strategy

Enhancing corporate environmental responsibility

Synonyms:
Increasing environmental awareness in enterprises
Establishing responsibility for the environment in business
Promoting environmentally responsible entrepreneurship
Greening companies
Description:

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.

Context:

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: First, endeavouring to restore the environment to pre-development conditions or developing other beneficial uses through rehabilitation and reclamation. Second, 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 third, 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.

Implementation:

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).

Claim:

Responsibility for the politics and actions of business and respect for the dignity and interests of its stakeholders are fundamental. Shared values, including a commitment to shared prosperity are as important for a global community as for communities of smaller scale. Without moral values in business decision making, stable business relationships and a sustainable world community are impossible.

 

Counter Claim:

Transnational corporations, private banks and pension funds cannot be expected to cover major public health and environmental infrastructure costs.

Constrained by:
Greenwashing
Subjects:
Self employed
Promotion
Business enterprises
Environment
Consciousness
Type Classification:
E: Emanations of other strategies