environmental challenges and corporate responses_pgpii

7/27/2019 Environmental Challenges and Corporate Responses_PGPII

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Environmental Challenge

and Corporate Responses

Prof. Shamama Afreen


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Environmental challenges

Atmosphere

Toxic chemicals and hazardous waste

Freshwater

Land

Oceans

Biotechnology and biodiversity


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Atmosphere

Receives maximum focus

Public awareness high

Air quality and atmospheric protection regulated intensely

Ozone issues important part of corporate agenda

international agreements, consumer pressure and competitionalternatives

Air pollution issues important for corporations

half of global GHGs related to corporate operations

automobile emissions, oil production, CFC emissions, electriciproduction and use

Corporations produce and use toxic materials

International deliberations on ozone depletion and climate chregulatory changes still ongoing


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Corporate response

Elimination of CFCs and other ozone depleting substances

Some of the largest chemical companies decided to pursue C

substitutes

Strongly supported international agreement on CFCs.

Corporate responses also influenced by national, regional an

international political agenda on ozone depleting substances


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Toxic chemicals and hazardous was

One of the most important environmental issues related tocorporations.

Toxic chemicals discharged into the environment directly (fepesticides) and indirectly (mining, industry effluents, fuel bu

Pesticides and herbicides kill between 10,000 and 40,000 pedeveloping countries every year

Many of these chemicals banned in developed countries

Unscrupulous dumping of waste by corporations in developicountries (Pepsi Cola Bottling Corporation).

Lead smelting operations increasingly being shifted to develcountriespollution control standards in developed countrie

stringent


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Corporate response

Management of toxic materials gaining importance in corporate age

Responses mostly driven by regulatory changes and international ag

Important international agreements on transboundary movement of

chemicals and hazardous waste

The Code of Conduct on the Distribution and Use of Pesticides

London Guidelines for Exchange of Information on Chemicals in Intl Trade

Corporate response also driven by highly publicized accidents in ch

factories

Responses include policies and programs related to accidents as wel

environmental issues


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Freshwater

Past 300 years - Withdrawals from worldwide freshwater sources have gr

35-foldwater shortages

Important issue for corporations in agribusiness and other sectors

In developed countries industry largest consumer of freshwater

After industrial use, water returned to water cycle heavily polluted (direct

waste site leakage)

Main polluting sectorspulp and paper, chemicals, petrochemicals and re

metalworking, food processing, textile

In developed countries industrial waste discharges tightly regulated; in de

countries largely uncontrolled


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Corporate response

Pollution control laws effective in creating incentives for cor

response to water challenges

Corporations now involved in water conservation

In developed countries most effective and economical way

recycle water


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Land

Land resourcesinclude minerals, fuels, agriculture, forestry

Central to most corporate products and processes

Heavy dependence led to environmental problemsdesertification, soil loss, defo

degradation

Corporate harvesting of forests major cause of primary forest destruction in tempe

countries

Family farms being replaced by corporate driven agribusinessLoss of soil nutrie

pollution from pesticides and herbicides,

Disposal of hazardous wastes and toxic materials on land causes leaching into drin


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Corporate response Mixed corporate response

Majority companies have not established land management p

Very few corporations (esp. in developing countries) have sa

zones around manufacturing plants

Afforestation programs being established by many corporati

More comprehensive land policies and programs undertaken

largest corporations.


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Oceans

Ocean degradationpollutants directly dispersed into oceans or i

reach there from rivers and atmosphere

Ocean protection relatively unregulated.

Main contaminantsurban sewage and runoff, plastics from land

dumping, synthetic organic compounds (pesticides, industrial che

from transportation and spills

Corporates not major polluters of oceanscontribute most of the

mercury, chlorinated hydrocarbons and other toxics.

Corporations active in mining and metal and chemical processing

production generate much of industrial waste dumped at sea.


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Corporate response

Largest petroleum corporations have lobbied against tougher

international agreements on ocean resources

Little regulationocean protection not high on corporate ag

Corporate efforts concentrate on minimizing oil and chemica

Outside the extractive-based sector, few efforts to protect oc


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Biotechnology and biodiversity

Biotechnology and genetic engineering are rapidly increasing m

Many devastating environmental effects of biotechnology being

Increased use of pesticides and herbicides

Increased tolerance to pesticides and herbicides

Spread of high-yield monospecies agriculture and plantationspecies diversity

Corporations faced with conflict of fulfilling short-term demand

profits and long-term financial-environmental obligations


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Corporate response Biotechnology still relatively new areabenefits and problems still b Most biotech firms large US-based corporations

Lobbied against agreements that could protect interests of developing

Problems arise when corporates use biotech in developing countries w

absent or weak.

Corporates need to assess voluntarily their impact on biodiversity


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Corporate environmental management structures:

Indicate organizations overall commitment to environmental act

Include:

Conservation and protection of natural resources Waste minimization

Pollution control

Continuous improvement

Provide a public statement from management to

Workers, Investors

Politicians

Regulators

Environmental groups

Other companies


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Policies generally encompass following areas:

Definition of environmental protection

R&D Production and product issues

Health

Environmental protection technologies

Methods of control and environmental information gathering

Role of workers

Environmental protection aims

Emergency plans

Public information

Customer relations


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Some trends

The largest corporations are twice as likely to have an environment

the smallest

Extractive sector is more likely to have an environmental policy th

goods, agricultural or service sectors

Corporations that impact environment greatly respond more compr

to environmental challenges

Corporations that have extensive capital and managerial resources

responsive


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Corporate environmental management structures: P

Programs are usually issue specific

Concern issues such as

Air

Water

Soil pollution

Health

Safety

Disposal of wastes

Sustainable development


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Corporate environmental management structures: Pro

Some trends

Companies in extractive and finished goods sectors and largest corp

more likely to have environmental programs

Highest program priorities relate to energy programs.

Many corporations link environment, health and safety.

More and more companies are including sustainable development in

environmental management agenda

Corporate program priorities


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Corporate program prioritiesHigh priority areas:

Energy related activities

Health and safety activities

Traditional environment activities

Waste/disposal related activities

Low priority areas:

Sustainable development activities

Afforestation programs

R&D for GHG reduction

Renewable energy

Biodiversity conservation and preservation of endangered species

Protection of wetlands/rainforests in developing countries


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Corporate Environmental Management Styles

Compliance

Preventive

Strategic

Sustainable development


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Corporate Environmental Management Styles: Com

Least progressive

Represents ways in which corporations have traditionally res

environmental challenges

Respond to fulfill legislative demands

Any innovative practices are geared towards better complian

environmental laws


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Corporate Environmental Management Styles: Pr

Goes beyond regulation compliance

Aims at pollution prevention and waste minimization

React to growing waste disposal costs, raw materials or insurance c

capital savings

Respond in a preventive and protective way to green trends

Respond to maintain and protect markets

Eg. Chevrons SMART program

Eg. ARCO Chemicalprevent industrial accidents and pollution

Corporate Environmental Management Styles: St


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Corporate Environmental Management Styles: St

Incorporates EH&S aims into overall economic strategy

Seeks to exploit the growing green market

Responds to environmental challenges in a more proactive mannerantic

potential green markets

Undertakes environmental R&D

Incorporates cradle to grave ethos environmental and resource issues a

stages of a products life cycle

Goes beyond efficient production and liability minimization

Sees the environment as an economic opportunityenters the market for

services and equipment

C t E i t l M t St l S t i bl D


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Corporate Environmental Management Styles: Sustainable D

The most proactive management style

Only few corporations at this stage

Have

Developing country policies

Ethical sales policies

Commitment to environmental disclosure

Climate change policies

Afforestation policies

Take leadership role in responding to environmental challenges

Possible desire to create a sustainable corporation

Sustainable Development Style


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Sustainable Development StyleDesirable activities to be undertaken by such organizations:

Adopt global standards

Develop special worker and management training programs

developing country operations

Develop company standards in countries which lack sufficie

enforced regulations

Facilitate transfer of useful technologies

Take into account local communities and cultures

S t i bl D l t St l T t


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Sustainable Development Style: Toyota

Interestingly, Toyota is a vehicle manufacturerpossibly the

environmentally degrading industry

But, active in progressive environmental practices

Believes in continuous improvement associated with increm

environmental innovations

Toyotas policy Our basic principle in environmental man

is to emit no pollutants[and]create plants that are enviro

sound, with due regard for the greater good of the communit

environmental challenges and corporate responses_pgpii

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