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Eco-efficiency For Products
-Establishment of Eco-efficiency Indicators for Sustainable Products
Chie Nakaniwa (nakaniwa@jemai.or.jp)Japan Environmental Management Association for Industry
-JEMAI-
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Overview of Presentations
1. The need for sustainability indicators-Introduction of Factor X project
2. Emerging eco-efficiency indicators-Evaluation of environmental performance and value
-Definition and calculation principles
-Case studies3. Development of eco-efficiency indicators
-Environmental product information
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1. The need for sustainability indicators
Introduction of Factor X project
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Decoupling economic growth from the environmental burden
Decoupling is a very important theme for business
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Factor 4
• The idea that resource productivity should be quadrupled so that wealth is doubled, and resource use is halved. The concept has been summed up as "doing more with less". It is argued that this would result in substantial macro-economic gains.
Green Sustainable Development Strategy for North-eastern NB Draft Strategy
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Factor 10
• The idea that per capita material flows caused by OECD countries should be reduced by a factor of ten. Globally, claim proponents, material turnover should be reduced by 50 percent, but because OECD countries are responsible for material flows five times as high as developing countries, and world population is inevitably increasing, the OECD has to set long-term targets well beyond the more conservative Factor Four target.
Green Sustainable Development Strategy for North-eastern NB Draft Strategy
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Definition of Eco-efficiency
Product or service valueEnvironmental influence
“Creating more value with less impact”“Economic and environmental efficiency in parallel”
Here, eco-efficiency indicators are defined as a ratio ex. $/T
Source:eco-efficiency creating more value with less impact by WBCSD
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The Needs for Eco-efficiency Indicators
• to track continuous improvement• to set goals for improvement• to promote efficient inputs and outputs• to report to stakeholders
Corporate;* Executives* Managers* Employees
Stakeholders;* Users* Financiers* The public* Media
Government;* Regulators
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Eco-efficiency, Measuring Level
Company
Factory Factory Factory Factory
Manufacturing
CorporateEco-efficiency Performance
ProductEco-efficiency Performance
extraction use disposaltransport
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Factor X Project in Japan
Eco-efficiency indicators for Product Environmental Performance
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Project Goal and Scope
Create Factor (indicator / index) for products and services:1. To provide quantified environmental information as a
single or several integrated numbers2. To provide comparability across a wide range of
industry sectors, companies, and products3. To accelerate sustainability development of business
segments4. To serve analytical foundation as political tools5. To link quantified evaluation provided by the factor
with Design for Environment and Eco label, or other environmental management tools, and promote them
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First Year Target (1/2)
1) Survey for current status in Japan• Identifying types of innovating manufacturing
technology, process• Identifying historical trends of industry sectors
about productivity, improvement2) Identifying the problems, potentials for the future• Identifying structural problems across sectors,
barriers, and technological limitation, and other issues
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First Year Target (2/2) 3) Reviewing concepts, existing models
about resource productivity, eco-efficiency, or other methodology
• What is the ratio? What are the denominator and numerator?
• What could be selected as service/value? What could be selected as environmental impacts?
• Existing model; Factor 4 and 10, WBCSD eco-efficiency, Ecological footprint, LCA, Dow Jones Sustainability Index, and others
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Project Scheme
Industry
Bottom Up Approach (WG 1) Top Down Approach (WG 2)
Product
IndustryCorp.Corp.
Corp.
•Theoretical approach
•Considering supply chain
•Assuming potential target
Product-Total Consumption
Industry
Industry
Industry
Industry Industry
Product
Extraction
Factor X
•Empirical approach
•Considering sectoral factor improvement
•NO TARGETExpecting self-improvement by applying Factor evaluation methods
Historical Trend and Possibilities
Factor(Industry)
Factor(Company)
Factor(Product)
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Two Kinds of Factors Examined1. Resource Productivity(RP)
RP=S/RCS=Service(product or service value), RC=Resource ConsumptionHere, energy substitutes for RCex. Factor=RP Y2000 /RP Y1970
2. Environmental Efficiency(EE)EE=S/ELS=Service(product or service value), EL=Environmental LoadHere, CO2 substitutes for ELex. Factor=EE A type /EE B type
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Two Kinds of Indicators Examined
BrightnessWashing capacityFreezing speedHDD, CPUIndicators
TVWashing machinerefrigeratorPCProduct
Product specific indicators (numerator=product performance value)
CO2MandatoryEnvironmental impactDenominator
Economic value, physical amount, specific function
OptionalProduct or service value
Numerator
Environmental efficiency
Energy consumptionMandatoryEnvironmental impactDenominator
Economic value, physical amount, specific function
OptionalProduct or service value
NumeratorResource productivity
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Example of Product Eco-efficiency (1)
*Factor per a product
Desktop PC
0
5
10
15
20
1997 1998 1999 2000 2001
Year
CO2,
pro
duct
func
tion
0
2
4
6
8
10
eco-
effic
ienc
y
environmental impact service(function) eco-efficiency
Denominator-Environmental impact;CO2 during life cycle
Numerator-Product function;CPU, HDD capacity
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Example of Product Eco-efficiency (2)
*Factor per a product
Laptop personal computer
0
2
4
6
8
1998 1999 2000 2001Year
CO2,
ser
vice
0
2
4
6
8
10
eco-
effic
ienc
y
environmental impact service/product function eco-efficiency
Denominator-Environmental impact;CO2 during life cycle
Numerator-Product function;CPU, HDD capacity
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Findings of FY 2001(3)Facts of a Service System
770MJ (P/770)58kg(P/58)Conventional-style meeting (B)
3.96.8Factor (A/B)
200MJ (P/200)8.5kg (P/8.5)TV meeting (A)
Energy Consumption(Resource
Productivity)
CO2(Environmental
Efficiency)
P is outcome of meetings
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0
10
20
30
40
50
60
70
80
0 100 200 300 400 500 600 700
◇Conventional style◆TV meeting◇Conventional style◆TV meeting
TV meeting
CO
2(k
g)
Travel distance (km)
Correlation Between Travel Distance and CO2
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CO2 Reduction Effects of TV Meeting Technology
2
TV meeting0
0.10.20.30.40.50.60.70.80.9
1C
OEmission Ratio
Conventional Style
WirelessEquipment
85% reduction
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Findings of FY 2001(4)Facts of a Product
*Factor per a product
(a)TV Factor 13
0
2
4
6
8
10
1994 1999
Year
S, RC
0
2
4
6
8
10
12
RP=S/RC
Resource Consumption(RC)
Standby power, Screen ruling(S)
Resource Productivity (RP)
(b) Washing Machine Factor6
0
1
2
3
4
5
6
7
1994 1999
Year
S, RC
0
1
2
3
4
5
6
7
RP=S/RC
Resource Consumption(RC)
Power for usage, washing capacity(S)
Resource Productivity (RP)
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Findings of FY 2001(5)Facts of a Product
*Factor per a product
(c)PC Factor 8
0
1
2
3
4
5
6
7
8
1995 1999
Year
S, RC
0
1
2
3
4
5
6
7
8
RP=S/RC
Resource Consumption(RC)
Energy Efficiency(S)
Resource Productivity (RP)
(d)Refrigirator Factor6
0
5
10
15
20
25
30
1991 1999
Year
S, RC
0
10
20
30
40
50
60
70
80
RP=S/RC
Resource Consumption(RC)
Power for usage, cooling/freezingspeeds(S)Resource Productivity (RP)
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Environmental Load-dependent pattern
1.01.2
1.5 1.61.8
0
500
1000
1500
2000
2500
19971998199920002001
Year
Service EL(CO2)
0.0
0.5
1.0
1.5
2.0
EE=S/EL
material parts assembly
Fundamental Patterns by Product Categories
Service-dependent pattern (1)
1.01.2
1.5 1.61.8
0
500
1000
1500
2000
2500
1997 1998 1999 2000 2001
YearService, EL (CO2)
0.0
0.5
1.0
1.5
2.0
EE=S/EL
Service-dependent pattern (2)
1.01.2
1.5 1.61.8
0
500
1000
1500
2000
2500
1997 1998 1999 2000 2001
Year
Service , EL(CO2)
0.0
0.5
1.0
1.5
2.0
EE=S/EL
Decoupling pattern
1.01.2
1.51.6
1.8
0
500
1000
1500
2000
2500
1997 1998 1999 2000 2001
Year
Service, EL(CO2)
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
EE=S/EL
Manufacturing stage
▲;eco-efficiency
■;numerator(value)
◆;denominator(environmentalimpact)
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Extraction
Extraction Steel Manufacturing (B)
Aluminum Manufacturing(A)
Automobile Manufacturing(a) Usage Disposal
Other consumption goods (b)
Other consumption goods(c)
Usage
Usage
Disposal
Disposal
How should we define the boundary of environmental impact?
-Resource Productivity (ex. Metal)
・ONLY resource productivity of consumable goods should be measured
・Consumer goods industries should be measured rather than semi-manufactured/material industries.
Other Materials(C)Extraction
Resource Consumption of Automobile =aA+aB+aC
Denominator of Factor X
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Extraction
Extraction Steel Man.(B)
Al Man.(A) Automobile Manufacturing (C) Usage (D) Disposal (E)
Environmental Efficiency (ex:CO2)
CO2:d kg
CO2:e kg
CO2:c kg
CO2:a kg
CO2:b kg
Automobile Industryc+dC+eC
Steel Industryb+dB+eB
Aluminum Industrya+dA+eA
d=dA+dB+dC e=eA+eB+eC
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Steering Committee
Chairman:Prof. Ryoichi Yamamoto
WG1: Sector-specific IndicatorsWG2: Exploring existing methods&allocation rules for environmentalburden on supply chain
WG3: ICT (measuring ICT eco-efficiency)
METI
JEMAI
WG4: Factor X Guidebook
Factor X Project of 2003
FY2001,2002
FY2003
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Questions and Discussions
1. What are eco-efficiency indicators working for?Market needs? Ranking?Promoting incentives of sustainability?
2. What is the future work?Comparability? –common rule for benchmarkingHarmonization? –for business specific indicators
• The amount of environmental product information are increasing.
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2. Emerging eco-efficiency indicators
Evaluation of environmental performance and value-Definition and calculation principles
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Eco-efficiency, Factor XState of the Art in Japan
1. Eco-efficiency (Factor) indicators for company(factory) performance
eco-efficiency for company=sales amount/environmental impacts
2. Eco-efficiency (Factor) indicators for productperformance
eco-efficiency for product=service/environmental impacts
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The Application of Eco-Efficiency Concept
4265Non-manufacturing
226285Total
184220Manufacturing
CorporateProduct
No. of companies to practice the concept of eco-efficiency
No. of companies to issue environmental report
Unit:Company
Source: FY2002 METI study
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Issues to Be DiscussedMethodological issues;• What is a definition of value (numerator)?• Which is better, single index or multiple indicators?
-Integrating various environmental aspects and product performance
• How could we weight those parameters?• Selection of reporting periodOperational issues;• What is a main purpose of using eco-efficiency?• What is a driving force to start eco-efficiency
indicators?
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Core function
Optional function
A Classification of Product Function
Usability
FunctionPurchaser’s judge
The general purpose of the function(e.g., washing cloth, cooling food )
Styling
Price
Intangible service
Operational procedures(e.g., setting type function along consumer’s favor)
Other function attached with the product, aiming at increasing user’s convenience(e.g., multiple-function product)
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Purchasingproduct
Realizing‘expected
result’
Realizing‘perceived
result’
Indicator frommanufacturing
viewpoint
Indicator fromConsumerviewpoint
A Model of Value Indicator Establishment
Functioningproduct
To establish value indicator would be possible by using product specification
To establish value indicator would be possible by using consumer test or other means.
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2. Emerging eco-efficiency indicators
Case studies
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Example of Matsushita “3 GP(green products) Indicators”
• Index for the prevention of global warming= product function *product lifegreenhouse gas emission over the entire life cycle
• Resource use index= product function*product life(newly supplied resources+discarded resources) over the entire life cycle
• Use of nontoxic materials
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■Basic Factor Computation● Comparison is made with standard product (as a rule, manufactured in 1990).● Do not take performance improvements into account.● The negative environmental impact which consists of each element of following
MET was integrated as length of a vector.(1) Products weight(2) Products energy consumption(3) Quantity of Toxic substances
contained in Products
(Note)M: Effective use of Material, E:Efficient use of Energy, T:Reduce use of Toxic substances
=
Example of Mitsubishi “Factor X”
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Calculation of multiple environmental aspects
( )222 TEM ++
222 111 ++
222 82.024.042.0 ++
Environmental impact of ‘old’ =
Environmental impact ‘new’ =
Product eco-efficiency 1
Negative environmental impact
FactorEco-efficiency of present productEco-efficiency of standard product
=1.73
=0.95
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Purpose of using eco-efficiency indicators
material parts assembly
user
producer retailer
S/EL=basic unit S/EL=?
• Environmental report
• Media
At shop
Negotiation ,business meeting, contract
S=1 S=multiple
Brand image safety function quality,preference
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Nokia’s eco-efficiencyProduct Eco-efficiency
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Home products-Mitsubishi Factor X
http://global.mitsubishielectric.com/company/environ/pepfxsp_b.html
Laptop PCsConsiderable reduction in electricity consumption through the use of high-end CPUs.
Automatic washing machinesSignificant decrease of electricity consumption through the implementation of water atomization technology and revision of operation control.
Lighting FixturesHigh efficiency, high output and continued light adjustment capability, as well as high energy conservation through the use of solar energy stored in the automatic control system.
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Mobile handsetsFurther miniaturization through the use of high energy density batteries. Substantial reduction in the use of resin.
Society Products-Mitsubishi Factor X
Semiconductor/MemoryReduction in electricity consumption through lower power voltage of the operating voltage, reduction in use of materials such as mold resin and soldering material.
MotorsReduction in power loss. We became the first Japanese manufacturer to acquire an EPAct certification number (CCO12A) from the US Department of Energy.
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Factor Evaluation of ProductsMicrowave Oven
Social contributionResource reduction 66.4t,
Energy reduction 15.9GWh
Factor1.27
Washing MachineSocial contribution
Resource reduction 5,700t,Water reduction 230 M litters
Lead reduction 3t
Factor2.00
TransformerSocial contribution
Resource reduction 2,400t,Energy reduction 246GWh
Toluene/Xylene reduction 3.7t
Factor1.34
SemiconductorsSocial contribution
Resource reduction 61.2t,Energy reduction 106GWh
Lead reduction 0.36t
Factor8.07
Mobile TelephoneSocial contribution
Resource reduction 68.9t,Energy reduction 266GWh
Lead reduction 0.33t
Factor2.97
Air ConditionerSocial contribution
Resource reduction 400t,Energy reduction 1,874GWh
Lead reduction 0.8t
Factor1.44
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Example of Fujitsu(1/2)
Method of environmental efficiency factor calculation
Environmental efficiency factor=
Service (ratio of new to old products)
Environmental burden (ratio of new to old products)
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Example of Fujitsu(2/2)
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Calculation of Fujitsu indicators
( )22 5221808.3 +=Optical performance
( )22 44.1121240.1 +=
( )250.111500.1 =
( )222 500.1240.1808.331469.2 ++=
Media processing performance
Data processing performance
Value=
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Feasibility Study of setting up Factor X (1/3)
0
2
4
6
8
10
12
14
環境効率指標数/個
導入事例 検討事例
インプットアウトプット間接的項目
Existing indicators Trial
Input itemsOutput itemsIndirect items
Num
ber o
f ind
icat
ors
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0
2
4
6
8
10
12
14
環境効率指標数/個
導入事例 検討事例
単一の環境負荷項目の使用複数の環境負荷項目を統合化
Feasibility Study of setting up Factor X (2/3)
Existing indicators Trial
Num
ber o
f ind
icat
ors
Single indicatorIntegrated indicator
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0
6
10
7
3
9
0
1
2
3
4
5
6
7
8
9
10
環境効率指標数/個
導入事例 検討事例
物理量
経済的価値
機能
Feasibility Study of setting up Factor X (3/3)
Existing indicators Trial
Num
ber o
f ind
icat
ors
Physical itemsEconomic itemsFunctional items
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Strategy of Implementing Product Eco-efficiency Indicators
• To provide information that the company is committed to evaluating both “product or service performances” and “the environmental impact”
• To describe the company’s efforts to make its products, environmental and performance more efficient
• To indicate the degree of product performances by consulting user priorities for product function
• To differentiate its own products from other company’s competitive products
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Current Trends and Development of Eco-efficiency Indicators
The third step*Standard-like indicators*Comparativeness*Expanding
market share ofhigh eco-efficiency
products
The first step*Positive screening*Expressing in ratio*Valuable tools for
corporate management *Internal tools
within companies
The second step*Information disclosure*Effective tools to showgood performance
*External and communication tools to catch attention of
stakeholders
Appropriate selection for environmental impacts and service items
Information beyond compliance
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Some Observations• The environmental performance ratio can be used for
both internal and external information.• A consensus needs to be reached by the business
sectors on core eco-efficiency indicators. • Reporting eco-efficiency indicators could become as
standard as reporting indicators of financial performance.
• The distinction between various industries (or products) and stakeholders needs to reflect the importance of proper identification of indicators as practical business instruments.
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3. Development of eco-efficiency indicators
-Environmental product information
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Disclosure ofEnvironmental Product Information
26.8
27.7
28.2
33.2
34.1
36.4
36.8
46.8
47.3 60
0 20 40 60
%
longer operating life
resolvability
information disclosure
material consumption
consumption of recycled materials
energy saving
reduction of related product impact
downsizing
packaging reduction
reduction of toxic materials
Source: FY2002 Environmental Reporting
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Simple ComplexDegree of Information Simplicity
Part
Full
Several Types of Product Environmental Information
Type Ieco-label
Type IIIeco-label
Type IIeco-label
For better understanding
of B to C,new way
of declarationsadded?
Life Cycle Consideration
QuantitativeType II
eco-label
CompleteLCA
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The Path for Establishing Eco-efficiency Indicators
Situation analysis/inventory
Apply indicators
Establish indicator system
Derive objectives and measures
Review indicator system
Data collection/determine indicators
company
Environmental condition
IGPA, Sept., 2002
External requirements
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Environmental Product Information Could Be a Key Tool
for Sustainable Development
ProducerPurchaser
(business procurement,user, consumer)
Selecting eco-efficient products and using in appropriate manner
Producing eco-efficient products
-to raise awareness, to establish priorities, and to motivate activities.
Decision, communication
tools
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Impacts on the Market
• Data on the market impact of environmental information is difficult to obtain.
• It is difficult to separate the effectiveness of providing environmental information from other factors which influence product’s market share.
• However, producers continue to apply for environmental information, expecting some expecting some market valuemarket value.
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• The effort in shifting from incremental to systematic change should be encouraged.
Indicator 1997Y=1
CO2 emission analysis for new model automobile
0.75
0.8
0.85
0.9
0.95
1
1.05
ManufacturingCO2(t)
Use stage CO2(t) Weight(kg)
Y1997 Y2001
How Could Environmental Product Information Encourage Producers?
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Shift From Particular Interestto Whole Life Cycle
• Concerns are increasingly based on life cycle analysis rather than specific stage(production, usage, and disposal).
• Rather than single attribute, multi-aspects of environmental information are expected.
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Could EPI Stimulate Product Innovation If There Were Benchmarks?
• Goal is outcomes rather than applied technologies
• Improvements/innovations should be recognized by the market, then rewarded
• Benchmarks would raise corporate targets and increase competition
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What Kind of Regulatory Requirements Could Promote These Strategies?
• Government task = prescribe each stage of product design
• Government task = set clear target from life-cycle basis
• Implementations – Explore the best combination: standard, competition,
cooperative harmonization.– Disseminate information and experiences.– Develop institutional scheme; e.g., evaluation system
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Current Status of Policy Approachesto Trigger Product Innovation
• EU– IPP (Integrated Product Policy)
• Japan– Integration of tools in future policy
• The LCA National project • Factor 8 committee~product eco-efficiency indicators• Eco-Leaf Program Environmental product declaration (ISO/CD
14025) • Green procurement
The tools are ready to be used…But, where do these things go?
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Possible Approaches Based on Life-cycle Information to Product Innovation
• To enhance product supply chain management– Green public and private procurement– Synergies of existing environmental management
systems/tools– Information flow and cooperation in product chains
• To enhance awareness– Capacity building
• To create market– Coordination and information in a critical mass
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What Could Be Driving Forces To Enhance Awareness?
• Obtaining credibility endorsement by stakeholders?• Stimulating supplier by economic incentives,
improved availability to LCA inventory data, training, critical review process?– Considering how to deal with data from developing
countries
• Stimulating demand by enhancing public procurement, promotion and training?
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How Could We Show Environmental Product Performance to Users?
Effective Approach to Enhance Acceptability of Environmental Information
• Improving declaration format and visibility?• Offering consumer education
(e.g. simple concept about life cycle thinking)?• Providing other incentives?• Analyzing consumer behavior/preference?
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Concluding Remarks
Success Factors• Establishment of priorities and targets • Dialogue
– Among producers– Between producers and consumers
• Case studies
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