Environmental management at Hungarian corporations Kerekes Sándor Budapest University of Economic Sciences and Public Administration Institute of Environmental Sciences NATO workshop Budapest 2003.

Two basic trend breaks in the transition period: 1. Two basic trend breaks in the transition period: 1. Environmental gratis effect  emission declined because of the structural change of the industry and agriculture  SO2, heavy-metal, NOx emission declined  hazardous waste production declined  artificial fertiliser and agrochemical use declined  VOC emission declined

Two basic trend breaks in the transition period: 2. Two basic trend breaks in the transition period: 2. Priorities has changed because of the EU requirements  We try to satisfy all the need of the international agreements  Not much happened related to the health impact of the pollution  No financial resources for the hot spot pollution elimination  Forced marsh and mainly end of pipe investments

„Fear, not greed has driven most environmental policies [of companies].” (Cairncross in The Challenge of Going Green, 1994.) win-win solutions are very rare companies should rather concentrate on cost-effective methods to achieve the required environmental objectives Companies should do what needs to be done to ensure a company’s existence in the long run and it should has to be done as cheaply as possible

„The role of well run companies is to make profits, not save the planet. Let them not make error of confusing the two.” Wolf, M 2001 Sleep- walking with the enemy.. London Financial Times, May 16 „Corporations aren’t allowed to be nice. Company directors are legally obliged to act in the best interest of their shareholders’ investments. …This is why corporate social and environmental initiatives can’t really get beyond the marketing and greenwash stage.” (2001) „ If business is so powerful, and is doing so much good: why is so much wrong with the world?” Oded Grajew 1999.

Environmental Policy Tools and Firm-Level Management and Practices: An International Survey National Policies Division OECD Environment Directorate

How important do you consider each of the following potential negative environmental impacts from your facilities' products and production processes? NoModer.Very Not Neg. Neg.Neg.Appl. Imp. Imp.Imp. Use of natural resources 41,352,23,72,8 Solid waste generation23,967,87,40,9 Wastewater effluent 41,947,17,43,7 Local or regional air pollution33,959,04,32,8 Global pollutants 57,926,01,115,0 Aesthetic effects 46,448,41,73,5 Soil contamination74,616,32,27,0 Risk of severe accidents47,546,03,33,3 Other negative environmental impact 62,37,25,824,6

Which practices have been established in your facility in order to implement environmental management? N=457 % Written environmental policy 54,3 Environmental criteria used in the evaluation and/or compensation of employees15,2 Environmental training program in place for employees42,6 Carry out external environmental audits42,9 Carry out internal environmental audits48,7 Benchmark environmental performance32,7 Environmental accounting 12,5 Public environmental report49,9 Environmental performance indicators / goals44,8

Has your facility acquired any of the following certifications in environmental management? % EMAS 0,4 ISO ,6

Has your facility implemented any of the following other management practices? n= % Quality management system (i.e. ISO 9000)78,8 Health and safety management system 22,2 Materials requirement planning system70,6 Full-cost or activity-based accounting62,7 Management accounting system51,1 Process/job control system 54,3

To what extent are the environmental activities of your facility integrated with activities regarding the following issues? N=400 NotAVeryNot at AllLittleMuch Relev. Quality management system 4,334,851,79,3 Health and safety management system 8,931,623,735,6 Materials requirement planning system11,336,936,914,7 Full-cost or activity-based accounting12,836,328,622,1 Management accounting system15,434,022,228,2 Process/job control system 10,936,430,122,3 Other 19,213,515,450,0

Risk strategies Proactive Reactive Strategic Crisis Preventive Exogenous Environmental Risks Endogenous environmental Risks Small Large Small Large Source:Kerekes-Vastag-Rondinelli

Varies among countries Changes with time ControlControl Environmental hazards ControlControl ControlControl Source:Mária Csutora 2000

Companies with ISO14001 on the strategic map Source:Mária Csutora 2000.

Cleaner production is, per definition, more efficient solution than end of pipe technologies, in terms of both environmental and economic efficiency. Then, however, it is hardly understandable why the dissemination of these kinds of preventive technologies is so slow. We would like to underline three types of problems: Shortage in financial capital available for SMEs. Missing public and regulatory pressure. The contradiction in the demand and the supply in environmental technologies.