Foundations in Business Sustainability B6420 Final Project 1
Running head: ENVIRONMENTAL STRATEGY PROPOSAL
Big Apple Finer Foods
Recommended Environmental Sustainability Strategy
Vanessa B. Jackson
Argosy University, Chicago
B6024 Final Project
March 1, 2011
Foundations in Business Sustainability B6420 Final Project 2
TABLE OF CONTENTS
Background
Analysis Methodology
AUDIO Tool
Top 10 Environmental Issues
Big Apple A.U.D.I.O Analysis & Recommendations
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Consistent with the assignment, this paper offers a recommended
environmental sustainability strategy for a small local grocer
in Chicago- Big Apple Finer Foods.
Background
Big Apple is located at 2345 N. Clark Street. The store
carries a variety of dry goods, fresh vegetables, and a limited
selection of fresh meats and seafood. Annual sales are about
$10M, an insignificant fraction of the $550B retail grocery
industry. Big Apple employs approximately 28 employees. To date,
the store owner has not given much thought to a sustainability
strategy. Surviving and meeting the everyday cash needs have
been the driving goals since the recession took force in 2008.
However, the store owner vows to examine several sustainability
initiatives in the next 2-3 years. Given the size and leanness
of his business, any initiative must have a 10% minimum ROI and
payback of 2-3 years.
Analysis Methodology
Given the variety of environmental issues, companies can
easily become overwhelmed and give up on sustainability efforts.
For that reason, this paper uses a framework suggested by Esty
and Winston (2009) in their book, Green to Gold. This conceptual
model provides a broad overview of the types of environmental
Foundations in Business Sustainability B6420 Final Project 4
issues that are most important in the context of a given
business. Like a traditional SWOT (strengths, weaknesses,
threats and opportunities), an A.U.D. I.O. analysis
forces a
company to examine their business up and down the value chain
looking for issues and opportunities. The end result is an
“issue map”. The AUDIO tool starts with the Esty and Winston
grid of the 10 major environmental strategies on one axis and
the five categories of the analysis on the other: Aspects,
Upstream, Downstream, Issues and Opportunities.
AUDIO Framework
First a company should ask themselves what Aspects of the
environmental issue affect their own operation. Do we produce
greenhouse gases? Use a lot of energy? Pollute the air or water?
Produce of sell products that have toxic ingredients? Next, ask
the same questions about each environmental problem looking
Upstream from their operations. Do our suppliers use a great
deal of energy or water? What primary materials are sourced from
sub-suppliers? Then look Downstream and ask questions about
customer use and the end of the product’s life? How is the waste
discarded? The next step is to look at vulnerabilities you need
to address. Walking back through the Aspects, Upstream and
Downstream, ask which elements create particular Issues and
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challenges for the company. Finally, the company should
brainstorm about the Opportunities these challenges create.
Top Ten Environmental Concerns
The environmental concerns that are most urgent in any
particular company vary. It is a complex area because
environmental issues evolve over time, scientific understanding
becomes more refines, while customer preferences and tastes
shift. In an effort to simplify this arena, Esty and Winston
propose the Top 10 Environmental Issues: 1) Climate Change, 2)
Energy, 3) Water, 4) Biodiversity and land use, 5)Chemicals /
Topics, 6) Air Pollution, 7) Waste Management, 8) Ozone Layer
Depletion, 9) Ocean and Fisheries and 10) Deforestation. Of
course the ranking of the issues is up for debate but it serves
as a good starting point.
Climate Change
Climate change, or global warming, as it is sometimes
called refers to the buildup in green house gases (carbon
dioxide, methane, and several other trace gases) in our
atmosphere and many scientists think that it could adversely
affect the habitability of the planet. CO 2 is 70% of the
problem and it comes from the burning of fossil foods. Theses
emissions emerge from three sectors in roughly equal
proportions: transportation, residential and commercial and
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manufacturing. The effect of climate change goes beyond rising
temperatures to include rising sea levels, changes in rainfall
patterns, more severe droughts and floods, harsher hurricanes
and other windstorms and new pathways of disease (for example,
Malaria spreads to places with warmer climates).
Energy
Energy is not exactly an environmental problem. But energy
production of any kind can damage the environment. Fossil fuel
burning causes pollution and contributes to the build up of
greenhouse gases. Even “clean” energy sources like hydropower
have their own environmental consequences. The energy future
will not be the same as the energy past as we enter a more
carbon constrained world. At present, two-thirds of U.S.
electricity is generated from fossil fuel combustion – 51
percent from coal 17% from natural gas and 3% from oil. The high
price of this fuel source has provided incentives for innovation
in wind, solar, geothermal, bio-based fuels and tidal power.
Water
Companies around the world now face real limits on access
to water. A rising population and growing economies are putting
substantial stress on resources in drier regions. Even where
water is relatively plentiful, water pollution is increasingly a
concern. How will this affect business? Certainly businesses
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that rely on quality water to produce their product (e.g. Coca
Cola) must expect increased scrutiny of their water use. Those
deemed to use too much water or degrading water quality will one
day face political and public attack.
Biodiversity and Land Use
By its very nature, biodiversity is difficult to measure.
Biodiversity is a catchall term for the spectrum of plant and
animal life around us – preserving our food chain and ecosystems
on which all life depends. Urban sprawl with little preservation
of open space, has fragmented ecosystems, jammed highways, and
diminished the quality of life for humans and animals.
Chemicals and toxins
Exposure to toxins and dangerous chemicals carry many
health risks. For example, dioxin, a by-product of production
process of paper and heavy metals like lead and mercury can
create severe health risks. Companies must pay attention to what
they produce and how they produce it.
Air Pollution
Air quality over the past 30 years has improved
dramatically.
Severe air quality controls on factories, cars,
and other emissions sources has radically reduced air pollution
levels. Controls on air emissions will not only remain tight in
developed countries, but increase substantially in developing
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countries. Companies with potentially significant air pollution
impacts must plan to face this challenge.
Waste Management
Today, we in the U.S. recycle about 20 percent of our
glass, 40 percent of our paper, 50 percent of aluminum and 60
percent of steel. Other countries have done better. For example
Sweden recycles 90 percent of glass and aluminum. For companies,
the mantra today is “Reduce, Reuse, Recycle”. In many cases it
is the law and secondly waste reduction can cut costs. Companies
save money on landfill tipping fees when they produce less
garbage.
An emerging issue is e-waste. Every older computer has
about four pounds of toxic materials including some of the worst
offenders like flame retardants, lead, cadmium and mercury. This
has lead to “extended producer responsibility” laws particularly
in Europe. This forces industries like electronics to design out
some elements or take back their products and handle disposal
themselves.
Apart from reducing cost, many businesses are seeing upside
opportunity in recycling waste. Many steel companies recycle
scrap metal into steel offering increased profits from recycling
and reuse. Other companies are finding ways to reuse and recycle
old computers that would have otherwise further cluttered the
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land fills. There is a growing demand for recycled PET bottles
because China is a major customer, purchasing 40% of recycled
bottles. They use recycled PET for their bottled products.
For some industries, recycling has broad advantages
touching on nearly all ten environmental concerns. Aluminum
production is one of the dirtiest and most energy-intensive
processes in modern society. More aluminum recycling means less
need for virgin ore, less smelting, and fewer new mines.
Those
reductions mean lower greenhouse gas emissions less toxic runoff
from mining, and reduced land use and biodiversity issues.
Ozone Layer Depletion
In the 1980’s, a hole in the planet’s protective ozone
layer opened up over Antarctica.
Scientists determined that the
culprit was the widespread use of a set of chemicals known as
chlorofluorocarbons (CFC’s) breaking down the ozone in the
stratosphere. A thinned ozone layer makes the earth a more
dangerous.
It reduces agricultural productivity, causes higher
incidences of skin cancer and other health problems. One EPA
study pegged the potential damage at 150 million cases of skin
cancer during the 21st century at a cost of $6 trillion. Many
businesses have to find substitutes to use in the production of
aerosols, solvents, coolants and cleansers. Some chemicals
slated for phase out, such as methyl bromide, which is used as a
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fumigant on farms have no substitutes and therefore remain
controversial.
Oceans and Fisheries
Put simply, we are catching fish faster than they can
reproduce and our ocean habitats are in trouble. Over three
quarters of the world’s fisheries are overexploited and beyond
the point of sustainability.
Companies which market fish
products are well aware that fish stocks had decreased
dramatically. Often called “rainforests of the sea”, coral reefs
form some of the most diverse ecosystems on Earth. They occupy
less than one tenth of one percent of the world ocean surface,
about half the area of France, yet they provide a home for
twenty-five percent of all marine species
(http://en.wikipedia.org/wiki/Coral_reef). About 20 percent of
the earth’s coral reefs are dead and more are dangerously
degraded. In the Gulf of Mexico, we’ve created a dead zone with
virtually no sea life.
At the mouth of the Mississippi River,
chemicals and fertilizers have killed everything in an area
bigger than New Jersey.
Deforestation
Every company that uses wood, paper or even cardboard
packaging, has some stake in, and responsibility for the state
of our forests. Even with reforestation, we lose millions of
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acres of forest every year. Since 1990, the net result is the
destruction of forest equal to the size of Texas, California and
New York combined.
BIG APPLE FINER FOODS A.U.D.I.O. ANALYSIS
Using the above environmental concerns, Big Apple Finer
Foods should examine its business to identify issues that it can
address in its small operations. In some cases, significant cost
savings result from more efficient energy use. In other cases,
customer goodwill may result from a more considered analysis of
the products they carry on their shelves. Below is a recommended
AUDIO for Big Apple.
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Big Apple Finer Foods
Environmental Sustainability Analysis
Challenge
Climate Change
Aspects
Upstream
Emission from Supplier
Downstream
Emissions
Issues
Customer
Opportunities
Launch eco-
store’s
from
concern over
efficiency
customers
store’s
effort targeted
driving to
green
at energy use in
store;
strategy;
store
energy use
possibly
operations.
from
behind
Select suppliers
products
competitors
who comply with
sold in
like
EPA Smartway
store
Trader’s
transportation
emissions.
energy use
Joe; Whole
Foods
Energy
Energy
Supplier e-
Energy use
Energy
Reduce energy
consumption
efficiency
in store
sourcing and
costs through
and rising
policies
operations
costs
building
cost
retrofits;
identify best
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energy cost
rates
Water
Contaminated
Water use in
Use of toxic
Rising
Cleaning and
runoff from
agriculture
products
pressure to
other store
buildings and for food sold
that end up
improve
operation
parking lots
in waterways
water
products should
quality
be pro-water
in stores
conservation;
redesign parking
lot and runoff
if necessary
flows
Biodiversity
Habitat
Products that
Consumer
Carry and
fragmentation rely on or
product use
promote products
due to land
reduce
that cause
that are pro-
use and
biodiversity
ecological
ecological
“footprint”
damage
of store
Chemicals/Toxins Use of
Fertilizer
Toxic
Possible
Ensure no
chemicals in
toxins used in
products
hard and
products sold
store
products
sold in
soft
have no toxic
operation
purchased
store
liability in
ingredients;
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products
promote eco
that harm
products
humans
Air Pollution
Air emissions Emissions at
Emissions
Tightening
Increase
from store
supplier
from
controls on
efficiency to
facility
factories and
products
air
reduce emissions
energy sources
sold and
emissions
store
operations
Waste Management Quantity of
Waste
Disposal of
Rising cost
Reduce
garbage
management
packaging by
of waste
packaging,
generated
strategy of
customers
disposal and
plastic grocery
increased
bags and offer
“take-back”
take-back and
legislation
recycling
suppliers
options to
customers
Ozone Layer
Residual CFC
CFC releases
CFC leaks
Legal
Offer only non-
Depletion
use in
by suppliers
from
constraints
CFC products
products
on use of
refrigeration
CFC’s
Oceans
Declining
Rising
Sell sustainably
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global fish
prices and
stocks and
growing
rising prices
pressure to
caught seafood
track
seafood
sources
Deforestation
Land clearing Wood supplier
Risk of
Use only
and disrupted reliance on
consumer
supplier who
eco-systems
protests
source wood
unsustainable
timber sources
sustainably
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Esty and Winston (2009)
Wikipedia. (2005). Coral Reefs. Retrieved March 1, 2011, from
Wikipedia Web site: http://en.wikipedia.org/wiki/Coral_reef
Blackburn, W. R. (2007). The Sustainability Handbook. Washington
DC: Earthscan.
Esty, D. C., & Winston, A. S. (2009). Green to Gold (Rev. ed.).
Hoboken NJ: John Wiley & Sons.