Environmental Performance Measurement Research Articles

Current trends of corporate performance reporting tools and methodology design of multifactor measurement of company overall performance

Enterprises normally have a different approach to performance reporting. Performance reporting, and unfortunately reporting globally, at small and middle enterprises are not widely supported or popular. It perceived as something what enterprises must do, not what they like to do. The reason could be because its time consuming for them or it gives not a good (or none) feedback to the enterprises. But there are also some of the enterprises, that have their performance reporting as normal part of the corporate culture and want to have reporting as part of their information system (ideally automated). The first step of successful implementation of the automated performance reporting into the information system is to formalize the business rule from natural language expression. Current trends of corporate performance reporting and performance evaluation, i.e., the measurement of environmental, social, economic and governance performance of a company, and corporate sustainable reporting, are discussed in the paper. The relationship between corporate performance and reporting is an important issue; and the design of modern and advanced methods to identify key performance indicators is discussed here along with the possibility of the utilization of XBRL taxonomy or/and Complex event processing (CEP) techniques and methods.

Measuring the ecoefficiency of a manufacturing process: a conceptual proposal

PurposeIndustrial growth has positively influenced the economic development but has also generated adverse effects on the environment. To minimize the environmental burdens resulting from industrial activity, new practices and management tools have been developed, including the concept of ecoefficiency which has aided the response to manufacturing environmental issues. However, traditional ecoefficiency measurement involves the use of multiple indicators that are individually evaluated over time to verify if the ecoefficiency is improving or worsening. This practice is procedurally difficult because ecoefficiency indicators can vary in opposite directions. To assess this issue, this paper suggests a procedure to appraise the ecoefficiency level of a manufacturing process by means of a conceptual proposal of a single measure that could reflect the process’ global progress, even if the selected ecoefficiency indexes move in opposite ways.Design/methodology/approachThe proposed concepts were developed through a theoretical approach to gauge the ecoefficiency level of a single piece of equipment, which was then expanded to the whole production process area. This work can be categorized as a conceptual paper using literature review and theoretical developments as basic tools to support the concepts proposed. Complementarily, one practical example is presented to illustrate the application of the suggested procedure to a real‐life situation.FindingsInitially the paper proposed a manner to evaluate the ecoefficiency level of a single machine combining the selected ecoefficiency indicators into a single index. Next, this concept was extended to consider the whole production process area by merging the ecoefficiency level of each equipment existing in a given production area with another single quantity named ecoefficiency level of the manufacturing process under consideration. The concepts developed were applied to a case study to show its use in a real‐life scenario.Research limitations/implicationsAlthough the suggested technique could in principle be used in most common manufacturing situations, its widespread utilization cannot be assured based on the developments made in this paper. This could be a possible limitation to the concepts suggested. However, additional empirical research considering other types of production conditions could resolve this problem.Practical implicationsFor the practitioners and managers dealing with environmental matters in manufacturing, this paper makes a relevant contribution because it permits the utilization of a single measure to appraise the ecoefficiency level in a single piece of equipment or in the entire production process, allowing challenging areas and the associated actions required to improve them to be identified.Originality/valueAlthough the integration of environmental pressures into a single environmental performance measure has been a major challenge, this paper conceptualizes the ecoefficiency level of a production process by suggesting of a single measure that could reflect its global evolution, even if the selected ecoefficiency indicators move in opposite directions.

Building environmental sustainability: empirical evidence from Logistics Service Providers

Abstract Environmental sustainability has recently become more and more of a concern among both academics and practitioners. In particular logistics services operations can play a significant role in reducing the environmental burden of the supply chain. Although studies on these issues have been progressively increasing in the extant literature, still little investigation has been performed among Logistics Service Providers (LSPs). The present paper aims to fill this gap and provides the results of an empirical study on the adoption of environmental initiatives in the contract logistics industry, along with the metrics used for environmental performance measurement and the barriers and drivers that may hinder or facilitate the adoption of these initiatives. After a careful literature review, a framework was developed to identify the initiatives towards environmental sustainability with a focus on companies involved in logistics and transportation processes. The framework was applied to a set of ten LSPs by examining their environmental reporting and a sub-set of three companies was finally selected for in-depth interviews. An analysis of the environmental sustainability initiatives of primary multinational LSPs and their adoption level is presented. The present paper contributes to the knowledge of environmental sustainability for logistics and transportation and offers new insights in theory, paving the way for further research on these topics.

Adaptive Flood Risk Management Under Climate Change Uncertainty Using Real Options and Optimization

It is well recognized that adaptive and flexible flood risk strategies are required to account for future uncertainties. Development of such strategies is, however, a challenge. Climate change alone is a significant complication, but, in addition, complexities exist trying to identify the most appropriate set of mitigation measures, or interventions. There are a range of economic and environmental performance measures that require consideration, and the spatial and temporal aspects of evaluating the performance of these is complex. All these elements pose severe difficulties to decisionmakers. This article describes a decision support methodology that has the capability to assess the most appropriate set of interventions to make in a flood system and the opportune time to make these interventions, given the future uncertainties. The flood risk strategies have been explicitly designed to allow for flexible adaptive measures by capturing the concepts of real options and multiobjective optimization to evaluate potential flood risk management opportunities. A state-of-the-art flood risk analysis tool is employed to evaluate the risk associated to each strategy over future points in time and a multiobjective genetic algorithm is utilized to search for the optimal adaptive strategies. The modeling system has been applied to a reach on the Thames Estuary (London, England), and initial results show the inclusion of flexibility is advantageous, while the outputs provide decisionmakers with supplementary knowledge that previously has not been considered.

Exploring the challenges in implementing supplier environmental performance measurement models: a case study

This study aims to explore the challenges associated with implementing supplier environmental performance measurement models in context of a global supply chain. After a thorough literature review on the topic, a case study-based research methodology is adopted to investigate the real-life perspective of the issues encountered while evaluating the supplier performance in a sustainable supply chain. An in-depth study of one of the biggest fast-moving consumer goods companies in UK is discussed and analysed in this paper. Findings of this research will pave the way for developing a robust, efficient and usable environmental performance measurement framework in a supply chain.

Environmental performance—Impacts of vendor–buyer coordination

Effective coordination is a hallmark of successful supply chain management. Without such coordination, vendors and buyers will act independently to make decisions that optimize their own objectives (e.g., maximize their respective profits or minimize their costs). This non-coordinated approach is unlikely to be optimal when one considers the supply chain as a whole. Most vendor–buyer coordination research concentrates only on an objective of minimizing total system costs; but with the increasing environmental awareness in business and the general public, many organizations acknowledge that strategies and practices which incorporate environmental considerations are essential to acquire a competitive advantage. The objectives of this research are concerned not only with the economic impact of vendor–buyer coordination on the organizations involved, but also with the wider effects on society, such as the effects of pollution on the environment. This research demonstrates how to effectively incorporate environmental issues into vendor–buyer coordination. First, we study the impacts of cost-minimizing vendor–buyer coordination models on environmental performance when compared with independent (non-coordinated) optimization. Second, we develop a single-vendor multi-buyer coordination model that includes both costs and environmental performance measures in its objective function. A numerical example and a real case study show how both the total system cost and the environmental performance can be simultaneously improved.

Battle of the Water Networks II

The Battle of the Water Networks II (BWN-II) is the latest of a series of competitions related to the design and operation of water distribution systems (WDSs) undertaken within the Water Distribution Systems Analysis (WDSA) Symposium series. The BWN-II problem specification involved a broadly defined design and operation problem for an existing network that has to be upgraded for increased future demands, and the addition of a new development area. The design decisions involved addition of new and parallel pipes, storage, operational controls for pumps and valves, and sizing of backup power supply. Design criteria involved hydraulic, water quality, reliability, and environmental performance measures. Fourteen teams participated in the Battle and presented their results at the 14th Water Distribution Systems Analysis conference in Adelaide, Australia, September 2012. This paper summarizes the approaches used by the participants and the results they obtained. Given the complexity of the BWN-II problem and the innovative methods required to deal with the multiobjective, high dimensional and computationally demanding nature of the problem, this paper represents a snap-shot of state of the art methods for the design and operation of water distribution systems. A general finding of this paper is that there is benefit in using a combination of heuristic engineering experience and sophisticated optimization algorithms when tackling complex real-world water distribution system design problems.

How to control environmental strategy?

The present paper aims at understanding which are used in corporate reports and how firms might control the environmental strategy. We propose a framework for the control of the strategic management of environmental issues. This framework is used for an empirical investigation of both social and annual reports of a sample of large public firms. By using content analysis, our findings show: i) a focus on strategy formulation and strategy implementation more than on environmental results; ii) the most relevant key value drivers and performance indicators in firms’ reporting; iii) a positive association between information on environmental value drivers and performance indicators and firm sector. Indeed, we offer some relevant insights on the relative absence of indicators of competitive advantage and on the predominant use of environmental qualitative and/or non-financial measures. This evidence suggests a lack of consideration as for the relationship between environmental strategies and environmental results and, at the same time, a high variability and limited standardization in environmental practices with implications for both internal and external stakeholders’ view. For the internal stakeholders, it seems that the actual environmental strategy control systems need to develop models and tools with reference to the relationship between environmental performance and financial effects. For external ones, the actual limits in the reporting of environmental measures pose the need for an increase in the comparability of environmental performance. Furthermore, by integrating theoretical and empirical findings, we suggest some potential improvements for environmental strategy performance measurement systems.

Reducing life-cycle carbon footprints in the redesign of water distribution systems

Water distribution systems (WDSs) contribute to undesirable greenhouse gas (GHG) emissions that are generated through their component fabrication, construction, operation and disposal processes. The concentration of GHGs in the atmosphere is strongly associated with global warming and climate change. In order to meet the consequent challenge of limiting GHG emissions, the problem of WDS redesign is formulated here as a multi-objective optimisation problem. The three objectives are as follows: (1) minimisation of total redesign cost, (2) maximisation of the WDS resilience, and (3) minimisation of GHG emissions. The resilience index serves as a measure of the WDS's intrinsic capability to ensure continuity of supply to users after sudden failure conditions, whilst the GHG emissions serve as a measure of environmental performance and climate change mitigation. The output from the non-dominated sorting genetic algorithm (NSGA2) optimisation process is a Pareto front containing optimal solutions traded-off in terms of the three objectives analysed. This methodology was applied on the New York Tunnels and the Anytown Network problems. The results obtained demonstrate that the redesign approach leads to cost-effective and resilient solutions that can also mitigate climate change compared with the single-objective (least cost) and other multi-objective redesigns over the long-term planning horizon.

Environmental Performance Evaluation in Supply Chain

Environmental performance evaluation is an area of growing concern among the worldwide community. Consequently, measurements to evaluate environmental performance are of great importance. However, lack of a quantifiable model to study the environmental performance is a problem in this area. This study therefore attempts to quantify the environmental performance of supply chain of a manufacturing company, which requires evaluation of many criteria. Therefore, selection of environmental performance measures leads to a multi-criteria decision making problem. As a result, analytical hierarchy process is selected to develop the model and is solved with Expert Choice software. Finally the proposed model is applied to a case study company to identify the key areas of environmental performance of the company’s supply chain and to assess various product categories manufactured under those key areas.

Environmental Management Commitments: Impacts on Environmental Performance, Profitability, and Financial Risk (Preliminary Phase of Study)

I propose a conceptual model that shows management commitment leading to better environmental performance and better financial performance. The model will be tested using factor analysis and regression on data from Canadian companies in the extractive sector from three points in time, 2004, 2008 and 2011, with the objective of identifying the discrete management decisions that lead to better performance. I use two alternative measures of environmental performance. The first is the volume of emissions recorded in Environment Canada’s National Pollutant Release Inventory database; the second is the asset retirement obligation disclosed in companies’ balance sheets. At this point the research is very incomplete as I have data for 2008 only. However the descriptive statistics are provocative. For example, the positive correlation between the remediation liabilities and emissions suggest what might be interpreted as a ‘halo effect’. The factor(s) that contribute to good performance in these two disparate performance metrics need(s) to be identified, which is the goal of this work. Also, when company size is considered, emissions vary considerably for both large and small companies, suggesting again that specific though yet to be identified management commitments lead to significantly different performance. When complete, this research will provide insight into the timing and scope of actions that must be taken to reduce negative environmental impacts, and provide managers with insight to formulate both long and mid-term operational strategies.

The Integration of Cleaner Production Indicators on the Environmental Performance Measurement System for the Indonesian Natural Rubber Industry

This study aims to identify the priority of the cleaner production implementation and integrate it in the design of a comprehensive environmental performance measurement system for natural rubber industry in Indonesia. Prioritizing the cleaner production on the production process of natural rubber is based on the case of 10 Indonesian crumb rubber companies using the Analytical Hierarchy Process. The comprehensive environmental performance measurement system in natural rubber industry, i.e. in crumb rubber industry, starts from the selection of key environmental performance indicators (KEPI) using the fuzzy independent preference evaluation method. The environmental performance measurement model is developed to assist users in evaluating the comprehensive environmental performance and condition of the key indicators. The weighting for each of the KEPI is performed by means of the expert choice software. The environmental performance measurement model is designed in the form of a environmental scorecard with traffic light facilities which can provide recommendations based on the performance achievement status of each KEPI. From the results of the model verification in the case of crumb rubber industry, several indicator statuses were found not good, i.e. on the index of raw materials, solid waste load, water conservation, energy conservation, and environmental innovation indicators. The environmental performance ranking model is designed to evaluate the comprehensive environmental performance in different companies or at different assessment periods.

The informational value of Toxics Release Inventory performance

PurposeThe study aims to evaluate the informational value to investors of the Toxics Release Inventory (TRI) as an external outcome measure of corporate environmental performance. Emphasis is placed on the market response differences between three highly polluting industries.Design/methodology/approachThe study uses pooled cross‐sectional, time‐series data and an event study methodology to examine the effects of TRI emissions on abnormal market returns.FindingsThere is empirical evidence that market reactions to TRI emissions information vary by industry. Investors reward decreases in emissions in the electric utility industry, but do not penalize increases. In the chemical industry, increases in emissions are penalized, but decreases are not rewarded. Models do not capture any reaction to emissions changes in the pulp and paper industry. These results may be explained by the significant difference between industries in the US percentage of total firm sales.Research limitations/implicationsThis research analyzes only data from US firms in three industries and evaluates a single measure of environmental performance, TRI. The value of TRI information is measured for one stakeholder group. Future research should attempt to address these limitations.Practical implicationsThe results suggest that research on the effects of environmental performance on market‐based measures should estimate models by industry, whenever possible. From a public policy perspective, the results suggest that regulators may want to consider alternative methods of reducing chemical emissions beyond TRI disclosure in the chemicals and pulp and paper industries.Originality/valueThe study distinguishes between the value of TRI as a “message service” and the content of the “message”. TRI may provide information of value to investors, but performance changes may not be sufficient to merit a price response. The study also specifically addresses industry differences and clearly shows how average coefficients can be misleading relating to this one environmental performance indicator. The use of pooled industry coefficients may lead to inefficient resource allocation decisions within industries and ineffective policies at the regulatory level.

A multi-dimensional assessment framework for sustainable supply chains

Many organizations are realizing the growing importance of sustainability in today’s business environment and the need to incorporate a supply chain approach, since the implementation of sustainability extends beyond organizational boundaries and involves multiple parties and various considerations. Based on a review of the literature of sustainable supply chain management and the integration of concepts from four organizational theories (using the resource based, institutional, stakeholder and social network perspectives), we illustrate the key drivers and enablers that influence sustainability initiatives at the supply chain level and thereafter propose a multi-dimensional assessment framework, which incorporates economic, environmental and social performance measures that can be used as a tool for the development and management of sustainable supply chains. This paper provides significant theoretical contribution and implications for supply chain management.

The impact of environmental performance on firm performance: Short-term costs and long-term benefits?

We examine the intertemporal effect of environmental performance on financial performance and propose a method to assess the environmental performance in a fuller manner based on the weighting various pollutants according to their dangerousness to environment. Using our improved measures of environmental performance applied to the firm level data from the Czech Republic, the results suggest that while the effect of environmental performance on financial performance is negative for environmental performance lagged by 1year lag, it becomes positive for 2years lag. As a consequence, our findings indicate that Porter hypothesis holds in the long-run.

TPS's process design in American automotive plants and its effects on the triple bottom line and sustainability

Many people assume that Japanese management practices, the Toyota Production System, have been whole-heartedly implemented by American automakers for more than two decades. However, the recent financial and operational crises faced by American automakers indicate that a performance gap still exists between their production processes and those used by their Japanese counterparts. In this paper, we conduct a case study to identify differences in the seven Toyota Way principles associated with process design between American automakers and Toyota from the triple bottom line perspective to investigate the effects of different process designs along three dimensions of sustainability: economic (profit), social (people), and environmental (planet). Through the within-case analyses, we identify the similarities and differences of process designs in two American automotive plants and the Toyota Production System to establish essential information for the triple bottom line analyses. We then conduct cross-case analyses to explore the effects of different process designs not only on the traditional profitability performance measures but also on workforce management and environmental performance measures. Our research findings provide new insights into the current status of Toyota Production System implementation and its effects on the triple bottom line and sustainability.

PENGARUH CORPORATE SOCIAL RESPONSIBILITY DISCLOSURE DAN ENVIRONMENTAL PERFORMANCE TERHADAP ECONOMIC PERFORMANCE PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA

This research is aimed to examine effect Corporate Social Responsibility(CSR) Disclosure and EnvironmentalPerformance on Economic Performance.This research used Corporate Social Responsibility Index (CSDI) asmeasure of CSR, Proper Index as measure of Environmental Performance and Return on Equity (ROE) asmeasure of Economic Performance. The samples of this research are 11 manufactur firms listed at IndonesianStock Exchange year 2006 until 2009. The research hyphotesis were tested using multiple regression analysis.Result of the analysis showed that corporate Social Responsibility Disclosure have significant effect on economicperformance, but Environmental Performance do not has significant effect on Economic Performance. Keywords: Corporate Social Responsibility Disclosure, Environmental Performance, Economic Performance

Natural resource based green supply chain management

PurposeThe aim of this paper is to conceptualise a structural model of natural resource based green supply chain management (GSCM), and its relationship, with an indication of cause and effect, to relevant performance measures and drivers.Design/methodology/approachThe literature, describing GSCM from a natural resource based view (NRBV), along with performance measures and institutional drivers, is critically evaluated and used to develop the model.FindingsConstructs are identified in terms of intra‐ and inter‐organisational environmental practices, performance measures and institutional drivers. Causal relationships, within and between the constructs, are also proposed in the form of hypotheses.Research limitations/implicationsAt this stage the model is purely conceptual and the causal relationships are only proposed. Empirical tests of the model and hypotheses are required.Practical implicationsOn empirical verification, this work can furnish managers with validated measurement scales to evaluate their strengths and weaknesses in their GSCM implementation and determine how firms can successfully implement GSCM to promote sustainable industrial development.Originality/valueGSCM from within the NRBV perspective, and incorporating performance measures and institutional drivers, has yet to be comprehensively synthesised in a coherent model. This conceptual work is the first step in that direction.

Evaluating ecological sustainable performance measures for supply chain management

Purpose – The purpose of this paper is to introduce a methodology to help evaluate, select, and monitor sustainable supply chain performance measurement that can be integrated into a performance management system (PMS).Design/methodology/approach – Grey‐based neighborhood rough set theory is used to help arrive at a core set of important business and environmental performance measures for sustainable supply chains. The supply chain operations reference (SCOR) model is used to develop both business and environmental measures for supply chain sourcing.Findings – A case illustration shows the applicability of the methodology. A sensitivity analysis shows that variations in outcome considerations may greatly influence the set of key performance measures for a sustainable supply chain PMS.Research limitations/implications – The methodology and presentation is conceptual, yet the tool can provide very useful interpretations for both researchers and practitioners.Practical implications – The tool can be valuable...

The purpose and focus of environmental performance measurement systems in logistics

PurposeEnvironmental performance measurement systems (EPMS) in supply chains are increasingly important. The aim of this paper is to investigate the purposes of having an EPMS in logistics and in what ways the purpose of an EPMS can influence its focus in the supply chain.Design/methodology/approachThe study is based on a survey of shippers and logistics service providers in Sweden. Exploratory factor analysis grouped the EPMS purposes. Regression analysis investigated the relation between EPMS purpose and supply chain focus.FindingsThose companies that had an EPMS had several purposes. The most common EPMS purpose was target setting. The seven purposes could be grouped into one external demand and one internal management factor. The most common focus was company‐internal, and the least common was to have a downstream focus. Significant relationships were verified between EPMS purpose and supply chain focus; companies seem to design their EPMS mainly out of internal management purposes.Research limitations/implicationsThe study contributed to theory on performance measurement in logistics by expanding it to include environmental performance. The richest theoretical contribution is related to the descriptive first research question, which provided theoretical structures and empirical knowledge on EPMS, which to the best of our knowledge has not been published before. Logical, valid and reliable factors or scales for measuring the purpose of EPMS were provided. The conceptualized relation between EPMS purpose and focus is an additional theoretical contribution.Practical implicationsManagers are provided with descriptions, structure and input to EPMS design. This paper has increased the understanding on EPMS design, related both to the own company's and other supply chain actors’ EPMS. It indicates the complex practices of having many purposes for the EPMS and offers explanation to why companies may be reluctant to expand EPMS beyond their company boundaries.Originality/valueDespite the increasing importance of environmental performance, few studies on EPMS are conducted. This study expands performance measurement knowledge by providing empirical evidence in a Swedish context.