Business and the Environment: Implementation of EMS within Tulip International - Case Study Example

Business and the Environment: Implementation of EMS within Tulip International Executive Summary Tulip International at Bromborough is the sole supplier of cold meats (ham and bacon) to Marks & Spencer. Marks & Spencer has been asking questions about Tulip's environmental performance, pushing towards an environmental management system. More recently they have changed direction and launched their eco plan that relates both to the business itself, but more importantly its suppliers. Tulip is therefore focusing on responding to this agenda in terms of dealing with climate change, waste management, protecting natural resources, being a fair partner and promoting health and wellbeing. The company is planning to adopt an environmental management system (EMS) and wants to understand the benefits of implementing EMS before the implementation. This report therefore, focuses on the benefits of implementing EMS and associated environmental impacts with the food retail industry. Table of Contents Business and the Environment: 1 Implementation of EMS within Tulip International 1 Executive Summary 2 Table of Contents 3 Introduction 4 The benefits of an EMS 5 Energy efficiency 7 Fuel efficiency 8 Green electricity 9 Sourcing food from UK and Ireland 9 Sustainability and greenhouse gases 10 External verification 11 Draft environmental policy 11 1.1.Sustainability policies 11 1.2.Legal and other requirements 12 1.3.Competence, training and awareness 12 1.4.Communication 13 1.5.Management Review 14 Reference 14 Introduction A process defined as environmental management system (EMS) of an organization is for managing, reviewing, correcting, and improving the approach to the business. Most of the times, the employees may be asked to consider how the environment can be affected on each day basis. This process offers a structured process for incorporating environmental considerations to the daily operations; it also graduates consistent improvement for the environment along with the human health (Belonax and Joseph 1999). It can also be defined as a tool that can impact the organization activities to the overall environment. It has been able to provide structured methodology for planning as well as implementing measures for improving the environment. It is also able to monitor the environmental performance which is very near or similar to the financial management system that is able to screen the income and the expenditure of the firm with regular checks. It also integrates the environmental management in the daily operations, for the long term planning and also quality management systems (Connor and Schiek 1997, Feldman 1991). The benefits of an EMS EMS is considered to be a very methodical approach for continuously improving the the planning, for implementing and reviewing the organization’s effort for managing the impact on the business environment (Green et al. 1996). With the increased awareness of the consumers about the environment, it needs to be seen with the green image for asserting a sense of “clean and green” producing unit which needs to be backed up by authenticity, and could be particularly used for the purpose of marketing. This is in case the consumers have to pay premium for green and clean product (Ferris et al. 1995). It could be authenticated by implementing environmental management systems or ISO14001 accreditation systems. The systems are designed for encouraging landholders as well as others for supplying chain for improving their environmental management by being very structured in case of planning as well as monitoring these processes. The formal range of systems which is in the food industry that needs to be monitored for product as well as process attributes includes ISO 9000 in case of quality control. Additionally, HACCP which is for specialised food safety as well as ISO 14000 this is for the environment (Hooper 2000). EMS can be defined as business management tool which is able to assists people for identifying as well as address environmental risk which is associated with the business activities. It also gives a structured management framework that is based on planning, executing and checking cycle which helps achieve constant improvement in the systems and processes. It has been seen that setting as well as running such an environmental management system can help provide some significant benefits across a lot of areas (Goetsch and Davis 2010). Key benefits By running an EMS in the business helps: To better understand the regulatory compliance that has been stated by the government or the state, it helps ensuring some of the legal responsibilities which are met and can be managed on a daily basis (Jorgensen 2008). Effective usage of resources: The policies as well as procedures which are tracked can help in managing resources and waste effectively and also help in reducing costs (Jorgensen 2008). Marketing: By running a EMS could help in improving the credentials of a business as a operation that is environmentally is able to commitment towards an continual improvement in the environment (Jorgensen 2008). Finance: It may be found easier to raise or increase investments from financial institutions such as banks and others, who are very keen to understand how a business has been controlling the environmental impact (Jorgensen et al. 2006). Sales opportunities increase: Some of the large government department and business may also deal with businesses which have EMS already, thus helping in increasing the business opportunities (Jorgensen et al. 2006). Lighter regulation: Although, EMS may not be a regulatory requirement, but with the commitment to environmental management may benefit by being charged of reduced fees from the environmental regulators (Jorgensen et al. 2006). Standards and EMS certification By gaining external certification can give business credibility for the customers as well as stakeholders. Some of the certification schemes also include ISO 14001, Green Dragon, BS 8555, and the Eco-Management and Audit Scheme (EMAS). These schemes are able to benefit by selling more effectively that is particularly towards the environmentally aware customers as well as government (Karapetrovic 2002). Energy efficiency With the implementation of the EMS Tulip aims to reduce store, office and warehouse energy usage by 25% per sqft by 2012 and by 35% per sqft by 2015. EMS would help the company to improve its energy efficiency by implementing various technologies or processes that would use lesser amount of energy while providing similar quality of output. Further, it would help in saving costs associated with energy consumption, which can be calculated by understanding the technology’s entire lifespan and the processes that would help in saving energy costs beyond the first year of usage. The company has already conducted trials in five Energy Efficiency Stores to test new equipment, maintenance and training techniques in 2009-10. These trials demonstrated successful techniques such as lower watt lighting, automated control systems and LED lighting in freezers. In 2009-10 the company introduced targets for store managers and in 2010-11 these will be linked to payments of performance bonuses. Thus, with the implementation of the EMS it would become easier for the company to track the consumption of energy as well as link it with the performance of the employees as well and reward them accordingly (Puri 1996). The company gained certification to the Carbon Trust Standard in 2009 and are preparing for the introduction of new UK legislation on energy usage called the Carbon Reduction Commitment for Energy Efficiency Scheme in 2010. Although, the company has reduced its energy use in its warehouses by an average of 19% to 21.3 kWhs per sqft (2006/07: 26.4 kWhs per sqft), energy use in its offices remains higher by 15% at 56.6kWhs per sqft (2006/07: 49.4kWhs per sqft). This might be due to the fact these offices were empty in 2006-07. With the implementation of EMS, it would become easier to track energy usage in such empty offices and rectify them accordingly. Fuel efficiency The company aims to achieve a 20% improvement in fuel efficiency in its deliveries to stores by 2012 and 35% by 2015. The company has reduced the fuel use for General Merchandise deliveries by 30% per product at 7 litres per 1,000 singles (2006/07: 10 litres per 1,000 singles). This was mainly due to a move to loose loading which allows us to get more products into a delivery vehicle. Fuel efficiency for Food deliveries was 1,991 litres per store per month which is an improvement of 22% against 2006/07 (2006/07: 2,556 litres per store per month). During the year the company moved higher volumes of Food products and ran some dual operations whilst we started to implement a new network to deliver frozen food. The EMS would help the company in tracking its fuel usage in a better manner and provide a log sheet at a moment’s notice. This would help in identifying any issue in the usage of fuel and rectifying the problem at the onset rather than waiting for the issue to aggravate. As fuel costs are one of the key expenditures for any company, the EMS would help Tulip to identify the excess amount that is being paid to source fuel and address it accordingly (Kahn and McAlister 1997). Green electricity The company aims to maintain its commitment towards procuring 100% ‘green’ electricity by 2012 and improve the percentage of small scale sources that it uses. The company now sources 40% of its electricity from ‘green’ tariff renewable supplies, compared with a starting point of just 2% in 2006-07. It has increased the number of small scale energy projects over a range of technologies including small hydro projects which totalled 10 gWhs. It plans to increase this substantially in 2010-11. Revised UK guidelines for calculating and reporting greenhouse gas emissions published in July 2008, after the launch of Plan A, do not allow ‘green’ tariff renewable electricity to count as a reduction of its carbon emissions. Thus, the company needs to keep a strict vigil on its electricity consumption as well as its commitment towards using green electricity to garner maximum benefits. In such a case, a robust EMS system is required to understand and calculate the energy savings undertaken by the company with the implementation of ‘green’ electricity (Cary et al. 2004). Sourcing food from UK and Ireland The company aims to source as much food as possible from the UK and Republic of Ireland by 2012. It sources all its fresh beef, pork, chicken, turkey, duck, goose, farmed salmon and trout, shell eggs and milk from the UK and Republic of Ireland. In addition, in early 2010 it became the first major UK retailer to sell 100% British bacon, sausages and eggs. In 2009-10 it was the only major UK retailer to sell UK grown carrots throughout the year. It sold more British Jazz apples and apricots than last year, reducing the need to import. It also introduced a new and exclusive variety of UK grown vegetable: the Flower Sprout. With the implementation of EMS, the company would be able to track the quality of the food sourced from its vendors. The EMS would create certain checklists which the food services manager may refer to while taking delivery of the food products. In case the product does not meet with the quality standards listed in the checklist, the company may reject the shipment. This would ensure that the company only provides excellent quality products to its clients and in case of issues is able to address it at the beginning itself rather than the problem getting escalated (Kinsey et al. 1996). Sustainability and greenhouse gases Sustainability is the using of financial, natural and human resources in a responsible way so that the requirements are met but without denting the needs of future generations. Greenhouse gases consist of carbon dioxide, ozone, methane, chlorofluorocarbons and nitrous oxide. These gases are released in the environment through the use of non-renewable sources of energy like natural gas, coal and gasoline. EMS focuses on monitoring the environmental effect of an organization’s products, activities and services. This is a part of the standards for environmental management systems adopted by the International Organisation for Standardization (Bhaskaran et al. 2006). Tulip understands the aspect that an organisation is also responsible for protecting the environment by monitoring the quality of water, air, soil and other natural resources on a regular basis, as well as conserving them for the future generations. Thus, the organisation needs to create various strategies and abide by set guidelines and regulations to ensure that the impacts on regional and global ecosystem due to the organisation’s operations are minimal, which can be measured through the implementation of EMS (Bhaskaran et al. 2006). External verification After the implementation of the EMS it is also important to understand whether the EMS is being successful or not. Therefore, the company may employ an outside consultancy firm to audit the EMS from time to time and in case of any issues rectify them. Further, the consultancy should be able to also update the EMS as per the current market condition and the business environment within which the company operates. Tulip should undertake such an audit once in a year, along with internal audits on a quarterly basis. External verification would also ensure that the company is not lagging behind any environmental issue and addressing all the issues giving equal importance to them. It provides authenticity and credibility to the company as well (Kroll 1992, Bertagnoli 1995). Draft environmental policy 1.1. Sustainability policies Using of natural resources minimally and in an efficient manner. Maximum utilization of renewable, recyclable and non-toxic materials Providing education and training to employees about sustainable issues Managing sustainable policies by following EMS standards Creating a steering committee to help in adopting and implementing various sustainable strategies in an organization-wide manner Developing goals and projects, investing into new technologies and gauging success of the activities undertaken by the organisation for creating a sustainable environment Documenting the progress of the organization on a regular basis and preparing annual reports and reviewing the reports annually 1.2. Legal and other requirements The organisation needs to comply with various legal and other such requirements that are applicable for the environmental rules, laws and regulations related to Tulip’s environmental aspects. The organisation ensures that all the legal requirements are adhered to in order to maintain, implement and establish its EMS. 1.3. Competence, training and awareness All the employees working with the organisation or on behalf of the organisation, which may include employees, vendors, contractors and other such parties, would be provided with the training. The EMS team would also be required to take the training program and help in training others. The performance records of each of the employees would be maintained. The employees should be aware of the following while undertaking the training program: The responsibilities and roles of each employee within the EMS should be clearly defined The potential as well as the actual environmental impacts that are being related with the work of each employee should be projected, in order to help the employees in improving their personal performances The significance of the environmental policy and the reasons to conform to these policies should be elaborated The responsibilities and roles of the employees should be defined in a proper manner so that the employees are able to conform to the environmental policies The consequences of not adhering to the EMS guidelines should also be stated in the programs 1.4. Communication The organisation needs to create various procedures to handle internal communications with various functions and levels within the plant. The responsibility to communicate information related to various EMS issues to the management as well as the EMS team rests with the Environmental management and Sustainability coordinator. The EMS Team in turn needs to communicate with the employees and other parties related to various EMS issues. The information provided however should also be documented and stored in a proper manner. The organization is also required to give a list of all its important environmental impact to external vendors or parties. This transfer of information is being handled by the Environmental management and Sustainability coordinator. The information related to EMS can be circulated through various methods such as the corporate website, intranet, bulletin boards, inter-departmental meetings, safety and environmental meetings, personal meetings, emails, employee newsletters etc. 1.5. Management Review The Environmental Management team along with the management of the organisation need to review the EMS on an annual basis for helping in the improvement of the environmental performance of the organisation. Reference Belonax, Jr., Joseph J. 1999, Food Marketing, Needham Heights, Massachusetts: Simon Schuster. Bertagnoli, L. 1995, “Recycling Kicks Into High Gear; Environmentally Friendly Waste Disposal Has Graduated From Fad to Trend,” Restaurants & Institutions, Vol. 105, No. 8, pp. 120. Bhaskaran, S., Polonsky, M., Cary, J. and Fernandez, S. 2006, “Environmentally sustainable food production and marketing: Opportunity or hype?” British Food Journal Vol. 108, No. 8, 677-690. Cary, J. W., Bhaskaran, S. and Polonsky, M. 2004, Green marketing and EMS: Assessing potential consumer influence on EMS development, Rural Industries Research and Development Corporation, Kingston ACT. Connor, J. M. and Schiek, W. 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