Enhancing corporate environmental responsibility

Responsible entrepreneurship can play a major role in the improvement of the efficient use of resources, the reduction of risk, the minimization of wastes and the safeguarding of environmental standards. Responsive entrepreneurial businesses are required as the driving force for sustainable economic development and for providing the managerial, technical and financial resources to contribute to the resolution of environmental challenges.

Recent years have brought greater recognition of the complexity of environmental issues, and some withdrawal of government from the detailed oversight of industrial operations. Instead of legislative micro-management, objectives are set and the details of implementation left to industry.

The responsibilities of top management now include planning not only economic, but also social and environmental strategies. Concepts such as fair trade, sound business management, business excellence, corporate social responsibility and EcoEfficiency are now on the agenda. Management is faced with the job of harmonizing environmental and societal concerns with economic growth and higher profits.

Responsible entrepreneurship cannot be comprised in a single definition. It needs to combine good regulatory with voluntary approaches and market-based initiatives in an integrated manner. Corporations have a responsibility for the environment, and must conduct all aspects of their business as responsible stewards of the environment by operating in a manner that protects the earth. Corporations must not compromise the ability of future generations to sustain themselves. Corporations must treat technical, economic and environmental factors on the same basis in all corporate decisions, from initial planing to construction to operations to decommissioning and disposal. This should include environmental costs in economic and financial analysis.

Corporations should anticipate and prevent adverse environmental effects caused by corporate policies, programs, projects and decisions rather than reacting to and remedying such effects after they have occurred. Corporations should address adverse environmental effects of corporate activities that cannot be prevented by: (1) endeavouring to restore the environment to pre-development conditions or developing other beneficial uses through rehabilitation and reclamation; (2) striving to replace the loss with substitutes that would enhance the environment and/or associated resource uses while offsetting the type of damage experienced; and (3) making monetary payments for damages on a fair, equitable and timely basis.

The trend towards greater corporate responsibility is being realized through self-regulation, corporate environmental policies, voluntary codes of practice (such as the chemical industry's Responsible Care Programme), and the use of environmental audits and open reporting. Such initiatives are becoming more mainstream, particularly now that the total quality management concept has been extended to the environmental sphere through systems such as the European Union's Environmental Management and Audit Scheme (EMAS), the British Standards Organization BS7750 and the ISO 14 000 series of management standards.

This strategy features in the framework of Agenda 21 as formulated at UNCED (Rio de Janeiro, 1992), now coordinated by the United Nations Commission on Sustainable Development and implemented through national and local authorities. Agenda 21 recommends that industry and business associations should encourage individual companies to undertake programmes for improved environmental awareness and responsibility at all levels, so as to make these enterprises dedicated to the task of improving environmental performance based on internationally accepted management practice.

The Coalition for Environmentally Responsible Economies (CERES), representing business investors, financial institutions and corporations promotes 10 principles of environmental management to its corporate members. The ninth principle states: "We will implement these Principles and sustain a process that ensures that the Board of Directors and Chief Executive Officer are fully informed about pertinent environmental issues and are fully responsible for environmental policy. In selecting our Board of Directors, we will consider demonstrated environmental commitment as a factor." A process of deep greening involves some fairly profound shifts which cannot happen overnight. The following staged process is recommended by Guy Dauncey (Victoria, BC, Canada, as featured by the Institute of Social Inventions, 1993).

[Green trimmings]

The company makes a symbolic nod in the right direction and might have five green products amount 5,000 ungreen ones, coupled with a big green marketing push.

[Green cuffs]

As well as their small green product line, the company orders an in-house, staff-run paper recycling operation, stocks-up on environmental sound cleaning liquids, is concerned for electricity usage and activates in other ways environmental awareness amongst the staff.

[Green clothes]

The company commissions a full in-depth environmental audit, appoints an environmental vice-president, adopts an environmental mission statement, and includes an environmental section in the annual report. It institutes permanent changes in areas such as waste management, packaging, transportation, paper use, pollution control, employee involvement, eliminating ozone depleting substance etc. If a producer, it develops a solid green product line, and adopts a policy on social responsibility.

[Green body]

The company redesigns its product-line to eliminate toxics and non-recyclables at source. It does a complete material-use analysis, with a view to long-term sustainability and recyclability. It examines and overhaul its purchasing policy to ensure that it is supporting sustainability down the line. It adopts a policy on global responsibility.

[Green brains]

The company develops and implements a long-term business plan designed to achieve environmental sustainability and effects a strategic redeployment of its assets and resources into sustainable products and activities (e.g. shifting out of oil into solar power). This entails a major shareholder education plan to protect itself from hostile takeover bids.

[Green heart]

The company undertakes the transfer of its company stock from the open "value-free" marketplace, where all that matters is the financial bottom line, into stock ownership funds equipped with social, environmental and global responsibility standards. It develops a community co-ownership programme for local plants and branch offices.

[Green soul]

At this final stage, the company embarks on a conscious evolution of its overall goals, policies, practices and processes, to shift into a mode of planetary service, This is a shift which many individuals are undertaking in their lives in response to the planetary situation. It involves asking the question: "How will this benefit the planet, the environment, the community, the customer, and the workteam?", and incorporating the answers into every action. As the company does this it will discover that it is experiencing an unparalleled release of synergy and co-creativity, in the pursuit of higher goals.