Corporate Environmental Management OM 6000

Class Today Introductions Syllabus Corporate Environmental Management Background Keith Coulter? Video on Industrial Ecology

Me -Joe Sarkis Professor of Operations and Environmental Management 6-7 years here Many interests (OM, Env, IS, Marketing, Accounting, Finance….etc.).

You Your School Background Your Work Background Environmental Issues that you have faced at work or anywhere else

Syllabus We will look at how companies deal with environmental issues. Today will be readings and brief introduction into some issues. Next few classes will focus on environmental issues in a number of functional areas for organizations.

Breakdown of grade 1 Team Case Write-up - 30% 1 Team Industry Evaluation - 30% Case Executive Summaries - 20% Class Preparation and Participation - 20%

Schedule Each Week a new case. Case questions on web-site. One change to schedule – In Two Weeks – Polaroid Case. Let us take a look at website syllabus.

Corporate Environmental Management

Basic Philosophical Elements and Issues of the Environment The Litany Global Problems Global Warming - Warmest Years on Record Ozone Depletion - Big Hole in Atmosphere Species Decimation Regional Problems Deforestation Acid Rain Water Pollution - Rivers, Lakes Local Problems Pesticides - Hazardous Materials Waste Disposal

Basic Philosophical Elements and Issues of the Environment Are these concerns realistic? Are some more realistic than others? How serious are they? What are some example implications for business? For these problems?

Changes in the Environment: The Master Equation EI = Population x x GDP EI Person unit of per capita GDP EI = Environmental Impact GDP = Gross Domestic Product Population = Population Concerns GDP/PERSON = Affluence Concerns EI/Unit of Per Capita GDP = Technological Concerns What Alternatives Exist to Manage EI Here? What areas Does Commoner think we should focus upon? Paul Ehrlich?

Environmental Consciousness What is man’s role with nature? Take Dominion over it? Dualistic? What is meant by that? Nature exists to serve humans anthropomorphic view is environment in “profit” equation? In calculation of “national” accounts? Linear “Design” of production. What is it and why might it no longer be applicable?

Stages of Environmental Concern Conservation Use resources wisely - nature’s utility is in its service to humans Preservation Leave certain areas alone - nature has intrinsic value Protection pollution control - protect humans Sustainability global perspective, “sustainable growth” (pg. 17), and equity. What is the basic theory behind equity and sustainability?

Ecology Analysis and evaluation can be carried out at many levels Individual Organism Population (individuals of same species) Community Ecosystem - non-biological (abiotic) integration. Biomes - grouping of ecosystems Analogy to organizations and business?

Management Theory and the Environment Anthropocentric Theories Ethics and stuff. Economic Corporate Social Responsibility Stakeholder Normative Social Contract Green Management Theories Ecocentricism Adjusted Stakeholder Sustainablity Resource Based Theory

Environmental Ethics and Business Western Society - Objectifies Nature Locke - “Something in a state of nature has no economic value and is of no utility to the human race” Ethics - a concern with actions and practices directed to improving the welfare of people. What are the environmental implications of this statement?

Economic Fundamentalism and Ethics The corporate social responsibility of a business is to increase profit. - M. Friedman Those things that cannot be traded on the market have no value. Where does the environment fit in these definitions for environmental ethics?

Corporate Social Responsibility What is it? By doing socially responsible things, businesses better human life. Supposedly ..good ethics is good business. Is this true? Is enlightened self interest a good way to push this?

Incorporating Environment into Management Theory Environmental Ethics is a starting point. Expanding ethics to include nature. What is the difficulty in doing this? What does the Biocentric ethic say (Goodpaster?) Biocentrism Natural objects have intrinsic value and morally considerable in their own right. Deep Ecology nature has an ethical status at least equal to humans.

Environmental Strategy Concepts and Development Four Readings related to Business Strategy and the Environment Porter and van der Linde Walley and Whitehead Respondents to Walley and Whitehead Stuart Hart What is meant by Win-Win?

Green and Competitive: Ending the Stalemate What stalemate? Regulation and the Environment a good thing for organizations? Traditional vs. New thought? Pollution = Inefficiency Resource Productivity? Why is this important? How does this argument relate to quality initiatives? How might TQM work with Environmental programs? Innovation’s role with Environment and Competitiveness Two innovation types End-of-pipe Prevention Examples? Does Regulation drive innovation?

Green and Competitive: Ending the Stalemate Why is Regulation needed for Innovation? A market drive may be needed to aid innovation. What is meant by the “rarely see $10 bills on the ground?” Inexperience causes a barrier to environmental innovation. Organizational inertia is a barrier What to do?

Green and Competitive: Ending the Stalemate Environmental Innovation Friendly Regulations Create pressure that motivates companies to innovate. Make sure regulations improve environmental quality Alert and educate companies about ineffeciencies and areas for technological improvement improve likelihood that innovations are environmentally friendly create demand for environmental improvement level the playing field making sure every one makes environmental investments

Green and Competitive: Ending the Stalemate What needs to be done Overall? Remove “Static” thinking (organizations) Make Regulations less adversarial more cooperative Less specific regs….address “whats” let organizations worry about “hows” Managers need to realize that environmental improvement is a competitive opportunity. (org) Make environmental decisions internal….not just delegated to adversarial external parties (org) resource-productivity rather than pollution control model must govern decision making (org)

Green and Competitive: Ending the Stalemate What do they recommend to managers? Measure direct and indirect environmental impacts (can’t manage what you don’t measure). Learn to recognize the opportunity cost of underutilized resources create bias in favor of innovation based, productivity enhancing solutions develop proactive relationships with regulators/environmentalists.

It’s Not Easy Being Green Should win-win be at the core of an organization’s environmental strategy? Yes? Why? No? Why not? Do they say let’s go back to the old ways? What should be maintained?

It’s Not Easy Being Green Two era’s of environmental management (Fisher and Schot) resistant adaptation embracing environmental issues with no innovation win-win derived from second era. Tradeoffs -Where are the tradeoffs? What is meant by low-hanging fruit? Where to make innovations? Is rabbit-out-of-the-hat a way to solve problems?

It’s Not Easy Being Green What is the “trade-off” zone? What is the value based approach? What framework do they recommend? What is “The Triage Framework?” Does it make sense? Does it help to more efficiently and effectively guide environmental spending?

Which way? Anything interesting of note that you found? Not all win-win opportunities are insignificant (Clarke) more efficiency in regulatory system still needed (Clarke) more strategic vision, not operational as win-win assumes. (Clarke) Are regulations good/bad for competitiveness? (somewhere in between).(Stavins) What about the rest of the world? (Greeno) Are they short-sighted? (Bavaria) Regulations inefficient and political (Cairncross) Porter’s arguments were for both sides, regulators/industry (Esty) etc. Anything interesting of note that you found?

Green Management Theories Resource based view of firm (Hart) making the environment a strategic and competitive part of the firm. Three categories PP Product Stewardship Sustainable development Should not only be theory..but actual normative practice.

Corporate Behavior and Reputation In 1995 What did consumers think of businesses and environmentalism? Were they doing better? Were they doing enough? What do you think consumers feel? A Couple Questions: Is Corporate Environmentalism a Fad? Is Corporate Environmentalism a Conspiracy?