Global Marketing and Environmental Excellence - PDF by aae14500


									    WSEAS TRANSACTIONS on                                                                    Davorin Kralj, Mirko Markič

                      Global Marketing and Environmental Excellence

                                  DAVORIN KRALJ¹, MIRKO MARKIČ²

                 ART-K, BusinessConsulting, Na gricu 47, 2000 Maribor, SLOVENIA¹,
             Faculty of Management, University of Primorska, Cankarjeva ul. 5, 6104 Koper,

Abstract: Environmental issues have become an important element in the management of both private and
public organizations. The Global Compact’s environment principles are derived from the Rio Declaration
on Environment and Development. The process of market globalization has lead to many changes. The global
economic system needs to show a more human and environment friendly face. Companies must ensure that their
traditional focus on corporate profits and shareholder value is accompanied by equal concern for the needs of
society and the environment. The article focuses on environmental excellence as a part of global marketing.
Integrated marketing management integrates the requirements of sustainable development and
environmental excellence. Sustainable development as a tool to continual improvement cycle and with
processes innovation the need to save money in the processes via reduced resources and utility costs.

Keywords: environmental excellence, globalization, marketing, management, sustainable development

1 Introduction                                                  ways. These centre around the four main economic
                                                                flows that characterize globalization:
The process of market globalization has lead to many            • Goods and services, e.g. exports plus imports as a
changes. Corporate responsibility now extends to                    proportion of national income or per capita of
encompass not only the needs of employees, but also                 population
the environment and society as a whole. As industry             • Labour/people, e.g. net migration rates; inward or
grows in strength and importance, it is also is being               outward migration flows, weighted by population
called upon to share the benefits of its growth with            • Capital, e.g. inward or outward direct investment
members of society. The global economic system                      as a proportion of national income or per head of
needs to show a more human face. In this respect,                   population
companies must ensure that their traditional focus on           • Technology, e.g. international research &
corporate profits and shareholder value is accompanied              development flows; proportion of populations (and
by equal concern for the needs of society and the                   rates of change thereof) using particular inventions
environment. The safeguarding and creation of jobs                  (especially 'factor-neutral' technological advances
and commitment to the environment and society are                   such as the telephone, motorcar, broadband) [2].
just as important as innovative, problem-solving
expertise and open dialogue [1]. Globalization can be           As globalization is not only an economic phenomenon,
described as a process by which the people of world             a multivariate approach to measuring globalization is
are unified into a single society. This process is a            the recent index calculated by the Swiss Think tank
combination of economic, technological, sociocultural           KOF. The index measures the three main dimensions
and political forces [2]. Looking specifically at               of globalization: economic, social, and political [2].
economic globalization, it can be measured in different         Globalization has various aspects which affect the
                                                                world in several different ways. One very important is

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ecological and because of this global marketing need                      regulations can constitute substantial barriers
environmental excellence.                                                 to entry in some markets, can provide a basis
Over the past three decades environmental issues have                     for predatory behaviour in some markets and
emerged as critical features of the business                              can be harmful to competition and welfare
environment. This is true across all areas of activity,                   through a variety of other channels [22].
but particularly in sectors such as chemicals, natural
resource      extraction,    energy    generation    and
transportation, which can have potentially significant            2 Benefits of Quality Management
impacts upon the natural environment [22]. The
natural environment places not just direct constraints
                                                                  Managing quality to achieve excellence means
upon the conduct of various activities, but also indirect
                                                                  managing an organisation, business or unit so that
constraints through regulatory response. In an effort to
                                                                  every job, every process, is carried out right, first time,
conserve natural resource stocks and environmental
                                                                  every time. To be successful this must be viewed as a
quality, regulatory authorities intervene in the market
                                                                  holistic approach that affects, and involves, everyone –
in a myriad of different manners. It is therefore natural
                                                                  employees, customers, suppliers, shareholders and
to expect that the way in which the environment is
                                                                  society. It must be driven from within the organisation,
regulated should have a substantial impact on the
                                                                  as it cannot be imposed from outside and is not a
pattern of business behaviours and practices in affected
                                                                  simply a cost-cutting or productivity improvement
sectors. Indeed, environmental regulation in the
                                                                  exercise [3]. The EFQM Excellence Model was
modern world is a major activity of government. In
                                                                  introduced at the beginning of 1992 as the framework
order to secure public environmental benefits, this
                                                                  for assessing organisations for the European Quality
regulation can sometimes place a significant cost
                                                                  Award. It is now the most widely used organisational
burden on business. Indeed, even if a given
                                                                  framework in Europe and it has become the basis for
environmental policy is welfare-improving overall, the
                                                                  the majority of national and regional Quality Awards.
effects on particular markets can be considerable.
                                                                  The EFQM Excellence Model is a practical tool that
Firms may be subject to several layers of
                                                                  can be used in a number of different ways:
environmental laws and regulations imposed by
different tiers of government . from municipal, to state
or provincial, to federal or national, through to the                 •   As a tool for Self-Assessment
imperatives of international environmental agreements.                •   As a way to Benchmark with other
Those strictures are incorporated in explicitly                           organisations
environment. rules and regulations, and are also bound                •   As a guide to identify areas for Improvement
up more generally in, for example, the laws of tort and               •   As the basis for a common Vocabulary and
nuisance, strictures on land use and the planning                         a way of thinking
process[22].                                                          •   As a Structure for the organisation's
The key points that will be made here are as follows:                     management system [4]

    •   Environmental protection and competitive                  The Model, which recognises there are many
        operation of markets are two high policy                  approaches to achieving sustainable excellence in all
        priorities, and objectives in the two policy              aspects of performance, is based on the premise that:
        spheres are complementary. Both are
        concerned (as with all public policy) with                Excellent results with respect to Performance,
        social welfare maximisation. Environmental                Customers, People and Society are achieved through
        regulation is about correcting the market                 Leadership driving Policy and Strategy, that is
        failure    associated   with    environmental             delivered through People, Partnerships and
        externalities competition policy about                    Resources, and Processes
        promoting consumer welfare and efficiency by
        fighting anti-competitive practices and                   The EFQM Model is presented in figure 1 form below.
        regulations.                                              The arrows emphasise the dynamic nature of the
    •   There are convincing bases in economic                    Model. They show innovation and learning helping to
        theory, and evidence from case study and                  improve enablers that in turn lead to improved results
        econometric analyses, to conclude that,                   [4]. The reputation of any organisation, be it public,
        depending upon their design, environmental
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private, small or large, is built on the quality and             do the right things right. Environmental performance
excellence of the products and/or services it provides.          is adopted in marketing function.
Quality management is a very powerful, competitive               The ISO Survey of ISO 9001:2000 and ISO 14001
weapon that any business wishing to be, or stay,                 Certificates, which each year provides a panorama of
successful cannot afford to ignore. Reputations for              certification to ISO's well-known quality and
poor quality last a very long time, ignore it at your            environmental management system standards, has just
peril! Never-ending improvement is the process by                been published revealing the worldwide situation at the
which greater customer satisfaction and, if appropriate,         end of 2003, which was a year of transition for ISO
greater market share are achieved. In a commercial               9000 and confirmed growth of ISO 14001.
organisation, these show up on the bottom line [3].              ISO 9001:2000
                                                                 Up to the end of December 2003, at least 500 125
                                                                 certificates to the ISO 9001:2000 quality management
                                                                 system standard had been issued in 149 countries and
                                                                 economies. The 2003 total represents an increase of
                                                                 332 915 (+ 200 %) over 2002, when the total was 167
                                                                 210 in 134 countries and economies.
                                                                 The 2003 total represents an increase of 455 737 (more
                                                                 than ten times higher) over 2001, the first year for
                                                                 which the survey recorded ISO 9001:2000
                                                                 certifications, when the total was 44 388 in 98
                                                                 countries and economies.
                                                                 ISO 14001
                                                                 Up to the end of December 2003, at least 66 070
                                                                 certificates to ISO 14001 had been issued in 113
                                                                 countries and economies. The 2003 total represents an
                                                                 increase of 16 621 (+ 34 %) over 2002, when the total
                                                                 was 49 449 in 117 countries and economies.
                                                                 Table 1 presents number of ISO 9001 and ISO 14001

             Figure 1: The EFQM Model
                                                                      ISO 9001:2000               ISO 14001:2004
Corporate reputation is an intangible asset that is
related to marketing and financial performance. The
social, economic, and global environment of the                     500 125 certificates         66 070 certificates
1990'shas resulted in environmental performance
becoming an       increasingly important component
of a company's reputation [5]. Environmental                         149 countries and            113 countries and
management argues that marketing strategies can                         economies                    economies
be implemented to change the context in which the
organization operates, both in terms of constraints on
the marketing function and limits on the organization                   Table1: ISO 9001 and 14001 certificates
as a whole. The current movement toward innovative,
entrepreneurial management-a return to the roots of              3 Marketing Approaches Change
American enterprise-captures the essence of this                   Management
perspective. The absence or, at a minimum, the
understatement of this perspective within the                    The marketing environment surrounds and impacts
marketing literature limits the contribution of
                                                                 upon the organization. There are three key
marketing to the management of organization-                     perspectives on the marketing environment, namely
environment relationships [6]. Essentially, quality              the 'macro-environment,' the 'micro-environment' and
means doing things right the first and every time. It is         the 'internal environment'.
not only important to do things right, however, but to
                                                                      • The micro-environment

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       This environment influences the organization               environmental and sustainability management.
       directly. It includes suppliers that deal directly         Environmental and social management has now
       or indirectly, consumers and customers, and                become an integral part of business operations. With
       other local stakeholders. Micro tends to                   organizations adopting a more systematic approach to
       suggest small, but this can be misleading. In              managing, measuring and reporting on social and
       this context, micro describes the relationship             environmental performance, the trend towards greater
       between firms and the driving forces that                  accountability and voluntary disclosure is gathering
       control this relationship. It is a more local              pace [8]. Consequently, a shift to sustainable corporate
       relationship, and the firm may exercise a                  and consumer behavior can be seen as a high-
       degree of influence.                                       involvement choice, one that will require sustained
   •   The macro-environment                                      marketing effort over the long run. Although different
       This includes all factors that can influence and           in goal and level of complexity, social marketing
       organization, but that are out of their direct             shares the same fundamentals as the marketing of
       control. A company does not generally                      consumer packaged goods:
       influence any laws (although it is accepted that
       they could lobby or be part of a trade                         •   identify clear marketing objectives, possibly
       organization). It is continuously changing, and                    using a pilot project as a test case;
       the company needs to be flexible to adapt.                     •   identify key target audiences and gather
       There may be aggressive competition and                            pertinent information (e.g., current attitudes,
       rivalry in a market. Globalization means that                      expectations, behavior);
       there is always the threat of substitute products              •   develop marketing strategies to communicate
       and new entrants. The wider environment is                         and influence target audience;
       also ever changing, and the marketer needs to                  •   identify/create impactful communication
       compensate for changes in culture, politics,                       vehicles;
       economics and technology.                                      •   execute plan;
   •   The internal environment                                       •   measure marketing impact (e.g., How many
       All factors that are internal to the organization                  people were effectively reached? How have
       are known as the 'internal environment'. They                      attitudes, expectations or behavior changed?)
       are generally audited by applying the 'Five Ms'                    [9].
       which are Men, Money, Machinery, Materials
       and Markets. The internal environment is as                Environmental performance is adopted in marketing
       important for managing change as the external.             function. Many organizations have undertaken
       As marketers we call the process of managing               environmental “reviews” or “audits” to assess their
       internal change 'internal marketing' [7].                  environmental performance [11]. Two well known
                                                                  studies in the business case for corporate sustainability
                                                                  have been undertaken by UNEP, SustainAbility Ltd
                                                                  and the International Finance Corporation (IFC). The
                                                                  first study (Buried Treasure: Uncovering the Business
                                                                  Case for Sustainability) looked primarily at evidence
                                                                  resulting from corporations in developed countries,
                                                                  while the second study (Developing Value: The
                                                                  Business Case for Sustainability in Emerging Markets)
                                                                  focused specifically on emerging economies. The
                                                                  study - Buried Treasure: Uncovering the Business
                                                                  Case for Sustainability - developed a Sustainable
                                                                  Business Value Model which links ten dimensions of
                                                                  sustainable development performance with ten more
                                                                  traditional measures of business success. The
        Figure 2 : Marketing Environment [7]                      Developing Value study looked at more than 240
Essentially we use marketing approaches to aid                    examples in over 60 countries, and identified the
                                                                  following business opportunities associated with
communication and change management. Business
                                                                  pursuing more sustainable approaches to business:
management needs marketing approaches with
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•     saving costs through improved efficiencies;                •   Research and development related to more
                                                                     environmentally friendly products can have
•     increased   revenues by improving the                          significant long-term benefits[15].
      environment and benefiting the local economy;
                                                                 Issues for the company to deal with under this
•     reducing risks through stakeholder engagement;             approach include providing better information to the
                                                                 consumer, communicating potential risk for the
•     building brand value and reputation;
                                                                 consumer, the public or the environment. It also
•     developing human and intellectual capital; and             includes obtaining prior approval before certain
                                                                 products, deemed to be potentially hazardous, may be
•     improving access to capital through better                 placed on the market. Steps that the company could
      governance [15].                                           take in the application of this approach include the

                                                                 •   Develop a code of conduct or practice for its
3 Environmental Management System                                    operations and products that confirms commitment
                                                                     to care for health and the environment.
The Global Compact’s environment principles are                  •   Develop a company guideline on the consistent
derived from the Rio Declaration on Environment and                  application of the approach throughout the
Development. The three principles are:                               company.

•   Principle Seven: business should support a                   •   Create a managerial committee or steering group
    precautionary  approach   to   environmental                     that oversees the company application of
    challenges;                                                      precaution, in particular risk management in
                                                                     sensitive issue areas.
•   Principle Eight: undertake initiatives to promote
    greater environmental responsibility; and;                   •   Establish    two-way      communication     with
                                                                     stakeholders, in a pro-active, early stage and
•   Principle Nine: encourage the development and                    transparent manner, to ensure effective
    diffusion of environmentally friendly technologies.              communication of information about uncertainties
                                                                     and potential risks and to deal with related
The key element of a precautionary approach, from a                  enquiries and complaints. Use mechanisms such as
business perspective, is the idea of prevention rather               multistakeholder meetings, workshop discussions,
than cure. In other words, it is more cost-effective to              focus groups, public polls combined with use of
take early action to ensure that irreversible                        website and printed media.
environmental damage does not occur. Companies
should consider the following:                                   •   Support scientific research, including independent
                                                                     and public research, on the issue involved,
•   While it is true that preventing environmental                   working with national and international
    damage entails both opportunity - and                            institutions concerned.
    implementation - costs, remediation environmental
    harm after it has occurred can cost much more, e.g.          •   Join industry-wide collaborative efforts to share
    for treatment costs, or in terms of company image.               knowledge and deal with issues, in particular
                                                                     production processes and products around which
•   Investing in production methods that are not                     high level of uncertainty, potential harm and
    sustainable, i.e. that deplete resources and degrade             sensitivity exist[15].
    the environment, has a lower, long-term return
    than investing in sustainable operations. In turn,            The world is today facing unique environmental
    improving environmental performance means less               challenges. Among these include; record loss of
    financial risk, an important consideration for               biodiversity and long-term damage to ecosystems;
    insurers.                                                    pollution of the atmosphere and the consequences of
                                                                 climate change; waste production & disposal; natural
                                                                 resource depletion; impacts of chemicals use and toxic

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substance disposal; damaged aquatic ecosystems and;
land degradation [15].                                            4 Environmental responsibility
Environmental management has evolved over thepast
four decades. At first, businesses responded tonew                The idea that business has a responsibility other than
regulations as they were enacted. These regulations               producing goods and services is not new. In 1919,
generally addressed pollution by eparateenvironmental             Henry L.Gantt stated his belief that the community
media, such as water or air. This type of regulation,             would attempt to take over business if the business
where government dictated the actions to be taken, was            system neglected its social responsibilities. Looking
often perceived by business as being overly restrictive,          back, the attitudes of managers toward social
inefficient, and costly. In response, many businesses             responsibility seem to have gone through three
began to seek more proactive ways of effectively                  historical phases:
managing their environmental impacts. One of the
most widely used voluntary environmental initiatives                    Phase 1; which dominated until the 1930s,
is the ISO 14001environmental management standard.                      emphasized the belief that that business manager
ISO 14001 is an international environmental                             had but one objective . to maximize profits,
management standard that offers a systematic                            Phase 2; from the 1930s to the early 60s,
approach to compliance and continual improvement                        stressed that managers were responsible not only
while being flexible and widely applicable to a variety                 for maximizing profits but also for maintaining
of organizations, such as manufacturers, service                        an equitable balance among the competing
providers, and government agencies [20].                                claims of customers, employees, suppliers,
ISO 14001 was developed by the International                            creditors and community,
Organization for Standardization to provide a template                  Phase 3; still dominant today, contends that
for environmental management systems. In order for                      managers and organizations should involve
facilities to obtain ISO certification they must:                       themselves in the solution of society′s major
•   Develop a policy statement on the organization’s
                                                                  An EMS is the organizational structure and associated
    commitment to the environment.
                                                                  responsibilities and      procedures to integrate
•   Identify the environmental impacts of products,               environmental considerations and objectives into the
    activities and services.                                      ongoing management decision-making processes and
•   Make a commitment to compliance with                          operations of an organization. According to an EPA
     applicable laws and regulations.                             summary, an EMS is a continual cycle of planning,
•   Set environmental goals for the organization, and             implementing, reviewing and improving the processes
     developing the means to achieve them                         and actions that an organization undertakes to meet its
•   Establish roles and environmental responsibilities            business and environmental goals. Most EMSs are
     within the organization.                                     built on the "Plan, Do, Check, Act" model. This model
•   Maintain documents about the EMS and related                  leads to continual improvement based upon:
•   Monitor key activities and track EMS performance              •   Planning, including identifying environmental
    to correct problems and prevent reoccurrences.                    aspects and establishing goals [plan];
•   Audit the EMS to verify that it is effective and              •   Implementing, including training and operational
    achieving objectives and targets to ensure that it is             controls [do];
     still suitable and appropriate.                              •   Checking, including monitoring and corrective
•   Make a commitment to continual improvement of                     action [check]; and
     the EMS.                                                     •   Reviewing, including progress reviews and acting
                                                                      to make needed changes to the EMS [act].
Despite these requirements, ISO 14001 does not
mandate a set level of environmental performance nor              Figure 3 presents leadership in EMS.
does the standard require the use of a particular
technology [20].

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       Results of self-assessment

                                              Continual Improvement Cycle

                      PLAN                      DO                           CHECK                        ACT

             Strategic planning         Values, policies and               Assessment                Improvement
           • Business planning        •Management by
           • SWOT                     objectives
                                       Internal and external
                Definition of         • Top management                                                        OUTPUT
             responsibilities and     core
                                          Acquisition and                            Achievable benefits
                                                                                      Achievable benefits
                                            resource                  • improved budgetary performance
                                           management                   • improved budgetary performance
                                                                      • increased competitiveness
                                                                        • increased competitiveness
                                                                      •improved customer retention and loyalty
                                                                        •improved customer retention and loyalty
                                                                      • improved intellectual capital
                                                                        • improved intellectual capital
                                                                         heightened employee accountntability
                                                                      • • heightened employee accountntability
                                                                      • improved supply chain performance
                                                                        • improved supply chain performance
                                                                      • optimized, effective and efficient processes
                                                                        • optimized, effective and efficient processes

                               Figure 3: Leadership in Environmental Management [16]

Organizations that develop EMS programs may be
eligible for certification under ISO 14001. ISO stands                   Figure 4 :Levels of Corporate Environmental
for the International Organization for Standardization,                               Management [14]
located in Geneva, Switzerland. ISO promotes the
development and          implementation of voluntary
                                                                     Most of the environmental challenges we face could be
                                                                     resolved if each individual and organisation slightly
international standards. ISO 14000 refers to a series of
                                                                     changed their habits and practices. The key to
voluntary standards in the environmental field under
                                                                     achieving this is education – providing the knowledge
development by ISO, including the ISO 14001 EMS
                                                                     and desire for change to happen. A truly sustainable
Standard [13].                                                       society will only be created when caring for the
                                                                     environment becomes second nature to us all
                                                                     Ultimately, most of the environmental challenges we
                                                                     face could be resolved if each individual and
                                                                     organisation slightly changed their habits and
                                                                     practices. The key to achieving this is education –
                                                                     providing the knowledge and desire for change to
                                                                     happen. We as individuals, and indeed society as a
                                                                     whole, change our habits all the time. Ten years ago
                                                                     very few people recycled their waste yet today the
                                                                     majority have learnt the habit. For many it is no longer
                                                                     a conscious effort, recycling has simply become the
                                                                     way things are done. Small changes such as this
                                                                     accumulate to change the paradigm of our society. A
                                                                     sustainable society will only be reached when caring
                                                                     for the environment becomes second nature to us
                                                                     all.[17]. Environmental responsibility needs ethics.
                                                                     Ethics are principles of conduct used to govern the
                                                                     decision making and behaviour of an individual or
                                                                     group of individuals. Figure 5 presents customer focus.
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Because management is concerned with making                       environmental management system. Organizations of
decisions within an organization, the ethics of the               all kinds are increasingly concerned with achieving
individual or group of individuals making these                   and demonstrating sound environmental performance
decisions have significant implications for the                   by controlling the impacts of their activities, products
organization′s stakeholders, its employees, customers,            and services on the environment, consistent with their
shareholders, suppliers, government, and the public at            environmental policy and objectives.
large [18]. Special are ethics principles important in
                                                     CUSTOMER FOCUS


       Results of self-assessment

                                            Continual Improvement Cycle

                      PLAN                   DO                               CHECK                         ACT

              Market appraisal        Product realization                   Assessment                 Improvement

           • Authority matrix        •Mentoring
           • Competence              •On-the-job training             •   Balanced scorecard
             matrix                  •Team building                   •   Benchmarking
           • Job design                                               •   Dashboard
           • Management by                                            •   Product audit
             objectives (MBO)                                         •   Trend analysis
           • Open bussines           •Professional                                                              OUTPUT
            culture                   development
           • Organizational
            development                 Communication
           • Resposibility           • Bulletin boards
            matrix                   • Focus groups
           • Succession              • Incentive and                                     Achievable benefits
             planning                  recognition                                        Achievable benefits
           • Trend building          • Internet and                        ••reduced costs
                                                                              reduced costs
                                       intranet                               improved customer retention and loyality
                                                                           • • improved customer retention and loyality
                                     • MBO, OBM                               improved intellectual capital
                                                                           • • improved intellectual capital
                                                                              optimized, effective and efficient processes
                                                                           • • optimized, effective and efficient processes

                                          Figure 5: Customer focus [16]

They do so in the context of increasingly stringent                         • the environmental risk
legislation, the development of economic policies and             •       a the social, communal and market judgement of
other measures that foster environmental protection,                      the company will improve
and increased concern expressed by interested parties             •       the inland and export markets will be reachable,
about environmental matters and sustainable                               they can be kept and can be continuously
development. [19]. Organizational depend on their                         broadened [21].
customers and therefore should understand current and
future customer needs, should meet customer
requirements and strive to exceed customer                        5 Total Quality Environmental
expectations [16]. The following beneficial effects can
be reached with the introduction of the ISO 14000                   Management (TQEM)
• The customers and the authorities can judge the                 The Global Environmerntal Management Initiative
    certified companies in a more positive way                    (GEMI) was formed in April 1990 by a coalition of 21
• In the future more and more tenders will require                companies including IBM, AT&T and Kodak. The
    the presence of the ISO 14001 certification.                  goal of the organization is to develop strategies and
• With the introduction of the ISO 14001 system and               standards for corporate environmental performance.
    the activity of the consultant the following will             GEMI's member companies, which now number
    decrease:                                                     around 40, operate in a variety of industry sectors,
       • material and energy utilization                          from the chemical industry to communications.
                                                                  Through GEMI they share best practice with one
       • the emission of the contamination and the
                                                                  another on environment, health and safety issues.
         arisen waste
                                                                  GEMI co-operates with international organizations
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such as the United Nations Environment Programme                      reports truly are early efforts but even companies
(UNEP) and the International Chamber of Commerce.                     with a lot of experience sometimes claim to be
It is also recognized as the creator of Total Quality                 beginners.
Environmental Management (TQEM), a method of                      •   Anecdotal (little data) - these reports are full of
applying total quality management approaches to                       short stories on different company projects or
corporate environmental strategies. TQEM supports                     programs but include few numbers.
continuous improvement of corporate environmental                 •   EMS/ISO 14001 - these reports focus on
performance.      Companies     that  have    already                 illustrating effective management and production
implemented TQM programs will find it relatively                      systems and often include indicators and targets
easy to satisfy the requirements of TQEM. According                   for improved performance.
to GEMI's 'TQEM Primer', there are four basic                     •   CERES/GRI guidelines, triple bottom line - the
elements of TQEM:                                                     current standard for presenting environmental,
                                                                      social and economic information. Generally, these
•   Customer identification: in TQEM, environmental                   reports provide side-by-side information (e.g.
    quality is determined by customer preferences.                    separate sections on environment and social
    Buyers, the local community, environmental                        responsibility) rather than integrated overviews.
    groups and the general public are considered                  •   Integrated reports - progress on environment,
    external customers, while a company's employees                   health, safety and/or sustainability is presented as
    represent the internal customer group.                            an important part of the company's annual report.
•   Continuous       improvement:      a   company's                  This is the newest trend in corporate sustainability
    management and employees should work                              reporting (Procter and Gamble).
    systematically towards the improvement of                     •   Innovative reports - the challenge is to strike a
    environmental      performance.     Company-wide                  balance between the "me too" reporting of set
    employee involvement in TQEM is a key to                          frameworks and a report that is customized to the
    success.                                                          needs and objectives of a particular company.
•   Doing the job right first time: TQEM supports the                 (Shell) [24].
    elimination of environmental risks. Employees
    should seek to identify and eliminate potential               A report looks as if it's been written by the
    environmental problems.                                       communications department if it contains little more
•   A systems approach: it is important to design all             than broad policy statements and, in some cases,
    components of the TQEM system so that they                    references to global agreements and events. It will read
    function together and support each other in                   as an attempted "greenwash" even if the company has
    achieving desired goals [23].                                 real information to share about its sustainability
                                                                  accomplishments. Figure 6 presents Involvement of
Leaders in corporate sustainability reporting (e.g.               people.
Royal Dutch Shell, Bristol-Myers, Norsk Hydro) are
active in international reporting initiatives spearheaded         Factors that influence credibility include:
by organizations such as the World Business Council
for Sustainable Development (WBCSD) and the                       •   Stakeholder participation - showing how input
Coalition for Environmentally Responsible Economies                   from different stakeholders has improved
(CERES). The Global Reporting Initiative (GRI) has                    performance demonstrates a sincere commitment
worked with representatives of many sectors to                        to community participation.
develop guidelines for reporting on sustainability.               •   Honesty in reporting - reports that include results
General Motors and Norsk Hydro both tested the draft                  of environmental (and economic) audits and other
guidelines for their 1999 environmental reports.                      forms of outside verification can build confidence
The 20 reports reviewed here, however, employ a                       in a company with a less than stellar public image.
variety of reporting approaches. Most are a hybrid of:                However, the controversial figures must be
                                                                      verified. Getting external verification for a non-
•   Learning curve - many reports stress that they are                controversial figure like quantity of energy
    taking first steps in integrating environmental,                  consumed and then failing to verify contentious
    social and economic factors into company policies                 information like the level of dioxin emissions can
    and operations or that they are just learning how to              heighten suspicion of the data and the whole
    do environmental/sustainability reporting. Some                   report.
                                                                                              Issue 5, Volume 4, May 2008
    ISSN: 1790-5079                                         427
    WSEAS TRANSACTIONS on                                                                            Davorin Kralj, Mirko Markič

                                                 INVOLVEMENT OF PEOPLE


        Results of self-assessment

                                               Continual Improvement Cycle

                      PLAN                      DO                            CHECK                         ACT

               Human resource           Recruit, training and                Assessment                Improvement
                  planning                 development
            • Authority matrix         •Mentoring
            • Competence               •On-the-job training            • Balanced scorecard
              matrix                   •Team building                  • Benchmarking
            • Job design                                               • Dashboard
            • Management by                                            • Employee
              objectives (MBO)                                          satisfaction survey
            • Open bussines            •Professional                   • Performance                            OUTPUT
             culture                    development                     appraisall
            • Organizational                                           •Trend analysis
             development                  Communication
            • Resposibility            • Bulletin boards
             matrix                    • Focus groups
            • Succession               • Incentive and                                    Achievable benefits
              planning                   recognition                                       Achievable benefits
            • Trend building           • Internet and                      ••reduced costs
                                                                              reduced costs
                                         intranet                             improved customer retention and loyality
                                                                           • • improved customer retention and loyality
                                       • MBO, OBM                             improved intellectual capital
                                                                           • • improved intellectual capital
                                                                              optimized, effective and efficient processes
                                                                           • • optimized, effective and efficient processes

                                        Figure 6: Involvement of people [16]

•   Admitting limitations - for some activities, there                environment is a limited production factor[10]. The
    may be a tendency to tell only part of the story.                 interest of customers, users, developers and others in
    This can backfire since raising the issue will                    the environmental aspects and impacts of products is
    provoke questions about what has not been done.                   increasing [12]. Environmental Excellence in Global
    Verification is one example of this. Another is life              Marketing is no more question. Quality management
    cycle analysis. Some reports explain how the                      with environmental policy is a first step to
    company operates on the principle of life cycle                   environment protection.
    analysis. On close inspection, it emerges that while
    the production process is viewed from a life-cycle                References:
    perspective, the impacts of the actual end use of
    the product (cradle to grave material flows) are not              [1]
    figured in. Credibility is built by demonstrating a               [2]
    clear understanding of an approach, including                     [3]
    where the company falls short and why.                            [4]
    Companies should be careful to strike a balance                   [5] Miles, M. P. and Covin J.G.: Environmental
    between positive and negative results.                                 Marketing: A Source of Reputational,
•   Consistency - stressing the importance of                             Competitive, and Financial Advantage, Journal of
    sustainability to the company but neglecting to                       Business Ethics, Vol.23, Feb. 2000
    show how it relates to core values and business                    [6] Zeithaml, P.C, Zeithaml, V.A.: Environmental
    activities detracts from credibility[24].                              Management: Revising the Marketing Perspective,
                                                                           Journal of Marketing, Vol. 48, No. 2 (Spring,
6 Conclusion                                                               1984), pp. 46-53
Quality and development of Environmental                                 _marketing_environment.htm /07.01.2008
Management System is constantly improving. New                        [8]
environment issues dictate the redefining of economic                    Sustainability_Management_and_Reporting/
interests in the wake of the recognition, that the natural               07.01.2008
                                                                                                   Issue 5, Volume 4, May 2008
    ISSN: 1790-5079                                             428
    WSEAS TRANSACTIONS on                                         Davorin Kralj, Mirko Markič

[9] Whiteman, G. 1999. Sustainability for the planet: a
    marketing perspective. Conservation Ecology 3(1):
[10]Ogrin U, Kralj D.: Economic Efficiency
    and Environmental Management System, WSEAS
     ED 06, Issue 10, Vol 2, Oct 2006
[11] ISO 14001:2004(E) Environmental
     management system – Requirements guidance
     for use
[12] ISO 14062:2006
[16] ISO 10014:2006(E)
[18] Rue, W.Leslie, Byars, Lloyd, L.: Management,
      Skillls and application, Sixth Edition, IRWIN,
      Boston, 1992
[19] Kralj, D, Eisner, L., Goricanec, D: Environment
      Management and its Policy in the Future,
      WSEAS Trans. Bus. Econ, Dec.2005, vol1, iss.3,
[23] 08.04.08

                                                                Issue 5, Volume 4, May 2008
    ISSN: 1790-5079                                       429

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