Corporate Env. Mgt

8/12/2019 Corporate Env. Mgt.

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Lecture-1


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What is Corporate/Corporation?

A company or group of people authorized to act as a

single entity (legally a person) and recognized as such in

law.

Company Act, 1994Not proprietorship concerns.

- Capital Shortage

- Limited Scope- Low Pressure


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Example of well known corporate:

UnileverMicrosoft

Chevron

IBMSony

HSBC

BATStandard Chartered Bank. (ETC)


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Society

Environment

Where does corporate operate?


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What is Corporate Environment

Management?Control of organizationsimpact on environment.It is the systematic approach to minimizing the

damage created by an organization to theenvironment which it belongs to .

What do Consumers Expect?

Organizations to be environmentally friendly.

At least to be environmentally aware.


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Where do we stand in terms of basic living

parameter?


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Hazaribagh : 270 registered tanneries.Every day, they collectively dump around 22,000 cubic litres oftoxic waste, including cancer-causing hexavalent chromium, intothe Buriganga, Dhakas main river and key water supply.

Source: The Daily Star

(Wed, November 6, 2013)


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Recent Green Event from Akij Cement

Akij Cement is going green with a new campaign, Lets turn to green.

Akij Cement has bought changes in its production dynamics by omitting fly ash from its

ingredients with the inclusion of blast furnace slag, which will help reduce its carbon

footprint by 41% compared to OPC (ordinary portland cement) production.

A carbon footprint is an estimate of the total climate impact of an activity.


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CEM Encompasses

Factors of Production:

Capital

Land

LaborOther Involved Factors:

Technology

Vehicles Usability of products

All sorts of Stakeholders


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Consumers general expectations:

(from Corporate)No pollution. (Air/Water etc.)

No Adulteration. (Specially Applicable in BD.)

Helping the poor/ affected people.

Equal opportunity/ Proper wage, salary for all.

Consume less energy/ Use renewable energy.

Stop deforestation.

Use recyclable material.

Use green technology/ not harming the env.


13/32Water Pollution

Air Pollution Climatic ChangeChild Labor

Labor Wage ProblemsHuman Rights Issues

Challenges faced by Corporate


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What are the objectives of a TraditionalBusiness?

I. Profit Maximization try to make themost profit possibleincrease share holdersvalue.

II. Sales Growth business tries to make asmany sales as possible. This may bebecause the managers believe that thesurvival of the business depends on being

large. Large businesses can also benefitfrom economies of scale.


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Traditional Business Obj.

Increasing sales.Making Profit.

Increase value of shareholders.

Make the businessBig

Additional Business Obj.

Corporate strategy balancing growth with env.

protection.

Taking care of the surroundings where it belongs.


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Transition in corporate viewpoint:

Sustainable development recognizes thatwithout happy, healthy people and good

natural environment the supply of resourcesfor the business will simply be unsustainableover the long term.

Corporate strategy now has to balance growth withenvironmental protection.

Profit making through sustainable development

policy.


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The Key: Sustainability

Sustainable development recognizes that theeconomy and the society depend on thebiosphere and environmental process

occurring within them. Definition by WCED: Sustainable

development is the development that meetsthe needs of the present withoutcompromising the ability of futuregenerations to meet their own needs.


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The Key: Sustainability (Cont.)

The stand alone term of sustainability is avague one. It needs to be specified.

In order to establish sustainabledevelopment irrespective of areas of anybusiness, an organization should articulatestrategies keeping in mind three basic

strategies-

Efficiency, Sufficiency & Consistency.


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Efficiency

Efficiency: Strategies of efficiency aim to reduce theenvironmental damage associated with the

production of each unit of output. How to achieve-

I. Use of fewer material resources in production,

II.extension of the life of products and productionequipment,

III.reduction if waste output and

IV.lower rejection rates are common output ofefficiency which eventually lowers theenvironmental impact.


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Sufficiency

Sufficiency means having enough. Strategies ofsufficiency are less of a technical solution toenvironmental issues and more of a behavioral orpsychological solution. Strategy reflects-

I. Place less emphasis on material values as animportant quality of life

II. Material consumption is not abandoned completelybut is balanced with closeness to nature

However, the problem is many aspects ofbusiness focus on having more rather than havingenough.


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Example

As a strategy of consistency: Traffic lightsmay be designed to use the same set ofcolored lights in sequence and therefore use

a specific amount of electricity. As a strategy of efficiency: Traffic lights

could be designed to use solar energythereby saving on the use of fossil fuels aswell as on material that would otherwise berequired to connect to govt. electric line.


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Difficulty in Differentiating

Its often hard to distinguish consistency

and efficiency from one another.

For example,

Re-usable systems can save energy and

improve efficiency as well as provide moreconsistency than disposable systems.


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3 Goals to achieve

Sufficiency Consistency

Efficiency

Integration of

Economy, lifestyle and environment


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i. Enhanced Brand Image, Increase sales & Customerloyalty

ii. Greater productivity & Quality

iii. Improved ability to attract and retain employeesiv. Possible improved financial performance with lower

operating costs

v. Reducing regulatory oversight

vi. Access to capital

vii. Product safety and reduce liability

Positive outcomes of corporate env.Policy:


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Theoretical Framework

Simpson (1991) suggested that corporate

responses to manage environmental pressures canbe divided in 3 groups.

1. Why Mes? : Forced to improve the environmental

performance. (BD Textiles Industries)

2. Smart Movers: Exploited the opportunity

created by the arrival of green consumer. (Heinz)

3. Enthusiasts: Have moved beyond compliance.(The Bodyshop)


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Example: (BD Textiles)

ETP

Textile industry produces:

56 billion liter (5600 crore)contaminated water

Water clogging due tounplanned establishment

Law got strengthened..Now ETP is recommended.

ETP Picture: Envoy Textiles BD.


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Mission Statement of Heinz:

"As the trusted leader in nutrition and wellness,

Heinzthe original Pure Food Companyisdedicated to the sustainable health of people,the planet and our Company.

To know ore about sustainability of Heinz

visit:http://www.heinz.com/sustainability.aspx


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Five core values of Body Shop:

The Body Shop is a leader inpromoting greater corporatetransparency, and we have beena force for positive social and

environmental change through ourcampaigns around our five core Values:Support Community Fair Trade,Defend Human Rights, Against Animal Testing,

Activate Self-Esteem and Protect Our Planet.

To know ore about sustainability of Heinz visit:http://www.thebodyshop.co.uk/services/aboutus_company.aspx


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What is Corporate Citizenship?

Corporate citizenshipis a term used to describe acompany's role in, or responsibilities towardssociety.

It is the extent to which businesses are socially

responsible for meeting legal, ethical and economicresponsibilities placed on them by shareholders.

The aim is for businesses to create higher standards

of living and quality of life in the communities inwhich they operate, while still preserving profitabilityfor stakeholders.


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Points in favor of Corporate as citizen:

i. Unique Entity

ii. Pay Tax

iii. Expect certain protection from Govt.

i. Can Corporate vote?

ii. Can Corporate be imprisoned?

Points against Corporate as citizen:


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Corporate Env. Mgt