A Framework for Managing Environmental Strategy

Over the last ten years, environmental strategy has taken an increasing amount of top management time, and the trend seems likely to continue. This article argues that most firms' environmental strategy is based on the overly simplistic model of quantitative Environmental Performance Indicators (EPI) which basically aims merely to minimise emissions relative to inputs (energy, materials). The author outlines a broader framework based on identifying priority stakeholders, including future stakeholders and future alliances between stakeholders. Whilst recognising the practical difficulties, he argues that direct stakeholder consultation is a net gain to companies because it helps to identify in advance the limits for what they can and cannot achieve in practice: getting approval from stakeholders in advance will often make action easier and becomes a critical success factor in industries which are intensively scrutinised. Changing to this approach also converts environmental strategy from being purely a potential source of costs to a potential source of market value creation, making it more likely that the Board will view it within a positive framework.