Corporate Environmental Strategies Corporate Environmental Strategies

&
b k Carbon Markets
Markets, Efficiency, Eco-efficiency
d and
Sustainable Product Development
Eco-Efficiency Eco Efficiency
Environmental Impact
Environmental Impact
Wh l ti l i fl f ti ti iti Whole or partial influence of a corporations activities,
products or services, whether adverse or beneficial, on the
environment (e.g. the impact on land, water and air quality and
on biodiversity) on biodiversity)
Environmental Impact Added p
Sum of all environmental impacts that are:
Caused directly or indirectly by business activities
Si ifi t b f th t d tit f t i l d Significant because of the type and quantity of material and
mass of energy used by businesses in their activities
Assessed according to the relative environmental harm they
cause
Source: Schaltegger et al., 2003
Source: Schaltegger et al., 2003
Market and Efficiency
Business primarily focuses its actions on Business primarily focuses its actions on
market activity
The relationship between price and costs
provides an indication of the economic
efficiency
Competition forces businesses to be efficient Competition forces businesses to be efficient
in the management of organizational
activities and processes activities and processes
Market and Efficiency
Productivity
Profitability
Environmental
Efficiency
Desired Output
Environmental Impact
=
o e ta pact
Added
Technical Environmental Efficiency Technical Environmental Efficiency
Economic Environmental Efficiency
(Eco-efficiency) ( y)
Eco-efficiency
Economic Value
Creation
Eco- Efficiency
Creation
Environmental Impact
Added
=
In most cases, eco-efficiency is taken to mean the ecological
optimization of overall systems while not disregarding economic
factors
Eco-efficiency considered to be a basis for decisions made in
factors
businesses today e.g. BASF
World Business Council for Sustainable Development
(WBCSD) (WBCSD)
Eco-efficiency more concepts
Business activity
Value addition
Environmental Impact Addition
Can be linked through consideration of products
or functions
Eco-efficiency
1 Ecological Product Efficiency 1. Ecological Product Efficiency
Ratio between provision of a unit of
product and environmental impact added product and environmental impact added
by that product over the whole, or over a
part, of the products life cycle
pollution prevention techniques or by
introducing end-of-pipe devices
d d f i t it reduced use of inputs per unit
substitution of resources
Eco-efficiency
2 Ecological Function Efficiency 2. Ecological Function Efficiency
Ratio between the provision of a function
and the associated environmental impact and the associated environmental impact
added
substitution with functions having high g g
EFE
reduction in amount used to fulfill
f ti function
prolonging life-span of product
Improving product efficiency Improving product efficiency
Eco-efficiency Analysis
The aim
to compare similar products or processes to compare similar products or processes
increase concrete (final) customer benefit
Involves carrying out an overall study of alternative Involves carrying out an overall study of alternative
solutions to include a total cost determination and the
calculation of environmental impact over the entire
lifecycle y
The results are used for comparison among competing
products products
They may increase market opportunities or assist y y
product improvement
Source: http://corporate.basf.com/en/?id=V00-1AgGG8pXRbcp3*O
Life cycle Assessment
Source: http://corporate.basf.com/en/?id=V00-1AgGG8pXRbcp3*O
Eco-efficiency Analysis: BASF
Environmental Impacts: Environmental Impacts:
Energy consumption
Emissions Emissions
Air
Water
S lid W t Solid Wastes
Material Consumption
Toxicity Potential Toxicity Potential
Abuse and Risk Potential
Cost Calculation
Ecological Fingerprint
Aggregationof impact categories Aggregation of impact categories,
representation of results
Normalization
The least favorable alternative is awarded a value of 1 and
all others are set in relation to that
Weighting factors
Relevance factors
Societal weighting factors
Total weighting factors
Ecological Fingerprint Ecological Fingerprint
Energy consumption Energy consumption
1,0 1,0 Solution, Solution,
electro electro--
chemically chemically
Emissions Emissions
Material Material
consumption consumption
0,5 0,5
Solution, Solution,
40% 40%
chemically chemically
Emissions Emissions
0,0 0,0
G l G l
Granules, Granules,
synthetically synthetically
T i it T i it Ri k Ri k
Granules, Granules,
biotechno biotechno--
logically logically
Toxicity Toxicity
potential potential
Risk Risk
potential potential
Powder Powder
from plants from plants
Eco-efficiency: Environmental Fingerprints?
Source: http://corporate.basf.com/en/?id=V00-1AgGG8pXRbcp3*O
In the Eco-Efficiency Portfolio, the Environmental
Impact is plotted against the Costs Impact is plotted against the Costs
Environ Impact Environ Impact (normalized) (normalized) Environ. Impact Environ. Impact (normalized) (normalized)
High eco High eco--efficiency efficiency High eco High eco--efficiency efficiency
Low Low
Benefit:
1.000 jeans
Solution
Electrochemical
j
dyed with
indigo
Plants
Granules
Biotechnological
Low eco Low eco--efficiency efficiency Low eco Low eco--efficiency efficiency
High High
Plants
19
Total costs Total costs (normalized) (normalized)
Low Low
The portfolio is based onto a principle idea of Schaltegger and Sturm 1992
Consequences of Eco-efficiency Analyses
Environmental Impact Environmental Impact (normalized) (normalized) pp ( ) ( )
low low
Depending on
h i i f
bring to market! bring to market!
1 0 1 0
the position of
the analysed
product, different
strategic
reduce reduce
costs! costs!
1,0 1,0 strategic
recommen-
dations are
given
reduce reduce
environmental environmental
impact! impact!
develop develop
alternatives! alternatives!
high high
given.
costs costs (normalized) (normalized)
1,0 1,0 high high low low
Source: http://corporate.basf.com/en/?id=V00-1AgGG8pXRbcp3*O
What does BASF use Eco-Efficiency Analysis for?
Internal Internal
Strategy Research/product
development
Decisions on investments
development
Prioritization of research
projects
Marketing
Politics
Discussion with opinion makers
Marketing
External customers optimize their
External External
p
in political decisions
products and processes with eco-
efficiency analyses
Source: http://corporate.basf.com/en/?id=V00-1AgGG8pXRbcp3*O