Chapter 1

Introduction to Environmental Planning

and Management
Environmental planning and management are strategic challenges
confronting businesses in the 21st century. As customers and
stakeholders demand that global companies lead by showing corporate
citizenship, the health, safety and security of both the people and the
natural environment have become a litmus test for good citizenry.
Successful companies today are not only measured by how much
profitable their products are but also how well they respond to the call to
protect the natural environment. Global companies are increasingly
recognizing that green products do not necessarily cost more but provide
market niche that could help the company thrive. For example, the
success stories of Kodak single-use camera and Xerox re-manufacturing
programs have made businesses rethink their strategies and pay attention
to environmental management.
The issues concerning the environment are not purely scientific but
rely also on planning and management. They are part of corporate vision,
mission, and strategy which need to be effectively planned to remain
competitive. Corporate leaders are recognizing the increasing role of
stakeholders and are accepting that their corporate strategies must focus
not only on their customers but also on their stakeholders. Stakeholders
are those whose actions or reactions have the potential to affect the
firm’s business operation and survival. Environmental burden is an issue
that affects world citizens and they have the right to demand that
corporate responsibility be properly defined to take into consideration
these concerns. Today, companies are adapting their strategies in
response to these concerns. World communities have reacted by adopting
international and national laws to ensure compliance to environmental
standards. It is also clear that green products may in fact, provide
competitive advantage. Recently, there has been significant growth in the
development of such products since the 1990s.
Paint companies are now producing zero-VOC (Volatile Organic
Compounds) products. Glidden introduced zero-VOC paint in the US in

1
2 Environmental Planning and Management

the mid 1990s and was followed by other major paint manufacturers
such as Benjamin Moore and Sherman-Williams. Homeowners have
responded very well to this development1. Today, all major paint
manufacturers market zero-VOC paint and offer lower-VOC coatings for
a variety of substrates. Some manufacturers such as Rodda Paint of
Portland, OR; have gained Green Seal on their paint products and that
has given it a competitive edge. It joins the likes of big players like
Benjamin Moore.
The energy industry has also reacted to green power which has been
defined by the National Association of Attorney Generals [NAAG] as the
use of replenishable or sustainable fuel sources in the generation and
transmission of electricity and the disposal of spent fuels. These releases
into the environment would not create harmful substances and would
pose no significant concern to the ecosystem and to land use. The focus
is on renewable energy supply. Studies have shown that homeowners are
willing to pay more to use green power2. This program is similar to the
waste recycling program in many communities that are paid for by
consumers.
The trend toward green is on the rise in every sector of the economy.
According to a study by Yanklovich Clancy Schulman, 78% of people
are “influenced greatly” to buy products that make environmental
claims. The Organic Trading Association notes that products with the
word “organic” have 34% sell-through rate compared to conventional
products. Furthermore, the rate of growth of natural or organic food has
been steady at 18-25% while conventional foods remain flat at 3-4%3.
The demand for organic products has also affected the clothing industry
where the current trend calls for the use of organic cotton.

1
Esposito, C.C., “The evolution of low- and zero-VOC paint,”
http://www.coatingsworld.com/May041.htm
2
PriceWaterHouseCoopers, “The Pitfalls and Potential of Marketing Green
Power,” Fall 1999 edition of Public Utility Topics,
http://www.pwcglobal.com/extweb/indissue.nsf/DocID/45CDA2C5CCA82EE9
8525689B00732FC5
3
Fassa, L., “The Trend Toward Green,”
http://www.babyshopmagazine.com/fall02/green.htm
 Introduction to Environmental Planning and Management 3

The growth of “conspicuous conservation” is also on the rise as the

demand for hybrid vehicles skyrocket4. Companies like Toyota and
Honda that were among the first to manufacture hybrid cars that combine
gas engines with battery-powered electric motors have witnessed surge
in demand. These products are not only environmentally friendly but are
also economical. Aside from the fact that these hybrid cars cut emissions,
owners in the US can write off a one-time deduction of $2,000 of the
purchase price for these vehicles since the Internal Revenue Services
(IRS) has recognized them as eligible for the clean-burning fuel tax
deduction5. This law also applies to other vehicles that operate on natural
gas, liquefied natural gas, liquefied petroleum gas, hydrogen, or any
other fuel that is at least 85% alcohol. Owners of completely electric
vehicles would even get tax credit of up to $4,000. Customers who
patronize these products want to be seen as saving energy and believe
that their consumption behavior reflect who they are. The trend towards
environmental conservation is further reflected in the emergence of
energy saving products such as energy star appliances, compact
fluorescent lights, photovoltaic solar cells, “high performance” homes
and others.
The green trend is on the rise and green products offer a new market
niche to global companies. According to The LOHAS journal, about
63 million consumers or about 30% of US adults purchase goods and
services that are classified as healthy, environmentally friendly, socially
conscious and sustainable6. The LOHAS index constitutes of five major
areas that comprise sustainable economy, healthy living, alternative
health care, personal development and ecological life style. While there
are more to this index, however, environmental issues are prominent.

4
Stafford, E.R., “Conspicuous Conservation – Believing that “you are what
you own,” an emerging trend exalts virtue over tawdry materialism,”
http://www.greenatworktoday.com.
5
Bell, K., “Cut emissions and your tax bill,”
http://biz.yahoo.com/brn/050309/9775_1.html, March 9, 2005.
6
http://www.lohasjournal.com/nbp/app/cda/nbp_cda.php?command=Page&
pageType=About
4 Environmental Planning and Management

The discussions above highlight the growing importance of

environmental management systems and the need to effectively plan and
manage in order to harness the values that would accrue to companies
that adopt environmental strategies. We shall next look at how to assess
the cost of environmental quality. It is very important that managers
understand the cost side of environmental quality. Knowledge of the
costs would obviously, hit home the need to be proactive and prevent
environmental errors from occurring.

Environmental Management Systems (EMS)

The focus of this book is on Environmental Management and

Planning. Naturally, Environmental Management System (EMS) forms
the core of any environmental management and planning program. EMS
has become increasingly popular in the past few years mainly due to
ISO 14000 series which is labeled EMS. EMS is a well structured
and documented approach to respond to environmental challenges by
focusing on environmental regulations and standards, and customer
requirements. It is based on the need to respond proactively to the
management of natural environment by conducting lifecycle assessment
to lessen environmental burden and optimize the use of limited natural
resources. Firms that adopt the EMS approach focus on effective ways to
use such limited resources to produce environmentally conscious
products and services. One of the popular approaches to achieve this is to
adopt a plan-do-check (study) - act (PDCA) which was popularized by
the father of Total Quality Management (TQM) Dr. Edward Deming.
Using PDCA requires that the firm focuses on how to develop
environmental policies by recognizing corporate, industry, local,
national and international environmental policies and standards. The
consideration of these policies and standards constitutes a major factor in
designing a product or service for the environment.
Planning is important to any successful EMS program. A chapter in
this book is devoted to the importance of planning. Effective planning
leads to successful consideration of factors that may support or hamper
 Introduction to Environmental Planning and Management 5

EMS efforts. Planning offers a way to optimization of resources and

stops the firm from “fighting fires.” Planning leads to preventive
measures and anticipation of future environmental changes. It positions
the firm to take competitive advantage rather than responding only to
challenges as they occur.
Effective planning also smoothens out implementation and
minimizes environmental burden since many of the sources of
environmental burden would be anticipated and addressed. It also
helps address “what if ” or sensitivity analysis questions. Thus, different
scenarios and alternatives will be anticipated, investigated, and
prototypes looked at to identify at least a satisficing solution that may
not necessarily be optimal but give a very good resolution to the
environmental problem. When products and services are designed for the
environment, they are properly planned and fully tested before
introduction into the marketplace. However, pushing these products and
services to the market does not end the responsibility of the firm.
Environmental scanning is an ongoing process that would lead to
continuous review of the products and services to achieve continuous
improvement.
Our approach in this book is to focus on management issues as key
to the success of environmental planning program. The traditional focus
of environmental systems has been on the natural sciences. While natural
sciences continue to play a major role in understanding the natural
environment, the problem of environmental burden or optimization of
natural resources would not be achieved without a focus on how such
burden or resources can be effectively managed.
This book therefore focuses on the strategic context of environmental
management. It focuses on corporate strategies to develop a new vision
of environmental management systems. Some of the areas that are
looked into are:

• Top management commitment – Since the era of TQM, it has

become apparent that most problems organizations face can
be blamed on top management. Top management wields a lot
of power and authority. It provides the mission and vision of
the organization. It lays down organizational strategies and it
6 Environmental Planning and Management

provides the resources to achieve organizational goals. If top

management is not committed to a cause, it would not devote the
needed resources to it. Top management must take EMS to heart
for it to be successfully implemented. Employees respond to the
call from their leaders. Corporate leaders have the responsibility
to educate their employees and make them buy into the
corporate mission. When top management views environmental
management as strategic, integrate it in corporate mission and
devote resources and commit time to it, others will follow. These
resources would enable to provide proper training, education,
and technology to address environmental burden.
• Cross-functional team – There is a need to develop cross-
functional teams that would work concurrently to address
environmental issues. The use of cross-functional teams is vogue
in managing successful organization. It is important that
members of the teams have a single view of the organization.
Functional units within organizations are interdependent and
should not be treated as independent silos. Members of the
manufacturing unit should be able to work together with
marketing and express and share views at the same time. The
concurrency at the design stage helps to reduce the cycle time to
introduce new products and makes the organization more
competitive. The different backgrounds of team members also
expose different worldviews that could be captured and used to
develop an acceptable plan to all the departments.
• Stakeholder Teams – In conjunction with the cross-functional
teams that may comprise mostly of organizational employees, it
is important to also work with stakeholder teams. Stakeholders
constitute those whose actions and reactions affect or are
affected by organizational actions. As cited in the book, many
organizations are today working with various interest groups to
develop environmental strategies. The involvement of different
stakeholder teams also helps win acceptance of final decisions
that are reached.
• Responsibility for the environment: – Who is responsible for
environmental management in the organization? Our response
 Introduction to Environmental Planning and Management 7

to this question is that everyone is responsible. The approach

adopted in this book is known as Total Environmental Quality
Management (TEQM). Environmental management is not
relegated to a particular department or to particular individuals in
the organization. Instead, every member of the organization
takes full responsibility for his or her own action and works hard
to make sure that EMS is fully implemented. Each member of
the organization seeks out ways to contribute, and identifies
ways to limit pollution and minimize waste in whatever function
or activity he or she is involved in.
• The bottom line – Businesses operate to maximize stockholders
wealth and must pay attention to the bottom line. If an activity is
not value-adding, then there is no need to continue with such an
activity. In the past, many corporate leaders complained about
the high cost of environmental management to justify inaction
or disinterest. Today, things have changed. Businesses are
observing that the external cost for environmental quality has
been underestimated and that such costs significantly affect the
survival of the business. In addition, they are acknowledging that
being environmentally conscious is being competitive. In this
book, we illustrate several case studies of companies who
regained market shares because they developed successful
environmental management programs. The recognition of the
importance of environmental management as a competitive
weapon could also explain the growing interest of companies to
get environmental certifications such as ISO 14000 and the other
environmental seals. Companies flout such recognition in
advertisement campaigns because they understand that social
consciousness influences purchasing decisions. Therefore, it
pays to be green.

The Road to EMS

While there is a need to develop EMS, this road is not always

smooth sailing. Companies are often bewildered by the avalanche of
8 Environmental Planning and Management

materials and guidelines on environmental laws. There is a need for

universal standards that would overcome some of the national laws.
These standards need to be simplified and designed with implementation
in mind. ISO focuses on such issues. However, its guidelines still need to
be trimmed to make it easier to implement.
Unfortunately many countries such as the United States are too
litigious. This poses a risk to companies who would actually want
to identify and rectify problems with their products and processes. There
is need to protect such corporate activities as environmental auditing.
With the free access to information coupled with “cradle-to-grave”
responsibilities for organizational products and services, environmental
auditing that detects serious environmental flaws may actually present
serious problems to a firm. The government may need to wade in to
encourage and protect firms that do environmental auditing to improve
environmental quality.
Environmental management should be required for all businesses
irrespective of size. Small and medium-sized firms may have more
problems due to limited resources and may also lack the knowledge
to effectively manage the environment. Government initiatives and
incentives may be necessary to encourage such businesses.
Adoption of EMS does not replace sound business strategies.
While it would complement the efforts, however, sound business
strategies that focus on the organization’s core competencies would
still be needed to survive in today’s highly competitive environment.
Thus, the goal should be to include environmental management system
as part of the strategic framework. Such consideration would help to
ensure that

• Products and services are designed for the environment. In other

words, such products and services will create minimal
environmental burdens, optimize limited natural resources, and
satisfy the growing needs of stakeholders for sustainable or
environmentally conscious products and services.
• The firm is competitive and able to survive in its market
environment. As mentioned above, auto manufacturers that
produced hybrid vehicles have reaped tremendous profits while
 Introduction to Environmental Planning and Management 9

producing green products; Kodak repositioned itself with the

single-use camera; and Xerox regained market share with its re-
manufacturing program.
• External cost which also affects customer goodwill is
diminished. Companies today have to take a “cradle-to-grave”
approach of their products. Their actions today may haunt them
in later years. In addition to punitive damages, top management
may still be held personally liable. It is important to be socially
responsible and adopt the correct course of action now, rather
than fight fires later. Furthermore, these costs could be further
diminished by working well with stakeholder teams. This would
allow several options or alternatives to be considered in the
product design and development stages, reduce cost, and quicken
introduction into the market. Designing for the environment
becomes a competitive weapon the firm can enjoy.
• The strategic importance of EMS decisions is very high. When
poor environmental decisions are made, they are irreversible
and the consequences are very high. The Union Carbide plant
explosion in Bhopal, India in 1984 is still a glimpse reminder of
the problems of poor environmental judgment. Apart from the so
many deaths, irreversible blindness, long-lasting pollution, the
ensuing public condemnation and labeling of the company has
for long, dented its image and made it very difficult for the firm
to operate. Poor environmental decisions lead to high production
costs, poor public perception, poor quality, and would ultimately
starve the firm of needed cash to conduct research and
development or finance new projects.

Environmental Action Box

Hybrid Cars

The history of hybrid vehicles dates back to 1665. Flemish

astronomer and Jesuit priest Ferdinand Verbiest developed plans for a
miniature four-wheel unmanned steam “car” for Chinese Emperor
10 Environmental Planning and Management

Khang Hsi. Since then, there have been several efforts to develop
efficient hybrid cars. The most successful commercial effort to this
effect could be traced to 1992 when Toyota Motor Corporation
outlined in its document titled “Earth Charter,” plans to develop and
market vehicles that will yield the lowest emission possible. By 1997,
Toyota began marketing Pirus in Japan and sold nearly 18,000 cars in
its first year. By 1997-1999, other big auto manufacturers including
Honda, GM and Ford introduced all-electric cars and those cars were
sold mostly in California where environmental protection laws are
stricter due to its poor quality air. Honda released its two-door Insight
in 1999 and it is considered the first hybrid car to be offered to mass
market in the United States. Insight was very successful winning
several awards and was rated by EPA to receive 61 miles per gallon
(mpg) in city driving and 70 mpg on highway. Toyota followed suit
by releasing Toyota Pirus in the year 2000. Unlike the 2-door Insight,
Pirus was the first 4-door sedan sold to mass market in the United
States. By 2002, Honda introduced Honda Civic Hybrid and in 2004,
Toyota Pirus II won Car of the Year Awards from Motor Trend
Magazine and North American Auto Show. The demand for Pirus has
skyrocketed in the US with Toyota’s production of this vehicle rising
from 36,000 to 47,000 in the US market. There was also a six month
wait to purchase the vehicle in 2004. These hybrid cars are gradually
making it into the mainstream market and other car makers have
joined Honda and Toyota. The US auto manufacturer Ford introduced
Escape Hybrid in September 2004 as both the first American hybrid
and the first SUV hybrid.
The use of hybrid cars has enormous potential to minimize the
burden on the environment. We shall summarize some of the
implications on the environment that could be minimized through
this effort. There has been a drastic increase in the demand for
motor vehicles since the 1970s. It is estimated that there are over
700 million vehicles worldwide and if the present trend continues, this
number could exceed 1 billion by 2025. There are more cars than
adults in the US alone, vehicles are driven more than two trillion
miles annually.
 Introduction to Environmental Planning and Management 11

Motor vehicles contribute to all kinds of environmental and health

hazards. While they are necessity for transportation purposes,
however, the demand and use of vehicles need to be tamed to improve
environmental quality. There are alternatives that could be pursued to
limit the environmental impacts of vehicles.
Global Warming – About 5.5 million tons of carbon is released
annually by the burning of gas, coal, and oil. The consequence is
that heat is trapped in the atmosphere and causes the warming of
the planet, thus producing greenhouse effect. Burning of gasoline
contributes to greenhouse effect. When a gallon of gasoline weighing
about 6 pounds is burned, it combines with oxygen to produce about
20 pounds of carbon dioxide (CO2). With the increasing demand for
motor vehicles, it is estimated that over 300 metric tons of carbon are
produced by cars and light trucks every year in the US. The carbon
dioxide emission from transportation constitutes more than a third of
all other sources of emission. It is therefore prudent that efforts be
spent on developing fuel efficient vehicles that would burn less fossil
fuel or use alternative technologies to limit environmental burdens.
The focus on hybrid vehicles could help achieve reduction in the
volume of carbon that is generated.
The ensuing temperature fluctuations caused by Global warming
could affect wildlife survival and the entire ecosystem.
In addition, carbon dioxide is the main greenhouse gas and
minimizing its production could help to build a cleaner environment.
The burning of fossil fuels by motor vehicles lead to the generation of
several gases and pollutants which are environmentally unfriendly and
unsafe to human health. We shall adapt and present some of the
statistical information from hybridcars.com to show the significant
gain of hybrid cars over conventional gas-powered vehicles. This
information is presented in Table 1 below7:

7
The comparisons in Table 1 are based on 14,000 miles per year/EPA ratings.
12 Environmental Planning and Management

Table 1: Comparison of Conventional and Hybrid Cars

Gas/Pollutant Car Type Emission Ecological/Health

Risk
Carbon dioxide 2004 Toyota 2004 Toyota Pirus Global warming;
Camry 3.0L, 6 1.5L, 4CVT Severe disruption of
Automatic global weather
patterns.
11,000 pounds of 4,800 pounds of
carbon dioxide carbon dioxide per
per year year

Carbon 2004 Cadillac 330 pounds of Poisonous gas that

monoxide SRX SUV 3.6L, 6 carbon monoxide attacks the central
Automatic Bin 5 per year nervous system

2005 Ford Escape 230 pounds of

Hybrid 2.3L, 4 carbon monoxide
CVT Bin 4 per year

Nitrogen oxides 2004 Volkwagen 49 pounds of Global warming,

Jetta 1.9L, 4 nitrogen oxide per formation of
Automatic Bin 10 year ground-level ozone,
acid rain, and smog;
2004 Honda Civic 17 pounds of Respiratory
Hybrid 1.3 L, 4 nitrogen oxide per problems
CVT Bin 9 year

Particulate 2004 Range 670 grams of Consists of particles

matter Rover 4.4L, 8 particulate matter of smoke, soot and
Automatic Tier 1 per year dust. Health hazard
especially lungs and
2005 Honda 240 grams of bloodstream.
Accord Hybrid particulate matter
3.0L, Automatic per year
ULEV II
Hydrocarbons 2004 Hummer H2 29 pounds of Air toxicity, smog,
6.0L, 8 Automatic hydrocarbons per lung and tissue
HDT-Bin 11 year diseases, birth
defects
2004 Honda 8 pounds of
Insight 1.0L, 3 hydrocarbons per
Manual Bin 9 year
 Introduction to Environmental Planning and Management 13

In addition to gases and pollutants associated with motor vehicles,

there are also the production of sulphur oxides and lead. Sulphur
oxides contribute in the formation of acid rain and are potentially
dangerous to children and elderly people. The production of lead is
also of concern although some countries have banned the use of
leaded gasoline. Lead poisoning is known to damage organs and other
tissues in the body.
This table did show that a shift to hybrid vehicles could help
to minimize environmental burden by improving fuel efficiency and
thereby reducing the amount of pollutants that are produced. As we
mentioned earlier in this chapter, some countries now give tax
incentives to encourage the shift to hybrid vehicles. Even with this
shift, motor vehicles in general pose major environmental hazard.
There are still the issues of water pollution from runoff oil or fluids or
chemicals that manage to sip into the waterways; with the increasing
number of vehicles on the road, noise pollution is still a major
concern; and there is concern about solid waste disposal. All these
problems continue to affect both ecological and health risks. Motor
vehicles need to be designed more efficiently, made lighter, and resort
to alternative energy sources to reduce environmental burden. Hybrid
vehicles are contributing in improving environmental quality but
human conscious effort to use mass transit systems and change
driving habits could even help further. Countries like the United
States also offer tax incentives to commuters who use mass transit
systems to commute to work.