Abstract
Small and medium-sized enterprises (SMEs) play an important role in the development of the country. The study explores environmental Practices in the import- export sector in Moradabad and highlights the potential avenues for achieving environmental sustainability. Academic emphasis is needed in this field to help practitioners with guiding implementation. It is an effort to gather information about the level of responsiveness in the manufacturing sector in Moradabad based on the longitudinal field study from July 2015 through November 2016. Further, to gain an in-depth understanding, a qualitative study was conducted in the form of semi-structured interviews with HR managers responsible for environmental management in manufacturing units. The research is more objective in nature because of field observation and is not based on perception or experience. Furthermore, the research is original in nature and is undertaken to explore the role of HRM in SMEs towards environmental sustainability. The key finding as quoted by managers was that they see their firm at an awareness level and discussed that not all workers are aware of the health benefits of environmental sustainable practices in the firm, thus posing a threat to implementation. Rewards and compensation were not reported to be linked to pro-environmental behaviour or even wastage reduction done by employees, but were found to be directly linked to the revenue generated by the respective teams on an annual basis. It was further observed that environmental initiatives were a result of pressure from buyers of different countries and were not implemented categorically under Environmental HRM. Recommendations and implications for HR managers are discussed at the end of the study, which rationalises the purpose behind conducting research.
Keywords
Introduction
Most of the companies listed in Fortune 500 companies share their environmental performance, but the execution of environmental performance in SMEs is not disclosed. India has a large number of SMEs and its adverse effects on environmental pollution cannot be ignored. The share of MSMEs in GDP in India is approximately 30% and, in state-wise distribution of enterprises, Uttar Pradesh is at top position, covering 14% alone (Gupta et al., 2018).
Sustainability is now a matter of concern for the whole world. The depletion of non-renewable resources at the current pace would disturb the environmental, as well as financial stability (Hawken et al., 1999) of companies’ and is expected to hamper the manufacturing sector more because of their high dependency on non-renewable resources.
Andriate and Fink (2008) discussed the triple bottom line for companies to achieve competitive advantage. Following the trend across the world, the manufacturing sector in India has also introduced Kaizen and 5S to reduce waste and maximise profit. Sustainability is an imprecise term that has evolved since its application in the contexts of the environment and population growth.
The three E’s, equity, economics, and environment, are often termed the triple bottom line. These three pillars of sustainability are also known as the planet, people and profit (Elkington, 1998). Our earth’s system is a complex adaptive system as its components are interlinked. Disturbing any component by human activities may result in destruction. One such component is the average temperature of our planet, and a slight shift in temperature results in climate change, floods, volcanoes, etc. A special report by IPCC (2013) on why it is necessary to maintain a global temperature rise below 1.5 degrees Celsius is enough to emphasise the importance of maintaining the average global temperature of our planet, and therefore the need to monitor the cause of these adverse impacts.
Changes in the natural environment have increased over the last few years and have caused much destruction, like climate change, heavy storms, unpredictable droughts and rains, causing much damage to agriculture. The effect of the climatic changes on agriculture is drastic and it has badly affected India because of the country being an agricultural land. India, being a developing country with agriculture-based economy, is vulnerable to these adverse situations and prone to climate change. Companies are causing the depletion of natural resources and emission of huge amounts of GHGs. There is a direct link between levels of GHGs and climate change. Human activities causing GHGs emissions are one of the significant factors in climate disaster. Most countries have increased carbon dioxide emissions since 1990, and so has the frequency of climate disasters. The composition of carbon dioxide and such GHGs in the atmosphere has increased since the industrial era (IPCC, 2013).
To sustain business for longer duration, and considering the coming generation needs, it is essential for any business to implement environmental sustainability. The unnecessary depletion of natural resources is posing a danger to further use and has also increased the frequency of natural calamities. The earthquakes, floods and hurricanes of recent years indicate a serious situation caused by human beings. Organisations, especially manufacturing sectors, are largely dependent on natural resources like coal, natural gas, underground and fresh water, metals, such as iron, brass and aluminium, etc. The irrational use of these resources will destroy the ecological as well as financial sustainability of these sectors. It is therefore required to pay attention to environmental sustainability if companies want to sustain long-term benefits. There is upraising in environmental concerns in both the manufacturing and services sectors in India. The need in the manufacturing sector is felt even more because of waste generated, harmful chemicals to the environment and society and the consumption of non-renewable sources at a larger scale. The increase in Air Quality Index has put a lot of pressure on the corporate sector to regulate their emissions and hazardous discharges.
Objectives
The following research questions are addressed in the present study:
Comprehensive overview of the role of HRM in Environmental Sustainability through existing conceptual models The extent of implementation of Environmental Sustainability and the role of HRM for implementing it in SMEs in one of the developing countries.
Literature Review
Sustainability
Sustainability is continuing for a very long term; it may also be referred to as systems and operations that endure and persist for a longer duration. Sustainable, as an adjective, is ability to continue without failing (Robertson, 2017). The attributes of sustainability are social, economical and ecological. All three attributes of sustainability are interconnected, and no single problem can be fixed in isolation. Social sustainability is improving the living conditions of all, economic sustainability is stable and progressive growth of economy globally, ecological sustainability is protecting environment and using natural resources in a sustainable way.
Environmental Sustainability
There is no one precise definition of the term, environmental sustainability, and it has been used in a variety of ways. Environmental sustainability is a vast term and one of the important parts of sustainable development. Brundtland’s (1987) definition of sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Thus, environmental sustainability can be defined as maintaining the quality of air, water, soil and quantity of natural resources for future generations. The Bruntland Commission is often termed as the World Commission on Environment and Development (WCED). Discussion about sustainability was fuelled by the Brundtland Commission of the United Nations. The Brundtland Commission took a broad view of sustainable development which was ‘global, long term and took into account a variety of stakeholders’. The aim behind the formulation of such a commission was to help countries towards sustainable development together. The term, environmental sustainability, can also be defined as maintaining the balance of nature as it was created without compromising with the development. Human beings are not sustainable on this earth forever because resources are growing arithmetically, whereas the human population is growing geometrically (Malthusian cycle).
Environmental Sustainability and HRM
HRM plays an important role in the sustainability of organisations (Järlström et al., 2018). Dubois and Dubois (2012) highlighted three factors that pressurise organisations for environmental sustainability—limited sources of natural resources, stakeholders’ expectations and radical transparency. Jabbour et al. (2013) studied the relationship between human resources and environmental management at 75 Brazilian companies and concluded that HRM relates positively to environmental management. To compete globally, SMEs need to invest in HR practices for the implementation of change required. Employees, irrespective of any business size and type, are vital to meet the objectives of an organisation, and the Human Resource Department plays a key role in managing employees in any organisation is.
Sustainable HRM has been used to refer to social and human outcomes that contribute to the continuation of the organisation for a long time, which leads to a sustainable organisation. A number of terms that have been used to link sustainability and HRM activities are as follows—sustainable work systems (Kira et al., 2002), sustainable management of HRs (Ehnert, 2006) and sustainable HRM (Mariappanadar, 2003, 2012). There is a growing concern about the impact of HRM policies on social and human aspects, environment, etc. (Mariappanadar 2003, 2012). Some of this literature also acknowledged that ‘HRM practices will influence the extent to which people are attracted to work for an organisation or to purchase its products and services’ (Jackson et al., 2011).
Role of HRM in Environmental Management: Environmental HRM Functions.
The role of HRM is essential in every activity of an organisation whether it be TQM or Environmental Management. Wehremeyer (1996), in his book, has categorised Environmental HRM functions into three parts as mentioned in Table 1. The first broad category is supplying competent staff in which job description, recruitment, induction and dismissal is covered. Job description includes job duties and responsibilities; job duties mentioned should cover how the amount of emissions should be controlled and what prevention measures employees need to take. Job responsibilities need to disclose the amount of emissions to which employees are expected to be exposed. The second broad category is managing staff, and the third broad category is promoting organisational dynamics.
Manufacturing Industries of Small and Medium Enterprises
Over the last few decades, micro, small and medium enterprises have contributed significantly to the country’s economic and social growth by creating the most job opportunities, second only to agriculture in India. MSMEs are meeting the demands of local and expanding businesses globally. With all the positive features, there are neglected and adverse effects on the environment. Manufacturing firms have evidenced the negative effects on environmental sustainability due to misuse of non-renewable resources, mismanagement of waste generated and environmental pollution. The drastically changing climate, global warming, ozone depletion, melting of glaciers have brought much attention to the neglected environment. Technological advancements and globalisation have brought tremendous change to the manufacturing sector. Growing technologies need to be monitored by the human resources department for their effective and safe use in society as well as the environment. Greenhouse gases such as CO2 (carbon di oxide) and CH4 (methane) are associated with human activities such as industrial production and fossil fuel burning. Moreover, SMEs bring employment opportunities to rural people, which is the need of developing countries.
India is one of the growing hubs for investors and buyers in the manufacturing sector because of labour cost and easy availability of labour. Hard-good industries of India are well known across the globe for their handicraft products, which are practiced by generation of artisanusing processed wood, metal, stone and fabric to create attractive designs. Hard-good products, many of which are handcrafted, have increasingly become lifestyle statements for international as well as national buyers. These SMEs also hold the potential for employment generation for local artisans. With all the policies and initiatives of the Indian government, much attention is paid to the manufacturing sector (IBEF, 2021). The industries chosen from the belt were having artisans well-known for brass work. X and Y Ltd., the companies under study, were established in 1996 and 2001, respectively, and have emerged as reputed manufacturers since then. The companies manufacture handcrafted products and are shipping all around the world since then. They are ISO 9001:2015 certified companies, which is an international standard signifying the maintenance of quality management in a company and is headquartered in Geneva. These industries comprise mainly of wood, metal, stone and fabric processing. These items are categorised as cost & cosy or clean & punch, attracting consumers of different taste.
Existing models relevant to this study for the implementation of Environmental Sustainability as illustrated in Figures 1, 2 and 3.
Overview Model of Environmental HRM Practices.
A Three-stage Model for Environmental Sustainability.
Implementing Environmental Policy for Continuous Improvement.
Jabbour and Santos (2006) as depicted in Figure 2, described a three-stage model for environmental sustainability in organisations. The first stage is the reaction of an organisation to environmental regulations, where the company either complies with the legislation or influences its regulatory environment. The second phase, as discussed, is focussed on preventing harm to the environment. The third and final stage in the model is taking proactive actions and ensuring environmental sustainability for the long term.
Research Methodology
On the basis of literature review and a longitudinal field study from July 2015 to November 2016, six open-ended questions were framed and the qualitative data was collected through telephonic interview. The questions were drafted keeping in mind environmental sustainability and Human Resource functions. The motive behind this was to extend the idea gathered during the observation and to gain an in-depth understanding of the implementation of environmental sustainability practices. In the initial phase, direct observation was used for data collection, and the author was Compliance executive in one of the companies. The research was exploratory in nature because the data for the hypothetical formulation does not exist in the literature. Longitudinal field study is one form of gathering in-depth studies from the organisation (Ahlstrom & Karlsson, 2009).
The application of environmental sustainability in Indian SMEs is not discussed, so adopting the field observation method was very rationale for this study. The second phase was an interview with the HR manager to avoid the researchers’ biases. Due to the vast inside knowledge, the quality of the data is increased. The study is based on observation and thus relies on semi-structured interview to support conclusions. The widely used method for qualitative data collection is observation and interview method (Creswell, 2007), which justifies the method selected for the study.
Findings
On the basis of field observation, the following information was gathered:
Both companies were similar in nature, and the operating procedures were approximately similar. Notable differences between the companies are mentioned in Table 2. Every international buyer has separate departments such as H&M, WSI and TARGET. Within each such department, there are sub-departments for handling sample and quotation, production team, logistics and sustainability teams. At the end of the financial year, every company is rated based on its performance in terms of on-time delivery, meeting sustainability criteria and quality of products delivered. At the sampling stage, only risk analysis of the product is done according to the buyer’s standard. One of the key messages from the H&M buyer was that sustainability drives business performance. Notable working areas in the field of sustainability from different buyers in companies were: ETP functionality, securing complete worker strength, safe chemicals and chemical handling and training in concerned areas in which code of conduct and code of ethics are also covered. Overtime data is prepared on a monthly basis, which gives the company a direction for ethical and social sustainability. Buyers categorise performance into quality, on-time and sustainability. An annual result is given to all the manufacturers, and business is increased if they get a platinum score, which is the highest score.
2.
Companies X and Y were Interviewed and the Following Insights Were Obtained from the Respective Managers.
It was quoted that first comes awareness, then implementation, which is followed by the level of achievement. The managers have judged their firms at the awareness level and discussed that all workers are not aware of the health benefits of environmental sustainability. Rewards and compensation were not reported to be linked to wastage reduction of workers or employees and were directly linked to the revenue generated by the respective teams on an annual basis in both the firms.
Discussion and Conclusion
The research work concludes that the linkage between environmental sustainability and HRM is inadequate theoretically as well as practically. The managers were aware of the role of HRM in supporting environmental management, but no such work was carried on. Employees were less motivated to implement environmental sustainability practices because of a lack of awareness and adequate knowledge, and were not aware of the impact of harmful emissions on the environment, leading to climate change and environmental disasters. It was quoted by company X that we are in the awareness phase and different training programmes are conducted as suggested by the buying house. Company X considered environmental management as a part of HRM and Chemical Management System as a sub-part of environmental management. Y Ltd. company has an environmental vision and environmental training, but it does not specifically address environmental sustainability. The research findings emphasise that environmental sustainability implementation is based on meeting the compliance of different buyers. Various programmes under environmental sustainability, such as environmental training (reduction in power consumption, reusing paper, 5S training for reducing waste, etc.), are implemented in both the firms under study but not distinguished under environmental sustainability. To summarise, the manufacturing companies covered under the case study have environmental initiatives but not strictly under the label of Environmental HRM. These initiatives were a result of pressure from buyers from different countries, and to comply with their compliance, manufacturing units were implementing environmental practices. As there are no such environmental HRM practices in SMEs, quantitative research in these enterprises is difficult to conduct.
Benefits of Implementing Environmental Sustainability
Implementing an environmental management system is beneficial to companies, as acknowledged below:
Waste minimisation and increased productivity Increase in business partners across the world Easy management of resources and employees
Sustainability concerns are essential to the operations of contemporary organisations. Research conducted in various countries concluded that environmental practices improve company performance and provide a competitive advantage to the firm.
A three-stage model for change process in organisation as discussed by Lewin in 1947—unfreezing, changing through cognitive restructuring and refreezing. Based on the existing change process model and field observation, we propose a five-stage change process for implementing environmental sustainability.
Implications for HR Managers
The need for validated instruments for evaluating the training developed was further discussed in both the firms. Every company needs to analyse their training needs and design training programmes that are easily implemented. Perron et al. (2006) emphasised the importance of environmental training and concluded that every organisation needs customised training programmes. Despite all the challenges and India being prone to climate disasters, there exists a lot of potential for non-renewable resources in India, such as solar energy, wind energy, etc. The price of solar energy is half that of coal energy and is much more economical and beneficial to the environment. The five-stage process based on change process (Lewin, 1947) can be helpful to companies in planning and implementing five-stage processes in their respective firms for environmental sustainability as illustrated in Figure 4. It can be concluded that buyers are not only interested in quality, rather are equally concerned with the performance and environmental sustainability of companies as well. Every buyer’s business plan of is based on the performance of quality, on-time delivery and social and environmental sustainability. To match global expectations, HR managers need to pay equal attention to the performance of employees in the direction of environmental sustainability. Linking monetary rewards to employees’ performance towards environmental sustainability and wastage reduction would help HR managers in achieving the desired outcomes.
A Five-stage Process to Implement Environmental Sustainability.
Recommendations for Future Research
Sustainable living is no more an option but a necessity, and so is the need for environmental sustainability. Application of sustainable and ethical aspects in emerging hard goods industries will help to increase awareness among employees and market share in local and global markets as global demand for sustainable and ethical products grows. As a result, it is a good idea to look at other rising SMEs in India and explore if there is a way to transform them into viable businesses.
Limitations of the Study
The research work is based on field observation and semi-structured interviews from only two organisations, which means it cannot be generalised for the whole population. Field observation was not available in other targeted SMEs and visitors were restricted from visiting the sites, which is one major limitation of the study. A conclusive study can be a possible extension based on data analysis and testing hypotheses such as the extent of the impact of the Human Resource Department in implementing environmental sustainability. There was no such control group in the organisation, and thus the impact of change over a period of time was not calculated. In future, an empirical data-based research can be a possible extension of this qualitative study.
