Revised CD Conference Paper-Melville Miranda- 20th Oct 08 Doc

8/14/2019 Revised CD Conference Paper-Melville Miranda- 20th Oct 08 Doc

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1Melville, Miranda

Community Development and Ecology: Engaging sustainability throughCommunity Development Conference 2008, Melbourne

26-28 March 2008

Community Development with Green Strategies for Development

Abstract

This paper will discuss the significant issues concerning the global environment, with

particular emphasis given to the problems of large corporations and their notions of global,

national, and local sustainability. Although the four possible strategies discussed are

hypothetical, it will be argued that a significant and undeniable association exists between

organisational processes and products/services. Thus, it will be shown that a sustainable

world can be developed by using green strategies for development.

1. Introduction

... the health of a community involves simultaneous consideration of the needs and goals of

the groups inhabiting the community, and examination of the conditions of life that either

enhance or impede their health of the community itself. In other words, it is a balance

between aspirations and health-related needs of individuals, groups, and the whole population

within the context of the environment McMurray (1999:9).

Community has been defined in terms of spatial and non-spatial boundaries. Christenson and

Robertson (1980), for example, propose that community has four significant factors that

define its nature. Thus, a community is: (a) people; it is (b) found within a geographically

bounded area; it is (c) involved in social action; and (d) it involves physical ties with both

community members and the actual place in which the community exists. Globalisation,

however, which has driven capital accumulation, is anti-ecological, and, in consequence,

harmful for communities. This is because of the current practice of race to bottom, which


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26-28 March 2008involves firms relocating to countries most keen to attract capital investment, despite the

environmental issues caused. As result, communities face significant health implications due

to environmental degradation.

Greening, according to various scholars, has been framed in terms cost reduction, risk

reduction, and reengineering (see, for example, Newman & Fowler, 1996). Rarely, however,

is greening linked to technology or strategy development, which means that the majority of

community organisations fail to recognise opportunities that potentially offer significant and

staggering possibilities for sustainability. Nevertheless, four levels of sustainability have been

clearly identified, which include: (a) quality of life and values; (b) species extinction and

human rights; (c) health and life expectancy; and (d) human survival at the basic level

(Marshall and Toffel, 2005.

Although the term sustainability, therefore, appears to be beyond a simple definition, it still

portrays the notion of environmental conservation alone as being a complicated and

problematic goal due to its practice being both socially and politically charged. Paehlke

(2005), for example, argues, as a social scientist, the concept is centred in economics, public

policy, and ethics rather than biological sciences. In accordance with ones perspective,

therefore, sustainability could be identified as an anthropomorphic enterprise in which both

the sciences and community development work as tools toward larger social goals, or the

environment, social sciences, and community development could be seen as being relatively

equal partners.


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26-28 March 2008Within such a context, therefore, this paper will creatively discuss community development

green strategies for development by primarily considering current notions within community

development with particular emphasis on corporate social responsibility (CRS) and

sustainability. Following this, consideration will be given to four important factors. These are:

(a) eco-efficiency; (b) compliance leadership; (c) eco-branding; and (d) environmental cost

leadership. These green strategies, as this paper will demonstrate, will promote community

wellness and community sustainability.

1.2 The Legacy of Poor Stewardship

In the last three weeks, the amount of ice melting in the artic has been completely

unprecedented. In only six days an area the size of the US state in Florida disappeared; in the

week before that, an area almost twice the size of Britain disappeared. Its melting 10 times

faster than previously recorded. Experts are now saying that if we dont act with urgency, the

entire ice cap could be completely gone in less than 23 years. Despite all the scientific

evidence about climate change, inaction still ruled among governments and business. Climate

change was not scientific, political or ideological. Its about survival (Al Gore, cited by

Doherty & Wilkinson (2007:10).

It is clear that humanity is facing significant questions concerning the future of the planet

and, in consequence, that of the survival of the human race. No longer can communities

believe in the vision of limitless resources that was once offered by the ideology of

industrialising progress, but, instead, humanity is faced by the spectre of environmental

catastrophe. Human population growth, urbanisation, the accelerating exploitation of natural


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26-28 March 2008resources, as well as the results of long-term environmental degradation, now threaten the

extinction of unprecedented numbers of life forms (Meadows et al., 1992).

The impact of environmental degradation falls disproportionately on the poorer nations and,

in particular, on socially disadvantaged groups within both nations and regions (Cannan,

2000). At thegloballevel, current research clearly identifies that the impact of global climate

change will fall most heavily on developing countries, such as the island nations of Oceania

and areas of the Indian sub-continent (Bruce et al., 1996; Wasson, 2000). Crop production,

for example, is expected to be reduced, whilst, conversely, many developed countries will

gain production potential. Fisher et al., 2001). This is in contrast to the major emitters of

green house gases being located in the temperate zones of the northern hemisphere. It is

important to remember that the resultant dislocation and poverty occurs locally and

differently, possibly from the interaction of several global issues (Eriksen, 2001). Indeed,

some critics have argued that an emphasis on the global dimension of environmental

problems is itself a form of imperialism (Mater, 1999) and that equity concerns have been

swept aside in the effort to achieve climate policy protocol (Buttel, 2000).

At a regional level, the environmental degradation river systems provide a perfect example of

the way in which sources are separated and the way in which these cause significant

problems that have far-reaching consequences. The damage caused by downstream land

clearing, pollution, and large dams, for example, occurs hundreds or even thousands of

kilometres from the source. Thus, in Australia, salinity problems, which are widespread

within the Murray-Darling Basin, have been more damaging in South Australia, where they

have seriously affected the water supply in the lower part of the basin. Another example can


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26-28 March 2008be seen in East Africa, where countries such as Mozambique and cities such as Nairobi are

bearing the brunt of river regulation and of inequity in water resources planning and

development (Tecle, 1997). The ecological footprints of large urban areas, therefore, extend

many hundred of miles into surrounding countryside, affecting air and water quality and

consuming scarce resources. Often this reflects the social and economic divide between city

and country.

Environmental degradation is also evident on a local level, where the growing geographical

dimensions of inequality in large cities promote environmental injustice. The presence of now

unwanted military land in Sydney clearly illustrates this point. In the western area of Sydney,

which is primarily working-class, there exists a large abandoned area that belongs to the

Australian Defence Industries (ADI). Currently, it is home to the wild population of

Australias icons, emus and kangaroos, as well as many other less known flora and fauna. The

ADI site, however, has recently been zoned for major housing developments, which,

according to many ecologists, will lead to the extinction of these populations (Doherty, 2000).

Conversely, military land in the more affluent areas around Sydney Harbour have been fully

protected, due to them being used as political mileage by both the state and national

government. Arguably, this reflects the halo effect, which involves placing different values

on ecosystems depending on their location, social status, and the political influence of

residents. Thus, in the western area of Sydney the popular sociocultural representation

portrays it as other and degraded (Powell, 1993:16), a concept which has been extended

to bushland within the western suburbs (Benson & Howell, 1990). This, in turn, provides a

convenient rational for developing the demand for housing on a scale that would be

unacceptable in other regions of Sydney.


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26-28 March 2008There is also considerable evidence showing that the nature of environmental degradation in

new industrial developments also militates against environmental justice. In the area

surrounding Botany Bay in Sydney, which was the first site of European colonisation in

Australia, there is a hight concentration of hazardous industries such as petrochemicals. This

is because each new development proposal is effectively treated on its own merits rather than

being treated within the notion of the cumulative risk assessment. As a result, this has the

effect of further increasing the concentration of such industry, thus increasing environmental

impacts, such as air pollution, heavy transport, and hazardous waste dumps, in areas that are

relatively small. Again, this results in a continuous cycle of social, economic, and

environmental disadvantages.

As shown by these examples, the overall lesson is that, whatever the scale being considered,

the polluter and those who benefit from environmental degradation often do not pay for the

damage they cause especially when the polluter is a developed country, region, or suburb

with a relatively high economic status. This is in sharp contrast to the ideal of distributive

justice, which is based on equity, fairness, and the notion that those benefiting from

environmental damage should meet the costs. Instead, what occurs is a strong correlation

between social, economic, and environmental injustice those spheres that are considered as

the three pillars or triple bottom line (Yencken & Wilkinson, 2000).


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26-28 March 20081.3 Corporate Social Responsibility and Sustainability

It is difficult to get a man to understand something when his salary depends upon his not

understanding it (Upton Sinclair).

The modern debate concerning CRS and sustainability, which is believed to have begun it the

early 20th century, is a response to growing concerns pertaining to the business practices and

principles of large corporative powers, through which a number of issues concerning the

concept of CRS were addressed. Ida Tarbell, for example, wrote The History of the Standard

Oil Company (1904), which helped to influence the Supreme Court of the United States to

dissolve the corporation on antitrust grounds. Similarly, the Jungle (1906), written by Upton

Sinclair, enabled the introduction of legislation such as the Meat Inspection Actand thePure

Food and Drugs Act. These are all relatively recent examples of attempts to mandate socially

responsible behaviour in large corporations (Gibb Dyer et al., 2006).

Although there have been numerous attempts to both define and study CSR (for example,

Wartick & Cochran, 1985; McWilliams & Siegel, 2001; Whetten et al., 2001; Margolis &

Walsh, 2003), H. R. Bowens influential notion that business people should pursue those

policies, to make those decisions, or to follow those lines of action which are desirable in

terms of objectives and values of our society, would appear to essentially capture its concept

(Bowden, 1953, p.6). This concept of CSR proposes that a societys corporations, whose very

survival is dependent upon public sanction and support, have a responsibility, even an

obligation, to be economically and socially accountable members of society and to act in

ways that are publicly responsible (Wartick & Cochran, 1985).


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26-28 March 2008Previous research relating to CSR, has suggested that the performance of corporations, in

relation to their degree of social responsibility, should be evaluated in accordance with two

dimensions: (a) Positive and effective social initiatives, such as charitable giving, through

which the corporation proactively attempts to improve society, and (b) the corporations

ability and effectiveness in avoiding situations and activities which may cause social

concerns, such as polluting the environment. Those corporations who fail to accomplish

either one or both of these, should, according to the theorys proponents, have to face

economic, social, or legal sanctions from both their stakeholders and their communities

(Godfrey, 2005).

Although Bowen, among others, have effectively argued that there is a moral dimension that

supports CSR (Rawls, 1971; Donaldson, 1982), which is based on the principle that

companies should do good because it is the moral, or right, thing to do, some have

proposed that it is also the profitable or cost effective thing to do (Waddock & Graves, 1997).

On the other hand, however, a number of recent studies addressing this subject have

suggested there is an extremely tenuous association between CSP and corporate financial

performance. This, consequently, has raised the question: Should there be an attempt by

corporations to benefit society ... if there is not apparent financial gain for the corporations

shareholders? (Gibb Dyer, 2006). Some people, such as Friedman (1970), have suggested

that directors who try to do good rather than helping the company do well are in violation

of their fiduciary responsibility to shareholders. In consequence, therefore, proponents of this

view argue that a corporations director should only practice social responsibility of it helps

to increase and/or maximize shareholder wealth. Ethical behaviour should not, therefore, be

determined by moral imperatives, but by the market (Friedman, 1970).


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26-28 March 2008Corporate Social Responsibility raises twin issues that are central to the economics of civic

policy. The first is whether and to what extent the egocentric dealings of individual economic

representatives in a market economy, especially in relation to those companies that are there

purely for profitable reasons, will be able to further the common good. The second regards

the issue of what actually can be achieved, either by individuals or corporations, to enable

both private and public interests to be brought more closely into line, and, in particular, to

make enterprise profitability a better indicator of social welfare (Ahmed Riahi-Belkaoui,

1999, p.27).

This relatively new approach to CSR is, in part, a reaction to recent world development, or to

what is perceived as such. It argues that a fresher and more expansive conception of the

social responsibilities of companies is now needed throughout the globe, not only because of

the way in which the world has changed, but also because of the planetary issues facing

contemporary society. Corporations are seen as having to respond to new challenges, new

demands, and new possibilities and opportunities for proactive action. In this situation,

according to these new theorists, it is insufficient for corporations to think, either primarily or

exclusively, in terms that only take into consideration profitability and owner-interest. In fact,

to do so is considered as being entirely self-defeating, in that it goes against the true long-

term interest of shareholders, and could, effectively, endanger both the future of capitalism

and the market economy. Contemporary corporations should, therefore, engage themselves in

explicit commitments that respect and uphold accepted values and goals, and which take into

account the interests and views of concerned stakeholders, while also demonstrating through

unequivocal actions that such commitments are genuine.


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26-28 March 20081. The continuing public and official concern in relation to environmental issues, in

particular the possible risks from the greenhouse effect, which has founded the

notion that all policies and actions should be focused on the objective of

sustainable development.

2. With the rise of so many large corporations, in particular MNEs, public opinion

tends to be either suspicious, or even hostile, towards private companies in

general, but especially in relation to profit-motivated behaviour and market

economy.

In recent years, however, four further factors have arisen. These are:

1. The development of shareholders theories, which address both business ethics

and corporate governance.

2. The effects, both real and supposed, of globalisation.

3. The growing influence, strength, and assertiveness of non-governmental

organisations (NGOs), which include conservation and environment groups,

consumer associations, organisations concerned with economic development in

poorer nations, movements for social justice, human rights groups, organisations

representing indigenous groups, and a whole wealth of different religious groups.

The majority of these, who have greatly increased their effectiveness through the

Internet, are extremely suspicious, if not openly hostile, towards private

companies in general, and MNEs in particular.

4. The way in which leading companies have been subject to well publicised,

aggressive, and harmful campaigns, which were led by NGOs.


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26-28 March 2008Corporations throughout the world, therefore, have come under the spotlight in recent years

concerning social responsibility. During the mid-1990s, for example, the Royal/Dutch

Group faced criticism over its operations in Nigeria and the Brent Spar episode; several

corporations, including Nike and Reebok, faced issues concerning salarys and working

conditions in their overseas plants; while MacDonalds, among other things, was accused of

consciously encouraging bad forms of eating habits that posed serious health risks. In

certain cases, as with Shell for example, many corporations have faced expensive and often

humiliating sanctions (Besser, 2002, p.47).

The majority of these cases were in response to a shift in attitude among members of the

public and some shareholders. Public opinion, particularly in relation to conservation issues,

has progressively become more openly critical of national corporations, businesses in

general, and, in particular, towards the MNEs. Corporations, in consequence, have become

increasingly subject to new expectations, new forms of questioning, new pressures, and new

demands in relation to both their goals and policies. In addition, both the profitability and

growth of modern corporations tends to be far more dependent upon its reputation, and on

the general attitude of the general population, which includes employees, regarding its

conduct. The central focus of this, relates to the way in which a corporation treats its staff;

its health and safety record; its impact on the environment, indigenous groups, and local

communities; its demonstrated and verifiable concern for human rights; and, the way in

which it deals with buyers, suppliers, partners, and overseas governments in particular

those whose behaviour is often a cause for concern. Within all of these issues, corporations

are now subject to permanent and often antagonistic analysis, while any practices that are


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26-28 March 2008considered as being acts of misconduct or failures can be effectively given instant

worldwide exposure (Atkins, 2007).

The notion of sustainability is currently considered as forming the basis, the very foundation,

of the way in which CRS is viewed and defined by most if not all of the many firm, business

organisations and outside commentators have endorsed it (Henderson, 2001, p.18).

Corporative social responsibility is, consequently, presently considered as being an essential

part of sustainable development. A growing number of corporations have, therefore, made

explicit commitments in relation to this understanding. For example:

Ethical trading and respect for human rights are core inherited values at Cadbury

Schweppes where we have long sought to treat our suppliers justly. We not only

believe that this is the right thing to do, we know it also makes sound business

sense. Good practice in our supply chain underpins the integrity, sustainability,

quality and safety of our products (Cadbury, 2007).

At Kimberly-Clark, we continue to show our commitment to health and hygiene

by developing new categories, products and technologies to better the lives of

people around the world. Over the past several years, our global company has put

forth great effort and resources toward upholding our duty as a fiscally

responsible, environmentally diligent and socially compassionate corporate

citizen. We have advanced Sustainability through all levels of Kimberly-Clark

from the production line to the executive boardroom striving to make it a part of

all that we do. Kimberly-Clark is determined to make Sustainability a critical

foundation for driving product and technology advancements, and for enhancing


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26-28 March 2008the health, hygiene and well-being of people every day, everywhere (Kimberly-

Clark, 2005).

As the Report explains, this challenge has three parts: to provide the massive

amount of extra energy needed to fuel development and reduce poverty; to keep

supplies secure from disruption; and to do this in socially and environmentally

responsible ways. Helping meet this challenge, while continuing to provide

competitive financial returns, is at the heart of the commitment we made in 1997

to contribute to sustainable development (Shell, 2006).

Present concepts of achieving sustainable development, therefore, is to define it with

reference to three essential dimensions. These have been categorised as economic,

environmental, and social, which requires the integrations of social, environmental and

economic considerations to make balanced judgements for the long term (Atkins, 2007);

or, as the idea of sustainable development, which gives equal weight to economic progress,

environmental protection, and social responsibility (WBCSD, 2000). This concept and

understanding of CSR, is widely considered as being a framework, or basis, for portraying

the practical implications of CSR commitment for corporations. Businesses are charged

with organizing and directing their activities towards sponsoring and promoting sustainable

development within all three dimensions, and to establish for this purpose an explicit

accounting and reporting process, so that the net contribution to all three goals can be

identified and at least roughly assessed (Henderson, 2001, p.20).

As previously stated, however, for many firms the pursuit of corporate sustainability remains

difficult to resolve with the objective of increasing shareholder value. By starting with legal


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26-28 March 2008or moral arguments for enterprise actions, however, managers inevitably underestimate the

strategic business opportunities associated with this important issue. To avoid this problem,

therefore, managers need to directly link enterprise sustainability to the creation of

shareholder value. The global challenges associated with sustainability, viewed through the

appropriate set of business lenses, can help to identify strategies and practices that contribute

to a more sustainable world, and simultaneously, drive shareholder value, which this author

defines as being the creation of sustainable value for the firm.

Sustainability implies a linking of problems of consumption and poverty with pollution,

resource degradation, and conflict, the solutions, thus, suggesting the need for novel linkages.

Regarding sustainability, science cannot exist in a vacuum, but must interact with politics,

with policy, and with governance issues that reach into peoples daily lives. For example,

Houston and Lucas (2007:3) report that climate change poses a real and serious threatto

Victorians 2000-kilometre coastline (authors italics). The authors cite the Victoria Coastal

Strategy Report (2007), which forecasts: (a) that low-lying coastal terrain will be inundated

more often and with increasing severity; (b) that sandy shorelines will retreat at 50 to 100

times the increase in sea levels, and that systems will rapidly move inland; (c) that salt water

will move further into coastal wetlands, subsequently causing significant and serious damage;

(d) that marine and coastal plants and animals will become extinct; and (e) that coast towns

will be more vulnerable to fires caused by rising temperatures. Thus, communication between

community sectors and business, which too often exists as compartmentalised units, is

crucial. Environmental scientists, in consequence, can no longer be content with merely

doing good science, but should ensure that discussion and persuasion becomes an essential

part of the scientists role.


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Noted environmental thinkers, economists and commentators, however, have long observed

the linkage between economic and population growth, and environmental decline. Recently,

for example, the focus of environmental debate has concerned issues such as the ultimate

possibility of the Earth absorbing continuing increases in effluent from factories (Suzuki,

1990:106). Having identified a direct relationship between effluent and industrial growth,

therefore, Suzuki calls for a negative economic growth as the solution, due to his belief that

economic growth must lead to increases in the use of energy and physical resources. Is this

how the future must be if we are to live within our ecological means? The answer to this

question, however, will significantly depend on our ability to de-couple economic activity

from energy and resource consumption.

1.5 Decoupling Growth and Environmental Degradation

When considering historic and current patterns of economic growth, it would appear that

researchers such as Suzuki (1990) and Trainer (1993) are right. Rising incomes were linked to

increasingly intensive patterns of energy and resource usage, environmental degradation and

pollution. Furthermore, they are still linked to absolute increases in the level of pollution,

resource and energy use. However, the trend from the 1990s indicated a decreasing intensity

of resource and energy use in industrial economies has become strongly apparent. For

example, a worldwide decline in manufacturing as a proportion of the economy has been

accompanied by an increase in service and information-based industries.

Long-term analyses of industrialised economies now show that the amount of physical

material and energy required for the unit of economic activity is decreasing. Technological


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26-28 March 2008improvements in energy, material use, and production processes have meant that we can do

more with much less, but we have yet to reach our full potential in doing so. However, the

ability to use energy and raw materials more efficiently, and to reduce or eliminate pollution

from manufacturing processes, shows that this trend can be accelerated. This would ease the

likely impact of production on the environment, as well as reducing the costs of

environmental protection. Increased recycling and closed loop production processes, for

example, would put the human race on the road to ecological sustainability by substantially

reducing the amount of energy and resources passing through the worlds economy.

It is evident, however, that technology alone is not sufficient to effect a decoupling of

economic growth from energy and resource usage and pollution. Changes in lifestyle and the

way we do things in the economy will also have a significant influence on the overall level of

environmental impact of a given measure of economic activity. In addition, many would

question whether there is indeed a necessary linkage between further general improvements

in material standards and human well-being in industrialised economies. In the authors view,

this is where the decisive debate should be: how to break the nexus between economic well-

being and resource consumption. In this context, therefore, the question of being for or

against economic growth becomes somewhat moot.

2. Community Development With Green Strategies.

2.1 Eco-efficiency

Porter (1990) reemphasised that productivity is the key element for organisations to gain

competitiveness. Community organisations should be able to transform costs into profits by

identifying concealed opportunities for innovation, thus leading to more efficient


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26-28 March 2008organisational systems. In later work, Porter and Claas van der Linde (1990) asserted that

organisations should promote resource productivity in the form of material savings, increase

in process yields, and better utilisation of by-products, because waste consists, fundamentally,

of an inefficient use of resources. In their view, therefore, companies would only need to find

hidden opportunities to profit from environmental investments and eventually transform such

investments into sources of competitive advantage.

By the end of the 1990s, Lovins, Lovins and Hawken (1999) readdressed resource

productivity issues from a more technical perspective. They demonstrated that by using eco-

design and eco-efficiency measures, the potential of a new set of community practices to

enhance productivity is so considerable that a new economic system may emerge from its

application. The authors, furthermore, substantiate their arguments by presenting examples

from organisations that are increasing the productivity of natural resources by shifting to

biologically inspired production models, moving to a solution based community model, and

by reinvesting in natural capital. Such practices would promote what the authors call Natural

Capitalism, where regulatory and market mechanisms eventually succeed in making

organisations internalise environmental costs. Since cost reduction is crucial, however, most

community organisations working on eco-efficiency strategies do so without much fanfare.

However, financial constraints may not detract them from implementing a much simpler and

less bureaucratic EMS than the ones using the guidelines of ISO 14001. Community

organisations supplying a relatively small number of other firms may choose to avoid the

costs of EMS certification and instead invite their clients to audit their systems. Overall,

community organisations focusing on this strategy will develop capabilities to continuously


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26-28 March 2008increase the productivity of their organisational processes while decreasing the environmental

impact and costs associated with them.

Through the reconfiguration of the industrial systems, such strategies and practices ca be

pushed beyond the physical borders of community organisations. From the perspective of

industrial ecology (den Hond, 2000) individual manufacturing processes are seen as parts of

broader industrial systems, which should be optimised according to the ecological principles

of efficiency. In practical terms, waste, by-products, and energy from one community

organisation can feed processes in another, forming closed-loop systems. The application of

industrial ecology requires not just interdependent flow of materials, processes, and energy

inside an industrial cluster, but also entails new forms of collaboration between member

firms. Even though the complexities involved in the design and implementation of closed-

loop systems limit their diffusion, collaborative schemes in the USA, the Netherlands, UK,

Sweden, and Australia are showing positive results (Hardy and Graedel, 2002).

In general, terms, eco-efficiency practices can generate some level of savings in virtually

every community organisation. Particular circumstances will result in some being rewarded

more than others. Preliminary empirical evidence, for example, suggest that eco-efficiency

strategies have greater potential to generate competitive advantage in community

organisations that supply industrial markets, face relatively high levels of processing costs,

and generate wastes and/or by-products. Many community organisations in the food and

beverage industries fall into this category. In such circumstances, since final consumers may

not pay for environmental protection, the focus on an eco-efficiency strategy simply makes

community-business sense. By humbly working towards eco-efficiency within the

community organisation as well as beyond its own borders, process-intensive community


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26-28 March 2008organisations will be saving money while decreasing the environmental impact of their

processes.

2.2 Beyond Compliance Leadership

Some community organisations not only want to increase the efficiency of their

organisational processes, but they also want customers and the general public to acknowledge

their efforts. They are willing, for instance, to spend money in their certification of their

EMS, subscribe to business codes of environmental management (Nash and Ehrenfeld, 1997,

pp.487-535) and invest in unprofitable environmental improvements. They are also willing to

pay to publicise these efforts.

The adoption of schemes such as the CERES Principles,1 the Global Compact, or the

Global Reporting Initiative can eventually differentiate community organisations from

competitors as well as producing some positive outcomes for the firm (CERES, 2008).

Community image, for instance, might be enhanced, influencing a positive public opinion

about organisational practices

For community organisations supplying products or services to other corporations

(industrial markets), beyond compliance practices such as certified EMS have a clear value

for the client organisation. EMS certification represented a first-mover advantage for a

relatively short period. However, by 2002, it became a mere license to operate in the

industry. Nonetheless, as in almost every sphere of management, competitive advantage is

1 Ceres (pronounced series) is a national network of investors, environmental organizations and other publicinterest groups working with companies and investors to address sustainability challenges such as global climate

change.


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26-28 March 2008indeed obtained in a relatively short window of opportunity. As community organisations

adopt more ambitious practices, the beyond compliance frontier moves further, and what was

once a differentiator (such as a certified EMS) becomes normal and non-competitive

practice.

Organisational processes that go beyond compliance might exert indirect influence on the

image of a community organisation and eventually affect the shopping behaviour of

consumers. The decision by Shell, for example, to dump the Brent Spar oilrig in the North

Sea created a clear image problem that resulted in European consumers boycotting their

products (Dickson and McCulloch, 1996). The Brent Spar case showed that the Shells

environmental performance was becoming increasingly important to stakeholders, which

contributed to a change in Shells rig disposal policy as well as its communication strategy.

The company now considers environmental reporting as being an essential communication

tool to address such concerns. Thus, by pursuing a strategy based on voluntary standards of

environmental excellence, Shell has demonstrated leadership among companies that have

significantly improved the image consumers and shareholders have about their operations

(Kolk, 2000).

Yet the Bret Spar case also showed that consumer response to community organisational

practices is more prone to happen around a specific concern. Therefore, in order to respond to

a particular environmental matter that relates to production processes, the community need to

be sensitised. Among the multitude of variables influencing consumer behaviour,

environmental concerns become important to consumers when a charismatic leader or a

controversial event mobilises public opinion. (Orsato and Clegg, 1999:263-279).


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2.3Eco-Branding

Marketing differentiation based on the environmental attributes of products constitutes the

most straightforward strategy. In the 21st century, ecology-oriented products and services

represent a defined market niche explored by community organisations worldwide. In

Sweden, where consumer environmental awareness is remarkably high, one of the largest

retailers of food and domestic products developed a creative way of differentiating a portfolio

of eco-products. Coop Sverige, the owner of 373 Konsum and 43 Forum hypermarkets (city

supermarkets with a clear orientation towards ecological excellence), created an ecological

brand, Anglamark, to communicate the image of environmental responsibility of food and

domestic products (from 20 products in 1991 to 309 products in 2004) (Renato and Ostrom,

2004).

In broad terms, a firm differentiates itself from its competitors when it provides something

unique that is valuable to buyers beyond simply offering a low price.(Porter, 1985: 120).

However, community organisations that intend to generate competitive advantage from

strategies based on eco-branding need to observe three basic pre-requisites: (a) consumers

must be willing to pay for the costs of ecological differentiation; (b) reliable information

about products environmental performance must be available to the consumer; and (c) the

differentiation should be difficult to be imitated. Consumers, therefore, need to perceive a

clear benefit for their purchase. In the case of industrial markets, the benefits are normally

translated into cost savings, better performance of the product, and cost reduction at risk

management. For instance, equipment and machinery that consumes less energy and

reprocess by-products might reduce the costs of the operation for the client. The vendor can


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26-28 March 2008explore these ecological attributes commercially (less environmental impact) that result in

gains during product use. In case the community organisation is not working in a price-

sensitive market, a price premium can be obtained. In consumer markets, the attributes

associated with products allow companies in charge higher prices for eco-branded or eco-

labelled products. Hence, in both cases, industrial and consumer markets, it is essential that

the consumer is willing to pay for ecological differentiation.

Credible information is the second pre-requisite for environmental product differentiation.

Scandinavian countries, in particular, constitute a demonstration case of the increasing

importance of eco-labelling. In Sweden, more than 3 200 products use the KRAV eco-label

for organically grown food as a way to differentiate themselves from competitors.

Community organisations and corporations are able to charge between 10% to 100% higher

prices than similar products that are not certified by KRAV (Haidenmark, 2000). The fact that

KRAV is accredited by the International Federation of Organic Agriculture Movements and is

controlled by the Swedish Board of Agriculture confers a high degree of credibility to

products with this label. This credibility was the rationale for Anglamark food products.

Another requirement for environmental product differentiation involves barriers to imitation.

If product environmental differentiation is to be successful, environmental innovation should

not be easily replicated. The innovative marketing strategy of the Swedish supermarket chain

characterises this pint. Although competitors could easily replicate most products sold

through Anglamark, imitating the eco-brand is impractical


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2.4Environmental Cost Leadership

Obtaining a price premium for ecologically oriented products may be the natural solution for

many companies. After all, if being green costs more, a differentiation strategy is the only

way out for the company to pay off ecological investments. This is acceptable when niche

markets are readily available for them to obtain price premiums, but what about the vast

majority of markets with reduced scope for differentiation? Does this mean that products or

services that can only compete on price will never be able to offset environmental

investments? Take the packaging industry for example. Although there is some scope for

differentiation, competition is heavily based on price. Regulatory measures, such as post-

consumers taxes, have been on the rise in developed countries and are only expected to be

higher in the coming decades. In other words, packaging material will have to be competitive

on price andenvironmental performance.

The combination of low margins with the saturation of mature markets in many industrialised

countries increases rivalry and places packaging manufacturers under extreme pressure to

reduce costs. Add to this reality an increasingly demanding customer and a constant

tightening of environmental regulations. For community organisations operating in such

context, focusing on radical product innovation, such as material substitution and

dematerialisation, makes more business sense than focusing on incremental process

innovation.

The case of Chemical Management Services (CMS) is instructive in this respect. CMS

emerged out of the need factories have to manage large amounts of chemicals used in


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26-28 March 2008workers, and would raise ethical issues for a number of community workers, such as those

working in rural communities reliant on the beef industry.

3. Recommendations

Models of sustainable development

This section reviews briefly the two predominant models of sustainable development from

the sustainable development literature. This will help define how this paper conceptualises

ESD and how this relates to sustainable societies. The two models of sustainable

development are, first, overlapping system model of sustainable development (Three Pillars

Model), and second, nested system model of ESD (Russian Doll model)

Overlapping system model of sustainable development

The major problem with overlapping system model (also referred to as the three pillars

model) is that it does not recognise that our economic and social systems must operate within

the constraints of the eco-system (State of the Environmental Advisory Council 1996). These

models generally promote a balance of ecological/environmental social and

economic/business interests (World Business Council for Sustainable Development).

Development approaches based on this type of model are less likely to meet one of the three

core objectives of ESD in Australia, which is to protect biological diversity and maintain

essential ecological processes and life-support systems (Ecologically Sustainable

Development Steering Committee, 1992:8).

The problem is that the earths ecosystems and the environment are crucially important to this

and future generations, thus needing to be balanced with economic growth, which is usually


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26-28 March 2008the focus of the economic circle or pillar at the world or national level. Ecosystems, in

consequence, need to be given higher priority in order to ensure that human activity systems

(social and economic) do not continue to do significant damage to them (Czech, 2000). An

example of this is the Australian Governments refusal to ratify the Kyoto Protocol in relation

to greenhouse gas emissions, something that is mainly due to the possible negative impact on

economic over the next decade (Hamilton 2003). This indicates a higher priority being given

to economic by the Australian Government than to the prevention of further damage to the

atmospheric ecosystem

The version of sustainable development or sustainability that is reflected in the overlapping

system model tends towards weak sustainability as defined by Bell and Morse (1999). Weak

sustainability equates to a sort of economic sustainability where the emphasis is upon

allocation of resources and levels of consumption, and financial value as a key element of

system quality. The Bell and Morse (1999) definitions of weak and strong sustainability

points towards either end of a continuum. At the weak sustainability end, ecological factors

predominate. Ecological factors are often not measurable in financial terms and include

measures of soil erosion, biodiversity, dry land salinity and so on. The nested system model,

discussed below, reflects more of a strong sustainability approach

The nested system model of ESD

The nested system model recognises the constraints imposed by the earths eco-systems. The

1996 Australia State of Environment Report describes the nested system model as: --- the

decision-making model needed for an ecologically sustainable future for Australia. It

recognises that that the economy is a sub-set of society, since many important aspects of


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26-28 March 2008society do not involve economic activity. Similarly, it acknowledges that human society is

totally constrained by natural ecology of our planet. It requires integration of ecological

thinking into all social and economic planning (Ecologically Sustainable Development

Steering Committee 1992: State of the Environment Advisory Council 1996, Ch 10, 12).

This holistic perspective, which recognises the limits imposed by earths ecosystems

on social and economic systems, indicates that we need to move beyond the triple bottom line

for business, which is based on the overlapping system or three pillars model.

3.1 Conclusion

This paper has discussed the problems of the global environment and has made

recommendations for a better environment. The boundaries between the four possible

strategies are hypothetical. In reality, there is an undeniable relationship between

organisational processes and products/services. After all, products have to be produced in one

way or another, and gains in process productivity can be transferred to products. Hence, if

interactions occur in reality, why should anyone consider the theoretical distinctions between

processes and products/services as presented in here?

Although subtle, there are indeed very practical reasons to make such distinctions. Finding

opportunities beyond the low hanging fruit requires a more detailed analysis of the

elements involved in competitive environmental management. By definition, analysis refers

to the breakdown of an issue into its components. In this case, the separation between

processes and products/services allows for the identification of the trade-offs between

strategic choices available to managers in community organisations. This, according to Porter

(1996), is a fundamental condition for strategy: a sustainable strategic position requires


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26-28 March 2008managers to choose between trade-offs------in the case of competitive environmental

management, betweenstrategic focus on processes or products/services.

Similar to the experience of Total Quality Management (TQM), proactive community

organisations will do their best to reduce their environmental impact. However, if

environmental issues are to be seen as business issues, then good community organisation

citizenship is not enough. If strategy is about doing better by being different, as Magretta

(2003) put it, then an environmental strategy requires more than doing well. Managers,

therefore, will need to identify the areas in which the community organisations can focus

their environmental efforts in the pursuit of competitive advantage. Fundamentally, they have

to ask: Who is valuing my environmental investments?


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