Due to rapid growth in emerging economies like China and India, global GDP grew by 3.8% in the last couple of years. This economic growth led to a rise in global energy demand of 2.1%, more than twice the rate as that in 2016. Fossil fuels being the main energy producers, global emissions rose again, by 1.1%, having been continuously increasing for the past 3 years.
The first installment of the IPCC’s Fifth Assessment Report confirmed that impacts of climate change are increasing, largely driven by anthropogenic GHG emissions. These emissions accumulate from developing young businesses, industries, hydroelectric plants, automobile factories, chemical manufacturers, and the lot. Every year that the global economy is unsuccessful in decarbonizing at the required rate, the 2°C goal of our global carbon budget becomes even more difficult to achieve. Given the present scenario, our world is, unfortunately, on track to exceed the prescribed budget in only 30 years. To make matters worse, exposure of communities to severe weather, precarious forest fires, droughts, and other climate impacts is likely if emissions continue relentlessly.
Besides, improper management of chemical industries, which produce more than just CO2, has the potential to cause hazardous exposure to the local population and the environment. The Bhopal gas tragedy (1984) and Vizag gas leak (2020) are just some examples in this context. Malfunction of the cooling system, which regulated toxic chemicals present in the plants, was held responsible for these disasters. But the gases had been inhaled. It was too late to repent.
Business Advantages of Undertaking Environmental Management
To decelerate exploitation of the ‘source and sink’ structure, i.e. our environment, management is the only way forward. In addition to bringing about a positive change in our surroundings, environmental management has a number of business advantages as well.
- Cost Savings: Though it may seem protecting the environment may cost a company more, the opposite actually stands true. By increasing process efficiency, modifying product design, regulating proper sourcing of raw materials and waste disposal, altering infrastructure layouts, and taking appropriate measures during packaging and transport, a company can save large sums of money.
- Reduction in Environmental Risk: By making sure assessment of environmental risks is, by and large, accurate, investors, banks and insurance agencies are more likely to commit to a company. Thus, standardized environmental assessment will go a long way to help a company in being decently insured.
- Meeting Supply Chain Requirements: With the world heading towards accountability in all sectors, suppliers are often required to provide evidence of their environmental policies. Therefore to gain a strong supplier foothold, a company is mandated to meet its set policies.
- Improved Public Image and Relations: Both, for gaining a positive reputation among consumer base and regulatory authorities, environmental management is the way to go. It showcases a company’s good faith in protecting and developing at the same time.
- Employee Benefits: Environmental protection is the new trend. A company preserving ecosystem rights administers enthusiasm in its employees. For they know, in some way or the other, they are doing their bit to save the planet.
- Ensuring Legislative Compliance: Avoiding public or media outrage by drafting sound environmental policies, while being aware of possible legislative changes, makes a company less susceptible to cash flow problems. Inculcating policies that cover all legal domains will cut down non-compliance fines for the company.
Guiding Principles for Environmental Management
Including social issues, related to human interaction with the environment, has always been a requirement in the management rules. However, application of the same has not been given much importance. Nevertheless, these rules can be rewritten to emphasize social issues related to environmental management. Some of these rules are:
- Precautionary Principle: Here respect is given to peoples’ way of life and integrity of their community. Mitigation measures are to be followed with certainty no matter the response from the community.
- Uncertainty Principle: This principle pays attention to the fact that we don’t fully know about social processes, and cannot comprehend these all the time, as these keep changing constantly from one place to another.
- Intra-generational Equity: The interventions planned should not fall disproportionately on certain sections of the society like children and women, socially excluded and disabled or particular generations, more than the other.
- Inter-generational Equity: The plans are to be made so that the needs of the present generation are met without compromising the ability of future generations to meet theirs.
- Recognition and Preservation of Diversity: Every community has diverse societies, thriving in their own way. And they have been doing so for many generations. The plan needs to respect that and make sure diverse social setups are not compromised or diminished.
- Internalization of Costs: All costs, ecological and social, must be included when drafting a policy. No plan should be approved until these costs are enclosed in the planning structure and deemed manageable.
- The Prevention Principle: It is always preferable and cost-effective to plan properly beforehand than restore any social or ecological impact after the project is finished.
- The Protection and Promotion of Health and Safety: The plans must necessarily take into consideration all health and safety protocols devised to prevent any untoward social or environmental impact on workers, locals, and future generations. This includes activities and impacts before, during and after completion of the project at hand.
- The Principle of Multi-sectoral Integration: All policies, plans, and infrastructural programs should consider social needs and social development requirements.
- The Principle of Subsidiarity: The whole planning and developing process should be decentralized, i.e. taking into consideration opinion of all stake holders, especially people who are going to be most affected by the project.
- The Polluter Pays Principle: It is a fundamental principle in US environment law and a regional custom because of the support received in majority of OECD (Organisation of Economic Co-operation and Development) and European Union countries. The principle demands that the whole cost of compensating for social impacts of a plan must be borne by the one who proposes the intervention. In simple terms, this principle states that as much as pollution is unavoidable, the industry or person responsible for it must pay some amount for restoration of the affected environment. It is mentioned in the Principle 16 of the Rio Declaration on Environment and Development of 1992.
Environmental Management Tools and Techniques
Now that we have established environmental management is important for any business to grow sustainably, another aspect to be appreciated is tools required for a business to effectively manage environmental and social affairs. The International Organisation for Standardization (ISO) in early 1990s recognized the need of introducing standardization in the arena of environmental management. Thus, 1993 saw the birth of a committee that would write standards related to the following management tools:
- Environmental Management System (EMS): It takes into consideration the company’s techniques to manage environmental issues pertaining to its business. It also provides a way to methodically address all concerns on improvements related to environmental management. ISO 14001 and EMAS are required to be addressed in this EMS scheme.
- Environmental Auditing: This tool focuses on the company’s ability to deliver what it has legally accepted. Auditing makes sure the business is proceeding as per required standards.
- Environmental Labelling: To make sure a product has the least environmental impact within the same product group, it is important to know about environmental labeling. Only 20-30% of products in a group fulfil the criteria set by a labeling scheme organiser. If a company wishes to obtain a label, it has to apply for it, and fulfil all criteria needed. If it does, then the product is certified as being one of the least harmful ones in a product category.
- Life Cycle Assessment (LCA): This takes on the ‘cradle to grave’ approach. LCA determines the impact of a product from its inception to its expiration, assessing raw materials, energy used, and waste disposal in its wake. This tool is important for a company to boldly support claims about environmental influence of its products. Also, it makes known when and where a firm should find cost-effective ways to reduce impact.
- Environmental Indicators: These indicators are used to assess environmental performance and improvements that can be included to enhance operations in a company. It can also be used in firms without a developed EMS.
- Environmental Policies: Drafting a policy is of utmost importance before undertaking any project. It signals commitment towards sound environmental management. It also makes sure that aims, objectives, and intentions of the company seamlessly converse with the environment.
- Eco-balances: This tool is important to understand about a company’s inputs, stocks, and outputs. It takes into consideration raw materials, energy, resources, products and wastes that enter and leave the company. This is to know about the business’s overall impact so as to practise environmental management earnestly.
- Environmental Reporting: To make known a company’s methods and standards in reducing environmental impact of its products, it may release the results for public viewing. Environmental reporting increases chances of a firm improving relations with various stakeholders and gaining a good image. All companies, large, medium or small, can find reporting a useful tool. An example in this context is CDPs (Carbon Disclosure Project) reporting for the world’s principal publicly traded companies.
- Environmental Charters: Subscribing to numerous charters or guidelines can enhance a company’s image and showcase its commitment to responsible environmental management.
Environmental management is essential to ensure effective strategies are implemented so that development, economic zenith, and environmental protection go hand in hand. Businesses must invest in constituting dependable environmental management systems for the benefit of both, man and nature.
Reference: Environmental management tools & techniques – National Capacity Self Assessment Project, National Environment Commission Secretariat Royal Government of Bhutan. Check the full document here.