Environmental Management - Essay Example

Environmental Management Introduction 200 Environmental management is a very important concept for businesses as it refers to carrying out business activities with least damage to the environment. Organizations operate in a way in which production of waste material, use of scarce natural resources and energy is minimized. This is concept is also called sustainability which is generally understood as a concept in which businesses meet the needs of today along with caring about the needs of future generations. Sustainability has been adopted by the businesses as a principle on which their strategies and policies are based. Over the years, sustainability and environmental management has become a necessity rather than an option. Operating a sustainable business is the fastest growing and newest area for business opportunities. These concepts and principles enable the business to make sense and also help our environment. Sustainability does not depend on the type and nature of business as it helps the businesses to save energy, spend less on inputs, and create a positive impression on customers and stakeholders. Sustainable development aims to compliment social, economic, and environmental aspects of business development. This concept is now the key feature of decision and policy making throughout the world. It often becomes challenging for the businesses to adopt new patterns of production while maintaining sustainability without compromising. Section 1 1300 Background 500 Observing the history of business, it can be seen that attention was never given clearly to the environment and attitudes were negligent towards the sustainability and management of the environment. Businesses found it easier to ignore the natural world and processes through which raw materials were carved out of forests, mountains, and deserts. The variety of waste generated and the pollution that it caused to the outside world was also brushed away. Little attention was given towards the effects on the environment of extracting resources and using land, animals, plants, water, or air too much. Evolution of the sustainable management has been problematic for two major reasons; firstly the norms of sustainability are continuously changing, for example, values which were unthinkable few years back are now evolving as standard practices. Secondly, sustainability requires the managers to think for the long term not only short term. The manager can take credit for cultural changes in the program but the organization culture reflects the contemporary concepts of the public. During the 1960s and 1970s, the industrial environmentalism time period was emerging where there were less environmental concerns in the industry but businesses successfully overcame these pressures and made separate regulations and definitions. Environmentalists existed but in businesses, they were discredited. In 1970 the U.S. Environmental Protection Agency was created which shifted the norms of environmentalism and created a link between the industry and the environmentalists. Despite this, the two sides did not really meet. Then by the 1980s, environmentalism emerged as a social responsibility and activism became influential. EPA lost its credibility but major non-governmental organizations were found. Businesses started becoming more cooperative and new managerial strictures were formed to deal with regulations. During 1988 and 1993, the industry emerged in understanding and changing attitudes towards environmental protection. New attitudes were adopted and the issue was dealt with in a new manner outlining important steps to be taken. From 1993 till date, environmental management has emerged as an opportunity for the businesses which increases the business position in the marketplace. Until 2000, the businesses regarded the environmental sustainability projects as unfeasible in the real corporate world. After that there has been a major shift in the attitudes of business managers. The reliable measurement systems for businesses have helped in changing the perceptions about environmental management. In 2000, the program of leadership in energy and environmental design (LEED) was launched by US Green Building Council. Since then, there have been hundreds of international studies that are based on the financial and social advantages of sustainability. The advantages are higher employee productivity, lower utility costs, and improved management structures. Mechanical systems and furnishings supported by environmental sustainability are considerably available widely. Hence, it has been seen that sustainable development is the new norm for businesses. Currently, many organizations, programs, businesses, and communities are following the sustainable management programs. These new approaches are supported by the changing management initiatives and social norms. Definition 350 There are many definitions of sustainable development, but the most commonly quoted is in the Brundtland Commission report published in Our Common Future in 1987. The term sustainable development was defined in this report as the “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. Before this report, the concept was broken into three constituent domains; economic, environmental, and social sustainability. Critiques have referred the fourth domain as institutional. According to the Brundtland report, the sustainable development consists of two concepts. The first concept is referring to the needs of the world’s poor and these needs should be the primary property of the organizations. The second concept is of limitations which are imposed by the social organization and state of technology on the ability of the environment to meet the needs of the present and the future. The definitions of sustainable development focus on seeing the world as a system which connects space and time. Thinking the world as a system connecting space, it can be understood that North American air pollution affects the Asian air quality. Similarly, the pesticides that are sprayed in Argentina can also harm the fish stocks on the coasts of Australia. When it is understood that the world is a system connecting time, it can be realized that decisions taken by our grandparents about farming might have affected the agriculture practices today. Moreover, the economic policies endorsed today will impact the future generations’ poverty. In order to understand these concepts, it has to be understood that quality of life is also a system. It’s good to be healthy physically, but access to education and poverty cannot be ignored. It’s good to be financially secure, but clean air and unclean world cannot be ignored. And freedom of religion is good, but it is also important to feed your family. This is the simplest way to explain the concept of sustainable development. This sort of systems thinking helps to understand our world. The problems of the world are serious and complex and addressing those problems becomes difficult, but we must know that these problems can be solved. Policies 300 The Earth Summit 1992 was a conference held by the United Nations which gave out the message that we have not inherited the earth from our fathers, in fact, we borrow it from our children. The main message of the summit was that we cannot betray our future generations as they will judge us and remember us harshly on this critical issue. The UN Secretary-General stated that if the resources of this planet are wasted for a few more decades, there will be a storm one day that will fall on the heads of our future generations. And then, it will be too late for them to solve the problem. The UN Conference of Environment and Development was hosted by Rio de Janeiro in June 1992. Global environment and its relation with science, economics, and politics was the major focus. The members present at this conference demonstrated their commitment to sustainable development. This was the first environment conference and after 20 years a follow up conference was held in 2012. This conference led the governments to rethink about their economic development in regard to saving the irreplaceable natural resources. The message of the summit was clear and simple; to transform attitudes towards environment and bring out necessary changes. As a result of the summit, several governments renewed their political strategies for sustainable development and declared strategies in order to promote a sustainable future. These plans and commitments included a set of aims targeting for sustainable development goals. The governments made attempts to strengthen their authorities and fulfill the recommendations by the UN. Financial resources were managed in a way to take environmental factors into account while producing GDP. International policies were created which promoted the achievement of global goals. Nations developed policies which implemented the management plans based on sustainability. All countries agreed on the commitments to phase out the subsidies of fossil fuels. Approach 300 The concept of the triple bottom line is the key to sustainability, which focuses on the concept that monetary gain is not only the impact of organizations, but the activities also have an impact on the society as a whole. The triple bottom line approach enables the organizations to move towards a radical change throughout the organization focusing on financial, social, and environmental performance. This approach enables the business to be sustainable and gain stakeholder value creation and return on financial assets. Businesses with this approach help to embrace stakeholder and community success as it gives priority to the cultural and natural environment. The triple bottom line approach demands the responsibility of a business to be towards the stakeholders rather than the shareholders. Stakeholders are the people who are directly affected by the company’s practices including employees, customers, and the whole society. Organizations under this approach must consider the people, planet, and profit. Under the consideration of people, the organizations owe a responsibility towards employees, communities, and society. The practices of the organization must impact the workers, customers, and society positively and must promote their best interests. Planet includes the environment, natural resources, and the sustainable practices of a business. The business must be committed to sustainable practices such as reduction of waste, conservation of energy, and maintaining processes that are environmentally safe. Strong profitability is the third aspect under which businesses must ensure that money is important for success. A triple bottom line organization understands the importance for sustainability as well as financial success. Sustainable organizations work under the social and environmental settings thus their profit calculations include the worker displacement, costs of pollution, and other factors. Section 2 1200 Stakeholders 400 There are many organizations that operate with environmental policies and strategies, but it becomes unclear why some organizations adopt practices that are beyond regulations. Researchers have analyzed that stakeholders, including government, customers, regulators, community, competitors, and environmental interest groups, influence the organizations. These groups impose pressures on the firms and managers act upon these pressures in different ways. There are a number of ways in which these groups impact the environmental policies and strategies. External factors force the organizations to adopt practices. In fulfilling these practices, the organizations tend to successfully please their stakeholders and excel towards success. The institutional pressures include the cultural and social pressures that are imposed on the organizations impacting their strategies and policies. These pressures include the normal and original set of norms and values that are present in the society. These are common values that are shared by all the organizations in the same culture. These pressures can lead to different environmental strategies as they depend upon the organizational fields and levels of pressures. For instance, a nuclear plant will have different pressures relating to the poisonous gases and manufacturing of those products. Government is the most important stakeholder affecting the environmental policies and strategies. Government forces legislation and policies on the organizations as they impose a coercive force by sending clear signals to endorse ISO 14001. Governments carry out controls and checks to ensure that organizations under their region are operating legally and environmental pressures are being addressed. Customers and competitors are also external forces that enforce pressure on the organizations. Businesses adopt the strategies and policies of large firms as they are useful and successful. Moreover, customers are a major driving force for the businesses as they don’t want to lose their customers and to respond to their concerns, businesses operate under their expectations. Local communities and environmental interest groups affect the business strategies just in the way customers do. Businesses need to adjust to the society that they are operating in and fulfill the expectations of the community. Businesses that take care of the environment and natural resources are often more respected than those who do not. Because of the awareness, communities and customers are aware of the need and importance of sustainability. Hence, those businesses that are not environmentally friendly are not considered sustainable and respectable by communities. This may have a negative impact on the productivity and position. Cost savings 400 It may surprise the businessmen but sustainability programs help in reducing costs and encouraging revenue growth. Businesses that have adopted environmental management policies have been able to gain several advantages, cost effectiveness being one of them. A majority of managers found out that sustainability does not only help to save the environment but also benefits the profit maximization of businesses. Businesses following environmental management policies tended to have maximized profits. This also resulted in a change of business models by many other businesses that were not following these policies. Environmental management greatly impacts the financial position of the business. Businesses observed that customers preferred those companies that sold organic and healthy products prepared in a safer and cleaner way rather those companies that focus on the product designs and prices ignoring the benefits to workers, quality, and sustainability. Companies that think about sustainability tend to benefit more in the market and experience fewer rejects and defects. According to researches, businesses that set sustainability goals tend to improve their financial and environmental performance. Overall, the environmental management system is a system that helps organizations to meet their legal obligations, environmental performances, cost savings, and resource efficiency. An Environmental Management System is an organized and structured program to control and reduce the impact on the environment caused by business operations. An EMS is not bound by law on the organizations but regulatory authorities encourage this system and organization's stakeholders to require this system. The EMS must be ISO 14001 certified as it is the most widely used EMS standard. Organizations applying this standard tend to avoid the risks of fines and compensations. If organizations do not comply with the legislation and regulations, heavy fines can be imposed and business reputation can be damaged. Moreover, organizations gain efficiency in using resources which helps them to reduce extra expenditure because costs related to the environment increase faster than normal inflation. Improvement and achievable targets can be set in order to increase resource efficiency and reduce costs. Since resources are used efficiently, the processes also have least impacts on the environment. Waste is reduced which encourages recycling and cuts down costs for managing waste. Moreover, the customers are attracted towards those organizations that are environmentally friendly and sustainable, thus sales and profits tend to rise. Environmental management and sustainability help organizations to save many costs and reduce expenses, and at the same time earn some extra profits and reputation. Advantages 400 This part of the paper discusses the advantages of environmental management in regard to a hotel. Cost saving is the major benefit to any organization that is applying environmental management policies. Cost saving is a major benefit to a hotel that is operating in a competitive market where costs of water, energy, and disposal of waste are high. Reduction of waste and efficiency of resources will result in more cost-effectiveness than competitors. For instance, energy consumption of a hotel can reduce by 40% without even affecting the performance. For hotels, energy is a major need as they need it to use air conditioners in summers, and heaters in winters. Hotels greatly utilize water and generate huge amounts of waste which can affect the environment which is why it is very important to adopt environmental management systems. Some ways in which a hotel can save energy and reduce costs is by using low flow showerheads and replacing or fixing leaky steam traps which saves annual costs and energy consumption. Another way is to install in-room energy management systems which feature sensors that monitor the room temperatures and adjusts them. This is an investment that ensures return with a few months. The environmental management system has also given the hotel a competitive advantage over other hotels. Sustainable activities attract customers and allow the hotel to launch new offers from the costs saved. The hotel is recognized in the industry because of the green activities and efforts. Hotels which adopt sustainable activities provide benefits to the employees as they identify principles and practices aligned with their values. Environmental programs thus motivate employees and generate enthusiasm to work in a team and achieve a common purpose. Employee turnover in the hotel business is higher thus environmentally sustainable hotels can take money out of training staff members. As the time has changed, the expectations and demands of customers have also changed. Today, hotel guests want sophisticated services and environmentally friendly facilities. Guests are concerned about recycling and usage of fuel-efficient vehicles. Hotels with environmental commitment tend to be more attractive for customers and customer loyalties increase for such hotels. Other benefits that a hotel gains by environmental regulations are that they respond successfully and efficiently to institutional and societal pressures. In this way the hotel can manage its risk factors and increasingly deal with the corporate social responsibility. The hotel can reduce the damage that can be caused from actions taken in ignorance of external factors. Hotels also address the environmental risks which add value to the company for long term. Apart from the regulations and laws, the hotel adopts environmental management policies because it is simply the right thing to do. It helps in dealing with pressures, in satisfying customers and employees, in reducing costs, in saving the environment, gaining reputation, and in managing the risk. Section 3 1150 Conflicts 400 Some of the issues that have evolved in the green industry are the conflict between the businesses and the customers. It has been observed that customers’ perceptions have been changed in the course of decades, but what has not changed is their urge to spend some extra money for environmentally friendly products. This can be cleared by outlining that consumers want businesses to spend thousands of dollars in environmental management policies and products, but they do not want to spend a premium for them. Hence, the market for eco-friendly products remains smaller and consumers continue to buy traditional products that are few dollars cheaper. This conflict gives rise to many problems in the green industry as businesses continue to spend capital on improving their products and making them environmental friendly and sustainable, but their sales remain low. An example of this can be seen in the Panasonic Company of Japan which is the greenest in the electronics industry. However, it describes a company which sells its products to companies and not to consumers directly. This is because the consumers are not ready to pay a few extra and buy the sustainable and eco-friendly batteries. During a survey, university students were asked whether they would want to pay a few more and buy organic food or a traditional hamburger. The answer was unanimously a traditional burger because they had their budgets and couldn’t afford it. Another example of this is fuel-efficient, green cars which have amounted to an increase in car sales while on the other hand it still accounts for just 4% of the total market. There are two sides of the coin and both are right. Annually, the sales of green cars are increasing but the growth is too slow. Consumers do not want to buy green cars as they believe them to be slow and unattractive. Moreover they are not easily refueled, thus, consumers go for the conventional vehicles. Even though when consumers are asked they suggest that fuel efficient, green cars are more sustainable and eco-friendly than conventional cars but still these cars are not sold because of the conflicting ties. Thus, there are many products which are eco-friendly and sustainable but are not consumed. Another leading example is of organic food products which are a few dollars expensive than the conventional foods but yet consumers are not buying them. In fact, in UK organic foods are present in the market since 20 years and intensive marketing is taking place, but still the sales is about 5% of the total food sales. Shareholders 350 Shareholders have many concerns when they invest in a business. Stakeholders’ proposals suggest that they invest in those companies that are environmentally sustainable, have effective risk management strategies, also the good financial performance. Nowadays, shareholders’ resolutions are based upon social and environmental issues. In regard to the previous proposals of shareholders, it has been seen that social and environmental issues contribute to the largest portion of proposals. Social issues which are considered by shareholders include political contexts, human rights, sustainability, environmental risks, and toxic gases and chemicals. Shareholders’ attitudes show that environmental and social issues are gaining the limelight since the last decade, and shareholders have started to consider the long term economic and financial benefits. Other matters that are considered by the shareholders are the board focused matters which impact the attitudes of the shareholders in investing in the business. These matters include the leadership, directors, and board declassification. Strategic issues are also issues that are considered when shareholders plan to invest in a company and executive compensation arrangements also contribute to the proposal decisions to a certain extent. Companies that are willing to adopt the environmental sustainability development programs tend to attract the shareholders as well as more proposals are supporting these businesses than before. Shareholders demand for higher profits and lower risks in the long term which are available through environmental management systems. In regard to the awareness and the UN conferences held to rediscover the importance of the environment and natural resources, shareholders have also changed their attitudes towards environmental sustainability and started investing in companies that have long term sustainability plans and policies. Shareholders have also considered sacrificing on short term dividends in order to gain long term benefits. This is also because the investors are becoming more aware of the financial risks associated with environmental and social management. This department is gaining immense popularity and development which is why shareholders have also taken steps to address to the issues and make proposals related to environmental policies. Not all but a majority of shareholders have continually regarded environmental management systems to their proposals. Pressure groups 400 Pressure groups for businesses can become influential as governments keep looking for ways to improve their position in the global market. Pressure groups are influential in involving policy making parties and demanding more than just solving the issues in hand. However, it is important to point out that pressure groups insisting sustainability do not influence the decision making of the organization. These groups do not have any aims to seize the office or gain power for themselves. These pressure groups are not stakeholders and they are not directly related to the operations of the business, but they surely influence the business operations. Many questions arise that how these pressure groups influence the business activities when they are not a part of the business nor they are aiming to get in power. The operations of these pressure groups can be divided into two categories; direct and indirect action. Direction action is a path taken in minority of occasions but it is this path which results in pressure groups to gain a bad reputation. The direct action taken by these groups may be harsh and aggressive such as chaining activists to trees so they cannot be cut off. These actions have resulted in ripping off the reputation of the group even though they acted under good intentions. This kind of direct action has resulted in great media coverage and headlines news. Indirect actions are those which are less controversial and the most popular form of initiative. This form involves holding meetings, carrying out programs, and organizing awareness campaigns to address the issues. As the social media popularity has grown, the pressure groups have found easier ways to address these problems and convey their message to different business organizations. Initiatives are being taken online and through other communicative methods. Since communication has become easier nowadays and messages are heard and understood more clearly, it has become easier for the business to deal with the pressure groups and come to dealing with them. If pressure groups are being too unreasonable, the business can hold meetings to negotiate or explain their terms. This has made it easier for the businesses to deal with these groups and sort issues out with them. Both business and the pressure groups can collaborate in this way and form an approach towards the betterment of the society in regard to considering both parties’ aspects. Section 4 1200 Conclusion 150 References Read More