GREEN PRODUCTION



Green production is a business strategy that focuses on profitability through environmentally friendly operating processes. Proponents of this management philosophy contend that green production is a sensible course to follow not only because of the benefits that it bestows on the natural environment, but also because of its fundamental strategic soundness. As Stuart Hart, director of the University of Michigan's Corporate Environmental Management Program (CEMP), indicated in Northwest Environmental Journal, "green business strategies based on the principle of environmental sustainability may constitute a key basis for competitive advantage in the coming decades." Other business observers concur with this evaluation. Writing in Business Horizons, J. Stephen Shi and Jane M. Kane asserted that many companies that take a proactive stance toward environmental improvements in production have a decided advantage over businesses that are indifferent to—or actively oppose—new standards: "First, they gain a 'greener' image in the public eye. Second, because adopting new standards takes time and money, they have more time to develop methods for reducing waste and can do so on their own schedule. Companies that wait until they are forced to change often find themselves in an expensive, last-minute scramble to meet the requirements. As a result, they end up throwing more money at the problem for a less effective solution than their more proactive counterparts."

DEFINING AND INSTITUTING GREEN PRODUCTION PROCESSES

Many people think that green production simply entails instituting pollution controls or recycling programs when manufacturing goods. The reality, however, is that green production processes seek to minimize the impact of the manufacturing process on the environment at every stage. As Hart observed in Northwest Environmental Journal, "pollution prevention … can only deliver half the loaf: Green production also means that firms transform their input (raw material use) and output (product disposition) processes." George Zinkhan and Les Carlson agreed, stating in the Journal of Advertising that green consumers "are worried about more than just the purchase and the consumption processes. They are also concerned about the production process, in terms of scarce resources consumed." Taking all these factors into consideration, Hart and P. Shrivastava defined green production as follows in a study titled "Greening Organizations": "Green production focuses upon three fundamental goals: 1) minimize emissions, effluents, and accidents; 2) minimize the use of virgin materials and non-renewable forms of energy; and 3) minimize the life-cycle cost (cradle to grave) of products or services."

"GREEN" USE OF RAW MATERIALS "Growing concerns over depletion of forests and other natural resources, and environmental degradation created by mining and fossil fuel production," remarked Hart, "suggest that corporations may need to rethink their raw material and procurement strategies." Significant sectors of the business community—especially large corporations engaged in the lumber and energy industries—continue to take issue with such sentiments, arguing that resources remain plentiful. But many other businesses, citing the findings of both the scientific and environmental communities (or the internal data of their marketing arms), have begun to make changes in the ways that they gather raw materials for their products. Reliance on recyclable or renewable materials, new energy and material conservation initiatives, and "replenishment" programs (such as forest replanting programs) have all been touted as effective tools in establishing processes that do not unduly harm the environment.

GREEN MANUFACTURING/PRODUCTION PROCESSES Information from industry studies and consumer research is being used to develop new products and to redesign existing products and services in order to reduce their impact on the environment. In its book Green Products by Design, the U.S. Office of Technology Assessment (OTA) advocated green design as a thoroughly viable goal "in which environmental attributes are treated as design objectives, rather than as constraints…. green design incorporates environ-mental objectives with minimum loss to product performance, useful life or functionality." In fact, supporters of green production assert that it makes financial sense for businesses of all sizes and shapes to undertake the process of green design. "Wasteful and polluting throughput processes lead to inefficient use of material and human resources as well as occupational and public health risks," wrote Hart in Northwest Environmental Journal. "Just as the 'zero-defects' goal in quality control demands preventative action and continuous improvement at every production step, a 'zero-waste' goal can focus efforts toward the virtual elimination of pollution. This preventative approach has proven far more efficient than efforts aimed at controlling discharges at the 'end of the pipe.' Corporations are realizing that pollution prevention can be a cost saving activity (e.g. by lowering compliance, waste treatment, disposal, and raw material costs)." Subsequently, some businesses have increasingly steered their product and packaging designs to use less materials or to be easily disassembled so that high-value components can be recycled or refurbished more readily.

Analysts generally agree that product packaging is one of the most visible and important elements of an environmentally sensitive production operation. Examples of green packaging include the use of recycled content in packaging materials, source reduction, and refill alternatives. Whatever form the packaging takes, it should clearly state whether green claims pertain to the product or to its package. "If the particular environmental quality that is lauded applies only to a portion or component of the product or packaging, this fact must also be clearly indicated," explained Shi and Kane. "For example, a manufacturer of aluminum foil displays a 'recyclable' claim on a box of aluminum foil with no qualifications. But if only the foil and not the box is recyclable, the claim is deceptive. The manufacturer must instead distinguish between the product and the packaging in claiming such recyclability. The exception to this rule is when only a minor, incidental component of the product or packaging is not recyclable."

THE "ENVIRONMENTALLY SUSTAINABLE" COMPANY As Shrivastava and Hart remarked in "Greening Organizations," companies that wish to embrace green production philosophies and processes after years of indifference usually have to redesign significant aspects of the business, including its mission and vision, competitive strategies, core technological systems, performance measurement and reward systems, and organizational processes and culture (of course, this task is more formidable for larger companies than it is for small and mid-sized firms). Of the above elements of a business, perhaps none is more important than "mission and vision," for all the other aspects of the organization are fundamentally shaped by those values. But while the process of establishing a green production company can be quite daunting, proponents argue that cost savings associated with pollution prevention efforts, coupled with marketplace benefits in the realms of reputation and consumer loyalty, can make the shift a beneficial one not only for the environment, but also for the company itself.

SMALL BUSINESS AND GREEN PRODUCTION

Although most media attention on green production has been directed at the efforts of big corporations, increasing numbers of small companies have successfully established ecologically sensitive business practices as well. Indeed, some small companies operate in regions or industries that are ideally suited to green production. Many companies that provide goods (equipment and clothing manufacturers) or services (retail stores, guiding services) to backpackers, anglers, mountain bikers, canoeists, kayakers, campers, and other aficionados of the outdoors are very careful to operate in environmentally friendly ways. Similarly, companies that operate in geographical regions that are very supportive of environmental protection may well publicize their use of green production methods and philosophies. The marketplace goodwill that can be realized in such situations should not be underestimated.

Small business consultants, meanwhile, counsel their clients to carefully research the obligations that a commitment to green production entails before making any decision. Smaller businesses sometimes have difficulty securing the necessary financing to switch physical operations to a green production mode. Moreover, jumps in other operating costs as a result of changes to green production methods sometimes result in higher prices for customers, and subsequent drops in sales. While larger companies can usually shrug off such ripple effects with ease, smaller businesses are often less able to do so. But consultants acknowledge that green production methods can boost business as well, increasing sales while decreasing production costs. Indeed, proponents argue that for many small businesses—and especially new ventures, which do not have previously established modes of operation—green production can be a rewarding business philosophy.

FURTHER READING:

Green Products by Design: Choices for a Cleaner Environment . Office of Technology Assessment, 1992.

Hart, Stuart L. "How Green Production Might Sustain the World." Northwest Environmental Journal. 1994.

Poltorzycki, Stephen. Creativing Environmental Business Value. Crisp, 1999.

Shi, J. Stephen, and Jane M. Kane. "Green Issues." Business Horizons. January-February 1996.

Shrivastava, P., and Stuart Hart. "Greening Organizations." Academy of Management Best Paper Proceedings. Vol. 52.1992.

Stern, Alissa J., and Tim Hicks. The Process of Business/ Environmental Collaborations: Partnering for Sustainability. Quorum Books, 2000.

Willig, John, ed. Auditing for Environmental Quality Leadership: Beyond Compliance to Environmental Excellence. Executive Enterprises, 1995.

Zinkhan, George, and Les Carlson. "Green Advertising and the Reluctant Consumer." Journal of Advertising. Summer 1995.



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