7 The occasions and driving forces behind the environmental initiatives in product chains

Environmental management in product chains

7.1 Relations between occasion and environmental initiative
7.2 Relations between occasions and industrial branches
7.3 Relations between occasions and size
7.4 How can environmental management in product chains be supported by influencing the occasions and the driving forces?

This chapter analyses the occasions and the driving forces, which in the case studies have been referred to as important, when the changes in the product chains were initiated.

With occasions, we refer to specific events or possibilities, which initiate an attempt to change something, like the possibility to become involved in a project, because a consultancy company is looking for case companies to a public supported project. With driving forces we refer to the aims or expectations behind the initiative, like cost saving, new market opportunities. In some cases, the occasion and the driving force may be the same.

In chapter 3 the following triggering factors were mentioned:

Governmental regulation
Governmental funding
Public debate
Customer demands
Expectations to market opportunities

7.1 Relations between occasion and environmental initiative

Table 7.1 shows the relations between the environmental initiatives and the occasions and driving forces described in the case studies. In some case studies, more than one occasion and driving force were found. The table gives a qualitative assessment of the relations, and not a quantitative assessment, due to the limited number of cases. The table shows that for all types of environmental initiatives more than one occasion and driving force is seen. In several cases, the occasion seems to be an internal initiative. However, such statements could in most cases probably be translated into an internal interpretation of societal discourses. This implies that some, more pro-active companies see a certain discourse as an occasion or even an opportunity, while other, more reactive, companies only take such an initiative if it is a customer demand.

A more detailed assessment of the occasions and driving forces show the following:

Only the initiatives information for customers and green product development have not been reported as internal initiatives
Customer demand is seen as occasion within all initiatives except recovery of products and materials
Economic support and consultant support is mostly initiating initiatives within life-cycle assessment, where project activities have been initiated by the possibility for governmental funding of consultant projects under the condition that companies are involved
Demands are almost exclusively mediated upstream in product chains, which mean as customer demands to suppliers. Only in one case, a multinational chemical manufacturer, is a company setting demands to its customers (about the use of responsible distribution companies) , because the chemical company want to avoid that problems during the distribution become a critique of the manufacturing company and its products
The product chain as structure is sometimes used to mediate governmental regulation of a company in one country into demands to its suppliers in another country.

7.2 Relations between occasions and industrial branches

With respect to the relations between the occasions and the driving forces and the industrial branches involved it could be expected that

Governmental regulation would be one of the occasions within the chemical industry
Governmental funding would be the occasions in cases where a governmental programme was targeting an industrial branch
Green procurement policies would be the occasion for companies having public customers
Eco-labelling would be the occasion in consumer-oriented companies (and not in companies oriented towards professional customers)

Cost savings could be expected to be important in companies with big resource consumption.

Table 7.2 shows the relations between the occasions and the driving forces and the industrial branches. Two chemical companies, two companies in the iron- and metal processing industry and one company in the plastic industry refer to governmental regulation as the occasion. Furthermore, customer demands are in some cases governmental regulation of the customer and their products, which is mediated to the suppliers (which are the company described in the case)..

There has not been support for specific branches involved in the case studies, although this kind of funding is known from several of the cleaner technology and cleaner products programmes in Denmark.

There is only one public company involved, the Danish Railway (DSB). For this company the public green procurement policy implied that the environmental focus around procurement was strengthened. It was a condition that the green procurement did not give increased costs. Public green procurement and expected market opportunities were the driving forces in four companies from four different branches supplying public customers: iron and metal processing, printing, cleaning and hygiene. However, it looks like the expectations were not met as actual changes in the public procurement.

Public debate is only mentioned in one case – the phasing out of PVC among the suppliers to a company, which is manufacturing playing ground equipment. However, as earlier mentioned, it could very well be so that public debates have played a role in more cases, but the public debate is not enough to initiate product changes. Governmental regulation may be a driving force, which also need to be in place besides public debate.

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Table 7.1: Relations between the environmental initiatives and occasions and driving forces

Table 7.2: Relations between the occasions behind and driving forces behind the environmental initiatives and the industrial branches involved

Table 7.3: Relations between the occasions behind and driving forces behind the environmental initiatives and the size of the core company

7.3 Relations between occasions and size

With respect to the role of the size of the initiating company, it could be expected that bigger companies with own research and development and own environmental competence more than smaller companies would be initiating changes themselves. Table 7.3 shows, however, that it is not only bigger companies but also small and medium sized companies, who indicate that initiatives were taken internally.

Customer demands have been one of the most important occasions and driving forces in bigger companies as well as in small and medium sized companies. It could be expected that this mainly would be the case in small and medium sized companies. It could also be expected that companies, who depends a lot on one or a few major customers had to meet or enter into dialogue about the demands from the customers. A few cases show this kind of relationships, but without customer demands are mentioned as an occasion or driving force behind the initiatives.

7.4 How can environmental management in product chains be supported by influencing the occasions and the driving forces?

Although the occasion in a case study often is referred as an internal initiative, another occasion or rather driving force is often also mentioned, like expectations about future governmental regulation, customer demand, the possibility to achieve an eco-label on products etc.

If the driving force is an expected productivity gain, it would be a good idea to support the development of competence that makes the company able to assess alternatives. This could be cost savings through reducing resource consumption or substituting to chemicals or processes with less environmental impact, where reduced wastewater treatment costs or waste management costs could give the company reduced costs.

Customer demands from Danish, but more often foreign, customers are in several cases referred as an important occasion and driving force. This implies that pressure from a part of the product chain, which is closer to the final users or the consumers in many cases play a role in the initiation of environmental initiatives in a Danish company in another part of the product chain (more upstream). Big as well as small and medium sized companies refer this kind of driving force. At the same time, other cases refer to lack of customer demands or lack of interest in environmentally better products among the customers among Danish and foreign customers.

The increased focus on public green procurement has been an important occasion and driving force for environmental initiatives in several companies. However, the companies did not see any interests among the public institutions for the environmentally improved products. One reason may be that the more environmentally friendly products were more expensive, which prevented the public institutions from buying them. There is need for more in-depth research into price mechanisms for this kind of products, including why they often are more expensive. Can this increased price be justified because of more expensive materials? Or is it rather an expectation from the manufacturing company that more environmentally focused users and consumers probably are willing to pay more for a product? Or is it because the more environmentally friendly product only is produced in small amounts and the company let this product “carry” all the extra costs from smaller batches?

In two cases, the suppliers set demands to the customers further down the product chain. In one case, a big multinational chemical manufacturer demands that the customer uses responsible distribution companies because accidents or other types of environmental impacts among the customers or the consumers also could imply critique of the manufacturing company. In another case, a supplier tries to sell its development of a more environmental friendly solution to customers. In the case with the chemical company, the occasion becomes supplier demands, which are based on a fear for the public debate about chemical products.