Page 73 - Design for Environment A Guide to Sustainable Product Development

52 Cha pte r F o u r

toward stakeholder concerns. Environmental management system
standards and codes of conduct were developed to promote best prac-
tices. The concept of product stewardship emerged as an ethical com-
mitment by companies to integrity and care in the management of
their assets and products, extending to all phases of manufacturing
and distribution. Table 4.1 is an example of a product stewardship
checklist from this era, which DuPont distributed freely.
Around the turn of the twenty-first century, the progressively
expanding scope of producer responsibility led to broad adoption of
corporate citizenship and sustainable development principles, includ-
ing stewardship of the “commons”—protection of natural resources
and ecosystem services. By this time, most corporations had em -
braced a broader commitment to social and economic well-being and
had initiated stakeholder outreach and dialogue. During this period,
the financial community began to recognize the important linkages

be tween sustainability and shareholder value, discussed later in this
chapter; and socially responsible investing began to accelerate.
Today, in search of strategic advantage, companies are expanding
the scope of their sustainability initiatives to their full value chains.
As discussed in Chapter 10, proactive management of the full prod-
uct life cycle implies that companies not only need to implement
green purchasing and operations policies but also must ensure that
their suppliers adopt sustainable business practices. These efforts
have already begun, as illustrated by the Electronic Industry Code of
Conduct described in Chapter 11. One of the key factors reinforcing
this trend is the expansion of multinational companies into develop-
ing nations, where they must confront poverty reduction and quality
of life issues. At this point, environmental responsibility becomes
inseparable from social responsibility. At the leading edge of corpo-
rate sustainability, companies are exploring how they can assure safe
and ethical labor practices in developing nations and how they can
partner with communities at the “base of the pyramid” to create viable
new businesses [5].
In the course of this evolutionary journey, the role of environ-
mental issues in decision making has shifted from a tactical risk
management approach that emphasizes cost avoidance to a strategic
life-cycle management approach that emphasizes value creation.
Figure 4.2 uses marginal economic analysis to illustrate this shift:
• Under the traditional risk management paradigm, companies
are largely concerned with identifying and mitigating sources
of risk that may result in financial liability. They will invest
in risk-control expenditures to the extent that the next mar-
ginal dollar of expenditure does not exceed the correspond-
ing re duction in potential liability, although the latter is
difficult to assess due to the presence of large uncertainties.