The benefits that a company can gain simply by implementing the sustainability concept - Essay Example

SUSTAINABLE ENVIRONMENT- Road to a greener future Introduction and Background to the study Sustainability is one of the most emerging concepts that have gained a lot of attention in couple of decade. In a wider sense, sustainability refers to the improvement of society and the environment. Sustainable environment is considered more than a responsibility by most of the multi-national company and for these companies providing high-quality life to children, grandchildren and great-grandchildren is a priority. It means that sustainable environment is improving the quality of life in the present without harming or compromising the future generation’s ability to meet their needs effectively. To make the point more clear regarding the sustainable environment it could be said that all the resources that the business needs in order to operates eventually comes from the environment but meeting the eternal needs of the customers, the businesses are ultimately moving in such directions that would perish the resources. This would not only create hurdles in improving the lives of the people but also for the future generations to meet their needs efficiently. It has become a necessity for every business to make their contribution towards the environment so that the future needs of the people could be met while maintaining balance between the environment and its resources. It is essential to take certain steps that would ensure the elimination or reduction of those factors that could create hurdles in the achievement of a greener and better future. For businesses it is essential to make contributions in the development of sustainable environment as it contributes the most in damaging the environment. Sustainability is not just linked to the reduction of waste or pollution but in a broader sense it is concerned with enhancing those practices that would reduce the damage on the environment that would ultimately lead the business to be completely sustainable. This environmental management study will help to indicate the benefits that a company can gain simply by implementing the sustainability concept and would provide sufficient knowledge regarding the companies that are active in providing high quality life. The relation of each company with the environment is also discussed in this study. This study will also provide brief knowledge regarding the issues faced by the management in environmental sustainability. The reason behind this study is to analyse to what extent multi-national companies have played their role in maintaining sustainable environment and the affect of their business on the environment. This study will also pinpoint the steps taken by these companies to enhance the relation between the environment and the business and to what extent the companies are successful to preserve the planet for the future generations. Literature review While talking about environment sustainability it is essential to discuss the business models that are linked to the sustainability of the environment. It is already established fact that business models related to sustainability focuses on adding value to the environment and society. The most common business sustainable models are (Willard, 2010a). 3-legged stool model 3 overlapping circles model 3-nested dependencies model These models highly focus on sustainability of the environment rather than extracting value from the environment and the society. Each of the environmental sustainability models is discussed below. 3-legged stool model The first model of sustainability clearly identifies the three aspects of sustainability; economic, environmental and social. This model indicates that if any one of the legs is weak it could make the whole system unstable. Businesses are well-aware of the 3 dimensions of this model and are making their contributions to enhance the environmental sustainability which would positively affect the other legs of the stool. Sustainability in this model lies at the point where all three legs of the stool are balanced where each leg represents quality of life, genuine wealth and progress (Dopplet, 2012). The businesses are making full use of their last chance for preserving the Earth’s environment and have significantly changed their traditional methods of business into modern methods that aims to protect the sustainability of the environment and progress of the society so that the resources could even be used by the future generations (Welford, 1997). 3-overlapping circles model This model of environmental sustainability again focuses on the three dimensions. These dimensions intersect each other to show their importance. From a business perspective the economic circle is the largest circle which indicates the dominance as most of the profit for the business is related to this factor while the other two factors are not as much important as this factor. This economic factor is considered as important because the success of the business lies in this factor (Luo, 2011). Society is considered as another important factor as most of the shareholders and customers reside in the society. Most businesses consider environment as the smallest and the least important factor as this factor focuses on the well-being of the people rather than the economic profit for businesses. Sustainability lies in the centre of the 3 overlapping circles which shows that to achieve sustainability the businesses must work accordingly and in balance (Kleef and Roome, 2007). (Adapted from Dopplet, 2012) 3-nested dependencies model The 3-nested dependencies model shows that each factor is co-dependent. It shows that the environment is the bigger picture as compared to other two factors and without this factor the remaining two are useless. The environment provides the businesses with natural resources that are converted as final products by businesses (Luo, 2011). Society is another important factor but not as much as the environment. This factor provides the business with workforce and helps the business to attain their objectives and goals. In this model the power lies with the people in the society as they decide what to do that could benefit them. The last factor in this model is the economy which is at the core of this model. It shows that the relation between society and economy is stronger than the environment. It could be shown with an example that during economic recession, the most that suffered were the people in the society and they had to change their lifestyle just because of the economic recession (Luo, 2011). (Adapted from Dopplet, 2012) Some other business sustainable methods are as follows: Cyclical Commodity Chain Model This business model focuses on creating an on-going and continuous chain of commodity where the products could be remanufactured or recycled instead of being disposed away after the use. This could help the business not only to reduce its cost but will also ensure the sustainability of the environment. By this method once the product is used it could be recycled to produce another commodity rather than disposing it away (Luo, 2011). Innovative Business model Another business model for sustainability depends on continuous innovation of technology to remain competitive in the market and to provide solutions for the betterment of the environment. This business model focuses on delivering value to the customers by remaining in environmental limits. For a business to succeed in the competitive market, innovation is never enough. It helps a business to remain sustainable for years (Kleindorfer, Singhal, and Van Wassenhove, 2005). Borrow-Use-Return Model This business model of sustainability encourages the concept of borrowing, using and returning. The model consists of three stages. This business model is far different than today’s model of take-make-waste. The first stage in this model emphasise on borrowing the natural resources from the environment. The second stage in this model focuses on using the borrowed resources and using those resources to provide the customers with products according to their need. The third stage lays great emphasis on returning the favour by investing in the natural resources so that the company can borrow these resources again in the future. This model not only reduces the waste but also increases the flow of products in the economy (Willard, 2010b). (Adapted from Dopplet, 2012) Findings and discussion By evaluating the 1962 view of Rachel Carson in her book – Silent Spring, one can clearly see a great difference in the path that the companies have taken to preserve the planet (Carson, 1962). By taking examples of three multi-national companies it could be made clear that these companies’ contribution towards the environment has significantly changed the world. The three multi-national companies that would be discussed in changing the relation with the environment are Unilever Procter & Gamble Nestle Each of the above mentioned multi-nationals has played a crucial role in changing the relation with the Earth and this was only possible by the adoption of Environmental Management System. Unilever: Unilever is one of the largest multi-national companies in the world. It operates in more than 100 countries and has played a significant role in the betterment of society and the environment. Being eco-friendly business, the company has always played its part directly or indirectly in the development of the environment and knows the importance of understanding and managing the society, environmental sustainability and economic factors. Unilever is known for its sustainability plans and from its latest sustainability record it was found that the company has played crucial part in the environment sustainability due to which the company has been awarded for 13th consecutive year as the sustainable leader in Food producers sector (Unilever, 2012a). With the company’s sustainable plans 35 million people have access to safe drinking water. Unilever is ranked in the 10 most sustainable companies in the world according the statistics (Coster, 2010). The importance of sustainability concept for Unilever can be seen by the staff members in R&D. The company has more than 5,000 employees that works for the development and protection of the environment. The company has not just limited itself to environmental sustainability but has more quite forward and has taken initiatives to help the families to live sustainably. The step that was taken by the company was to ensure the reduction in household waste by 25%. The company aims to improve the lifestyle of more than 500 million people by providing them with safe drinking water. This will eliminate the diseases like diarrhoea from the society and the environment (Unilever, 2012a). Unilever works collaboratively with other organisations in order to spread the awareness of environmental sustainability. The lifebuoy hand washing campaign was one of the milestones achieved in the year 2011 where the participation of people reached to 48 million in the programmes. From the success and constant support for environment sustainability it could be said the road that Unilever has chosen will lead to the preservation of the environment rather than destruction. This could be shown from Unilever’s dedicated “Sustain Ability challenge” to support the company’s sustainable living plan which includes reducing the impact on environment and improving the lifestyle of consumers. To reduce the impact on the environment the company has announced to remove 23 million vehicles kilometres (environmental leader, 2012a) which would ultimately support in the protection of environment. The goal behind this reduction is to halve the impact of the company on the environment and to reduce the CO2 emission. To protect the environment the company aims to reduce the carbon emission from the trucks by about 15,000 tons in each year (Flinch, 2010). According to a environmental leader (2012b), the company has partnered with Carrotmob, a company that focuses highly on sustainability campaigns. The aim of this partnership is to reduce the green house gas emission by 50 percent while doubling its size of production. This partnership is an opportunity for Unilever to educate new customers regarding its efforts towards the environmental sustainability which would benefit the company to some extent. The passion for reducing the impact on the environment has lead the company in the Dow Jones Index (environmental leader, 2012c), where the company is rated as super sector leader by tracking financial performance of leading sustainability for the year 2012-2013. Unilever’s Sustainability Model According to the business model of Unilever (2012b), the performance of the company is based on 3 aspects; brands and innovation, great people and sustainable living. Growth is the aim of every business. The company aims to achieve growth sustainably by providing the customers with greater quality products while reducing the impact on the environment. The sustainable growth concept means that the company remains consistent, competitive, profitable and meeting the major needs of society and environment. The company lays great importance on environment as compared to economic factor. The company believes that by providing eco-friendly products and determination to protect the environment will ultimately support the company to reach its goals and objectives. The company wants to slash the carbon, water and waste impact on the environment to help the people live in safer and greener environment (Anderson, 2010). (Unilever, 2012b) As the model shows that the company focuses on the economic factor (brand and innovation), societal factor (greater people and greater place) and environmental factor (sustainable living). These 3 factors enhance the performance of the company and helps the company to make the business more profitable. Nestle: Nestle is another multi-national company that almost provides its customers with almost every product in food and beverage category. The company aims to provide nutritional products to the customers. Being a producer of nutritional products the company lays great importance to preserve the environment for the future generations. The company is committed to protect the environment due to which it has successfully implemented the environmental sustainability system which is fully aligned with ISO 14001:2004 standard. Due to the company’s commitment to environmental sustainability it was awarded a golden medal and named as the winner of 27th World Environment Centre (Kratky, 2011). This award is presented annually to the company which is exceptionally committed to the betterment of the environment. The company’s dedication to preserve and protect the environment could be seen by the reduction of water consumption by 33 percent over the last decade and increase in the production volume by 63 percent. The company has also built over 250 water treatment plants in developing countries to ensure the waste water treatment (Nestle, 2010). Nestlé’s corporate sustainability report shows an increase in the production volume by 3.4 percent and the green house emission decreased by 3.8 million metric tons of CO2 as compared to 2011 (environmental leader, 2012d). After receiving “B-“ for recycling effort in the U.S. beverage container recycling report (environmental leader, 2011a), the company has put in extra-ordinary efforts for sustainable packaging and recycling. The company received the highest score (i.e. 2.88) than its peers such as PepsiCo, Coca-Cola Company, Red Bull and Starbucks. Nestle is committed to protect their dream to provide the best nutritional products while protecting the environment. To do so the company is committed to deliver 220 million high yielding to the farmers for high demonstration of practices. The company was caught red-handed by Greenpeace for the consumption of palm-oil for popular chocolate bars such as KitKat and in response to such allegation Nestle announced that being promoter of environmental sustainability the company would stop buying palm-oil from those suppliers that are linked to deforestation and destruction of the environment (environmental leader, 2010). More than 400 factories of Nestle are certified to ISO 14001 which shows the contribution of the company towards the environmental sustainability. The company has done a great job in recycling to make the world a better place. The company has achieved a milestone of accomplishing the recycling of Nespresso capsules up to 75% and the company has even established capsule collection program for B2B customers (environmental leader, 2012e). By using the technology, Nestle created an iPhone application that would indicate the nearest and closest collection point to recycle the capsules (environmental leader, 2012e). With so many achievements the company has also faced a lot of critics from Greenpeace for using palm oil in company’s chocolates such as KitKat which is cheaper than cocoa butter (Caitlin, 2010). The company is alleged with the destruction of rainforest for the sole purpose of gaining palm oil. The critics got even worst when the company failed to manage the situation. Another critic that the company faces is the boycott of Nestlé’s infant formula in many countries as the company fails to obey the international laws and regulations of marketing by promoting harmful strategies that puts the babies at risk (Baby milk action, 2012). Procter and Gamble Procter and Gamble is ranked as 24th innovative company in the year 2011 by Forbes (Forbes, 2012). The company’s products are sold in 180 countries. For P&G sustainable development is to “ensure a better quality of life for everyone, now and for generations to come” (Proter & Gamble Professional, 2012). This means that P&G aims to improve the quality of life in both developing and developed countries by promoting sustainability. The company’s believes to improve the life of the world’s consumer by providing them with products that are healthy and future friendly. The vision of Procter and Gamble is to protect the environment and at the same time improve the lives of the people. The company aims to focus on those areas that could benefit the environment in future rather than those that would create negative impact for the future generation. The company established its sustainability report in 1999 and before that the company was engaged in producing separate reports on environment, economic and social performance (Scott, 2012). To enhance the sustainability and to accomplish its goals the company shifted 200 forklifts to hydrogen cell fuel power which ultimately increased the productivity while reducing the greenhouse gas emission (environmental leader, 2012f). This dedication of the company has recognised it as an innovator and leader in dealing with the environmental issues. The company has been recognised throughout the world for its effort in reduction of waste and environmental protection (Procter & Gamble, 2012b). The company is also known for its recycling techniques and method through which the company diverts tons of waste products into something useful and sells or donates to other companies that can reuse it. This sets an example for other companies in the industry to work for zero manufacturing waste. The company has an ability to convert 45 different materials to be recycled and for such purpose the company ships around 13,000 tons of waste materials to be recycled or reuse (Procter & Gamble, 2012a). The company aims to use 100% renewable or recycled material for their packaging which means that the production of such material and packaging would not result in the destruction of the environment and the eco-system. Procter and Gamble is recognised for its concept of sustainable development to enhance the quality of life of consumers. For the sole purpose Procter and Gamble has taken an initiative to develop Bio-based chemicals with ZeaChem (environmental leader, 2011b). The purpose of this agreement is to create bio-based chemicals through the process of fermentation using ZeaChem’s highly efficient technology. Evaluating the adoption of Environment Management System by Procter and Gamble it could be said that the company has advanced in the field of sustainability and innovation. The company has always considered sustainability and innovation to be the priority and has strived to be the best when it comes to sustainability. P&G’s Sustainability Model By considering the business model it could be said that 3-legged stool model would suit the company best. The company considers all the 3 dimensions as equally important for the success of the company. Procter and Gamble has contributed to improve the quality of lives of the customers by providing them the best products and services and improved the environment by actively participating in the sustainable environment campaigns (Procter & Gamble, 2012b). The company gave equal importance to all the three dimensions that resulted in the growth and recognition of the company throughout the world. The three dimensions include Economic development, Environmental protection and Social responsibility. To be recognised as sustainable corporation the company has always delivered solutions for the protection of environment (Procter & Gamble, 2012b). Conclusion and Recommendations To conclude this study referencing to Rachel Carson’s view (Carson, 1962), it could be said that the road that the multi-national companies have taken could lead to the protection of the environment. The multi-national companies such as Unilever, Procter & Gamble and Nestle have played an essential role in the protection of the planet. The initiatives taken by each company has its own importance accordingly. Using the 3R’s strategy that indicates Reduce, Reuse and Recycle has sufficiently changed the views of the people and the people have started making contributions for the betterment of environment. Each of the implemented methods by the multi-nationals is to some extent similar to each other which ultimately aim to benefit the environment in the future. Small and medium enterprises have also started making contributions by following the footsteps of the giants in the industry. Environmental statistics also shows the decline of level of particulates and ozone which is an achievement for the companies. This shows that instead of companies fighting for profits or survival, the companies are considering for long-term success that includes winning the hearts of the people by doing something good and fulfilling their corporate responsibility. This is the last chance for the companies to do something for the environment according to Rachel as she believes that those companies that only consider deceptive methods for their success leads to the destruction of the environment and eventually the company’s. Adoption of Environmental Management system by multi-national companies shows their dedication and passion for the protection of environment and these companies believes to operate in such a way that the needs of the present people could be fulfilled without compromising the needs of the future generations. Sustainability of the environment is now considered the success of the company. The recommendations for multi-national companies that might come in handy are Being the leader in respective industry, the company should encourage other companies to make contributions as well. Environmental sustainability is not the responsibility for the multi-national companies but it is for all those companies that are responsible for the destruction of environment in the past and years to come. Awareness regarding the protection of environment and society should be increased through campaigns. The companies can play a crucial role as they have the power and resources to create a safer and greener future. Environmental sustainability concept is not just limited for companies but for all the members of the society. The society depends highly on the environment and to motive the people, the company should advertise regarding protection of environment in schools and colleges as youth is more interested in such campaigns. The companies should work with NGO’s and other organisations that are deeply associated with the protection of environment. The company should provide these organisations with resources in public to increase the morale of these organisations and to build credibility in the society. The company’s sustainability report provides a clearer picture of the company’s interests and direction. These reports should be annually published publically with accurate facts and figures. By this the company would be directly answerable to the society rather than committees. 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