6 The environmental and organisational focus and impacts of environmental management in product chains

Environmental management in product chains

6.1 Environmental focus and impacts of the initiatives
6.2 Organisational focus and embedding of the initiatives

This chapter analyses the environmental and organisational focus and impacts across the analyses of the different initiatives in product chains in chapter 5. The aim of the analysis of the environmental impacts is to see whether there is a positive environmental impact from the different initiatives, the type of the environmental impact in focuss, and where in the product chains the reduction of environmental impacts are obtained.

The analysis focuses on

the time perspective of the environmental initiatives and the impacts (whether they are short or long term oriented),
the role of preventive measures like cleaner products and technologies (compared to for example end-of-pipe initiatives like waste management)
the degree of holistic perspective (whether there is focus on for example the relation between environmental initiative and product quality)
the changes in different types of environmental impacts (whether the focus is on reduction of the resource consumption, reduced emissions of greenhouse gasses etc.)

The analysis of the organisational focus and impact aims at identifying organisational structures, which have influenced the shaping of the initiatives, and organisational changes, which show that the initiatives have become embedded in some of the involved organisations. The analysis of the organisational embedding focuses on whether the initiatives seems to become embedded in terms of changes in tasks/activities, structures, competencies, tools and technologies etc., and where in the product chains or other types of networks such changes are seen.

6.1 Environmental focus and impacts of the initiatives

It is not possible in all the analysed cases to say whether reductions in environmental impact actually have been obtained due to the initiative. Some cases are more a description of initiatives without a report on the actual impact, for example whether customers actually choose to buy some cleaner products. Other cases are only reporting better knowledge about environmental impact of products as a result. Table 6.1 gives an overview of the actual and the potential reductions of environmental impact

Environmental initiative/ management effort	Changes in environmental aspects and impacts
Life cycle assessment	Reduction of electricity consumption and consumption of chlorinated solvent in manufacturing process Phasing-out the use of chemical with heavy metal for product Possibility for cleaner products Possibility for reduced environmental impact from handling of electronic waste Possibility for internal dissemination of cleaner technology within company
Customer information, marketing	Reduced wastage from distribution of chemicals Substitution of hazardous materials in electronic products Increased environmental choices in the purchase of printed matter Possibility for customers to choose an eco-labelled product Possibility for customers to choose a product with less environmental impact Possibility for reduced environmental impact from handling of electronic waste
Green procurement policy or strategy	Changes in procurement with substitution of several products with products with less environmental impact
Recovery of materials and products	Reduced amounts of waste and reduced resource consumption Possibility for reduced environmental impact from handling of electronic waste
Supplier assessments and dialogues	Substitution of chemicals in agriculture (through change to other suppliers) and in industrial processing Substitution of PVC and hazardous materials in paint. Change to certified wood
Greening product development	Reduced consumption of detergents in textile service Reduced use of hazardous chemicals and monomers in paints Development of more biodegradable chemical to textile industry Possibility for customers to choose an eco-labelled product
Eco-labels	Substitution of chemicals in agriculture (through change to other suppliers) and in industrial processing Energy savings in manufacturing process as spin-off Development of more biodegradable chemical to textile industry Increased use of eco-labelled detergents for cleaning Possibility for customers to choose an eco-labelled product Possibility for customer to integrate environmental concerns in the purchase of printed matter
Strategic co-operation	Reduced consumption of detergents in textile service Increased use of eco-labelled detergents for cleaning Increased use of waste materials in concrete leading to reduced CO2 emissions from manufacturing Possibility for customers to choose an eco-labelled product Possibility for customer to integrate environmental concerns in the purchase of printed matter

Table 6.1: Actual and potential (in italic) reductions in environmental impact from environmental management in product chains

The reductions in environmental impacts from the analysed cases are described in the following paragraphs.

6.1.1 Time perspective

Many of the environmental initiatives have a long-term perspective since they focus on integration of environmental concerns into product development. Some of these initiatives have led to increased knowledge about the environmental impact of products, the possibility for customers to purchase eco-labelled products and design guidelines for integration of environmental concerns into the design of future products.

6.1.2 The type of environmental initiative, including the role of prevention

There are examples of changes at a number of different levels; reaching from more complex levels like products towards more simple levels like handling of wastes and emissions. The following levels have been in focus: products, production/manufacturing, processes and handling of specific wastes and emissions. The changes focus mostly on prevention of environmental impact, like

reduction of resource consumption, including energy consumption
reduction of the use of hazardous chemicals and materials
reduced resource consumption through increased resource efficiency

A few initiatives focus on the handling of waste. One example concerns the handling of electronic waste and two other initiatives deal with the use of waste as resources for new products.

6.1.3 Holistic perspective

A few examples mention links to other areas of concern explicitly. The use of residual products as partly substitutes for cement in concrete has demanded many tests of the quality of the new material. There has probably also been focus on quality aspects in other changes of products, but these concerns have not been mentioned. One case with focus on substitution of hazardous substances in paints has its focus on the reduction of the chemical exposure in the use stage, but some of these substitutions will also imply reduced environmental impact.

6.1.4 Types of environmental impact in focus

Several of the cases focus on reduction of emissions of hazardous chemicals and materials without specific types of environmental compartment mentioned as specific concern. One case has focus on reduced emissions of greenhouse gasses and one case focuses on the biodegradability of a chemical. A few cases have a focus on reduced resource consumption using waste or residual products as materials for new products.

The overview also shows that environmental management initiatives in product chains do not necessarily imply a focus on the environmental impact in the whole product chain. The focus might be on the whole product chain, like in initiatives with focus on the use of life cycle assessments (LCA), but also here might the focus be limited later in the assessment, due to the initial screening of the environmental aspects and impacts in the product chain.

In a discussion of the environmental focus in the product chain, it is useful to understand a product chain as having a material as well as an organisational dimension. As described in chapter 3, a product chain can be seen as a number of material activities implying flows of material resources, and as an organisational entity with flows of capital and information and with different actors having different types of social relations interacting with the material flows. Furthermore, it is important to focus on the material and organisational interconnectivity of the different parts of a product chain and how the environmental aspects and impacts along the product chain are shaped during the different activities related to a product: design, extraction and processing of materials, manufacturing of products, use of products and disposal.

In an analysis of environmental initiatives in a product chain different perspectives can be applied:

1. A perspective where the focus is on those parts of the product chain where the changes in environmental impacts are wanted or are seen

2. A perspective where the focus is on those actors and those parts of the product chain, where changes in environmental aspects (technology, structures etc.) are taking or should take place in order to obtain the changes in environmental impacts (this could be called a direct influence on the environmental impact)

3. A perspective where the focus is on those actors and those parts of the product chain and other linked networks and product chains, where changes in driving forces are taking or should take place in order to obtain changes in the environmental aspects (this could be called an indirect influence on the environmental impact)

An example: In one of the cases, where a manufacturing company wished to reduce the environmental impact from its own painting processes (perspective 1) the paint supplier had to deliver paints with less organic solvents (perspective 2). Although the focus was not on the emissions of the supplier the emissions of the supplier were also reduced concurrently (although by far the biggest part of the emissions take place when the paint is applied) (perspective 1). The changes were partly inspired by enquiries for environmental issues from customers concerned about the environmental impacts along the whole product chain of the products, which they buy (perspective 3). Table 6.2 shows how the three perspectives on the product chain in some of the analysed cases sometimes involve actors in different parts of the product chain and sometimes actors in the same parts of the product chain.

Environmental initiative/management effort	Perspective 3	Perspective 2	Perspective 1
Life cycle assessment Textile yarn Electronic product	Customer Customer/ manufacturer	Supplier Suppliers/Manufac-turer	Manufacturing Product disposal
Customer information, marketing Printing house	Customer	Suppliers	Suppliers/Manufac-turing
Green procurement policy or strategy Public transport	Customer	Suppliers	Maybe throughout the product chain
Recovery of materials and products Reuse of construction waste	Actors along the product chain	Supplier	Manufacturing
Supplier assessments and dialogues Playing ground equipment Chemicals	Customer Manufacturing	Suppliers/Manufac-turing Distribution	Throughout the product chain Distribution
Greening product development Textile service Printing house/designer Sanitation product	Customer Customer Customer	Supplier Designer/Manufac-turer Suppliers/Sale/ Customer	Service provider Suppliers/Manufac-turing Suppliers
Eco-labels Textile Furniture Detergents/Cleaning service	Customer Customer Customer	Suppliers Suppliers Supplier/cleaning service	Suppliers Suppliers Supplier/cleaning service
Strategic co-operation Concrete constructions	Customer	Actors throughout the product chain	Supplier

Table 6.2: Actors involved in the three perspectives on some of the analysed cases (only cases where there is enough information to apply all three perspectives. Each case is only mentioned once although they might have been analysed within more of the initiatives

The overview shows that the choices of customers in many cases are important in order to obtain the environmental potentials, because many of the initiatives are offers to the customers for buying products or services with less environmental impact. Only in a few cases are environmental achievements obtained throughout the product chain. On the other hand there is a case within strategic co-operation which shows how it is necessary to involve actors throughout a product chain in order to obtain an environmental improvement from the practice of one of the suppliers (concrete manufacturing).

6.2 Organisational focus and embedding of the initiatives

This paragraph identifies and analyses organisational structures that has been important in the shaping of the initiatives and organisational changes that show embedding of the initiatives in involved organisations. Table 6.3 gives an overview of the organisational aspects in the shaping and in the embedding.

Environmental initiative/management effort	Organisational aspects as drivers and barriers in the shaping of the initiatives	Organisational structures in the embedding of initiatives
Life cycle assessment	LCA-model too time consuming and too data demanding Eco-label criteria easier to have suppliers to react to Too little importance as customer in relation to supplier in data enquiry for LCA Sales contact to customers provide knowledge about customer needs Customer demand as driving force Use of consultant assistance in network of companies Pioneer inside company important	Knowledge about environmental impact of products Database with environmental information about components Design handbook and guidelines Implementation of a ISO 14001 environmental management system
Customer information, marketing	Long-term contracts made by mother company as barrier Same view on environmental issues in involved countries Too little importance as customer in relation to supplier Confidence with suppliers and customers Demands for written procedures barrier for small supplying companies Difficulties in finding alternative suppliers Distributor’s customer contact important	Tool for sales department Procedures for customer enquiries Internal integration of specialist functions Participation of environmental staff in sales activities Closer relations to suppliers and customers Auditing of suppliers and customers Implementation of a ISO 14001 environmental management system
Green procure-ment policy or strategy	Different view on environmental issues in involved countries as barrier Environmental guidelines and eco-label criteria as guidance LCA-model too time consuming and too sophisticated Lack of recognition from public customers	Guidelines for green procurement
Recovery of materials and products	Limited support from municipal authorities to recycling scheme Differences in municipal regulation of waste management	Agreement among actors about procedures for recycling of waste as raw material Guidelines for customers for dismantling and recycling of product
Supplier assess-ments and dialogues	Confidence with suppliers provide access to (confident) data Mutual dependency between manufacturing company and strategic suppliers Easy data collection based on ISO 14001 system Providing environmental policy to supplier may initiate or disseminate environmental initiatives	Supply chain management as part of environmental management Dialogue with suppliers provides ideas and targets Chemical database Integration of environmental issues into contracts Inspections and audits of contractors/suppliers/customers
Greening product develop-ment	Demand from important customer Long term contract with important supplier provide confidence and commitment Small suppliers find it difficult to provide environmental documentation	Future development projects with strategic supplier Product steward programme for future collection of customer demands Design guidelines Supplier’s environmental specialist at customer Customer’s environmental specialist at supplier
Eco-labels	Demand from important customer as driving force Long term contract with important supplier provide confidence and commitment Easy data collection based on ISO 14001 system Expectations for public green purchase as driver – and actual interest as barrier	Supplier’s environmental specialist at customer Design guidelines Suppliers inspired to develop ISO 14001 system Development of eco-labelled product assortment
Strategic co-operation	Demand from important customer as driving force Long term contract with important supplier provide confidence and commitment Expectations for public green purchase as driver – and actual interest as barrier Long-term co-operation as basis for co-operation about joint resource centre and network measures	Future development projects with strategic supplier Design guidelines Supplier’s environmental specialist at customer Suppliers inspired to develop ISO 14001 system Development of eco-labelled product assortment Experience from pilot project expected to become embedded into public standards

Table 6.3: Organisational aspects as drivers and barriers in the shaping of the initiatives.

Organisational structures in the embedding of initiatives

The overview shows how existing organisational relations to suppliers and customers can be a barrier as well as a prerequisite for an environmental initiative in a product chain. This is in line with Boons (1999), who points to network relations as a possible benefit as well as a possible barrier, when a company wants to take environmental initiatives in a product chain.

The cases also show how long-term co-operation (networking) among a company and its suppliers and customers can create mutual confidence and maybe dependency, which motivates participation in co-operation around environmental issues. A link to a customer might provide access to knowledge about future customer needs as a resource in future product development. On the contrary, too little importance in relation to a supplier might limit the willingness of a supplier to provide data for a life cycle assessment or an environmental declaration, if the data are not easily accessible or are considered as confidential. However, some of the analysed cases show that joint participation in a project activity, which several of the initiatives are, might create commitment for further co-operation in the future. In one case, a supplier transfers the “solution” provided to one customer to the case company. This shows how a product chain might be an arena for dissemination of environmental competence among different product chains.

Existing methods and criteria might provide guidance in this kind of initiatives. However, several cases show that a full LCA methodology is too time consuming, too sophisticated and too data demanding. Some companies have then chosen in stead to use existing eco-label criteria as guidance in the dialogue with suppliers. (In chapter 10, the role of governmental regulation as guidance is analysed further). In one case, an ISO 14001 system is highlighted as providing a good framework for collecting data to a supplier, who asks for information about the company and its processes and products.

Some cases point to the important role of an internal or external change agent in carrying through a project. In one case, such an internal change agent is called a pioneer. There is not enough information to analyse the role of such change agents closer. Broberg and Hermund (2003) point to the political, reflective navigator as a connotation for a change agent and mentions several possible roles: expert, process consultant, facilitator, and network and alliance builder with the ability to adjust the strategy as an important competence.

Several of the initiatives have been embedded in one or more of the participating companies as new knowledge, guidelines or new or changed organisational structures. Lenox and Ehrenfeld (1997) show that a prerequisite for good environmental design capability is access to environmental knowledge resources, the ability to exploit these knowledge resources by making them available in the organisation through persons, databases and/or guidelines. Furthermore, that there need to be interpretative structures which support the actual application in for example product development of the environmental knowledge. This could be gatekeepers between the environmental community and the more technical communities in for example product development for example through training of technical staff or through environmental specialists as members in for example design teams. All together, the cases show these types of embedding strategies. Knowledge resources are developed as specialists and as databases; guidelines (for example a design handbook or tools for sales persons) and/or persons acting as interpretative structures. New internal organisational structures are created, where for example different so-called specialists functions are integrated in one function (environment, human resources and dialogue), because they are all seen as important in management of environment and work environment, including the dialogue with customers. In a few cases environmental competence has been integrated by creating new organisational structures across two companies, when either a supplier provide environmental competence to a customer or a customer provide environmental competence to a supplier. The temporal centre within concrete construction is an example of a structure built among a number of companies with high degree of mutual experience, aiming at extending the co-operation into the environmental field. These examples show an extension to the analysis of Lenox and Ehrenfeld who only analyse inside companies and not analyse the relations to customers or suppliers.

It is not possible to point to a blueprint for embedding of environmental initiatives. Organisation development literature highlights the importance of recognising the relationships between tasks, actors and their competencies, structures, and the tools and technologies available. If a change process is having one of these four elements as primary focal point, it is important to focus on the impact on the other three elements and to assess whether they are able to adjust to the change or they need to be adjusted in order to make the change process successful. It is for example not enough to develop a design handbook or guideline (tool/technology), if it is not clear who (actors) is going to use the guideline as part of which task (for example product development) and as part of which organisational structure (for example a product development team).