The Challenge of IntegrationThe Challenge of Integration

The Expandable Limits to Corporate ResponsibilityThe Expandable Limits to Corporate Responsibility

Corporate Industrial EcologyCorporate Industrial Ecology

Community Industrial EcologyCommunity Industrial Ecology

Expandable Limits of Corporate Responsibility

The limits to corporate integration in product cycle and infrastructure

Benefits of integrated control over products and processes

Benefits of distributed control among product cycle stages

Integrated and Distributed Responsibility in the Product Cycle: Oil Companies

ResourceExtraction

MaterialsProcessing

PartsManufacture

ProductAssembly

Distribution

Consumption

MaterialsCollection

Recycling

Material & Energy Inputs

Pollution Outputs

Primary responsibility Secondary responsibility

Integrated and Distributed Responsibility in the Product Cycle: Cars

ResourceExtraction

MaterialsProcessing

PartsManufacture

ProductAssembly

Distribution

Consumption

MaterialsCollection

Recycling

Material & Energy Inputs

Pollution Outputs

Primary responsibility Secondary responsibility

Integrated and Distributed Responsibility in the Product Cycle: Retail

ResourceExtraction

MaterialsProcessing

PartsManufacture

ProductAssembly

Distribution

Consumption

MaterialsCollection

Recycling

Material & Energy Inputs

Pollution Outputs

Primary responsibility Secondary responsibility

How to include physical infrastructures?

ResourceExtraction

MaterialsProcessing

PartsManufacture

ProductAssembly

Distribution

Consumption

MaterialsCollection

Recycling

Social Infrastructure:Gov’t, industry assoc.s,

NGOs, etc.

Material & Energy Inputs

Pollution Outputs

Physical Infrastructure:roads, sewers, land use,

electricity, etc.

Value Cycle

ResourceExtraction

MaterialsProcessing

PartsManufacture

ProductAssembly

Distribution

Consumption

MaterialsCollection

Recycling

Social and Physical Infrastructures

Material & Energy Inputs

Pollution Outputs

Value Exchange

Transfer Impacts

Value infrastructure

Value creation at each stage of the lifecycle That is, cost reduction or differentiation

downstream or upstream for its customers or suppliers

Requires other types of infrastructure: e.g. recycling or waste exchange systems, environmental responsibility, regulations, (even economic theory).

CORPORATE INDUSTRIAL ECOLOGY

Leasing Product stewardship Extended Product Responsibility Demand Side Management Investing in natural capital Carbon offsets

Leasing (servicizing, selling function)

Meaning: Sell services and retain ownership of products. Value is created by offering customers a consistent flow of satisfaction rather than an accumulation of goods. Manufacturing companies capture benefits of

increased resource productivity and closed-loop activities.

Service companies compound downstream savings and avoid stocking and labor costs.

Leasing Interface sells floor covering services—customer

gets less disruption and tax advantages Dow Chemical and Safety-Kleen lease dissolving

services instead of selling solvents Fujitsu recovers computer components as part of its

DfE program Xerox maintains control and profits by

remanufacturing machines and components Carrier Air-conditioning sells coolth—customer

receives constant comfort with no capital or labor costs

Xerox’s Leasing Model

Designed remanufacturable machines and components, paper, energy and hazardous waste saving machines

Also redesigned business delivery system by: Recovering assets Designing its own ‘reverse logistics’ Selling the function of the photocopier and

components--not the photocopier

Examples of industrial Ecology: Xerox

Sustainability Vision: Interface

Interface

Interface Carpets: Solenium Completely remanufacturable Replaceable modules Lasts four times longer Uses 40% less material than carpets 86% reduction in materials intensity Free of chlorine, toxins Doesn’t stain or grow mildew, easily cleaned

Product Stewardship

Commitment of a firm to design its products so that they reduce environmental impact wherever they are used in the product cycle. Design responsibility is taken but otherwise there is little attempt to control the other stages of the product cycle.

Product Stewardship

Proctor and Gamble’s low environmental burden consumer products

Patagonia’s sportswear produced from recycled plastic bottles

Ben and Jerry’s Ecopint ice cream container

Emphasizes designing low environmental burden consumer products

Designs products and packages to get "more from less.” Designs product to have low impact when disposed of

down the drain, released into the atmosphere, and burned or buried.

Exerts influence downstream on wood fibre and uses few hazardous materials

Ben and Jerry’s Ecopint Ice Cream Container does life-cycle analysis of materials and will seek

more environmentally friendly alternatives if necessary.

identified harmful materials and chemicals existing in their pint container.

Designed ECO-Pint, made from unbleached Kraft paperboard with a non-toxic printable clay coating.

company's goal is to create and use an unbleached container that is 100% biodegradable.

leave it to consumer to dispose of container in a manner that will allow its biodegradable capability to be realized.

Patagonia’s Recycled Plastic Fleece Sportswear First company to adopt post-consumer recycled plastic

into (PCR®) fleece into its product line. Plastic recycled and spun from 2-liter soft drink bottles

provides excellent base material for Synchilla® fleece. Now make more than 150 Synchilla garments from 3,700

recycled 2-liter bottles, thereby saving a barrel of oil (42 gallons) and avoids about half of a ton of toxic air emissions.

Since '93, over 40 million 2-liter plastic soft drink bottles have been diverted from landfills, saving 400,000 gallons of oil (1,600,000 litres).

Encourage customers to wear it out or pass on to charities for redistribution.

Extended Product Responsibility

Forces companies to reuse, recycle, or dispose of their products and/or packaging or pay someone else to do it;

Gives companies the incentive to design for reduction of product materials,packaging, and toxins, and to otherwise make reusing, recycling, and disposal easier and cheaper.

Producer (brand owner, importer or manufacturer) has primary responsibility because of greater influence on design.

In practice, responsibility shared by stakeholders in product cycle: consumers, government, waste sorters, and recyclers.

Requiring a company to deal with its product or packaging at the end of its product life.

The German Dual System for Packaging Materials from all Industries

HK’s EPR pilot schemes for electrical and electronic

equipment, vehicle tyres, rechargeable batteries, packaging materials and beverage containers.

Government intends to introduce mandatory PRSs on specific products that require particular attention.

HK’s EPR Working with business is a key element in the success Consumers as decision-makers deciding which products to use must

play their part as well. As Hong Kong is no longer a major manufacturing base, PRSs in

Hong Kong will emphasize shared responsibility of all parties along the supply chain, from importers and distributors to retailers and consumers.

PRS initiatives will need to be supported by a network of regional and district recycling centres.

May impose landfill bans on certain end-of-life products. The property management sector is a key partner in managing MSW

from buildings and housing estates.

Government Industrial Ecology Initiatives improve the collection network through programmes on

separation of waste at source; adopt PRSs as a major measure to enhance the recovery of

recyclable materials; lease suitable STT sites exclusively to waste recyclers; establish an EcoPark to provide long-term land for the

environmental and recycling business; adopt a green procurement policy to enhance market demand

for recycled products; continue to support and encourage research and development

of new recycling technologies through the ECF, the Innovation and Technology Fund, and funds for small and medium enterprises; and

continue to organise educational programmes at the community level to increase the public awareness of waste recycling.

“Exporters see red over EU green rules”

“Exporters see red over EU green rules”

New European Union environmental requirements will affect about US$25 billion worth of Hong Kong exports annually and force manufacturers to invest heavily in compliance, according to industry groups.

The waste electrical and electronic equipment directive, which comes into effect in August, will hold European retailers and their Hong Kong suppliers responsible for recycling what they sell in Europe.

Consumer-goods retailers, for example, will have to accept discarded goods and pass them back to their suppliers for recycling or proper disposal, obliging exporters to restructure their supply chains and manufacturing processes.

Another EU directive will ban all electrical and electronic equipment containing excess amounts of substances including lead, cadmium, mercury and certain flame retardant materials from July next year.

"Hong Kong manufacturers will have to invest a lot of effort to meet these requirements in a very short time," said Sunny Chai of the Hong Kong Electrical Appliances Manufacturers Association.

Mr Chai estimates that less than 10 per cent of Hong Kong manufacturers realise how seriously the new EU directives could affect their businesses.

Manufacturers that fail to meet the requirements will be fined if they attempt to export to the EU and possibly barred from the common market.

"Local industries stand to lose a big share of the global export market," Federation of Hong Kong Industries (FHKI) chairman Chan Kei-biu said.

"It will take a lot of time and expense for Hong Kong manufacturers to meet the requirements, but it's a matter of survival.

"Multinationals will insist on these requirements, so it's either business or no business for the manufacturers.

"Meeting the requirements will not be impossible, but not cheap either. Of course their costs will rise."

The new rules will affect 10 categories of electrical and electronic goods, including household appliances, telecommunications equipment, toys and lighting, and electrical tools.

In response, seven industry bodies have banded to form the Hong Kong Green Manufacturing Alliance, which will provide advice and technology to manufacturers to achieve compliance.

The alliance will give Hong Kong products a "G-mark" certification, indicating they meet the EU's new green standards.

The seven organisations are the FHKI, the Hong Kong Electronics Industries Association, the Hong Kong Electrical Appliances Manufacturers Association, the Hong Kong Toys Council, the Hong Kong Watch and Clock Council, the Toy Manufacturers Association of Hong Kong and the Hong Kong Watch Manufacturers Association. Advising the alliance are the Trade Development Council and various academic institutions.

Similar green laws were passed last year in Japan and it would not be long before the United States and China follow suit, Mr Chan predicted.

"Hong Kong manufacturers should not think stricter environmental requirements will be confined only to the EU," he said.

Demand Side Management

Usually in utilities such as electricity and water supply

Utility can gain from putting off investments in capacity; load leveling; profit sharing with customer

Utilities often educate and subsidize changes on demand side.

Producers helping customers (i.e. the demand side) to reduce their costs and improve the performance of their purchased electricity, water, or other good.

CLP’s Demand Side Management

Information and Education, Energy Efficiency Centre, Pilot Lighting Programmes

Non-residential Energy Efficient Lighting Rebate Programme

Non-residential Variable Speed Drive Rebate Programme

Non-residential Energy Efficient Air-conditioner Rebate Programme

Making money by not investing in more facilities and maintaining service.

Non-Energy Efficient Lighting Equipment vs. Energy Efficient Lighting

Incandescent Lamp vs. Compact Fluorescent Lamps

(CFLs) 70 ~ 80% energy saving

Fluorescent Tube (FT) vs.Energy Efficient Fluorescent

Tube (EEFT) 10 ~ 30% energy savings

Conventional Electromagnetic Ballast (EMB) for Tubular Fluorescent Tube Electronic Ballast (EB) for Tubular Fluorescent

Tube 20 ~ 30% energy savings

Reinvest in natural capital

Meaning: Business must meet the necessity to restore, sustain, and expand the planet’s ecosystems so that they can produce their vital services and biological resources more abundantly.

Business can create value at the same time it fulfills these needs.

Reinvest in Natural Capital

Organic farming—and purchasing Natural ingredient and sustainable harvest

based products Natural waste recycling Ecotourism Green factories Residential development

Patagonia Organic Cotton

Clothing Converted entire sportswear line to 100% organically grown cotton

without compromising quality and improving the feel of the fabric Removed toxic damage to ecological systems and human health Encouraged biodiversity and healthier ecosystem; increased soil

fertility and reduced erosion; improved human health conditions; and realized true economy in human and environmental health and well-being costs.

Fair Trade Commodities: coffee, tea, cocoa, cotton, fruit,

vegetables, rice, beer, wine, honey, etc. Guarantees a minimum price to producers of

commodities and investments into communities Standards are set by stakeholders from producers

and commercial distributors Producers and distributors are audited September 2004: 422 certified producer groups in

49 producer countries selling to hundreds of Fairtrade registered importers, licensees and retailers in 19 countries.

Environmental Impacts: Green and Black’s Chocolate•farmers grow cocoa trees under the shade of indigenous trees alongside other crops, including avocado, pineapple, coffee, papaya and bananas. The canopy of shade trees - mahogany, cedar and teak - are grown above the cacao trees and ginger is occasionally grown underneath.•variety of cocoa and shade trees and interspersing with other plants promotes biodiversity and helps fight off diseases like black pod.•cocoa trees are not treated with pesticides and certified organic (farmers don’t suffer from the health related problems suffered by farmers growing cocoa conventionally).

Carbon Offsets

Companies can fund other companies, communities, or governments to reduce their GHG emissions by changing to renewable energy or other types of technologies that reduce or eliminate other greenhouse gases and by funding the sequestration (storage) of carbon dioxide.

Carbon Offsets

Companies can fund other companies, communities, or governments to reduce their GHG emissions by changing to renewable energy or other types of technologies that reduce or eliminate other greenhouse gases and by funding the sequestration (storage) of carbon dioxide.

Carbon Offsets

Eliminate, reduce, sequester Cheaper and more flexibility than inhouse

changes Suppliers Real benefits Brand building or greenwash?

HSBC Carbon Neutral Project

HSBC has bought 170,000 tonnes of carbon offset credits from four offset projects around the world:

Project 1: Te Apiti wind farm, in North Island, New Zealand Project 2: Organic waste composting, in Victoria, Australia. Project 3: Sandbeiendorf agricultural methane capture, in

Sandbeiendorf, Gemany. Project 4: Vensa Biotek biomass co-generation, in Andhra

Pradesh, India.

Community Industrial Ecology

Community Product CyclePrivate Sector Based

Planning BasedParticipation

Community Product Cycle

product is designed by groups of people to reduce environmental impact in the most efficient manner for their area.

Therefore don’t have to design infrastructures for products designed elsewhere.

Goods and services.

Overcome Limits of Product Cycle

Limited capacity to respond to local environmental and infrastructure conditions

Transaction costs of finding out Proximity effect Community control

Private Sector Based: IE Parks

Synergies of materials and energy savings Cogeneration of energy, co-treatment of

waste, use of by-products Spontaneous evolution and planned

development Government regulations and support

Industrial Ecology (Symbiosis) in Kalundborg

Industrial Ecology (Symbiosis) at Kalundborg

The industrial symbiosis in the Kalundborg district is built up as a network cooperation between five industrial enterprises and the municipality of Kalundborg. In this symbiosis, the five enterprises : Asnæs Power Station, the plasterboard manufacturer GYPROC, the pharmaceutical and biotechnology company Novo Nordisk/Novozymes, the soil remediating company A/S Bioteknisk Jordrens and the STATOIL refinery trade by-products because the waste of each is a valuable raw material to one or more of the others. The result is a reduction of both resource consumption and environmental impacts.

The six business partners also gain financially from the cooperation because all contracts within the symbiosis are based on sound commercial principles.

Industrial Ecology (Symbiosis) at KalundborgPower station steam and heat: used to heat 4,300 homes in town of Kalundborg; process steam for STATOIL Refinery (15% of total); process steam used at Novo Nordisk/Novozymes for heating and sterilisation; cooling water from Power Station is used by a fish farm to produce 200 tonnes of troutWater: use reduced by 50-90%, recycled for further useRefinery gas: used at Power Station instead of coal and oil, formerlyalso supplied GYPROC, now used as back-up system. Gypsum: Power Station´s flue gas desulphurisation plant removes sulphur dioxide from flue gas to produce 200,000 tonnes of gypsum a year which is sold to GYPROC for plasterboard products for the building industry. This gypsum is more uniform and cleaner than natural gypsum.

Industrial Ecology (Symbiosis) at KalundborgBiomass: Enzyme production at Novo Nordisk/Novozymes isbased on fermentation of such raw materials as potato flour and corn starch. Resulting biomass used by West Zealand farmers to fertilise fields. Surplus yeast from insulin production is used as animal feed.Liquid fertilizer : sulphur dioxide removed from the flue gas is used in the production of liquid fertilizer - around 20.000 tonnes a year - which roughly correspond to the Danish annual consumption.Fly ash: removed from the flue gas at70.000 tonnes a year, is used in the building industry, most for cement production.Sludge: from the public water treatment plant in Kalundborg is utilized at A/S Bioteknisk Jordrens as a nutrient in the bioremediation process.

Planning Based

Government control over what activities take place where and how they are connected

Expressed through zoning, infrastructure, policies Previously focused on economic efficiency and

separation of land uses for health and amenity Now greater emphasis on integrating nature and

combining land uses

Planning: Goals,Components, Control

1. Environmental, social, economic goals

2. Industry; Housing; Energy; Transport and communication; Buildings and facilities

3. Coordination, participation, policy and legislation

Planning: industrial ecology practices Conscious mapping of resource (energy, materials, waste,

water, etc.) flows at a city and regional level; Coordinated development of government activities,

residential patterns, industry sectors, technologies and individual companies to maximize resource synergies;

Minimization of imports of materials, exports of wastes and long distance movement of part-finished goods; and

Encouraging businesses to locate near their workforces, suppliers, customers, and other businesses with synergies

Planning: industrial ecology examples Nature in Cities Urban farming Distributed energy and waste facilities District heating and cooling Adapted transportation networks Localized manufacturing Demand side management Design of multiple functions into buildings and

infrastructure

Participation

Set priorities based on stakeholder needs Obtain information and foster support Enable the development of long-term,

comprehensive solutions Key component in planning Problems of alienation in society, lack of sense

of place, government/planning structure

Stakeholder Participation

Who Citizens Business Government NGOs and other

groups Visitors

When and Where Plan initiation Plan design Operation of plan Monitoring and

enforcement Evaluation of plan

‘$50,000 lure’ for minibus LPG switch

1. What physical infrastructure is under development?

2. What land-use considerations are required?

3. What kind of social decisions are being made?

4. Who is involved?5. Are the decisions being made in a

atmosphere of cooperation or conflict?

How could you cooperate with your neighbours on:

Energy, Transportation (people and goods), Sewage and garbage, Recycling, or Purchasing?