Clean Techn Environ Policy (2006) 8:217–218 DOI 10.1007/s10098-006-0068-1

GUEST EDITORIAL

Environmental management and corporate social responsibility Annik Magerholm Fet

Published online: 10 October 2006 Ó Springer-Verlag 2006

Topics like industrial ecology, environmental management, corporate social responsibility, global supply chains and systems’ understanding are becoming more connected as business are going global. The international conventions such as the Global Compact, the Millennium Development Goals, and the Global Reporting Initiative offer important guiding principles to businesses that want to meet the sustainability challenges. Cleaner production (CP) techniques, environmental accounting (EAc), input–output (I/O) analyses, life cycle assessment (LCA), and environmental management (EM) are being used by companies to evaluate their overall environmental performance. These tools and techniques can be classified as process-, product-, or management-related. These techniques can also be applied at different system levels, for instance at a corporate site, for a product’s life cycle, or at a global supply chain. In CP, site-specific input–output analyses have been the traditional approach. Input–output analyses examine material- and energy-flows into and out of a production system as well as the emissions of pollution to air, water, and soil. At a global scale, the same analysis is still applicable, but now with a wider focus considering the opportunities for improvement along the entire supply chain, which includes sub-suppliers and consumers.

A. M. Fet (&) Department of Industrial Economics and Technology Management, Norwegian University of Science and Technology, NTNU, 7491 Trondheim, Norway e-mail: [email protected]

Industrial ecology (IE) is the study of the flows of materials and energy in industrial and consumer activities. It includes the study of the effects of these flows on the environment. It also includes the study of the influence that the use and transformation of resources have on economic, political, regulatory, and societal factors. Industrial ecology operates at three levels: at the firm level, across firms and at a regional level, or at a global level. At each of these levels, industrial ecology aims to provide tools and knowledge for analysis and design toward more sustainable solutions. Product-related tools and methods focus on the entire life cycle of the product. Data from the production phase, the use phase, and the end of life phase are needed to do a complete LCA. The results from an LCA will show the hot-spots and potential for environmental performance improvements of the product. Most environmental management systems are structured according to ISO 14001. The latest version that came in December 2004 shows a shift toward a stronger focus on larger systems. In the version of 1996, companies were asked to identify the environmental effects caused by their activities, processes, or products. In the latest version the ‘‘or’’ is changed to ‘‘and’’. This means that a company cannot ignore the impacts caused by their products and the environmental burden given through the entire supply chain. In its widest sense, CP, IE, LCA, and EM involve not only the supply chain, but a network of actors with traditional stakeholders and others like the ‘‘you and me’’, the local society, and the future generation. This means that business is facing new challenges of the environmental and societal aspects of sustainability. As a result of globalization and the increasing

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complexities of modern economies, corporate social responsibility (CSR) has become a focus of interest. Business and regulatory models within distributed production systems that often span several organizations, sectors, and national boundaries need to be addressed. The distributed production chains or networks are involved when operating in a global market. This implies that CSR concerns must be conceptualized and implemented not only in several business units, but also through a series of market relations. Insights from systems theory may also prove to be of vital importance as the CSR performance of companies is influenced by a variety of actors interacting in several arenas. But, does CSR make sense for companies? There are two broad categories of companies, the ones with a reactive attitude versus the ones with a proactive attitude. These are firms that are defending their brands and are afraid of being targeted by activists, and firms

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where CSR is part of the corporate strategy and business identity. For both categories CSR has become an important component of their management of community, public, employee, and shareholder relationships. Businesses are now facing the challenge of how to shift focus to this new global and wider focus. How can companies extend their management systems to also incorporate the societal aspects along a network of actors? Similarly to EM there is a need to map the stakeholders’ views, identify the significant aspects, do an impact assessment of the activities and products in a global system of actors, set up objectives and targets for improvements, and communicate this to the interested parties. This sets the requirements for multidisciplinary understanding and system thinking. To sum up, the change from site to global focus should be systematically done by the use of different management tools by which companies will be able to build their sustainable strategies.