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Corporate Environmental Management and Carbon Markets
                          Class 04




                        Prof. Sushil Kumar
            Indian Institute of Management, Lucknow
Environment: What is It?
Environment?

 We all live in – and with –
 environmental systems

   A system is a structured set of
   objects (components), or a
   structured set of attributes or a
                     attributes,
   structured set of objects and
   attributes combined together
         Sub systems
         Sub-systems
         Hierarchy
         Inter-relatedness
         Interactive


     Source: Mukherjee, 2000           Photo: coastsider.com
Environment ?

   The environment is everything around us It  us.
 includes not only the natural elements that the
 word "environment" most often brings to mind,
                                           g         ,
but also people and the manmade components
                      of our world.
It is much more than the oceans and the ozone
    layer. It is air, soil, water, plants, animals,
      y             ,     ,      ,p      ,         ,
     houses, restaurants, office buildings, and
        factories and all that they contain.
Ecosystem: producer-consumer-recycler model
  Ecological system or
  ecosystem
    Biotic assemblage of plants,
    animals, and microbes, taken
    together with their physico-
    chemical environment
    In
    I an ecosystem the biological
                  t    th bi l i l
    cycling of materials is maintained
    by three groups: producers,
    consumers, and decomposers
    Nature is capable of sustaining
    the producer-consumer-
    decomposer cycle indefinitely,
    with the sun as the energy source.
    The s a est suc e t ty that is
       e smallest such entity t at s
    self-sufficient and self-regulatory
    is an ecosystem
    Immensely complicated and
    diverse, ranging from a small
                 g g
    pond to a mature forest
                                          Source: www.unu.edu
Anthroposystem: producer-consumer-recycler
model
  d l

 Human activities that
 perturb natural
 environment
   Producing activities include
   Prod cing acti ities incl de
   energy production (fossil fuels),
   manufacturing (non-fuel
   minerals), and growing food
           )      g       g

   The consumers are humans
   and their domestic animals

   Decomposing or recycling
   activities include treatment of
   waste water and recycling of
   metals
Natural Resources
Natural Resources

   Natural Resources
    Are naturally occurring substances that are
    considered valuable in their relatively
                                          y
    unmodified (natural) form

    A commodity is generally considered a natural
    resource when the primary activities associated
    with it are extraction and purification as
                               purification,
    opposed to creation
Natural Resources

 Renewable NR
  Renewable resources can restock themselves
  and be used indefinitely (if they are used
  sustainably)
      t i bl )
  Can become non-renewable if used at a greater
  rate than the environment s capacity to replenish
                environment's
  them
    Living
      Trees, animals
      Trees animals, fish etc.
                          etc
    Non-living
      Oxygen, fresh water, soil, winds
Natural Resources

 Non renewable
 Non-renewable NR
  A natural resource that cannot be re-made or re-
  g
  grown

  They do not naturally re-form at a rate so as to
     y                y
  make their use sustainable

    Coal, t l
    C l petroleum, natural gas etc.
                     t l        t
Corporate Environmental Management:
               History
CEM: History

 Rachel s Carson’s
 Rachel’s Carson s The Silent Spring (1962)
 sparked the environmental revolution
     Massive destruction of wildlife caused by the use of
                                             y
     chemical insecticides and other biocides
  Friends of Earth, Greenpeace founded


 Bhopal Disaster, discovery of hole in ozone
 layer, Ch
 l      Chernobyl, pollution of Rhi
              b l    ll i     f Rhine
CEM: History
  Our Common Future by WCED in 1987
    Sustainable Development
                      p
         Meeting the needs of the current generation without
         compromising the ability of future generations to meet their
         needs
  Adoption f li i for
  Ad ti of policies f environmental protection
                         i      t l    t ti
  by world politicians
         Acts/laws related to environmental protection
         ISO 14000, EU Eco-management & Audit Scheme
  Shift from end-of-the pipe pollution prevention
  and clean-up technologies to more pro-active
       clean up                        pro active
  and integrated approaches
  The World Business Council for Sustainable
  Development
  De elopment (WBCSD) in 1991
International Chamber of Commerce: Business
Charter for Sustainable Development

    Corporate p
       p      priority
                     y
         Establish policies, programmes and practices for conducting
         operations in an environmentally sound manner
    Integrated management
        g          g
         Integrate policies, programmes and practices in organizational long-
         term strategies
    Process of improvement
         Sensitive to technical developments, scientific understanding,
         consumer needs, community expectations and legal regulations
    Employee education
         Educate, train and motivate employees to conduct their activities in
         environmentally responsible manner
    Prior assessment
         Assess environmental impacts before starting new activity/project

                                                          Source: Welford & Gouldson, 1993
International Chamber of Commerce: Business
Charter for Sustainable Development

   Products and services
       that have no undue environmental impact,
       are efficient in their consumption of energy & NR, and
       can be recycled, reused, or disposed of safely
   Customer advice
       Advise and educate customers, distributors and public in the
       safe use, transportation, storage and disposal of p
               ,      p        ,      g         p        products
   Facilities and operations
       Develop, design and operate facilities and conduct activities
          Efficient
          Effi i t use of energy & raw materials
                        f                  t i l
          Sustainable use of renewable resources
          Minimisation of adverse environmental impact and
          Safe d
          S f and responsible di
                            ibl disposal of residual wastes
                                       l f     id l     t
International Chamber of Commerce: Business
Charter for Sustainable Development

    Research
         Environmental impact of raw materials, products, processes,
         emissions and wastes and the means of minimising these
    Precautionary approach
                y pp
         Modify manufacturing, marketing or use of products or services to
         prevent serious or irreversible environmental degradation
    Contractors and suppliers
         Encourage wider adoption of these principles by contactors and
         suppliers
    Emergency preparedness
         Emergency preparedness plans in conjunction with emergency
         services
    Transfer of technology
         Throughout the industrial and public sectors
International Chamber of Commerce: Business
Charter for Sustainable Development

  Contributing to the common effort
      Contribute to the development of public policy, govt. programmes &
      educational initiatives

  Openness to concerns
      Foster openness and dialogue with employees and public

  Compliance and reporting
      Measure environmental performance
      Conduct regular environmental audits and assessment of compliance
      Provide appropriate information to various stakeholders

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Corporate Environmental Management And Carbon Markets

  • 1. Corporate Environmental Management and Carbon Markets Class 04 Prof. Sushil Kumar Indian Institute of Management, Lucknow
  • 3. Environment? We all live in – and with – environmental systems A system is a structured set of objects (components), or a structured set of attributes or a attributes, structured set of objects and attributes combined together Sub systems Sub-systems Hierarchy Inter-relatedness Interactive Source: Mukherjee, 2000 Photo: coastsider.com
  • 4. Environment ? The environment is everything around us It us. includes not only the natural elements that the word "environment" most often brings to mind, g , but also people and the manmade components of our world. It is much more than the oceans and the ozone layer. It is air, soil, water, plants, animals, y , , ,p , , houses, restaurants, office buildings, and factories and all that they contain.
  • 5. Ecosystem: producer-consumer-recycler model Ecological system or ecosystem Biotic assemblage of plants, animals, and microbes, taken together with their physico- chemical environment In I an ecosystem the biological t th bi l i l cycling of materials is maintained by three groups: producers, consumers, and decomposers Nature is capable of sustaining the producer-consumer- decomposer cycle indefinitely, with the sun as the energy source. The s a est suc e t ty that is e smallest such entity t at s self-sufficient and self-regulatory is an ecosystem Immensely complicated and diverse, ranging from a small g g pond to a mature forest Source: www.unu.edu
  • 6. Anthroposystem: producer-consumer-recycler model d l Human activities that perturb natural environment Producing activities include Prod cing acti ities incl de energy production (fossil fuels), manufacturing (non-fuel minerals), and growing food ) g g The consumers are humans and their domestic animals Decomposing or recycling activities include treatment of waste water and recycling of metals
  • 8. Natural Resources Natural Resources Are naturally occurring substances that are considered valuable in their relatively y unmodified (natural) form A commodity is generally considered a natural resource when the primary activities associated with it are extraction and purification as purification, opposed to creation
  • 9. Natural Resources Renewable NR Renewable resources can restock themselves and be used indefinitely (if they are used sustainably) t i bl ) Can become non-renewable if used at a greater rate than the environment s capacity to replenish environment's them Living Trees, animals Trees animals, fish etc. etc Non-living Oxygen, fresh water, soil, winds
  • 10. Natural Resources Non renewable Non-renewable NR A natural resource that cannot be re-made or re- g grown They do not naturally re-form at a rate so as to y y make their use sustainable Coal, t l C l petroleum, natural gas etc. t l t
  • 12. CEM: History Rachel s Carson’s Rachel’s Carson s The Silent Spring (1962) sparked the environmental revolution Massive destruction of wildlife caused by the use of y chemical insecticides and other biocides Friends of Earth, Greenpeace founded Bhopal Disaster, discovery of hole in ozone layer, Ch l Chernobyl, pollution of Rhi b l ll i f Rhine
  • 13. CEM: History Our Common Future by WCED in 1987 Sustainable Development p Meeting the needs of the current generation without compromising the ability of future generations to meet their needs Adoption f li i for Ad ti of policies f environmental protection i t l t ti by world politicians Acts/laws related to environmental protection ISO 14000, EU Eco-management & Audit Scheme Shift from end-of-the pipe pollution prevention and clean-up technologies to more pro-active clean up pro active and integrated approaches The World Business Council for Sustainable Development De elopment (WBCSD) in 1991
  • 14. International Chamber of Commerce: Business Charter for Sustainable Development Corporate p p priority y Establish policies, programmes and practices for conducting operations in an environmentally sound manner Integrated management g g Integrate policies, programmes and practices in organizational long- term strategies Process of improvement Sensitive to technical developments, scientific understanding, consumer needs, community expectations and legal regulations Employee education Educate, train and motivate employees to conduct their activities in environmentally responsible manner Prior assessment Assess environmental impacts before starting new activity/project Source: Welford & Gouldson, 1993
  • 15. International Chamber of Commerce: Business Charter for Sustainable Development Products and services that have no undue environmental impact, are efficient in their consumption of energy & NR, and can be recycled, reused, or disposed of safely Customer advice Advise and educate customers, distributors and public in the safe use, transportation, storage and disposal of p , p , g p products Facilities and operations Develop, design and operate facilities and conduct activities Efficient Effi i t use of energy & raw materials f t i l Sustainable use of renewable resources Minimisation of adverse environmental impact and Safe d S f and responsible di ibl disposal of residual wastes l f id l t
  • 16. International Chamber of Commerce: Business Charter for Sustainable Development Research Environmental impact of raw materials, products, processes, emissions and wastes and the means of minimising these Precautionary approach y pp Modify manufacturing, marketing or use of products or services to prevent serious or irreversible environmental degradation Contractors and suppliers Encourage wider adoption of these principles by contactors and suppliers Emergency preparedness Emergency preparedness plans in conjunction with emergency services Transfer of technology Throughout the industrial and public sectors
  • 17. International Chamber of Commerce: Business Charter for Sustainable Development Contributing to the common effort Contribute to the development of public policy, govt. programmes & educational initiatives Openness to concerns Foster openness and dialogue with employees and public Compliance and reporting Measure environmental performance Conduct regular environmental audits and assessment of compliance Provide appropriate information to various stakeholders