Environmental Stewardship

Companies will have varying impact on the environment around depending on their focus, such as manufacturing, service, online, etc. Each has a stewardship to minimize that impact and protect or, at least, not harm the environment (Jacobs & Chase, 2021). The government has imposed some regulations to hold businesses to a standard of minimal emissions, but these firms can do more than what they are required to do. The cradle-to-grave assessment has become popularized among many companies to evaluate the environmental costs associated with their products. However, a new focus has been on cradle-to-cradle, rather than cradle-to-grave.

Instead of creating waste with each product made, the goal is to make a product thats parts can be safely reused or returned to the environment to decompose. This requires creativity and innovation on the part of the manufacturer to achieve this in a cost-effective way. Another way firms are applying this approach is by using renewable energy to create their products. This cradle-to-cradle effort has become a focus of the European Union and many companies worldwide.

The Ellen MacArther Foundation, which promotes building a circular economy, shared research that the EU, could save up to $630 billion a year by switching to a cradle-to-cradle model (Alaraj, 2020). Another company, Shaw Industries, improved their water efficiency by 48% which, along with other cradle to cradle method adaptations, allowed them to save $2.5 million in 2012 (Alaraj, 2020). Method is a cleaning business that has successfully created a circular production system. Their products are made from fully biodegradable materials, they use renewable energy for their production processes, and they let another company, Gotham Greens, use the roof of their plant as a greenhouse to grow produce for local markets (Alaraj, 2020). In this way, Method has applied the cradle-to-cradle method while also creatively and efficiently using all the space they have for their business.

The cost savings and associated economic benefit linked with these improved efficiencies may help some companies to justify the switch financially. However, firms that are in poor or developing societies may not be able to adopt this approach as they are struggling just to survive (Jacobs & Chase, 2021). Firms that are competing to be low-cost provider may lose their advantage if they change their production methods to completely transform them to be cradle-to-cradle certified. Some people argue that lessening their environmental impact would cause them to work less efficiently, but would that loss be temporary or long-term? Company leaders will often look to the numbers on a spreadsheet to justify moving their company to be more sustainable.

To add sustainability to a companys goals, it must create value for stakeholders and shareholders. In the future, it is expected that more customers will be choosing where to make their purchases based on what the business is doing to take care of the environment. The companys level of sustainability and their communication to their stakeholders and shareholders concerning their progress in that area, may be the tie breaker between the customer keeping their loyalty with them or switching over to their competitor.

References:

Alaraj, L. (2020, Nov 1). Cradle-to-Cradle: Method Case Study. Governance & Accountability Institute, Inc. Retrieved from https://ga-institute.com/Sustainability-Update/tag/cradle-to-cradle/

Jacobs, F. R. & Chase, R. B. (2021). Operations and Supply Chain Management. McGraw Hill.

Question: Do you believe it is reasonable for every business to adopt the cradle-to-cradle method? Why or why not?

Answer: