Benchmark Progress towards Sustainability - Assignment Example

Benchmark Progress towards Sustainability Benchmark Progress towards Sustainability Sustainability issueshave been around since 1930s.There were lots of movements like the ducks unlimited, Un conference on human environment in 1972,world commission on environment and development and many others. All these had one common aim, to create awareness on sustainability. Stuart Hart came up with an outline of four strategies that define sustainability. The first one is pollution prevention. This is basically how well an industry is dealing with its toxic waste and reducing risk. This could be by recycling and reusing or treatment of water. The other strategy in the quadrant is product stewardship in regard to cradle to grave design also called cradle to cradle. This can be simply put as the effects of the product to the external environment in its entire lifecycle. The third strategy is clean technology also referred to as cleantech. This involves use of renewable energy like solar, wind and biofuels to avoid over utilization of non renewable natural resources. The fourth and final strategy is existence authenticity. This is about the existence and the strategic plan and vision of the company and its effect on social and environmental problems (Hart, 1997). Sustainability has been built since the shift from coal to oil and from gas to electricity light. Hoffman feels that business in the key to elimination of greenhouse gases. This is through building a reputation for clean companies all over the world, also by anticipation of climatic change regulations and human resource management, reduction of operational costs and also being influential in information on sustainability. We look at two competitors below and their strategies towards sustainability. These are two major energy production companies in America. They are Chevron Corporation and Conoco Phillips. Chevron Corporation is one of the biggest energy companies in the world based in California. It operates in over a hundred and eighty countries. Chevron formerly known as SoCal is the second largest oil company in the United States and eleventh in the world. It is based in America and it’s a multinational corporation with its headquarters in San Ramon California. It is involved with gas, oil and geothermal exploration, refining, marketing and generation of power. The company has over 11000 wells of natural gas in the United States. The company manufactures lubricants, petrochemicals, additives and fuels which it also sells in the downstream. It contributes billions of dollars to the US economy (Chesser, 2010). In 2008, Chevron was ranked top among companies in California for sustainability reporting after scoring an A+. This shows that the company has put more efforts in sustainability after a series of scandals and lawsuits .Some of the scandals included incidences of oil spills and explosions in the wells. The company product stewardship strategy of Hart in 1997 has put into place many policies (Stanley, 2013). For example the company has set aside $2billion for research on renewable power sources and their acquisition. This will prevent incidences of overutilization of resources in the sources of energy. The research will also ensure only safe methods are acquired (Chesser, 2010). The company also bought Unocal corporation for $18.4million.This was a worthwhile purchase as their natural gas and petroleum reserves were increased to fifteen percent. With this kind of investment, the company will not overuse natural resources. Chevron has also discovered a way of recovering hydrocarbons. They developed a shale oil extraction process that helped to recover hydrocarbons from oil shale (David, 2005). Chevron Corporation has alternative energy sources which include geothermal, wind solar, biofuel and hydrogen. These are very friendly to the environment because they do not cause any type of pollution. These alternative energy sources are put into place to reduce pollution. Wind cannot in any way harm the environment yet it produces a lot of energy. Solar energy is equally harmless to the environment. It has no effects on the ozone layer because the energy is tapped directly and is used to for light and other energy based activities. Chevron itself has plans underway on using solar power to power their facilities. This shows that the company has faith in its products and has good intentions and not fraud. Geothermal energy is one of the safest forms of energy and environmental friendly (David, 2005). Product stewardship in terms of cradle to grave design suggests that ecosystems must be prevented from harm and enriched by industries. Chevron Corporation is implementing this with its strategies of renewing and recycling products. Production of 1,273 MW of geothermal energy in South East Asia as an alternative to fossil fuels and other energy sources (Hart, 1997). There is a five hundred KW solar mine in Fellows California .Chevron owns a twenty nine mega watts thermal solar to steam station in Coalinga for oil recovery. By using such safe energy production sources, then they protect the ecosystem from harm. The company has taken responsibility to any environmental damage that may have occurred during production. For example in Ecuador, the company spent over $40million dollars to clean up an entire area after production in 1990.At El Segundo in California, Chevron spent $500,000 to install non leaking valves and double sealed pumps (Stanley, 2013).This was to avoid release of air contaminants into the environment. The company also upgraded its leak detection system to reduce emission of hazardous gases such as sulfur. The company went ahead to pledge in combating global warming in 2004.This has been made possible by putting into place life cycle assessment tools. The company is able to follow its products from its raw material form to the finished products. This is in accordance with Hart’s strategy of pollution prevention. Clean technology is vital to any company. This involves use of renewable energy like wind, solar, hydrogen, biomass and green transportation. Chevron has not only produced energy from safe sources but also embraced this by powering their own facilities with solar power. Chevron has teamed up with other groups to promote clean technology use. The company intends to get early access to renewable energy by partnering with nonprofit organization cleantech open in 2006.The company has dedicated a third of its capital to renewable energy. There is a wind power in Southwest California and a solar mine (Hart, 1997). Chevron has a variety of solar technologies like solar panels, concentrating photovoltaic which involves the use of mirrors to direct light to solar cells and concentrating solar thermal which involves use of mirrors together with the heat from the sun for steam and electricity production. An example is project Bright field which is 740 KW of solar energy. This shows that the company has fully embraced clean technology. Chevron has teamed up with well reputed Institutions of Higher learning like Georgia institute of technology to conduct research. This is a project that required over $112million for development of cellulosic biofuels and conversion processes of biomass like wood and switch grass to fuels. These are strategies that show effort in pollution prevention. Waste like excess water is recycled and reused for other activities like cleaning. To control waste production from harming the environment, the company has its stations away from people. This makes it safe for citizens of the countries (Reinhartd, 2006). Conoco Phillips is the third largest energy production company in America. It was founded in August 30; 2002 after Conoco inc. and Phillips petroleum merged and hence the name and has its headquarters in Texas United States of America. It is a public company that deals with oil natural gas, petroleum, petrochemicals and lubricant exploration, production marketing, transportation and selling. It initially started as a coal, kerosene, oil and grease distributor in 1875 when it was just Conoco Inc. This was the first oil company in the United States to join United States Climate Action Partnership a coalition of large business companies with environmental groups. The company spent over $150million towards research and development of alternative energy sources and technologies in 2007 which amounted to fifty percent increase in expenditure from 2006. This Company has embraced the Hart’s strategies of sustainability. Conoco Phillips has a number of strategies that are put into place for sustainability development (Hart, 1997). In regard to pollution prevention strategies, Conoco Phillips manages its waste by contracting only waste companies that meet the set standards. The company strives to maintain waste management standards and where they are not directly involved, they try to influence the ventures to enact similar measures. In Canada, the company came up with a waste management program by keeping track of waste disposal and only contracting waste disposal facilities that have been approved. The company strives to reuse and recycle assets that have been used in production. In Ekofisk, the company recycling and reusing rate rose to 97 percent. There were wastes disposed in environmental friendly manner and by fully equipped facilities and fully licensed to deal with hazardous wastes. The decommissioning team ensures that drilling cuts are properly relocated. Waste management and optimization is a key. When a well is exhausted, the company does not just abandon the area without cleaning it up. It puts aside millions of dollars for cleanup and proper waste disposal. Conoco Phillips is keen on biodiversity and has put strategies and biodiversity initiatives. There are many conservation projects by the company and also those it sponsors. Most of these projects are run by the company employees. The company has projects like tree planting to protect the natural habitats for animals and to purify air. The company also protects water catchment areas with tree planting. Product stewardship is very complex for many companies. Conoco Phillips has designed a method for protecting the environment yet delivering their products and building the economy. One such strategy is life cycle evaluation. This allows the company to make informed decision in regard to use of natural resources and the environment. Some of the benefits of such programs include finding out that electric energy from natural gas has very little greenhouse emissions compared to coal. This makes it an alternative thus preventing over utilization of coal and also preventing pollution of the environment (Hart, 1997). The life cycle assessments (LCAs) are key in decision making concerning social, economic and environmental welfare. Conoco Phillips embraced this methodology giving it better understanding of the environment conservation processes. Clean up technology is unavoidable in any big company. Conoco Phillips is not left behind when it comes to use of environmental friendly renewable resources. The company has solar mines, wind mines and biofuels. These are renewable alternative sources of energy. They help to prevent over utilization of non renewable natural resources. This company has also collaborated with stakeholders for collaboration and biodiversity education. This creates awareness thus minimizing environmental damage. The company also engages services from vendors for reuse and recycle of their assets. This mainly includes electronics such as televisions, fax machines, computers, telephones, microwave ovens and copiers. These electronics are no longer valuable at Conoco Phillips but may be valuable to other people in other places and other lines of business. They are reused, recycled and remarketed in a process called e-cycling. LCAs also have made it possible to reduce greenhouse emission from coal by 45 percent. Conoco Phillips has been a leader in sustainability development. It has great influence on other companies in terms of sustainability. This is because it involves the community by engaging stakeholders in biodiversity education. Conoco Phillips being the third largest oil and natural gas Company in the United States is a major contributor to the economic growth. The company had a revenue of $62.004 billion in the year 2012.(John,2007).It has minimized environment destructive methods and capitalized on environmental friendly approach thus increasing its net income to $8.428billion in 2012.This is a big reap from just simple environmental friendly approach to run its activities (Blum, 2005). These two companies have very similar strategies for sustainable development. They have made significant effort to ensure that they maximize their income and also protect the environment. They are the two major oil and natural gases in the United States therefore are role models to other smaller companies. With their efforts in engaging stakeholders to create awareness by education, then they have played their part. The pollution prevention strategies by the two companies are excellent. They are not careless in waste disposal and they also put into consideration recycling and renewing of waste. Waste water in these companies can be millions of gallons ad since this is too much water to be wasted, they have water treatment plants that recycle this water. By using alternative means to generate energy like solar and wing, these two companies are able to conserve natural resources by not over utilizing them (Hart, 1997). Reinhardt believes that organizations are working at being sustainable. This is by managing competitors, saving costs, managing environmental risk and redefining markets. In his article, he tries to explain why it is profitable to conserve the environment. He tries to show how it’s a win-win situation between firms and the environment. When a company invests in conservation of the environment, it is likely to get good returns in the long run.(Reinhardt 1999) This is because there is prevention of future hazards that could cause billions of dollars to control. For example, a company like Chevron used up to n$40million dollars to clean up an area in Ecuador. This could have been prevented by putting in place proper waste disposal measures .The Company also incurred great losses in a fire in Angola after two of its wells went on fire due to leakages caused by old pipes and equipment. If they had installed double sealed pipes and leakage proof valves, then this could have been avoided (Hart and Ahuja,1996). With proper measures to conserve the environment, costs are saved. Natural gas electricity generation is safer to the environment. It is also cheaper to produce, transport and market. Solar energy is renewable. It is very profitable to sell solar panels with a worldwide market. This keeps the environment clean and leaves the company with huge financial gains. Companies can also explore new markets as a way of conservation and sustainability development. This means that they will have more profits and also conserve natural sources of energy by not overusing them. This shows a great relationship between environmental conservation and financial gain. It is possible for firms to be green and competitive (Reinhard, 1999).When a leading firm succeeds in this, competitors will follow suit and everybody gains from it. There are numerous pollution prevention opportunities for companies making good environmental performance a source of higher financial gains. As many businesses embrace the idea of sustainable development, there are still few strategies on how they should go about it. Hart’s framework on the left side of his quadrant puts emphasis on waste management. This ranges from environmental waste to social waste. Social waste includes unproductive work. Pollution prevention minimizes costs in the short term and in the long term. There are people who differ with this but recent research from different scholars has revealed a great relationship between financial gain and environmental performance. Although there is still not enough evidence to show this relationship, there are still researches going on to prove this beyond reasonable doubt. References Hart, S. (1997) ‘Beyond greening: Strategies for a sustainable world’. Harvard Busines Review. 75(1): 66. Hart, S. and G. Ahuja. (1996). ‘Does it pay to be green? An empirical examination of the relationship between emission reduction and firm performance.’ Business Strategy and the Environment. 5:30-37. Reinhardt, F. (1999) ‘Market failure and the environmental policies of firms.’ Journal of Industrial Ecology. 3(1): 9-21. Cohen, M. S.Fenn, and J. Naimon. (1995). ‘Environmental and financial performance:Are they related?’ Working paper, Vanderbilt University. Denton, K. (1994). 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