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
O
I
Entropy increase, disequilibriums, pollution, death
I
O
O
I
I
Input
Output
Industrial processes
O
Natual cycle of a closed system
Optimize I/O efficiency
where I and O are energy
and materials
Industrial “line” of an open system
Optimize I/O efficiency where
I and O are monetary benefits
and costs
waste
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 systems
close 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 also
new 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 raw
materials; infrastructure; packaging and transport)
Anticipating future legislation
Reduced environmental risk (financing, insurance, avoid social alarms and pressure)
Improved public image, relations and market opportunities
How? Which tools?
Environmental policy
Environmenal management systems
Environmental auditing
Environmental performance indicators
Ecobalance
Life cycle assessment
Environmental labelling
Environmental reporting
Environmental 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 voluntary
EMAS: 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
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
Process of ISO 14001
Continual
improvement
1 Environmental
policy
5 Mngmt. review
4 Checking and corrective action
monitoring and measurement
non-conformance and correcective and preventive action
records
env. mngmt. audit
2 Planning
env. aspects (significant or not?)
legal and other requirements
objectives and targets
env. mngmt. programme
3 Implementation and operation
strucutre and responsibility
training, awareness and competence; communication
env. mngmt sys. documentation
document and operational control
emergy preparedness and response
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)
use
disposal
Why doing it? Financial benefits, assessing design potential, marketing tool
Structure of LCA:
1 Goal and scope definition Interpretation
2 Inventory assessment
and
3 Impact assessment
improvement
Emiss
ions
and
waste
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” businesses
but lack of control and information is always a problem in global consumption
another 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 SMEs
http://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-815E42E914998365/27/rappinglese.pdf (english)
http://www.feem.it/NR/rdonlyres/07B9BBC7-DF91-456C-815E42E914998365/28/rapporto.pdf (itlaiano)