Environmental Sustainability

Definition: 

The increasing social awareness of environmental impacts of business activity forcing businesses to adapt their practices in alignment with standards of environmental sustainability. Reduce ‘carbon footprint’ - amount of carbon dioxide entering environment from business activity.

Ecological sustainability: actions to preserve the fragile ecology of the planet; development and use of methods of production that minimises use of non-renewable resources, minimises release of carbon into the atmosphere, and preserve the localised natural ecosystems in proximity to business operations (streams, forests)

The rising risk of climate change is widely known. Operations managers need to integrate long-term sustainable resource management. (Most) customers prefer businesses that are environmentally friendly.

How it can influence operations:

• Investment in new technology that is less polluting (capital investment)

• Sourcing material from sustainable sources (supply chain)

• Could lift overall costs of operations (cheaper inputs / processes are usually the ones that damage the environment)

• Could lower some operational costs (better technology might require less energy, reducing carbon footprint)

• Loss of revenue and profitability for firms that fail to adapt to pressure to become more environmentally sustainable in operations

• Sustainable operations practices could also be used as a positioning strategy to differentiate business from competitors