Linking Science and Technology to Society's Environmental Goals (1996) / Chapter Skim
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Setting Environmental Goals: The View from Industry. A Review of Practices from the 1960s
Setting Environmental Goals: The View from Industry. A Review of Practices from the 1960s
Pages 281-326
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From page 281... ...
291 GOAL-SETTING IN THE STAGE OF PROACTIVE ENVIRONMENTAL MANAGEMENT ......................................................... 294 Goal-Setting by Individual Firms, 297 Goal-Setting by Industry Groups, 302 Coordinated Action to Establish Legitimacy, 302 Coordinated Action to Promote an Environmentally Attractive Product, 305 Coordinated Action to Signal Environmental Leadership, 306 Coordinated Action to Seek Regulatory Relief, 307 Goal-Setting by Government-Industry Coalitions, 308 281
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From page 282... ...
282 LINKING SCIENCE AND TECHNOLOGY TO ENVIRONMENTAL GOALS GOAL-SETTING IN THE STAGE OF MANAGING FOR THE ENVIRONMENT ........................................................................... 309 Industrial Ecology and Design for the Environment, 311 National Goals for Sustainability: The Dutch Covenants, 316 CONCLUSION ................................................................................................
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From page 283... ...
As companies move from treating environmental management as a case-by-case problem-solving issue, to a regulatory compliance issue, to an issue for proactive management, and finally, to a central element of business strategy, the environmental goals they set necessarily change. What trends are discernible in corporate goal-setting over the last 30 years?
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From page 284... ...
Paralleling social sentiment, industry goals for environmental performance have become more aggressive, more explicit and more far-reaching, as the rise in environmental consciousness in the 1960s spawned current concerns over global sustainability. This paper traces changes in corporate environmental goal-setting in the context of the overall evolution of corporate environmental management.
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From page 285... ...
Hunt and Auster presented an artifactual description of five stages of corporate environmental development starting with "beginner," and progressing through "fire fighter," "concerned citizen," "pragmatist," and "proactivist."1 Shrivastava referred to this process of environmentally directed self-renewal as "greenewal." That process, he states, is initiated by a strategic threat from regulations, public pressures, public safety concerns, or social expectations. The embattled firm then forms ad hoc strategic programs, testing their competitive benefits and, if necessary, expanding the organizational systems through institutionalization and cultural changes.2 The five stages shown in Figure 1 have been used by researchers at MIT to classify observed and anticipated changes as corporate environmental management evolves.
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From page 286... ...
Proactive Environmental Management At this stage, the firm believes that environmental protection has certain stra
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From page 287... ...
According to a survey by Arthur D Little of the top 100 companies in the Fortune 500 index, 49 had environmental Vice Presidents in 1991.7 Several widely publicized stories, some of which are detailed below, tell of companies reducing pollution beyond compliance levels while at the same time increasing profits.8 Later in this stage, companies may expand the scope of their proactive environmental management beyond mere pollution prevention at the end of the pipe.
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From page 288... ...
Companies will move beyond concern for the protection of the present environment, to considering the environmental impacts of their activities on future generations. Concerns about sustainable development are fundamentally different from the essentially compliance-related actions that characterize all of the earliest stages of corporate environmental management.
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From page 289... ...
The forthcoming ISO Environmental Management Standard (ISO 14001) makes a distinction between the two types that is worth mentioning here12 environmental objective -- overall environmental goal, arising from the environ mental policy that an organization sets itself to achieve, and which is quantified whenever practicable.
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From page 290... ...
For the purposes of this paper, then, corporate goal-setting means the commitment of a firm or group of firms to a certain course of action or end-state, which may be tightly or loosely defined. Environmental Goals and Stages of Corporate Environmental Management Few, if any, environmental goals can be identified in the early, problemsolving stage of corporate environmental management.
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From page 291... ...
In this regard, industry reacts no differently to environmental rules than to any other set of public mandates. As we shall see, corporate environmental goal-setting becomes much richer in the proactive phase of environmental management.
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From page 292... ...
The federal Environmental Protection Agency (EPA) , through such statutory instruments as the Clean Air Act of 1970, the Clean Water Act of 1977, and the Comprehensive Environmental Response, Compensation, and Liability (CERCLA, or "Superfund")
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From page 293... ...
of setting a target date by which the goals were to be achieved. The Clean Air Act directed the EPA to establish air quality levels to serve as goals to be met through the use, primarily, of control devices on sources of six air pollutants.
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From page 294... ...
GOAL-SETTING IN THE STAGE OF PROACTIVE ENVIRONMENTAL MANAGEMENT Several highly visible events, which occurred in the 1980s -- the Bhopal toxic chemical release; the discovery of a hole in the ozone layer; and the Exxon Valdez oil spill -- inextricably linked environmental degradation with the actions of industry. While the public sought to blame the chemical, petroleum, and other industries for their environmental wrongs, firms were simultaneously driven to accept responsibility for the environment.
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From page 295... ...
Compliance means that the moral initiative lies elsewhere -- outside of industry.22 Thus, environmental goal-setting by firms and industry groupings can be expected to reflect fundamentally different aims from those of government. The strategic reasons for corporate environmental goal-setting may include any or all of the following: • protection of right-to-operate by defusing public mistrust; • reduction in operating or waste management costs; • preemption of command-and-control regulation; • obtaining "first-mover" advantage through marketing a new, cleaner product or service; • creating a market for an environmentally sound substitute to an entrenched product (e.g., CFCs)
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From page 296... ...
These include the Global Environmental Management Initiative (GEMI) , a group of 27 multinationals from a variety of industries, which acts as a forum for benchmarking environmental management practices and stimulating new strategies; the International Chamber of Commerce's Business Charter for Sustainable Development, which outlines 16 principles for environmental management; and the Industry Cooperative for Ozone Layer Protection (ICOLP)
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From page 297... ...
program introduced by 3M in 1975 is perhaps the earliest example of a U.S. firm taking explicit action in environmental management.
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From page 298... ...
. And it moves us far closer to public expectations."29 These elements -- to align corporate environmental goals with public expectations, and to set a course for environmental leadership -- were not an explicit part of the earlier pollution prevention programs launched by 3M and others.
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From page 299... ...
The environmental management discussion section reported exclusively on spending on environmental research, site restoration, and new equipment to meet environmental standards, and referred to Noranda's participation in industry-government debates on global environmental issues.34 Companies differ widely in the approach they take to setting even this narrow range of measurable waste reduction goals. Some firms set targets that elicit greater attention to manufacturing processes, but do not fundamentally change the design of processes or the selection of products for manufacture.
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From page 300... ...
In early 1991, many manufacturing sites had exceeded the 50% goal, so a revised goal for quarter-upon-quarter continuous improvement was set.39 Setting goals for continuous improvement is only meaningful if performance is continually measured and evaluated and methods for meeting goals are implemented and updated. Xerox cites its adoption of product life-cycle analysis as a key methodology that will enable continuous improvement in environmental performance.
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AT&T cites two methodologies as its "primary allies" in evolving environmental management: quality and Design for Environment (DFE)
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From page 302... ...
Coordinated Action to Establish Legitimacy Two recent initiatives, by the chemical and petroleum industry associations, seek to guide the environmental activities of their members by articulating principles and practices for environmental management. These programs both arose following a major incident that threatened the industry's right to operate and seriously undermined public confidence.
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From page 303... ...
Self-evaluation is required on the part of each participating firm and the CMA publishes annual aggregate performance statistics, but critics argue that third-party verification should be adopted as an enforcement mechanism.44 The six codes cover a comprehensive set of environmental and safety practices, several of which go far beyond the waste reduction and pollution prevention goals established by many individual firms. In particular, the most rigorous code is the Product Stewardship code, which aims to "make health, safety, and environmental protection an integral part of designing, manufacturing, marketing, distributing, using, recycling and disposing of .
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From page 304... ...
environmental management system [as] that part of the overall man agement system which includes organizational structure, planning activities, re sponsibilities, practices, procedures, processes and resources for developing, achieving, reviewing and maintaining the environmental policy.
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notes that EPE "is a process and tool which provides management with information linked to the achievement of an organization's targets and objectives in the environmental management system."53 It is much too soon to predict how the adoption of ISO 14000 will affect the way firms set objectives and targets, but it will certainly make whatever process they use more visible and subject to scrutiny. The standard does not require the firms to make public their progress to these goals, but many will choose to do so in their efforts to gain more legitimacy and public trust, as discussed earlier.
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From page 306... ...
However, the document outlines six research priorities for the industry as a whole, four of which deal directly with environmental issues. These include research into sustainable forest management, environmental performance, improved capital effectiveness, recycling, and sensors and control.
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From page 307... ...
In particular, SPI is lobbying to allow polymerization to be considered as an acceptable control technology to handle hazardous wastes. Elsewhere in its Issues Activity Report, the SPI notes that it is actively representing the plastics industry on several other environmental issues including: hazardous waste, global warming/climate change, Clean Air Act implementation, clean water/Great Lakes initiative, and chlorine.
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From page 308... ...
, cites this as one example of what he sees as a growing trend towards voluntary programs involving government bodies at the federal, state and local levels.58 The Automotive Pollution Prevention Project (Auto Project) was established in 1991, and the parties committed to reduce the generation and release of persistent toxic substances in the Great Lakes basin.
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From page 309... ...
While this may reduce the burden of compliance and thus improve chances for successful reduction in PFC levels, it is unclear to what extent this type of voluntary agreement reflects a desire on the part of industry to take responsibility for environmental consequences. Bob Strieter of the Aluminum Association noted that aluminum is seen as an environmentally friendly metal because of its ability to be easily recycled, so the industry wanted to preempt any negative public reaction that may result from inaction on reducing PFC emissions.61 Like the aluminum industry, the Semiconductor Industry Association (SIA)
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From page 310... ...
In some ways, it is a meta-goals setting initiative, exhorting firms to recognize environmental management as among the highest corporate priori ties and as a key determinant to sustainable development; to establish policies, programmes and practices for conducting operations in an environmentally sound manner67 while avoiding any explicit vision of sustainability. The preamble to the ICC (BCSD)
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From page 311... ...
Industrial Ecology and Design for the Environment69 Design for environment and other sustainable development schemes guide decisions based on some set of normative objectives related to prevention of toxic impacts, resource conservation, avoidance of dysfunction in the natural system, and so on. There is no consensus on what this set of norms should be, nor is it likely that such a set will appear soon.
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From page 312... ...
Fundamental to industrial ecology is that environmental impacts across the entire life cycle of products, from cradle to grave, be considered in decisionmaking. Industrial ecology provides principles by which to guide actions that affect the entire product life cycle.
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• Industrial symbiosis -- the "interaction among companies so that the residual of one becomes the feedstock of another."78 Converting pollutant, disposal, and energy flows into inputs to other product life cycles. The following quote is taken from a recent Monsanto report and indicates considerable interest in industrial ecology, even in its early stages, as an important factor for industry to consider in setting out its long-range goals.
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There are three critical points in this definition of design for environment: • environmental impacts across the entire product life cycle are considered; • impacts are addressed during the product development cycle; and • decision-making is guided by a set of principles, based on industrial ecology or some set of system-configured, integrative principles. Further, environmentally conscious means that the design process and all who participate in it consider potential environmental impacts explicitly alongside and in the same manner as all other factors that influence the design process.
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From page 315... ...
Workers in the LCA field have used a variety of impacts in the past, as shown in Table 1.82 The large number and categorically dispersed nature of these impact objectives suggests that translating broad goals such as sustainable development is a very complex and problematic exercise: Which ones should the actors use and how should they aggregate them or trade them off in practice? Given the complexity of the phenomena and the need for large amounts of information, it ap
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From page 316... ...
After the Brundtland report was issued, the Dutch government began to look seriously at the implications of sustainable development on its own economy. Following the publication of a national assessment of the state of the environment,83 the government issued a sweeping National Environmental Policy Plan (NEPP)
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There is ample room for negotiation all along the way. The establishment of sectoral goals should minimize the risk of strategic competitive actions by individual firms.
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From page 318... ...
Industry associations also publish environmental performance reports of a similar nature, but they generally aggregate the data at the level of the industry, rather than report on performance by individual firms. The American Petroleum Institute started publishing annual reports on aggregate industry environmental performance around 1992.
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in an aggregate measure of all industries, and by 1992 total releases exceeded the 1995 goal by only about 20%.89 In the future, the ISO Standards are likely to add a significant new onus to the overall environmental management functions of an individual firm both in the
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From page 320... ...
If we speculate that environmental goal-setting by industry actors represents a new trend in environmental management, we must consider its prominence relative to other corporate goal-setting activities. It seems that even the most proactive company in environmental goal-setting still implicitly places environment on a lower level than other strategic goals.
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From page 321... ...
and the other three report on the hiring of women and minorities, and the support of non-profit and charitable groups. When a leading company chooses to relegate its substantial commitments to environmental performance to such a position in a report to shareholders, it begs the question whether environmental responsibility really will "become as integral a strategic element of the business as product performance and cost effectiveness."91 Besides these questions that bear on "social responsibility" and concomitant commitments of companies to meet environmental norms, setting goals has many complex technical aspects.
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Hunt and Ellen R Auster, "Proactive Environmental Management: Avoiding the Toxic Trap," Sloan Management Review, Vol.
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From page 323... ...
See Smart, op. cit.; Bruce Piasecki, Corporate Environmental Strategy: The Avalanche of Change Since Bhopal, John Wiley & Sons, New York, 1995; Schmidheiny, op.
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52. "Environmental Management Systems - Specifications with Guidance for Use," ISO/DIS 14001, June 26, 1995, Unofficial version.
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69. This section is adapted from Michael Lenox and John Ehrenfeld, "Design for the Environment: A New Framework for Making Decisions," Total Quality Environmental Management, Vol.
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