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Corporations and Sustainability

Corporations and Sustainability

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Corporations and Sustainability

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  1. Corporations and Sustainability Module 14

  2. Overview • The Case for Sustainability in Manufacturing • Terminology • Natural Systems as Models • Directions in Industrial Ecology • Examples

  3. Political Importance of Sustainability SustainableProduction & Consumption Compulsory CO2-reduction Goals (Kyoto) Agenda 21 Biodiversity Oil Crisis Brundtland UN-Report Political Relevance of Sustainability Ecological Tax reforms Country Strategies Sustainability RIO SustainabilitySummit 1970 1980 1990 2000

  4. Economic importance of sustainability Shell 20% renewable energy by2020 Shell: Compulsory Sustainability-Goals Dow Jones: Global Sustainability Index Unilever: Sustainable Fishing Daimler-Benz Fuel Cells not later than 2004 Chemical industry: Environmental reports Economic Relevance of Sustainability Banks/Insurance UNEP-Declaration Industry: EMAS ISO 14‘000 Swiss Re: Sustainable Performance Group 1970 1980 1990 2000

  5. Dow Jones Sustainability Index 330.00 187% DJSGI World (in EUR) 280.00 DJGI World (in EUR) 131% 230.00 180.00 130.00 80.00 Dec 93 Jun 94 Dec 94 Jun 95 Dec 95 Jun 96 Dec 96 Jun 97 Dec 97 Jun 98 Dec 98 Jun 99 Dec 99 Jun 00 Dec 00 • DJSGI / DJGI (Euro): • Correlation: 0.9617 Tracking Error: 3.08% • DJSGI Volatility: 16.80% DJGI Volatility: 16.11%

  6. Investment performance "Most of these companies will fluctuate with the market," Zehnder said. "But the larger ones don't fall as hard. The smaller sustainable companies have a little more volatility -- they may be hit harder in a downturn, but they come back at a stronger rate, as well." Zehnder may have a point. In recent days, when the Dow Jones Industrial Average has taken a dive, the sustainability index has made modest gains of 2 or 3 percent -- although it's about 14 percent lower than last year at this time. Gainesville Sun, Thursday, March 22, 2001

  7. Candidates for Lessening Impacts • Zero Emissions Systems • Orderly progression from Type I (high throughput mass and energy, no resource recovery) to Type III (closed loop) • Eliminate ‘leaks’ • Material Substitution • More durable, less waste, more recyclable • Dematerialization • Theory of Dematerialization: the more affluent a society becomes, the mass of materials required diminishes over time • Must result in less waste to be effective • Functionality Economy • What is the function? Do we need automobiles? Waste from telephone disposal (old phones were leased and returned!)

  8. Terminology • Ecology: the study of the earth’s life support systems, of the interdependence of all beings on Earth (Odum, E.) • Metabolism: sum of the processes sustaining the organism: production of new cellular materials (anabolism) and degradation of other materials to produce energy (catabolism) (Ray) • Industrial Ecology: application of ecological theory to industrial systems (Rejeski); views the industrial world as a natural system, embedded in local ecosystems and the local biosphere (Lowe) • Industrial Metabolism: flow of materials & energy through the industrial system and the interaction of these flows with global biogeochemical cycles (Erkman) • Industrial Symbiosis: an industrial system where waste from processes is a resources for other processes

  9. More Terminology • Design for the Environment: considers all potential environmental implications of a product: energy and materials used in the product; its manufacture and packaging; transportation; consumer use, reuse, and recycling; and disposal. • Design for Recycling • Design for Disassembly • Design for Remanufacturing

  10. Design for the Environment (DFE) • Considers all potential implications of a product • Energy & materials • Manufacture & packaging • Transportation • Consumer use, reuse or recycling, and disposal • A holistic design process • Example: automobile bodies (Iron, plastics, & aluminum) • Tradeoffs: virgin vs. recycled, energy at each stage, materials recyclability, manufacturability, costs • Challenges: • Adequate database about materials and their impacts • Concurrent engineering to work across R&D, marketing, quality.. • Public sector involvement for defining values for trade-off

  11. DFE Example - Xerox Build New Components Raw Materials Certified Reprocessing Closed Loop Recycling Certified Reprocessing Deliver Return to Suppliers Customer Use Sort/Inspect Third Party Recycling Remove Materials for Recycling Dismantle Alternative Uses Disposal Goal: Zero to Landfill

  12. More Terminology • Eco-Efficiency: Integration of economic efficiency (financial return, profit, productivity, customer perception) and environmental efficiency (energy, emissions, environmental impacts. • Ecofactory: integrated design of production systems technology- including DFE at product and process levels – with disassembling, reuse and materials recycling technology (Agency for Industrial Science and Technology, Japan)

  13. Natural Systems • Function as an integrated whole • Minimize waste: dead or alive all plants and animals and their wastes are food for something • Decomposers (microbes and other organisms) consume waste and are eaten by other creatures in the food chain • Toxins are not stored or transported in bulk but are synthesized and used as need by species individuals • Materials are continually circulated and transformed in elegant ways. • Nature runs largely off solar energy • Nature is dynamic and information driven, identity of ecosystem players is defined in process terms

  14. The Deep Ecology Paradigm • Earth is a closed system • Human society and ecosystems have co-evolved • Nature has value and an independent right to exist • Nature’s intrinsic value is hidden by economic activity • Sustainability is the wrong question as it comes out of human-centeredness • Human transformation of “self” to realize harmony with nature • Technological pessimism: the value of technological innovation must be proven • Level of economic activity ultimately consistent with solar inputs

  15. Industrial Ecology • The name “industrial ecology”- why? • Models of non-human biological systems and their interactions with nature are instructive for industrial systems that we design and operate • The biological model is clever, a closed-loop materials system • Recent better understanding of the materials and energy flows of biological systems • Questions: • How do you apply the biological principles of resilience, limiting factors, other rules? • What about the low efficiency of natural systems (<5%)? • Bottom Line: • Lessen (dramatically the impacts of our industrial system) • Management of the industry-natural systems interface, match input-output of the manmade world to the constraints of the biosphere

  16. Industrial Metabolism • A “Big Picture” analytic tool developed by Robert Ayres • Examination of the total pattern of material and energy flows form initial extraction of resources to final disposal of wastes • Factors in the real value of nonrenewable resources and environmental pollution, gives value to externalities • Can be used for regions (the Rhine basin), specific industries (aluminum) or specific materials (heavy metals) • Suggests some measures of sustainability: ratios of potential to actual recycled materials, virgin to recycled materials, materials productivity

  17. Industrial Symbiosis • Most commonly understood meaning of industrial ecology • Waste materials and energy serving as inputs or resources for other industrial processes • Also referred to as “By-product synergy,” “green twinning,” “zero-waste/zero-emissions,” “cradle-to-cradle eco-efficient manufacturing” • Evolving into the concept of an Eco-Industrial Park where co-locating

  18. Conventional Waste Managment in Fiji MushroomGrowing Chicken Raising Methane Gas Production Fish Ponds Brewery waste dumped into oceans to destroy coral reefs Brewery Muck dumped on fields Waste piles up Methane vented Muck cleaned out

  19. Industrial Ecology in Fiji MushroomGrowing Chicken Raising Methane Gas Production Fish Ponds HydroponicGardening Brewery waste fertilizes mushrooms Brewery Mushroom residue feeds chickens Chicken waste is composted Solids become fish food Nutrients used in gardens

  20. Industrial Ecosystem: Kalundborg Greenhouses Kemira Statoil Refinery District Heating Lake Tisso Asnaes Power Station Gyproc Fish Farming Novo Nordisk Fertilizer Cement;roads Heat Water Gas Heat Steam Water Water Gypsum Steam Water Heat Sludge Fly Ash

  21. Implementing Industrial Ecology • Technical Basis • Choose material • Design the product • Recover the material • Monitor the Situation • Institutional Barriers and Incentives • Market and informational barriers • Business and Financial barriers • Regulatory barriers • Legal Barriers • Regional Strategies • Ecoparks, Eco-Factories

  22. The Eco-Industrial Park (EIP) • A community of manufacturing and service businesses seeking enhanced environmental and economic performance through collaborating in the management of environmental and resource issues. • The interactions among companies resemble the dynamics of a natural ecosystem where all materials are continually recycled. • Industrial Park: restricted meaning in terms of geography and ownership. • An EIP is a relate estate property that must be managed to bring a competitive advantage to its owners. • An EIP is a “community of companies” that must manage itself to provide benefits for its members. • Decisions are based on maximizing the profitability of the EIP as a whole • Transfer prices negotiated so each member will be as profitable as without the EIP

  23. Some Case Studies of Businesses • Victoria Versicherungs-Gesellschaften • Monsanto • Xerox • Interface • Ford Motor Company

  24. Victoria Versicherungs-Gesellschaften • Certified to European Union (EU) Environmental Management and Audit Scheme (EMAS) in 1999 • EMAS designed for manufacturing firms but there are many indirect impacts of financial institutions • Victoria has extensive real-estate holdings (184) buildings: location, energy-consumption • Internal operations: energy, water, solid waste, consumption of office supplies, restricted air transport (most air emissions due to business travel) • Rewards environmentally-friendly behavior in insurance coverage, premium calculations, claims adjustment, etc. • Compensates clients for replanting trees and shrubs in residential construction • New guidelines for calculating premiums for liability at wastewater treatment plants for reduced chemical use. • EMS is a license to participate in developing new tools and markets

  25. Interface, Inc. • A manufacturer of carpet tiles and carpeting • 6,300 people, 110 countries, 26 plants • Want to become the world’s first truly sustainable company: 400 sustainability initiatives • The basic questions: • What do we take? • What do we make? • What do we waste?

  26. The Path to Sustainability • Eliminate Waste • Benign Emissions • Renewable Energy • Closing the Loop • Resource Efficient Transportation • Sensitivity Hookup • Redesign of Commerce

  27. The Prototypical Company of the 21st Century

  28. Xerox • ‘Waste Free Products from Waste Free Plants for Waste Free Offices’ philosophy. • Definition of Xerox equipment: "Xerox equipment and accessories have been produced in a factory from new parts and reprocessed parts, which meet the performance standard of new parts.“ • The company uses eco-efficiency to enable it to satisfy customers’ requirements for environmental and functional benefits, while at the same time improving its own operational efficiency while deriving economic benefit. This is done through waste free products, waste free plants and waste free offices. • Packaging free products is major goal

  29. Xerox-Ecoefficiency Strategy Xerox has shown that eco-efficiency can provide win-win-win situations: 1. win for the customer (increased savings by increased efficiency, and lowering the environmental impact) 2. win for the company (avoiding raw material purchases, and increased customer satisfaction) 3. win for the environment (reduced raw material consumption)

  30. Xerox –Waste Free Products 1. reduced material mix – resulting in easier separation of materials for recycling 2. parts commonality – enabling the reusing of parts 3. multiple lives – avoids disposal of useful parts and optimized part life 4. serviceability – digital machines utilize ‘sixth sense’ diagnostics, which allow remote servicing and eliminating ‘broken calls’ whilst minimizing service engineer journeys 5. easy disassembly – products designed for disassembly allowing reuse/recycling 6. packaging-free – reusable or recyclable pallets eliminate the need for traditional waste producing packaging

  31. 7. life cycle analysis – used in the design process to evaluate environmental impacts 8. life cycle costing – costing throughout all phases of the life cycle 9. customer requirements – delivering products which include customers’ requirements into the design process 10. materials recycling – as much material as possible is reprocessed or recycled, reducing resource consumption and providing an economic return through the purchasing of fewer raw materials 11. document productivity – by making document management more efficient, Xerox is both satisfying its customers with higher flexibility and functionality while reducing material consumption.

  32. Xerox-Zero Waste Plants

  33. Xerox-Waste Free Offices • Waste in an office is a sign of inefficiency • Reclaim toner bottles and cartridges • Printing on both sides of a sheet of paper

  34. Monsanto’s Product Sustainability Process

  35. Ford Motor Company • A typical U.S. car weighs 3,274 pounds with the industry consuming: • 76 percent of all natural rubber • 33 percent of iron • 31 percent of aluminum • Ford has developed and offered Design-for-Environment training to all engineers and suppliers to help them understand issues, tradeoffs and the state-of-the-art with respect to recycled content and other desirable materials. • Cross-functional Vehicle Recycling Action Teams in North America and Europe are charged with the task of increasing the use of recycled content, non-metallic materials and "design for recycling" in an effort to achieve environmental targets. • Ford was the first automotive company to issue worldwide recycling guidelines to its suppliers and engineers

  36. Ford (continued) • These efforts have borne fruit, with Ford's recent models such as the Taurus, Fiesta and Excursion ranging from 80 percent to 84 percent recyclable. • Ford itself has entered the recycling business through the purchase of more than 25 automotive recycling companies. • Ford is an active participant in the International Dismantling Information System (IDIS), a consortium formed in 1995 and expanded in 1999 to include all 20 major automotive manufacturers worldwide. • The purpose of IDIS is to provide dismantlers with needed information on environmentally sound treatment of end-of-life vehicles. • IDIS has developed a single, user-friendly database of information on vehicles dating back to the early 1980s, listing any parts that are worth recycling and detailing procedures for fluid removal, air bag treatment and dismantling.

  37. Program in Sustainable Manufacturing (PRISM) • Leading edge of courses offered at universities • Michigan Tech • “A student-led, manufacturing learning enterprise.

  38. Summary and Conclusions • Manufacturing, like other sectors, must deal with sustainability • Industrial Ecology and Metabolism provide a possible framework for creating a shift • Leading businesses around the world are beginning to examine how to shift their practices to accommodate zero emissions, closed loop behavior, mimicking of nature, into their businesses • Sustainable manufacturing can make the US more competitive globally