CLEAN = competitive

 Claude Fussler shows how pointing the compass to eco-efficiency brings rapid benefits to the bottom line

Any waste, obviously, is bad for our environment – and of course, hazardous waste is especially dangerous to our health as well. But all waste, hazardous or otherwise, is also bad for business. So while companies have a responsibility and duty to eliminate any hazardous substances completely from their products and processes, they should also be aiming to reduce all waste. And when they succeed, it will be a win-win situation for the environment, and for them.

It can be done. Companies are doing it through applying cleaner production or eco-efficiency, two closely interlocked concepts that hold the key for business to improve our environment and health, and boost corporate profitability at the same time. Let me give two examples.

  • In the early 1990s, Beijing Chemical Factory No. 3 (BCF3), one of China’s main producers of additives for polymer products, like paints and plastics, was in trouble because production costs were rising due to its obsolete equipment and the inefficient use of raw materials. The plant was also the third largest polluter in the Beijing region, discharging organic pollutants to the air and the Liang Shuihe river system.

    Installing expensive wastewater treatment could have tipped the company into bankruptcy. Instead, BCF3 initiated a cleaner production audit. This identified 20 options for action. Nine were introduced rapidly. They cost a mere $1,200 to implement, and saved $30,000 a year – a payback period of just 15 days.

    Then the factory carried out a special audit of its butyl acetate plant, chosen because of its overconsumption of raw materials and the heavy chemical pollution in its effluent. These increased costs were threatening its financial viability. The audit identified a number of low-cost measures that, when implemented, cut consumption of acetic acid and butyl alcohol, both saving money and cutting pollution. They cost $20,000 to implement and generated annual savings of $55,000 – a five-month pay-back period.

    Overall, BCF3 halved its water discharges, reduced its raw material requirements by 10 per cent, and cut energy consumption. Through this programme, competitiveness improved hand-in-hand with environmental performance.
    The bottom line of eco-efficiency is that it benefits the bottom line

  • On the other side of the world, in April 1999, Dow completed a two-year collaboration with United States environmentalists to reduce toxic emissions at its Midland, Michigan site – the company’s original chemical facility. Dow and the Natural Resources Defence Council recruited five local environmentalists to take part in this Michigan Source Reduction Initiative (MSRI). The initiative set aggressive goals: 35 per cent cuts in both the generation of a specific list of wastes and in emissions to air and water.

    The result? By April 1999, the site was on track to cut waste generation by 37 per cent, and to reduce emissions by 43 per cent – beating the original targets. There was a financial pay-back too. Dow invested $3.1 million to make the changes, but they are expected to save the company nearly $5.4 million every year. Again, competitive gains were based on environmental improvements.

    This is the key point. The bottom line of eco-efficiency is that it benefits the bottom line. This alone should be a compelling reason for every company to embrace the concept.

    Eco-efficiency is about innovation – changing process or manufacturing technology, changing input materials, changing the final product, and breaking with business-as-usual. And companies must do things differently if they are to compete successfully, prosper and even survive in a marketplace where, increasingly, there will be no hiding place for laggards.

    The truth is we are well beyond the point where firms can simply tinker at the edges, adding a few end-of-pipe technical improvements to reduce pollution. Business still has to produce, but must do so differently – through eco-efficiency, a totally integrated package that brings financial returns, as well as gains in quality, productivity and environmental performance.

    Quantifiable benefits
    And it patently makes sound business sense for any company to reduce its use of materials and energy, to conserve resources, to cut down on its waste – hazardous or not – and to reuse it wherever possible. The benefits are quantifiable in hard dollar terms.

    But how is it to be done? At Dow we developed an ‘eco-compass’ to identify and evaluate improvements and innovations needed to move towards sustainability. Two of its six poles are mainly environmental – health and environmental risk, and resource conservation. The other four are also of business significance – energy intensity, materials intensity, revalorization (remanufacturing, reuse and recycling) and service extension.

    Using the eco-compass, companies can find the breakthrough solutions to put themselves ahead of the competition – not in a haphazard way, but through a structured process of innovation that involves:

    • Accepting the challenge of eco-efficiency and assembling the key data.

    • Identifying the opportunities.

    • Organizing the best ideas.

    • Pinpointing the potential winners.

    • Implementing the most promising proposals.

    • Setting clear targets.

    • Introducing indicators of progress.

    • Measuring progress.

    The targets must be ambitious. The gap between them and current performance presents the challenge to innovate, a design assignment for better processes, better products – and a better company. Moreover, people are energized by the challenge. And they should be rewarded and share in the success – because eco-efficiency works best with empowered employees in an environment of continuous learning.

    Certainly, eco-innovation takes courage for managers. But the next 30 years will be rough. The world is not just demanding that business cleans up its act. It expects business to create more wealth with far, far less – four- to ten-fold less – resource intensity.

    It is some challenge, but also an incredible business opportunity. Ask the Greek tannery that saved $43,000 a year by reducing emissions of chromium, or the Tunisian battery manufacturer saving $2 million over a two-year period for an investment of under $400,000. They need no convincing. It can be done – because it is being done

    Claude Fussler is Vice President at Dow Europe and is currently serving as Director of Stakeholder Relations at the World Business Council for Sustainable Development.

    PHOTOGRAPH: Topham

  • This issue:
    Contents | Editorial K. Toepfer | Celebration and challenge | Informal diplomacy | Being in earnest | International Declaration on Cleaner Production | Clean = competitive | Not on planet Earth! | The Basel Convention | At a glance | Competition | It’s a waste | Move these poisonous mountains | Broad, global and dynamic | A monumental challenge | UNEP Chemicals | Latin lessons | Sasakawa Environment Prize | Of potholes and ozone holes | Will we learn?

    Complementary articles in other issues:
    Ralf Corsten: Where the buck stops (Tourism) 1999
    Kenneth F. Hine: Green beds and greenbacks (Tourism) 1999
    Geoffrey Lipman: Travelling hopefully (Tourism) 1999
    Colin Marshall: Change in the air (Tourism) 1999
    Al Fry and Walter Rast: Tapping industrial ingenuity (Freshwater) 1998
    Margaret G. Kerr: Profits with honour (The Way Ahead) 1997
    David T. Buzzelli: Our millennium challenge (Chemicals) 1997
    Surya Prakash Chandak: A crucial juncture (Chemicals) 1997
    Osama A. El-Kholy: Cleaner, timely and all-embracing (UNEP 25) 1997
    Molly Harriss Olson: Shaping a path to sustainability (Production and Consumption) 1996