Environmental management in China

Abstract: In this study the aim was to investigate and nuance how the Volvo Construction Equipment (VCE) production Hub can evolve their environmental work, at Chinese wheel loader producer Shandong Lingong (SDLG), to reach Volvo standard. The study also aimed to investigate what international companies in China should take into consideration in their environmental work. The work was carried out by answering the following research questions; In which way or ways can the VCE Hub at SDLG evolve their environmental work to reach Volvo standard? What should international companies take into consideration in their environmental work when establishing on the Chinese market, and why? A lot of the information in this Thesis is based on empirical data, i.e. interviews. Three interviews with Swedish companies have been carried out. They are all highly valuing Environmental work but use different methods, their situations are unlike and they produce diverse products. Several interviews with people working with environmental issues in different ways have also been done, as well as with the SGS; a Chinese certification body. Three different companies with production in or around Shanghai were chosen; Volvo CE, SKF, and Sandvik. All three companies are originally Swedish but with production in China. Environmental work is highly prioritized in Sweden and the companies have global environmental policies and goals. The three companies were chosen because they are in different production areas but they are striving in the same direction with environmental issues in China. They are working differently and their situations are of various kinds. In 2006 Volvo CE invested in a Chinese wheel loader producer named Shandong Lingong. Volvo CE has a Hub, at the plant, which runs independently. SDLG are still not ISO 14001 certified and do not have an environmental management system (EMS) that is conformably with the Volvo demands. The most important to take into consideration when doing business in China is according to the study; top management support, to do training for the employees, mediate the importance of awareness, and to have knowledge about Chinese regulations. These are some of the issues International companies have to deal with when doing business in China. A well established EMS is a necessity for a good environmental work. To implement an EMS in the Hub as a pilot project is the best solution according to the information gathered in this thesis. SDLG could be a part-, they can evaluate-, and later it could be possible to implement the process in the whole SDLG. Due to this methodology they will learn how to work according to Volvo requirements and obtain benefits of an implementation. There are three different alternatives for the ISO 14001 certification of the Hub according to this work. For the Hub to be ISO 14001 certified together with another Volvo plant seems to be the best alternative thought it reduces the amount of work with legal authorities. VCE’s EMS will also not be compared with SDLG and it will be moneysaving. The policies and Environmental aspects (EA) though have to be rewritten to be suitable for both the factories.