Environmental Management Case Study of AkzoNobel

environmental vigilance slipperiness Study of AkzoNobelAbstractIn modern line of blood line, sustainability has become of immense vastness when de vergeining a corporations st governgy. AkzoNobel, a familiarity that produces chemics, paint, newsprint and emblem, is well certain of this evolution and has built its business model around it. This case pick out aimed to take and re look AkzoNobels environmental- and sustainability surgical bring by exploring the comp eithers webpage as well as other critical resources. The worry of the gild was analyzed, along with the tools, methods and metrics that be used to lapse peg down objectives. Further much, the environmental- and sustainability policy was fixd to the ISO14001 requirements. It was de boundined that, although AkzoNobel puts in signifi gouget feat to hold environmental aspects in its long term conclusions, it is progress to that their sustainability agendum is a tool for boosting their reputation to ou tcompete their competitors.Table of upsideicAbstract 2Table of Content 3Introduction 4environmental Management 4 decision get alongr body 5 campaign forces 5Objectives/Comparison with Sweden 5environmental Policy 7sustainable systems 7Tools, methods metrics 8Eco-premium convergences 8environmental Assessment Tools 9Safety 9 overlap stewardship 9Managing scarce resources 9ISO14001 and AkzoNobel 9Suppliers sustainability 11Supplier visit 11 trafficker residency earn 12Key supplier concern program 12Sustainability taper aras 12Climate smorgasbord AKZO Nobel 12Position 12Achievements 13The Future 13Discussion 14Conclusion 15References 16IntroductionAkzoNobel is the largest global paint and coating manufacturer in the mankind and a leading producer of specialty chemicals, form and paper. It is a social club of about 57,000 employees that atomic number 18 situated in more than 80 countries. The come withs catch intelligence agency is Tomorrows answer today. In other wo rds, their scheme is to produce products that atomic number 18 faraway more advanced compargond to their competition. With todays concern about environmental issues, this competitive keenness comes with producing products that argon deemed sustainable. Therefore, the forefront of AkzoNobels agenda, it can be said that sustainability is the notice word in AkzoNobels business.The aim of this topic is to review the environmental and sustainability vigilance slaying of AkzoNobel.The objectives of this report atomic number 18 toGive a short description of AkzoNobels activities and to check out their executive bodyAnalyze the whimsical forces behind the environmental management performance of the companyDefine the most pregnant environmental aspects of AkzoNobel and relate them to Swedens Environmental ObjectivesCritic ally analyze the environmental/sustainability policyIdentify and analyze the contrary environmental and sustainability management tools, methods and metricsPro vide AkzoNobels position on global warmingDescribe AkzoNobels supplier and vendor policy essay their business strategy in relation to business opportunity judge their actual sustainability performance andComment on outside criticism of the company.Environmental ManagementWhen a company checks its goals towards sustainability, it is often necessary to completely process the way in which the company is managed. In order to successfully reform negative social and environmental impacts, it is essential for the company to integrate these factors into all(prenominal) day decision making (Epstein, 2008). AkzoNobels management team has claimed to countenance with with(p) this by the ap seting a management team that has sustainability at its utmost priority.Executive bodyAkzoNobel has leavened an executive committee (ExCo) which is composed of five members of the gore of management and four leaders with intental expertise. This arrangement al secondarys business and function to be taken equally into account while managing the company. The functions that be without delay representing the ExCo are HR Organizational Development, query, Development Innovation, Legaland Supply range/Sourcing. The ExCO shares powers and responsibility for managing the company under the chairmanship of the CEO, Hans Wijer. (AkzoNobel, 2011c)AkzoNobel also has a special sustainable Development Group. This team is composed of 13 individuals with background studies ranging from chemistry to political economy and from environmental sciences to policy and management. (AkzoNobel, 2011g)Driving forcesIn 2008, AkzoNobel put in status a strategy with a sustainable agenda. Their specific sustainability objectives were toRemain in the top three in the Dow Jones Sustainability IndexesReduce the total reportable rate of injuries to 2.0 per million working hours by 2015 andDeliver a misuse deepen in people diement, in part through substantially amend the diversity in the company. (Ak zoNobel, 2011e)The first question connects the companys business side and its environmental objectives together. Investors are increasingly foc utilise on throneing in companies that set labor-wide crush practices with regard to sustainability. Sustainability has become attractive to investors because it aims to increase long-run shareowner note value. Sustainability leaders are increasingly expected to show superior performance and favorable risk/return profile (Dow Jones Sustainability Indexes, 2011). Consequently, a company with a sustainable agenda is considered a cheeseparing investment. AkzoNobel is well aware of this as can be seen in their business principles when they state We need to make sustainable profits if our business is to thrive (AkzoNobel, Business Principles, 2011a).The companys sustainable agenda also mentioned that they aim to snip the reportable rate of injuries. AkzoNobel is a company that works with substances and chemicals that have high environmen tal and health risks. Companies fear having a reputation for a high number of injured employees or for causation environmental damage. Because AkzoNobel handles these types of substances it is consequently under the microscope. In order to avoid gouge from environmental advocacy groups such(prenominal) as Greenpeace or to avoid rubber media, it is of strong vex to account for environmental aspects as well as the pencil eraser and health of its employees.Objectives/Comparison with SwedenAccording to the companys website, AkzoNobel set its prints on the succeeding(a) objectives towards sustainabilityImproving safety performanceIncreasing turnover from eco-premium productswhich are twain eco- efficient and attract a premiumDeveloping sustainable pee management at all sitesReducing coke emissions from cradle to gate regard to and training in the companies Code of Conduct Strengthening the diversity of the companys manpower andImplementing leading people development programs (AkzoNobel, 2011b).From these targets it is clear that AkzoNobel considers a well adept and ambitious workforce an great tone of voice towards sustainability. It can also be seen that there is an emphasis on the responsibility of the workforce. It is important for the company that its personnel office are aware of the sustainable targets and that the employees take part in stint them.In comparison, Swedens Environmental Objectives are the succeeding(a)Reduced Climate clashing clean AirNatural Acidification OnlyA Non-Toxic EnvironmentA Protective Ozone LayerA Safe Radiation Environment cipher EutrophicationFlourishing Lakes and StreamsGood-Quality GroundwaterA Balanced Marine Environment, Flourishing Coastal Areas and Archipelagos boom Wetlandssustainable ForestsA Varied Agricultural LandscapeA princely Mountain LandscapeA Good Built EnvironmentA Rich Diversity of purposet and Animal Life(Government offices of Sweden, 2011)The management of AkzoNobel is in line with most of Swedens environmental objectives. They are aware of the need to abridge carbon emissions and employ sustainable water management. Furthermore, the achievement of eco-efficient products is a step towards a non-toxic environment.Eka chemical substance is AkzoNobels daughter company that specializes in specialty chemicals, pulp and paper. Their goal is to have pulp and paper products that are made from sustainably sourced fibers (i.e. sustainable forestry), while using cogency from re forward-lookingable sources and discharge further of water that is cleaned after production (AkzoNobel, 2011d).Taking into concern its environmental aspects, AkzoNobel has a clear aim towards one of Swedens Environmental Objectives, which is A Good Built Environment.Environmental PolicyWithin a company, the principles of environmental policy are the knowledgeableness for carry throughing a sustainable system. Usually full nourish at the top management level is needed to make such a system work and to gain the attention of all employees inside the organization (ISO 14001,2010).The term Environmental Policy can be defined asany action deliberately taken to manage human activities with a view to prevent, mortify, or mitigate hurtful set up on nature and earthy resources, and ensuring that man-made changes to the environment do not have harmful effects on humans. (Fairbridge Technologies, 2009).As mentioned previously, AkzoNobel substantively takes care of its reputation for being a sustainable company. This, again, is mentioned in their vendor Policy. The slogan Tomorrows Answer today shows that this discipline is omnipresent and AkzoNobel not only explains that sustainability is at the heart of allthing we do notwithstanding also that they have integrated sustainability into every area of their business. (AkzoNobel, 2011a)Sustainable systemsSustainable systems are considered ones that take into account not only environmental aspects unless also social and economic o nes. The main goal of an Environmental Management System is to improve all three aspects simultaneously without losing performance in one.AkzoNobel uses a sustainability framework which is part of the managing our values ideal. Former happen upon points such as integrity, governance and compliance are now being replaced with new topics such as value creation through process excellence, conception and talent development. More specifically, AkzoNobels sustainability framework focuses on three conceptsImprove hold back to respect with environmental and social regulations to ensure a license to operate. This point is considered to be the core element of how AkzoNobel, as a company, operates.Manage include sustainability in all aspects of the value chain.Invent integrate sustainable value propositions to develop a long-term strategic value.(AkzoNobel, 2009)Tools, methods metricsThe global strategy of AkzoNobel is to integrate sustainability in all aspects of the value chain, to decr ease their carbon mark and to make profits from these standardized systems. It starts in the early stage of commercialise research across sales and ends in cooperation with stake toters. Furthermore, AkzoNobel highlights the essential aspect of long-term opportunities for their business which should be reached by these tools, methods and metrics. In the fol menialing theres a detailed list of the sustainability actions in the company.Eco-premium productsAkzoNobel analyzes all of their products by quantitative or soft measurements every sentence they bring a new product on the market. In order to be deemed an eco-premium product, the product must score importantly better than a on-goingly available product in at least one of the following categoriesToxicityEnergy Efficiencyexercising of Natural Resources and Raw MaterialsEmissions toss offLand use and risk(AkzoNobel, 2009)Environmental Assessment ToolsAs mentioned previously, AkzoNobel quantitatively and qualitatively measures the sustainability of all products before they are considered suitable for sales. In order to conduct these assessments, the company implements the use environmental assessment tools such as life cycle abstract, environmental impacts analysis, carbon footprint analysis, eco footprint analysis and eco cleverness assessment. Environmental tools, such as the ones mentioned, are essential for turning data into environmental business strategies. info for each of the tools is gathered from in house personnel, measurements, authorities, etc. and the conclusions from each report are used for negotiations, reducing costs, come across permit requirements, improving efficiency, meeting guest demand and setting sustainability targets. (AkzoNobel, 2010b)SafetyThe establishment of a behavior- base safety program and a new Safety Leadership Program for bye management is an efficient method of improving the injury rate for employees and contractors. This figure is also influenced by the inte gration of standards for process safety and occupational health and the, so called, Health, Safety, Environment and Security (HSES) audit process. The aim is to share good practice all over the company with corporate HSES audits to analyze progress. (AkzoNobel, 2009) harvest-tide stewardshipTo guarantee that AkzoNobel fulfills all good and ethical requirements for their products (according to REACH, GHS etc.), a Global Product Stewardship and Regulatory Affairs Council has been established. Their tasks are to integrate good practice from the company into a product stewardship framework and to ensure that supplies, training and audits are optimized step by step. (AkzoNobel, 2009)Managing scarce resourcesAkzoNobel puts in a significant amount of effort in reducing the carbon footprint of their products and creating more value for the customer at the same time. Sourcing managers have been installed to identify focus areas for improvement and develop a carbon management plan in a parl ey with suppliers. In the future, AkzoNobel wants to learn more about customer applications to become more efficient in their environmental management. (AkzoNobel, 2009)ISO14001 and AkzoNobelThe ISO 14000 family of environmental management standards can be used to implement a successful environmental management system. Specifically, ISO 14001 can be considered the most important framework for organizations around the world to reach their environmental goals and keep an effective environmental system running. The cyclical process of plan, do, act and check are similar to the ISO 9000 family (Quality Management) and focused on environmental issues. Nevertheless, it is possible to combine the two because it is voluntary for companies to implement these systems. Therefore, every organization regardless of size or sector has the ability to implement ISO 14001. Two different companies can run two completely different environmental management systems entirely both according to the framew ork in ISO 14001. The basic principle which distinguishes ISO 14001 from all other strategies is the Concept of Continual procession Process (CIP). This concept ensures that products are continually being monitored and improved to hold to environmental and safety regulations. (Envirocip, 2011 Environmental Management System, 2011 ISO, 2009)ISO 14001 consists of four basic points (figure 1). They are similar to traditional usualized strategic planning and are followingPlanDoCheckAct(ISO, 2009)Figure 1 ISO 14001(Jonsson, L. 2011)An comment of each step and its connection with AkzoNobels business policy is as follows.Plan Environmental management system implementationIn the first step of the PDCA-cycle, environmental goals are defined and strategic processes are created to reach them. ideally those targets are measurable so it also leapings a framework for a see system. AkzoNobel installed sourcing managers to take care of their carbon management plan and to determine new focus areas for improvement and development together with suppliers. (AkzoNobel 2009 ISO, 2009 U.S. Environmental tax shelter Agency, 2008)Do Conduct life cycle assessment and manage environmental aspectsDuring this step, the company begins the life cycle assessment process and determines how to manage environmental aspects. This step requires that documentation be taken throughout the entire assessment, control systems are run, employees are educated and emergency plans are established. One pillow slip of how AkzoNobel deals with this step in the ISO 14001 process is the implementation of the EUs REACH-Project in 2007. This program conglomerate changing the requirements and rules for suppliers which how AkzoNobel educated their contractors to manage environmental aspects differently. (AkzoNobel ,2007a)Check Conduct audits and adjudicate environmental performanceThe check step in the ISO 14001 involves screening, measuring and unconditional all processes and products controlled by in ternal audits etc. AkzoNobel is very proud of its Eco-Premium Products. They give this label to new products after positive analyses of their carbon footprint. (AkzoNobel 2009 ISO, 2009 U.S. Environmental tribute Agency, 2008).Act Communicate and use environmental declarations and claimsDuring this stage, companies determine whether their goals and targets within their Environmental Management System were fulfilled. In AkzoNobel, a Product Stewardship System controls and improves all activities from cradle until gate. An effective way to follow this step of the ISO-framework is to check the current situation, and go back and find a better solution in a continuous process. (AkzoNobel 2009 ISO, 2009 U.S. Environmental Protection Agency, 2008)Suppliers sustainabilityAs mentioned previously, AkzoNobel claims to have implemented sustainability into every area of their business. As per this initiative, part of their long-term strategic goal is to build relationships and work with partne rs that befriend the company increase its sustainability. Currently, AkzoNobel requires suppliers of raw materials to tie to certain restrictions with regards to social and environmental standards. This is laid out by the AkzoNobel Vendor Policy- a document that formulates the conditions that suppliers are legally bound to. The conditions that vendors must comply to have been broken down into four categories supplier visits, vendor compliance letter, key management program, and sustainability focus areas. (AkzoNobel, 2011h)Supplier visitAkzoNobel regularly conducts support visits with their vendors. The purposes of these visits are to not only ensure that AkzoNobels restrictions are being met but also to provide sustainability counseling. AkzoNobels personnel give suggestions and act as environmental consultants to their suppliers. Continual regular visits ensure that the suppliers have implemented the sustainability measures and have keep their new strategies. This process is la id out in the Vendor consanguinity Management Framework. (AkzoNobel, 2011h AkzoNobel, 2011j)Vendor compliance letterAs part of the legal obligation for vendors to adhere to AkzoNobels business principles, vendors are required to sign the Vendor Compliance Letter. This document contains AkzoNobels core values as well as a framework for labor, environmental, safety, and business relations guidelines. (AkzoNobel, 2011i)Key supplier management programThis program aims to work with suppliers to increase and improve Eco-premium solutions for their customers. Regular meetings are conducted where suppliers and AkzoNobel agree upon new products that go forth continue success not only in economic terms, but also environmental sustainability terms. (AkzoNobel, 2011h)Sustainability focus areasAkzoNobel has developed sustainability focus areas (SFA) in order to source products and services that give the company the opportunity to significantly visit their ecological footprint. These areas i ncludeLogistics TravelWaste ManagementPackagingCarbon ManagementRenewable Raw MaterialsIT read Cars(AkzoNobel, 2011h)Climate change AKZO NobelPositionAkzoNobels position on humour change is laid out in the document AkzoNobels Position Statement. This document states that AkzoNobel recognizes climate change as a man-made global issue of great importance and, therefore, it is necessary to mitigate CO2 emissions. In an effort to reduce their carbon footprint, AkzoNobel monitors, measures and studies all CO2 emissions related to industrial or production activities. Yearly, this data is compiled into reports that are in accordance with the Greenhouse Gas protocol and provide an analysis of direct, indirect, and total CO2 emissions. From these reports, reduction goals and mitigation objectives are developed that the company aims to achieve by the following year. The 2015 target is to reduce carbon emissions by 10% (based on 2009 emissions) per ton of product and the 2020 target is to reduce carbon emissions by 20-25% (based on 2009 emissions). (AkzoNobel, 2008)AchievementsAkzoNobel has been recognized as the global leader in sustainability in the chemicals industry. From 2006 to 2007 AkzoNobel has managed to decrease their carbon dioxide emissions from 5.2 (Million T c) to 3.3 (Million T c). From 2007 to 2008, AkzoNobel decreased their carbon dioxide emissions 1 percent per ton of production. Because AkzoNobel aims to significantly reduce their ecological footprint, they have set up a strategy to help reduce carbon-intensive processes and improve free qualification efficiency. Thus far, they have achieved the following73% of worldwide power consumption is based on zero and low carbon sources37% of electricity in the production process is based on hydropowerConsidered in the top ten percent for energy efficiency in manufacturing salt-chlorine-PVC loop- on our their most energy intensive processesUse low carbon energy sources to produce their other two most ener gy intensive chemicals- sodium chlorate and hydrogen peroxideTrying to replace fogy fuels with renewable resources such as wood chipsAssessed the eco-efficiency/carbon footprint of key productsDeveloped several carbon efficient solutions for our customersInclude energy efficiency and carbon footprint criteria in their investment decisions(AkzoNobel, 2008)Additionally, Scandinavias pulp and paper industry and Hollands base chemical production are AkzoNobels most energy intensive production plants. These two industries combined are responsible for 82% of AkzoNobels total energy use and 73% of their CO2 emissions. Recently, the pulp and paper chemicals production plant shifted 58% of its energy to hydropower. Also, the base chemicals plants were retrofitted with highly energy efficient, gas fired cogeneration units that produce steam and power. (AkzoNobel, 2007b)The FutureAkzoNobel has made plans to invest in creating a system that produces steam from waste and biofuels. AkzoNobel also supports implementing a cap and trade system that encourages plants to become sustainable while laboured the unsustainable ones. Their position states that they support the development and implementation of the most energy efficient technologies worldwide. For the future, AkzoNobel is revising their 2008 Carbon Strategy to build new sustainability goals. This strategy will include plans to reduce carbon emissions in the area of manufacturing. (AkzoNobel, 2007b)Discussion subsequently reviewing AkzoNobels business strategy, it is clear that AkzoNobel looks at high environmental/sustainability performance as a business opportunity. The company specifically aims to produce products that are economically as well as environmentally rewarding. Currently, sustainability and climate change issues are at the forefront of the global agenda. If AkzoNobel chose to disregard these issues and continued with business as usual their reputation would lack the high integrity which has been a key el ement to their success. Because this company has managed to significantly reduce their ecological footprint, they have veritable several awards, media attention, and PR. This attention does not go unrecognized as consumers are attracted to companies that hold such a high esteem. Additionally, it is well known amongst the general population that chemical production as well as pulp and paper production are two notoriously environmentally harmful industries. As the general population becomes increasingly involved and aware of environmental issues, AkzoNobels business and purchasing decisions begin to reflect it. It is, thus, in AkzoNobels best interest to address the companys sustainability and remain at the forefront of the global sustainability arena. If AkzoNobel chose to disregard sustainability issues it would, in the long-term, cause AkzoNobel to not be able to compete with its competitors in the market. This is in line with AkzoNobels philosophy of environmental stewardship and their understanding of customer demand as can be seen by the following AkzoNobel quotationSustainable innovation process drink is driven by the need for better product performance but its always connected to sustainability and environmental performance. We cant bring a product to market that is less environmentally friendly than its predecessor and expect it to succeed. Equally, a new eco-product will only do well if it also offers real competitive advantage.(AkzoNobel, 2010a)Regardless of the companys attempt to address environmental/sustainability issues, AkzoNobel is nonetheless environmentally harmful. Producing chemicals, paint, paper, and pulp products is never through with(p) without an ecological price. However, AkzoNobel has made a significant effort to increase the companys environmental sustainability as much as possible. This has been done by developing strategies, goals, and plans through rigorous sustainability planning and the success of the activities have been m onitored via environmental testing. Because reductions in VOCs, CO2, SO2, and NOx emissions have been proven, the business activities of the company are in correlation to the environmental planning.As mentioned, companies in modern business are aware of the importance of being green. Unfortunately some of them let on to act green even though they present themselves as such. Greenpeace has set up a campaign to stop this so called Greenwashing and ask companies to Clean up your act, NOT your image (Greenpeace, 2011). While surfing AkzoNobels webpage, it was clear that AkzoNobel was exceedingly proud of all its positive achievements but hardly mentioned when it didnt succeed or have a bad performance. However did SOMO (Centre for Research on multinational Corporations) make a report in 2009 about AkzoNobel to provide supernumerary information that AkzoNobel itself might not have reported, focusing on the 2008 annual report. In this report it was stated that in 2008 the Political E conomy Research Institute (PERI) of the University of Massachusetts had ranked AkzoNobel in the 85th place on the Toxic 100 Index. This index indicates the top 100 air polluters in the U.S. on the basis of total human health hazards resulting from air toxics emissions at their facilities. (Knottnerus, 2009). It was also noted that in 2008, AkzoNobel had not fulfilled requirements about the example and purchase of renewable energy. Knuttnerus mentioned more cases that were not environmentally friendly, though some(prenominal) were old, some even stationed back in the 1980s. Sustainability first became a primeval principle in AkzoNobels business in 2004. The company had a dissolute success and already in 2008 it was in 2nd place on the Dow Jones Sustainability Indexes. (Knottnerus, 2009). The company has succeeded a lot in a short time and its understandable that some things cant happen over a night.From our point of view AkzoNobel could think about taking part in the Chemical Lea sing program coordinated by UNIDO to mitigate their environmental pollution. The idea of ChL is to establish a service-oriented business model and to guide customers away from buying and using too much chemicals for the purpose of the environment. The producer mainly sells the functions performed by the chemical and functional units are the main basis for payment. (UNIDO, 2010)ConclusionAfter analysis of AkzoNobels environmental/sustainability management performance, it is clear that the company has a strong sustainable agenda that is supported by all levels of management- an essential aspect for successful implementation of business strategies. To execute this plan, AkzoNobel established an Executive Committee and a special Sustainable Development group that focuses on these matters. The main driving force for the development of this strategy is to increase long-term share holder value. The company monitors and develops both their internal production as well suppliers through the u se of several sustainability tools. It was determined that AkzoNobel uses this sustainability strategy as a business opportunity as well as a means of boosting their general image. Since it was difficult to find figures or statistics that showed negative environmental performance, it is unclear whether the company adheres to Greenpeaces campaign slogan Clean up your act, NOT your image. Either way, it is important that modern day companies are transparent and do not will to report their bad performance. Transparency and honesty in business is the best way to be trusted and to avoid being classified as a Greenwashing company.