Environmental driving forces

A number of driving forces encourage good environmental performance. It is important that both management and the work-force understand the importance of the driving forces to your company and that environmental management issues are perceived as a real business issue rather than a nicety.

Legal driving forces
Financial forces
Market forces
Social forces

Legal driving forces

Legislation is the single most important driving force. Laws will generally provide a minimum acceptable standard and companies which fall below this standard can face prosecution by the relevant regulatory authority. Good environmental performance will help to protect the future of companies and jobs, by minimising potential environmental liabilities and legislative non-compliance.

Financial forces

a. Cost savings: Waste minimisation and energy management are two areas with substantial savings potential in furniture manufacturing. When asked to estimate the cost of waste, it is very common for companies to purely think in terms of the disposal cost. The true cost of waste is typically 5 to 20 times the cost of disposal as it includes:

The value of the raw materials being thrown away
The labour and resources expended in processing the materials prior to discarding them
Legislative compliance, e.g. cost of administrative procedures and any fines / long term liabilities associated with waste
Opportunity costs of space, equipment and resources given over to on site waste handling and storage

By systematically identifying and managing all areas of environmental management, cost savings can be identified. Work by BFM Ltd and Envirowise suggest that most companies can save 1% of turnover through simple waste reduction measures. A cost reduction of 1% will generally have the same bottom line impact as a 10% increase in sales.

b. Cost of financial services: Financial institutions are increasingly concerned with the implications of current and long term environmental liabilities for their clients. It is becoming ever more expensive to insure against environmental damage resulting from site's activities. Banks and creditors are now requiring environmental reviews or audits of those companies to whom they lend money, because they realise the potential cost implications of bad environmental practices, e.g. the contamination of ground and groundwater. In similar fashion, large organisations have increasingly been conducting pre-acquisition environmental due diligence audits of companies that they are considering acquiring. There have been cases where the resultant value of companies has been reduced to zero due to the potential environmental liabilities.

Market forces

Environmental performance is becoming an issue raised by customers. This is likely to become increasingly important especially for those furniture manufacturers in the contract markets & / or supplying large companies due to the expected widespread uptake of environmental management systems (EMSs) throughout European industry. Companies who adopt EMSs will be required to evaluate the environmental performance of their suppliers, including those who supply their furniture. Hence the evolution of supply chain pressures for the improvement of environmental management performance. More horizontal pressures will subsequently arise, with firms having to implement EMSs to stay on equal terms with their competitors.

Social forces

Good environmental management will generally lead to a cleaner working environment, and hence one which is better for employees, e.g. less dust and solvent fumes. Similarly, such control will help to prevent the creation of nuisance which impacts on local residents. Social pressures also arise due to strong feelings regarding the global issues and they can be manifested in the shape of “environmental consumerism” - purchasing on the basis of environmental credentials.