Using life-cycle assessments in large corporations: A survey of current practices

Industries presently face a challenge to maintain competitiveness while creating minimal adverse impacts on the environment. The conventional concerns of product functionality, quality, and cost are further complicated by environmental considerations. Thus, corporate environmental strategies are evolving toward a life-cycle approach by implementing life-cycle analysis (LCA), design for environment (DFE), and environmentally conscious design and manufacturing (ECDM) practices. These life-cycle concepts provide a tool for industry to identify and evaluate opportunities to minimize environmental burdens from cradle to grave. A mail survey administered by Vanderbilt University's U.S.-Japan Center for Technology Management was sent to 175 U.S. corporations from the 1994 Fortune 500 list. The results show that more than half of the 56 respondents are using life-cycle concepts for environmental assessments, with marketing and cost issues as the primary motivation factors. Hi-tech and personal care firms are more active in implementing LCAs while chemical and intermediate companies are more involved with maintaining databases and utilizing LCA tools. The survey and this article show how life-cycle thinking has not been adequately integrated throughout corporate organizations, and most environmental efforts are initiated by the environmental affairs department. However, the percentage of top management involvement has increased since 1992 and is now at moderate levels. LCA methods need to be further developed in order to expand their industrial acceptability.     

Improving environmental management with full environmental cost accounting

Based on the most comprehensive field research ever conducted in corporate environmental management, this article reports on the integration of environmental impacts into product costing and cost management practices in organizations. It examines approaches for identifying and tracking current environmental costs related to both current and past production. It also develops the need and prospects for a complete analysis of future environmental impacts, including both costs and benefits, and the integration of these elements into a life-cycle costing or full environmental cost accounting model. The prospects for full environmental cost accounting and the related accounting issues are analyzed. Finally, the importance of full environmental cost accounting for improving corporate environmental performance, reducing corporate environmental impacts, and increasing long-term corporate profitability is discussed.     

Stakeholder trust: How do I get it?

A damaged corporate environmental reputation can cost your company business—and may take years to overcome. Building stakeholder trust should be central to every firm's corporate strategy in today's environmentally conscious world. © 2000 John Wiley & Sons, Inc.     

Achieving eco-efficiency through design for environment

“Eco-efficiency” is a term that does not yet appear in dictionaries but has already gained considerable force in shaping the environmental policies and practices of leading corporations. The Business Council on Sustainable Development (BCSD) sounded a trumpet call with their 1992 manifesto, “Changing Course.” Due to the credibility of the companies that constitute BCSD's membership—including Dow Chemical, 3M, Northern Telecom, Ciba-Geigy, Volkswagen, Nissan, Mitsubishi, and many others—their message has had a substantial influence on the strategic thinking of company executives around the world, BCSD's concept of eco-efficiency suggests an important link between resource efficiency (which leads to productivity and profitability) and environmental responsibility. Eco-efficiency makes business sense. By eliminating waste and using resources wisely, eco-efficient companies reduce costs and become more competitive. As environmental performance standards become commonplace, eco-efficient companies will be at an advantage for penetrating new markets and increasing their share of existing markets. This article describes the business practices companies are adopting to increase their eco-efficiency and improve their competitive advantage. “Corporations that achieve ever more efficiency while preventing pollution through good housekeeping, materials substitution, cleaner technologies, and cleaner products and that strive for more efficient use and recovery of resources can be called eco-efficient.” Declaration of the Business Council on Sustainable Development, 1992.     

Managerial conceptions of environmental responsibility

Summary In order for business and industry to exercise environmental responsibility in their daily operations and practices, it is necessary for company personnel at all levels to be aware of and committed to the implementation of environmental policies. This study used a phenomenographic approach to explore different ways in which company executives understand and apply environmental responsibility in their managerial roles. Ten senior managers located in three large industrial companies were interviewed and encouraged to express their own interpretation of the phenomenon of environmental responsibility. Four distinct conceptions emerged from the data which differ according to the preferred methods of expressing environmental responsibility within a business setting and the perceived motivations underlying corporate environmental action.Environmental responsibility may be conceived as: (1) an internal proactive undertaking by the company; (2) a reactive response to external community pressures; (3) a negotiated responsibility based on balance and compromise between competing demands; or (4) a collective responsibility involving cooperation amongst companies, government and the wider community. These findings provide a realistic perspective on the phenomenon of management behaviour towards the environment. They form the basis for development of education programmes which will assist managers to adopt and implement environmentally responsible practices within their companies. Further research to extend this knowledge base is recommended.     

POEMS: A Case Study of an Italian Wine-Producing Firm

Over the last decade, researchers paid much attention to concepts such as Design for Environment, Extended Producer Responsibility, Responsible Chain Management, and Eco-design. Many management tools and standards (such as EMAS, ISO 14001, LCA, EPD, Ecolabel) have been developed to support companies in the evaluation and management of their environmental performance and to pursue continual environmental improvement. The more recent development of the aforesaid fields looks at interorganizational environmental management. Such an approach can complement the more traditional intraorganizational corporate environmental management approaches and tools. A typical example of this new trend is the Product Oriented Environmental Management System (POEMS), which represents the natural evolution of the above-mentioned tools, combining the features of EMS, EPD and Ecolabel. Although the structure of the POEMS is still not standardized, many experimental applications have yet been carried out in Europe. In developing a POEMS, a company needs to determine all of the environmental impacts caused at all life-cycle stages of the product and, ideally, to reduce all of them through a continual commitment. The aim of the present study was to perform a survey of the developed POEMS models and to analyze their peculiarities and drawbacks in the application to Small and Medium Enterprises. A case study regarding an Italian winery company is presented. The study analyzes the structure and the activities of the examined firm, in order to estimate direct and indirect environmental impacts following a life-cycle approach. The chosen functional unit is a 0.75-L bottle of red wine. The article also suggests some solutions to improve the environmental performances of the firm’s products.     

Environmental cost accounting: The bottom line for environmental quality management

Recent years have seen the environment emerge as one of the most pressing issues facing American business. Eventually, environmental costs will affect the bottom line of every American company. A recent study in the National Law Journal estimates that cleanup of the nation's known hazardous wastes sites will cost $752 billion over thirty years under current environmental policies. Environmental legislation and regulations impose annual compliance costs estimated by the Environmental Protection Agency at more than $30 billion. In the near future, environmental expenses for cleanup, regulatory compliance, and management are anticipated to grow to between 2.5 and 3 percent of GNP. Corporations that wish to be competitive must successfully manage these costs while maintaining or improving their role as responsible corporate citizens. Implementing a comprehensive system for identifying and managing environmental costs requires a multidisciplinary team effort. Environmental costs impact product selection, design and pricing, capital budgeting, and future strategic direction. In order to make informed and meaningful managerial decisions on environmental programs, real cost data are vital. An environmental management systems (EMS) requires information to set goals and then monitor progress towards those goals over time. This article will discuss the current cost accounting systems (CASs) available to support the myriad goals of environmental management systems. In addition, the article will outline a framework for plotting the location of your current EMS on a matrix of regulatory and information requirements and evaluating whether your corporation's CAS is adequate to support the goals and objectives set by your environmental management program. By anticipating future regulatory and information requirements, flexible systems can be developed to adapt to new and more stringent regulations and more complex information requirements.     

Model for sustainability implementation and measurement in construction sites

Sustainable practices at construction sites should be considered from the start of the project, meaning during the design phase. A model for the implementation of sustainability at a site is an important management tool, and its adoption can indicate good practices and propose an assessment of local conditions. Thus, the main contribution of this article is to propose a practical model to evaluate the level of implementation of sustainable practices at construction sites. The model was based on sustainability certifications and validated at six construction sites in Brazil. The results indicate that construction companies that possess environmental certifications have better levels of implementation of good practices at their work sites. However, it was noted that it is not necessary for a company to obtain an environmental certification; rather, it is necessary for sustainability strategies to become corporate culture.     

中国煤电企业环境压力测试

中国煤电行业的发展伴随着各种环境风险,本文以典型煤电企业为例,在产能过剩、能效标准提高、环境保护税、全国碳市场、水资源税和非水可再生能源规划目标的风险约束下,建立环境成本内部化和环境风险分析工具,考虑不同压力情境下对煤电企业价值的影响,构建环境风险影响财务成本的压力测试框架。结果表明,对单个风险而言,产能过剩和碳市场风险对企业价值的影响是大多数地区在不同情景中面临的主要风险驱动因素。对于综合风险压力测试而言,各地区1 000MW超超临界机组乐观情景及悲观情景的企业价值距合理回报预期企业价值相差小,而300MW和600MW亚临界机组因能效水平低、经营成本高等原因在环境风险压力下企业价值偏离合理回报较多。随着环境风险严重程度的不断增加,环境压力测试有助于煤电企业和金融机构了解环境风险对企业财务状况的影响,从而对投资决策产生影响。     

Integrating total cost assessment with new management practices and mandates

Today's environmental manager cannot afford to operate in a vaccum, but continually adjusts to the latest management initiatives, whether it is Activity Based Costing, ISO 14000, or Total Quality Management. These paradigms offer an excellent structure to view process improvements and implement changes, however, they all tend to miss the mark in one critical area—quantifying and tracking the true cost of environmental management. The recent upsurge of interest in Total Cost Assessment (TCA) is proof positive that, although many excellent management programs exist, something is still missing. In this article, the author shows how using TCA in conjunction with these practices enhances their effectiveness and shows the total picture of environmental management costs.     

Corporate Ethics in the Era of Globalization: The Promise and Peril of International Environmental Standards

The growing assumption thattransnational corporations (TNCs) will apply``best practice' and ``international standards'in their operations in developing countries hasseldom been checked against close observationof corporate behavior. In this article, Ipresent a case study, based on field research,of one voluntary initiative to useinternational standards and best practice forenvironmental protection in the AmazonRainforest, by a US-based oil company,Occidental Petroleum (Oxy) in Ecuador. The moststriking finding is that the company refuses todisclose the precise standards that apply toits operations. This, and the refusal todisclose other important environmentalinformation, make it impossible to verifyindependently Oxy's claims of environmentalexcellence, or assess the effectiveness of theinitiative. At the same time, Oxy uses theinvocation of international standards to wrapitself in a veneer of corporate responsibility;reassure government officials and localresidents; cultivate confusion about standardsand practices that apply to the operations;deflect meaningful oversight and transparency;and arbitrarily legitimize norms that have beendefined by special interests. In short,international standards offer great promise forneeded environmental improvements; but can alsobe used to impede, rather than advance,corporate responsibility and the development ofeffective environmental law at the nationallevel. These findings suggest that for theapplication of international standards to bemeaningful, the international community needsto move beyond statements of principle anddevelop mechanisms that can be used toevaluate, verify, and monitor independentlyenvironmental claims by TNCs.     

Product life cycle: The key to integrating ehs into corporate decision making and operations

A consensus is emerging that traditional environmental health and safety (EHS) programs—characterized by EHS professionals serving a support function to a company's main operations—represent only part of effective EHS management. In order to be truly successful, EHS management must go beyond this format and integrate EHS considerations into the corporation itself, from its strategic corporate decision making to its everyday operations on the manufacturing floor. Only when EHS becomes part of the fabric of a business's activity will EHS risks and costs be truly minimized—and the many potential benefits fully realized. This article discusses how to make this goal a reality by use of the manufacturing and product life cycle (PLC) perspective. It will first stress the importance of integrating EHS considerations into corporate decision making and operations. It will then trace the critical steps for achieving such integration through the use of the PLC, concentrating particularly on a General Electric Company (GE) chemical management process that weaves EHS concerns into every stage of day-to-day operations.     

企业环境管理中政府和企业作用分析

我国的经济发展伴随着日益严重的环境问题。在引起环境问题的诸多因素中,来自企业方面的因素对环境的影响最为深远,因此改善环境首先就需要加强企业的环境管理。在推动企业进行环境管理的各种因素中,既有如政府的管制等外部因素,也有如减少成本、产品差异化等企业自身内部因素。外部因素和内部因素对推动企业环境管理都具有重要作用,但也有其局限性。本文通过政府管制及企业自身因素对驱动企业进行环境管理的作用机制的研究,分析各个驱动因素优缺点,寻求各驱动因素的最佳的组合,促使企业更好地加强环境管理。     

Using triple bottom line metrics and multi-criteria methodology in corporate settings

With the growing importance of environmental sustainability in the corporate sector, businesses are compelled to progress from assessing and benchmarking their environmental impact to making decisions on how to prioritize impact reduction alternatives. Most often, business decisions are driven by financial metrics, but with sustainability improvements becoming a business goal, it is also important to assess metrics from environmental and social spheres; nevertheless, practically and systematically performing such an assessment is challenging. We present an application of a multi-criteria decision analysis (MCDA) method that addresses the aforementioned challenges in a corporate setting. Our case study company – one of the largest inland marine freight carriers in the United States – promotes a business culture focused on financially viable, yet socially and environmentally responsible solutions. Thus, we combine life cycle analysis (LCA), financial calculation methods, and corporate surveys to quantify environmental, economic, and social performance measures, respectively. Multiattribute utility theory is integrated with analytic hierarchy processes (AHPs) and fuzzy analysis to create a carefully designed framework for corporations with diverse groups of stakeholders. With company leadership, implementation is feasible and successful at prioritizing alternatives among diverse stakeholders. The process provides a platform for negotiation and promotes discussions on decision drivers. The use of MCDA methodologies promoted the inclusion of a suite of metrics that aligned with the company's sense of social and environmental responsibility, generating an in-depth analysis of the alternatives that factored in other things besides economics. Return-on-investments (ROI) calculations, the typical approach used in the corporate setting, would have required significantly less time and effort from the company, but the results of our MCDA application indicated that inclusion of triple bottom line metrics delve deeper into stakeholder preferences. Thus, our case study company gained a holistic view of the candidate alternatives, in addition to creating a platform for structured discussions about company goals and priorities.     

上市公司环境信息披露调查研究——基于公司高管的访谈

上市公司高管态度对企业环境信息披露会产生重要影响。为充分了解企业高管如何看待上市公司环境信息披露过程中涉及的环境信息沟通、披露制度、能力建设等多方面问题，本文对涉及第一、第二和第三产业的16家上市公司高管进行访谈调研。研究发现，多数高管视社会第三方机构对企业的环境信息需求为较大的潜在风险，非强制是上市公司环境信息选择性披露的主要原因，企业重视环保投资但信息公开能力建设不足，环境信息公开对企业价值影响较弱。本文提出编写环境信息公开指南及实施细则，提升企业环境信息公开的能力建设，拓展政府和社会组织对企业环境信息公开的奖励形式等建议。     

Measuring environmental success

Process improvement, environmental results, and customer satisfaction all can—and need to—be measured in order to achieve total quality environmental management. This article details why and how to take such measures, with examples of leading company practices.     

A framework for assessing discretionary corporate performance towards the environment

This article reviews the existing models of corporate social responsiveness and develops a theoretical framework with which to examine corporations' discretionary performance with respect to one social issue, that of the environment. Discretionary indicators of corporate response to environmental issues are developed and tested within this framework. Twelve companies from five different sectors were selected for the survey, based on prior knowledge of their commitment to environmental concerns. Primary data was collected from personal interviews, and secondary data was obtained from company documents, annual reports, and other forms of publically disclosed information. Empirical results varied, but certain voluntary indicators, such as composition of the board of directors, the environmental affairs function, community support, and the annual report are considered to provide strong indications of discretionary corporate performance. Philanthropy and company products proved to be less satisfactory indicators of corporate commitment to the environment. The aggregated results revealed a correlation between the final rankings of firms' discretionary environmental performance and whether those companies are process or product oriented. Linkages between discretionary elements and those of economic and legal requirements were not explored.     

Practices of energy use management and sustainable performance in Brazilian mineral industries

Energy is an essential asset for the existence of industrial activities, however, the absence of energy use management may lead to numerous environmental, economic, and social impacts. Thus, industries, which are major consumers of energy, play an essential role in seeking to preserve the energy system. This study aimed at analyzing the practices of energy use management and their relation to sustainable performance in the industries within the Brazilian mineral sector. The practices of energy use management were measured using the model proposed by Liu et al. (2012, Journal of Cleaner Production, 26, 79–89). After that, evidence of sustainable performance was identified based on performance indicators developed by the Global Reporting Initiative (2006, 2010, 2014). The study is characterized as quantitative, and it was conducted through a survey of industries linked to the Brazilian Mining Association. Through our results, we verified that the practices related to energy use management existent in the companies that we studied are subjected to periodic verification of the impacts caused by company activities on the environment, and that attention to energy use provides an incentive to daily practices of energy saving. On the other hand, the practices of energy use management are still little disseminated among these companies, as is certification to the International Organisation for Standardization's (ISO) Energy Management Systems framework, ISO 50001. In general, through the analyses that we performed, we can verify the existence of positive associations between the factors related to the practices of energy use management and to corporate sustainable performance.     

Corporate environmental excellence and stewardship: Five critical tasks of top management

One of the most important challenges facing business is shaping the role of senior management in corporate environmental performance. In some leading companies, the CEO or chairman takes the initiative to carefully define his or her role because of a strong personal commitment, a keen grasp of the business incentives, in response to past problems, or because of a combination of these. In other companies, even where corporate policies genuinely support and promote corporate environmental, health, and safety programs, there may still be inaction or reluctance on the part of top management to participate or get involved. This management posture may work for a few more years, but no longer than that—and could quickly become a major detriment to any company's ongoing market success or viability. This article will focus on a strategy for getting top management involved in your company's programs and, where they are already involved, for sharing some insights we have gained from our work with a number of companies where top management has taken a strong role in environmental issues and has established precedence for what can work well.     

Selling green: What managers and marketers need to know about consumer environmental attitudes

Research clearly shows that the environment is not going to go away as an issue of public concern. In fact, for many people, the environment is no longer simply an issue—it is a way of life. This is not likely to change. What has changed, however, is today's consumer. Today we are faced with a different type of consumer: one who is more knowledgeable on environmental issues—and more demanding. Environmental messages can be effective in reaching these potential buyers—but only if corporate managers and marketers understand public concerns and learn how to craft their environmental marketing strategies. © 1999 Integrated Marketing Services (IMS) and Environmental Research Associates, a division of IMS, Princeton, New Jersey. Reprinted with permission.