It is a well-known fact that “protecting an organization’s capital base is a well-accepted business principle” (International Institute for Sustainable Development, 1992, p.6). This assertion is especially true when it comes to giant corporations with business operations that can affect millions of lives. However, there is now increasing pressure from society, government, employees, business partners, and other stakeholders for corporations to reconsider sustainable development in their business practices (Labuschagne, 2005, p.2). Although corporations are entities created to please shareholders it is imperative to consider corporate social responsibility and sustainable development.
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Many business organizations turn a blind eye to the impact that they cause to the environment. But as climate change and environmental degradation has manifested their cause and effect, consumers are demanding that corporations must be held accountable for questionable business practices. Aside from worrying about the increasing costs of fossil fuels, there is another problem that plagues this planet. The continuous use of fossil fuels is creating significant amounts of air pollutants. Cities will soon become uninhabitable if nothing is done to curb dependence on non-renewable and carbon-emitting fuels.
An ethical dilemma ensues when the company is forced to decide to give back to the community or satisfy the needs of the shareholders. The investors or shareholders have only one thing in mind and that is to earn a profit through the money that they invested. But in the 21st-century pressure from consumer groups and government policies can force corporations to change their core business strategies or face a public backlash.
One of the major steps that have to be accomplished is the significant reduction of carbon dioxide gases released into the atmosphere. This is easier said than done especially when there is a great demand for energy consumption and goods that are by-products of an energy-intensive manufacturing process. At the same time, businessmen must continue to address the need for cars, electronic equipment, processed foods, and other processes that require a great deal of energy to run continuously.
The backlash from the general public is due to the impact of the degradation and destruction of ecosystems brought about by excessive exploitation of natural resources (Pollard, 2009). Many people are now aware that climate change and flash floods are direct results of non-sustainable business practices. It is time to consider sustainable development principles that would ensure a long-lasting relationship between the business community and the environment (Pollard, 2009).
According to the Brundtland Report by the World Commission for Environment and Development in 1987, sustainable development was defined as “development that meets the needs of the present without compromising the ability of future generation to meet their own needs” (Gareis, Huemann, & Martinuzzi, 2009, p.2). Thus there is a need to redefine the meaning of a corporation because “a company is increasingly seen as a social actor with an array of responsibilities towards a broader group of social actors than just the company’s shareholders or its subcontractors or employees – i.e. communities as a whole, regulators, interest groups and others” (Gareis, Huemann, & Martinuzzi, 2009, p.3).
In the 21st century, it is easier to understand why many corporate leaders are jumping on the sustainable development bandwagon. It has become clear that various stakeholders and the general public are clamoring for sustainable practices (Prout, 2006). As more people are educated regarding climate change and the need to protect the environment, there will be increasing pressure from various stakeholders regarding the importance of sustainable development in corporate strategy and policy. However, many corporate leaders are merely paying lip service and yet unwilling to commit to change the direction of their respective companies (Gareis, Huemann, & Martinuzzi, 2009, p.2).
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In a 2002 survey on the 101 Fortune 1000 companies, the PricewaterhouseCoopers Sustainability Survey revealed that “72% of the respondents do not include the risk and opportunities of sustainability in their project, investment and transaction valuation processes” (Labuschagne & Brent, 2007, p. 4). Besides, data from other research firms also revealed that “traditional business management systems are solely geared towards financial performance and therefore exclude environmental and social sustainability aspect” (Labuschagne & Brent, 2007, p. 4).
The purpose of this study is to answer two major research questions. The first question reads as follows: how can Enexis integrate the principles of sustainable development into their project management framework? The second question reads as follows: which challenges and potential problems can be identified for project management when integrating principles of sustainable development?
Enexis must not only be evaluated based on a general statement regarding its commitment to sustainability. The company must also be evaluated based on their commitment to sustainable project development. It is therefore important to gather pertinent information regarding Enexis. The data gathering requirement can be addressed by using a case study on Enexis. Aside from data that can be gleaned from this case study, other sources of information are public documents such as the Enexis Annual Report of 2010. Another major source of information is the official website of the company that provides data regarding their commitment to sustainable development and the various activities related to this goal.
The proponent of this study will also use the maturity of sustainability in the projects questionnaire (Silvius & Schipper, 2010). Furthermore, the proponents of this study would like to determine how Enexis understands the importance of linking sustainable development and project management. A review of related literature will be conducted to understand even further the importance of sustainable development, corporate social responsibility, and the challenges involved when linked to project management.
The Case of Enexis
Enexis is an energy company and its primary purpose is to manage the power grid in the northern, eastern, and southern Netherlands (Enexis, 2011). The primary task of the company is to ensure that customers can have access to gas and electrical sources of energy (Enexis, 2011). The company is responsible for the energy needs of 2.6 million households as well as a significant number of businesses and government offices (Enexis, 2011). The company can be considered a monopoly because it serves as a major link between residential and business consumers of energy to their respective energy suppliers. Their existence is made more evident every time a new house has been constructed or a business establishment requires a new connection to the energy supplier.
Enexis used to be under the umbrella of Essent the largest energy company in the Netherlands (Enexis, 2011). As mentioned earlier, Enexis is a dominant force in the Netherlands energy industry. Imagine the impact of the company when it was still part of the Essent Network. Perhaps due to monopoly issues, the government ratified laws to prevent corporate giants from controlling key industries. In the Netherlands, the said legislative act was called the Network Management Act (Grevelman & Kluiwstra, 2010). The force of the said law compelled Enexis to work outside the control of the Essent Network.
As of January 2011 companies that are related to energy production, trading, and supply of energy can no longer be bundled together. But Enexis did not wait until 2011 to comply with the new laws. Since June of 2009, Enexis is fully unbundled and working independently outside the Essent Network (Grevelman & Kluiwstra, 2010). Even as an independent entity Enexis employs 3,511 employees (Grevelman & Kluiwstra, 2010). Enexis may have cut its ties to Essent Network but it is still a significant energy company in the Netherlands. Thus, it is important to point out that this organization has made it known that it is committed to sustainable development. Before going any further it is important to take a closer look at the definition of sustainability, sustainable development, and corporate social responsibility. Insights gleaned from a review of literature will be used to assess the seriousness of Enexis’s commitment to sustainability. It is also imperative to discover how the company integrates sustainable development and project management.
Using the regulatory approach – the creation of laws and policies – in solving global climate change is almost impossible (Taylor, 2008). There are many reasons why it is difficult to follow the principles suggested by sustainable development advocates. Ray Oglesby, the Interim Director for Global Environment Program of Cornell University explained why:
Uncertainty in all long-range climate predictions is frequently cited as a reason for doing little or nothing in the way of adaptation and control … add to this the sheer complexity of climate prediction mechanisms and the many determinants of climate still poorly understood (White, 1992, p.3).
The challenge to change business practices that are destructive to the environment is very evident in today’s world. But when the discussion is elevated to human rights issues the hurdles to development are magnified significantly. Take for example the perspective of European countries dealing with suppliers from Asia. It would be difficult to care for someone that lives thousands of miles away. This problem is intensified even further as seen in an observation made by researchers who wrote:
In many subcultures the value of progress in any form is unquestioned. This includes a short-range orientation […] concerned with quantity-economic benefits, newness, and expediency and not with long-range quality or environmental considerations (Mangun & Henning, 1999, p.10).
Nevertheless, business organizations must change the way they look at the environment, their customers, the community, and the planet in general. There will come a time when environmental degradation and human rights abuses can no longer be tolerated. The companies that adhere to sustainable development principles can easily develop a competitive advantage over others. It is the right time to learn more about sustainable development and corporate social responsibility.
It is of crucial importance to point out the deeper meaning of sustainability. At first glance, it seems that proponents of sustainable development are actively lobbying for a halt on technological development. It seems that sustainability is equated with ecology and therefore everything man-made is considered destructive. However, a closer examination of the Brundtland Report by the World Commission for Environment and Development in 1987 will reveal that technological innovation is part of sustainable development. Consider for instance the clarification made by experts in this field who contended that there are two key concepts in sustainable development: “the concepts of needs, in particular the essential need of the world’s poor, to which priority should be given; and the idea of limitations imposed by the state of technology and societal organization on the environment’s ability to meet the present and future needs” (Gareis, Huemann, & Martinuzzi, 2009, p.2).
Environmental sustainability means the optimized use of natural resources to increase “resource productivity and minimize emissions and wastage” (Taylor, 2008, p.2). But at the same time, one has to consider social sustainability. It is the mindset that takes into account “all the interests of all the stakeholders in any development activity, not just that of the client or sponsor” (Taylor, 2008, p.2). Finally, corporate leaders must always consider the importance of economic sustainability. It is a mindset that takes into account “the environmental and social cost of human actions” (Taylor, 2008, p.2).
The importance of integrating sustainable development in corporate policy lies in the fact that business is one of the three pillars of society (Labuschagne & Brent, 2007, p. 2). Corporate leaders must strike a balance between three facets of the sustainable development framework. There must be economic sustainability, environmental sustainability, and social sustainability (Labuschagne & Brent, 2007, p. 2). With regards to economic sustainability, the CEO must determine the financial health and economic performance of the organization. It is also important to find out the potential financial benefits before finalizing the deal to accept a particular project. Thus, the company does not exist as a charitable organization but as a business that happens to consider environmental and social issues.
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When it comes to environmental sustainability, the CEO through delegated authority must determine the use of air, water, land, energy, and mineral resources (Labuschagne & Brent, 2007, p. 4). For those who are clamoring for a clear focus on sustainable development, the emphasis is on the environment. But the business organization cannot afford to focus on taking care of the environment alone. Sustainable development also focuses on developing natural resources and not just to exploit it for monetary gain.
The fear that most leaders have regarding the decision to fully transform a company that used to focus only on profit to one that is more mindful of the environment and society can be linked to the need to earn money (International Institute for Sustainable Development, 1992, p.6). One of the problematic aspects of sustainable development is the added costs involved. Business leaders are forced to choose one option and when they analyze the requirements they can easily conclude that their business opportunities may be constrained (International Institute for Sustainable Development, 1992, p.6). It does not take a long time to realize that sustainable development is a terrible proposition.
The customers and other stakeholders must provide incentives for companies to engage in sustainable development strategies. Most of the time, customers unknowingly encourage firms to forego sustainable development as seen in the following statements: “Walmart is rewarded by the market for cutting costs; Costco, which offers better insurance and benefits to its workers, is penalized by the market for not cutting costs as well, and therefore not being as profitable as Walmart” (Russell, 2008, p.2). “These leaders must be convinced that there are a method and strategy that are both environmentally and socially sustainable but someone has to make it clear to them.
When it comes to social sustainability the corporate leaders must develop strategies that look into their internal human resources (Labuschagne & Brent, 2007, p. 4). Sustainable development considers the human factor in the business process. More importantly, the company does not only focus on their employees. They are also concern about the external population that is directly and indirectly affected by their business processes. Finally, the company determines the impact of stakeholder participation and the cascading effect on the macro level.
Corporate Social Responsibility
Aside from sustainable development, it is also crucial to understand the importance of corporate social responsibility. In essence, it is doing ethically accepted behavior while at the same performing at a cost-efficient level earning profit for the company. Skeptics say that it is a much-idealized view of how a multinational firm should operate and in the real world, it will not work. This was expounded by the former CEO of IBM who said:
Business usually profits best when it serves the public interest within its ability to do so. But we can never loosen ourselves from the iron law of profit … If a corporation so diverts its energies and resources as to go broke, there is nothing it can do – nothing at all – even if its claims to have a heart and conscience as big as the world (Prout, 2006, p.184).
The said executive was correct when he said that it is all right to go after the ideals of corporate responsibility but one has to learn to keep the company afloat (Prout, 2006). Giving without receiving is not the best business strategy available because corporate leaders must continually take care of the bottom line. In the case of bankruptcy, the company’s ability to goodwill not be sustained and everything that was done in the past is in vain (Prout, 2006).
A more balanced view perhaps was provided by advocates of corporate social responsibility who coined the phrase, “Doing the most good for your company and your cause” (Kotler & Lee, 2005, p.10). Carly Fiorina of Hewlett-Packard asserts that more and more organizations are experiencing a paradigm shift, “…that cutting-edge innovation and competitive advantage can result from weaving social and environmental considerations into the business strategy from the beginning” (Kotler & Lee, 2005, p.12). This simply means that companies from the very beginning must already incorporate corporate social responsibility principles as part of their overall strategy. They must not treat it as a separate endeavor.
The commitment to give back to the community is easy to explain and easy to understand. When a company increases its efforts to produce safer and better quality products, a more humane way of treating employees, and a gentler way of treating the environment will generate positive reviews for the company (Kotler & Lee, 2005). In an interconnected world made possible by social networking sites and enhanced telecommunication capabilities, it is easy to destroy the reputation of a company that violates corporate social responsibility guidelines.
A more sophisticated view regarding sustainability is the Triple Bottom Line Approach (Gareis, Huemann, & Martinuzzi, 2009, p.3). It is comprised of performance measurement of enterprise with a separate focus on the economic, social, and environmental performance of the organization that is topped by a social and economic accounting and reporting (Gareis, Huemann, & Martinuzzi, 2009, p.3).
The core principle came from Gro Harlem Brundtland, Norway’s Prime Minister in the late 1980s who asserted that “growth needs to take place on the one hand while acknowledging that it must also be restrained on the other” (Taylor, 2008, p.2). The restraint on growth can take several forms such as a) social efficacy and conscience; b) environmental reality; and c) economic necessity (Taylor, 2008, p.2). Another way to express this principle is through the following assertion: “For the business enterprise, sustainable development means adopting business strategies and activities that meet the needs of the enterprise and its stakeholders today, while protecting, sustaining and enhancing the human and natural resources that will be needed in the future” (Labuschagne & Brent, 2007, p. 2).
Sustainability in Project Management
Experts in the field of sustainable development made an interesting argument when they said that they consider projects as temporary organizations (Gareis, Huemann, & Martinuzzi, 2009, p.3). They even went further in their declaration that sustainable development and project management are related (Gareis, Huemann, & Martinuzzi, 2009, p.3). Sustainability can be linked to project management (Silvius, Brink, & Kohler, 2009). However, it must be made clear that the project manager will have to change perspective when he or she accepts a project with a sustainability challenge (Silvius, Brink, & Kohler, 2009). Sustainability in project management has a simple framework. It is to adopt environmental policies appropriate to the project (Taylor, 2008, p.1).
It has been made clear that the pressure for companies to incorporate the principles of sustainable development into policies and activities extends to project management. Nevertheless, the current project management frameworks “do not effectively address the three goals of sustainable development” (Labuschagne & Brent, 2007, p. 1). The three goals of sustainable development are social equity; economic efficiency; and environmental performance (Labuschagne & Brent, 2007, p. 1).
It is already a well-known fact that “companies are increasingly accountable for the impacts of an implemented project on the society, environment, and economy long after the project has been completed – beyond the normally considered project life cycle” (Labuschagne & Brent, 2007, p. 4). There are many reasons why it is prudent to develop sustainable development strategies around the concept of project management. First of all, it is time to change the mindset of corporate leaders that the concept of project management has evolved in the 21st century. Secondly, it is more practical and efficient to develop sustainable development strategies around a particular project. It is easier to monitor and study as opposed to transforming the whole culture of the organization.
It can be argued that most managers have an outdated view of this management tool when they should realize that “projects today exist in an environment of globalization, free markets, borderless worlds, mobile capital, international benchmarks and momentous advances in technology and communication” (Silvius, Brink, & Kohler, 2009, p.4). Another major reason why companies should begin at the project management level when it comes to integrating sustainable development strategies is explained in the following commentary:
While business traditions seek precision and practicality as the basis for its planning efforts, sustainable development is a concept that is not amenable to a simple and universal definition. It is fluid and changes over time in response to increased information and society’s evolving priorities. The role of business in contributing to sustainable development remains indefinite. While all business enterprise can contribute to its attainment, the ability to make a difference varies by sector and organization size (International Institute for Sustainable Development, 1992, p.2).
Even if sustainable development is a new concept in the field of project management, business leaders must strive to gain sustainability in the product of the project and in the process of delivering the product (Turner, 2010, p.2). Project management can be enhanced with the utilization of a sustainable business concept called value management or VM (Abidin & Pasquire, 2007). The power of VM to change transform sustainable development strategies lies in its ability to bring together different stakeholders and allow them to participate in the process. In a typical VM meeting, there are decision-makers such as clients and client representatives (Abidin & Pasquire, 2007). There are also representatives of the company as well as other stakeholders. In this type of meeting the company can create a project management framework that suits the needs of the clients.
Using VM and sustainable development the project manager can find ways to integrate sustainability issues into the design of the project. By involving the clients the project manager creates a more proactive decision-making process. A project manager can convince clients that there can be a balanced solution to business needs (Abidin & Pasquire, 2007). At the same time, clients can provide inputs that can help project managers develop solutions without compromising the high standards set by clients. It is also possible for clients to make concessions for the sake of corporate social responsibility.
A project manager must consider the importance of selecting team members. Project managers must incorporate sustainability criteria in selecting contractors, suppliers, and specialists (Taylor, 2008). This is linked to the assertion that “sustainability in project management is about considering the full life-cycle of the project” (Silvius, Brink, & Kohler, 2010, p.6). It starts from pre-feasibility to construction and finally to phase-out and disposal (Silvius, Brink, & Kohler, 2010, p.6).
The Maturity Model
Although there is a strong clamor for companies to adhere to the principles embodied in sustainability development, it can be argued that there is a great deal of misunderstanding regarding this subject matter. The explanation concerning sustainable development may sound impressive from the point of view of politicians and businessmen, but for project managers, the concept regarding sustainable development is vague and cannot be translated to a working framework (Labuschagne & Brent, 2007, p. 2). There are over 100 definitions of sustainability and sustainable development (Labuschagne & Brent, 2007, p. 2). Even if there is an agreement regarding the three pillars of sustainable development – social, environmental, and economic – it is time to develop a model that project managers can use (Labuschagne & Brent, 2007, p. 3).
There has to be a more practical approach when it comes to creating a useful framework when it comes to sustainable development. As early as the 1990s, leadership experts already pointed out the obvious: “If sustainable development is to achieve its potential, it must be integrated into the planning and measurement systems of business enterprises … for that to happen, the concept must be articulated in terms that are familiar to business leaders” (International Institute for Sustainable Development, 1992, p.1).
It is important to provide them examples of how sustainable development can be achieved without radically altering the core strategies of the business process. In many sustainable practices adopted by multinational companies, the environment benefited from minor tweaks in the system as seen in the following anecdote:
Many executives have demonstrated that pursuing sustainable development strategies makes good business sense. For example, a 3M manufacturing plant scaled down a wastewater treatment operation by half, simply by running cooling water through its factories repeatedly instead of discharging it after a single-use. Meanwhile, Dow’s ‘Waste Reduction Always Pays’ program, which began in 1986, has fostered more than 700 projects and saved millions of dollars a year. And in a Westinghouse metal finishing factory in Puerto Rico, the company reduced ‘drag out’ – the contamination accidentally carried from one tank to another – by 75% simply by shaking the tank to remove solids before releasing the chemical to the next tank (International Institute for Sustainable Development, 1992, p.4).
It is of crucial importance to consider the following: a) project objectives; project scope and schedule; project resources, costs, income, and risk; project organization; project context; and design of the project management process (Turner, 2010, p.3). Project management is a tool that must be leveraged to create sustainable development within the organization.
Sustainability and Enexis
The corporate leaders at Enexis, together with their employees and staff unexpectedly learned more about project management. Although the company and its people were well aware of the importance of project management and how to use it as an effective tool in achieving corporate goals, their awareness regarding this management tool was at an all-time high in 2009. It was the time when the company began to cut its ties from Essent Network. Nevertheless, project management was not used for sustainable development. It was used to pave the way for a smooth transition into independence (Grevelman & Kluiwstra, 2010).
Aside from using project management tools as a way to help them deal with the changes within the company, Enexis used the same strategy to monitor customer satisfaction with regards to the services that they provide for their clients. Nevertheless, Enexis demonstrated its commitment to sustainable development through the use of project management. However, it must be made clear that the company initiated projects that led to sustainable development but the integration of sustainable practices into their project management protocol seems vague.
One of the more important projects concerning sustainable development was started in 2010. This was known as the Mobile Smart Grid. It is a network of smart charging stations that enable the efficient and convenient recharging of electric cars (Enexis, 2011). Aside from the convenience, it brings to electric-powered cars, the Mobile Smart Grid provides information that would help in choosing the right time to charge the car to avoid peak levels of demand from consumers. Also, the “smart grid” was designed to handle future innovations in energy production. The company stated that in the future their customers are not only consumers but they are also producers. Thus, there is a need to develop a system where energy can flow in two directions (Enexis, 2010). However, there is no clear explanation as to how this can happen.
The more ambitious projects trumpeted by Enexis are still on the drawing board. Construction may have started but it is not yet completed. The same thing can be said about the Mobile Smart Grid. Nevertheless, it is major evidence of the commitment of the company when it comes to sustainable development. However, stakeholders must continually monitor the progress of this project. At the same time, Enexis must update the general public regarding the roadblocks to this project. The reasons given for the delay provides a glimpse into the conflict between the need to make a profit and the need to develop sustainable practices.
Another major project is the installation of “smart meters” (Enexis, 2010). These devices “collect data about the electricity usage of households, allowing advice to be given on energy savings and – in the somewhat longer-term – intelligent control of electricity supply” (Enexis, 2010, p.44). However, smart meters require additional costs to the company and the consumers. These devices are not part of the original system used by Enexis and therefore only new users can avail of the potential benefits of the said technology. Stakeholders must continue to monitor the progress of this project. It is important to find out the reasons for the delay in the implementation process and if all households and businesses can benefit from this new technology. It is also important to find out if the customers will bear the additional costs of the said energy-saving device.
The third major project that focuses on sustainable development is the partnership with Attero, a company that produces green gas. In the case of Attero, the green gas is biogas produced through a fermentation process. In this partnership, Enexis provided the biogas pipeline that enables farmers to feed their biogas so that it can be redirected to consumers. However, the expansion of the program requires government subsidies and the company made it clear that without these subsidies it would be difficult to increase the area of coverage (Enexis, 2010). The biogas project is another example of high-profile projects that are still in construction or stuck on the drawing board. The general public must make Enexis accountable for unfinished projects. There must be a way to report progress and why hurdles exist for a project that promises to help reduce harmful emissions of toxic gases to the air.
It was pointed out earlier the significant projects undertaken to demonstrate Enexis’s commitment to sustainable development. But according to one of their top officials, the company is not only concerned with the implementation of expensive projects that can contribute to a significant improvement of the environment. It is also concern with changes that affect the internal workings of the company. One of the best examples is the policy concerning a sustainable fleet. The company used a type of vehicle that promises to lower the consumption of fuel (Enexis, 2010). At the same time, the company used 3 electric scooters and 16 electric cars (Enexis, 2010). In the year 2011, the company wanted to add 23 electric cars and 50 vehicles that use green gas or natural gas (Enexis, 2010). The company must be commended for its efforts in reducing the number of pollutants to the atmosphere. However, a quick comparison to the number of employees and the number of electric cars provides a clear picture of how Enexis has lagged when it comes to overhauling their fleet.
According to top officials of Enexis the company one of the major steps towards sustainability in project management is to make sure that the materials used for the project came from manufacturers that adhere to sustainable practices (Grevelman & Kluiwstra, 2010). Enexis tries to find out how these materials are produced. At the same time, the suppliers are scrutinized because Enexis wants to find out if they are certified by agencies that use corporate social responsibility as one of their standards (Grevelman & Kluiwstra, 2010). However, not much is known when it comes to non-compliance.
Aside from high-profile projects that benefit the external environment, the company is serious about changing the corporate culture within the company. Enexis made sure that the employees contribute to sustainable development in their little way. One notable example is a policy that encourages employees to use double sides printing. It may not be as significant as reducing the dependence on fossil fuel but in the long-term, the reduction in the consumption of paper helps in saving more trees that should have gone to the paper mill. The more trees are left untouched the greater is the capability of the environment to deal with the negative impact of climate change and natural calamities such as flash floods.
Another important policy is the directive that managers and employees must use digital technology and video conferencing (Grevelman & Kluiwstra, 2010). Digital technology leads to a paperless system of information and knowledge management. Once again the company contributes to the preservation of the planet’s ecosystem by reducing the number of trees cut down to produce paper.
Another important evidence to support its commitment to sustainable development is the policy that company employees must use video conferencing. In the old way of doing things, Enexis’s employees have to travel across the country to discuss an issue with team members or clients. By using video conferencing the company does not only save time and money but also reduces the need to burn fossil fuel for their transportation needs. It is important to point out that this policy also covers project management teams. This is one tangible proof that the company attempted to integrate sustainable development strategies into its project management framework.
In their offices, the company tries to use furniture that came from renewable sources. They also use cleaning agents that are less harmful to the environment. More importantly, the company uses “smart measurement systems” (Grevelman & Kluiwstra, 2010). This is a technology that enables Enexis to monitor the consumption of energy within the company. It also helps educate their employees regarding a more efficient way to use energy. Another way to increase awareness of sustainable strategies is to compel employees to check their tire pressure. They learn to value the importance of having correct tire pressure to have a more efficient way of conserving fuel.
Steps were also taken to deal with the social aspect of sustainable development. This action started at the company level where it was noted that the turnover of employees is very low (Grevelman & Kluiwstra, 2010). The company is proud to announce that they take care of their employees (Grevelman & Kluiwstra, 2010). A top official from the company disclosed that full-time, part-time, and even temporary workers receive benefits from the company (Grevelman & Kluiwstra, 2010). The employees at Enexis are covered by collective bargaining agreements (Grevelman & Kluiwstra, 2010). The company earned the distinction as one of the best places to work in the Netherlands. In the Best Employer Survey Intermediary of 2009, the company was voted as having one of the best working conditions and employee engagement in the whole country (Enexis, 2011). It is important to highlight this feature of the business operation because one of the crucial facets of sustainable development concerns people and not just the environment.
Concern for their employees was very much evident in 2010 when the company decided to move all smoking areas outdoors (Enexis, 2010). As a result, workers were further discouraged from smoke, because it would require greater effort to walk from the office building to the designated smoking areas. There was also a program that encouraged preventive medical examinations (Enexis, 2010). This measure is an example of sustainable development because when workers are sick their performance is affected.
The company has a strict policy when it comes to human rights abuses. The company cannot transact with suppliers that use child labor. However, Enexis believes that it is impossible to carefully scrutinize all suppliers if they adhere to the same principle. Enexis is not only concerned with the external environment when it comes to human rights issues. Their employees are entitled to see a counselor if they believe that they are being discriminated against (Grevelman & Kluiwstra, 2010). The company readily admitted that a great deal of work is needed to comply with international standards when it comes to the prevention of human rights abuses especially when it comes to third-party suppliers.
Analysis of Data
The company has made known its desire to incorporate sustainable development into their core business strategies. However, the company leaders are still aware of the numerous challenges that are involved in the complete integration of sustainable development and the long-term goals of the organization. One of the major issues concerns the cost of such an endeavor. According to one of their top officials, the benefit of video conferencing is clear however, an enhanced sustainable practice requires decentralized video conferencing in every laptop (Grevelman & Kluiwstra, 2010). This policy means that the company has to invest more to upgrade the IT capability of all employees. This move is something that cannot be accomplished without added expenses and training.
One of the top officials of Enexis readily admitted that the company has a long way to go when it comes to overhauling its strategies and policies about sustainable development (Grevelman & Kluiwstra, 2010). The said official said that when it comes to the triple-bottom-line of social, environmental, and economic sustainability, Enexis still leans towards the economic aspect of project management. Based on this disclosure it was discovered that aside from profitability the organization is also a great concern when it comes to the working environment. The corporate leaders at Enexis are concern about the comfort and satisfaction of their workers.
One of the officials of the company readily admitted that not much thought was given to training product managers when it comes to sustainable development strategies (Grevelman & Kluiwstra, 2010). Another conflict when it comes to sustainable development and competitive forces in the market can be seen in the difficulty of hiring personnel based on where they live. In an ideal situation, the company is encouraged to hire workers that live nearby. This action saves on fuel and creates a minimal carbon footprint as opposed to a worker that has to commute long distances to go to work every day. However, Enexis understands that this is not a practical approach. The company hires people based on their skills and experience. The same thing can be said when regards to choosing appropriate suppliers. The organization does not choose suppliers based on their location.
It is now time to evaluate Enexis’s commitment to sustainable development using the maturity model developed by researchers (Silvius & Schipper, 2010). In the said maturity model there are 31 questions but it is practical to focus on a few questions to gauge how Enexis was able to integrate sustainable development strategies into their various projects.
With regards to the question regarding the position of sustainability in the strategy of the organization, it is important to take a closer look at some of the major projects undertaken by Enexis since 2009. Using the three notable projects such as the Mobile Smart Grid, the use of “smart meters” and the creation of the biogas pipeline provide enough evidence that Enexis developed a strategy that mentions a wise use of natural resources and commitment to social responsibility. However, it must be pointed out that most of these high-profile projects are still on the drawing board.
With regards to the question of sustainability reporting, it has been made clear that the company wanted various stakeholders to know the steps taken to move the company to a more sustainable future. The commitment to report the progress of the project with regards to conformity to sustainable standards can be seen in the official reports that can be accessed through their websites and other public documents. Enexis also said that it utilizes the Global Reporting Initiative guidelines to figure out their compliance. In this regard, Enexis claimed that they have complied on more than 20 performance indicators and has a GRI B standard (Enexis, 2010, p. 112). The company can improve its ranking based on the GRI guidelines.
With regards to the question regarding the type of benefits recognized in the business case of the project, it can be argued that benefits are highlighted based on cost savings and reduced use of resources. This was made evident with the enhancements made to their transportation requirements. At the same time, benefits are recognized based on the improved business process. This was made clear with the use of “smart meters” and the Mobile Smart Grid. Finally, the company recognized benefits in terms of extra revenues from innovative products and services. This was made evident in a partnership that enabled Enexis to supply biogas to their clients.
With regards to the question regards to managerial flexibility, it can be argued that the projects were designed with little room for changes. Based on an overview of statements made by top officials of the company, and the overall pattern of behavior of the organization, it is clear that Enexis is focused on the economic aspect of sustainable development. Thus, projects were designed to create profit and not just to help the environment.
With regards to the question regarding project reporting, it can be said that Enexis does not allow for a great degree of transparency when it comes to their projects. The project does not formally report progress in terms of sustainable development. Enexis is content with the idea that its commitment to sustainable development has been made known but the organization is not willing to inform the general public regarding the detailed steps taken to shape the project in conformity to sustainable development standards.
With regards to the question regarding investment evaluation, the company has made a point to go beyond the need to make a profit. However, it is not accurate to say that projects are evaluated and selected predominantly based on sustainable development. Nevertheless, the company has proven its commitment to consider both long term and short term perspectives in considering the economic, social, and environmental aspects of the project.
With regards to the question of procurement, Enexis made it clear that suppliers were chosen based on cost-efficiency and not only on principles regarding sustainable development. The company prefers to use suppliers with the ability to help Enexis deliver products and services more sustainably. But this is not always the case. Nevertheless, the company has expressed its commitment to never partner with a supplier that has committed human rights abuse such as the use of child labor.
With regards to the question regarding the procurement of materials, the company expressed its desire to use materials based on reuse capabilities and value. This commitment was demonstrated in the use of cables that can last for up to 50 years. However, the company made the disclosure that materials are mostly chosen based on functional requirements and their costs.
With regards to the question of energy, the company has demonstrated its commitment to promote the smart use of energy. Energy-saving equipment is used when appropriate. Steps were taken to reduce the consumption of energy. This was made evident in the use of “smart meters” and the use of electric cars and other vehicles that use green gas. The conservation and reduced use of energy consumption have become one of the parameters of the design of the project. However, these changes are not yet implemented on a wider scale.
With regards to the question of water consumption, pollution, and waster, Enixis has demonstrated its commitment to reduce consumption and its negative impact on the environment. The company released information regarding their “condition-based maintenance and a risk-based program for the phased replacement of non-maintainable assets” for the detection of leaks (Enexis, 2010, p.68). It is a conscious effort to reduce the impact of the company in terms of releasing unwanted substances into air and water.
When it comes to the question of travel the company used a two-pronged approach. First of all, they used cars that run on renewable energy sources. Not all their vehicles run on green gas but they strive to upgrade their fleet so that it adheres to sustainable development standards. Secondly, video conferencing is the policy of the company when it comes to the need for face-to-face interaction. They do not need to travel because video conferencing can deliver the same results.
When it comes to the question on project reporting there is no hard evidence to support the assertion that Enexis conducts regular progress reports. They did not release progress reports to third party agencies. If there are progress reports these remain confidential and accessible only to the managers and corporate leaders of Enexis.
With regards to the question of labor practices and decent work, it was mentioned earlier that the company was voted as one of the best employers in the Netherlands. It seems that the workers are satisfied with the benefits that they are receiving from the company. At the same time, corporate leaders at Enexis are not resting on their laurels because they introduced a remuneration policy that “increased flexibility and more rapid growth within income categories” (Enexis, 2010). The company also instituted policies to take care of the health and welfare of the employees.
With regards to the question of training, education, and organizational learning, the company has shown its pledge to continuously upgrading its leadership college (Enexis, 2010, p.62). The company has made it clear that they want to improve the capabilities of their workers. However, no program exists that would cater to the needs of the community in terms of training, education, and development of stakeholders.
With regards to the question of human rights, the company made it explicitly clear that they will not tolerate human rights abuses especially when it comes to child labor. However, the company also conceded that employees did not receive any form of training on how to deal with various aspects of human rights issues (Enexis, 2010, p.112). Therefore, an employee or project manager may transact with a supplier that violated human rights principles and may not be able to discern that violations have occurred.
With regards to the question regarding society and customers, the company insists that they are aware of the importance of corporate social responsibility. This desire to design projects that translates to social responsibility towards external stakeholders can be seen in the way Enexis carefully evaluates the suppliers. But more importantly, some of the major projects were designed to demonstrate social responsibility such as the creation of the Mobile Smart Grid.
With regards to the question of bribery and anti-competitive behavior, there is no indication that Enexis has considered the importance of this issue. A probable explanation is that there is no need to worry about bribery and anti-competitive behavior because the rule of law is a significant characteristic of Dutch society. At the same time, company leaders are aware of the consequences if the government discovers that Enexis violated regulations regarding anti-competitive behavior.
Discussion and Limitations
It has to be made clear that although Enexis was unbundled from Essent Network, this organization is still a dominant force in the Dutch energy sector. The number of employees as well as the scope of its responsibilities attested to the fact that Enexis is a big company. Thus, it is not surprising to discover that on the issue of corporate social responsibility and Triple Bottom Line, the company tends to focus on the economic aspect of the business.
The energy industry is a lucrative business and investors who pour money into such type of commercial undertaking expect to see a significant return on their investment. Furthermore, the energy industry requires huge capital infusions. In other words, a significant amount of money is sown into a project and it may take a long time before investors can make money out of such an undertaking. It is therefore interesting to point out that even with the challenges faced by Enexis, the company made known its commitment to sustainable development.
Although Enexis has made declarations regarding its awareness of corporate social responsibility and sustainable development, there is still a long way to go before the company can truly claim full integration of sustainable development principles into their core business strategies. Enexis claimed that they have complied on more than 20 performance indicators and has a GRI B standard (Enexis, 2010, p. 112). The company has to work hard on improving its overall rating.
An overview of their performance will reveal that Enexis wanted to accomplish greater things when it comes to sustainable development but are aware of the various limitations imposed on them by shareholders and the sheer costs of adhering to sustainable development principles. Take for example the need to integrate sustainable development strategies and the project management framework. For this to happen the company has to invest in training project managers to understand the different facets of sustainable development. Consider for instance the need to learn more about human rights abuses at the supplier end of the business process.
A full commitment to sustainable development requires a drastic reduction in fossil fuel emissions but this may hamper the efficiency of the workers. There is a great deal of difference between using a conventional vehicle and a scooter. The speed and efficiency of an ordinary car are far greater than the one that runs on solar power and biogas. There will come a time when engineers can solve this problem and bridge the gap between renewable energy sources and fossil fuels. However, in the present time, world-class companies like Enexis have to consider cost-efficiency over sustainable development.
Enexis has to be commended for its effort to adhere to sustainable development principles. The company has to e commended on its drive to promote corporate social responsibility. Nevertheless, there is much more than the company can achieve if more resources are redirected for sustainable development efforts. The corporate leaders at Enexis were on the right track when they attempted to increase awareness regarding sustainable development. But Enexis must go to the next level and this requires more investment in their workforce so that they can contribute to sustainable development. The project managers must be well-trained when it comes to recognizing human rights abuses. Project managers must learn to determine violations in sustainable development standards according to GRI guidelines. It is also important to point out that Enexis needed to work harder to fully integrate sustainable development strategies into its project management framework. Project managers must undergo rigorous training to understand the different facets of sustainable development. The company must take drastic action to force suppliers to adhere to their standards regarding sustainable development.
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