Scandinavian Airlines — Committed to Eco-Efficiency

Scandinavian Airlines — Committed to Eco-efficiency

Airlines are major contributors to environmental issues through air emissions, noise emissions, air traffic congestions, and hazardous waste disposal. Scandinavian Airlines (SAS) however, is considered a leader in environmental management. The leadership of SAS incorporated environmental management into strategic management. In 1995, SAS published the first of its annual, award-winning environmental performance reports. Because of its commitment to environmental management and willingness to discuss it, Lynes & Dredge studied SAS to identify its tools and determine its motivations.

They found that SAS utilizes four main tools or mechanisms to manage its environmental program:

1. Publication of a public environmental report annually
2. Utilization of an eco-efficiency index to measure the economic efficiencies derived from implementing environmental measures
3. Utilization of an emissions calculator to determine destination-specific calculations of carbon dioxide generated
4. Institution of a corporate management policy that requires all managers to complete environmental reports for their divisions and also to purchase from suppliers who practice environmental management.

Lynes & Dredge identified five factors that are motivating factors in SAS' environmental management program:

1. Financial cost-benefit: SAS saves money by employing energy and water-saving techniques.
2. The regulatory setting: SAS accepts regulations and anticipates future legislation.
3. The desire to be a good corporate citizen: SAS presents a positive image of airlines within the transport industry and embodies the "Scandinavian spirit."
4. SAS desires a positive image as an airline within the marketplace, with suppliers, and with regulatory agencies.
5. SAS fosters positive relationships with stakeholders within the aviation community: corporate customers, the government, and unions.

Interestingly, SAS interviewees indicated that its environmental management program was not influenced by pressure from passengers as that did not seem to affect passengers' choice of airlines. Nor, was SAS inspired to promote environmental management as a marketing technique; the interviewees indicated that such marketing would be dishonest because airlines consume so much fossil fuel that none can really call themselves "green" yet. Lynes & Dredge concluded that a major element for the success of SAS to incorporate environmental management into its management strategy is the active and continuing role and commitment of top management to the program and its promotion as part of SAS corporate culture to employee at all levels within the organization (Lynes & Dredge, 2006).

Example 2: Gap Inc. — Committed to the Community & the Environment:

In 2004, Gap Inc., parent company of Gap, Banana Republic, Old Navy, and Forth & Towne, was the first retailer to publish a social responsibility report. Gap Inc. has incorporated social responsibility into four areas of its strategic management by:

1. Instilling sustainable solutions in its supply chain by improving working conditions, monitoring factories, enforcing labor standards, and collaborating for industry-wide change.
2. Ensuring a positive work environment for employees.
3. Contributing to the community through charitable contributions and volunteer work.
4. Assuming responsibility for environmental management practices in the operation of stores, distribution centers, and offices worldwide, by monitoring energy and supply consumption, safety rates, and the environmental management policies of external vendors.

According to Eva Sage-Gavin, Executive Vice President, Human Resources and Communications for Gap Inc., the company's social responsibility commitment dates back to its beginnings in 1977, when the founders established the Gap Foundation. Additional motivating factors include Gap Inc.'s efforts to meet global compliance standards for labor and the desire to improve even further upon the practices presented in Gap Inc.'s first formal social responsibility report in 2004. Sage-Gavin describes three major benefits resulting from Gap Inc.'s social responsibility program: