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Corporations and Sustainability


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Title: Corporations and Sustainability

Corporations and Sustainability
  • Module 14

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

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
Economic importance of sustainability
Shell 20 renewable energy by 2020
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 14000
Swiss Re Sustainable Performance Group
Dow Jones Sustainability Index
  • DJSGI / DJGI (Euro)
  • Correlation 0.9617 Tracking Error 3.08
  • DJSGI Volatility 16.80 DJGI Volatility 16.11

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

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!)

  • Ecology the study of the earths 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
  • Industrial Symbiosis an industrial system where
    waste from processes is a resources for other

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

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,
  • Tradeoffs virgin vs. recycled, energy at each
    stage, materials recyclability,
    manufacturability, costs
  • Challenges
  • Adequate database about materials and their
  • Concurrent engineering to work across RD,
    marketing, quality..
  • Public sector involvement for defining values for

DFE Example - Xerox
New Components
Raw Materials
Certified Reprocessing
Certified Reprocessing
Closed Loop Recycling
Return to Suppliers
Customer Use
Third Party Recycling
Materials for Recycling
Alternative Uses
Disposal Goal Zero to Landfill
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)

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
  • 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

The Deep Ecology Paradigm
  • Earth is a closed system
  • Human society and ecosystems have co-evolved
  • Nature has value and an independent right to
  • Natures intrinsic value is hidden by economic
  • 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

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
  • 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

Industrial Metabolism
  • A Big Picture analytic tool developed by Robert
  • 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

Industrial Symbiosis
  • Most commonly understood meaning of industrial
  • 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

Conventional Waste Managment in Fiji
Brewery waste dumped into oceans to destroy coral
Muck dumped on fields
Waste piles up
Methane vented
Muck cleaned out
Industrial Ecology in Fiji
Brewery waste fertilizes mushrooms
Mushroom residue feeds chickens
Chicken waste is composted
Solids become fish food
Nutrients used in gardens
Industrial Ecosystem Kalundborg
Fly Ash
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

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
  • An EIP is a community of companies that must
    manage itself to provide benefits for its
  • 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

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

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
  • 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
  • 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

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

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

The Prototypical Company of the 21st Century
  • 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

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)
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
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
Xerox-Zero Waste Plants
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


(No Transcript)
Monsantos Product Sustainability Process
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-Environm
    ent 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

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
  • 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.

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

Summary and Conclusions
  • Manufacturing, like other sectors, must deal with
  • 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