How Lafarge Manages the Environmental Issues - Essay Example

?Lessons from Lafarge Cement is an extremely polluting production. Industry leader Lafarge is trying to change that bad Lafarge is a member of the United Nations Environment Program (Lafarge Website 2012). Lafarge is certified with the environmental management system ISO 14001:2004 (Certificate of Registration, 2010). Lafarge works on the issues like climate change, emission management, biodiversity, water management and resource management (Lafarge Annual Report, 2011, pp.124-133). In this paper we will try to understand how the company manages the environmental issues. Objectives of ISO 14001:2004 The internal objectives of the ISO 14001:2004 are provide assurance to management for controlling organizational processes and activities having an impact on the environment, and to assure the employees that they are working in an environmentally responsible organization. The external objectives are assuring external stakeholders like customers, community and regulatory agencies about the environmental issues, conforming to the environmental regulations. Other objectives include supporting the organization’s claims and interactions about its environmental rules, strategies and proceedings. A structure for representing compliance by means of suppliers’ statement of conformity has also been an object (ISO 2012). Environmental Performance Measurement The first generation of environment performance evaluation (EPE) comprised companies with reactive environmental policies. The focus was on the risk management and dealing with environment related costs. The available environmental performance data was used for internal purpose (Bennett et al. 1999, p.84). The second generation environment performance evaluation is marked by the inclusion of stakeholder management in the framework. Companies moving to this phase focus on site reporting. This phase is also influenced by the total quality management. This requires more detailed data. The second generation focused on resource productivity with waste minimization (Bennett et al. 1999, pp.84-86). The proposed ISO 14031 can be modeled in the shape of diamond. There are three important facets of environment performance evaluation. The first facet reflects bulk of measurable activities dealing with energy, materials, emissions and wastes. The second facet is a west-east axis which is mainly the product chain that includes the environmental impacts of the supplier. The diamond’s north south activities have two objectives. The first one is to assess the direct environmental impacts associated with the sustainability of the organization’s activities. The other is to assess the business side of the environmental actions (Bennett et al. 1999, pp.87-90). In 2011, Lafarge remained in the Dow Jones Sustainability Index (DJSI). The group scored high in the environmental reporting, climate strategy, biodiversity and stakeholder commitment. This is evaluated by Sustainability Asset Management for the DJSI (Lafarge, 2012). Ernst & Young examined the Group's social and environmental indicators and certified its practices (Lafarge, 2012). Corporate Environmental Strategies Managers should consider company’s position with respect to both market and nonmarket factors while deciding on an environmental strategy. Market strategy uses environmental issues for creating a competitive advantage for the company. This is achieved through cost savings and increased profits. Nonmarket strategy focuses on the interactions with stakeholders like, regulators, local communities, and environmental interest groups. These strategies consider creating value by improving overall performance and image. Nonmarket strategies may present competitive advantages by recognizing new opportunities created by regulation or public sentiment (Maxwell, J. et al. , 1997, pp.118-119). The proactive companies’ managers recognized a number of competitive advantages arising from their environmental response. The reactive companies were not able to relate their corporate environmental awareness strategies with any positive organizational outcomes. Their main purpose has been to lower the liabilities arising out of risk of environmental accidents (Sharma & Vredenburg, 1998, p.735). Industrial ecology is emerging as a good corporate environmental strategy. It tries to minimize losses of materials in consumption and production processes through waste recovery (Lafarge, 2012). 5 Rs of Sustainability The 5 Rs of the sustainability are ‘reduce’, ‘reuse’, ‘replace’, ‘recycle’, and ‘reinvent’. Among these 5 Rs, reduction is the golden goal. Only through reduction we can make the biggest impact on the environment and save our money, too. Here two areas are of utmost importance: energy and water. Next there comes reuse. Products at the end of lifecycle are basically useful in the context of reuse. The most reusing strategies cover packaging, containers, plastic and paper bags, etc. Replacing is also important role in sustainability. For example we can replace a conventional product with an environmentally friendly one. Generally the home electrical appliances are the best areas of replacements. The next R is recycling which has a bit of controversy due to the financial and environmental costs, especially in the field of transportations and electronics. But recycling is important with regards to scarce resources. At last there is an urgent need to reinvent the processes that occupy our daily life. Reinvention is thus an important part of sustainability (Thibault, 2008). In Lafarge’s case, they focus mainly on reducing, replacing and recycling. Environmental Issues of the Cement Industry The cement industry generates above 5% of carbon dioxide emissions caused by human beings (Adam, 2007). The manufacturing process involves burning vast amount of cheap coal in a temperature more than 1500 degree Celsius. Typically, it needs 1.6 tonnes of chalk, limestone or clay to manufacture one tone of cement (Environment Agency, 2005, p.5). Air pollutants produced during the cement manufacturing procedure consist mainly of particulates from the raw and finished materials, and fuel combustion by-products. Additional air pollutants released include such materials as sulfur oxides and nitrogen oxides generated from the kiln and drying processes (INECE, 2012, pp.1-8). The most frequently reported clinical features in cement dust exposure are ‘chronic cough and phlegm production, impairment of lung function, chest tightness, obstructive and restrictive lung disease, skin irritation, conjunctivitis, stomach ache, headache, fatigue and carcinoma of lung, stomach and colon’ (Meo, 2012, p.5). Environmental Policy of Lafarge The corporate belief at Lafarge is that ‘long-term economic performance is inseparable from respect for the environment’ (Lafarge, 2012). Lafarge has three main dimensions of protecting the environment, namely, preserving resources, managing quarries, and limiting waste. Lafarge has projected two goals with respect to the conservation of natural resources: falling consumption and finding substitute explanations. These two approaches coincide with ‘reduce’ and ‘replace’. Also it is focused on recycling. For preserving the natural resources, Lafarge has adopted an industrial ecology approach. For example, the group sources 40% of the gypsum from the byproduct of the power industry. Also, the paper that helps to create plasterboard comprises 95 % cast-off cellulose fiber. At the same time, the group is committed to limit the use of natural resources in all of its operation. Currently, the group uses 12% of the group’s fuel uses is sourced by alternative fuels. Nearly 84% of the Lafarge plants use such alternative fuels. The group is also using solid waste as fuel in an accelerated rate (Lafarge, 2012). Lafarge has over 750 dynamic quarries around the earth. Quarry management is very important for Lafarge. Before opening a new quarry, Lafarge executes an environmental impact study which pays close attention to biodiversity at each stage of the quarry's life. A quarry's life starts from extraction and ends at rehabilitation. If a project turns to be environmentally unviable, it is put on hold or some special measures are taken. Sometimes the fragile species are transferred to a safe place, or some part of the site is closed down. Sometimes such sites are designated as nature reserve (Lafarge, 2012). Lafarge started the quarry rehabilitation policy in 2001 with an association with World Wildlife Fund (WWF). The purpose of the rehabilitation policy is to limit the traces of extraction and to bring life back to the area by transforming it into a nature reserve or a leisure zone. As of 2010, 94% of the active quarries were validated by the WWF and 84.5% of them had a rehabilitation plan (Lafarge, 2012). The other important issue related to managing quarries is the disturbance for local residents. Extraction operations involve huge noise, vibrations, changes to the landscape, and traffic transporting materials. All these cause disturbance to the local residents. The team has built solutions to reduce dust emissions and limit noise and vibration in quarries and surrounding areas. Apart from all these, Lafarge explains to the local communities the how the quarries would be rehabilitated and it would be beneficial for the communities (Lafarge, 2012). As an approach to limit waste, it recycles production waste and reduces construction waste. Products appropriate for recycling comprise poor quality plasterboard and cement with kilning imperfections. For reducing construction waste, Lafarge designs materials which save raw materials. They have come up with new class of clinkers that requires less limestone and can be manufactured at lower temperatures. The carbon dioxide emission has been cut by 25-30%. At the same time, Lafarge is committed to reduce the amount of construction waste which is sent to landfills (Lafarge, 2012). Conclusion Sustainability is becoming a core issue in modern corporate management. This issue is intricately related with environmental issue. There are standards that guide the corporate houses in such issues. In other cases, the corporate are developing their guidelines in association with some global organization. In following these guidelines, companies are relying on the 5 Rs of sustainability and binding their strategies to these ideas for tackling the long term problems. Though these initiatives are too little considering the nature of the problem, such leadership is good start towards a sustainable human civilization. References 1. Lafarge, 2012, Group performances, Available at: http://www.lafarge.com/wps/portal/2_5_2-Organismes_de_notation (Accessed on: April 17, 2012) 2. Lafarge Annual Report, 2011, Available at: http://www.lafarge.com/04102012-press_publication-2011_annual_report-uk.pdf (Accessed on: April 17, 2012) 3. Certificate of Registration, 2010, Available at: http://www.lafarge.co.uk/AandCAggregates/ISO%2014001%20EMS56720%20Exp%202012.pdf (Accessed on: April 17, 2012) 4. ISO, 2012, ISO 14000 Essentials, Available at: http://www.iso.org/iso/iso_14000_essentials (Accessed on: April 17, 2012) 5. Bennett, M. James, P. and Klinkers, L. 1999, Sustainable Measures: Evaluation and Reporting of Environmental and Social Performance, UK: Greenleaf Publishing Limited 6. Maxwell, J. et al. , 1997, Green Schemes: Corporate Environmental Strategies and Their Implementation, California Management Review, Vol.39, No. 3, 118-134 Available at: http://18.7.29.232/bitstream/handle/1721.1/1456/166a.pdf?sequence=1 (Accessed on: April 17, 2012) 7. Sharma, S. & Vredenburg, H. 1998, PROACTIVE CORPORATE ENVIRONMENTAL STRATEGY AND THE DEVELOPMENT OF COMPETITIVELY VALUABLE ORGANIZATIONAL CAPABILITIES, Strategic Management Journal, Vol. 19, 729–753, Available at: http://119.226.37.130/0780010101/topics_all/doc/sharma.pdf (Accessed on: April 17, 2012) 8. Thibault, M. 2008, The 5 Rs of Sustainability, Green Age, Published on : July 28, 2008, Available at: http://www.green-age.org/blog/2008/07/28/the-5-rs-a-path-toward-sustainability/ (Accessed on: April 17, 2012) 9. Adam, D. 2007, The unheralded polluter: cement industry comes clean on its impact, The Guardian, Published on October 12, 2007, Available at: http://www.guardian.co.uk/environment/2007/oct/12/climatechange (Accessed on: April 17, 2012) 10. Environment Agency, 2005, Measuring Environmental Performance, Available at: http://publications.environment-agency.gov.uk/PDF/GEHO1105BJVK-E-E.pdf (Accessed on: April 17, 2012) 11. INECE, 2012, Cement Industry, Available at: http://www.inece.org/mmcourse/chapt6.pdf (Accessed on: April 17, 2012) 12. Meo, S. A. 2012, Health Hazards of Cement Dust, Available at: http://repository.ksu.edu.sa/jspui/bitstream/123456789/2857/1/HEALTH%20HAZARDS%20OF%20CEMENT%20DUST.pdf (Accessed on: April 17, 2012) 13. Lafarge, 2012, Environment, Available at: http://www.lafarge.com/wps/portal/2_4_1-Environnement (Accessed on: April 17, 2012) 14. Lafarge, 2012, Preserving Resources, Available at: http://www.lafarge.com/wps/portal/2_4_1_1-Preserver_les_ressources (Accessed on: April 17, 2012) 15. Lafarge, 2012, When waste becomes resources, Available at: http://www.lafarge.com/04032008-Activities-industrial_ecology-uk.pdf (Accessed on: April 17, 2012) 16. Lafarge, 2012, Managing Quarries, Available at: http://www.lafarge.com/wps/portal/2_4_1_3-Gerer_les_carrieres (Accessed on: April 17, 2012) 17. Lafarge, 2012, Ernst & Young Assurance, Available at: http://www.lafarge.com/04292011-sustainable_development-Ernst_and_Young-2010-uk.pdf (Accessed on: April 17, 2012) Read More