Environmental Management Systems

Understanding Organizational Drivers and Barriers

Stephen Tinsley, Ilona Pillai

• Publisher: Routledge
• Year: 2012
• Print ISBN: 9781138607255
• eBook ISBN: 9781136566585
• Edition: 1
• Topic: Business
• Subtopic: Management
• Index: Business

Implementing an Environmental Management System (EMS) has become a crucial consideration for large organizations. This book offers insight to practitioners and professional students as to why they have been developed, how they are implemented and the barriers that can impact on their effectiveness. A practical, experience-based text written by leading consultants and researchers, the book explores the drivers that have led to the development of environmental strategies and the benefits of formulating a complete EMS.

The book examines the way in which EMSs are structured to ensure that a company achieves continuous improvement in environmental performance. Alongside practical advice for businesses that wish to achieve accreditation, the book addresses key issues to be aware of to ensure optimum benefits, different strategies that companies may adopt to establish an EMS and the challenges that arise when trying to integrate an EMS into the business strategy. Also included is a review of the ways in which academics try to categorize and predict the effectiveness of these different approaches to EMS using modelling tools. Finally, case studies are presented to demonstrate examples of companies that have implemented their own EMS, the different approaches that they have taken and the resulting issues that have emerged.

This is essential reading for all environmental practitioners as well as students of environmental management and business.

1

The Theory of Environmental
Management Systems

INTRODUCTION

This chapter provides an introduction to the development of environmental management and to the organizational drivers that require managers to adopt environmental management systems (EMSs) to reduce the level of environmental risk to which their organizations may be exposed. This chapter also outlines some of the options available to reduce this risk.

BACKGROUND

It could be argued that public interest in the damage being caused by industry to the environment first began in the 1960s with the publication of Rachel Carson's Silent Spring (1962). Her book focused on the damage being done to the environment in Europe and North America by mass consumption and the intensive methods of farming and industrialization used to keep pace with consumer demand. She felt that the chemicals used in such intensive processes were poisoning the planet.

ENVIRONMENTAL RISK MINIMIZATION

Everything that consumers, companies, institutions and authorities do has a positive or negative impact upon the environment. The persistence of this view is fuelled by some managers believing that the pursuit of environmentally sound strategies is detrimental to the managerial goals of profitability, maintaining market share, cost control and production efficiency (Gallarotti, 1995). This view rests upon three fundamental assumptions. First, that management consider that the benefits of environmentally sound practices cannot be achieved because consumers are not prepared to pay the increased costs to industry. Second, the business costs of environmentally sound strategies are significant; and third, industry is not prepared to increase its investment in non-productive areas such as environmental risk aversion.

BOX 1.1 EXAMPLES OF CORPORATE
ENVIRONMENTAL DISASTERS

Environmental disasters such as Three Mile Island and Exxon Valdez have drawn the public's attention to business activities and the effect they have on the environment.

Exxon Valdez

The supertanker Valdez, operated by US organization Exxon Group, ran aground in March 1989 on a reef in Prince William Sound, Alaska, due to human error. It spilled 11 million gallons of crude oil and caused one of the largest man-made ecological disasters. The oil slick covered 3000 square miles. While a clean-up plan outlined how an oil spill would be handled, including provisions for maintaining equipment (such as a containment boom) and a response team to be on 24 hour notice, a spill of this size had not been anticipated. To make matters worse, time was wasted as corporations, the Alaskan state government and the national government argued over who should take control of the situation, who would pay for what and who was responsible.

Three Mile Island

In 1979 a major nuclear incident occurred in America. A circulator pump failure inside a nuclear reactor, combined with a stuck pressurizer valve, allowed pressurized water coolant to escape. The reactor core overheated in minutes and core meltdown was narrowly avoided. As a result of mechanical and human error the total cost of clean up was in excess of US$1 billion. Changes that could have prevented this disaster, but which were only implemented afterwards, include:

• upgrading plant design and installing additional equipment to monitor radiation levels and mitigate accident conditions;
• installing an improved signalling system to avoid the confusion that hampered operations during the accident;
• regular analysis of plant performance by senior managers;
• enhancement of emergency procedures and preparations, including immediate notification of abnormal events and 24 hour staffing at monitoring sites.

Tokaimura

In September 1999 a nuclear power-related incident occurred in a uranium processing plant in Tokaimura, Japan. During the manufacturing process the enriched fissile fuel elements went critical when too much fissile fuel in the processing, coupled with the presence of water, caused further atoms to split, resulting in a momentary nuclear reaction. Radiation levels one mile from the site were reported to be about 15,000 times the norm. The incident registered 4–5 on the IAEA scale of 0–7 for nuclear incidents. The outcome of this ‘error’ was that 31,000 residents were affected, with 19 workers being hospitalized. Once again it was only after this accident that emergency plans, manuals, nuclear hazard prevention drills and lectures were provided, in an off-site emergency measures facility.

Chernobyl

In April 1986 a unit IV nuclear reactor at the Chernobyl nuclear power station in what was then the Soviet Union caught fire and exploded. Over 100 million curies of radiation were emitted with approximately half being deposited within 30 kilometres of the plant. Registering 5 on the IAEA nuclear incident scale, the cause of the incident was an experimental reduction in power from 3200MW to approximately 1000MW. During the experiment the reactor could not be stabilized quickly enough and power dropped to 30MW. Neutrons absorbing xenon in the core prevented the raising of the reactor power level to above 200MW. To counteract this, control rods were withdrawn resulting in the reactor becoming unstable and a slow nuclear chain reaction ensued that blew the top off the reactor. The subsequent fire was eventually controlled by dropping 5000 tonnes of boron, limestone and sand into the reactor from helicopters. Once again, the sheer magnitude of the disaster took everyone by surprise. Decisions that could have been carefully thought through beforehand were made as the disaster unfolded.

Lessons learnt

The aftermath of these disasters has seen major organizations suffer massive losses in terms of both finance and credibility. In addition, environmental legislation has grown quickly to reduce the risk of similar disasters occurring by making companies and their directors more responsible for any environmental neglect resulting from business activities. The most recent debates on the hole in the ozone layer and the cause of global warming have served to widen the public perception of what constitutes environmental impact. It is better understood that it is not just the car user, the multinational corporation, the government or the individual that is responsible but it is the responsibility of everyone to monitor and rectify environmental abuse.

Twenty years ago, there was virtually no debate over the relationship between environmental practices and corporate performance. It was taken as a fact that the organizational goals of economic development and the public demand for environmental protection were in direct opposition to each other. Thus the pursuit of environmental goals was a violation of the acceptable duty of managers to shareholders (Peattie, 1990; Prothero, 1990; Prothero and McDonagh, 1992; Welford, 1996; Melnyk et al, 2003). The main objective of economic development is to maintain and gradually improve a standard of living for the existing population and for future generations (World Commission on Environmental Development, 1987). The main objective of environmental protection is to avoid, or limit, the problems with pollution, dereliction, loss of habitats and wildlife species arising from improved standards of living (Charter, 1992). Conflict arises when the cost of avoiding environmental damage is perceived as being a constraint on economic activity.

The strongly held tenets of traditional management thinking are continually being questioned and gradually being broken down (Melnyk et al, 2003). By addressing growing public concern for environmental sensitivity and the legislative requirements of industry, companies are gradually becoming more aware of the benefits of having an environmental focus. This has finally led to environmental management being viewed as an opportunity for companies to reduce their exposure to environmental risk. Managers have also begun to understand the corporate rewards of managing the environment, such as improved efficiency. Research has shown that there is profit in going green and that sound environmental management can lead to competitive advantage in business practice (Azzone et al, 1997; Banerjee, 2002). It has been predicted that the focus of companies will increasingly be on clean technology, competitive advantage, cost savings, environmental marketing, integrating environmental management into business functions and measuring environmental performance (Hale, 1995).

Many managers within industry still argue that some green issues are more relevant to other companies than to their own. They would also argue that environmental scientists and regulators have yet to agree among themselves on what constitutes being environmentally friendly (Kleiner, 1991). Therefore, despite mounting pressure on businesses to be environmentally aware, managers share no common understanding of what environmental awareness means within their own companies. However real or imagined these constraints, those companies who see regulations and government intervention as a constraint are jeopardizing their long-term future (Punjari and Wright, 1994).

In contrast, the pursuit of corporate environmentalism can be seen as a sound business strategy; managers who think environmentally increase profitability (Gallarotti, 1995). This view has been demonstrated in the past by the ‘3Ps’ – ‘Pollution Prevention Pays’ devised by the company 3M, and by Dow Chemical's ‘Waste Reduction Always Pays’ (WRAP). A company's environmental record affects its share price, access to credit and its business credibility. It is this need for environmental credibility coupled with a company's increasing exposure to litigation that drives companies to better manage environmental risk. Companies are learning, through experience, that they cannot exist, much less prosper, without public acceptance (Buzzelli, 1991).

BOX 1.2 COMPANY INITIATIVES THAT REDUCE
ENVIRONMENTAL RISK

3M

3M is a technology company with a worldwide presence in numerous markets: consumer and office; display and graphics; electro and communications; health care; industrial; safety, security and protection services; and transportation. 3M products include: Scotch® Tape, Post-it® Notes, medical/pharmaceuticals, abrasives and chemicals. In 1975 3M developed an environmental programme that aimed to eliminate pollution and save resources and money for the company. This was implemented through gaining a better understanding of product and process design and a commitment to quality improvements and innovation. The programme was named ‘Pollution Prevention Pays’ and was revised in 2002 to add new criteria, including a bigger drive for innovation and life-cycle analysis (Kotsmith, 2004).

Dow Chemical's ‘Waste Reduction Always Pays’

In 1986 Dow formalized its waste reduction initiative, calling it ‘Waste Reduction Always Pays’, thereby integrating waste into Dow's pollution prevention code. As outlined by Castledine (2001), the WRAP programme had five basic goals:

1	continuous improvement in processes to reduce emissions and the volume of waste being treated;
2	recognition of employee efforts to motivate and encourage other employees to continue seeking new methods of waste reduction;
3	enhanced waste reduction mentality by having an employee-driven programme to promote waste reduction throughout the organization;
4	measuring progress to track waste reduction within each operating division;
5	reduced long-term costs through savings in fuel, raw material and environmental control costs.

ORGANIZATIONAL DRIVERS FOR ENVIRONMENTAL MANAGEMENT

An organization introducing an environmental management system to meet its environmental needs should have an understanding of what those needs are. However, not all organizations do understand their needs. If they did, there would be greater commitment to developing environmental management systems and commitment to the identification of the elements to be included in an EMS to ensure its success (Kirkland and Thompson, 1999). While environmental management will improve environmental performance, there are many other benefits depending on the proactivity of the company and its willingness to increase its capacity in learning, innovation and environmental integration. The various ways in which companies commit to environmental improvements suggest that there are different motivations for wanting environmental improvements (González-Benito and González-Benito, 2005).

More specific organizational drivers such as laws (regulations), lawsuits, government policies, banks, investors, accounting systems, employees, markets, costs, the public, environmental NGOs, industry codes and standards, self-regulation and international factors have been identified by Kirkland and Thompson (1999). They can be incorporated under seven main headings, each discussed in more detail below:

1 energy efficiency;

2 waste minimization;

3 green company image;

4 competitive advantage;

5 supply chain pressures;

6 environmental legislative protection;

7 staff morale and corporate social responsibility.

The pursuit of these drivers varies from organization to organization, to the extent that some organizations do not recognize the need for any environmental management (Walley and Whitehead, 1994).

Energy efficiency

This is the most logical starting point for those companies that wish to begin with something familiar that will provide a short-term return for minimum expenditure. A simple review of oil, electricity and gas bills will provide a base from which to measure future savings. Adopting an energy efficiency programme is a good way to begin an environmental awareness programme for the company. The corporate environmental po...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright
• Contents
• List of Boxes, Figures and Tables
• List of Acronyms and Abbreviations
• Preface
• 1 The Theory of Environmental Management Systems
• 2 Implementing an Environmental Management System
• 3 Organizational Barriers
• 4 Models for Classifying Environmental Management Strategies
• 5 Linking Environmental Management with Business Strategy
• Appendix: Examples of Environmental Charters
• References
• Index