Doing Better by the Environment Sustainable development INTRODUCTION The latter part of the twentieth century saw an increasing concern for the environment. The concept of “sustainable development” (as defined by the World Commission on Environment and Development in 1987) is: “development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs. ” There are many views about the nature of sustainability. In its simplest form it is about ensuring a better quality of life for everyone, now and for future generations.
To achieve this, sustainable development is concerned with achieving economic growth alongside the protection of the environment and also at the same time making sure that these economic and environmental benefits are available to everyone. These three aspects – economic, environmental and social form the basis of the sustainable development concept. Rio and after By the early 1990s there was considerable pressure for governments to create agreements concerning the environment and its protection.
In 1992 the United Nations Conference on Environmental and Development (UNCED) was held in Rio de Janeiro. The main outcome of the conference was Agenda 21, which marked an important landmark in the sustainable development fight, and inter country co-operation. Agenda 21 was the main document signed at the conference. It was over 800 pages long, and represented a new global commitment to sustainable development. It was not a legally binding document, but was devised as a working plan which countries would follow.
The conference marked the start of global co-operation, which was needed to deal with the many issues, including concern for the environment. The environment is a key subject that affects us all. Protection of the environment and the move towards sustainable development remains a responsibility that must be shared between the public, governments and the private sector. efficiency in manufacturing in turn leads to a more efficient use of natural resources. Operating efficiently translates to competitive advantage for business and supports the economic pillar of sustainability as well.
Therefore, all aspects of sustainability are seen as complementary, and mutually interdependent. Agenda 21 states that responsible businesses should play a major role in improving the efficiency of resource use. This can result in minimising waste and protecting human health and environmental quality. For a business to be environmentally sustainable, the company must start by becoming environmentally aware from the inside. The whole ethics and culture of the organisation must reflect those of sustainable development.
This includes what the company does, how it treats its workers, how it deals with other organisations, how the managers act and what messages these actions send out. Sustainable Development is an integrated approach including economic, environmental and social aspects. Therefore all three are to be put at complementary levels of priority each considering effects of the other components. Agenda 21 lays out a seven point plan for businesses to start changing values and perceptions. It states that they should: develop policies that support operations and products that have lower environmental impacts nsure responsible and ethical management of products and processes from the point of view of health, safety and the environment make environmentally sound technologies available to affiliates in developing countries without prohibitive charges encourage overseas affiliates to modify procedures in order to reflect local ecological conditions and share information with Governments create partnerships to help people in smaller companies learn business skills establish national councils for sustainable development, both in the formal business community and in the informal sector, which includes small scale businesses increase research and development of environmentally sound technologies and environmental management systems.
Naturally, Nestle is committed to sustainable development and environmentally sound business practices. The key drivers for Nestle’s worldwide environmental approach are: total compliance with all laws and regulations in all countries where it operates that Nestle seeks to provide a leadership role – to establish the benchmark for good business practice by committing resources, both human and financial, to secure environmental targets, including: employing new technologies and processes measuring the costs and benefits to the business of its activities ensuring employees are aware of best practice. To be effective a programme of environmental improvement must be supported by practical management systems.
Nestle’s worldwide approach, therefore, has been to: set targets for environmental improvements monitor progress audit results review targets. BROWSE THE WEB FOR This case study examines the background to sustainable development, the environment and its protection. It also looks at how Nestle S. A. , the world’s leading food company, developed a policy and current business practices that reduce the company’s effect on the environment. Following years of work on environmental issues dating back to the 30’s, in 1996 the Nestle Environmental Management System (NEMS) was introduced which consolidates all environmental measures taken by the Nestle Group.
NEMS is now used to ensure continuous improvement in Nestle’s environmental performance covering all its business activities. The sustainable business The concept and support for, sustainable development is growing. Many businesses have integrated a strategy of sustainability (taking into account its 3 main aspects economic, environment, social). It makes good business sense for companies to be environmentally friendly as improved Nestle as a sustainable business As the world’s largest food company, Nestle S. A. is dedicated to providing consumers with the best food throughout their lives. The primary role of the Company is the transformation of natural resources into finished products that meet consumers’ expectations for safety, quality, convenience and value. information on the organisation www. nestle. co. uk www. nestle. com ACCESS THE CD FOR • printouts of the case study • hotlinks to: www. thetimes. co. uk www. thetimes100. co. uk THE TIMES 100 Edition 6 GLOSSARY OF KEYWORDS Progress to date – An example from Nestle UK In the UK a series of surveys at all Nestle UK locations formed the basis for a programme of continuous improvement. Action plans were developed for each Nestle UK site, including capital expenditure plans for environmental protection. two business examples of areas where improvements are being made: Packaging Packaging is essential to maintain the high quality of the products.
Nestle continuously reviews packaging and, where possible, reduces the amount used. This results in saving on materials such as glass and plastics. Nestle is also playing its part in meeting national targets for the recovery and recycling of packaging waste. Nestle has established a set of criteria for evaluating packaging. These are: Is the packaging appropriate for the product? Is the size of pack justified? Are there any unnecessary components within the pack? Could any of the components be reduced in weight or thickness? Could the manufacture and construction of the outer packaging be made simpler? Is the material re-usable or recyclable?
Between 1991 and 2000 Nestle UK has been able to reduce its consumption of materials by up to 10%. Major achievements in this area included: Removal of the inner plastic sleeve from Kit Kat Bumper packs saving 160 tonnes of plastic per year. A reduction in the thickness of 200g Nescafe jars saving 1041 tonnes of glass per year. A reduction in thickness of base material for chilled dessert pots saving 150 tonnes of plastic over a two year period. Energy management As an integrated part of its environmental policy, Nestle UK is committed to responsible energy management and seeks to use energy as efficiently as possible. This is done to: improve cost-effectiveness, productivity and orking conditions prolong the useful life of fossil fuels avoid unnecessary expenditure prevent related emissions to the environment. This involves seeking to buy fuels at their most economic cost and then to use them as efficiently as possible. It also means a reduction in pollution, and less dependence on non-renewable resources. In the short-term this involves gaining better control over energy consumption. Different operations are measured to determine energy usage. Nestle is investing in energy saving measures as well as staff that are properly informed. Carbon dioxide is the most significant of the greenhouse gases believed to be responsible for the effects of Global Warming.
The Kyoto Conference on Climate Change (1999) has meant that the UK and many other Governments have entered into a legally binding agreement to reduce greenhouse gases. In addition, the Government has set a unilateral target of 20% reduction of carbon dioxide by 2010 from 1990 levels. This is a summary of the steps taken by Nestle UK since 1994 to reduce greenhouse gas emissions: the replacement of a coal-fired steam raising plant with a gas-fired combined heat and power plant at York, saving 45,000 tonnes of CO2 per year similar changes at Dalston – saving 24,000 tonnes Ashbourne – saving 9,000 tonnes Fawdon – saving 12,500 tonnes. All figures shown relate to savings made per year.
As a company which produces frozen, chilled and other perishable foods, refrigeration is essential to many parts of Nestle’s production and distribution systems. Nestle is progressively cutting refrige r a n t s t h a t are potentially harmful to the environment. In the late 1980’s a survey indicated that up to 10% of refrigerants used by the company in the UK were CFCs. The decision was made to phase out CFCs in all but small, hermetically sealed systems and today this programme is complete. Nestle Policy and the Environment Protection Act all forbid the deliberate discharge of refrigerants into the atmosphere. Where refrigerant has to be removed from a system and cannot be immediately reused, it is recovered and sent for recycling or disposal by suitably qualified companies.
Conclusion World governments are increasingly realising their responsibility to develop and implement shared solutions to global environmental issues. At the same time responsible businesses like Nestle S. A. are taking on a leadership role. This should drive forward changes in policy and practice which will help us all to enjoy a sustainable future. Audit: Listing and measuring results, in order to check on performance. Continuous improvement: Based on the Japanese notion of Kaizen of continually seeking small incremental steps to improve products, processes and ways of working. Culture: The typical pattern or way of doing things in an organisation.
Drivers: The underlying forces that prompt and lead change. Environment Protection Act: UK legislation creating series of requirements on business to operate in sustainable ways. Ethics: Sets of moral principles/beliefs. Practical management systems: Systems which are designed to put management decisions into action. Strategic commitment: Organisation wide commitment involving all the parts of organisational policy and practice. Sustainable development: Development in living standards and improvements in the quality of life of people as a whole (rather than just for specific individuals) over a period of time. Nestle’s Environmental Management System (NEMS)
NEMS is an organisational tool at the heart of Nestle’s programme for the environment, and sets the framework for all measures applied. The NEMS objectives include: To provide a systematic approach that ensures compliance with Nestle’s environmental policy, relevant laws and Nestle’s operational standards. To ensure the continuous improvement of Nestle’s environmental performance, e. g. through the conservation of natural resources and the minimisation of waste. To achieve compatibility with international voluntary standards on environmental management systems. To build mutual trust with consumers, governmental authorities and business partners. NEMS is being implemented throughout Nestle S. A. s entire operation. Ways in which Nestle is doing better by the environment Nestle UK’s commitment to sustainable business practice is illustrated by Removal of inner plastic sleeves from Kit-Kat bumper packs saves 160 tonnes of plastic per annum. QUESTIONS • information on the organisation BROWSE THE WEB FOR 1 How can the removal of the inner plastic sleeve from Kit Kat Bumper packs be seen as a move towards sustainability? 2 Why are International Treaties like Rio and Kyoto important in encouraging sustainable business practice? 3 Give one other example of how Nestle has developed business practice in line with Agenda 21’s seven point plan for business. 4
Why is it important for organisations like Nestle to show leadership in developing sustainable business practice? 5 What further steps could Nestle take in contributing to sustainability? www. nestle. co. uk www. nestle. com BROWSE THE WEB FOR • answers to these questions • a profile of the organisation • revision help www. thetimes100. co. uk ACCESS THE CD FOR • printouts of the case study • hotlinks to: www. thetimes. co. uk www. thetimes100. co. uk THE TIMES 100 Edition 6 The Times Newspaper Limited and ©MBA Publishing Ltd 2000. Whilst every effort has been made to ensure accuracy of information, neither the publisher nor the clients can be held responsible for errors of omission or commission.