Corporate environmental benchmarking

Citation

Sarkis, J. (2003), "Corporate environmental benchmarking", Benchmarking: An International Journal, Vol. 10 No. 2. https://doi.org/10.1108/bij.2003.13110baa.001

Corporate environmental benchmarking

Joseph Sarkis

About the Guest EditorJoseph Sarkis is Professor of Operations and Environmental Management, Graduate School of Management, Clark University, Worcester, Massachusetts, USA.

Corporate environmental benchmarking

The consistent influx of pressure on corporations to improve environmental performance has been evident for the past few decades. The pressure sources are varied, ranging from competition and other corporations to government agencies and consumers. All in all, no longer are the goals of corporate environmental programs reactive, but require effective and proactive measures. Keeping penalties and fines to a minimum is no longer seen as the appropriate strategic focus for organizations when the issue is ecological concerns. Some environmental practitioners and researchers have become very much aware of the relationship between the environmental function and performance of organizations and that of quality. Similar to the initial organizational role of the quality function, the corporate environmental function has typically been within the domain of specialists and support staff. Yet, just like total quality management (TQM), where all members of the organizations are required to be responsible for quality, from the CEO down to the clerk or shop-floor worker, environmental issues have also started to become a pervasive employee responsibility. And like TQM, the core tenet for many organizations for environmental performance and practices has been on continuous improvement.

For continuous improvement to be successful a central element is the awareness of how well the organization is doing. That is, determining and monitoring the environmental performance of the organization. The use of performance measurement and benchmarking requires that organizations have hard, factual data, to help in goal setting and achieving those goals. Benchmarking is both internal and external. Organizations determine how well they have done with respect to past performance and within various areas of their own organization (internal benchmarking) and externally versus competing and non-competing organizations. The aphorism that “you cannot manage what you cannot measure” is just as true in corporate environmental management circles.

It was not much more than a decade ago that the process of benchmarking for environmental purposes was typically an exercise in futility. The sources of benchmarking data from both internal and external sources were virtually non-existent. Organizations did not keep the necessary detailed records and, if they did, they were not willing to share them for many reasons, including potential liabilities associated with environmental performance. With increased awareness of environmental problems by consumers and communities, a changing environmental stance by regulatory bodies from one of command-and-control to one of cooperation, and a change in policy and strategy of organizations from compliance to beyond-compliance and proactive environmental strategies, the requirements, process, and reasons of data and information gathering and use have changed.

In the USA, mandated reporting of hazardous and toxic wastes, in Europe, product stewardship and life cycle analysis, in Japan, competitive pressures and adoption of ISO 14000 standards, have all been pressures and practices that require the management of information and data that is beneficial to corporate environmental benchmarking. Corporations and non-governmental organizations have also been involved in the development of voluntary environmental reporting measures such as the global reporting initiative (GRI). Yet, even though the avenues and sources of information have increased, what has occurred is only the beginning of what will be riches of data for environmental benchmarking. The use and practice of corporate environmental benchmarking has had limited study. This topic, like most other corporate environmental management topics, is in its relative infancy in terms of theory and practice.

To help build and enhance the theory and practice of corporate environmental benchmarking, I thought a special issue on the topic may help motivate researchers and practitioners to share their ideas and provide some initial foundation for further study and exploration of this important topic. What we see are a number of practices and tools that are available. Making sense of these elements of corporate environmental benchmarking includes knowing what does and does not work with respect to effectively implementing benchmarking and performance measurement tools and practices. The variety of issues in terms of investigating the management of benchmarking for corporate environment is just as great as that for benchmarking in general, in fact we are much further behind in applying these tools to environmental arenas. The question of whether there are differences between regular and corporate environmental benchmarking is also open for discussion. Many differences may exist, but expertise is available in these areas. The melding of the two topical and managerial areas in the most effective manner is part of the integration and development issue for this field. Investigation of various influences of benchmarking practice on actual corporate performance is clearly a major gap that could be addressed. The costs and effort in terms of capital and time that goes into corporate environmental benchmarking must be considered, and how these costs become internalized, evaluated, justified may be of interest to many managers.

These are some of the myriad issues related to corporate environmental benchmarking. What we now have in this special issue is a compendium of innovative and interesting practices and tools from a variety of sources. These papers went through a peer review process where over 20 reviewers were involved in helping to make this special issue possible. A summary of these papers is now provided.

The first paper in our special issue, by Deanna Matthews, focuses on the issue of how to get environmental management systems to be more effective environmental benchmarking tools. The article provides a good overview of the continuous improvement cycle associated with the ISO 14000 environmental management standards and its relationship to benchmarking. The current limitations of these systems with respect to benchmarking capability are outlined and discussed, with some analysis on how the systems can be improved to aid in benchmarking.

The second paper, by Vesela Veleva, Maureen Hart, Tim Greiner and Cathy Crumbley, looks at what and how one industry is doing with respect to sustainability (an extension of environmental management) measures. Using an indicator for benchmarking developed by the Lowell Center for Sustainable Production, which they define as a hierarchy, they evaluate the environmental performance of six companies in the pharmaceutical industry. They utilize voluntary corporate environmental reports that follow the global reporting initiative outlines. They introduce their hierarchical model as a benchmarking tool by actually carrying out a benchmarking study for this industry. What they find is that many organizations in the pharmaceutical industry are still at lower levels of performance and capabilities with respect to their production and manufacturing operations functions.

The next two papers look at a couple of specific case studies in the electronics industry and what they are doing with respect to corporate environmental benchmarking. There are similarities and differences between these two papers. They are both in the electronics industry, benchmark around product families and design for the environment (ecodesign), and are process oriented within a larger benchmarking framework with supporting tools. The differences are that one paper (by Casper Boks and Ab Stevels) focuses on the joint research and development of tools by an industry/academic partnership (Delft University of Technology and Philips Consumer Electronics), while the other paper, by Shane Schvaneveldt, focuses on an internal organization developed tool at Sony. Boks and Stevels’ model for ecodesign has as its foundation five “focal areas” including energy, materials application, packaging and transport, potentially harmful substances, and durability/recyclability that all have environmental implications. Schvaneveldt’s framework focuses on a more general and categorized benchmarking gap analysis where product features (including those that overlap with the focal points of Boks and Stevels’ paper) are evaluated. These two case studies are of companies that are on different continents; the efforts are similar even in these two very different cultural, geographical, and regulatory environments. A reason for similar practices is that their markets are global and thus have similar global environmental pressures.

Following a theme that seems evident in this special issue, the final paper, by Scott Matthews and Lester Lave, provides an overview of another benchmarking tool set to help organizations evaluate their environmental performance. This tool focuses on the use of economic input/output life cycle analysis. An interesting characteristic of this tool is that it is available world-wide through the Internet at no charge to users. The roles of other tools and systems are also described, especially that of social accounting systems, their need and usefulness.

These papers help to describe some of the more innovative practices and tools, as well as managerial and research implications for corporate environmental benchmarking. Even though we present a variety of ideas and issues in this special issue, benchmarking, performance measurement, continuous improvement and other related management practices still need further investigation and development. This special issue adds to the growing literature in this area, an area that we believe will continue to grow in importance.

Finally, this special issue would not be possible without the contributions and efforts of the researchers in this special issue and of others who submitted. Also, the invaluable help of over 20 anonymous reviewers who provided the feedback needs to be mentioned. I would also like to thank the Editor-in-Chief, A. Gunasekaran, for his support and for his agreement to publish a special issue on this important topic.