Environmental Performance Measurement Research Articles

Dominance-based measurement of productive and environmental performance for manufacturing

The concept of efficiency measurement is based on the definition of a frontier that envelopes observed production plans. The effect of pollution prevention and environmental compliance on productive efficiency is typically studied by considering pollution as not freely disposable (i.e., there is a cost incurred to dispose of pollution) or by assigning shadow prices to pollution outputs. However, the frontier along with the required technological assumptions needed for its definition may be replaced with the concept of pairwise dominance. With data from a manufacturing facility, the use of pairwise dominance allows one to consider a wide spectrum of inputs and outputs. Furthermore, the approach of benchmark correspondence is augmented so as to consider environmental performance. Pairwise dominance is applied to segregate production plans into sets according to their relative environmental and productive efficiency performance. These sets in conjunction with appropriately identified reference production plans are used to define distance-based measures of efficiency and environmental performance. Pollution prevention activities of a printed circuit board manufacturing facility motivated the development of the reported analytical framework.

The measurement of environmental performance: an application of Ashby's law

AbstractAshby's law of requisite variety is a fundamental law of organizations. An implication of the law for business organizations is that they must develop sufficient information management and decision‐making capacity to cope with the complexity in the environment in which they operate.The law has the major limitation that, for all practical purposes, variety cannot be measured; the number of states of anything other than the simplest ‘controller’ is a vast, incomputable value. However, it is possible to carry out relative studies—comparing organizations and, in this case, comparing effectiveness in different contexts. To do this, a questionnaire was used to gauge managers' perceptions of business context complexity and organizational capacity.The paper describes a study of the UK textile industry and, in particular, the response of that industry to environmental (i.e., green) pressures and opportunities. The study was undertaken both at the level of individual companies and of the industry itself. Comparisons of performance are made between the organizations' responsiveness to their natural and commercial environments. Copyright © 2003 John Wiley & Sons, Ltd.

Measuring Environmental Performance at State Transportation Agencies

Measuring environmental performance presents a new set of challenges for state transportation agencies, many of which have been using measures for years to track transportation-related characteristics of the system. Challenges associated with environmental performance measures and the roles of performance measurement in the environmental area were reviewed, highlighting the key role of stakeholder satisfaction. Some of the attempts to measure environmental performance at state transportation agencies around the country, the different areas of focus, and actual environmental performance measures in use were examined.

Performance evaluation of an analytical laboratory the laboratory product model

Background, Intention, Goal and Scope The analytical laboratory is traditionally considered to be a service provider. This has resulted in laboratory environmental management being considered mostly from a pollution prevention and waste minimization perspective. There is a recognized need to view environmental performance of a laboratory service provider from a broader perspective. This broader perspective is inclusive of sampling, analysis and the potential for impacts to arise from the use of output information products. A generic methodology for the measurement and benchmarking of the overall environmental performance of an analytical laboratory and its outputs using the Laboratory Product Model (LPM) is described. Environmental performance indicators, relating to inputs and processing are proposed.

Are ‘Other Gainful Activities’ on farms good for the environment?

There has been a lot of academic interest in the pursuit of diversification activities and off-farm employment by farm household members. This is regarded as an important strategy for mitigating the effects of low agricultural income. One aspect of the debate about these so-called ‘Other Gainful Activities’ (OGAs) is whether they are associated with any environmental improvement on farms. In this paper, we use three approaches to analyse this issue. We examine whether measures of agricultural intensity are associated with the pursuit of OGAs by farmers and their spouses. We examine whether OGAs are more likely on farms where there is an ESA Management Agreement. Finally, we examine whether OGAs are associated with the farmer's stated environmental intentions. Although we tentatively conclude that there is a relationship between OGA involvement and these measures of environmental performance or concern by farmers, the magnitude of the association is small relative to other variables such as farm size, the type of land use, the form of business and recent agricultural training.

The influence of motivations for seeking ISO 14001 certification: an empirical study of ISO 14001 certified facilities in Hong Kong

This study proposes a model linking firm motivations for seeking ISO 14001 certification to the effectiveness of three major components of an environmental management system (EMS) – environmental policy, the assessment of environmental aspect and impacts, and management review. The relationship of these EMS components with a self-reported measure of environmental performance is also examined. From a sample of 29 ISO 14001 certified facilities in Hong Kong (of 71 total certifications at the time the data was collected), it was found that motivations to enhance firm reputation are positively related to perceptions of the effectiveness of the policy statement. Motivations for reputation enhancement and cost reduction were positively related to perceptions of EMS effectiveness in assessing environmental aspects and impacts. The effectiveness of the methodology for identifying environmental aspects and impacts was also found to be positively related to improved environmental performance.

E‐Commerce: Sorting Out the Environmental Consequences

SummaryThe environmental effects of e‐commerce may be described in terms of first‐, second‐, and third‐order effects. Data for these effects are scarce, partly because research on environmental effects of e‐commerce and e‐business is still in its infancy, although it is evolving very rapidly.Until now, positive environmental consequences of e‐commerce have generally been coincidental. Two crucial questions that must be addressed are (1) How do we improve our understanding and management of the environmental effects of e‐commerce? and (2) Which approaches are best suited to the development of sustainable e‐solutions? Three approaches to developing sustainable e‐commerce solutions are discussed: the extension of environmental performance measurement and management to e‐commerce activities, the use of new cooperative forms of innovation management, and the provision of customer choice. Finally, an outlook on future research demands is presented. The technology itself (information and communication technologies, Internet) does not determine sustainability, but rather its design, use, and regulation does.

Developing environmental performance indicators for an information technology systems and services company

Improved measurement of environmental performance should be part of the regular business activities of any organisation. However, it requires a set of environmental performance indicators (EPIs) that can be applied to the particular organisation's unique functions and culture. This paper presents the development of EPIs within an information technology systems and services organisation, ICL plc. (International Computers Ltd; now Fujitsu Services Ltd). EPIs have been developed, based on the company's environmental policy and targets, and a framework for their measurement outlined. ISO 14001 certification requires that certified companies demonstrate continuous improvement in their environmental performance, and EPIs have been developed in order that the company can demonstrate such improvements year on year. The results show that a simple and logical methodology can be applied to identify EPIs that are compatible with ISO 14031. Finally, a risk assessment methodology is applied to demonstrate the effects of business constraints in the decision-making process regarding environmental programmes.

The UK supermarket industry: an analysis of corporate social and financial performance

In a previous paper (Moore, 2001), the headline findings from a study of social and financial performance over three years of eight firms in the UK supermarket industry were reported. These were based on the derivation of a 16‐measure social performance index and a 4‐measure financial performance index. This paper discusses the formulationof the indices and then reports on: discussions with two supermarket firms concerning the overall results; inter‐relationships between individual financial performance measures; inter‐relationships between individual social performance measures; stakeholder group analysis; and inter‐relationships between turnover, age and gearing with social performance measures. The paper discusses these inter‐relationships, incorporating comments from the interviews with the two supermarket firms, and reports on both factor and cluster analysis.The interviews lend support for Preston and O’Bannon’s (1997) Available Funding Hypothesis in both its positive and negative form. The findings show that there are individual or combinations of related measures that could be used as surrogate measures for social and financial performance, instead of deriving a full index. However, the recommendation is that a full index continues to be used until there is further corroboration of these results. The findings also provide statistically significant support for the Negative Synergy Hypothesis (Preston and O’Bannon, 1997), show a statistically significant association between pre‐tax profits (both lagged and contemporaneous) with community contributions, and show that all statistically significant associations between individual social performance measures are positive – suggesting that they are mutually reinforcing. The association of size with social performance, noted in the previous paper, is also reinforced.Findings in relation to the proportion of women managers and the number of women on the Board and positive associations with other social and environmental performance measures raise interesting gender issues for business ethics. Factor analysis leads to no clear conclusions but cluster does show two or three clear clusters of firms, where size would seem to be the main but not sole factor. Further areas of research are noted.

The measurement of corporate environmental performance and its application to the analysis of efficiency in oil industry

This paper addresses a measurement of corporate environmental performance, and its application to the analysis of efficiency in the petroleum firms. In order to measure firms' environmental performance, we suggest a framework called “Gscore” that consists of five categories, namely general environmental management (GEM), input, process, output, and outcome. Gscore is a proxy measure of corporate environmental performance based on voluntary environment, health, and safety (EHS) report and is calculated by aggregating the points of the above five-categories. We apply our measurement framework to the data of 39 firms' voluntary EHS reports which are available on the internet. Ten of them, on which efficiency analysis was conducted with Gscore, assets, employee, and profits, are in petroleum and refining industry. According to our results: (1) a gap is found between rhetoric and practical environmental management stemming from calculating the relation between GEM and data part in 39 EHS reports. (2) On the whole, EHS reports of petroleum firms have something in common, but there are significant differences in the type and amounts of disclosed data among the EHS reports. (3) From the results of efficiency analysis, it is found that the number of employee exerts a considerable influence on determining the relative efficiency of petroleum firms, then Gscore, profits, and assets in sequence. Furthermore, Exxon, Ashland, Phillips Petroleum, and ARCO are shown to be efficient among 10 petroleum firms.

Books

Industrial Environmental Performance Metrics. Challenges and Opportunities by the Committee on Industrial Environmental Performance Metrics, National Academy of Engineering Washington, DC Measures of Environmental Performance and Ecosystem Condition, edited by Peter C. Schulze Washington, DC Sustainable Measures: Evaluation and Reporting of Environmental and Social Performance, edited by Martin Bennett and Peter James with Leon Klinkers Sheffield (UK) Sustainable Development in the United States: An Experimental Set of Indicators. A Progress Report prepared by the U.S. Interagency Working Group on Sustainable Development Indicators Washington, DC

Sustainable Measures - Evaluation and Reporting of Environmental and Social Performance

Foreword Klaus Topfer, United Nations Environment Programme Foreword Jonathan Lash, World Resources Institute Foreword Lise Kingo, Novo Nordisk Foreword Maria Emilia Correa, BCSD Colombia Introduction Martin Bennett, Gloucestershire Business School, UK, Peter James, Sustainable Business Centre, UK, and Leon Klinkers, PricewaterhouseCoopers, Netherlands 1. Key Themes in Environmental, Social and Sustainability Performance Evaluation and Reporting Martin Bennett and Peter James Section 1: Evaluating environmental performance 2. ISO 14031 and the Future of Environmental Performance Evaluation Martin Bennett and Peter James 3. An Environmental Performance Measurement Framework for Business William Young, University of Manchester Institute of Science and Technology, UK, and Richard Welford, Huddersfield University, UK 4. Standardisation: The Next Chapter in Corporate Environmental Performance Evaluation and Reporting Allen White and Diana Zinkl, Tellus Institute, USA 5. Information Systems for Corporate Environmental Management Accounting and Performance Measurement Pall Rikhardsson, PricewaterhouseCoopers, Denmark 6. Ecobalancing in Austria: Its Use in SMEs and for Benchmarking Christine Jasch, Institut fur Okologische Wirtschaftsforschung, Austria 7. Ecobalance Analysis as a Managerial Tool at Kunert AG Rainer Rauberger, Institut fur Management und Umwelt, Germany, and Bernd Wagner, Augsburg University Management Centre, Germany 8. Environmental Performance Evaluation and Reporting in Developing Countries: The Case of Indonesia's Programme for Pollution Control, Evaluation and Rating (PROPER) Shakeb Afsah, International Resources Group Ltd, USA, and Damayanti Ratunanda, Environmental Impact and Management Agency, Indonesia 9. Evaluating Corporate Environmental Performance in Developing Countries: TERI's Eco-Rating System Vandana Bhatnagar, Tata Energy Research Institute, India 10. Measuring and Benchmarking Environmental Performance in the Electric Utility Sector: The Experience of Niagara Mohawk Joseph Miakisz, Niagara Mohawk Power Corporation, USA 11. A Weighted Environmental Indicator at Unox: An Advance towards Sustainable Development? Willem van der Werf, Unilever, Netherlands 12. The Evolution of Integrated Environmental Performance Evaluation and Reporting at Baxter International Martin Bennett and Peter James 13. Evaluating the Whole-Life Environmental Performance of Products: A Comparison of Eco-Points, Eco-Compass and Eco-Costing Approaches Martin Bennett, Andrew Hughes, University of Bradford, UK, and Peter James Section 2: Reporting environmental performance 14. Towards a Generally Accepted Framework for Environmental Reporting Roger Adams, Association of Chartered Certified Accountants, UK, Martin Houldin, EMAG Ltd, UK, and Saskia Slomp, European Federation of Accountants, Belgium 15. A Survey of Company Environmental Reporting: The 1997 Third International Benchmark Survey John Elkington, Niklas Kreander and Helen Stibbard, SustainAbility, UK 16. Statutory Environmental Reporting in Denmark: Status and Challenges Pall Rikhardsson, PricewaterhouseCoopers, Denmark 17. Reaching Consensus on the Implementation of Good Practice in Environmental Reporting: A Dutch NGO's Perspective Jan Willem Biekart, Stichting Natuur en Milieu, Netherlands, and Karin Ree, University of Groningen, Netherlands 18. Environmental Reporting in Japan: Current Status and Implications of ISO 14001 and a Pollutant Release Inventory Takehiko Murayama, Fukushima University, Japan 19. South African Corporate Environmental Reporting: Contrasts with the Experience in Developed Countries Charl de Villiers, University of Pretoria, South Africa 20. The Relationship between Company Environmental Reports and their Environmental Performance: A Study of the UK Water Industry Peter Hopkinson, University of Bradford, UK, and Michael Whitaker, freelance environmental consultant, UK 21. Internet-Based Environmental Reporting: Key Components Kathryn Jones and Julia Walton, Centre for Environmental Informatics, University of Sunderland, UK 22. Sustainable Industrial Development: Benchmarking Environmental Policies and Reports Riva Krut, Benchmark Environmental Consulting, USA, and Ken Munis, Environmental Protection Agency, USA Section 3: Social and sustainability performance evaluation and reporting 23. Sustainability Reporting Guidelines: Exposure Draft for Public Comment and Pilot-Testing The Global Reporting Initiative 24. Signs of Sustainability: Measuring Corporate Environmental and Social Performance Janet Ranganathan, World Resources Institute, USA 25. Socially Challenged: Trends in Social Reporting John Elkington and Franceska van Dijk, SustainAbility, UK 26. Social Reporting: Developing Theory and Current Practice Andrew Wilson, Ashridge Business School, UK 27. A New Deal for Sustainable Development in Business: Taking the Social Dimension Seriously at The Body Shop Maria Sillanpaa, KPMG, UK

Environmental performance measurement in business: current practice and future trends

Business's impacts on the natural environment have become an increasingly topical issue, with significant implications for commercial success. Companies are developing methods of performance measurement in this area to support both their internal management and, for some companies, voluntary reporting of environmental performance to external stakeholders. This paper reports some of the results of two recently concluded empirical research projects in the field, one focusing on internal company practices and opinions, and the other on external stakeholders' use of data. It draws conclusions from this and discusses the implications of developments in this relatively new area for performance measurement more widely.

Environmental criteria in design

The representation of process environmental performance in the modelling of chemical processes is considered. The wide range of environmental effects associated with chemical processes is discussed. Selection of appropriate representations depends on the stage of design, the effects to be considered and the nature of the design decisions to be supported. The objective of the paper is to provide guidelines for the modeller to support the selection of appropriate measures of environmental performance.

Integrating environmental issues into the mainstream: an agenda for research in operations management

AbstractResearch related to the natural environment in operations management is still in its infancy. The relatively few studies to date have primarily emphasized environmental issues relating to process technologies, quality, new product development, and supply chain management. This paper reports on the work of a focus group of environmental and operations management researchers, which generated a broad framework useful for identifying fruitful research opportunities. This framework is structured along two dimensions: level of analysis and process of environmental improvement. Research areas identified by the focus group to be most promising subsequently were mapped onto this framework. Strong opportunities for building our understanding of environmental issues and improving practice are evident in the areas of manufacturing strategy, quality, supply chain management, and technology management. Research on intra‐ and inter‐firm diffusion of best practices, environmental technology investment and transfer, and measurement of environmental performance promises to lead to a more integrative view of environmental operations management.

Measuring corporate environmental performance

As shareholders, government regulators, consumers, employees, and the general public pay more attention to companies' environmental performance, measurement issues are becoming increasingly important and demand is growing for relevant information to assist stakeholders in making key decisions. Despite the enhanced interest in and attention to companies' environmental activities, the accounting profession has been slow to take on the role of defining, measuring, and controlling this broad corporate domain. Thus, measures of environmental performance have proliferated in the absence of clear, generally accepted guidelines as to what constitutes good and bad environmental performance. As a result, the public is becoming increasingly confused and cynical about interpretation of such data. In this paper, we use theoretical and empirical approaches to define corporate environmental performance and consider how well existing measures operationalize the construct. Interestingly, some popular environmental rating schemes seem to rely more heavily on public reaction to environmental events than on more precise and measurable outcome or process dimensions. Our findings suggest a need for explicit environmental performance metrics in order to provide stakeholders with more reliable, consistent, and accurate information for comparing companies and making key strategic decisions. We argue that the accounting profession is an obvious candidate for establishing such metrics since the domain of accounting typically includes measuring, communicating, and regulating information about company performance. Expanding accountants' domain to include environmental performance can greatly contribute to the usefulness of environmental performance metrics.

Measures of Economic and Environmental Performance for Alternative Agricultural Production Systems

The primary purpose of the reported research was to evaluate the economic and environmental performance of three production systems under study in the Ohio Buried Valley Aquifer Management Systems Evaluation Area (MSEA) project. The three systems studied included a monoculture system-ontinuous corn (Zea mays L.) (chisel plow) with routine fertilizer and pesticide treatments; the typical system-a corn/soybean [Glycine max (L.) Merr.] rotation (chisel plow and no-till) with routine applications of pesticides and fertilizers ; and an alternative system-a corn/soybean/wheat (Triticum aestivum L.)-hairy vetch (Vicia villosa Roth subsp. villosa) rotation (ridge-tilled) with fertilization based on soil tests and strategic applications of pesticides. Enterprise and whole farm budgets were constructed for each system. All sources of receipts and costs arising from production were recognized in the profitability analysis. The typical system was found to have the highest return to management and the monoculture system the lowest return. The alternative system produced net returns of about 50% of those of the typical system. The wheat phase of the alternative system was the primary source of reduced returns. A linear programming analysis was conducted to compare profitability for the three systems with farm size variable (machinery complement capacity was the determinant of farm size). The LP results suggested a widening of the profit differential between typical and alternative systems due to a greater acreage capacity for the typical system. However, results suggested that if wheat yields were increased through spring application of N fertilizer for wheat, the alternative system would be about equal in profits to the typical system. Environmental impact assessment, evaluated through use of the Erosion-Productivity Impact Calculator (EPIC), suggested lesser environmental consequences resulting from the alternative system than from either of the other studied systems. Adjustments in the alternative system to improve profitability brought little environmental downside.

Environmental performance indicators for integrated supply chains: the case of Xerox Ltd

The Integrated Supply Chain at Xerox Ltd is a large complex organisation which has many potential impacts on the environment. In order to better understand and reduce those impacts, an environmental bias has been introduced into the decision making process which allows more environmentally conscious decisions to be made. This paper details how the environmental bias was developed and how it can be used to provide both a measure of environmental performance for the whole supply chain, each functional element within the chain and for different product delivery scenarios. The environmental decision making tool construction is discussed and preliminary results show that it is the working life of a typical product which causes the biggest environmental impact.

Eco-rating System for Optimizing Pesticide Use at Farm Level. Part 1: Theory and Development

Abstract A computer-based decision support system is described which aims to encourage and enhance sound environmental management within agriculture. Part of the system focuses on the management of pesticides on the farm, and can help to ensure that the farmer adopts practices which maximize crop production and profitability without jeopardizing the environment. The approach taken looks at all aspects of farm pesticide use including crop applications, storage and waste disposal and the use of non-crop pesticides. As a whole, the system can act as a informal environmental management system. An ecorating is derived by comparing actual farm practices with what is perceived to be best practice for the site, to provide a measure of environmental performance. The first time the method is used, these indices act as benchmarks against which the success of future improvements can be judged. The system has three modes of operation. An “assessment mode” seeks to identify strengths and weakness in practices and regulatory compliance and to provide guidance on areas where improvements could be made. In support of this, a second mode known as the “technical system” allows the user to explore “what–if” scenarios in order to identify site-specific best practice and aims to provide answers to the issues raised in the assessement mode. The third mode is a fully integrated hypertext information system containing a range of context-sensitively mapped text on agriculture and the environment which can be used on a stand-alone basis or accessed from any part of the software system.

Accountability for environmental performance of the Australian Commonwealth public sector

Takes an exploratory approach to the development of an accountability framework for environmental performance of the Australian Commonwealth public sector. Explains that the aim of the environmental performance accountability framework is for the various stakeholders to understand the actions of Commonwealth public sector organizations and consequences of those actions for ecological systems; to become familiar with the trends and changes in trends in public sector environmental performance; and to place stakeholders in a position to promote change when performance is not acceptable. Examines three interrelated strands of literature. Identifies key institutional stakeholders in the Commonwealth public sector. Synthesizes the literature related to public sector transformation, and reviews the flourishing literature on environmental accounting and reporting, and links it to the concept of environmental accountability. Drawing on this literature, explores interrelationships between three characteristics of environmental performance at the federal level in the Australian public sector: criticality of natural capital; information uncertainty; and regulatory response. Examines environmental accountability dimensions of each of these characteristics. Concludes by making three policy recommendations: first, measurement of environmental performance should focus on criticality of natural capital and informational uncertainty as bounded by the precautionary principle; second, the measures of criticality of natural capital and informational uncertainty should determine the extent of direct accountability to parliament for each public sector organization’s environmental performance; and, finally, a third party attestation of reported information is needed. Also makes some suggestions for extending this exploratory research.