Corporate Environmental Management for the Textile Sector University of BergamoAlbachiara BoffelliBarbara RestaStefano Dotti

Agenda

• Context

• Theoretical Framework

• Research questions

• Empirical investigation

• Cluster analysis

• Results

• Evolutionary trajectories

• Management tools

• Conclusions and future developments

Negative impacts associated to the textile industry:1. Energy consumption 2. Water consumption

3. Use of chemicals

4. Solid waste production 5. CO2 emissions

Context

Context

• In order to address the problem, the University of Bergamo created an observatory on sustainability within the textile industry: Osservatorio Tessile & Sostenibilità (OT&S)

• University of Bergamo follows several projects aimed at helping the textileindusty to gain competitiveness and to became more sustainable

• During the last three years OT&S worked on the topic of environmentalsustainability*

• One of the outputs of this work, achieved thanks to a deep literatureanalysis as well as to the feedback of the industry, is the Corporate Environmental Management Framework

* See Resta et al. (2014) "Practices for Environmental Sustainability in the Textile, Clothing and Leather Sectors: The Italian Case”

Corporate Environmental Management Framework

Research questions

• Starting from the Corporate Environmental Management Framework, the goal is to answer to three research questions:

1. RQ1: Are there consistent and recurring patterns of strategic environmental dimensions which can be viewed as an empirical typology of corporate environmental strategy?

2. RQ2: What are the practices that characterise each environmental strategy type?

3. RQ3: What are the environmental competitiveness and profitability benefits that are related to each environmental strategy type?

Empirical investigation: Survey

• The primary data for this study was collected through a web survey in June–September 2014.

• The research was initiated with the design of the research model and the related questionnaire, which was the main source for data collection.

• The questionnaire was categorized into 4 sections:

1. Section A - Company’s general information;

2. Section B - Environmental strategy;

3. Section C - Environmental Management Practices (EMPs);

4. Section D - Environmental competitiveness.

1295 companies without a website

Empirical investigation: Reference population

• The questionnaire was administered to the total population of Italian textile companies included in the AIDA database (NACE code: 13).

• The first extraction resulted in 2804 companies, with the following distribution among the NACE sub-codes:

1509 companies

with a website

Empirical investigation: Respondents sample

General information

• Segment: all the segments are well represented, the majority of the respondents belongs to weaving and finishing;

• Company dimension: micro and small companies are more frequent –representative sample;

• Geographical distribution: the companies are based mainly in the textile districts of Lombardia, Piemonteand Toscana – representative sample;

• Competitive strategy: the strategy mainly adopted is product differentiation.

Respondents: 303

20,1%20,1%

Empirical investigation: Respondents sample

Environmental strategy

• Environmental proactivity: predominance of a reactive behaviour (54,7%);

• Competitive advantage: product differentiation is the more reported advantage;

• Integration of environmental and competitive strategy: generally, a medium level of integration is experienced;

• Importance of stakeholders: customers, suppliers and employees are perceived as the most important stakeholders.

Empirical investigation: Respondents sample

Empirical investigation: Respondents sample

Empirical investigation: Respondents sample

Empirical investigation: Respondents sample

Empirical investigation: Respondents sample

Environmental Management Practices

• The categories of practices mostly adopted are Waste Management, Materials, and Raw materials

Empirical investigation: Respondents sample

Environmental competitiveness

Cluster analysis

• Cluster analysis includes a large number of techniques which aim to determine homogeneous groups, in which each member of one group is more similar to another member of this same group than to members of any other group.

• We used an agglomerative hierarchical method.

• Steps:

1. Selecting the variables from the strategic dimension of the Corporate Environmental Management Model;

2. Applying cluster analysis to group the textile companies into different strategic types;

3. Examining whether the clusters identified are interpretable. In this stage, the clusters were characterized and interpreted according to the variables of the practice and competitiveness dimensions;

4. Defining differences between clusters.

Results

Results

Committed to environmental sustainability

• 100 companies;

• High environmental proactivity(2.44/3.00);

• High integration of environmental and competitive strategy (3.96/5.00);

• Differentiation competittive advantage(78%);

• Stakeholders importance:

– External primary(0.75/1.00);

– Internal primary (0.25/1.00);

– Regulatory (0.24/1.00);

– Secondary (0.10/1.00).

Results

Prone to environmental sustainability

• 147 companies;

• Reactive behaviour (2.02/3.00);

• Medium integration of environmental and competitive strategy (3.07/5.00);

• Differentiation (48%) and cost reduction(69%) competitive advantages;

• Stakeholders importance:

– External primary (0.75/1.00);

– Internal primary (0.22/1.00);

– Secondary (0.04/1.00);

– Regulatory (0.01/1.00).

Results

Subjected to environmental sustainability

• 56 companies;

• Passive behaviour (1.49/3.00);

• Low integration of environmental and competitive strategy (1.57/5.00);

• Differentiation competitive advantage (56%);

• Stakeholders importance:

– External primary (0.58/1.00);

– Internal primary (0.10/1.00);

– Regulatory (0.07/1.00);

– Secondary (0.03/1.00).

Results

Clusters characterization in terms of practices

Results

Clusters characterization in terms of competitiveness

Results

• An additional aspect to be considered is the profitability analysis.

• Three measures has been taken into consideration: ROE, ROI, ROS.

• While for the variables representing the perceived competitive benefits statistically significant differences are observed, all the profitability varibales are not significantly different between the groups.

Evolutionary trajectories

Management tools

• Several management tools could be employed to accomplish the two trajectories and to better control environmental sustainability:

1. Environmental Management Information System (EMIS): to make environmental information available in companies;

2. Environmental Performance Management System (EPMS): a systems of indicators, fed by the EMIS;

3. Flexible governance system: characterised by coordination, commitment and participation as mechanism of governance, rather than hierarchical authorities;

4. Learning-based organisational change;

5. Culture for environmental sustainability: pervading not only firms but all the society as a whole.

Conclusions and future developments

• Environmental sustainability is gaining more and more relevance for textile companies since it can positively contribute to the firm’s value creation process.

• Our research outlined a medium level of sustainability of the textile companies: a lot of improvement opportunities.

• The textile machinery manufacturers can definitively help the textile industry to improve its environmental sustainability.

• Possible future development of our research:

‒ Include textile companies from other countries;

‒ Enlarge the conceptual model to social sustainability aspects;

‒ Provide to the companies a benchmarking tool, allowing them to self assess their environmental sustainability level and supporting them during the evolutionary process.

Corporate Environmental Management for the Textile Sector -University of BergamoContactsAlbachiara Boffelli – albachiara.boffelli@unibg.itBarbara Resta – barbara.resta@unibg.itStefano Dotti – stefano.dotti@unibg.it