- Email: [email protected]
Meeting community information needs: Kodak's environmental reporting strategy
Meeting Community Information Needs: Kodak’s Environmental Reporting Strategy By Anthony J. Tubiolo
Kodak Park, the world headquarters of Eastman Kodak Company, in Rochester NI: is struggling with the problem of communicating its improved environmental performance to a public that has historically viewed the company as poor environmental performers. Past communication efforts have only resulted in luke-warm public acknowledgment, and the community percejtion of thefacility does not reflect the environmental improvements achieved. Kodak Park (KP) is attempting to repair their image by providing information through their web site, a community newsletter to the neighborhoods near KR and in Community Advisory Council and Neighborhood Leader meetings which provide strong two-way communication. Their current environmental communcation efforts provide an example of the actions that can be taken to improve a community ‘s understanding of the environmental performance and risks associated with a facility.
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Inc. All rights reserved.
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ELSEVIER
Environmental Strategy 7 (2000) wwwcorporate-env-stategy.com
OO&OOO
Meeting Community Information Needs: Kodak’s Environmental Reporting Strategy By Anthony J. Tubiolo
E
very day corporations face continually increasing environmental performance demands from the government, local communities, the market and court of public opinion, and major environmental groups. Corporate reputation and public percep tion are ever-changing and relative to the public’s knowledge and relationship with a corporation. Despite improved environmental performance, companies can still experience lowered approval and opinion ratings concerning environmental performance. This is especially true in the communities where mining facilities, chemical manufacturing plants, power generating utilities, and pulp and paper facilities are located-industries with historically negative environmental operations. Kodak Park, located in Rochester, NY, is no different (see sidebar: Eastman Kodak Company Facts).
Eastman l
l l l l l
l
Kodak l
is a Master’s student in the Environmental Management and Policy program at Rensselaer Polytechnic Institute’s School of Management and Technology. He holds a Bachelor’s degree in Environmental Science from St. Bonaventure University. Currently he is an Assistant Editor for
Anthony Tubiolo
Corporate Environmental
Strategy.
Vol.7, No. 2 2000 1066-7936/OOj$
- see front matter 0 2000 Elsevier
Science
Inc. All rights reserved.
l
l
l
Company
Facts
Products: Still & motion cameras, film, photographic chemicals, photographic paper, computer peripherals & software. For consumer, professional, and healthcare markets. Sales: Over $13 billion in 1998 Total Employees: About 86,000 in 1998 Ranked #I21 in the Fortune 500 Top competitors: Fuji Photo, Canon, Xerox In 1998 Kodak recycled 61 million “single use” cameras and the film containers from 348 million rolls of film. Eastman Kodak Company has four manufacturing facilities in the US, two in the United Kingdom, and one each in Canada, Mexico, Brazil, France, Germany, and Australia. (Sources: Hoover’s Online, Annual Report 1998)
l
Kodak Park (KP), Eastman Kodak Company’s world headquarters and largest manufacturing facility, located in Rochester, New York is a good example of improved environmental performance with mixed community perception. Toxic Release Inventory and SARA release data reported to the Federal government show that Kodak Park has
Kodak
Disclosure,
Global Access, Kodak
Park Facts
Products: Nearly 1000 varieties of film and nearly 300 kinds of photographic paper Size: “Kodak Park is the largest photographic product manufacturing facility in the world, and the largest industrial complex in the northeast United States.” It “has some 160 major manufacturing buildings, nearly 30 miles of roads, two power plants, its own sewer system, and water treatment facilities. KP also operates its own fire department, railroad, and a fleet of some 1000 vehicles.” Kodak Park is a 108-year-old facility situated on a 1300acre site. Employees: Approximately 15,000 in 1998. More than 200 are employed to work on health, safety and environmental programs. Community Outreach: Funds several scholarship programs, gave over $300,000 to the Seneca Park Zoo, and a grant of $2.8 million to the United Way in 1998 (Sources: Kodak Park 1998 Environinental Annual Report, pg. 2; Kodak Annual Report 1998; Kodak Park Neighborhood Information center.)
Meeting
Community
Information
Anthony J. Tubiolo
Needs
reduced total emissions by seventy-one percent since 1987 (Exhibit 1). In 1998 a further twelve percent total reduction in releases to the environment was achieved. Despite this reduction, telephone surveys of KP neighbors in 1997 and 1998 reflected the lowest ratings ever received by KP for environmental performance (Exhibit 2). This perception is held along with the fact that ninety-one percent of those polled “said that Kodak’s environmental performance is the same or better than other U.S. companies”1
performance often seem to be lacking in the eyes of local communities? According to Cynthia Ames, Environmental Issues Coordinator, and the Technical Editor of Update, Kodak’s community newsletter, the public has continually increasing expectations. In this milieu, public perception and satisfaction levels decrease, or at least seemto decrease. Other reasons for decreases in public satisfaction are the influence of the media and environmental activist groups. These two groups often look at emissions data with an untrained eye and draw inaccurate conclusions, or greatly overstate the meaning of the data. These conclusions are often more widely circulated among the communi-
Why do companies with strong environmental management programs and good environmental
1998 SARA 313 Report Kodak
Park
Summary
(thousands of pounds) 1987
1993
1994
18,800 2,270 84 21,154
8,800 538
7,600 310 1 7,911
30
39 575 614
1995
1996
1997
1998
6,700 619 7,319
6,141 678 130 6,944
5,400 657 31 6,088
339 2,726 3,065
978 2,809 3,787
610 1,846 2,456
Releases:
Air Emissions Releases to Water Land Releases Total
Releases
Off-Site
0 9,338
7,600
540 1 8,141
0
Transfers:
Treatment Disposal Recycle/Recovery Total
Off-Site
Source:
Update,
NR
Transfers issue 4 October
30 1999.
Eastman
Kodak
612 426 1,038
400 320 720
Company
Exhibit 1
On a scale of 1 to 10 where 1 is unacceptable and 10 is the best it could be, please rate Kodak park on the following: Control
of:
1998 Telephone Survey Rewonses 5.5 5.1
Range
of Responses J1992-1998) 5.5 - 6.6 5.1 - 6.2 6.9 - 7.4 5.4 - 6.5 4.8- 6.0
Water Pollution Air Pollution Noise 6.9 Particulate 5.8 Odors 4.8 Despite the significant progress achieved in reducing KP emissions over the last ten years, public perception of KP’s environmental performance have declined in recent years. Source:
Kodak
Park Environmental
Annual
Report
1998,
page
10.
Exhibit 2
178
CORPORATE ENVIRONMENTAL STRATEGY
Anthony J. Tubiolo
Meeting Community Information Needs
ty or public than are the actual data or the company’s communications about the data. One vivid example of this in Kodak’s case is an article titled “Lasting Image: Kodak’s Fake Smile for the Cameras” which was published in May 1999 in a free weekly paper. This weekly advocacy paper has the potential to reach many more Rochester residents than Kodak’s information, like Kodak’s Update, which is sent to only 13,500 households.2 In this article, the author took shots at the company’s environmental performance and associated risk to the community, local workforce downsizing, and corporate management. The impact of print pieces like this is immeasurable.
Communicating
with the Public
Since 1986 when Congress passed the Emergency Planning and Community Right-toKnow Act (commonly referred to as SARA Title III) effective communication with the local community has become increasingly important to all firms. SARA Sections 311, 312, and 313 require companies to make publicly available information regarding the risks of hazardous substances produced and used at local facilities, as well as the type and volume of chemicals released. The availability of this information has forced companies to become responsive to the demands of communities, the media, and environmental groups.
Situations such as this are highly beneficial to corporations, because they can be a main driving force behind the environmental performance of corporations. The point of the beneficial aspects of external pressure is well stated by Joan Bavaria, President of Franklin Research & Development Corp., and CoChair and CEO of CERES: “The adversarial climate of the past was fueled by lack of information. Environmentalists often did not understand challenges that business faces in balancing multiple interests, such as the environment, job creation, and financial survival, and business often chose to ignore the environmental consequences of its actions. Information and a complete accounting system can bring more understanding of these challenges to all sides of the debate. There is a natural tension between various competing interests, but that tension does not have to be destructive: it can be creative.“4
James Salzman, at American University’s Washington College of Law addressed the importance of the TRI and other methods of reporting releases in a recent G%Sarticle. Salzman states:
In what ways should a company communicate with the public? One way is to issue various forms of environmental reports and send them out to the community. Almost all major corporations produce at least an annual environmental report, and many use more frequent communication forums. Whatever frequency and forum a company decides to use to communicate environmental information to the community, the content of the communication must be appropriate. Laurence Mach, creative consultant and partner at Laurence and Susan Mach Creative Services, Inc., has said:
“. . .major corporations, confronted with publication of their annual releases and the reactions of local communities, have pledged significant reductions in toxic emissions and commenced intensive waste reduction initiatives. Major environmental groups annually publish lists of the 500 largest industrial polluters. Such pressure led companies such as Monsanto and AT&T to pledge pollution reduction of over ninety percent within short time periods.“3
“...the content issue [of a company’s environmental and safety report] becomes thornier as you confront dealing with your company’s environmental and safety liabilities, operational problems, fines, penalties, and the like. Should you present ‘warts and all’ and let the chips fall where they might? Should you try to explain or rationalize problems? As far as many stakeholders are concerned, your report should lay out the facts that surround a noncompliance prob
Vol. 7, No. 2 2000
179
Meeting Community Information Needs
lem, an environmental accident, or penalty without arguing the case.“5 Some companies, such as Kodak, have found that the best strategy is a policy of openness and voluntary disclosure of all environmental, health, and safety matters. Kodak’s website is an excellent source of information regarding its environmental performance, and even it’s shortcomings (Exhibit 3). As explained on Kodak’s website, “probably the most visible way Kodak Park communicates with the community is through its Update newsletter. Five times a year this publication is sent to approximately 13,500 plant neighbors and 12,000 KP employees in an effort to keep people informed about developments at Kodak Park.” One of these five issues is an environmental annual report. Also, once a year a survey is included in Update to get feedback from the community. Update is sent to the neighborhoods that have called KP’s Environmental Concerns Line the most frequently. This allows the newsletter to reach the prime target audience-truly concerned citizens. The first issue of Update was published in 1988, and since then has helped Kodak Park respond to pressures from the press, the community, and major environmental groups to communicate its actions regarding emissions and waste. Kodak voluntarily reports emissions and environmental performance in this newsletter, as well as plans for emission reductions. The philosophy behind selfreporting to the public is to address the public concerns openly, accurately and in a timely way. In a conversation with Cynthia Ames, KP Environmental Issues Coordinator, she stated: “we have never run into a problem by providing too much information.” Other ways Kodak Park responds to community concerns is through a Neighborhood Information Center and the previously mentioned Environmental Concerns Line. The public can call these phone numbers to obtain answers to questions or to get prompt attention to health and envi180
Anthony J. Tubiolo
ronmental concerns. Since 1988 the concern calls to Kodak Park have reduced in severity from health concerns to quality of life issues (mainly regarding noise). This is an indicator of the success of Update in informing stakeholders in the community.
“. ..we have never run into a problem byproviding too much information. ” Kodak Park is also involved in community concerns through a Community Advisory Council that meets monthly and Neighborhood Leaders meetings, which are held every two weeks. The Community Advisory Council is comprised of sixteen members “representing local government, school districts, environmental groups, plant neighbors, and area high schools.” (For more information on community advisory panels, please see John Milliman and Ann Feyerherm, “Responding to Community Expectations on Corporate Environmental Performance: How to Develop Effective Citizen Advisory Panels,” CES (1999) V6N2, pp. 164174.) The Neighborhood Leaders Meetings delve into more specific details “of issues raised by the neighbors as well as topics suggested by plant management.“6 Kodak also has a comparatively strong environmental management system. The company is a founding member of the Global Environmental Management Initiative, follows the Responsible Care program established by the Chemical Manufacturer’s Association, is IS0 14001 certified, and won the 1999 World Environmental Center’s Gold Medal Award. Third party audits of Eastman Kodak Company’s Corporate Health, Safety and Environmental Assessment Program have been quite favorable. In 1993, McLaren Hart’s audit summarized that “the Kodak HS&E Assessment Program is one of the better programs in the industry.“7 In 1997 Environmental Resources Management, Inc. evaluated the same program at Kodak and stated, “the program provides compeCORPORATEENVIRONMENTALSTRATEGY
Anthony J. Tubiolo
Meeting Community Information Needs
Kodak Fines and Penalties 1997 Our Policy is to carry out our business activities in a manner consistent with sound health, safety and environmental management practices, and to comply with all applicable laws and regulations. Given the complex nature of today’s regulatory arena and the size and complexity of our operations, we believe our compliance record, while extremely good, also shows the need to continue to improve. February 28, 1997 RCRA assessment against Kodak Park for self-reported non-compliances from ‘91-‘96 --$90,000 March 18, 1997 Illinois Dept. of Transportation for violation of hazardous materials transportation regulation $750 September 30, 1997 TSCA fine for failure to submit timely pre-manufacturing notice (PMN) - $1,575 December 19, 1997 TSCA fine for failure to submit timely notice of commencement for a new chemical substance $1,105 1997 Super-fund Liability Kodak has been designated as a potentially responsible party (PRP) for possible assessmentand cleanup costs at approximately 25 Super-fund sites. At each of these sites, the company’s actual or potential allocated share of responsibility is small. To date, settlements and costs paid in Superfund matters have not been material; future costs are also expected to be material to the company’s financial position. Kodak Fines and Penalties 1998 April 1998: Illinois Department of Transportation civil penalty for alleged failure to provide Kodak’s carrier of hazardous materials with proper placards. $2,250. December 1998: Massachusetts Water Resources Authority for alleged violations of sewer use regulations and permits regarding discharges from Qualex, Inc. photo processing operations. $10,500. 1998 Super-fund Liability The company is potentially responsible under the Superfund law or similar state laws at approximately 15 active sites. The total future costs for these sites are not expected to exceed $5 million. Source: http://www.kodak.com/uS/en/corp/environment/performanes/index.shtml Exhibit 3
Vol. 7, No. 2 2000
181
Anthony J. Tubiolo
Meeting Community information Needs
tent, reliable, and objective information to management about the status of the Company’s HSE compliance programs and performance,” and “a number of program elements.. .are quite advanced when compared to practices in other companies.“s Notwithstanding Kodak’s continually improving environmental performance, community concerns about KP’s impact on the environment are not without cause. According to the 1998 Federal Toxic Release Inventory (TRI), Kodak Park is New York State’s third largest polluter releasing approximately 6.1 million pounds of reportable chemicals to the environment (Exhibit 4 shows KP’s ranking in the 1998 TRI). All in all, the Environmental Defense Fund ranks Monroe County among the dirtiest/worst ten percent in the United States.9 This ranking is primarily attributable to Kodak Park’s large emissions.
Responding
to a Recent Problem
A recent issue for Kodak Park is the August 1999 penalty of $775,000 that it paid to the New York State Department of Environmental Conservation (DEC) for environmental violations between 1993 and 1999. Violations included inadvertent bypass of carbon absorbers and subsequent release of more than 60,000 pounds of VOCs in 1995, exceeding
rap 10 Polluters in New York State Accordiq To The 1998 Toxic Release Inventory
1 2 3 4 5 6 7 8 9 10
Company ZCA Mines CWM Chemical Services Eastman Kodak Co. Finch, Pruyn & Co. C.R. Huntley Steam Station Dunkirk Steam Station Russell Station AES Somerset Samuel Carlson Generating Danskammer Generating
Source:
N.Y. State Department
of Environmental
Exhibit
182
Millions
4
Conservation
of Pounds 10.1 6.2 6.1 5.9 2.9 2.4 1.8 1.8 1.7 1.5
smokestack smoke density limits, incinerating groundwater contaminated with PCBs without a permit, failure to submit a NOx monitoring plan on time, storing unmarked containers of hazardous waste, discharges of untreated wastewater to the Genesee River during severe rainstorms in 1996, and miscellaneous record-keeping and other administrative errors. The fine came as part of a Consent Order in which the DEC required Kodak to address odor problems and emissions at its wastewater treatment plant and to control the density of smoke from its generating plants. National newspapers such as the New Ywk Timesexplained that Kodak did not admit or deny these alleged violations, but that Kodak simply waived its right to a hearing and agreed to comply with terms of the settlement.10 As Andrew Kreshik, DEC Director of Regional Enforcement Coordination, states, “ninety-nine percent of the time a Consent Order allows the violator to avoid publicly admitting wrongdoing.“11 (It also avoids the need to be cross-examined concerning alleged violations/practices in a public hearing) For Kodak, however, avoiding public admission does not seem to be an objective. In fact, the opposite seems to be true. Kodak responded to DEC’s fine and Consent Order by openly addressing the violations in the October 1999 issue of Update. In that issue David Kiser, Director of Health, Safety and Environment for Kodak Park was quoted concerning the consent order: “While most of the alleged violations were selfreported incidents, we did not hit our target, which is 100 percent compliance with environmental regulations. At the same time, keep in mind that Kodak Park has a stringent self-monitoring and self-reporting system. This action covers several years of self-reported violations at one of the country’s largest industrial complexes.“12 The complexity of being fully compliant, while meeting aggressive corporate environmental goals (see Exhibit 5) continues for Kodak, as does communicating the results of those efforts to the public. CORPORATE
ENVIRONMENTAL
STRATEGY
Meeting Community Information Needs
Anthony J. Tubiolo
Kodak’s Worldwide Corporate Environmental Goals Building . . . . . .
on the last ten years of progress, we are now committed
to achieving,
by January 1,2004:
A further reduction of 50% in air emissions of methylene chloride, bringing the aggregate reduction in these emissions to more than 90% since 1988. A 40% reduction in emissions of 30 chemicals on our priority target list, bringing their aggregate reduction to 70%. A 25% reduction in manufacturing waste-less waste of all types means less environmental impact. A 15% reduction in water usage. A 15% reduction in energy consumption. A reduction of 20% in emissions of carbon dioxide-the major “greenhouse gas” linked to global warming. This reduction will be achieved through energy conservation and by converting the fuel for one Kodak Park power plant boiler from coal to natural gas.
Source: Kodak Park Environmental
Annual Report
1998.
Exhibit 5
The Role of Employees Employees are a sometimes-overlooked group with a stake in a company’s environmental performance. Employee productivity and satisfaction, as well as employment security are influenced by corporate environmental performance, not just by salary and benefits. “A new corporate environmental strategy can capture the hearts and minds of employees,” saysSteve Percy, former Chair and CEO of British Petroleum America. Percy explained that BP had faced a similar situation to that of Kodak Park, in which a large number of employees were cut from jobs. [Ed. Note: Please see Percy’s “Concluding Remarks” in this issue of CES.] He feels however, that strong communication of a company’s environmental improvement can help raise spirits within the facility and the local community. Percy also believes that employees contribute to more than just corporate profit - if they are encouraged and given the chance they can contribute to superior environmental performance.13 An implementation strategy he suggests is reflecting employee contribution to environmental goals in salary Vol. 7, No. 2 2000
bonuses. Kodak has a program for this type of compensation called the Management Performance Commitment Process. A potential future strategy for KP’s environmental improvement would be to integrate this program from top to bottom throughout the company, rather than applying it just to HSE managers. When employees are given encouragement, they may see and openly communicate opportunities for improvement in safety, health, and environmental operations, which are not obvious to management. The bottom line: communication is of key importance for a corporation’s environmental reputation. Companies like Kodak with strong environmental leadership must share performance information with the public in every way possible. William K. Reilly of the Texas Pacific Group and Former Administrator of the U.S. EPA explains the benefit of a strong reputation for environmental performance: “I can recall instances where something went wrong at a good company and regulators and enforcers gave the corporation the benefit of the doubt.“14 Weak communication of environmental performance risks harsh judgment in the 183
Meeting Community Information Needs
unforgiving court of public opinion when an accident does occur. The ideal is for all facilities to become a “‘boundary-less’ plant where information, understanding, concerns, and people flow freely between the plant and its surroundings.” This, coupled with a goal of corporate environmentalism - “an attitude and performance commitment that place corporate environmental stewardship fully in line with public desires and expectations.. .by going beyond regulations and reducing the environmental impact of products and processes voluntarily”15 - is what it takes to satisfy the pub lit’s expectations.
Anthony
Managing
an Effective Environmental
J. Tubiolo
Strategy, McGraw-Hill,
1996. 5. Laurence Mach, “Practitioner Insight on Environmental Reporting,” in Bruce Piasecki, Kevin Fletcher, and Frank Mendelson’s Environmental Management
and Business Strategy: Leadership Skills
fm the
21st Century, John Wiley & Sons,1998.
6. Kodak Park Environmental Annual Report1998,page 10. 7. McLaren Hart, 1993 Evaluation of EastmanKodak Company’s HS&E Assessment Program, Executive Summary, in Measuring Corporate Environmental
While information disclosure can help, in part, to meet those public demands, the weight of historic environmental performance and the reputation it brings to a company illuminates the need for a persistent and complete environmental communications strategy. Kodak Park, through targeted communications, community participation, and open information disclosure has embraced this more complete and dynamic strategic response in order to break free from the weight of past mistakes. ;Y
Perfmance: Best Practices for Costing and Managing an Effective Environmental Strategy, Marc J. Epstein, McGraw-
Endnotes
20, 1999.
Hill, 1996. 8. Taken on February 20th, 2000from Kodak’swebsite www.kodak.com.
9. Pleasesee: www.scorecard.org/env-releases/ranking. tcl?fips_county_code=?36055 10. “Kodak to Pay Penalty,” The New Ywk Times, August
1. Kodak Park Environmental Annual Re@rt 1998,page 10. 2. Jack Bradigan Spula, “Lasting Image: Kodak’s Fake Smile for the Cameras,”City Newspaper, Rochester,NY, May 19-26,1999,page 4.
11. From phone conversationon October 27,1999. 12. Kodak Park, Update community newsletter,Issue4, October 1999,page 4.
3. James Salzman, “Environmental Protection Beyond the Smokestack:Addressing the Impact of the Service Economy,” Corporate EnvimnmentalStrategy: Elsevier’s Journal of Environmental Leadership, V7Nl.
13. From a presentation at RensselaerPolytechnic Institute, Troy, NY, November 1, 1999.
4. Taken from Marc J. Epstein’sbook Measuring Cor,$orate
15. E.S.WoolardJr., Chairman and CEO, E.I. duPont de Nemours& Company.From Epstein seeEndnote 6.
Environmental
184
Performance: Best Practices for Costing and
14. PleaseseeEndnote 6.
CORPORATEENVIRONMENTALSTRATEGY
Kodak Park, the world headquarters of Eastman Kodak Company, in Rochester NI: is struggling with the problem of communicating its improved environmental performance to a public that has historically viewed the company as poor environmental performers. Past communication efforts have only resulted in luke-warm public acknowledgment, and the community percejtion of thefacility does not reflect the environmental improvements achieved. Kodak Park (KP) is attempting to repair their image by providing information through their web site, a community newsletter to the neighborhoods near KR and in Community Advisory Council and Neighborhood Leader meetings which provide strong two-way communication. Their current environmental communcation efforts provide an example of the actions that can be taken to improve a community ‘s understanding of the environmental performance and risks associated with a facility.
CORPORATEENVIRONMENTALSTRATEGY
176 1066-7936/00/$
- see front matter 0 2000 Elsaviar
Science
Inc. All rights reserved.
Corporate
ELSEVIER
Environmental Strategy 7 (2000) wwwcorporate-env-stategy.com
OO&OOO
Meeting Community Information Needs: Kodak’s Environmental Reporting Strategy By Anthony J. Tubiolo
E
very day corporations face continually increasing environmental performance demands from the government, local communities, the market and court of public opinion, and major environmental groups. Corporate reputation and public percep tion are ever-changing and relative to the public’s knowledge and relationship with a corporation. Despite improved environmental performance, companies can still experience lowered approval and opinion ratings concerning environmental performance. This is especially true in the communities where mining facilities, chemical manufacturing plants, power generating utilities, and pulp and paper facilities are located-industries with historically negative environmental operations. Kodak Park, located in Rochester, NY, is no different (see sidebar: Eastman Kodak Company Facts).
Eastman l
l l l l l
l
Kodak l
is a Master’s student in the Environmental Management and Policy program at Rensselaer Polytechnic Institute’s School of Management and Technology. He holds a Bachelor’s degree in Environmental Science from St. Bonaventure University. Currently he is an Assistant Editor for
Anthony Tubiolo
Corporate Environmental
Strategy.
Vol.7, No. 2 2000 1066-7936/OOj$
- see front matter 0 2000 Elsevier
Science
Inc. All rights reserved.
l
l
l
Company
Facts
Products: Still & motion cameras, film, photographic chemicals, photographic paper, computer peripherals & software. For consumer, professional, and healthcare markets. Sales: Over $13 billion in 1998 Total Employees: About 86,000 in 1998 Ranked #I21 in the Fortune 500 Top competitors: Fuji Photo, Canon, Xerox In 1998 Kodak recycled 61 million “single use” cameras and the film containers from 348 million rolls of film. Eastman Kodak Company has four manufacturing facilities in the US, two in the United Kingdom, and one each in Canada, Mexico, Brazil, France, Germany, and Australia. (Sources: Hoover’s Online, Annual Report 1998)
l
Kodak Park (KP), Eastman Kodak Company’s world headquarters and largest manufacturing facility, located in Rochester, New York is a good example of improved environmental performance with mixed community perception. Toxic Release Inventory and SARA release data reported to the Federal government show that Kodak Park has
Kodak
Disclosure,
Global Access, Kodak
Park Facts
Products: Nearly 1000 varieties of film and nearly 300 kinds of photographic paper Size: “Kodak Park is the largest photographic product manufacturing facility in the world, and the largest industrial complex in the northeast United States.” It “has some 160 major manufacturing buildings, nearly 30 miles of roads, two power plants, its own sewer system, and water treatment facilities. KP also operates its own fire department, railroad, and a fleet of some 1000 vehicles.” Kodak Park is a 108-year-old facility situated on a 1300acre site. Employees: Approximately 15,000 in 1998. More than 200 are employed to work on health, safety and environmental programs. Community Outreach: Funds several scholarship programs, gave over $300,000 to the Seneca Park Zoo, and a grant of $2.8 million to the United Way in 1998 (Sources: Kodak Park 1998 Environinental Annual Report, pg. 2; Kodak Annual Report 1998; Kodak Park Neighborhood Information center.)
Meeting
Community
Information
Anthony J. Tubiolo
Needs
reduced total emissions by seventy-one percent since 1987 (Exhibit 1). In 1998 a further twelve percent total reduction in releases to the environment was achieved. Despite this reduction, telephone surveys of KP neighbors in 1997 and 1998 reflected the lowest ratings ever received by KP for environmental performance (Exhibit 2). This perception is held along with the fact that ninety-one percent of those polled “said that Kodak’s environmental performance is the same or better than other U.S. companies”1
performance often seem to be lacking in the eyes of local communities? According to Cynthia Ames, Environmental Issues Coordinator, and the Technical Editor of Update, Kodak’s community newsletter, the public has continually increasing expectations. In this milieu, public perception and satisfaction levels decrease, or at least seemto decrease. Other reasons for decreases in public satisfaction are the influence of the media and environmental activist groups. These two groups often look at emissions data with an untrained eye and draw inaccurate conclusions, or greatly overstate the meaning of the data. These conclusions are often more widely circulated among the communi-
Why do companies with strong environmental management programs and good environmental
1998 SARA 313 Report Kodak
Park
Summary
(thousands of pounds) 1987
1993
1994
18,800 2,270 84 21,154
8,800 538
7,600 310 1 7,911
30
39 575 614
1995
1996
1997
1998
6,700 619 7,319
6,141 678 130 6,944
5,400 657 31 6,088
339 2,726 3,065
978 2,809 3,787
610 1,846 2,456
Releases:
Air Emissions Releases to Water Land Releases Total
Releases
Off-Site
0 9,338
7,600
540 1 8,141
0
Transfers:
Treatment Disposal Recycle/Recovery Total
Off-Site
Source:
Update,
NR
Transfers issue 4 October
30 1999.
Eastman
Kodak
612 426 1,038
400 320 720
Company
Exhibit 1
On a scale of 1 to 10 where 1 is unacceptable and 10 is the best it could be, please rate Kodak park on the following: Control
of:
1998 Telephone Survey Rewonses 5.5 5.1
Range
of Responses J1992-1998) 5.5 - 6.6 5.1 - 6.2 6.9 - 7.4 5.4 - 6.5 4.8- 6.0
Water Pollution Air Pollution Noise 6.9 Particulate 5.8 Odors 4.8 Despite the significant progress achieved in reducing KP emissions over the last ten years, public perception of KP’s environmental performance have declined in recent years. Source:
Kodak
Park Environmental
Annual
Report
1998,
page
10.
Exhibit 2
178
CORPORATE ENVIRONMENTAL STRATEGY
Anthony J. Tubiolo
Meeting Community Information Needs
ty or public than are the actual data or the company’s communications about the data. One vivid example of this in Kodak’s case is an article titled “Lasting Image: Kodak’s Fake Smile for the Cameras” which was published in May 1999 in a free weekly paper. This weekly advocacy paper has the potential to reach many more Rochester residents than Kodak’s information, like Kodak’s Update, which is sent to only 13,500 households.2 In this article, the author took shots at the company’s environmental performance and associated risk to the community, local workforce downsizing, and corporate management. The impact of print pieces like this is immeasurable.
Communicating
with the Public
Since 1986 when Congress passed the Emergency Planning and Community Right-toKnow Act (commonly referred to as SARA Title III) effective communication with the local community has become increasingly important to all firms. SARA Sections 311, 312, and 313 require companies to make publicly available information regarding the risks of hazardous substances produced and used at local facilities, as well as the type and volume of chemicals released. The availability of this information has forced companies to become responsive to the demands of communities, the media, and environmental groups.
Situations such as this are highly beneficial to corporations, because they can be a main driving force behind the environmental performance of corporations. The point of the beneficial aspects of external pressure is well stated by Joan Bavaria, President of Franklin Research & Development Corp., and CoChair and CEO of CERES: “The adversarial climate of the past was fueled by lack of information. Environmentalists often did not understand challenges that business faces in balancing multiple interests, such as the environment, job creation, and financial survival, and business often chose to ignore the environmental consequences of its actions. Information and a complete accounting system can bring more understanding of these challenges to all sides of the debate. There is a natural tension between various competing interests, but that tension does not have to be destructive: it can be creative.“4
James Salzman, at American University’s Washington College of Law addressed the importance of the TRI and other methods of reporting releases in a recent G%Sarticle. Salzman states:
In what ways should a company communicate with the public? One way is to issue various forms of environmental reports and send them out to the community. Almost all major corporations produce at least an annual environmental report, and many use more frequent communication forums. Whatever frequency and forum a company decides to use to communicate environmental information to the community, the content of the communication must be appropriate. Laurence Mach, creative consultant and partner at Laurence and Susan Mach Creative Services, Inc., has said:
“. . .major corporations, confronted with publication of their annual releases and the reactions of local communities, have pledged significant reductions in toxic emissions and commenced intensive waste reduction initiatives. Major environmental groups annually publish lists of the 500 largest industrial polluters. Such pressure led companies such as Monsanto and AT&T to pledge pollution reduction of over ninety percent within short time periods.“3
“...the content issue [of a company’s environmental and safety report] becomes thornier as you confront dealing with your company’s environmental and safety liabilities, operational problems, fines, penalties, and the like. Should you present ‘warts and all’ and let the chips fall where they might? Should you try to explain or rationalize problems? As far as many stakeholders are concerned, your report should lay out the facts that surround a noncompliance prob
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lem, an environmental accident, or penalty without arguing the case.“5 Some companies, such as Kodak, have found that the best strategy is a policy of openness and voluntary disclosure of all environmental, health, and safety matters. Kodak’s website is an excellent source of information regarding its environmental performance, and even it’s shortcomings (Exhibit 3). As explained on Kodak’s website, “probably the most visible way Kodak Park communicates with the community is through its Update newsletter. Five times a year this publication is sent to approximately 13,500 plant neighbors and 12,000 KP employees in an effort to keep people informed about developments at Kodak Park.” One of these five issues is an environmental annual report. Also, once a year a survey is included in Update to get feedback from the community. Update is sent to the neighborhoods that have called KP’s Environmental Concerns Line the most frequently. This allows the newsletter to reach the prime target audience-truly concerned citizens. The first issue of Update was published in 1988, and since then has helped Kodak Park respond to pressures from the press, the community, and major environmental groups to communicate its actions regarding emissions and waste. Kodak voluntarily reports emissions and environmental performance in this newsletter, as well as plans for emission reductions. The philosophy behind selfreporting to the public is to address the public concerns openly, accurately and in a timely way. In a conversation with Cynthia Ames, KP Environmental Issues Coordinator, she stated: “we have never run into a problem by providing too much information.” Other ways Kodak Park responds to community concerns is through a Neighborhood Information Center and the previously mentioned Environmental Concerns Line. The public can call these phone numbers to obtain answers to questions or to get prompt attention to health and envi180
Anthony J. Tubiolo
ronmental concerns. Since 1988 the concern calls to Kodak Park have reduced in severity from health concerns to quality of life issues (mainly regarding noise). This is an indicator of the success of Update in informing stakeholders in the community.
“. ..we have never run into a problem byproviding too much information. ” Kodak Park is also involved in community concerns through a Community Advisory Council that meets monthly and Neighborhood Leaders meetings, which are held every two weeks. The Community Advisory Council is comprised of sixteen members “representing local government, school districts, environmental groups, plant neighbors, and area high schools.” (For more information on community advisory panels, please see John Milliman and Ann Feyerherm, “Responding to Community Expectations on Corporate Environmental Performance: How to Develop Effective Citizen Advisory Panels,” CES (1999) V6N2, pp. 164174.) The Neighborhood Leaders Meetings delve into more specific details “of issues raised by the neighbors as well as topics suggested by plant management.“6 Kodak also has a comparatively strong environmental management system. The company is a founding member of the Global Environmental Management Initiative, follows the Responsible Care program established by the Chemical Manufacturer’s Association, is IS0 14001 certified, and won the 1999 World Environmental Center’s Gold Medal Award. Third party audits of Eastman Kodak Company’s Corporate Health, Safety and Environmental Assessment Program have been quite favorable. In 1993, McLaren Hart’s audit summarized that “the Kodak HS&E Assessment Program is one of the better programs in the industry.“7 In 1997 Environmental Resources Management, Inc. evaluated the same program at Kodak and stated, “the program provides compeCORPORATEENVIRONMENTALSTRATEGY
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Kodak Fines and Penalties 1997 Our Policy is to carry out our business activities in a manner consistent with sound health, safety and environmental management practices, and to comply with all applicable laws and regulations. Given the complex nature of today’s regulatory arena and the size and complexity of our operations, we believe our compliance record, while extremely good, also shows the need to continue to improve. February 28, 1997 RCRA assessment against Kodak Park for self-reported non-compliances from ‘91-‘96 --$90,000 March 18, 1997 Illinois Dept. of Transportation for violation of hazardous materials transportation regulation $750 September 30, 1997 TSCA fine for failure to submit timely pre-manufacturing notice (PMN) - $1,575 December 19, 1997 TSCA fine for failure to submit timely notice of commencement for a new chemical substance $1,105 1997 Super-fund Liability Kodak has been designated as a potentially responsible party (PRP) for possible assessmentand cleanup costs at approximately 25 Super-fund sites. At each of these sites, the company’s actual or potential allocated share of responsibility is small. To date, settlements and costs paid in Superfund matters have not been material; future costs are also expected to be material to the company’s financial position. Kodak Fines and Penalties 1998 April 1998: Illinois Department of Transportation civil penalty for alleged failure to provide Kodak’s carrier of hazardous materials with proper placards. $2,250. December 1998: Massachusetts Water Resources Authority for alleged violations of sewer use regulations and permits regarding discharges from Qualex, Inc. photo processing operations. $10,500. 1998 Super-fund Liability The company is potentially responsible under the Superfund law or similar state laws at approximately 15 active sites. The total future costs for these sites are not expected to exceed $5 million. Source: http://www.kodak.com/uS/en/corp/environment/performanes/index.shtml Exhibit 3
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tent, reliable, and objective information to management about the status of the Company’s HSE compliance programs and performance,” and “a number of program elements.. .are quite advanced when compared to practices in other companies.“s Notwithstanding Kodak’s continually improving environmental performance, community concerns about KP’s impact on the environment are not without cause. According to the 1998 Federal Toxic Release Inventory (TRI), Kodak Park is New York State’s third largest polluter releasing approximately 6.1 million pounds of reportable chemicals to the environment (Exhibit 4 shows KP’s ranking in the 1998 TRI). All in all, the Environmental Defense Fund ranks Monroe County among the dirtiest/worst ten percent in the United States.9 This ranking is primarily attributable to Kodak Park’s large emissions.
Responding
to a Recent Problem
A recent issue for Kodak Park is the August 1999 penalty of $775,000 that it paid to the New York State Department of Environmental Conservation (DEC) for environmental violations between 1993 and 1999. Violations included inadvertent bypass of carbon absorbers and subsequent release of more than 60,000 pounds of VOCs in 1995, exceeding
rap 10 Polluters in New York State Accordiq To The 1998 Toxic Release Inventory
1 2 3 4 5 6 7 8 9 10
Company ZCA Mines CWM Chemical Services Eastman Kodak Co. Finch, Pruyn & Co. C.R. Huntley Steam Station Dunkirk Steam Station Russell Station AES Somerset Samuel Carlson Generating Danskammer Generating
Source:
N.Y. State Department
of Environmental
Exhibit
182
Millions
4
Conservation
of Pounds 10.1 6.2 6.1 5.9 2.9 2.4 1.8 1.8 1.7 1.5
smokestack smoke density limits, incinerating groundwater contaminated with PCBs without a permit, failure to submit a NOx monitoring plan on time, storing unmarked containers of hazardous waste, discharges of untreated wastewater to the Genesee River during severe rainstorms in 1996, and miscellaneous record-keeping and other administrative errors. The fine came as part of a Consent Order in which the DEC required Kodak to address odor problems and emissions at its wastewater treatment plant and to control the density of smoke from its generating plants. National newspapers such as the New Ywk Timesexplained that Kodak did not admit or deny these alleged violations, but that Kodak simply waived its right to a hearing and agreed to comply with terms of the settlement.10 As Andrew Kreshik, DEC Director of Regional Enforcement Coordination, states, “ninety-nine percent of the time a Consent Order allows the violator to avoid publicly admitting wrongdoing.“11 (It also avoids the need to be cross-examined concerning alleged violations/practices in a public hearing) For Kodak, however, avoiding public admission does not seem to be an objective. In fact, the opposite seems to be true. Kodak responded to DEC’s fine and Consent Order by openly addressing the violations in the October 1999 issue of Update. In that issue David Kiser, Director of Health, Safety and Environment for Kodak Park was quoted concerning the consent order: “While most of the alleged violations were selfreported incidents, we did not hit our target, which is 100 percent compliance with environmental regulations. At the same time, keep in mind that Kodak Park has a stringent self-monitoring and self-reporting system. This action covers several years of self-reported violations at one of the country’s largest industrial complexes.“12 The complexity of being fully compliant, while meeting aggressive corporate environmental goals (see Exhibit 5) continues for Kodak, as does communicating the results of those efforts to the public. CORPORATE
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Anthony J. Tubiolo
Kodak’s Worldwide Corporate Environmental Goals Building . . . . . .
on the last ten years of progress, we are now committed
to achieving,
by January 1,2004:
A further reduction of 50% in air emissions of methylene chloride, bringing the aggregate reduction in these emissions to more than 90% since 1988. A 40% reduction in emissions of 30 chemicals on our priority target list, bringing their aggregate reduction to 70%. A 25% reduction in manufacturing waste-less waste of all types means less environmental impact. A 15% reduction in water usage. A 15% reduction in energy consumption. A reduction of 20% in emissions of carbon dioxide-the major “greenhouse gas” linked to global warming. This reduction will be achieved through energy conservation and by converting the fuel for one Kodak Park power plant boiler from coal to natural gas.
Source: Kodak Park Environmental
Annual Report
1998.
Exhibit 5
The Role of Employees Employees are a sometimes-overlooked group with a stake in a company’s environmental performance. Employee productivity and satisfaction, as well as employment security are influenced by corporate environmental performance, not just by salary and benefits. “A new corporate environmental strategy can capture the hearts and minds of employees,” saysSteve Percy, former Chair and CEO of British Petroleum America. Percy explained that BP had faced a similar situation to that of Kodak Park, in which a large number of employees were cut from jobs. [Ed. Note: Please see Percy’s “Concluding Remarks” in this issue of CES.] He feels however, that strong communication of a company’s environmental improvement can help raise spirits within the facility and the local community. Percy also believes that employees contribute to more than just corporate profit - if they are encouraged and given the chance they can contribute to superior environmental performance.13 An implementation strategy he suggests is reflecting employee contribution to environmental goals in salary Vol. 7, No. 2 2000
bonuses. Kodak has a program for this type of compensation called the Management Performance Commitment Process. A potential future strategy for KP’s environmental improvement would be to integrate this program from top to bottom throughout the company, rather than applying it just to HSE managers. When employees are given encouragement, they may see and openly communicate opportunities for improvement in safety, health, and environmental operations, which are not obvious to management. The bottom line: communication is of key importance for a corporation’s environmental reputation. Companies like Kodak with strong environmental leadership must share performance information with the public in every way possible. William K. Reilly of the Texas Pacific Group and Former Administrator of the U.S. EPA explains the benefit of a strong reputation for environmental performance: “I can recall instances where something went wrong at a good company and regulators and enforcers gave the corporation the benefit of the doubt.“14 Weak communication of environmental performance risks harsh judgment in the 183
Meeting Community Information Needs
unforgiving court of public opinion when an accident does occur. The ideal is for all facilities to become a “‘boundary-less’ plant where information, understanding, concerns, and people flow freely between the plant and its surroundings.” This, coupled with a goal of corporate environmentalism - “an attitude and performance commitment that place corporate environmental stewardship fully in line with public desires and expectations.. .by going beyond regulations and reducing the environmental impact of products and processes voluntarily”15 - is what it takes to satisfy the pub lit’s expectations.
Anthony
Managing
an Effective Environmental
J. Tubiolo
Strategy, McGraw-Hill,
1996. 5. Laurence Mach, “Practitioner Insight on Environmental Reporting,” in Bruce Piasecki, Kevin Fletcher, and Frank Mendelson’s Environmental Management
and Business Strategy: Leadership Skills
fm the
21st Century, John Wiley & Sons,1998.
6. Kodak Park Environmental Annual Report1998,page 10. 7. McLaren Hart, 1993 Evaluation of EastmanKodak Company’s HS&E Assessment Program, Executive Summary, in Measuring Corporate Environmental
While information disclosure can help, in part, to meet those public demands, the weight of historic environmental performance and the reputation it brings to a company illuminates the need for a persistent and complete environmental communications strategy. Kodak Park, through targeted communications, community participation, and open information disclosure has embraced this more complete and dynamic strategic response in order to break free from the weight of past mistakes. ;Y
Perfmance: Best Practices for Costing and Managing an Effective Environmental Strategy, Marc J. Epstein, McGraw-
Endnotes
20, 1999.
Hill, 1996. 8. Taken on February 20th, 2000from Kodak’swebsite www.kodak.com.
9. Pleasesee: www.scorecard.org/env-releases/ranking. tcl?fips_county_code=?36055 10. “Kodak to Pay Penalty,” The New Ywk Times, August
1. Kodak Park Environmental Annual Re@rt 1998,page 10. 2. Jack Bradigan Spula, “Lasting Image: Kodak’s Fake Smile for the Cameras,”City Newspaper, Rochester,NY, May 19-26,1999,page 4.
11. From phone conversationon October 27,1999. 12. Kodak Park, Update community newsletter,Issue4, October 1999,page 4.
3. James Salzman, “Environmental Protection Beyond the Smokestack:Addressing the Impact of the Service Economy,” Corporate EnvimnmentalStrategy: Elsevier’s Journal of Environmental Leadership, V7Nl.
13. From a presentation at RensselaerPolytechnic Institute, Troy, NY, November 1, 1999.
4. Taken from Marc J. Epstein’sbook Measuring Cor,$orate
15. E.S.WoolardJr., Chairman and CEO, E.I. duPont de Nemours& Company.From Epstein seeEndnote 6.
Environmental
184
Performance: Best Practices for Costing and
14. PleaseseeEndnote 6.
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