Comm 101 Chapter 16: Integrating Sustainability into Operations PDF

Chapter 16 : integrating sustainability into operations As societal expectations change, and consumers become more aware of the cost on the environment of doing business,a growing number of organizations are turning their focus to establishing more sustainable operations “Sustainable development is...

Chapter 16 : integrating sustainability into operations As societal expectations change, and consumers become more aware of the cost on the environment of doing business,a growing number of organizations are turning their focus to establishing more sustainable operations “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs” A sustainable business conducts its operations without negatively impacting the environment, community or society as a whole , goes beyond environmentalism Sustainable businesses can focus on: - Concerns for social equity and economic development - Product design improvements - Reduced energy consumptions - Participation in environmental clean up + restoration efforts Some strategies may increase business costs in the short term, they can also provide many long-term benefits for businesses and the communities in which they operate Slide 4: unilever sustainable living plan website Maple leaf foods- sustainable food company website (environmental sustainability) 16.1 - 3 pillar of sustainability Consideration for social, environmental and economic impacts (triple bottom line) is critical for businesses looking to incorporate sustainability into their operations → this shifts away from thinking of a business in terms of just sales and profits → more holistic view of business operations The 3 dimensions of sustainability :interrelated, but can be defined separately 1. Social sustainability: Managing operations in a way that positively contributes to the social well-being of , and how a company contributes to the social well-being of its employees, customers, the community it operates in, and society as a whole - Considers: diversity, equity, community engagement, ethical procurement, building resilient communities, and philanthropy 2. Environmental sustainability: managing operation in a way that minimizes negative impacts on the natural environment → the impacts a company has on the natural environment - Increasing focus on reducing emissions, minimizing waste, using less energy, and, mitigating negative impacts on the environment - Adjusting to have a more positive impact on the planet, leads to a positive impact on the companies finances 3. Economic sustainability: managing operations in a way that promotes long-term growth and profitability of the company through responsible and efficient use of resources while minimizing negative impacts on the environment and society - Conducting business responsibly and increasing profits , without causing undue harm to the environment and society - Businesses can evaluate economic sustainability of their operations by reviewing their financial performance, business competitiveness and cost efficiency 16.2- Since the industrial revolution, society has followed a linear model of production and consumption: linear economy: traditional economy, “take,make,waste” model of production , where raw materials are extracted and transformed into products that are sold → are used until eventually → discarded as waste (growing concern ) An effective way a business can reduce its impact on the environment is to reduce waste by identifying and eliminating inefficiencies in production and operations Businesses are making a positive contribution to the transition to a circular economy: economic system aimed at eliminating waste and pollution, keeping products,resources and materials in use for longer (extending their life), and regenerating natural systems - 3 principles of circular economy: designing out waste and pollution, keeping products and materials in use for longer, regenerating natural systems - This could mean : designing a product for a long life, designing for use in its afterlife (via disassembly and recycling) or designing for repair and upgrade Slide 5: Circular model : nike and How can businesses benefit from the circular economy model? Examples : Reduced costs : fewer materials, lower input costs, reduced spending on energy and waste management Improved resilience: by reducing the use of raw materials and using more recycled, reusable or easily transformed inputs, companies become less sensitive to volatility in raw materials pricing - This also protects and safeguards them against unexpected material supply shortages Strengthened customer relationships: products are often rented or leased by customers during different periods of time, if the type of product allows for it (in circular economy model) - This provides an opportunity to increase interaction with their customers and better understand consumer behaviour Positive brand: a business can set itself apart from competitors and establish a positive brand by incorporating principles of a circular economy into its operation → demonstrating a commitment to sustainability The global food and climate crisis can be helped by reducing loss and waste - united nations youtube video Reduced costs → less inputs , Improved resilience → not affected if run out of materials in the world 16.3- A critical part in any design plan for a good or service , is determining how to make the product sustainable In the past, the life cycle of a product would be described as cradle-to-grave : a design and production approach that considers impacts from production of the product, up until the products disposal only Due to increased focus on sustainability , its shifted to thinking about product design in terms of cradle-to-cradle: a design and production approach that emphasizes recycling , upcycling, renewing and reusing productions with a goal of 0 waste - Linked to the concept of a circular economy Characterized by 3 principles: 1. Everything is a resource for something else 2. The “waste” of one system becomes food for another 3. Everything can be designed to be disassembled and absorbed back into nature or reused as high-quality materials for development of new products The goal of cradle-to-cradle is to mimic the regenerative cycle of nature, where waste is reused , cyclical process - Primary objective is to eliminate waste altogether, instead of just reducing it Slide 9: cradle - to - cradle in practice: For businesses, incorporating cradle-to-cradle design principles into product design demonstrates their long-term commitment to sustainability, Companies around the world are beginning to employ cradle-to-cradle methodology to improve their products using the following principles as a guide: - Material health : inputs must be safe (few to no negative impacts on the environment) - Material reutilization: inputs should be readily recoverable and recyclable - Renewable energy : energy used in production and operations should come from renewable sources - Water stewardship → emphasize water as a precious resource : water must be regarded as a precious resource - Social responsibility : businesses should respect diversity and follow fair labor practices In a cradle-to-cradle model, products must be designed to ensure that all materials can be classified into 1 of 2 cycles (closed-loop systems), all outputs are safe and beneficial 1. Biological cycle : all materials (“nutrients”) can be absorbed back into nature, such as food , natural fibers or biodegradable food containers - These nutrients flow through the biological cycle, where they will be reintroduced after use instead of being turned into waste 2. Technical cycle: all non-toxic and human made materials that have no negative effects on the natural environment (metals, oil based plastics, chemicals) can be reused, repaired, or transformed without losing their quality - Often referred to as upcycling: the transformation of waste into materials or products of higher quality Space hippies: these Nike sneakers are trash – youtube video Nike: technical cycle Many businesses are learning that nature is an untapped resource that can be used as inspiration for the next sustainable and successful business or design solution, a concept referred to as biomimicry: learning from and then emulating natures forms, processes, and ecosystems to create more sustainable designs and solve business challenges - Biomimicry is transforming the way businesses design, produce, transport and deliver goods and services Janine Benyus on biomimicry - innovation inspired by nature - youtube video Developing a better understanding of a products life cycle impacts is necessary to transition to a more sustainable design - A business can leverage a variety of useful tools to gain a thorough perspective on its goods and services, including impacts from the purchase of raw materials, design and production, transportation, manufacturing, consumption and the end of life and disposal A popular tool is the life cycle assessment (LCA): used to assess the potential environmental impacts of a product, process, or service over the product's entire life cycle - LCA measures the environmental impact of a product from cradle-to-grave or cradle-to-cradle depending on the business - Every part of the products life cycle can have several impacts on the environment Widely recognized and standardized methods of conducting LCA’s are set out by the environmental management standards of the international organization for standardization (ISO) - ISO 14044, LCA is conducted according to 4 stages 4 stages of LCA: 1. Define the goal and scope: what exactly do we want to analyze? How in depth do we want our analysis to be? 2. Inventory analysis: data collection phase, looking at environmental inputs and outputs , ex- raw materials or resources , energy, water, emissions 3. Impact assessment: impacts are classified into categories: human toxicity, global warming potential, and measured 4. Interpretation of the data: draw conclusions : emissions associated with the product, how it compares to other products the company makes, the biggest opportunities to reduce impacts throughout the life cycle, and ways to increase efficiencies during the manufacturing process Life cycle assessment (LCA) to evaluate environmental impacts of bioeconomy - cartoon - youtube video Life cycle assessment : gore-tex footwear - youtube video Business benefits of LCA: allows businesses to assess baseline environmental performance of products and identify and prioritize the most effective performance improvements to reduce cumulative impacts over the course of the entire products life cycle , the results of an LCA can be leveraged across all business functions (purchasing or procurement division, product design team or marketing team for example) 2 pitfalls to completing and LCA: complexity and resources(time, money), and the limited ability for the assessment to evaluate the social impacts of a product 16.5- sustainable supply chain management Activities that occur throughout the supply chain (energy intensive production activities and transportation of goods) lead to significant environmental and social impacts - Consumers are becoming more conscious of the effects of supply chain on the environment, so businesses also need to consider sustainability in their supply chain management strategies Supply chain sustainability : the companies efforts to consider the environmental, social and economic impacts of a products journey through the supply chain - Raw materials sourcing → production → storage → delivery (and every transportation link in between) - Sustainable supply chain management considers not only logistics (moving goods) and operational performance (speed, cost and reliability), but it also considers: environmental and social factors like: climate change, water security, human rights, fair labor practices etc. Sustainable supply chain management can include: reduction of energy use and renewable alternatives for water and greenhouse gas emissions, minimizing waste, recycling, reduction of packaging materials, etc. - There are many strategies, best practices and frameworks businesses can leverage to build more sustainable supply chains Example of a framework for integrating sustainability into supply chain, 4 key areas of focus 1. Procurement : starting point for most businesses is to determine ways to procure energy, water and materials more sustainably - Social procurement 2. Operations: attention to operational processes or segments along the supply chain that are inefficient and look for opportunities to reduce resource consumption 3. Waste management : businesses can determine ways to avoid excess waste by designing products for upcycling and reuse (cradle-to-cradle) 4. Data and communication: to manage a sustainable supply chain effectively, key performance indicators (KPI’s) must be developed within each of the 3 areas ^ and the indicators should be measured, reported on, and communicated to customers, supply chain partners and other stakeholders Slide 15: Procurement of products Benefits of supply chain sustainability: benefits the triple bottom line , operations benefit from efficiency gains and cost reductions, positive branding, and improved investor relations, and compliance Challenges of incorporating sustainability into the supply chain: lack of visibility into the supply network (influencing each tier to go into sustainable practices) , cost (especially for smaller businesses) upfront costs can be a barrier → but efficiency improvements can often lead to cost savings in the long run, and lack of options 16.6- Product stewardship:an environmental management strategy that focuses on minimizing the human health, safety, environmental, and social impacts of a product and its packaging (raw materials) throughout all stages of the products life cycle (a responsibility shared by all actors in the supply chain) – to prevent or minimize negative impacts and maximize value - Canada has over 50 programs related to product stewardship , most managed provincially under different policy frameworks Slide 16: tire stewardship of Saskatchewan Slide 17: waste recycling | Saskatchewan waste management | Government of saskatchewan – website Extended producer responsibility (EPR) : an environmental policy approach used by governments that places physical and/or financial responsibility for the life cycle of the product , including the post-consumer stage, on the producer - This incentivizes producers to shift toward more sustainable design practices in consideration of the environment - EPR programs are commonly made mandatory through legislation, but can also be adopted voluntary Both product stewardship and EPR programs are used to manage products at their end of life Differences between the 2: EPR status in Canada: 16.7- The concept of green marketing emerged as a result of the broader movement toward environmentally and socially conscious business practices Green marketing: the practice of developing and advertising goods and services based on their environmental sustainability - Can involve public communication (press releases) and product messaging on a variety of sustainability topics like: climate change and energy, sourcing, production, and, water B corp certification: Slide 18: sourcing : Nestle , home > sustainable sourcing– website Pitfalls of green marketing: Greenwashing: the act of providing inaccurate information or exaggerated claims about a product or service to mislead consumers into believing their goods and services are sustainable , when they may be not seeing the full picture Common examples: 1. Hidden trade-off: 1 thing is better, but with another being worse 2. Lack of proof: environmental claims with no or limited data available to substantiate the claim 3. Vagueness: using terms or labels that are broad and/or not well-understood ex- “all natural”