In my previous blog,
I focused on presenting some general concepts in setting up eco-efficiency performance indicators for the economies of scale. Looking at attempts of some countries to test and analyse the environmental improvements and what is their effect on the economic and social situation.
The challenges of setting effective KPIs are also considered from business perspective. Here, the formula applies to eco-efficiency of specific product. It is measured in the value of the product, divided by the environmental impact of the product.
Eco-efficiency = Value of a product / Environmental impact of a product
The formula enables us to develop strategies for improving the eco-efficiency performance:
- Reduce the use of resources (land, water, materials, energy) allowing the price to be reduced
- Reduce impact on the environment (less waste disposal of toxic substances, reducing water dispatch and air emissions
- Increasing product value - providing benefits to customers with better product functionality, additional services and improved flexibility
Many businesses make the environmental strategy as part of their business corporate philosophy and able to boost quality of life and reduce environmental impact.
Businesses want to measure the value provided by products and services from customer perspective driving product safety, convenience and reliability of product through design and innovation. The aim is also to mitigate climate change, use resources efficiently and manage toxic chemicals used and released from production. Environmental issues are reviewed throughout the entire product life cycle from a very comprehensive perspective.
The environmental and social responsibility of businesses is no longer a Public Relations (PR) and Marketing matter. Many organisational leaders see it now as the way of doing business. It is said that 93% of CEOs believe that sustainability issues are the driving factors for future of their business. Yet, many organisations still struggle to implement the strategies effectively. One of the most significant barriers are the complexities of implementation across different business functions. Businesses are at a journey of minimising these barriers and systematically aim to improve the performance both internally and externally.
With the help of consultants and working closely with the customers and suppliers meaningful progress is made towards the sustainability goals.
Define your goals
One of the starting points for introducing any improvements will be do define clear and defined objectives. These should be made available in the business motto and organisational strategy and values. Eco-efficiency goals and performance indicators set effectively will create more value and reduction in environmental impact.
Toshiba Group for example based their parameters on efficiency factor. They have came out with an equation based on internationally accepted parameters:
- The Organisation for Economic Co-operation and Development (OECD) estimates that the world’s average GDP per capita will grow by a factor of 3.4 by 2050 - The world population is expected to increase by a factor of 1.5 between the years 2000 and 2050 - The 15th Conference of the Parties to the U.N. Framework convention on Climate Change concluded that greenhouse gas emissions must be reduced by half by 2050 Taking these three points into account, the required improvement in eco-efficiency can be expressed in the equation 3.4×1.5×2 = 10.2.
(Source: Toshiba, Environmental Strategy Brochure)
The goal is therefore to improve performance y a factor of 10, by not only complying with applicable laws and regulations but number of voluntary protection guidelines.
Develop products that create desired value
By creating user-friendly products customer value is created. Evaluating product life cycle and reducing environmental impact take a strong lead at some businesses this days. Green procurement, environmentally compatible materials and aim of abolition of certain chemicals drives innovations and research departments. Reduce-reuse-recycle principle stays at heart of product development strategies.
Analyse your processes
Businesses work to conserve resource and energy Each business unction from production, marketing, logistics, procurement are evaluated with the aim of enhancing ecological compatibility.
Raise awareness
Businesses deliberately expand employee's environmental consciousness. This is done by taking part is society-wide sustainability projects, environmental training and education, awareness campaigns and cooperations with administrations and new partners.
Enhance environmental compliance
Businesses not only want to comply with applicable laws and regulations, but voluntarily apply environmental guidelines. This include certification to the ecological standard ISO 14001, strictly adhering to EU directives and regulations such as RoHS (Restriction of Hazardous Substances), REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) and WEEE (Waste Electrical and Electronic Equipment).
Evaluate supply chains
The sustainability efforts also do not stop at core business activities. The efforts are expanded among suppliers and post-sale product life activities including disposal. Many organisations work with their suppliers to raise awareness, developing projects and training to assess the supply chain environmental impact. New partnerships are created, new business opportunities, new jobs and potential markets are explored.
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