ENVIRONMENTAL

MANAGEMenT
Ecological Innovations in
Organizations

INTRODUCTION:
It is often stated that the application of information and communication technologies
(ICT) to learning and training has great potential to produce significant changes in
educational practice. But for this to happen, the technology first needs to be
accepted and adopted. Applying innovation theory increases the chances of
successful adoption. Conventional approaches to innovation, such as innovation
diffusion suggest that supposedly innate characteristics of the innovation are
important in determining whether or not it is adopted. Borrowing ideas from
innovation translation, in actor-network theory it is people who are all important, as
they may either accept an innovation in its present form, modify it to a form where it
becomes acceptable, or reject it completely. Recent research has shown that an
innovation translation approach is particularly useful in considering ICT innovation in
small business.

Beyond innovation translation, lies an ecological framework which considers the

process of innovation and change in organizations. This socio-technical approach
has shown the ability to identify factors at work that do not emerge from traditional
approaches to innovation theory.

A decision-taking process in an organization, based on an analysis of economic

costs/gains and long-term objectives, often leaves out an analysis of
expenses/effects related to environmental protection. It results from a strong
pressure of competition which causes organizations to use a mechanism of
transferring costs to third parties thanks to which there is an increase of an
organization’s profits. On the other hand, an appropriate quality of the natural
environment constitutes a generally socially acceptable objective and is not limited to
selected entities. In this situation, there arises a need to force organizations into
certain behaviours. The behaviours are aimed at achieving socially acceptable
objectives.

In the case of environmental protection, this tendency to internalize external costs is

always attained by means of instruments of ecological policy: legal, economic,
psychosocial. They involve regulations of a structural character, which define rights
and obligations of business entities concerning the use and protection of the
environment, as well as rules which regulate financial and organizational problems,
the legal importance and character of ecological policy. The aim of the regulations is
to safeguard, by means of legal norms, such a system of social and economic
relations which would completely eliminate harmful and undesirable changes in the
environment, or which would prevent its degradation.

According to the researchers, legal regulations provide a major incentive to

implement ecological innovations. They force organizations, irrespective of their
strategy, to comply with the binding emission standards and technological standards.
Legal responsibility compels organizations to adjust their installations to legal
requirements. On the other hand, the relationships holding between environmental
regulations and ecological innovations are very tight. At the same time, in Central-
Eastern European countries, their character has not been fully recognized.
Consequently, it becomes important to know if environmental regulations impact
ecological innovations, including: the amount of RD spending, the range of
implemented ecological innovations.

ECOLOGICAL INNOVATION AT XEROX:

As the world’s largest distributor of cut-sheet paper, Xerox Corporation

respects its responsibility to foster sustainable development by using paper wisely
and protecting forest resources. Since its early days, Xerox has helped customers
conserve paper, and more recently it has worked with partners and suppliers to
promote environmentally sound practices. Following are some of the major initiatives
taken up by Xerox Corporation to imbibe environmental solutions in their core
business practices:
• 1964 – Xerox establishes the Media and Compatibles Technology Centre in
Webster, N.Y. The research lab’s mission is to ensure that papers Xerox sells
are optimized for use in Xerox products, preventing waste and product
downtime.
• 1969 – Xerox introduces the 7000 duplicator, the first product that is able to
make two-sided copies, a paper-conserving measure. Copying on the second
side required the paper to be to be manually reinserted.

• 1973 – Xerox introduces a recycled grade of cut-sheet xerographic paper

called Cyclex.
• 1988 -- Xerox announces recycled thermal fax paper with minimum waste-
paper content of 50 percent, including 10 percent post-consumer waste.

• 1997 – Xerox introduces DocuShare, its first software for posting, sharing and
managing collections of information across corporate intranets. DocuShare is
the first of a series of software and workflow tools that help people manage,
share, and store electronic documents, reducing the need for hard-copy
documents.

• 1999 – Xerox introduces FlowPort, the first scan-to e-mail software. It bridges
the paper and digital worlds by enabling users to capture and integrate paper-
based documents into an organization’s digital workflow, where content can
be electronically accessed, retrieved and distributed.
• 2000 -- Xerox notifies partners that beginning in 2003 all companies providing
Xerox with paper for resale will have to meet new environmental standards to
do business with Xerox. Aimed at protecting the health and integrity of forest
ecosystems, conserving biological diversity and soil and water resources,
safeguarding forest areas of significant ecological or cultural importance, and
ensuring sustainable yield, the requirements cover all aspects of
papermaking, from forest management to production of finished goods.
• 2003 – Xerox paper sourcing requirements are phased in, affecting more than
30 paper suppliers around the world. Requirements cover responsible
environmental management of mills; sustainable forest management and
 sourcing of wood raw materials; chemicals/materials use; packaging; and
compliance with environment, health and safety regulations. Under the
requirements, for example, vendors are asked to supply independent third-
party certification that wood raw materials supplied to their mills come from
sustainably-managed lands.

• 2006 – Xerox announces its research laboratories have created an

experimental printing technology that produces prints whose images last only
a day, so that the paper can be used again and again. The technology is
known as self-erasable paper and is still in a preliminary state. It blurs the line
between paper documents and digital displays and could ultimately lead to a
significant reduction in paper use.

• 2007 – Xerox introduces Xerox High Yield Business Paper™ – the industry’s
first mechanical fibre paper optimized for digital printing. Made by grinding
wood into pulp, the process uses half as many trees as the standard chemical
pulping process, reduces the chemicals and water consumed, and is
produced in a plant using hydroelectricity to partially power the pulping
process, resulting in reduced fossil fuel use and up to 75 percent reduction in
greenhouse gas emissions.

ECOLOGICAL INNOVATION AT IBM

 Waste Minimisation and Management

• In 2008, IBM sent 79% of its non-hazardous waste to be recycled worldwide.

• In 2008, 64% of non-hazardous waste was recycled from IBM leased and
operated location in Australia, up from 57% in 2007.
 • Almost 90% of 285.57 tonnes of non-hazardous waste was diverted from
landfill and primarily recycled from the National Head Quarters in Sydney.
• In addition almost 80% of 123.67 tonnes of non-hazardous waste was
diverted from landfill and reused and recycled from the national distribution
warehouse in Sydney.

 Conserving raw materials and waste avoidance

• In 2008, office paper use in Australia fell by 13% or 6.1 million sheets to 41.8
million sheets, saving AU$64K in Australia. Each employee used 5.8 Reams
of office paper per year, down from 7 Reams.

 Energy Efficiency and Conservation & Climate Protection

• In 2008, Australia delivered an energy conservation saving of 4.5% against

the corporate target of 3.5% of actual annual electricity and fuel used.
 saved 4,462 MWh and over AU$320K
 avoided 4,400 tonnes of carbon dioxide equivalent emissions
 purchased 3.9 GWh/yr of government accredited Green Power renewable
energy
• Energy conservation projects included upgrading of major building
infrastructure to energy efficient chillers, cooling towers and generators, and
many lighting projects were completed which improved lighting controls at
many of our locations in Australia.
• As a further example in 2008 GHG emissions from Australian employees’ air
travel for business reduced by 8% Y-o-Y – or over 1,500 tonnes CO2

ECOLOGICAL INNOVATION AT CIBA SPECIALITY

CHEMICALS

Ciba Speciality Chemicals, a Swiss manufacturer of textile dyes is a classic

example of Ecological innovation. Textile manufacturers dye cotton or rayon fabrics
by immersing the material in a bath containing dyes dissolved in water and then add
salt to push the dye out of the solution and into the cloth. Ciba speciality Chemicals
had introduced dyes that fix more readily to the fabric and therefore requires less
salt.

The new dyes help Ciba’s customers in the following way:

1. They lower the outlay for salt. This reduces their costs for salt and thereby
reducing the overall cost by 2% - a significant amount in an industry with
wafer thin margins.

2. It reduces the manufacturer’s costs for water treatment. Used bath water – full
of salt and unfixed dye – must be treated before it is released into the rivers or
streams (even in low income countries where environmental standards may
be relatively lax). Thus less salt and less unfixed dye mean lower water
treatment costs.

3. The new dyes higher fixation rates make quality control easier thus lowering
the costs of rework.

Ciba’s dyes are the result of years of development in the laboratory. They are
protected against imitation by patents and by the unpatentable but complicated
chemistry that goes into making them. For those reasons, Ciba can charge more for
its dyes and capture some of its value it is creating for customers. Lowering a
customer’s environmental costs add value to its operations just as surely as a new
machine that enhances labour productivity.

But there are three conditions required for success with environmental
differentiation, and Ciba’s approach satisfies all the three.

1. The company has to identify customers who are willing to pay more for an
environmentally friendly product

2. It has to able to communicate its product’s environmental benefits credibly

3. It should be able to protect itself from imitation for long enough to profit on its
investment.
 A company which fails in any of these three aspects will fall flat with its
ecological innovation.

SOME OTHER INTERESTING INITIATIVES:

• LEELA HOTEL GROUP: It was honoured by the American Academy of

Hospitality Sciences for environmental initiatives. At The Leela Goa, for
example, Nair’s imprint can be seen in the 75 acres of lush gardens and
foliage planted along the property. In all, there have been a total of 3,556,633
trees planted on the Leela Properties.
• One of the companies has saved around $14mn/yr just by reducing the font
size from 16 to 10.
• Hybrid car that result in higher fuel efficiency.
• Using solar energy instead of electric energy.

EFFECT OF ECO INNOVATIONS ON EMPLOYMENT:

Ecological innovations have increasingly been seen as a major response to

environmental problems. An important question for both economic research and
public policy is whether these innovations also increase employment or not (the
question of a double dividend). The question here is how factors affecting direct
employment changes due to eco-innovations at the firm level. Using data from
around 1600 firms in five different countries (Germany, Great Britain, Italy, Holland
and Switzerland) it has been observed that firms investing in relatively important
(from the firm’s perspective) labor cost saving product innovations that have not
been subsidized by the state and pursuing a market driven business strategy that
leads to increases of their sales in industries in which they have a market power also
increase the likelihood of their achieving a positive long term direct employment
effect. Firms that deviate - on average - from this ideal portrait do not have positive
direct employment effects.

CONCLUSIONS:
 Initiatives to bring ecological components to urban living are put forward by
governments, grassroots groups and private industry. Some projects focus primarily
on the application of resource-saving technology and/or related user behavior.
Others emphasize the cohesion and empowerment of the community as the principal
agent to proliferate and further develop concepts of sustainable living.
Based on one of these perspectives, an organization (firm) will have a specific
set of characteristics. These can be grouped into four categories:
1. Basic strategic orientation – The more or less coherent view of the world as it
is relevant to the firm, including its relationship to the natural environment. It
may not be formalized in terms of a vision or mission statement, but it is
assumed to be more or less consistent at the level of a firm.
2. Definition of value – The basic strategic orientation is based on assumptions
of what are valuable activities, resources, and capabilities, and a firm‟s
strategy can be understood as the pursuit of such valuable items. This
definition includes ecological value: what are relevant ecological issues, and
what are legitimate ways of dealing with these.
3. Capabilities – The organizational routines the firm employs to combine
resources (money, people, materials, knowledge) in order to materialize the
goals that are implied in its basic strategic orientation. Examples are:
organization of R&D, specific ways of organizing production, routines to
collaborate with stakeholders, marketing routines, environmental
management, etc.
4. Activities related to reducing ecological impact – Based on capabilities, firms
will develop activities that in the end determine their ecological impact.
Examples of these are: product innovation, collaboration with consumers,
recycling activities, lobbying and communication, moving production to other
countries, etc.

These four categories are closely related. The definition of value can be seen
as the normative complement of the basic strategic orientation. This normative
framework defines the selection environment in which capabilities emerge, are
developed, or discarded. Through activities, which flow from capabilities, the
strategic orientation is tested, and if successful, maintained.

From the perspective of the various studies carried out in this context it has been
inferred that:

• Not surprising is the result that an eco-innovation in general, measured by its

share of a firm’s total innovation expenditures (input indicator), does have a
significant impact on firms’ long term employment.

• It is surprising that organizational eco-innovations do not have any significant

impact on firms’ long term employment.

• From a theoretical (neo-classical) viewpoint is it quite surprising that price-

based competition among firms does not have a positive impact on long term
employment. This suggests that imperfect competition (market power) helps
firms to innovate and create jobs.

• It is worth noticing that firms pursuing different strategies achieve different

outcomes concerning employment. Firms with a clear market-driven strategy
(innovation in order to secure existing markets or to increase market share)
are more successful than those that are aiming at just improving their
corporate image.

• The size of innovation as measured by the share of eco-innovation

expenditures as a percentage of firm’s total innovation expenditures has a
positive effect on the firm’s probability to increase long term employment. In
addition, as expected, product innovations seem to have a positive impact,
while process innovations seem to have a negative impact on long term
employment.
  The market power of the innovating firm:
The impact of competition in product markets on the long term
employment of firms operating in those markets depends on the means used
for competition: while innovation-based and corporate image based
competition seems to have a positive effect, price competition seems to have
the opposite effect.

 The price elasticity of product demand:

Eco-innovation led to increase in output and sales.

 Firm specific variables:

While firm size does not seem to affect long term employment due to
eco-innovations, firm-specific strategies do. Eco-innovating firms that pursue
a clear market driven strategy such as securing existing markets or increasing
market share also increase their long term employment. On the other hand,
firm strategies that consist of innovating in order to comply with environmental
regulations or to improve the firm’s image do not seem to have the same
systematic effect on long term employment.

 Industry and country specific differences:

The long term employment effect of co innovations varies not only
across firms but also across industries and countries.

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