Defining Environmental Planning
The natural environment is connected to everything. From the air we breathe, to the water we drink, food we eat, and energy we consume. Given the importance of the environment on an individual level, it is easy see that it also plays a large role in business and management.
Planning is done in a variety of ways; however the foundation of it analyzes opportunities and risks that exist both internally and externally. Future consideration and forecasting can also be taken into consideration when developing a plan for moving forward with business ideas and activities.
Environmental planning is intentionally taking environmental information and using it to further develop a business plan or strategy.
Let us first look at how management can engage their planning team in determining opportunities from an environmental perspective.
As climate change becomes more apparent on a physical level, clients and consumers are beginning to understand that this change not only has an impact on the earth and environment, but affects their daily lives as well. That being said, consumers and clients are looking for ways to live and work sustainably, rather than contribute more to environmental damage.
If a company is manufacturing products that require packaging, part of their environmental plan could look for ways to make the products environmentally friendly by using renewable resources rather than finite resources in production.
Plastic, for example, is made from petroleum, which is a finite resource. Therefore any packaging that is made from plastic is not maximizing its potential to be environmentally friendly. Luckily, biodegradable packing exists, and it is often made from natural based raw materials such as corn or bamboo.
While there may be an additional cost to using biodegradable packing in the beginning, there is an opportunity that exists to gain a market share of eco-conscious consumers who are looking to purchase from companies that are taking the environment into consideration. The management team needs to analyze this idea from two angles: the increase in cost related to increase in consumer confidence.
Risk and Investment
Another important part of planning is analyzing risks, both present and future. While some risks cannot be avoided such as the rising cost of certain raw materials, they can certainly be mitigated through planning.
Let us take energy for example. Historically this has been a volatile commodity. Prices can increase or decrease one day to the next without much warning. Luckily there are many innovative ways a company can source energy, and therefore if proper plans are in place, the fluctuating prices will not have a major impact on operations.
A good place for a company to start is by conducting an energy audit to determine exactly how much energy they are currently consuming. This will help to identify where energy is being overused or wasted and how energy dependent production is. Once levels are determined, management can create a plan on how to reduce these levels by using energy efficient technology.
This starting point is one that does not have a heavy cost from a capital perspective, and it also has the opportunity to engage staff members in understanding energy consumption in the workplace. One of the most common ways to decrease energy consumption in the workplace is to change the light bulbs from incandescent to fluorescent. Although it seems like something very small, if it is applied throughout an entire building or factory, the savings add up.
While decreasing energy consumption is a stepping stone for addressing the fluctuating price of energy, to further mitigate risks, capital investments can be made. Perhaps a company will consider investing in solar panels to source energy from the sun. Another capital investment has to do with building design. By having buildings with large windows, natural light can be used rather than overhead lighting.
Environmental Laws and Regulations
Another important area that can be covered through environmental planning is compliance with laws and regulations. Depending on where a company is operating, certain rules may exist that would make them liable for compliance.
Waste disposal is an area where understanding laws and regulations is very important. If a company is producing a product, and through the production cycle a bi-product is created, they may be liable to dispose of this bi-product in a manner that is compliant with local laws.
Depending on legal requirements, future environmental liabilities can be handled in different ways. At the very least, a company may need to disclose the future liability, in some cases they may need to put money aside for future disposal costs.
No matter the legal requirements, a company can always benefit by being honest and forthcoming about environmental matters with the public. This will lead to an increase in confidence from stakeholders. This will also allow the management team to be fully aware of their responsibilities and work this into their planning.
As the global environment shifts, it is in management's best interest to stay informed and incorporate the environment into their planning. Planning analyzes opportunities and risks that exist both internally and externally. Environmental planning is intentionally taking environmental information and using it to further develop a business plan or strategy.
Companies can take climate change and sustainability into consideration in their environmental planning. By producing biodegradable materials there is an opportunity to attract eco-conscious consumers. By reducing energy consumption or investing in alternative energies, companies can save costs, mitigate risks of fluctuating prices, and make capital investments that could save money in the long run.
Companies must also take environmental laws and regulations into account in their planning. Following the rules and being transparent to the public will be benefit the environment and consumer confidence and reputation.
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