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Module 9. Practice: business and environment

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”

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Module 9. Practice: business and environment

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  1. 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

  2. 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)

  3. O I Entropy increase, disequilibriums, pollution, death I O Output O Input waste Industrial processes I I O Natual cycle of a closed system Industrial “line” of an open system Optimize I/O efficiency where I and O are energy and materials Optimize I/O efficiency where I and O are monetary benefits and costs Industrial ecology Representing the metaphor with a natural methabolism and the differences

  4. 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

  5. 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 legislationReduced environmental risk(financing, insurance, avoid social alarms and pressure)Improved public image, relations and market opportunities How? Which tools? Environmental policyEnvironmenal management systems Environmental auditingEnvironmental performance indicatorsEcobalanceLife cycle assessment Environmental labellingEnvironmental reporting Environmental charters

  6. 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

  7. Process of ISO 14001 1 Environmental policy Continual improvement 2 Planningenv. aspects (significant or not?)legal and other requirementsobjectives and targetsenv. mngmt. programme 5 Mngmt. review 4 Checking and corrective actionmonitoring and measurementnon-conformance and correcective and preventive actionrecordsenv. mngmt. audit 3 Implementation and operationstrucutre and responsibilitytraining, awareness and competence; communicationenv. mngmt sys. documentationdocument and operational controlemergy preparedness and response

  8. 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…)

  9. 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

  10. pre-production (i.e. purchasing, designing) production (i.e. manufacture) distribution (i.e. packaging and transport) use disposal Energy and material inputs Emissions and waste 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: 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

  11. 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)

  12. “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

  13. 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

  14. 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)

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