Intended learning outcomes: Differentiate between opportunities and threats favoring proactive and reactive environmental involvement.
Continuation from previous subsection (3.3.3)
The situation for companies can be presented with two general options (with many intermediate levels in real application). As Figure 3.3.3.2 shows, companies may decide to be proactively environmentally committed (light gray fields) or take a reactive position (dark gray fields). For both options, uncertainties lead to opportunities as well as threats.
Fig. 3.3.3.2 Selection of opportunities and threats favoring proactive rather than reactive environmental involvement. Adapted from [ScVo10].
When being environmentally proactive, the human factor is very important for creating opportunities. Internally, employees’ awareness can be raised, and the capability to deal with challenges and changing environmental conditions can be increased. Further, strategic relationships with stakeholders from GOs, NGOs, and new customers can be developed. Also, productivity can be increased and international standards fulfilled, resulting in financial savings. Thus, being active increases planning security and lessens dependency on volatile prices.
Taking the reactive role may be advantageous in the short and medium term. Focusing on core competencies strengthens competitiveness, as investments in environmental changes may be postponed to a later point in time when technology is “adult” and reliable (“no experiments”). Company resources are used only where it is imperative to satisfy regulatory measures, which allows conservative budgeting.
Proactive commitment entails several risks for which competing polluters may gain competitive advantage (in the medium term). For example, a company may invest in a technology that reduces a certain kind of pollution. When regulation does not implement liability costs for this pollution, it results in a disadvantage for the company. Fulfilling standards may differ greatly from region to region, which hinders knowledge transfer. When engaging in (and marketing) “green” practices and products, the noncompliance of supply chain partners has a stronger impact and they may be more difficult to replace (“captive buyer situation”). The identified risks are rather of a company external nature. Perhaps a reason is that integrated approaches go hand in hand with higher interdependencies between, for example, companies, regulatory bodies, and supply chain partners.
There are various risks when taking the reactive environmental engagement position. A company may become vulnerable to regulation, market development, and liability costs as unanticipated developments emerge. Vulnerability to price shocks and supply disruptions is higher if no countermeasures have been taken (e.g., increased efficiency or alternative feedstock). Lower level of employees’ awareness leads to potentially missing out on cost-saving opportunities, and internal satisfaction may suffer due to a lack of environmental responsibility. With regard to a company’s visibility, a polluter image and negative reporting from the media and NGOs may lead to disadvantages in the long term.
Although this analysis considered mostly industries in the developed countries, many of the risks and opportunities may be applicable in other regions as well. Environmental regulations change and become more important as wealth increases. The relevance of these economic drivers may apply to virtually all industry sectors (with EIIs being especially affected). Therefore, searching for new approaches and solutions is an essential part of working towards long-term competitiveness. Also, earlier approaches need to be re-evaluated. Although they may not have been accepted in the past, they can become viable under the changed economic conditions. For further reading, see [Sriv07].
Course section 3.3: Subsections and their intended learning outcomes
3.3 Sustainable Supply Chains
Intended learning outcomes: Explain the changing concept of sustainability with reference to the triple bottom line. Disclose economic opportunities for social commitment and for environmental commitment. Describe energy management concepts and measures for improved environmental performance. Produce an overview on the measurement of the environmental performance. Present social and environmental dimensions in industrial practice.
3.3.1 TBL — The Triple Bottom Line
Intended learning outcomes: Produce an overview on the concept of the triple bottom line.
3.3.1b The Changing Concept of Sustainability with Reference to the Triple Bottom Line
Intended learning outcomes: Present the paradigm change that correlates to the evolution of sustainability aspects and their interaction.
3.3.2 SCoC — The Supplier Code of Conduct: Economic Opportunities for Social Commitment of Sustainable Supply Chains
Intended learning outcomes: Disclose the term “double bottom line”. Produce an overview on ethical standards, or code of conduct (CoC). Differentiate between groups of company-internal ethical standards and groups of company-external ethical standards. Present the supplier code of conduct (SCoC) and the certificate of compliance.
3.3.3 Energy-intensive Industries — Using Waste From Other Industries: Economic Opportunities for Environmental Commitment of Sustainable Supply Chains
Intended learning outcomes: Produce an overview on energy-intensive industries. Disclose examples of using alternative fuels and raw materials in order to decrease the carbon footprint and the amount of fossil fuels required in the cement industry.
3.3.3b Proactive Environmental Involvement: Economic Opportunities for Environmental Commitment of Sustainable Supply Chains
Intended learning outcomes: Differentiate between opportunities and threats favoring proactive and reactive environmental involvement.
3.3.4 Energy Management Concepts Using Triple Bottom Line (TBL) Thinking
Intended learning outcomes: Describe energy management in production systems. Differentiate between energy-aware manufacturing processes and integrating energy efficiency in production information systems.
3.3.4b Industrial Symbiosis, and Measures for Improved Environmental Performance Using Triple Bottom Line (TBL) Thinking
Intended learning outcomes: Produce an overview on major aims of industrial symbiosis. Present measures such as enhanced utilization of wastes, the recovery of medium and low temperature waste heat, and the framework for alternative fuels and resources.
3.3.5 The Measurement of the Environmental Performance of Sustainable Supply Chains
Intended learning outcomes: Produce an overview on ecoefficiency. Describe an indicator system for the costs, quality and delivery, and environmental impact performance dimensions.
3.3.6 CSR and IPL Statement — Social and Environmental Dimensions of Sustainable Supply Chains in Industrial Practice
Intended learning outcomes: Produce an overview on Corporate Social Responsibility (CSR). Present in detail the integrated profit and loss statement (IPL) of Holcim Global.
