By: Dr. Aruna Ram
While my previous articles detailed issues in current environmental rating schemes, this article in this series defines “the Seven Zeroes of Green Management” to help companies/ stakeholders understand what “green” means, deals with the last of drawbacks in current rating schemes and how Corporate Environmental Performance Rating (CEPR), a new methodology that could help companies address these issues along with results of a sample data analysis for 6 US retail companies.
The EU and Japan are far ahead of the US in terms of green management, corporate reporting and advancement in sustainable solutions for a better world. Necessity, as we all know, the mother of invention drives this. These countries along with developing countries already constrained of resources and overpopulation have far more stringent laws and effective ways to produce sustainable solutions. European Union and Japan are way ahead in compliance laws for human health especially in chemicals like Restriction of Hazardous substances (RoHs) and on Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) regulations. However, suppliers in the US are not required to disclose the ingredients by law or many ingredients are exempt from labeling requirements just because the product formulas are protected as proprietary. This means, supplier may not enter potential substances of concern, though the product may include it. Or, until a mishap occurs due to a product containing a harmful substance, it cannot be contained or restricted 100% in the US, unlike a preemptive REACH regulation in the EU or GHS in Japan, where all substances have to be tested and preregistered before released to the public.
The recent recall of children’s charm bracelets is a clear example of how the system is not foolproof. High levels of Cadmium in bracelets were deemed unacceptable and recalled only after the issue was raised by an NGO. Thousands of similar products have been recalled in the retail industry due to risk to human health and safety. Thus, consumers in the US are more susceptible to environmental safety risks like the above, especially concerning chemicals, unless they are protected by more stringent laws such as REACH, while costly litigations and costs of recalls should make companies like Walmart pay more heed to this risk. ULE880 provides 6 out 80 environmental points for undertaking initiatives towards environmentally preferred materials. This could definitely be higher due to the risk it poses under current legalities esp., in the US and could include points for RoHS and REACH compliance wherever applicable, substitution of toxics, certified raw materials, etc, all of which promote sustainability on firm grounds, which CEPR does.
Figure 5.1 Comparison results of CEPR and Newsweek’s of US retail industry A sample data analysis was done for 6 US retail companies and results of Newsweek’s 500 Greenest was compared. The rankings are different for reasons we have already detailed in this series. In short, CEPR ranks in the order of the greenest companies that serve green customers the best.Though Macy’s has larger revenues than Kohl’s and JCP, it has not measured its GHG inventory yet, nor has specific targets for GHG reduction, has installed 3% green power only, reason why it is ranked low in CEPR. From the analysis, it is clear that IKEA, Walmart and Target are more balanced in greening in that order than others in all scores, except Target lagging in Management. Strangely, Newsweek has not ranked IKEA at all. Thus, CEPR can help pinpoint trailing area/ focus point and can help focus greening efforts in balanced way. For instance, Kohl’s would want to divert its efforts from focused resource stewardship after a 100% green energy investment, to other trailing areas such as product innovation, which can help reduce its product load and create less confusion by start offering eco products to its green customer. J C Penney’s (JCP) would want to see why it has a large number of Superfund sites in the retail industry, a huge liability to the company if not cleaned up and focus on reducing hazardous wastes in the first place both for its own and planet’s sake, other than investigating why the normalized energy usage load is high despite its intense initiatives, while Target could do better by increasing transparency about audits and engaging in Environmental Supply Chain activities and so on.
Finally, since no specific and clear definition for greenness exists until now, for the first time, the Seven Zeroes of Green Management have been proposed to help companies understand the definition of green and strive towards ideal goals in environmental sustainability.
Figure 5.2 Spider Chart of 7 Zeroes of Green Management
At least Seven Zeroes of Green Management are as follows:
a) Zero emissions – This includes all activities that contribute to net zero emissions such as zero emission technologies, vehicles, etc.
b) Zero toxic input, output, wastes – This includes all input, output and waste materials that are toxic or are termed as hazardous.
c) Zero output/packaging waste – This means all waste is recycled where no waste ends in landfill.
d) Zero non biodegradables as input, output, waste and disposal – This means all non biodegradables are recycled as qualitative raw materials finally aiming at zero non biodegradables as input, output or waste.
e) Zero resources waste such as Zero energy buildings, etc.
f) Zero Inappropriate Systems such as environmentally unfriendly Information Technology/ systems, etc.
g) Zero product/output disposal – This means all products are recovered, disassembled, taken back or recycled. The above has been an effort to define “green ” in a way that companies and stakeholders can understand as a single message. Additionally, the following 100% voluntary rules can apply as follows.
Figure 5.3 Spider Chart of 100% Rules of Green Management
In the final article, we will take a snapshot look at how CEPR differs from the other 2 most popular environmental rating schemes, Newsweek’s 500 and ULE 880. The Scheme will be out for open review before the final article in this series or kindly review the scheme at https://sites.google.com/site/greencepr/.
The rest of Dr. Ram’s Environmental Sustainability Scorecard series can be found here.