Chapter 10

Question 1

Environmental law?

Answer 1

Refers to rules, standards and regulations enacted by governments to protect the natural environment by controlling pollution, managing natural resources and holding violators accountable

Eg. A clean air act sets air quality status to control pollution is like ozone, sulphur dioxide and nitrogen oxide.
Eg. Sweden Leads in solid waste recycling less than 1% of household waste ends up in hand due to extensive recycling programs.

Question 2

Key features of environmental laws?

Answer 2

1. Role of government
   - set minimum environmental protection standards across industries
   - Insurance no firm is unfairly disadvantage for compliance
   - Create agencies like EPA (environmental protection agency) to enforce laws
2. Major US environmental laws
   - Water — water pollution control act, safe drinking water act
   - Solid and hazardous waste — toxic substances control act, super fun act
   - Cross media pollution — pesticide control act, pollution prevention act

Question 3

Example examples of enforcement?

Answer 3

• volkswagen (air pollution) — find 4.3 billion for emissions fraud
• BP oil spill (2010) —massive water pollution case in the Gulf of Mexico

Question 4

International practices?

Answer 4

EU — strict regulations are marine pollution, a standardised penalties
Sweden — exemplifies advanced waste reduction and recycling systems
Developing nation — often less enforcement due to limited resources, but rising awareness in pushing change

Question 5

Regulatory policy approaches?

Answer 5

These are strategies governments used to enforce environmental laws and encourage pollution reduction. They include command- and -control, market -based mechanisms, information disclosure and enforcement.

Eg. The clean air act - introduced cap and trade program to reduce acid rain emissions - allowing companies to buy and sell pollution permits

Question 6

Command and control regulation?

Answer 6

Government sets specific limits for pollution and mandate certain control technologies

Question 7

Advantages of command and control regulation?

Answer 7

• legally enforceable
• compliance is mandatory

Question 8

Disadvantages of command and control regulation?

Answer 8

• One size fits all, not flexible for different industries
• May discourage innovation
• Expensive and complex to enforce

Question 9

Market based mechanisms
Cap And trade systems ?

Answer 9

Government sets an emissions cap and allows companies to trade allowances

Question 10

Advantages of cap and trade systems?

Answer 10

• Encourages innovation and cost efficiency
• Achieve environmental goals at lower economic cost

Question 11

Disadvantages of cap and trade systems?

Answer 11

• can be seen as “licensing to pollute”
• Permit levels are hard to set fairly

Eg. Acid rain program under the US clean air act saved billions annually.

Question 12

Emissions fees and taxes?

Answer 12

Polluters pay taxes based on the amount of pollution they emit

Question 13

Advantages of emission fees and taxes?

Answer 13

• Penalises bad behaviour (pollution)
• Can drive long-term behaviour change

Question 14

Disadvantages of emission fees and taxes?

Answer 14

• Fees may be too low to be effective
• Difficult to calculate correct fee levels

Question 15

Government incentives?

Answer 15

Office subsidies or credits for environmentally responsible behaviour

Question 16

Advantages of government incentives?

Answer 16

• encourages companies to exceed standards
• Rewards innovation

Question 17

Disadvantages of government incentives

Answer 17

May not be strong enough to influence or firms

Question 18

Information disclosure (regulation by publicity)?

Answer 18

Government publishes data about company pollution levels to pressure change

Question 19

Advantages of information disclosure?

Answer 19

• Low costs to enforce
• Allows consumers to influence corporate behaviour

Question 20

Disadvantages of information disclosure?

Answer 20

• Not all companies respond to public pressure

Eg. The toxic release in inventory TRI reports company emissions annually to the public.

Question 21

Civil and criminal enforcement?

Answer 21

Firms that violate laws faced fines, cleanup costs or even criminal charges

Question 22

Advantages of civil and criminal enforcement?

Answer 22

• strong deterrent
• Holds individuals accountable

Question 23

Disadvantages of civil and criminal enforcement?

Answer 23

• depends on how strictly laws are enforced
• May not be effective if enforcement is weak

Eg. AnaDarco paid over a $5 billion in penalties for toxic contamination across 11 US states.

Question 24

Costs of environmental regulation?

Answer 24

• manufacturers, mining companies and utilities spend billions of dollars annually to comply with environmental regulations
• Some jobs are lost in particularly polluting
• Competitiveness of some capital intensive dirty industries is impaired
• Consumers pay more when companies pass along increased costs of regulations

Question 25

Benefits of environmental regulations?

Answer 25

- emissions of pollutants - Air and water **quality improve** , toxic waste sites are cleared up, and natural beauty is preserved or enhanced - People **live longer and healthy** lives in this polluted environment - **Jobs are created** in the economy sector, such as environmental products and services, alternative energy and tourism

Question 26

An ecologically sustainable organisation (ESO)?

Answer 26

**A business that operates in a way that is environmentally benign, meet the needs of the present generation without compromising future generations and actively support the long-term sustainability of natural ecosystem**

Question 27

What are the stages through which firms progress as they become more sustainable?

Answer 27

1. **Pollution prevention** - **Focus** : minimising or eliminating waste before it is created - eg. Reducing emissions, improving process efficiency. 2. **Product stewardship** - **Focus** : managing environmental impacts across the products life-cycle - eg HP designed printers for reuse and offered cartridge return services 3. **Clean technology** - **Focus** : innovating new technologies that deliver actual environmental benefits - eg. GE invested in clean energy through ecomagination.

Question 28

Managing for sustainability?

Answer 28

refers to **strategic efforts by companies to reduce their environmental impact** , meet regulatory and stakeholder expectations and ensure long-term ecological and economic resilience**

Question 29

Key organisational approaches to sustainability management?

Answer 29

1. **The ecologically sustainable organisation (ESO)** 2. **Stages of corporate environmental responsibility** 3. **Chief sustainability officer role (CSO)**

Question 30

1. Ecological sustainable organisation?

Answer 30

- an ESO operates in line with sustainable development — **without deleting natural resources of harming ecosystems** - Minimise energy used, waste and pollution and works in partnerships to meets sustainability goals Eg. Interface started a mission zero (zero environmental impact by 2020)

Question 31

3. Stages of corporate environmental responsibility?

Answer 31

Companies typically move through 3 stages : - **Pollution prevention** Focus on eliminating waste before its created - **Products stewardship** Managing all environmental impact across the products life-cycle - **Clean technology** Investing in sustainable innovations

Question 32

3. Chief sustainability officer role (CSO)?

Answer 32

- Many firms now appoint a CSO to lead sustainability strategies - Report directly to the CEO and influence operations, supply chains and marketing

Question 33

Common characteristics of effective sustainability management?

Answer 33

1. Top management commitment 2. Clear goals and metrics 3. Employee engagement 4. Alignment of incentives 5. Environmental auditing and reporting

Question 34

1. Top management commitment?

Answer 34

**Strong sustainability commitment from CEOs and boards is essential** Eg. CEO integrated sustainability into core strategy/board oversite.

Question 35

2. Clear goals and metrics?

Answer 35

Leading companies set **science based, measurable goals** and track progress regularly Eg. Kumar releases a full environmental profit and loss statement using recyclable materials where possible.

Question 36

3. Employee engagement?

Answer 36

**involving employees across apartments leads to better implementation** Eg. Cisco’s greenhouse enables employees to reduce waste and environmental footprint.

Question 37

4. Alignment of incentives?

Answer 37

**Best performing firms Link manager pay and bonuses to achieving sustainability goals** Eg excel energy link bonuses to annual reductions in customer energy use

Question 38

5. Environmental auditing and reporting?

Answer 38

**Firms measure and reports on their sustainability performance using integrated or standalone reports** Eg. 20 1783% of the worlds largest companies reported on sustainability up from 44% in 2011

Question 39

Environmental partnerships?

Answer 39

**Firms collaborate with NGOs and stakeholder to improve sustainability outcomes** Eg. Starbucks and conservation International promote sustainable coffee farming and biodiversity hotspots like Mexico/Indonesia.

Question 40

Effective sustainability management is not only ethically responsible but also financially rewarding how?

Answer 40

**It reduces operating cost, attracts investment, enhances innovation, minimise legal risk and build long-term resilience**

Question 41

How effective sustainability management makes firms more competitive and improve their financial performance?

Answer 41

1. Cost savings 2. Technological innovation 3. Reduced regulatory and liability risk 4. Strategic planning 5. Improve reputation and market value

Question 42

1. Cost savings and 2. Technological innovation?

Answer 42

1. **Cost savings** Reducing waste, reusing materials and improving efficiency significantly cut operating costs - Subaru saves over $2 million a year by operating a zero waste facility recycling waste 2. **Technological innovation** Environmental challenges push firms to develop new technologies which can open new markets and increase efficiency - ibm reduced water waste as its semiconductor plant and launched intelligent water— consulting business to help others do the same

Question 43

3. Reduce regulatory & liability risk and 4. Strategic planning?

Answer 43

3. **Reduce regulatory & liability risk** Companies that manage proactively are better prepared for future regulations and avoid penalties/lawsuits - Anadarker was fined for environmental violations productive firms avoid such outcomes and gain compliance advantages in global markets 4. **Strategic planning** Using sustainability as a lens for planning and better anticipate trends and market needs - toyota was an early innovator with the prius and weathered economic recession is better due to forward looking sustainability planning

Question 44

5. Improve reputation and market value?

Answer 44

**Firms that embrace sustainability are more attractive to investor, customers and top talent** Eg. Study by Harvard business school found that high sustainability firms are performed others in stock market and financial results.