
Family-friendly forces Emissions, energy use
Living wage for international labour Solid waste recycled
Social Performance Environmental Performance
4
5. Poor environmental performance
• Can lead to fines
• Litigation and its costs
• Damage to the company’s brand
While sound environmental management
Leads to cost reductions, quality and yield improvements, improved
relationships with regulators, reduced insurance costs and
enhancement to the company’s revenue streams and brands.
Positive mention in the media about a company wrt
environmental issues have contributed positively to the share
price.
Delta Airlines achieved significant cost reductions when they
pioneered the practice of using only one engine while taxiing. It
effected substantial fuel cost savings while fuel not burned
contributed to energy conservation and pollution reduction.
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6. UPS example
• UPS redesigned its packaging making its next
day air service packaging both lighter and
reusable.
• Saved UPS – 1.6 mn USD per year, conserved
enough energy to light 20,000 light bulbs for a
year, eliminated 550 tons of solid waste and
saved more than 2200 tons of trees.
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7. Market for environmental services
• In US alone worth 200 mn USD
• An environmental service co alters the environmental
performance of another company.
• BCG undertook many projects with significant
environmental implications
• PriceWaterhouseCoopers offers a wide range of
environmental services. Their services range from raw
material use and disposal to developing sustainable
product strategies to advice related to global climate
change.
• Both BCG and PWC are members of WBCSD (World Business
Council for Sustainable Development)
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8. LEED Certified Buildings
• Architects and Builders offer important environmental
services.
• Leadership in Energy and Environmental Design (LEED)
programme sets guidelines for designing and
constructing environmentally friendly buildings.
• LEED emphasizes five design areas:
1. Building site selection and erosion control
2. Water efficiency
3. Energy and atmosphere
4. Materials and resources
5. Indoor environmental quality
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9. Environmental Services
Degree of interaction and customization
Low High
Service factory Service shop
Traditional •Hospitals and Auto Repair
•Airlines and Hotels
Degree of labour intensity
Environmental
Low Environmental •Hospital environmental
•Solid waste management services and hazardous
and facilities management waste management
Mass service
Professional Service
Traditional
Traditional
•Retailing and Schools
High •Lawyers and doctors
Environmental
Environmental
•Environmental Standards
Environmental consultants,
Organizations like
Architects and auditors
ISO 14000 9
10. Environmental Issues for Service
Degree of interaction and customization
Low High
Service factory
Service shop
Airlines
Hospitals
Solid waste from cabin service, fuel
Solid waste from rooms, biohazards,
use, engine emissions, hazardous
Energy uses from lighting and climate
chemicals from aircraft maintenance
Degree of labour intensity
Control, water use from laundry, cleaning
blue water
Chemicals.
Low Hotels
Auto Repair Shops
Solid waste from restaurant and
Hazardous chemicals to clean parts,
room operations, energy use,
Waste oil, solid waste of replaced parts,
Lighting and climate control,
Hazardous chemical-soaked rags
Water use from laundry
Mass service Professional Service
Retailing Operations Consultants
Fuel and emissions from product Fuel and emissions from travel, paper
distribution, urban sprawl from location Use, carbon dioxide emitted during client
High decisions, solid waste from packaging
meetings
Schools
Energy use from lighting and climate
control, food waste, hazardous Dentists
cleaning products, paper use from Biohazard waste, toner cartridges, 10
paper
copiers and printing and other office waste
11. Coalition for Environmentally
Responsible Economies - CERES
• Protection of the biosphere
• Sustainable use of natural resources
• Reduction and disposal of wastes
• Energy conservation
• Risk reduction
• Safe products and services
• Environmental restoration
• Informing the public
• Management commitment
• Audits and reports
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12. Services and their environmental impact
• Hotels offer guests the choice not to have sheets and
towels changed every day which saves water, electricity
and saves the amount of residual laundry soap
discharged into the sewer system.
• Office waste – paper/cartridges
• Medical wastes from doctors include soiled/blood
soaked bandages, used surgical gloves, instruments,
needles, cultures, swabs, glassware and removed body
organs.
• Auto repair shops work with hazardous cleaners, worn
out parts, motor oil and other hazardous wastes.
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13. Environmental Strategies for Service
Operations
• Process Opportunities
1. Process improvement (TQEM)
2. Process certification – ISO 14000, Self-
certification or subscribing to environmental
standards like CERES principles
3. E-commerce – Migrating to paper based
processed to e-commerce model. E-ticketing, E-
statements
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14. Product opportunities
• Product Redesign – Change from high contact
design to low contact design impacts costs
• Value-added services along environmental
dimensions – UPS – Service Parts logistics group
manages critical repair component distribution
systems for telecom and computer companies.
• Dematerialize
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