Seventh Environmental Management Leadership Symposium Responsibilities in Sustainable Industries ROCHESTER INSTITUTE OF TECHNOLOGY J. Morelli L. Greenwood K. Lockwood C. Portillo

Where should responsibility reside? Business organizations are consumers as well as producers Sustainability-related consumption and production is influenced by where within the organization responsibility resides Essential to understand how to most effectively allocate responsibility among the organization’s functional units Sustainability is a term that is applied commonly and ubiquitously, stripped of any specific meaning and left open to individual political and philosophical interpretations. This is strongly evidenced in recent employment advertisements for sustainability managers and directors. Posted job descriptions associated with employment opportunities for sustainability managers in US corporations reported great diversity in expectations regarding the associated scope of duties. This work examines where within business organizations responsibility for sustainability is most appropriate. The goal of this research was to provide a better understanding of which professionals and functional units within an organization are most appropriately prepared and positioned to contribute to the various elements of an organization’s sustainability and social responsibility efforts.

Description of the Study 7,400 professionals surveyed 20 functional areas 523 respondents 45 questions Derived from 220 action items in ISO26000 16 related to sustainable production, consumption, and communication Survey premise: Organization declares its commitment to social responsibility & sustainability; what level of responsibility will you hold? Professionals were surveyed working in over 20 different functional areas, including: legal affairs, environmental management and engineering, occupational health and safety, purchasing, product and process design, materials management, manufacturing, operations, purchasing, production, facilities management, marketing and sales, communications, human resources, and risk management, quality, finance and accounting, engineering, customer service, business development. Attempts were made to reach at least 200 individuals in each functional area but there was considerable variation in the number available in each. The premise of the survey was that the leadership of the organization has announced its intention to move the organization toward a more sustainable and socially responsible future, and asked all the professional members to assess 45 action items and identify for which and to what extent they believe they are prepared to take responsibility. The action items were constructed by consolidating representative elements of the 220 action items in the proposed ISO26000 Social Responsibility standard. The professionals were asked to rank their responsibility for the given action items as: no role or responsibility, minimal role or responsibility, supporting role or responsibility, major role or responsibility, or principal in charge. Every question had two parts. The first was the individual’s responsibility and the second was to identify any other professional group in the organization that the individual felt should take some responsibility.

Operations/Production Environmental, Health and Safety Sustainable Consumption Ensuring that the organization offers consumers socially and environmentally beneficial products Providing consumers with accurate information about environmental and social factors related to products and services Self-Indicated Few Perceived by Others Marketing Operations/Production Environmental, Health and Safety Self-Indicated Marketing/Sales – 29% Perceived by Others Marketing Communications/Public Relations Legal Regarding Sustainable Consumption, This action item stated: Ensuring that the organization offers consumers socially and environmentally beneficial products. Few respondents indicated an intention of taking either principle or major responsibility for ensuring that the organization offers consumers socially and environmentally beneficial products. However, the Marketing, Operations/Production and Environmental functions were identified as perceived by others as having roles in this regard. The following action item: Providing consumers with accurate information about environmental and social factors related to products and services. With respect to providing consumers with accurate information about environmental and social factors related to products and services, the Marketing function was strongly perceived by other professionals as having a significant role, followed to a lesser extent by the Communications/Public Relations and Legal functions. However, few respondents in any functional area self-indicated an intention of taking either principle or major responsibility in this regard, including only 29% of Marketing/Sales professionals.

Environmental, Health & Safety – 92% Protecting Consumers’ Health and Safety Ensuring that the organization will provide products and services that, will be safe for users and the environment Instructing consumers in the proper use of products and conveying appropriate safety information Self-Indicated Environmental, Health & Safety – 92% Perceived by Others Operations/Production Health & Safety: Self-Indicated Environmental, Health & Safety – 89% Perceived by Others Marketing Legal Health & Safety Operations/Production

Operations/Productions Self-Indicated Fair Marketing Sustainable Resource Use Ensuring the organization will not engage in any deceptive, misleading, fraudulent or unfair practices, including omission of critical information Implementing programs and practices for sustainable material, energy and environmental resources Self-Indicated Finance and Accounting – 80% Human Resources – 50% Environmental - 48 Operations/Productions – 48% Perceived by Others Human Resources Environmental Operations/Productions Self-Indicated Environmental, Health & Safety-70% Perceived by Others Operations/Production Facilities Environmental Health & Safety Purchasing

Self-Indicated Purchasing-60% Perceived by Others Purchasing Climate Change and Mitigation Identifies potential adverse impacts on ecosystems and biodiversity; and implement planning, design and operating practices to eliminate or minimize them Considers environmentally and socially responsible performance when evaluating and selecting suppliers and contractors. Self-Indicated Purchasing-60% Perceived by Others Purchasing Self-Indicated Environmental, Health & Safety-64% Perceived by Others Operations/Production Environmental Facilities Health & Safety

Environmental, Health & Safety-48% Climate Change and Mitigation Considers market mechanisms, such as carbon emissions trading, to internalize the cost of environmental burdens resulting from the organizations’ activities, products and services. Incorporates the protection of natural habitat, wetlands, forest, wildlife corridors, protected areas and agricultural lands into land development projects. Self-Indicated Environmental, Health & Safety-48% Perceived by Others Operations/Production Environmental Self-Indicated Environmental, Health & Safety-49% Perceived by Others Environmental Operations/Production

Self-Indicated Perceived by Others Self-Indicated Perceived by Others Prevention of Pollution Ensuring that the organization measures, records, reports and publically discloses the amounts and types of toxic and hazardous materials used and released, and makes known the associated risks to human health and the environment. Implementing measures to minimize waste, prevent pollution and properly manage that which is unavoidable Self-Indicated Environmental, Health and Safety – 84% Perceived by Others Environmental, Health and Safety Self-Indicated Environmental, Health & Safety – 86% Operations/Production-61% Perceived by Others Operations/Production Environmental Facilities Health & Safety

Self-Indicated Purchasing-89% Perceived by Others Purchasing Community Involvement & Development Promoting SR in Sphere of Influence Giving preference to local suppliers of products and services and contributing to local supplier development where possible and practicable Ensuring the organization participates in raising the environmental and social responsibility awareness of those with which it has relationships Self-Indicated Purchasing-89% Perceived by Others Purchasing Self-Indicated Environmental-58% Perceived by Others Human Resources Purchasing Environmental Operations/Production

Human Rights Due Diligence Organizational Governance Ensuring that the organization does not partner with those who engage in human rights or environmental abuses. Ensuring the organization is governed in a manner that balances the needs of the organization and its stakeholders, including immediate needs and those of future generations Self-Indicated Operations-67% Environmental, Health & Safety-54% C-Level-89% All Functional Areas-44%/80% Perceived by Others Operations Human Resources Environmental Health & Safety Self-Indicated Environmental, Health & Safety-42% Perceived by Others Human Resources Purchasing Legal Op/Prod:

Red – Self-Indicated Blue- Perceived After the data was gathered, we made a chart to better see where the Self-Indicated responsibility collaborated with the Perceived Responsibility. (overlaps are indicated with blue boxes with red X)

Conclusions Opportunities for collaboration Environmental, Health & Safety and Operations Environmental, Health & Safety and Purchasing

Conclusions Evidence that organizations are engaged in some sustainable production activity No significant commitment to socially responsible products Offer environmentally/socially beneficial products Accurate consumer information on environmental and social factors for products Most respondents from the Environmental and Health & Safety functions self-indicated major or principal responsibility for all but three of the 16 action items related to sustainable consumption. This level of responsibility was corroborated by the perceptions of professionals from all other functions for virtually all items. While this generally indicates a willingness of EH&S professionals to take the lead on issues related to sustainability and social responsibility, the data strongly suggests opportunities for collaboration and sharing of responsibility with other functional areas. In ten of the 16 action items, both the EH&S and Operations/Production functional areas were identified as having significant responsibility. In some cases this makes sense because the EH&S function would be associated with identifying, measuring, and reporting aspects, and the Operations function would be associated more so with designing, planning and implementing practices necessary to minimize them. However, while most EH&S roles were self-indicated, most roles for Operations/Production were identified as the perceptions of others. This is evidence of the need for collaboration between these two functional areas specifically, in addressing many items, and suggests that the contributory role of operations in sustainability and social responsibility efforts should be emphasized and more strongly encouraged. Purchasing professionals generally indicated principal or major responsibility for issues related to suppliers and contractors, but few self-indicated a major role in raising environmental and social responsibility awareness of those with which the organization has relationships, or ensuring the organization does not partner with those who engage in human rights abuses. Respondents from other functional areas perceived both the Purchasing function and EH&S functions as significant contributors in these latter roles. Purchasing professionals may not currently have the expertise for raising awareness of these issues, suggesting an opportunity for collaboration with EH&S to promote social responsibility in the sphere of the organization’s influence. The data suggest that the responsibilities related to pollution prevention, sustainable resource use, minimization of adverse environmental impacts, and provision of products and services that are safe for users and the environment are generally entrenched in the organization as a part of the role of the EH&S function, with perceived opportunity for the Operations function to play a comparably significant role. However, only a few individuals indicated intentions of taking any significant responsibility in offering consumers socially and environmentally beneficial products, or providing consumers with accurate information about environmental and social factors related to products and services. No functional area emerged with any significant commitment in these areas. Thus, while there is evidence that organizations are engaged in some efforts to make production activities more sustainable, in other words, focusing on their own internal consumption of goods and resources, there is no indication that businesses are presently engaged to any significant extent in external social responsibility with regard to sustainable consumption of their products and services.

Conclusions Future research: Executive level Target more response in particular functional areas http://media.rit.edu/faculty/jxmctp/NTP/Game_Iteration3.html

Conclusions . http://media.rit.edu/faculty/jxmctp/NTP/Game_Iteration3.html

Conclusions . http://media.rit.edu/faculty/jxmctp/NTP/Game_Iteration3.html

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