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New Zealand Engineering 1998 June

Sustainability and the Corporates (Part 2)

Ron McDowall is a registered and chartered professional engineer and is director of the IPENZ Centre for Sustainable Management (ICSM)

The ICSM is a partnership venture between UNITEC, University of Auckland and IPENZ

There are two steps to becoming a company that truly adopts the principles of sustainability.

Firstly, adopt the principles of product stewardship and corporate governance, and secondly, after achieving the first step, adopt the principles of sustainability.

Many New Zealand companies are still in the so called "no regrets" phase where their use of resources and production of waste within operational management procedures assume that all of this is limitless and can continue indefinitely without any regrets.

The Rio declaration put an end to the "no regrets" phase in theory but the concept is still in evidence today. While many companies are still in this phase they cannot simply transfer to the sustainable phase without going through the governance phase.

Product stewardship is a term used to imply a complete cradle to grave recognition of the product development cycle. In the "no regrets" phase companies usually consider the internal implications of the product manufacture or development and pay little attention to the external impacts and considerations. Certainly they often ignore environmental considerations and almost always ignore societal or behavioural impacts.

Total Responsibility

By adopting a product stewardship strategy or attitude the company takes the responsibility for all product activity the company is involved with. This includes all external and internal impacts. This may include life cycle analysis of all raw materials, all sub-suppliers components LCA analysis, processing or manufacturing process analysis and adoption of cleaner production techniques, good housekeeping systems, new occupational and health systems and so on.

The spectrum for product stewardship is broad by definition and involves every aspect of companies' operations. End use and disposal becomes the responsibility of the producer under a strategy of product stewardship. The producer or manufacturer of a product cannot be divorced from the ultimate disposal of the product.

Evolution of the company towards sustainability

This "model" indicates that the path to sustainability is a serial path that runs through each of the three gates one after the other. It is possible, of course, for a company to enter the pathway at gate two but many companies will have to start with gate one.

Product stewardship is driven by corporate governance. The standard and quality of corporate governance will determine the quality of the product stewardship. How a company is managed at the top and the method by which the leadership of the company is employed will determine the success of product stewardship.

The lack of product stewardship is visually evident in everyday living in New Zealand. For example, if you go to a well known bookstore and purchase a book it will be given to you at the end of the sale in a cute plastic bag with the bookseller's name on it. This bag, which has dubious reuse appeal, will end up in the landfill for many hundreds of years. If the bookseller was practising product stewardship, this practice would cease. Product stewardship does not have to involve a particular environmental issue. It may involve analysing a process and making changes for other beneficial reasons. The point here is that unless companies develop their stewardship standards and begin to run their companies more efficiently and develop strategies for low impact, then becoming sustainable is a difficult task.

Leadership as a prerequisite of product stewardship is a given but even the standard of leadership or corporate governance suffers from the lack of maturation in New Zealand. Traditionally, leadership in this country is often based on some mystical notion that some people have been bestowed with a power that enables them to gather people that will go with them come what may. The criteria for a great leader therefore is personality and this is strongly contested as being correct or effective. Leadership as defined by Jaques and Clement is described as

"that process in which one person sets the purpose or direction for one or more other persons, and gets them to move along together with him or her and with each other in that direction with competence and full commitment."

Process

This definition removes the idea of personality and places the emphasis on process management. From this idea the requirements of product stewardship can flourish and be efficiently applied. Too many companies have the lower order managerial staff complaining that while they like the leader they cannot understand where they are supposed to be going and to what standard. Unless there is competent corporate governance there can be no product stewardship and therefore the idea of sustainability cannot be applied.

There is a tendency to use the principles of good corporate governance as measures of sustainability. Companies that adopt the trappings of sustainability and not the substance believe that by adopting, for example, waste management practices, they are becoming sustainable. These activities must not be confused with the principles of sustainability. Activities related to waste management and resource use are more to do with good governance or stewardship rather than sustainability. Sustainability is about pollution prevention not pollution control.

In part three of this series we will see how engineers can contribute to the process of moving a company from the "no regrets" phase to the "sustainability" phase, and how the ethics and ethos of the engineering profession provide the platform for real reform in corporate attitudes towards sustainability.