The environmental management activities at a firm are guided by the selection of an environmental strategy. This strategy drives alignment of the environmental management systems, programs, and tools that will be used. Environmental strategies can be said to occupy four levels of sustainability:compliant, market driven, engaged, and shaping the future.
Four Strategy Levels
- Compliant: A firm decides it will be in compliance with all environmental, health, and safety regulations. This is the minimum level of environmental strategy a firm can adopt.
- Market-driven: A firm responds not only to regulatory requirements, but also reacts to its customers’ environmental expectations by providing leading product/service and operational performance.
- Engaged: A firm is not only in compliance, but also understands its environmental market opportunities and proactively uses that knowledge to create engagements with the value chain and other stakeholders to identify opportunities faster.
- Shaping the Future: A firm develops products and services for current and future market conditions, addressing unmet societal needs by proactively integrating economic growth, environmental health and safety, and social well-being into its operations and business practices.
Source: Adapted from Fava, J. et. al. (1998).
The relationship of business implications (e.g. efficiency, compliance, liability reduction, cost savings or avoidance, and revenue generation) to environmental strategy is shown in Figure 5.2. As a firm moves from a compliant strategy to a more sustainable strategy, different implications result.
A compliant strategy, for example, is often viewed as a cost and often includes only strategic elements aimed at meeting the legal requirements as efficiently as possible. In a market-driven strategy, a firm has integrated pollution prevention and customer/consumer or reactive market considerations into the design of its products or processes, which results in cost savings or cost avoidance. On the other end, a shaping the future strategy may generate revenue by viewing the environment from a strategic perspective to identify new business opportunities, and greener products.
Strategy Is Essential but Not Sufficient; Businesses Also Need Environmental Management Systems, Programs, and Tools
Organizations use various approaches and tools to integrate environmental considerations into their everyday decision processes. Environmental approaches and tools can be described as operating at a management system level, a program level, or a tool level.
Environmental management systems are broad, flexible frameworks for managing an organization’s environment-related activities. They are usually tailored to a specific organization’s environmental strategy, business model, and environmental responsibilities. Management systems addressing similar needs can vary significantly from one organization to another, based on differentiation arising from their respective business models and environmental strategies.
Programs are a level below management systems and are often used to carry out the strategic intent of the organization. Programs generally have a higher degree of specificity, and common program elements often appear among organizations in the same industrial sector.
Tools are used to support environmental systems and programs. Environmental tools are highly specialized and are often created with rigorous scientific methodology.
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