EFE_Environmental Management course booklet - Universit degli Studi Milano Course of Environmental Management Booklet Prof.FabioIraldo 1 Summary

EFE_Environmental Management course booklet - Universit...

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Unformatted text preview: Università degli Studi Milano Course of Environmental Management Booklet Prof. Fabio Iraldo 1 Summary UNIVERSITÀ DEGLI STUDI .......................................................................................................................... 1 MILANO .................................................................................................................................................... 1 COURSE OF ENVIRONMENTAL MANAGEMENT ......................................................................................................... 1 BOOKLET .......................................................................................................................................................... 1 PART I PERSPECTIVES ON ENVIRONMENTAL MANAGEMENT ..................................................................... 3 HISTORICAL OVERVIEW ON ENVIRONMENTAL MANAGEMENT AND FURTHER NEEDS ....................................................... 3 THEORETICAL PERSPECTIVES ON ENVIRONMENTAL MANAGEMENT: FROM INSTITUTIONAL THEORY TO RESOURCE BASED VIEW THEORY ............................................................................................................................................................ 6 ENVIRONMENTAL MANAGEMENT AND BUSINESS COMPETITIVENESS: DOES IT PAY TO BE GREEN? ..................................... 7 PART II. OVERVIEW OF ENVIRONMENTAL CERTIFICATIONS ..................................................................... 17 INTRODUCTION TO THE PRODUCT AND PROCESS ENVIRONMENTAL CERTIFICATIONS ..................................................... 17 PRODUCTS ENVIRONMENTAL CERTIFICATIONS ....................................................................................................... 19 THE ENVIRONMENTAL CERTIFICATION OF ORGANIZATIONS AND THEIR PROCESSES ........................................................ 21 OTHER TYPES OF ENVIRONMENTAL CERTIFICATIONS ............................................................................................... 24 COSTS AND BENEFITS OF ENVIRONMENTAL CERTIFICATION ...................................................................................... 32 THE EFFECTIVENESS OF CERTIFIED ENVIRONMENTAL MANAGEMENT SYSTEMS (EMSS) IN THE IMPROVING OF ENVIRONMENTAL PERFORMANCE ........................................................................................................................ 42 PART III. THE ENVIRONMENTAL CERTIFICATION OF ORGANISATIONS: THE STANDARD ISO14001 AND THE EMAS REGULATION ................................................................................................................................. 47 THE DRIVERS OF EMAS AND ISO 14001 ADOPTION .............................................................................................. 47 THE ENVIRONMENTAL REVIEW ........................................................................................................................... 51 ENVIRONMENTAL POLICY AND PROGRAMME ......................................................................................................... 71 THE ENVIRONMENTAL MANAGEMENT SYSTEM ..................................................................................................... 77 THE ENVIRONMENTAL AUDIT ............................................................................................................................ 100 AUDIT PROGRAMME ....................................................................................................................................... 104 DISTINGUISHING FEATURES OF THE EMAS PATH WITH REGARD TO ORGANIZATION REQUIREMENTS ............................. 116 THE ENVIRONMENTAL STATEMENT ................................................................................................................... 122 PART IV THE ENVIRONMENTAL CERTIFICATION OF PRODUCTS. ............................................................. 124 THE LITERATURE FRAMEWORK IN THE FIELD OF ENVIRONMENTAL CERTIFICATION OF PRODUCTS ................................... 124 ENVIRONMENTAL LABELS AND TRADEMARKS ....................................................................................................... 128 LIFE CYCLE ASSESSMENT AND THE 14040 STANDARD ........................................................................................... 133 THE EUROPEAN ECOLABEL ............................................................................................................................... 138 THE ENVIRONMENTAL PRODUCT DECLARATION (EPD) ......................................................................................... 143 THE PRODUCT ENVIRONMENTAL FOOTPRINT (PEF) AND THE PRODUCT CARBON FOOTPRINT ....................................... 146 THE ENERGY LABELS ....................................................................................................................................... 154 REFERENCES .......................................................................................................................................... 157 2 Part I Perspectives on environmental management Historical overview on Environmental Management and further needs The relationship between human beings and the environment has always been interspersed with moments of conflict and harmony depending on the individual’s ability to live with respect to the carrying capacity of the ecosystems. Various studies indicate that acts of environmental pollution have accompanied human civilizations since ancient times (Nriagu, 1983). For instance, soot found on the ceilings of prehistoric caves provides ample proof of the high levels of pollution associated with the inadequate ventilation of naked flames (Brimblecomb, 1995). The forging of metals which began in the Chalcolithic period seems to be a turning point in the creation of significant levels of external atmospheric pollution and core borings of glaciers in Greenland indicate an increase in pollution associated with the production of metal by the ancient Greeks, Romans and Chinese (Hong et al. 1994). Other examples may include the behavior of the colonies on the North American prairies which, in the space of a few decades, almost annihilated the buffalo population with which the Natives had found a balance for coexistence lasting thousands of years. Other authors see the Industrial Revolution which began in England in 1700 and a little later in North America as the start of a conflicting relationship between man and nature. This is the onset of the industrialization process which lasted almost two centuries and gave birth to the capitalist economy (Hobsbawm, 1975). The first companies with increasingly mechanized equipment and factories were created; profit and wealth became the values influencing individuals’ actions. A multitude of innovations radically changed peoples’ way of life and with it their relationship with the environment. An increase in production and consumption often concentrated in enclosed locations like big cities such as London and New York caused a rise in the pollution of the atmosphere and waters and the first interventions for the management of organic waste. This situation continued until somewhere between the end of the 18th century and the beginning of the 19th century when the first environmentalist movements such as the conservation movement (Buchholz, 1993) were born in the United States. This movement arose from the need to increase awareness in society about a more careful management of resources both by individuals and by businesses and it can be considered the forerunner of the environmental movement which began in the mid‐1960’s. It is, in fact, from the second half of the Sixties onwards that we can see the first change in the attitude of industrial organizations to the way they interacted with the environment. We can pinpoint the birth of the first green practices by companies to this period. In the early 1970's the economic and social effects of environmental degradation, caused by the unsustainable use of natural resources and as a consequence of industrial activity, began to exert a pressure on industry to improve its performance. The combined influence of public and community opinion, environmental pressure groups, “green” political parties, and the media, (at local, national and global level) targeted policy makers and brought forth a regulatory regime which demanded high levels of compliance of the large industrial organizations. It is the period of 3 the first global conference on the human environment (Stockholm 1972), where scientific and political debates considered systems of consumption and production as a potential threat to human survival. Climate change, loss of natural resources, extinction of species and environmental damage caused by emissions and waste can result from unsustainable patterns of consumption and production. The major catastrophes which occurred during the 1970's and 1980's (including Seveso, Three Mile Island, Bhopal, Chernobyl) served to strengthen the public belief that most environmental problems were connected with the activities of large organizations, mainly multinationals operating in specific industrial sectors such as chemicals, petrochemicals and nuclear power. In consequence, public policy making bodies in charge of environmental control paid more attention to larger companies than to smaller ones. Industries and companies targeted had to spend their energies and resources in seeking solutions to environmental problems and demonstrating socially acceptable behavior. During the 1990's, the public concern about SMEs' contribution to the deterioration of the environment has also rapidly increased. In order to effect a global improvement in industry's environmental performance, policy makers have become aware that environmental policy measures, supports and incentives should also target SMEs. During this period, it was become increasingly urgent for many companies to play their part in finding reliable ways of managing environmental problems through innovative means, which place emphasis on effectiveness and integrated solutions, rather than conventional management and bolt‐on "end‐of‐pipe'' means. From the year 2000 onwards, the possibility of combining competitive advantages and eco‐ efficiency became more evident in businesses. The environmental variable became an integral part of corporate strategy and a factor to be taken into consideration in all corporate functions. Integration occurred both on a strategic and operative level and the environment became an almost moral obligation for business owners and was demanded by external stakeholders as well. This process led Pane Haden et al. (2009) to an interesting definition of environmental management by attempting to combine and summarize the various aspects which characterize it, namely “Green management is the organization‐wide process of applying innovation to achieve sustainability, waste reduction, social responsibility, and a competitive advantage via continuous learning and development and by embracing environmental goals and strategies that are fully integrated with the goals and strategies of the organization”. This evolution in companies’ attitude, combined with an even more efficient approach by regulatory bodies, has led to greater improvements even though some critical elements still remain. For instance, the emissions from EEA countries have been reduced of 17% since 1990 and appear to be steadily decreasing, although they are still 5 times higher than the 2050 target for a sustainable level of GHG emissions from Europe. At absolute level, production‐related direct greenhouse gas emissions of the EU‐25 remained nearly constant over the same period but showed a slight increase since 1999 (Watson et al., 2011). On the contrary, direct emissions of acidifying gases and ground‐level precursors related to European production saw an absolute decoupling from economic growth during the period 1995‐ 4 2006 (they decreased by 27% and 13%, respectively despite an increase in economic output of 40%) (Watson et al., 2011).. Moreover, long term improvements in material productivity and energy productivity have been less rapid than improvements in labor productivity: during the period 1970–2007, productivity per unit of labor in the EU 15 increased by 144%, while productivity per unit of material and of energy increased by 94% and 69% respectively (Watson et al., 2011). Looking at products, many of these are gradually becoming more energy‐efficient during their use phase. Most energy using products for which data is available across Europe have shown improvements in energy efficiency since 1990. Petrol and diesel cars have reduced their fuel consumption per km by roughly 10% over this period, while washing machines and dishwashers reduced electricity use per cycle by 25% and 37% respectively ( Watson et al., 2011) However, further improvement should be addressed mainly on product categories showing a higher environmental intensities (i.e. transport, food and drink and housing goods). In particular, in each product categories demand should be oriented towards more environmental friendly products. In summary, the need for further initiatives has been demonstrated from various perspectives. 1. Current trends in resources used for production and consumption show that this might trespass the biocapacity of the planet Earth. Concepts like Ecological Footprint or HANPP (Human Appropriation of Net Primary Production) show that the limits of our current economic system are rapidly reaching the biophysical limits of our environment. 2. Energy, resources and waste are all costs to the economy. By not utilizing our resources more efficiently, competitiveness of companies may be at risk. A recent study showed that EU companies acknowledged the importance of resource efficiency as a viable strategy for cost reduction, product quality improvement and increased productivity, hence, a viable strategy for maintaining competitiveness in their global markets (Rademaekers et al., 2011). 3. The inclusion of sustainable production and consumption into decision making processes may form an excellent case for the growing number of green jobs. Jobs in renewable energy have increased by 25% in 2009 and 2010 (Eurobserver, 2011). Overall, the challenge is to create a virtuous circle: improving the environmental performance of products throughout their life‐cycle, promoting and stimulating the demand of better products and production technologies and helping consumers to make better informed choices. This calls for actions at the microeconomic level – i.e. for actions that directly affect individual economic actors and both institutional and private consumers – as well as for actions aimed at integrating the resource efficiency issue along three areas: Products, in order to improve their environmental performance; 5 Consumption, in order to stimulate demand for “green” products and to assist consumers to reduce their environmental impacts; Production, in order to improve companies’ resource efficiency and competitiveness while reducing their environmental impacts. Theoretical perspectives on environmental management: from institutional theory to resource based view theory Environmental emergencies derived from unsustainable consumption and production patterns have led to the need to change the behaviour of firms and to adopt new solutions to combine economic success with the preservation of natural resources (Pane Haden et al. 2009). In the literature, the determinants of environmental practices’ adoption can be broadly divided into: “external factors”, mostly linked to stakeholders’ pressure; and “internal factors”, i.e. a specific business‐led strategic process. These differ according to the source of the “stimulus” that drives the development of an environmental strategy, and that encourages their diffusion through all a firm’s functions or departments. The adoption of environmental practices at the firm level has been mainly investigated within the framework of institutional and neo institutional theory (Henriques & Sadorsky, 1999; Delmas, 2002; Brammer et al. 2012, Gusmerotti et al. 2012). The institutional environment where a firm operates is made up of several institutions such as regulators, customers, trade associations, and competitors who exert permanent pressure on a firm’s decisions, leading to isomorphic behavior (Meyer and Rowan 1977, Townley, 2002). Although the adoption of environmental initiatives may be genuinely motivated by the idea of gaining a competitive edge (Henriques & Sadorsky, 1996; Porter and Van der Linde 1995, Ambec and Lanoie, 2008; Darnall et al. 2010), institutional pressures, and especially those associated with the adoption of environmental management systems, tend to encourage “ceremonial behaviours” and a superficial and apparent conformity to the standard requirements (Boiral, 2007). Limiting the analysis only to “institutional pressures” does not allow for a complete understanding of why organizations operating within the same context pursue different strategies, despite experiencing similar institutional pressures. There can be strategic motivations that encourage managers to adopt actions that aim at designing, rationalizing, implementing environmental practices and that are not just spurred by external stimuli. Environmental management is, therefore, developed by organizations not just as an ad hoc operational response to external pressures, but as a key‐element of a business strategic vision, aimed at pursuing better environmental and commercial results. Pursuing a better “competitive performance” can have different meanings and be achieved in many ways. The three most diffused strategic approaches that are able to favor the adoption of environmental practices by firms are the following: 1) “reputation‐led”: the improvement of environmental performance of the whole product life‐cycle can significantly contribute to positive corporate image (Darnall et al. 2008); 6 2) “efficiency‐led”: an environmental‐oriented business strategy can reduce the use of raw materials per unit of product or reduce the weight and the thickness of the packaging thanks to innovative solutions. This leads to cost savings and enables the company to supply a cost‐competitive product to the market (Delmas, 2002). 3) “innovation‐led”: An environmental‐oriented approach can also be seen as the result of an innovation leader’s strategy. Those companies that are front‐runners in developing product and process innovations can find in pioneristic environment‐related practices an opportunity to strengthen their leadership and create a gap with respect to their competitors (Vachon & Klassen, 2007). One of the predominant theories addressing the role that the natural environment can play in an organization's competitiveness and success is the natural‐resource‐based view of the firm (Hart, 1995). The conceptual framework for this theory is comprised of the interconnected strategies of pollution prevention, product stewardship, and sustainable development. Empirical evidence also lends support to this theory, finding that organizational capabilities that lead to a competitive advantage can be obtained via proactive responsiveness to ecological issues. According to this approach, competitiveness and success of companies and products depend on the quality and quantity of the resources available and by the ability of companies/industries to optimize their use (Russo and Fouts, 1997). The Resource‐Based View identifies five kinds of resources (Grant, 1991): Financial and economic resources; Physical resources; Human resources (and their competence); Technical (considering innovation capabilities); Intangibles (e.g.: reputational, managerial, organizational,..). This approach emphasizes that also in the short run, the quality and quantity of internal resources can benefit from the ad...
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