The Coalition for Environmentally Responsible Economies, or more commonly CERES, is a non-profit organisation established in 1989. The fundamental practices and objectives of Ceres involve integrating sustainability into capital markets. In order to specify these objectives Cues outlined and implemented a set of environmental commitments, known as the Ceres Principles. These principles include pledges of improvement to organisational conduct regarding the environment, involving: Biosphere protection, use of naturally sustainable resources, waste disposal and reduction, conservation of energy, reduction of risk, safer products, services and restoration of the environment. As well as these environmental affirmations, Ceres also includes principles relating to the administrative aspects of green accounting. These include: Informing the public, management commitment and the auditing and reporting process of 'greening' the accounts. Charles Donovan's assertions, as stated in the above quotation, that these principles are unrealistic "in terms of cost, practicability and acceptable levels of emissions," are not uncommon. During the course of this essay, by analysing the intricacies of these principles in terms of Donovan's claims, i will attempt to decipher the accuracy of his assertions. I will also investigate the relative merits of the Ceres Principles and look at the Wider context of implementing environmental policy, in order to determine the extent to which Donovan's claims are accurate. To draw possible solutions as to how any improvements can be made to current practices, it is necessary to analyse organisations who have successfully implemented these principles into their current structure. To this end I will focus on organisations such as BP, Marks and Spencer
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and Green Skip Hire who have adopted similar practices, hopefully enabling me to draw conclusions as to how successful and realistic introducing the principles into an organisation would be.
An important aspect to be considered, in gauging how realistic or unrealistic abiding by the Ceres principles or running an internal environmental policy would be, is to look at the first steps involved in developing such an environmental policy. The initial stages involved in implementing a policy tend to focus largely on specific 'target- setting' in order to give a sense of tangibility. Many organisations, in preference to Ceres, employ their own set of environmental principles in an internal policy. It has been argued that Ceres demands unrealistic standards so an internal policy can be used to counteract this. The advantages of adopting an internal policy revolve around the fact that it is often easier to implement, as well as being more financially viable. Organisations can use these policies as a way of tackling environmental problems encountered, without having to adhere to the strict confines of an external policy like Ceres. In doing so the organisation may actually be able to derive a policy more beneficial to the environment as it is tailored specifically to their individual needs. However, a number disadvantages may arise from such a plan. Critics have however argued that policies, when administered internally can be nothing more than an environmental smoke-screen (ironically enough). The policy may well find itself well down the list priorities, incomparable to other organisations, with an avoidance of pivotal environmental factors within the organisation. Also, internal policies may often be viewed with a certain amount of cynicism by the general public, many regarding them as merely superficial, therefore resulting in bad PR.
One company that has shown that an internal policy is a viable and possibly more realistic alternative is Marks and Spencer. In January 2007 M&S announced an environmental initiative known as plan A. The project would cost two-hundred million pounds over five years with the aim of 'increasing the environmental sustainability of the business.' The plan outlined relatively general environmental targets; Becoming carbon neutral, landfill wastage eliminated, extended sourced sustainability, aid improvements to quality of life for suppliers and introduce a healthier way of living to customers help customers. Marks and Spencer have continued to commit to these initiatives despite a fall in share price due to the current recession. They have also implemented initiatives specific to their business. The introduction of brown recyclable bags has been hugely successful in lowering waste, along with charging 5p for a plastic one in order to discourage use.
A further issue that requires discussion when analyzing how realistic it is to expect organisations to employ the Ceres principles is whether the environmental concerns professed by many, are indeed as important an issue as commonly believed. If an organisation believes this not to be the case, it is unlikely they will be willing to incorporate environmental concerns into their accounting process. Certain theorists have put forward arguments suggesting that common held beliefs regarding the environment, and the impact that not only organisational, but also human emissions can have are overestimated. Thus an over concentration of resources on this area could be detrimental to an organisation, therefore deeming it unrealistic for the deployment of the Ceres principles. Some recent researchers have put forward the counterclaim that the consequences of global warming will largely be unexceptional, with some benefits as well as the negatives. A further claim made is that human emissions of greenhouse gases account for a fairly, and perhaps insignificant, proportion of the causes of global warming. With natural causes contributing a larger part. Therefore a reduction in emissions of Carbon Dioxide would at best have a negligible effect on the amount of global warming. Also, when government support is given to cutting emissions, it can cause difficulty to the poorer members of the world's population. It has been argued, when taking into account some of these
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reasons, that a greater use of resources would be aiding the poorer members of society, in preference to shovelling resources into environmental measures. It is believed that excess taxation used to fund the reduction in energy usage may cause great hardship for the world's poor populace, and that following initiatives such as this may be the difference between survival and struggle in some of the poorest nations. Many people say that the extremes that some environmentalists are pushing for are just not possible. The amount of money and man power it would take to completely overhaul the
world's systems, when it comes to energy, food and pollution, is just too high. There are stricter growing laws in African countries about the amount of pollution they are allowed to produce, but the only form of industry the poorer countries can afford is high in pollution, and since they are not allowed to build it, they have no chance to industrialize further.
When delving further into the distinct characteristics of the Ceres principles it is important to investigate the administrative and management procedures included in the mandate. There are several Ceres principles included in this area. Informing the public entails, providing information to persons whose health may be endangered by
the practices carried out by a company, whilst also notifying of any environmental or safety factors. The company will seek to communicate with the local community and explore any improvements that local people recommend. Also, the company will encourage employees to report unsatisfactory working conditions without fear of personally being reprimanded. Many companies have found this to be a realistic and reasonable principle to adhere to, often expressing a willingness due to the additional bonus of an improved reputation and 'good PR.' However, the concern has been expressed that some companies manipulate the figures and merely present what will come across as favourable. Also, when seeking advice from local borough councils, ideas put forward are usually dismisses with a 'nod and move on' attitude. Reporting of environmental concerns can, in some organisations, also be time consuming for employees wishing to illuminate a problem. A further administrative principle alludes to managerial commitment to the policy. The commitment asserts that when appointing a director to the board, candidates with a history of environmental practice will be looked upon favourably. The Board of Directors will also be kept abreast of the ever changing nature of environmental issues and are fully responsible for the companies' environmental performance. It is realistic to expect Board of Directors to be responsible for the companies' overall environmental performance. If 'being green' is a priority then the issue should be treated as other organisational matters, such as sales, marketing, staff etc. with the 'buck stopping' with the Board of Directors. However, and particularly in these times of recession, it can be viewed as unrealistic to expect a Board of directors to prioritize the environment if the business is struggling to survive. Additionally it may be unrealistic to appoint a director with an impressive environmental record ahead over someone who has a rack record of improving overall financial performance. The bottom line in most organisations, particularly when it comes to the shareholders is economic performance; therefore this factor needs to be the Board of Directors primary consideration.
An additional administrative factor included in the principles is how the environmental practices are reported and audited. Ceres dictates that organisations should monitor the process of implementation by conducting an 'annual self- evaluation.' Companies will also reinforce their position with auditing procedures which are commonly accepted, while also undertaking a publicly available Ceres report. Realistically it is acceptable to believe that companies will be able to implement such a procedure of auditing and reporting a self-evaluation will allow those inside the organisation to target areas where they are environmentally unsound, as well as showing areas where progress has been made. However, some companies may not wish to distract from an overall goal of profitability and therefore may well set less challenging and easily attainable targets. It is probably unrealistic to expect a company to release a set of damning environmental statistics.
A different area in which the Ceres principles focus is health and safety. Encompassed in this spectrum is the principle of risk reduction. The risk reduction principle entails offering employees, as well as other stakeholders, a safer environment in which to operate. Employees should be able to work in an environment that is as risk-free as possible. Such a risk-free environment can be orchestrated through the use of the safest equipment and technology available, and backed up by sound operating procedures. The company should also be able to handle and deal efficiently with any emergency that may occur. Many believe it is realistic to assume that companies will adhere to this principle and workers and other stakeholders alike should be entitled to
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environmentally safe working conditions. The upgrading of working conditions may also have long term benefits for an organisation. Staff efficiency may be enhanced by improved conditions, eventually offsetting the initial outlay on upgraded equipment, and possibly enjoying greater job satisfaction. However, in certain working environments there will always be difficulty in ensuring perfect environmental safety. British Petroleum (BP) operates in the oil industry, where obviously the highest standards regarding environmental health and safety are required. They have spent hundreds of millions of pounds in ensuring these industry safety standards are met and exceeded. However, earlier this year an oil rig exploded in the Gulf of Mexico, tragically killing eleven people and causing monumental damage to the environment. BP have been held responsible and will incur all clean up costs. This case shows that in spite of meticulous precautions, accidents may still occur even if there is the slightest error of judgement.
Another area the principles relate to is how companies can reduce waste, and highlight that waste should be disposed of in an 'environmentally friendly' manner. The policy emphasises the importance of recycling, while also adding that reducing waste at the source can contribute to improved waste efficiency. Many companies have adopted the policy of recycling their waste. Green Skip Hire has reported significantly higher profits and a higher market share through taking an `environmentally friendly' stance towards waste management. They guarantee that all waste will be recycled and proven that this is a realistic and efficient alternative to traditional methods of waste disposal. Some competitors have however found making such a shift more problematic. They claim that recycling costs have a substantial negative impact on costs. Some have even resorted to 'fly tipping' a practice which involves 'dumping' waste unauthorised and unsupervised.
One other area the Ceres principles focus on is that of energy conservation. The principle states that companies should commit to improving energy efficiency of internal processes, and also the efficiency of any produce. The principle requires a guarantee be made to use 'safe and sustainable energy resources.' One company that has improved energy efficiency is Shropshire Classic Motorcycles. On a modest budget they have managed to reduce excess electricity used for heating and lighting by tightening up the manufacturing process, thus proving it is a realistic aim. An oft held belief now emerging in manufacturing industries is that they are operating at maximum efficiency and improvement is simply unfeasible.
In conclusion, when concentrating on the Ceres principles as individual policies and also as a collective, I believe it is fairly clear that to some extent, these principles are realistic. Companies' alluded to before like Marks and Spencer, Shropshire Classics and Green skips have shown introducing an effective environmental policy is realistic. They have also proven through implementation of these policies that together with environmental benefits attained, personal savings can also be made. British Petroleum on the hand unfortunately proved that no matter what amount of attention and planning is given to reducing and minimising environmental damage, there will always be the possibility of such harm. Also it is important to note that it is not universally accepted that environmentalism, and correspondingly the Ceres Principles are in fact not a worthwhile enterprise. Thus it is unrealistic to expect such sceptics to incorporate the principles.