in US and Canadian SMEs

Role of the Environmental Manager
in US and Canadian SMEs

Professor Scott B. Wolcott, PE

Rochester Institute of Technology


Bocconi University

June 8 and 9, 2009


Bocconi

Bocconi

Workshop Overview

•
US and Canadian definitions of Small and
Medium
-
sized Enterprises (SME)

•
Who is the Environmental Manager around
here?

•
Options for the SME Environmental Manager
in North America

•
Strategic options for Italian SMEs


SME = SB (US) = SME (Canada)

•
United States
-

Small Business (SB):

–
< 500 employees for manufacturing facilities

–
< $7M annual receipts for non
-
manufacturing facilities

–
99.7% of all employer jobs

–
Many exceptions: e.g. Florida SB < 100 employees

•
98% of businesses in Florida are SB

–
Private, non
-
farm SB contribute to 50% of US Gross
Domestic Product (GDP)








Bocconi

US continued: 16 Small Business Sectors

% contribution of Small Business towards Sector GDP
(2002)


•
20% Information

•
23% Utilities

•
33% Mining and manufacturing

•
40% Finance and insurance

•
41% Transportation and
warehousing

•
44% Holding companies

•
49% Trade

•
49% Waste management
services
















•
50% Education services

•
56% Health services

•
58% Accommodation and
food services

•
70% Professional and
technical services

•
75% Arts and entertainment

•
79% real estate and Leasing

•
85% Construction

•
85% Other Services


Bocconi

SME = SB (US) = SME (Canada)

•
Canada
-

SME

–
SME is an organization with < 500 employees

•
Small business < 100 employees

•
Medium business is between 100 and 499 employees

–
99.8% of Canadian companies are SMEs

–
SMEs account for 45% of Canadian GDP

•
Small businesses with < 50 employees account for 26%
of Canadian GDP




Bocconi

SME = SB (US) = SME (Canada)

•
Individual economic and environmental impact is tiny

•
Collectively, SMEs are contribute ~50% of US and
Canadian GDP

•
Collectively, SMEs are estimated to be responsible for:

–
60% of all carbon dioxide emissions and

–
70% of all pollution

•
73% of Canadian SMEs have not heard of ISO 14001






Bocconi

Who is the Environmental Manager?

•
No one!

•
Everyone?

–
The activities performed by an environmental
manager in a large organization are performed by
one or more people at an SME.

–
Owner, general manager, facility manager,
production manager, line employees, etc…

Bocconi

Roles for the

“Environmental Manager
s
”

•
Purchasing

–
Develop controls for materials
purchases

•
Human Resources

–
Employee training, rewards

•
Maintenance

–
Preventive maintenance
programs, ID environmental
aspects

•
Accounting

–
Track environmental costs,
budgets, economic feasibility


•
Engineering

–
ID pollution prevention
opportunities, consider
environmental impacts of
products & processes

•
Top Management

–
Communicate importance of
activities, provide resources,
review progress

•
Line workers

–
Provide 1
st

hand knowledge
of environmental aspects,
mentor new employees

Bocconi

Role of the “Environmental Manager”

•
Strategic choices in the environmental context

•
External pressures

–
Governmental agencies

•
Federal, state, and municipal

–
Competitors

–
Community Associations

Bocconi

Strategic choices

for the SME “Environmental Manager”

Proactive

•
Actions

–
Cooptation

•
NBAA (Northwest Baltimore
Automotive Association)

–
Resource Sharing

•
Laundry service

–
Environmental Enacting



Reactive or resistant

•
Actions

–
Maintain status quo

–
Solo protective measures

–
Reactive Risk Management

Bocconi

Strategic choices

for the SME “Environmental Manager”

Proactive

•
Outcomes

–
Greater eco
-
literacy

–
Enhanced environmental
performance

–
Better financial performance



Reactive or resistant

•
Outcomes

–
Sustained external threats

–
Forced closings

Bocconi

Options for the Proactive

“Environmental Manager”

•
Environmental Initiatives (i.e. Low hanging fruit)

•
Environmental Management Plan

–
Actions of an organization with regard to environment, regulatory
compliance, establishing and meeting goals and targets

•
Environmental Management System

–
Incorporates quality improvement principles

–
“Plan
-
Do
-
Check
-
Act”

–
Does not have to include ISO 14001 certification

Bocconi

Incentives and Barriers facing the

“Environmental Manager”

Incentives/Advantages

Barriers/Disadvantages

•
Lack of resources (e.g. time)

–
Delays development

–
Maintain plan

•
Lack of resources (e.g. staff)

–
Implementation


review

•
Promotion of environmental
activities to employees

•
Starting fresh (w/o previous
exp. ISO 9001)






•
Enhanced compliance

•
Improved documentation

•
Competitive advantage

•
Cost savings

•
SME employees multi
-
task

•
SME Less complex hierarchy

•
Starting fresh (no EM plan
to replace)







Bocconi

Summary of the Italian SMEs
“Environmental Manager”

•
Current Business Structure of SMEs

–
Very small, < 50 employees

–
Family owned and generational succession

•
Not always a straightforward succession

•
Unlikely to learn about innovative ideas w/o economic
driver

–
Often connected to each other

•
Part of the same supply chain

•
Districts








Bocconi

Summary of the Italian SMEs
“Environmental Manager”

•
Current Regulatory Environment of SMEs

–
Lots of regulation

–
Inconsistent enforcement of regulations

–
Culture of interpreting laws and regulations at all
levels

–
Little neighborhood influence on SMEs

–
Slow judicial system

–
Large bureaucracy system







Bocconi

Bocconi

•
What to do?

•
Reactive: Address external threats as SME
group

–
Initially for economic reasons

–
Later, environmental compliance

•
Strategic, proactive initiatives

–
Lobbying financial sector

–
Environmental competitive advantage











Strategic Options of the Italian SME
“Environmental Manager”