Corporations and Sustainability

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Corporations and Sustainability

• Module 14

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Overview

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

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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
2000
1980
1990
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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
1970
2000
1980
1990
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Dow Jones Sustainability Index

• DJSGI / DJGI (Euro)
• Correlation 0.9617 Tracking Error 3.08
• DJSGI Volatility 16.80 DJGI Volatility 16.11

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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

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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!)

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Terminology

• 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
  (Erkman)
• Industrial Symbiosis an industrial system where
  waste from processes is a resources for other
  processes

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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

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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 RD,
  marketing, quality..
• Public sector involvement for defining values for
  trade-off

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

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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

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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
• Natures 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

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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

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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

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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

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

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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

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Some Case Studies of Businesses

• Victoria Versicherungs-Gesellschaften
• Monsanto
• Xerox
• Interface
• Ford Motor Company

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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

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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
  initiatives
• The basic questions
• What do we take?
• What do we make?
• What do we waste?

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The Path to Sustainability

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

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The Prototypical Company of the 21st Century
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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

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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)
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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
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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.
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Xerox-Zero Waste Plants
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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

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Monsantos Product Sustainability Process
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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

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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.

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Program in Sustainable Manufacturing (PRISM)

• Leading edge of courses offered at universities
• Michigan Tech
• A student-led, manufacturing learning enterprise.

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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