Making business sense out of eco friendly practices
MOST OF the world believes industry can only harm the environment, Stephen Schmidheiny disagrees and in Changing Course, he explains why. The main theme of his book is that governments and industry can cooperate to preserve the environment, or at least not harm it.
The argument, for which one has to grope somewhat, is eventually a predictable one: Given the right mix of regulation and incentives, the private sector will work towards sustainable development.
The first half of the book -- about 180 pages -- is devoted to a discussion on the various issues that have cropped up in the debate on environment versus development. However, Schmidheiny's treatment is rather cursory and discursive, which is a pity, because the lack of sharpness leads the reader to anticipate the second half will be equally unfocussed. In fact, it is not.
The second half consists of 38 case studies of companies that have taken up sustainable development as a management objective. Their experiences do not suggest that a common approach can be evolved for others to emulate. Instead, the case studies indicate each company will have to chart its own course. All of which is fine, except that the conditions under which a company decides to go green are not always made clear. For example, for Union Carbide to adopt standards in developing countries that prevail in developed countries would seem to be fairly obvious. But the company began doing so only after the Bhopal disaster -- and this, surely, holds some lessons.
Much the same thing holds good for a number of other companies cited in the book. Procter & Gamble, for instance, perceived "a significant increase in consumer interest in the environmental impact of its products in recent years, and has seen environmental considerations play an increasingly important role in purchasing decisions." P&G, in fact, was forced to draw up a comprehensive environmental quality policy that ensured the company would be responsible for the product throughout its lifecycle. The policy also included a commitment "to reduce or prevent the environmental impact of the product".
At Volkswagen, the issue was not so much falling sales as the German government requiring it to make its cars more disposal-friendly and energy-efficient. This would require use of lightweight materials. But plastics are not all that easy to dispose and Volkswagen has only managed to reduce to 6 per cent the total production material that is used as waste. These environmental innovations have helped boost the company's image as well as product sales.
On the whole, this is a rather inconsequential book and one wonders whether it would have made any difference had it stayed unwritten.
---T C A Srinivasa Raghavan is an associate editor with The Economic Times.