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320 PART 5 • KEY STRATEGIC-MANAGEMENT TOPICS

limited knowledge on environmental issues may make poor decisions, so business schools
should address environmental issues more in their curricula. Failure to do so could result in
graduates making inappropriate business decisions in regard to the natural environment.
Failing to provide adequate coverage of natural environment issues and decisions in their
training could make those students less attractive to employers. 14
Reasons Why Firms Should “Be Green”
Preserving the environment should be a permanent part of doing business for the following
reasons:
1. Consumer demand for environmentally safe products and packages is high.
2. Public opinion demanding that firms conduct business in ways that preserve the
natural environment is strong.
3. Environmental advocacy groups now have over 20 million Americans as members.
4. Federal and state environmental regulations are changing rapidly and becoming
more complex.
5. More lenders are examining the environmental liabilities of businesses seeking
loans.
6. Many consumers, suppliers, distributors, and investors shun doing business with
environmentally weak firms.
7. Liability suits and fines against firms having environmental problems are on the
rise.

Be Proactive, Not Reactive
More firms are becoming environmentally proactive—doing more than the bare mini-
mum to develop and implement strategies that preserve the environment. The old unde-
sirable alternative of being environmentally reactive—changing practices only when
forced to do so by law or consumer pressure more often today leads to high cleanup
costs, liability suits, reduced market share, reduced customer loyalty, and higher medical
costs. In contrast, a proactive policy views environmental pressures as opportunities and
includes such actions as developing green products and packages, conserving energy,
reducing waste, recycling, and creating a corporate culture that is environmentally
sensitive.
New required diesel technology has reduced emissions by up to 98 percent in all new
big trucks, at an average cost increase of $12,000 per truck. “Clean air is not free,” says
Rich Moskowitz, who handles regulatory affairs for the American Trucking Association,
which supports the transition. 15

ISO 14000/14001 Certification
Based in Geneva, Switzerland, the International Organization for Standardization (ISO) is
a network of the national standards institutes of 147 countries, one member per country.
ISO is the world’s largest developer of sustainability standards. Widely accepted all over
the world, ISO standards are voluntary because ISO has no legal authority to enforce their
implementation. ISO itself does not regulate or legislate.
Governmental agencies in various countries, such as the Environmental Protection
Agency (EPA) in the United States, have adopted ISO standards as part of their regulatory
framework, and the standards are the basis of much legislation. Adoptions are sovereign
decisions by the regulatory authorities, governments, and/or companies concerned.
ISO 14000 refers to a series of voluntary standards in the environmental field. The ISO
14000 family of standards concerns the extent to which a firm minimizes harmful effects
on the environment caused by its activities and continually monitors and improves its own
environmental performance. Included in the ISO 14000 series are the ISO 14001 standards
in fields such as environmental auditing, environmental performance evaluation, environ-
mental labeling, and life-cycle assessment.
ISO 14001 is a set of standards adopted by thousands of firms worldwide to certify to
their constituencies that they are conducting business in an environmentally friendly