Leading Corporate Citizens McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved. In the Global Village Chapter 9 Ecological Thinking

McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved. Leading Corporate Citizens C9-2 Ecological Footprint n Rate at which ecological resources are used n 1.7 hectares is sustainable n US is at 10.3 n Poor nations use fewer resources and have smaller footprints, with less economic development n Implications?

McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved. Leading Corporate Citizens C9-3 Greening Business n Requires change of perspective or “metanoia” to think ecologically n Holistic and systems thinking n Awareness of interdependencies n Environmental standards u ISO and ISO n Progression from Environmental Management System to Sustainable Development

McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved. Leading Corporate Citizens C9-4 Stages of Environmental Awareness in Corporate Citizens n Stage One: Focus on Prevention based on a “command and control” setting n Stage Two: Product Stewardship, minimize pollution and all other sources of environmental impacts n Stage Three: “Clean technology” ; develop technology that is built to last using fewer resources

McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved. Leading Corporate Citizens C9-5 Environmental Management Systems n Waste minimization and prevention n Demand-side management n Design for Environment n Product Stewardship n Full-cost Accounting n Prevent vs control; materials substitution, process modification, recycle, reuse n Understand customer needs n Produce for dissasembly, upgradability, recyclability n Care in design, manufacturing, distribution, use and disposal n Identify, quantify, and allocate direct and indirect environmental costs of operation

McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved. Leading Corporate Citizens C9-6 Environmental Cost Accounting n Takes into account ecological costs of production, u energy consumed u waste produced u cleanup costs u possible liabilities with production n Similar to lifecycle accounting n Three categories of costs: u failure costs u prevention costs u appraisal costs

McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved. Leading Corporate Citizens C9-7 n Inventory n Impact Analysis n Improvement Analysis n An objective, data-based process of quantifying environmental releases incurred throughout the life-cycle of a product, process, or activity n A technical, quantitative, and/or qualitative process to characterize and assess the effects of the products identified in inventory. Includes both environmental and human health considerations. n A systematic evaluation of opportunities to reduce the environmental impact. Life cycle accounting

McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved. Leading Corporate Citizens C9-8 Environmental Audits n Highlight where potential problems exist and improvements can be made n Reports on ecological impacts of corporate citizens n Transparent n Accountable n Environmental audits... u use environmental cost accounting or u life cycle accounting

McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved. Leading Corporate Citizens C9-9 Sustainability Practice n From command and control n Toward market-based incentives that encourage sustainability n Build new businesses, save money, gain competitive advantage

McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved. Leading Corporate Citizens C9-10 n Differentiate u use processes/products with ecological benefits n Manage competitors u change the rules of society n Save costs u improve environmental performance n Manage environmental risks n Redefine markets Corporate citizens that integrate an environmental perspective...

McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved. Leading Corporate Citizens C9-11 CERES Principles n Protection of the biosphere n Sustainable use of natural resources n Reduction and disposal of wastes n Energy conservation n Risk reduction n Safe products and services n Environmental restoration n Informing the public n Management and commitment n Audits and reports

McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved. Leading Corporate Citizens C9-12 Social capital... n Features of social organization n Networks, norms, and social trust that facilitate coordination and cooperation for mutual benefit n What turns “I” into “we”...

McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved. Leading Corporate Citizens C9-13 n ENHANCE PRODUCTIVITY n DRIVE INNOVATION n STIMULATE FORMULATION OF NEW BUSINESS

McGraw-Hill/Irwin © 2002 The McGraw-Hill Companies, Inc., All Rights Reserved. Leading Corporate Citizens C9-14 GOVERNMENT ROLE u Educational institutions u Local infrastructures u Appropriate rules of competition u Providing needed “public goods”