Sustainable Development is Vital for Future Survival of any Modern Company Essay Example

a potential trade-off between ecological health and financial prosperity. Consequently, businesses in this sector may face limited opportunities.

Sustainable development involves forms of development that are both environmentally and socially sustainable. Its purpose is to improve the environment while also promoting development that does not deplete our environmental resources. To achieve sustainable development, we must transform our approach to these issues. The first step towards achieving this goal is by complying with regulatory measures, including implementing new national and international environmental regulations that encourage businesses to enhance their environmental performance.

Unforeseen expenses that jeopardize profits can arise from compliance with regulations, particularly in terms of penalties for noncompliance, remediation efforts, and clean-up costs (Barbier, 1987). If environmental liabilities are not considered, businesses may encounter problems. To avoid these liabilities and comply with regulations, companies use remediation and abatement measures. However, this reactive approach may impede their capability to establish efficient cost control systems and growth strategies.

Many businesses view environmental protection as a burdensome, expensive task that hinders their competitiveness and negatively impacts their market performance and results. However, some companies opt to adopt comprehensive environmental programs and strive for sustainable development to surpass regulatory compliance. This approach is more effective in the long term as it allows for more freedom from environmental regulations. Environmental risk management represents the next step towards achieving sustainable development, as corporate and personal liability for cleanup costs and claims compel business executives to implement proactive strategies to address environmental concerns.

Some businesses choose to employ a precautionary approach to minimize risk by anticipating possible hazards and preventing them. This approach provides more flexibility in responding to situations than merely complying with

regulations (Barbier, 1987). Some companies undertake environmental health and safety (EHS) assessments, create environmental policies, and establish environmental management systems (EMSs) to enhance their environmental control. Implementing techniques like pollution prevention and recycling helps put policy objectives into action.

Companies can save money and improve environmental quality by implementing risk management strategies that anticipate and prevent costs related to environmental damage. These strategies also help reduce expenses associated with future regulatory compliance, minimize waste, prevent pollution, and eliminate hazards. The ultimate objective is to achieve sustainable development while enhancing competitive advantage for corporations. Many companies consider integrating sustainable development policies into their existing environmental policies as a natural extension of their overall business strategy.

Management aims to achieve economic, environmental, and community benefits by considering the long-term needs and interests of stakeholders. Sustainable development strategies can reveal new business opportunities where costs or risks were once perceived. These strategies result in the creation of more environmentally friendly processes, better financial performance, and an improved reputation among stakeholders. By adopting sustainable practices, enterprises can meet current stakeholder needs while also preserving natural and human resources for future generations. Ultimately, sustainable development leads to significant advantages for business operations.

According to Mitlin (1992), the focus on environmental safety creates advantageous prospects for various types of businesses. These include suppliers catering to eco-friendly consumers, companies producing materials and utilizing processes that align with environmentally sound practices, and businesses investing in eco-efficiency or social well-being. The positive impact of such efforts can be reflected in improved financial performance and community recognition. William Mulligan, environmental affairs manager at Chevron Corporation, acknowledges the increasing importance of environmental concerns among the business community, recognizing

challenges and opportunities that come with it.

'Throughout the past 10 years, numerous polls have affirmed the significance of the environment to Americans,' remarks the speaker. 'To ignore this development as fleeting or neglect to incorporate environmental factors into all aspects of a company's operations would be reckless. Environmental proficiency must be included in strategic decision-making. Ultimately, doing so is economically advantageous.'

When change is forced upon us, it often presents opportunities. Many executives have shown that sustainable development strategies can benefit business. For instance, a 3M factory reduced its wastewater treatment capacity by half by circulating cooling water through the plant instead of disposing of it after one use. Pacific Gas and Electric determined that investing in energy conservation was more financially rewarding than nuclear power. McDonald's transition from plastics to paper was a prominent part of their broader waste reduction strategy. (Romm, J, 1999) Philips Electronics is a prime example of a company that has embraced sustainable development, operating in approximately 60 countries worldwide.

With revenues of 66 billion guilders, Philips is a major multinational electronics and consumer products firm that employs 265,100 people worldwide. The reduction of wastewater, improved energy efficiency, minimized packaging, managing supplier issues to reduce the environmental impact of products acquired, and eco-design are the key environmental issues for Philips. Eco-design calls for minimizing the environmental impact of all product life cycle stages, materials used, and product end-life. In 1991, Philips had finalized its current environmental policy; however, in 1994, the company initiated an action plan called "The Environmental Opportunity" to turn the environment into an opportunity for the company.

The policy and action plan of the industry companies center around four

essential principles which are: Sustainable development, Prevention being better than cure, The total impact on the environment matters, and Open communication with the authorities. Environmental performance and the integration of environment into business strategy are both significant focuses for these companies. Philips is of the view that informed customers in the future will demand sustainable products which will then become a marketing issue. As durable goods manufacturers, both Philips and its competitors must anticipate market trends. Consequently, there is extensive benchmarking taking place concerning previous products. Philips is acknowledged for its program and has garnered considerable interest primarily from Japanese and Korean companies.

Although Philips has reaped benefits from its environmental policy, it encounters challenges in the form of producer responsibility for end-of-life product disposal. Some countries require producers to manage the retrieval and disassembly of old products from consumers or retailers. Nonetheless, certain Philips products have gained market share due to their ecologically-friendly characteristics.

Philips was awarded the title of 1999 Green Lights Manufacturer of the Year by the US Environmental Protection Agency due to the success of its ALTO low-mercury fluorescent lamp in gaining market share for its environmental benefits. The ALTO is notable for being the first lamp of its kind in the United States to pass EPA's test for non-hazardous waste. Although it is challenging to gauge the exact influence of recognition and awards, Philips recognizes that they have had a substantial overall impact.

The Earth Summit in Rio de Janeiro in 1992 marked a significant milestone in the development of sustainability. Since then, Philips has initiated an environmental improvement program that has gained worldwide recognition and improved their brand position. Their commitment

to sustainable development has garnered positive attention and contributed to their success. Other businesses can follow Philips' lead and realize that sustainable development is not only beneficial for the environment but also for public relations, which can ultimately drive demand for their products. (International Institute for Sustainable Development - Internet 2000-02)

Agenda 21 emerged from a historic summit where numerous heads of state assembled to establish solutions for the economic and environmental challenges of the late 1900s. The document operates under the assumption that sustainable development of the planet is not just achievable, but mandatory. Daniel Sitarz dedicated a book to Agenda 21 and affirms that it outlines a variety of measures that every individual on our planet should undertake.

... Recommendations are provided to individuals and companies across the globe to establish novel industries, introduce inventive technologies, create new technologies, and establish unique trade agreements.

In the aftermath of the Earth Summit, a prominent theory has emerged called the triple bottom line (TBL), which emphasizes the importance for corporations to consider not only their economic value, but also their impact on the environment and society. The triple bottom line serves as a framework for measuring and reporting corporate performance based on economic, social, and environmental factors. (Source: www.sustdev.)

The idea of "sustainable development" entails companies following certain values, concerns, and procedures to lessen adverse effects from their operations while generating economic, social, and environmental advantages. To achieve this goal, it is necessary to comprehend company objectives while taking into account stakeholders such as shareholders, customers, employees, business partners, governments, local communities and the public. The sustainability concept represents society, economy and environment as interconnected elements. A sound global

ecosystem takes precedence since society depends on a strong economy which relies on an undamaged environment. Industries that substantially contribute to environmental harm necessitate special attention towards sustainable development.

The production of raw materials and use of fossil fuels pose a threat to natural conservation areas, making sustainable development strategies crucial. Implementing these strategies can greatly benefit forestry, providing necessary protection and setting examples for stronger regulations to be enforced.

Canfor Corporation, headquartered in Vancouver, Canada, is an integrated forest products company with around 5,600 employees. Its range of forest products is produced mainly from wood taken from publicly owned forest lands, under different types of tenure agreements. Their key products include lumber, hardboard panelling and specialized wood products (Deloitte; Touche - 2000/02). However, Canfor and the wider forest products industry face various environmental issues such as energy and water use, waste management, biodiversity, air emissions (including greenhouse gases), climate change, wood waste management and land use and conservation. Recently, international non-government organizations like Greenpeace have launched environmental campaigns against the Canadian forest products industry.

Companies have had to carefully consider their actions to prevent negative public reactions. Canfor has shown a strong willingness to actively manage their environmental impact. When faced with criticism about bleaching and harvesting methods, Canfor recognized the importance of taking initiative to address environmental concerns. From that point forward, the company has taken a proactive approach to managing their environmental performance instead of simply responding to emerging issues.

The company's motivation to remain proactive has been stronger than concern over any regulatory limitations, according to the International Institute for Sustainable Development Internet (2000-02). Canfor implemented a program of frequent environmental audits at all of

its operations in 1990, but altered these procedures in 1997 to align with the ISO 14001 approach. Additionally, the company has taken significant steps towards implementing Life-Cycle Assessment (LCA) processes and practices. This method estimates the potential ecological impact of a product throughout its entire life cycle, including harvesting, manufacturing, and transportation, providing a new methodology for assessing the land use impact on ecosystems such as forests.

Canfor, a forest products company in Canada, is believed to be the only one in the country currently implementing LCA. The company is recognized both domestically and internationally for taking a proactive approach to environmental protection, placing it at the forefront of environmental management within the forest products sector. Some of Canfor's clients have been so impressed with its environmental action that they have requested assistance from the company in developing their own strategies. This approach has helped Canfor to secure and expand its business, particularly in Europe where concerns for forests have given rise to international environmental issues. According to Canfor, the growing demand for forest sustainable certification among stakeholders is a clear indication of the increasing importance of good environmental management as a vital business consideration. As the market continues to demand more evidence of good environmental practices, arguments for environmental protection will play an increasingly strong role in developing competitive advantage.

As the demand for accountability from the business sector grows, companies can utilize environmental factors for international business. The concept of sustainable development is relatively new but has significant implications for the future. Companies cannot avoid addressing this issue as it becomes a growing public concern. It is essential for larger conglomerates and multinational corporations with

sufficient budgets to set examples and address critics. However, smaller companies and lower level businesses contribute to the majority of environmental concerns.

It is crucial for everyone to raise their awareness of sustainable development, in order to minimize environmental damage and promote long-term sustainability. Rather than waiting for government regulations, businesses should recognize the cost-saving benefits of taking action now and incorporate sustainable practices into their strategies. Canfor and Phillips are successful examples of organizations that have implemented these practices, proving that sustainable development is not a temporary trend but rather an essential aspect of growth.