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Environmental Performance Indicators and Strategy

From LCI data for LWA to indicators for Environmental Management

Anne Rønning

STØ

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National and international authorities

National requirements for reduction of climate gas emissions, which may lead to considerable investments and increased manufacturing cost.

Introduction of a national and international system for climate gas trading

A radical increase in landfill waste costs (e.g. for waste from building demolition), demands put on the different manufacturing branches to design and operate recycling systems for waste after end use, as well as a requirement for a certain, minimum share of recycled material in new products.

• A radical increase of prices for fossil energy resources and electric energy.

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Why use environmental indicators for decision support

Systematic work for – changing of the energy mix

– more energy- and material efficient products

– change of the product mix and material composition of products

may prevent large increases in manufacturing costs for companies in a 5-10 year perspective.

The introduction of environmental indicators in the various decision situations may become an efficient tool to: – plan

– follow-up

– control

this company performance in these areas.

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Deciding what to measure

• The challenge is to decide upon the most important parameters to be prioritised and in which form these should be expressed.

Emissions and

resource consumption

To air

CO2 kg/tonCO2 (waste) kg/tonSO2 kg/tonNOx kg/tonCO kg/tonHC kg/tonParticulates kg/tonCH4 kg/tonN2O kg/tonNH3 kg/tonHCl kg/tonHF kg/tonPAH kg/tonRn-222 kBq/tonCl- kg/tonHg kg/tonCd kg/tonAs kg/tonPb kg/tonNi kg/tonBa kg/tonCu kg/tonCo kg/tonCr tot. kg/tonMo kg/tonSe kg/tonZn kg/ton

To water

SO4- kg/tonMetals kg/tonCOD kg/tonDissolved solids kg/tonTot-N kg/tonOil kg/tonNH3 (aq) kg/ton

Waste

Waste to landfill kg/tonWaste to recycling kg/tonHazardous waste kg/ton

Virgin resources

Clay kg/tonLimestone kg/tonDolomite kg/tonIron kg/tonCrude oil kg/tonCoal kg/tonGas kg/tonPeat kg/tonBiomass kg/tonWood kg/tonNatural uranium kg/tonHydro power MJ/ton

Non-virgin resources

Waste oil kg/tonBleaching earth (fossil) kg/tonBleaching earth (biological) kg/tonBiomass (waste) kg/ton

Primary energy consumption

Fossil energy MJ/tonBioenergy MJ/tonNuclear energy MJ/tonHydro power MJ/ton

Energy from recycled materials

Fossil energy MJ/tonBioenergy MJ/ton

Sum energy consumption MJ/ton

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When to use EPIs

• For planning, goal-setting and follow-up on a strategic level

• For planning, goal-setting and follow-up on an operational level

• External communication

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When to use EPIs

• On a strategic level - Effectiveness indicators– do the right thing

• On a operational level - Efficiency indicators – do it correctly

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Type of indicators - how are they expressed

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Example of effectiveness indicatorTurn over in 2000

0

50

100

150

200

250

300

350

400

Product 1 Product 2 Product 3

mill

Ter

ra D

olla

r/ye

ar

Process

0

50

100

150

200

250

Product 1 Product 2 Product 3

ton

ne

CO

2/m

ill T

erra

Do

llar

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Example of effectiveness indicatorCO2-emissons from own processes incl. emissions from production of raw

materials

0

50

100

150

200

250

300

350

400

Product 1 Product 2 Product 3

ton

ne

CO

2/m

ill T

erra

Do

llar Upstream processes

Own process

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Use of strategy matrix

- Making Product 1 better, e.g. by selecting a substitute material or choosing another supplier (with a better environmental profile);

- Making Product 2 better, e.g. by making the manufacturing process more energy efficient and converting to a less fossil-dependent energy mix.

Environmental quality

Market value

High

Medium

Low

Low Medium High

Prod.1

Prod. 2

Prod. 3

?

? ?

?

?

?

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Example of efficiency indicator

0

20

40

60

80

100

120

1997 1998 1999 2000 2001 2002 2003

kg/m

3 L

WA

CO2 (waste)CO2

CO2

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Delegating responsibility;linking decisions and consequenses

• everyone should be able to see the effect on the environment resulting from the decisions they make– breaking into a cause/effect chain

Plant management

Supporting functions(Env.mng.,

Purchase ProductionMarketing/

SaleRaw materials

Effect indicators

Products

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Delegating responsibility;linking decisions and consequenses

Product portfolioclimate consequences

Energy consequencesfrom manufacturing

Production planningimplications

Product design orspecifications

Energy conversionefficiency

Share of fossilenergy

Fossil energy conse-quences in user-phase

Product concept -design or specifications

Consumer use/operationin user phase

Organisation of product development function

Product developer’sknowledge/understanding

Challenge of product function requirements

Consumer knowledgeand understanding

Product selection guidance

Technologyselection and mix

Level of operationalmaintenance

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Delegating responsibility;linking decisions and consequenses

In the EMS - make a close connection between the significant environmental aspects, and the functions responsible for continuous environmental improvement

how should the indicator be expressed how often should it be reported and to whom who is responsible for following up

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Not just reporting

Operational level

Tactical level

Strategic

level

Reporting

Managing

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EPI as a part of EMS

Registration

EnvironmentalReview

Environmental Objectives &

Program

EnvironmentalManagement

system

EnvironmentalAuditing

Environmental Statement

Validation

Environmental Policy

Program

Manager

Procedure

Cyclus 1-3 years

EU

Nationalregister

Application

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Procedures for reporting and managing

ManagingDirector

Purchaser Marketing/Sales manager

Env.manager

Resp. forproduct dev.

To whom?How oftenGoal/action planHow to use

CO2/grossturnover(split intofossil andwaste) Why

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The greenhouse gas protocol - a corporate accounting and reporting standard

• World Business Council for Sustainable Development (WBCSD) and World Resources Institute (WRI)

• suggested this standard is used as the common, internationally accepted system for accounting and reporting

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The greenhouse gas protocol - a corporate accounting and reporting standard

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Scope 1 - Direct GHG emissions

accounts for direct GHG emissions from sources that are owned or controlled by the reporting company.

• production of electricity, heat, or steam• physical or chemical processing• transportation of materials, products, waste, and

employees, • fugitive emissions: intentional or unintentional

releases such as: equipment leaks from joints, seals; methane emissions from coal mines; HFC emissions during the use of air conditioning equipment; and CH 4 leakages from gas

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Scope 2 - GHG emissions from imports of electricity, heat, or steam

• accounts for indirect emissions associated with the generation of imported/purchased electricity, heat, or steam

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Scope 3 - Other indirect GHG emissions

Indirect emissions that are a consequence of the activities of the reporting company

– employee business travel– transportation if products, materials and waste– outsourced activities, contract manufacturing– emissions from the use and end-of-life phases of

products and services produced by the reporting company

– employees commuting to and from work– production of imported materials

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The GHG Protocol recommends that companies account for and report scopes 1 and 2 at a minimum.

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CO2-trading system

• EU-countries– expected to participate in the initial phase EU

trading system between 2005-07

– CO2 quotas will in this period probably be free based on a nationally selected reference year from 1990-2000

• Non-EU countries (Norway)– Leca must participate in the Norwegian trading

system during the period 2005-07. – Quotas corresponding to 80% of 1990 emissions

will be free

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Conclusions

• Implementation of EPI on all level in organisation is vital– Strategic indicators few in all levels but operational

indicator can be many and different in each level.

• Link to EMS important.• Not only a reporting system – but a tool on strategic

and operational level!• CO2 trading demands focus on this issue – EPI can

be the tool to do that in the whole organisation.• GHG emission based on the same data as EPI.

Again a tool to keep this issue in focus