Module 9. Practice: business and environment

Industrial ecology

Environmental management

Environmenal management systems (EMAS and ISO 14000)

Environmental performance indicators

Ecobalance

Life Cycle Assessment

Environmental reporting

“Greenwash”

….and, from the demand side: ethical consumption, public actions, boicot

Industrial ecology

How to relate the theoretical framework of ecological economics paradigm to the business framework?

Industrial ecology = connection to the theoretical framework of ecological economics

Analyse an industrial system as a methabolism (use of a metaphor):

look material and energy flows that is, look at real, non-monetary processes

Differences from a natural methabolism:

linearity of the industrial processes rather than circularity (closing the circle)

use of exosomatic energy (especially non-renewable)

“survival of the fittest” based on max profit, not on max I/O energy efficiency

(I/O energy efficiency not accounted for as externalities are not internalized)

Industrial ecology

Representing the metaphor with a natural methabolism and the differences

Optimize I/O efficiency where I and O are monetary benefits and costs

Industrial “line” of an open system

Industrial processes

Natual cycle of a closed system

Optimize I/O efficiency where I and O are energy and materials

Entropy increase, disequilibriums, pollution, death

I

I

II

O

O

O

O

wasteInput

Output

Industrial ecology

Central points:

•Analyse economies from the point of view of system theory, recognising complexity of the relationships with the biosphere

•Try to imitate natural systemsclose cyrcles: the waste of an enterprise, can be a resource for another, like in nature;use of renewable energies;optimize energy and material efficiency…

•Consider technological dynamics as internal factors of analysis (most conventional economic models consider technology as given).

in fact not only negative externalities should be accounted for, but alsonew clean technologies should be supported against barriers to entry in the markets

Environmental management (source: EEA)

Environmental management is a management of those activities of a firm that have or can have an impact on the environment. Why having environmental management?

Cost savings (in process efficiency; prduct design; waste disposal; sourcing of rawmaterials; infrastructure; packaging and transport)Anticipating future legislationReduced environmental risk (financing, insurance, avoid social alarms and pressure)Improved public image, relations and market opportunities

How? Which tools?

Environmental policyEnvironmenal management systemsEnvironmental auditingEnvironmental performance indicatorsEcobalanceLife cycle assessmentEnvironmental labellingEnvironmental reportingEnvironmental charters

Environmenal management systems (EMS)

An EMS consists of a number of interrelated elements that function together to achieve the objective of effective environmental management. In EU, there are two systems, both voluntaryEMAS: only EU, not a standard but a regulation. More strict than ISO 14001: beyond an EMS, it also requires an environmental statement and a verification; peformance based

ISO 14001: international based, self-declaration or certification, management based

EMAS process:

•Define environmental policy

•Preliminary envronmental analysis (focus on: environmental impacts; energy, water, materials, waste and noise management; new production processes; product planning; supply chain env. practices; prevention of environmental hazards; emergency procedures; training, external communication)

•Introduction of an environmental programme and execution of environmental audit; objectives and targets setting

•Environmental declaration

•Certification

1 Environmental policy

2 Planningenv. aspects (significant or not?)

legal and other requirementsobjectives and targets

env. mngmt. programme

3 Implementation and operationstrucutre and responsibility

training, awareness and competence; communicationenv. mngmt sys. documentation

document and operational controlemergy preparedness and response

4 Checking and corrective actionmonitoring and measurement

non-conformance and correcective and preventive actionrecords

env. mngmt. audit

5 Mngmt. review

Continual improvement

Process of ISO 14001

Types of ISO 14000

ISO 14001, 14004 EMS and guidelines

ISO 14010,14011, 14012 Environmental evaluations

ISO 14020, 14021, 14022, 14023 Ecolabelling

ISO 14031 Environmentla implementation

ISO 14040, 14041, 14042, 14043 Life Cycle Assessment

Environmental performance indicators

Environmental indicators express useful and relevant information about a firm’s environmental performance and its efforts to influence its performance

•Operational Performance Indicators (energy use, waste production, emssions, water usage…)

•Management Performance Indicators (mngmt performance on objectives and targets; training; relative to monetary terms –i.e. finance; ...)

•Environmental Condition Indicators (contaminant concentration, bacteria, odour)

The indicators can be absolute; relative (ratios); aggregate (total); indexed and weighted (most significant…)

Ecobalances

A company ecobalance records the various raw materials, energy, resources, products and wastes entering a company over a specified period of time, i.e. it provides a record of a company’s physical inputs, stock and outputs

Inputs Stock Outputs

Land Land Land

Buildings Buildings Buildings

Plant and equipment Plant and equipment Plant and equipment

Product-related materials Product-related materials Products and solid waste

Energy Energy emissions

Water Waste water

Air Air emissions

Life cycle assessment

Life-cycle assessment is a systematic framework for carrying out an assessment of all of the environmental impacts associated with a product over its entire life cycle

Phases of a life-cycle:

Energy and material inputs

pre-production (i.e. purchasing, designing)production (i.e. manufacture)distribution (i.e. packaging and transport)usedisposal

Emissions and waste

Why doing it? Financial benefits, assessing design potential, marketing tool

Structure of LCA:

1 Goal and scope definition Interpretation2 Inventory assessment and3 Impact assessment improvement

Environmental reporting

An environmental report is a document which a company produces to inform stakeholders about its environmental performance

Characteristics: stand-alone, or annual; non mandatory, except for Denmark and some industries in Holland and Sweden; communication tool.

Steps:

1 Defne reporting objectives and the target audience

2 Determinate the content of the report (company profile, env policy, EMS, legal compliance, inputs, outputs, env objectives and targets, company env spending, env liabilities)

3 Identify data sources

4 Format the environmental report (reportying style, quantitative data, graphs…)

5 Standardise the reporting process

6 Evaluate the effectiveness of the report (reactive or proactive approach for feedback)

“Greenwash” and other problems

Environmental reporting can be misleading, there is no standard of application, absolute figures and not relative to environmental impacts, one sided, often a marketing and PR tool. Compare it with the requirements, control and liabilities of the annual balancesheet

The power of media communication, green campaigns compared to access to information

No control on who joins the World Business Council for Sustainable Development

Ecolabelling is relative: 5% to 30% of a certain category can be said to be “green” (even if is a polluting one)

EMSs should become compulsory (command and control policy) or, in alternative

polluter pays principle should be applied: polluter pays for ecolabelling of others (market based policy)

LCA is independent from effective willingness to improve environmental impacts; it can be used for its opposite goal: planned obsolescence

Ethical consumption

The power of consumers is in their wallets

Consumer’s push can lead to “greener” businessesbut lack of control and information is always a problem in global consumptionanother information problem: cheap price (known) vs. good quality (unknown)

Local based, direct consumption provides more control and information

Consumers’ cooperatives

Actions, campaigns, boicots as a “bottom-up” pression tool

Readings and websites

Baldo: Life Cycle Assessment (in Italian)

Maritano, Beltrano and Vesce: Environment & Company (in Italian)

Martinez-Alier and Roca: Economia ecologica y politica ambienta” (in Spanish)

Hopfenbeck: the green management revolution

Hutchinson and Hutchinson: Environmental business management

Reinhardt and Vietor: Business management and the natural environment –cases and text

European Environmental Agency: environmental management tools for SMEshttp://reports.eea.eu.int/GH-14-98-065-EN-C/en/enviissu10.pdf

Company environmental reports:

http://www.feem.it/NR/rdonlyres/07B9BBC7-DF91-456C-815E-42E914998365/27/rappinglese.pdf (english)

http://www.feem.it/NR/rdonlyres/07B9BBC7-DF91-456C-815E-42E914998365/28/rapporto.pdf (itlaiano)