CORPORATE
STRATEGIES FOR ECOEFFICIENCY
HOW HP, DELL, KODAK, AND SONY ACHIEVE ECO-EFFICIENCY
THROUGHOUT THEIR PRODUCT LIFE CYCLES
WHITE PAPER PREPARED BY MBA STUDENTS
UNIVERSITY OF NORTH CAROLINA’S
KENAN-FLAGLER BUSINESS SCHOOL
AT THE
Authors
Brian Wilson (MBA 2006)
Tarry Baker (MBA 2006)
Takafumi Sako (MBA 2006)
Won Kook Lee (MBA 2006)
Abstract
There is an increasing awareness of the need for sustainable practices in the
entire product life cycle, particularly in manufacturing sectors. This can be
achieved through eco-efficiency. Eco-efficiency is achieved through the
delivery of “… competitively priced goods and services that satisfy human
needs and improve quality of life while progressively reducing environmental
impacts of goods and resource intensity throughout the entire life cycle to a
level in line with the Earths estimated carrying capacity.”
Using four major companies - Hewlett Packard, Dell, Kodak and Sony - as case
studies, this paper analyzes how consumer electronics companies achieve ecoefficiency throughout their product life cycles. It highlights specific programs
of each firm in the areas of product design, procurement, production,
distribution, and product recycling. The authors conclude that efforts towards
improving eco-efficiency, if implemented and managed properly, can yield
tremendous benefits and most importantly can lead to a competitive
advantage for the implementing company.
Publication Date
2005
©2005 Kenan-Flagler Business School, University of North Carolina, Chapel Hill, NC,
USA. Reprinted by permission. Available online at www.cse.unc.edu. This white paper was
prepared by MBA students for class MBA251B Sustainable Enterprise, taught by
professors Albert H. Segars and James H. Johnson. It is reprinted for educational purposes.
Citations and source accuracy have been reviewed, but cannot be guaranteed; clarifications
or comments may be directed to cse@unc.edu.
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Keywords:
Hewlett-Packard, HP, Sony, Dell, Kodak,
eco-efficiency, recycling, product
design, manufacturing, electronics
environmental protection, information
technology, high tech, electronic waste,
lifecycle analysis
HOW HP, DELL, KODAK, AND SONY ACHIEVE ECO-EFFICIENCY
THROUGHOUT THEIR PRODUCT LIFE CYCLES
Table of Contents
I. Introduction
1. Definition of eco-efficiency
2. Method of analysis
II. Corporate Strategies for Eco-efficiency
1. Hewlett Packard
2. Dell
3. Kodak
4. Sony
III. Conclusion and Recommendations
Appendix A - Kodak’s Health, Safety, and Environmental Goals
I. INTRODUCTION
Smart companies developed environment protection such as waste water and waste material
treatment in 70’s and 80’s. Nowadays, more advanced efforts to address ecological issues are
becoming essential for most companies. For example, as of July 1, 2006, the European Union will
restrict the presence of certain substances - lead, mercury, cadmium, and hexavalent chromium - in
electrical and electronic products offered for sale. In Japan, “Law for recycling of specified kinds of
home appliances” was executed in 2001. Kyoto Protocol calls on 38 industry countries to reduce CO2
and other greenhouse gas emissions from the year 2008 to 2012. With this backdrop in mind, we
investigate how forward-thinking companies, especially within the consumer electronics industry,
plan and implement eco-efficiency programs.
1. Definition of eco-efficiency
According to the World Business Council for Sustainable Development (WBCSD), eco-efficiency is
achieved through the delivery of " ...competitively priced goods and services that satisfy human
needs and bring quality of life while progressively reducing environmental impacts of goods and
resource intensity throughout the entire life-cycle to a level at least in line with the Earth's estimated
carrying capacity." 1 Further, eco-efficiency includes three objectives for sustainable enterprise:
reduction in consumption of resources, reduction in impact on nature, and increase in product or
services value. 2 Based on these definitions, we analyzed how consumer electronics companies
achieve eco-efficiency throughout their product life cycles and within their limited budgets.
2. Method of analysis
We chose Hewlett Packard, Dell, Kodak, and Sony as representative consumer electronics
companies, mainly based on breadth of their eco-efficiency initiatives and the ease of access to
http://en.wikipedia.org/wiki/Eco-efficiency
Walking the Talk: The Business Case for Sustainable Development, Chad Holliday, Stephen Schmidheiny, and Philip
Watts
1
2
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pertinent information. In the product life cycle, consumer electronics companies typically design
product, procure materials, manufacture products, distribute them to consumers, and recycle
products (see diagram below). We compared these companies’ strategies for eco-efficiency in each
product life cycle stage and then analyzed how a sustainable enterprise can utilize strategies for ecoefficiency to compete in the industry.
Diagram: Product Life Cycle
Product
Design
Procurement
Recycling
Production
Distribution
II. CORPORATE STRATEGIES FOR ECO-EFFICIENCY
1. Hewlett Packard
Approach to eco-efficiency
Hewlett Packard (HP) is committed to providing products that are eco-efficient in all stages of its life
cycle. It realizes that "environmental impacts can occur at every stage of the product life cycle: from
product design, through manufacturing and transport, to use by customers and, finally, disposal at
the end of a product's life." 3 Its programs and processes were developed to minimize these impacts
as illustrated in the figure below.
3
http://www.hp.com/hpinfo/globalcitizenship/index.html
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2
Source: www.hp.com
Product Design Stage
In 1992, HP established a Design for Environment Program that had 3 priorities: energy efficiency,
materials innovation, and design for recyclability. They wanted to create products that required less
energy to manufacture and use, required fewer materials and had less of an environmental impact,
and were easier to upgrade or recycle. The premise entailed development of products which would
meet international standards for eco-labeling. Currently, more than 1,000 HP products carry the
Energy Star eco label sponsored by the U.S. EPA. This translates to "over 94% of Personal Systems
Group products and 98.5% of the Imaging and Printing Group Products" carrying the Energy Star
eco label. 4
The program developed Design for Recycling (Dfr) standards that focused innovation towards
products with minimal environmental impacts. These design features include:3
Modular design to allow components to be removed, upgraded or replaced
Eliminating glues and adhesives, for example, by using snap-in features
4
Ibid.
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3
Marking plastic parts weighing more than 25g according to ISO 11469 international
standards, to speed up materials identification during recycling
Reducing the number and types of materials used
Using single plastic polymers
Using molded-in colors and finishes instead of paint, coatings, or plating
Relying on modular designs for ease of disassembly of dissimilar recyclable materials3
This provides designers with a clear set of guidelines to assess a product's recyclability before it is
even produced.
Some examples of products designed for the environment include the HP laptop, HP All-in-One, HP
CRT monitors, and others listed below: 5
Parts and resins in monochrome LaserJet print cartridges have decreased by more than 50%
since 1992.
Compared to their predecessors, HP laptops use significantly less energy when in lower
power mode. After a period of inactivity, the HP laptop automatically switches to lower
power mode and consumes less than one watt of power; the Energy Star requirement is 15
watts.
HP uses recycled glass from discarded cathode ray tube (CRT) monitors in the
manufacturing of new CRT monitors. Up to 40% of glass in new HP CRT monitors is
recycled glass from discarded CRT monitors.
The HP All-in-One combines a printer, scanner, copier, and fax machine into a single
product and reduces material consumption during production by 40%.
The average pages printed per gram weight of LaserJet cartridge has increased by 139%
from 1990-2004. 6
HP continues to make progress as it designs products with minimal environmental impact.
Procurement Stage
HP's spending in materials and commodities in the IT industry gives HP large buying power among
its suppliers. "In 2004, HP purchased approximately $53 billion of products and materials,
components and manufacturing, transport and other services from approximately 7,000 suppliers
globally."3 7 Suppliers "must comply with HP's requirements specified in the Electronic Industry
Ibid.
Ibid.
7
Ibid.
5
6
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Code of Conduct and the product content environmental guidelines found in the General
Specification for the Environment (GSE)." 8 The Electronic Industry Code of Conduct was developed
in collaboration with Dell, IBM and their environmental management system (EMS) providers to
promote industry standards for socially responsible business practices across the global supply
chain. The "General Specification for Environment (GSE) prohibits or restricts certain substances
from use in HP products or in the manufacturing of HP products." 9 Furthermore, HP gives
preference to those suppliers who have achieved ISO 14001 certification, which indicates they have
implemented their business practices with an environmental management system.
As of July 1, 2006, the European Union will restrict the presence of certain substances --lead,
mercury, cadmium, and hexavalent chromium --in electrical and electronic products offered for sale.
HP is working closely with its partners in order to be compliant by this date.
Production Stage
HP is one of the first "multinational businesses to obtain a single, global ISO 14001 certification for
worldwide manufacturing operations." HP has reduced energy consumption and toxic emissions
during production by ensuring environmental management processes are in place at their
manufacturing facilities. Such processes help HP determine their ecological footprint. As a result,
in 2004, HP "reduced natural gas use by 12%, solid waste volumes by 3%, water use by 7%, and
hazardous waste volumes by 20%." 10
Distribution Stage
Looking at product distribution, HP participates in Clean Cargo and Green Freight Groups and has
concentrated on reducing toxic emissions from transportation by focusing on product packaging.
For example, HP "decreased unused space in camera packaging by 25% by using a high-density
polyethylene." As a result this created more efficient shipments because HP could ship "50% more
products per pallet while decreasing packaging materials use by half." While reducing
transportation impacts on the environment, HP saved $1 million in packaging costs. 11
Recycling Stage
In 1991, HP launched the Planet Partners program that operates globally and handles the end-of-life
recycling processes for its products. It collected and recycled more than 120 million pounds of used
products in 2003. In 2004, almost 360,000 pounds of inkjet cartridges and approximately 27 million
HP LaserJet print cartridges were recycled. Furthermore, more than 95% of the materials of
returned HP inkjet print cartridges were diverted from landfills.
Some initiatives HP has taken to increase customer awareness of recycling are the following:
E-coupons: e-coupons offer online recycling customers savings on new products from
HPshopping.com.
In-box labels and envelopes: Postage-paid labels and envelopes are included in many
replacement HP LaserJet and inkjet print cartridge boxes in the United States and Europe.
Standards: HP has global recycling standards for management of end-of-life computer
hardware products that address labor and safety at supplier operations.
Public policy: HP has worked closely with national, state and provincial governments to
develop “shared responsibility” recycling legislation where producers are responsible for
the recycling of their products." 12
Ibid.
Ibid.
10
Ibid.
11
Ibid.
12
Ibid.
8
9
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With these initiatives, HP expects to recycle 1 billion pounds of electronic products and supplies by
2007. 13
Evaluation
HP has taken a lead in addressing electronic waste and recognizing that innovation in product
design will improve recycling efforts. The company's Design for Recyclability Standards are
incorporated into a tool that is used worldwide by product designers. In addition to addressing
electronic waste, HP plans to raise its standards for its global supply chain in the next 3-5 years.
These goals include the following:
Complete assessments with 100 high priority suppliers in 2004, 250 in 2005 and 500 in 2006
Add Supplier Code of Conduct to all product materials supplier contracts by 2005
Collaborate with industry and suppliers to establish an industry standard supplier code of
conduct by 2006 14
One of the challenges HP will need to address is how it can determine the environmental
performance of its products. There should be performance metrics along every stage of the product
life cycle to ensure that HP is meeting its goals. HP does not address long-term future goals for
attaining eco-efficiency. A key to its success will be how it prepares for the future.
2. Dell
Approach to Eco-efficiency
Dell is actively seeking ways to provide eco-efficient products and operations that meet its
comprehensive environmental policy and standards. Dell’s commitment to eco-efficiency is
summarized as follows: “Dell’s vision is to create a company culture where environmental
excellence is second nature. Dell’s focus on integrating improved environmental performance into
all aspects of its business is strong and driven in large part by its commitment to serve customers
and to do what is right for them and the world we share.” 15
Dell’s overall approach to eco-efficiency includes stewardship of the environment and
implementation of programs and processes to ensure its operations and products are
environmentally sound. Dell’s focus on business efficiencies and customer satisfaction drives its
environmental stewardship program to conserve product energy consumption, reduce or eliminate
materials for disposal, prolong product life span and provide effective and convenient equipment
Ibid.
Ibid.
15
http://www.dell.com/downloads/global/corporate/environ/2005_Sustainability_Report.pdf
13
14
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recovery solutions. Dell has also established criteria for its suppliers, and actively continues to
explore ways to expand markets for environmentally preferable computer systems.
Dell continuously addresses the critical issues related to its products, operations and services
through its company-wide environmental management systems. The major environmental policy
objectives include: design of products with the environment in mind, prevention of waste and
pollution, continuous improvement, demonstration of responsibility to stakeholders, and
compliance with the law.
Dell’s environmental policy provides a comprehensive framework that is designed to ensure
sustainable practices throughout the entire life cycle of the product. As Dell’s market grows into a
wider circle of relationships, it continually refines its process controls and further developing a
culture focused on the basic elements of sustainable practices such as resource conservation and
waste management.
Dell’s approach to environmental responsibility incorporates every stage of the product life cycle to
prevent pollution and conserve natural resources, achieving environmental responsiveness in
tandem with sound business management.
Product Design Stage
Dell fully recognizes that even a small environmental consideration during the early stages of a
product design can have a large effect on the environmental impact of a product throughout its life
cycle. The Dell’s Design for Environment (DfE) program instills environmentally sound principles
into product design. The Design for Environment (DfE) incorporates into product development
environmental attributes such as extension of product life span and decreases in equipment energy
consumption.
For example, Dell’s modular, upgradeable design - parts can be removed without use of special tools
- allows easy repair and upgrades, thus lengthening the useful life of the computer. Dell also strives
to design packaging with optimization techniques to reduce the amount of packaging used and to
ship products for more efficient and eco-friendly methods. During FY2005, Dell implemented a new
inbound packaging program by replacing wooden pallets used to ship computer chassis and
monitors into its facilities with plastic slip sheets, thereby allowing fewer shipping containers to be
sent to Dell via ship, truck and train. 16
Dell continuously modifies the design of its products to enhance energy efficiency of product. For
example, most of the desktop, workstation and portable products consume less than 5 watts in a
low-power mode and exceed the current levels set by the EPA for energy efficiency. Dell has chosen
to default the power management settings to meet the EPA requirements for Energy Star®
compliance for OptiPlex platforms. 17 Dell has also taken the extra step to reduce the amount of time
required by the EPA for Energy Star compliance of 30 minutes to enter the low-power mode to 15
minutes to save even more energy. By enabling the power-management features of all OptiPlex
desktop and notebook products, Dell has reduced the CO2 emissions by 45%.
Procurement Stage
As a company with an extensive global supply chain, Dell recognizes that sustainable business
practices cannot stop with its own operations but must also be extended to its global supply chain.
Two important initiatives include the Restricted Materials program and requirement of its suppliers
to gain ISO 14001 and OHSAS 18001 certification. 18
Ibid.
OptiPlex Environmental Brochure
18
http://www.dell.com/supplierprinciples
16
17
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Since 2002, Dell has intensified and formalized the Restricted Materials program by directing its
suppliers to restrict and/or eliminate certain environmentally sensitive materials in the components
and products supplied to Dell. Dell requires suppliers to provide restricted materials “declarations”
for each new part supplied to Dell, indicating compliance with its Restricted Materials program
specifications. If restricted materials are found in supplier components, Dell takes corrective action
to eliminate these substances. To date, Tier 1 and regional suppliers represent approximately 90% of
Dell’s product procurement expenditures and over 140 suppliers have enrolled in this program.
Furthermore, Dell gives preference to those suppliers that have gained ISO 14001 and OHSAS 18001
certification, which indicates they provide the primary international standard for environmental
management systems, and the standard for occupational, health, and safety management systems. 19
Production Stage
Dell’s computer assembly processes do not generate significant air emissions or hazardous waste, or
use significant quantities of water. Nevertheless, Dell is committed to programs that reduce energy
and water usage for conservation of natural resources.
Dell set goals to reduce energy and water usage, aiming to achieve reduction in electric
consumption by 10%, reduction in irrigation water consumption by 25%, and increase in use of clean
sources of energy. For example, Dell purchased 6.2 million KWh of electricity, approximately 10%
of the total power consumed in 2005, from clean sources of energy such as wind-generated power.
Distribution Stage
As a partner in the EPA’s SmartWay program, which aims to cut emissions
from logistics operations, Dell shipped more than 90% of its U.S. volume via
environmentally friendly SmartWay-certified carriers in 2004, exceeding the
EPA’s requirement of 50%. 20 Optimizing freight from planes to trucks
continues to be one of Dell’s key areas for emissions reduction. Since air
transportation produces almost eight times more harmful emissions than
ground transportation, air-to-ground conversion has tremendous potential for
emissions reduction. In 2004, the air transportation only accounted for 8% of
total shipments, compared to 25% in 2000 and the air shipments were reduced
by 6% for a net emissions reduction, thereby significantly reducing emissions.
By aligning manufacturing centers around geography instead of product lines and moving closer to
the end customers, Dell aims to reduce the average distance traveled to reach its end customers,
which in turn helps reduce GHG emissions. Its manufacturing facility planned in North Carolina is
along the east coast of the U.S., where the majority of its customers are located. The opening of this
facility is expected to further help reduce GHG emissions.
Recycling Stage
Dell’s broad strategies and programs for equipment reuse and recovery are among
the industry’s most progressive and comprehensive in many of its regions. For
example, Dell’s Recovery and Waste Disposition Environmental Guidelines achieve
consistent guidance for all of Dell’s disposal channels globally. The intent of these
guidelines is to provide an infrastructure to appropriately manage electronic
waste, generated both from customers as well as through Dell service and
manufacturing operations. Dell also offers a wide range of environmentally
friendly recycling and reuse services to consumers to dispose of outdated
computer equipment that no longer has a useful life. Dell now provides U.S.
consumers a recycling option both at point-of-purchase and after point-of-purchase.
19
20
http://www.dell.com/downloads/global/corporate/environ/2005_Sustainability_Report.pdf
http://www.dell.com/environment
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All Dell manufacturing facilities are ISO 14001 certified and collect and recycle or reuse a variety of
materials, including cardboard, office paper, plastics, foams, metals, batteries, disks, aluminum cans,
bottles and pallets. Dell achieved 85% recycle/reuse performance for non-hazardous waste at its
facilities in 2004.
Evaluation
Dell has developed an environmentally and socially sound culture that has made it the world’s
leading technology company and that will sustain its success in the market place in the long run.
Dell has been strongly committed to continuous improvements in environmental performance and
is clearly and deliberately more responsible as evidenced by its environmentally-conscious efforts.
Dell evaluates how the company can contribute to the pursuit of a sustainable society outside the
immediate impact of its products and processes. For example, by linking to other organizations
concerned with sustainability and promoting sustainable behavior among its employees. In Dell’s
eco-efficiency efforts, we can get some implications about what motivates a company to reduce its
environmental impact, and what short- and long-term costs and benefits it can realistically expect
from this action.
Dell strongly values long-term sustainability and recognizes that it is part of the society in which it
operates and that its success is built upon the way it responds to environmental issues. Dell knows
that this approach works only if it is truly part of the social culture. For Dell, this includes an
explicit belief that businesses receive their right to exist from customers and communities, and that
this license to operate is revocable. As a company aiming for sustainability, Dell needs to perform
not against a single, financial bottom line but against the triple bottom line.
The following recommendations sum up more sustainable principles, setting out a benchmark for
increasing eco-efficiency while reducing environmental impact:
Internally, Dell should make more efforts to refine its processes and products so that they
reflect the issue of sustainability at all stages.
Externally, Dell should pursue its policy in partnership with a portfolio of nongovernmental organizations (NGOs).
3. Kodak
Approach to eco-efficiency
Kodak maintains a transparent vision and strategy of their eco-efficiency goals. Kodak’s website
lists nine “Guiding Principles,” which stand as a strong foundation for Kodak’s commitment to ecoefficiency. These principles are extremely thorough in covering many potential environmental,
health and safety issues, such as research, plant operations, strategic planning, product design and
recycling, customer education, and government affairs. One of these guiding principles relates
directly to this transparency: “To measure our health, safety, and environmental performance on a
regular basis and provide timely, appropriate information to officials, employees, customers,
shareowners, and the public.” 21
This commitment has manifested itself in the formulation and tracking of aggressive performance
goals. These goals were established in 1997, tracked over a five year period from 1999 until 2004,
and then reassessed and retargeted for a period ending in 2009. The following table places these
goals within the eco-efficiency framework stated in class: 22
21
22
http://www.kodak.com/US/en/corp/HSE/homepage.jhtml?pq-path=2879/7196
Ibid. See Appendix A for details of Kodak’s Health, Safety, and Environment goals.
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The Flow of SC
Product Design
Strategy
Goals
(for 2004-2009)
Previous Goals
(for 1999-2004)
Result
(1999-2004)
Enhance product
durability
Others
Procurement
Reduce material
consumption
- Reduce
manufacturing
waste by 20%
- Reduce
manufacturing
waste by 20%
Use environmentfriendly material
- Improved end-oflife and reduced
heavy metal usage.
- Reduce/Eliminate
use of heavy
metals in products
Reduced by
47%
Down 85% by
weight
Others
Production
Reduce energy
consumption
- Reduce energy by
10%
Reduce toxic
emissions
- Reduce emissions
of greenhouse
gases by 10%
Reduce Water
Recycling
- Reduce
Methlyene Chloride
by 35%
- Reduce Priority
Chemicals (28) by
15%
- Reduce Water
Consumption by
20%
- Reduce energy
consumption by
15%
- Reduce emission
of greenhouse
gases from power
production by 20%
- Reduce
Methylene Chloride
by 50%
- Reduce Priority
Chemicals usage
by 40%
- Reduce Water
Consumption in
Production by 15%
Reduced by
19%
Reduced by
17%
Reduced by
69%
Reduced by
44%
Reduced by
36%
Enhance recycling
Note the major themes of material, energy, emissions, and water reduction. While Kodak does not
directly apply quantitative goals to product design and recycling, it maintains established programs
in both areas which will be described shortly.
Product Design Stage
Kodak’s progress in digital camera design reveals its overall commitment to product stewardship.
The following is an excerpt from the company website describing the improvements in product
design that Kodak has made:
The 2002 models are half the size of the 1998 models, yet have as much as four
times the resolution. The average weight of the 2002 Kodak digital cameras is
between 7 and 10 ounces, down from 14 to 20 ounces. And consumers now have
battery options that allow them to reuse rather than throw away batteries. Kodak's
technological advances have also greatly reduced the power and time required to
download images onto a computer. New models with EasyShare 2.1 software
allow a user to download 1000 images in just 11 minutes - saving 31 minutes and
74% PC power compared with the earlier generation software. 23
However, it is important to note that the competitive landscape of the digital camera market is a
natural driver to improvements to product design. The increasing demands of savvy technology
customers, coupled with the steep cost decline of technology components, are catalysts for such
swift product design improvements.
23
Ibid.
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Procurement Stage
Kodak is extremely active in finding new ways to improve its efficiency in the realm of material
procurement. The goals initially set in this area in the late ‘90s “focused on elimination of heavy
metals, mercury, cadmium, chromium VI and lead from products.” 24 However, their recently
stated goals for the upcoming 5 year time horizon looks to eliminate the use of lead solder and
chromium I from 95% of new products brought to market in 2008.
Production Stage
The transparent performance measures place a heavy emphasis on improving various areas in
Kodak’s manufacturing operations. Most specifically, their goals focus on emissions and
conservation of natural resources. Their previous performance and future goals in these particular
areas were noted in the table depicted earlier.
Specifically, Kodak reduced emissions of methylene chloride by 36% in 2004, compared to the 2008
35% goal. This reduction “resulted primarily from several changes in operating procedures and an
upgrade made to an emissions control unit at Kodak Park in Rochester, where this material is
mostly utilized.” 25
With respect to reduction in air emissions, Kodak has pinpointed 28 “priority chemicals” where it
has focused its emissions reductions efforts. Recent progress in these areas came out of upgrades
made to emissions control equipment. Greenhouse gas emissions were reduced 5%, relative to a
10% goal in 2004: “As part of Kodak’s commitment to the U.S. Environmental Protection Agency’s
Climate Leaders program, Kodak is working with a third-party to provide independent verification
of its greenhouse gas emission inventory on a worldwide basis.” 26
Finally, with respect to the conservation of natural resources, Kodak is able to address
manufacturing waste, energy usage, and water usage. For example, recent reductions in
manufacturing waste resulted from “significant improvements in manufacturing process yields and
the improved recovery of waste solvents at Kodak Park. Energy use reduction in 2004 was
approximately on pace with Kodak’s 10% five year goal. The demolition of obsolete buildings at
Kodak Park in Rochester, NY contributed to this reduction. Finally, water usage declined 16% in
2004 as compared to the 2008 20% goal. 27
Distribution Stage
No information is readily available.
Recycling Stage
Kodak’s One Time Use Cameras have been a centerpiece of their formal recycling efforts for over 15
years. Since 1990, “Kodak's one-time use camera has gone through four major redesigns, with
engineers meeting the same three environmental design goals each time: reduce the material
content and energy required in the manufacturing process, increase the number of recycled parts,
and increase the number of parts that are reused in the camera.” 28
Since then, cameras made by Kodak have been designed so that at least 77% by weight of the
product can be re-manufactured, and all components not reused are recycled elsewhere. 29
Ibid.
Ibid.
26
Ibid.
27
Ibid.
28
Ibid.
29
Ibid.
24
25
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Kodak has established a recycling program for their One Time Use Cameras (OTUC) in 26 countries
worldwide. The recycle rate for one-time use cameras is greater than 75% in the United States,
which is higher than any other consumer product. The following staggering numbers should be
noted about one time use cameras: over 1 billion OTUCs have been recycled through Kodak’s
recycling programs (80% of which are Kodak products). See the table below from Kodak’s HSE 2004
report:
However, this recycling program does not come without difficult challenges for Kodak– while it
“recycles” parts of OTUCs, these recycled parts can end up as lesser quality “knock-off” OTUCs,
which potentially harms the brand value of Kodak.
Evaluation
Kodak certainly appears to be on the cutting edge of multinationals in their commitment to ecoefficiency, as it has been consistently been ranked as a member of Global 100 Most Sustainable
Companies. Its transparency in publishing its strategic eco-efficiency goals as well as its progress
towards them should be held as a great example for other multinationals looking to advance their
own eco-efficiency goals. However, it is our perspective that Kodak’s success in large part results
from low-hanging fruit based on the very nature of their product and industry. Therefore, they
must continue to push towards more aggressive goals not only in the current areas of focus. For
example, with 1 billion OTUC cameras recycled in 2004, it seems logical that Kodak’s next step
should be determining how to reduce the overall production and importance of OTUCs in their
portfolio of products, instead redirecting funding towards more sustainable products such as
regular digital cameras and the like. This is a challenge, as there is still a strong demand in the
marketplace for OTUC. Therefore, Kodak must determine better ways to convince the customer that
more sustainable products are preferable to OTUCs.
4. Sony
Approach to Eco-efficiency
Sony’s eco-efficiency vision is described as follows. “Sony recognizes the importance of preserving
the natural environment that sustains life on earth for future generations and helps humanity to
attain the dream of a healthy and happy life. Sony is committed to achieving this goal by seeking to
combine ongoing innovation in environmental technology with environmentally sound business
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practices.” 30 In order to achieve this vision, Sony has introduced “Five Environment Indices,”
recognized environmental impact from the perspective of product life cycle, and defined ecoefficiency measurement.
The diagram below presents “Five Environment Indices” from Sony’s global home page. From this
diagram, you can see that Sony tries to identify aspects of operations that Sony can audit and
improve. The special feature of these indices is that they provide quantitative measurements of
environmental impact, with lower numerical values signifying smaller levels of impact. Also, Sony
published “Sony's Green Management 2005 plan” which contains detailed targets related to each of
these indices.
Source: www.sony.com
The chart below (from Sony’s global home page) provides a graphic presentation of Sony’s impact
on the environmental from the perspective of product life cycles, including energy and resources
used during Sony's business activities, energy consumed by Sony products when used by its
purchasers, and the recycling and disposal of products after use. Based on this chart, Sony is
undertaking numerous activities to lower environmental impact to realize its environmental vision.
30
http://www.sony.net/SonyInfo/Environment/environment/management/vision/index.html
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Source: www.sony.com
Sony has defined eco-efficiency by using the following equation -- measured in terms of greenhouse
gas emissions, resource input and resource output -- and has set a goal of raising eco-efficiency to 1.5
times the level in fiscal 2000 by fiscal 2005.
Product Design Stage
Although Sony does not have concrete goals in the product design stage, it designs eco-efficient
products by enhancing the energy efficiency and minimizing the environment impact of the
products. As an example, Sony developed Energy-Efficient Digital High-Definition TelevisionsHappy Wega Series. Happy Wega series offer a winning combination of low power consumption,
outstanding picture and sound quality, and low running noise. Happy Wega series also realizes a
significant improvement in standby power consumption, down to 0.15W, from 0.8W for previous
Wega models. Also, Sony develops and commercializes Vegetable-Based Plastics and Mercury-Free
Silver Oxide Batteries. These products are designed as environment friendly product. 31
31
Ibid.
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Procurement Stage
Sony’s goal to reduce material consumption entails the specific goal of resource input reduction by
at least 20% between 2000 and 2005. Reduction in PVC (Polyvinyl chloride) usage is a telling
example of the progress towards this goal. MDR-Q66LW headphones use non-PVC materials in
their cord and plug. Also, Sony prohibits, phases out, or reduces use of controlled chemical
substances in products. In order to achieve this goal, Sony introduced “Chemical Substance
Management Standards” and “Three Core Principles for Managing Chemical Substances in
Products.” Shift to lead-free solder is one of results of these movements. 32
Production Stage
For reduction in energy consumption through production process, Sony has set three primary goals:
reduction in operating power consumption by 30%, reduction in energy use calculated in terms of
CO2 emissions from business sites by 15% per sales unit, and increase in use of renewable energy to
at lease 5% of energy used at all sites. Sony has introduced energy-saving equipment and changed
to fuels that lower CO2 emissions. The goals have not been achieved due to an increase in
production at semiconductor and liquid crystal manufacturing sites in Japan and at sites in China,
an increase in sales volume of major products, such as televisions and DVD recorders, and increases
in the size of LCD and plasma televisions.
For reduction in toxic emissions, Sony sets four primary goals: reduction in emissions of greenhouse
gases other than CO2 calculated in terms of CO2 emissions from business sites by 30%, shift to
environmentally conscious packaging materials, reduction in waste from sites by 30% per sales unit,
and control of chemical substances at sites. For the first goal, Sony has installed and promoted use
of gas removal systems, and sought alternative gases that are less likely cause global warming.
Using recycled plastics helps Sony progress toward their second goal. For the third goal, Sony has
lowered defect rates, used material more effectively, and reduced wastewater and sludge. For the
final goal, Sony has installed double-floor wastewater treatment tanks and proceeded with
decontamination work at two sites where contamination had previously been discovered. Thanks to
these efforts, the achievement rate for reduction in toxic emissions is very high. 33
Distribution Stage
Sony also aims to reduce in CO2 emissions derived from in-house and subcontracted logistics
operations. In order to achieve this goal, Sony has promoted modal shift especially in Japan and
improved the efficiency of international logistics. 34
Recycling Stage
Sony strives to achieve a waste reuse/recycle rate of 95% or higher between 2000 and 2005. In order
to achieve this goal, Sony proceeded with television recycling and PC recycling. Mini hi-fi stereo
system made from 100% recycled polystyrene is a concrete example of Sony’s recycling strategy. As
a result, Sony’s current waste reuse/recycle rate is 88% for global sites and 98% for Japanese sites. 35
Evaluation
The figure below from Sony’s global home page represents Sony’s eco-efficiency achievement based
on its own eco-efficiency measurement. From this figure, you can see that Sony is still struggling to
achieve the goals of raising eco-efficiency to 1.5 times the level in fiscal 2000 by fiscal 2005.
However, Sony has conducted many strategies to achieve this high goal as we have already shown.
Ibid.
Ibid.
34
Ibid.
35
Ibid.
32
33
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We believe that it is critical to have high goals based on numbers as Sony did in order to realize its
eco-efficiency program.
Source: www.sony.com
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III. CONCLUSION AND RECOMMENDATIONS
As we have shown, each company has good strategies to treat eco-efficiency issues in each product
life cycle stage. These efforts are summed as the following diagram shows.
Product Life Cycle
Product Design
Procurement
Company's strategy
Enhance product durability
Enhance energy efficiencies of product
Develop environment-friendly product
Reduce the material consumption
Use environment-friendly material
Production
Reduce energy consumption
Reduce toxic emissions
Distribution
Enhance logistics efficiencies
Use environment-friendly transportation
Recycling
Enhance recycling
We also analyzed the four companies based on the eco-efficiency evaluation matrix that we learned
in class. The matrix provides a cross-cutting perspective which links product design, procurement,
production, distribution and recycling, along the product life cycle. Hence, it is well suited to the
kinds of integrated problems and solutions which characterize the sustainability challenge.
Key:
Best =
Middle =
Worst =
Here, green color means the best and red color means the worst performance, while the yellow lies
halfway in between two. Nevertheless, the results of the analysis are very subjective.
Overall, this figure seems to tell us that Sony is performing the best while Kodak is performing
worst. At the product design stage, HP is the best while Kodak is the worst performing. At the
procurement stage, all the four companies are generally performing well. At the production stage,
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Sony is the best while HP is the worst. At the distribution stage, Dell is the best while Kodak is the
worst. At the recycling stage, all the four companies are generally performing well.
On the basis of the results of eco-efficiency evaluation matrix, each company should begin
benchmarking best practices from these comparable companies so it can address problem areas in
order to ensure future sustainability. For example, Kodak should learn from HP, which has a
product design team focus to enhance its product design.
While no company has zero impact on the environment, a few are clearly and deliberately more
responsible as evidenced by their environmentally-conscious efforts. Each time a best-practice
company achieves more, or sets higher objectives, the overall goal move slightly. These market
leading companies have reaped tremendous benefits from their programs while having also
positively effected ecological and societal change. Furthermore, these companies are likely to have
more opportunity to gain potential benefits of eco-efficiency and sustainability in the future.
It is clear from our research that companies which strive to reduce their environmental impact can
save money by spending less on water, energy, and hazardous waste disposal. As we have seen
from our analysis of these four companies, the efforts towards improving eco-efficiency, if
implemented and managed correctly, can yield tremendous benefits and most importantly, a
distinct competitive advantage.
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APPENDIX A
Kodak’s Health, Safety, and Environmental Goals
Source: http://www/kodak/com/UC/en/corp/HSE
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