Role of the Environmental Manager in US and Canadian SMEs

Professor Scott B. Wolcott, PERochester Institute of Technology

Bocconi UniversityJune 8 and 9, 2009

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Workshop Overview

• US and Canadian definitions of Small and Medium-sized Enterprises (SME)

• Who is the Environmental Manager around here?

• Options for the SME Environmental Manager in North America

• Strategic options for Italian SMEs

SME = SB (US) = SME (Canada)

• United States - Small Business (SB):– < 500 employees for manufacturing facilities– < $7M annual receipts for non-manufacturing

facilities– 99.7% of all employer jobs– Many exceptions: e.g. Florida SB < 100 employees

• 98% of businesses in Florida are SB– Private, non-farm SB contribute to 50% of US Gross

Domestic Product (GDP)

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US continued: 16 Small Business Sectors% contribution of Small Business towards Sector GDP

(2002)

• 20% Information• 23% Utilities• 33% Mining and manufacturing• 40% Finance and insurance• 41% Transportation and

warehousing• 44% Holding companies• 49% Trade• 49% Waste management

services

• 50% Education services• 56% Health services• 58% Accommodation and

food services• 70% Professional and

technical services• 75% Arts and entertainment• 79% real estate and Leasing• 85% Construction• 85% Other Services

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SME = SB (US) = SME (Canada)

• Canada - SME– SME is an organization with < 500 employees• Small business < 100 employees• Medium business is between 100 and 499 employees

– 99.8% of Canadian companies are SMEs– SMEs account for 45% of Canadian GDP• Small businesses with < 50 employees account for 26%

of Canadian GDP

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SME = SB (US) = SME (Canada)

• Individual economic and environmental impact is tiny• Collectively, SMEs are contribute ~50% of US and

Canadian GDP• Collectively, SMEs are estimated to be responsible for:– 60% of all carbon dioxide emissions and – 70% of all pollution

• 73% of Canadian SMEs have not heard of ISO 14001

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Who is the Environmental Manager?

• No one!• Everyone?– The activities performed by an environmental

manager in a large organization are performed by one or more people at an SME.

– Owner, general manager, facility manager, production manager, line employees, etc…

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Roles for the “Environmental Managers”

• Purchasing– Develop controls for

materials purchases• Human Resources

– Employee training, rewards• Maintenance

– Preventive maintenance programs, ID environmental aspects

• Accounting– Track environmental costs,

budgets, economic feasibility

• Engineering– ID pollution prevention

opportunities, consider environmental impacts of products & processes

• Top Management– Communicate importance of

activities, provide resources, review progress

• Line workers– Provide 1st hand knowledge

of environmental aspects, mentor new employees

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Role of the “Environmental Manager”

• Strategic choices in the environmental context• External pressures– Governmental agencies• Federal, state, and municipal

– Competitors– Community Associations

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Strategic choicesfor the SME “Environmental Manager”

Proactive

• Actions– Cooptation

• NBAA (Northwest Baltimore Automotive Association)

– Resource Sharing• Laundry service

– Environmental Enacting

Reactive or resistant

• Actions– Maintain status quo– Solo protective measures– Reactive Risk Management

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Strategic choicesfor the SME “Environmental Manager”

Proactive• Outcomes

– Greater eco-literacy– Enhanced environmental

performance– Better financial performance

Reactive or resistant

• Outcomes– Sustained external threats– Forced closings

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Options for the Proactive “Environmental Manager”

• Environmental Initiatives (i.e. Low hanging fruit)• Environmental Management Plan

– Actions of an organization with regard to environment, regulatory compliance, establishing and meeting goals and targets

• Environmental Management System– Incorporates quality improvement principles– “Plan-Do-Check-Act”– Does not have to include ISO 14001 certification

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Incentives and Barriers facing the“Environmental Manager”

Incentives/Advantages Barriers/Disadvantages• Lack of resources (e.g. time)

– Delays development– Maintain plan

• Lack of resources (e.g. staff)– Implementation review

• Promotion of environmental activities to employees

• Starting fresh (w/o previous exp. ISO 9001)

• Enhanced compliance• Improved documentation• Competitive advantage• Cost savings• SME employees multi-task• SME Less complex hierarchy• Starting fresh (no EM plan

to replace)

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Summary of the Italian SMEs “Environmental Manager”

• Current Business Structure of SMEs– Very small, < 50 employees– Family owned and generational succession• Not always a straightforward succession• Unlikely to learn about innovative ideas w/o economic driver

– Often connected to each other • Part of the same supply chain• Districts

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Summary of the Italian SMEs “Environmental Manager”

• Current Regulatory Environment of SMEs– Lots of regulation– Inconsistent enforcement of regulations– Culture of interpreting laws and regulations at all

levels– Little neighborhood influence on SMEs– Slow judicial system– Large bureaucracy system

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• What to do?• Reactive: Address external threats as SME

group– Initially for economic reasons– Later, environmental compliance

• Strategic, proactive initiatives– Lobbying financial sector– Environmental competitive advantage

Strategic Options of the Italian SME “Environmental Manager”