Environmental leadership and competitive advantage through environmental management system standards

Abstract

Stakeholders exert pressures on businesses to demonstrate environmental responsibility. However, it is the source and extent of such pressures that determine business response. At present it would appear that the principal pressure on UK businesses to demonstrate environmental responsibility is that exerted by government through legislation and regulations. Businesses must comply with such legislation or risk punitive action. Compliance is the basis of environmental responsibility. However, businesses may elect to go beyond compliance which implies that they are implementing a leadership strategy, balancing risk against competitive advantage. An environmental leadership strategy can provide competitive advantage for a company in two ways: firstly, by catering for a demand in the market place for environmentally responsible products or services ahead of its rivals; secondly, by generating cost savings from practices that conserve energy and materials and reduce waste. Companies that have determined that their strategy should be one of environmental leadership will want to publicize this to their stakeholders. One way of doing this is through an environmental management system standard. This paper presents a case study on Autosmart Ltd., one of the first companies in the UK to obtain BS7750. The case study describes the motives for seeking certification, the changes made to products and processes to improve environmental performance, and the commercial and competitive benefits gained through certification. © 1998 John Wiley & Sons, Ltd and ERP Environment.