Environmental Management Expenditures: Assessing the Financial Returns from Structural and Infrastructural Investments



Management research on green operations has continued to evolve to consider a broad range of management decisions, programs and technologies that contribute to greener operations. After briefly tracing earlier research that explored whether it pays to be green, this presentation uses a multi-dimensional definition of environmental expenditures to examine implications for performance.  Multi-year data drawn from several Canadian government databases provided the basis for assessing the financial implications of increased levels and varying allocations of environmental expenditures, and expanding the range of management tools employed. Overall, management practices, including environmental monitoring, assessments, auditing, administering environmental programs, and environmental training, emerged as a key lever in improving manufacturing performance. Both increasing expenditures of and a greater allocation toward management practices yielded positive financial returns across several specific cost and inventory metrics.  Finally, I conclude by extending from these results to emerging areas of sustainability-related research in operations management.
Robert D. Klassen is a Professor of Operations Management and J.J. Wettlaufer Faculty Fellow at the Ivey Business School, University of Western Ontario, Canada.  Klassen’s research explores the multi-faceted linkages between the natural environment, social issues and firm performance, termed the triple bottom line, with a particular emphasis on the pivotal role of manufacturing operations.  He has over two-dozen publications in such journals as Management Science, Journal of Operations Management, Academy of Management Journal, Production and Operations Management, International Journal of Operations and Production Management, and other management journals.  At Ivey, he has taught the core Operations Management course in the MBA and EMBA programs, as well as electives in Sustainable Development, Services Management, Operations Strategy and Technology Management.  He has recently coauthor two textbooks, Foundations of Operations Management (Canadian ed.), and Cases in Operations Management: Building Customer Value through World-Class Operations.  He has also written over 25 cases and simulation exercises in the areas of operations strategy, process analysis, and sustainable development.
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Rob Zuidwijk