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SUSTAINABILITY IN THE

MANUFACTURING PROCESS: IHCORPORATING THE NATURAL STEP

PRINCIPLES In early 1998, the was involved in The Oregon Department Katural Step (TNS), of Environmental Rejuvenation Inc. 's environmen- an international Quality (DEQ), to- sustainability net- gether with the Ore- work with a chapter gon Natural Step in Oregon. They Network and the agreed to partici- City of Portland pate in a pilot proj- Bureau of Environ- ect that DEQ had mental Services (BES), individually were interested specifically developed to incorporate sustainabili- in implementing a working strategy based around ty into an EMS. a sustainability paradigm. DEQ was also interested Rejuvenation has two facilities: a retail store in incorporating a sustainability paradigm into an in southeast Portland and a manufacturing facili- environmental management system (EMS) compa- ty in northwest Portland. The EMS, developed for rable to the standards of the International Organi- Rejuvenation's manufacturing facility, was imple- zation for Standardization's I S 0 14001 EMS.

fal management system

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Project Summary Dave Kunz, John Klosferman, and Rejuvenation Inc., a Portland-based lighting

fixture manufacturing and retailing company, Christopher Juniper

mented in fall 1999. Rejuvenation is expanding the sustainability strategy to the entire company during year 2000.

As a result of the pilot, Rejuvenation has adopted an environmental policy focused on preservation of natural capital. They selected nine manufacturing operations that create ”significant” environmental impacts to be addressed with goals and objectives for improvement. Ten key “eco-indicators” were developed to help monitor environmental performance and goals have been set, including the provision of “social equity” within the company. Actual results from using the EMS will be monitored by DEQ at the end of 2000 in the form of an EMS audit.

The project confirmed that integrating sustainability into a custom-designed EMS for a growing, medium-sized manufacturer has beneficial impacts on the company in adhering to environmental regulations. The TNS/EMS also assists the company to identify and invest in opportunities that enhance business competitiveness via greater environmental performance. (The term “environmental performance,” as used here, means the active reduction of business environ-

mental impacts. The

The project confirmed that integrating sustainability into a custom-designed EMS for a growing, medium-sized manufacturer has beneficial impacts on the company in adhering to environmental regulations.

greater the environmental performance, the less the environment is impacted by the existence of the business-i.e., by the full life-cycle of the movement of materials and use of energy from raw materials to

disposal of both products and waste stimulated by the existence of the business.)

The proof of these environmental improvement opportunities occurs over time and largely depends on the vigor with which the company pursues the competitive advantages of increasing

environmental performance. As the company experiences growth that might affect future regulatory requirements, the EMS is a tool to stay ahead of the situation by preventing emissions or designing permit solutions.

The project also demonstrated that a collabo- ration of interested government and nonprofit agencies can substantially assist a medium-sized business to cost-effectively design and implement a sustainability EMS. During the course of the pilot project, several unique tools were developed to facilitate the incorporation and measurement of sustainability within the EMS. Others developing an EMS can use these tools and benefit from the issues and lessons identified along the way.

Similar projects would likely require at least six months to a year to develop an understanding of the environmental impacts of the business; to complete a custom-designed sustainability EMS; to establish appropriate environmental performance indicators; and to integrate the EMS into annual corporate strategic planning. This EMS development. typically occurs while the key manufacturing managers are fully occupied with the full-time (or more) rigors of business management.

Rejuvenation lnc. Rejuvenation-also known at its retail store as

Rejuvenation House Parts-is a rapidly growing Portland manufacturing, mail-order catalog, and retail firm. Owner and founder Jim Kelly initially opened Rejuvenation in order to satisfy a market for used “house parts”-hardware, trim, and lighting, among others. Soon, however, the demand for original period pieces exceeded the supply from home demolition and remodeling projects. In 1978, Rejuvenation began manufacturing reproduction lamps and fixtures in an 85-square- foot basement corner of an old saloon storefront.

The manufacturing operations have since espanded to an 87,000-square-foot factory in

16 / Autumn 2000 / Pollution Prevention Review Dave Kunz, John Klosterman, and Christopher Juniper

northwest Portland. The company sells over $15 million worth of manufactured and companion products via its bi-annual mail-order catalog (the current 12th edition is 88 pages), its Internet site (http://www.rejuvenation.com), and its retail store in inner southeast Portland.

Rejuvenation’s manufacturing primarily involves metal finishing and light assembly and wiring of top-quality authentic period reproduction lighting. Components are sourced from both domestic and foreign foundries, spinners, stampers, screw machine shops, and sheet metal fabricators. Brass is the primary material, with copper, aluminum, cast iron, and a variety of glass types (for shades) comprising the majority of the balance.

Over 300 customizable models necessitate a job-’shop approach to produce orders made espe- cially for the direct customer. Teams operate in a lean-manufacturing hybrid to craft the complex assembly with 11 standard, hand-worked metals finishes. Recent manufacturing challenges include:

implementing sophisticated MRP-I1 manufacturing software with a rules-based custom product configurator; rehabilitating an old Chase Bag plant into a viable manufacturing facility; converting to a hybrid of lean (or demand flow) manufacturing; recruiting and training new employees as metal finishers and fixture assemblers who are often learning English as a second language; and maintaining quality and environmental compliance under consistent 25-30 percent annual growth.

Seeking to set standards for its environmental performance that “substantially exceed legal requirements,” Rejuvenation became interested in-The Natural Step (TNS) and attended a variety of workshops throughout 1997. As the Oregon

Natural Step Network was organized and began offering local TNS training opportunities, Reju- venation became interested in building sustainability into their business operation. Rejuvena- tion’s manufacturing management team recognized the opportunity and capacity for change, but its corporate management still needed to be convinced to devote sufficient attention to a wholly new approach.

Rejuvenation Inc. was selected by DEQ for the pilot because of their commitment to socially responsible business leadership. They were already involved in TNS and willing to commit sufficient time and the energy of company principals to develop a sustainability strategy with the

Rejuvenation’s manufacturing management team recognized the

opportunity and capacity for change, but its corporate management still needed to be convinced to devote sufficient attention to a

wholly new approach.

limited technical assistance provided by the project partnership.

Environmental Management Systems (EMSs) An environmental management system (EMS)

offers an organized approach to managing an organization’s environmental impacts. It pro- vides an organization with a systematic method to document policies, develop targets and objectives, set controls, establish target indicators, and account for ancillary procedures. As part of developing an EMS, a facility’s processes can be mapped to determine very. specific inputs and outputs, and materials can be mathematically balanced to determine levels of waste and/or opportunities for efficiency.

The environmental management system can be designed to conform to’an external EMS standard, such as I S 0 14001; this allows the system to be recognized and/or audited by other organizations. The I S 0 14000 series was developed in con-

Incorporating The Natural Step Principles Pollution Prevention Review / Autumn 2000 / 17

http://www.rejuvenation.com

junction with the Geneva-based International Organization for Standardization (ISO), and has become widely recognized as an international EMS standard since its introduction in 1996. I S 0 standards can be audited by third parties, or self- audited by the company (with outside assistance if necessary).

The Natural Step (TNS) The Natural Step (TNS) is a set of principles

that define the basic conditions for a society to be environmentally sustainable. The principles were derived from a scientific consensus process initi- ated by Swedish cancer researcher Dr. Karl-Henrik Robert in the late 1980s. The consensus process aimed to determine what scientists could agree on as fundamental natural principles of the planet’s operations. The Natural Step organization in Sweden then converted the scientific consensus into four “system conditions” that society should seek to attain in order to achieve environmental sustainability.

The Natural Step is a sustainability paradigm based on scientific principles regarding the non- negotiable physical laws of the Earth. The scientific basis for The Natural Step is as follows:

1. All mass and energy in the universe is con- served; energy may be converted into differ-

ent forms, yet the total amount of energy in an isolated system

constant* This First Law of Thermo- dynamics is important to understanding the Earth as a system. When matter in the

form of liquid fossil fuels or coal is burned it is not destroyed, but is simply converted into waste in the form of both visible and invisible gases. Or simply put: Nothing disappears.

The Natural Step is a sustainability paradigm based on scientific principles regarding the non-negotiable physical laws of the Earth.

2. Energy and matter tend to spread spontaneous- ly; everything has a tendency to disperse. This is best understood through the Second Law of Thermodynamics, or the Law of Entropy. Entropy is a measure of the disorder or random- ness of a system. In every isolated system, such as the universe, entropy always increases. Exam- ples of increases in entropy include that organic matter decays, colored dye in clear water dis- perses, and ice samples taken in the Arctic Cir- cle contain measurable amounts of the man- made PCBs. Materials generated by, or intro- duced into, society eventually will disperse in nature. Or simply put: Everything spreads.

3. Material quality is in the concentration and structure of matter. For example, food and gasoline are valuable because they contain order. One cannot consume energy or matter, only its concentration, purity, and structure. If you drop a teacup and it breaks on the floor, some of the value from its structure is lost, but each of the original atoms is still present. Or simply put: There is value in order.

4. Net increases in material quality on Earth are generated almost entirely by sun-driven pho- tosynthetic processes. Chloroplasts in plant cells capture energy from sunlight and form bonds that provide energy for other forms of life, such as animals. According to the Second Law of Thermodynamics, disorder increases in all closed systems. However, the Earth is an open system with respect to energy in that it receives light from the sun, and it is this flow of sunlight which is responsible for almost all increases in net material quality on this planet. Or simply put: Plants create structure and order by using energy from sunlight.

The four conditions are:

System condition I: In order for a society to be sustainable, nature’s functions and diversity

18 / Autumn 2000 I Pollution Prevention Review Dave Kunz, John Klosterman, and Christopher Juniper A

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cannot be systematically subjected to increasing concentrations of substances extracted from the Earth’s crust. Or simply put: Keep it in the crust. System condition 2: In order for a society to be sustainable, nature’s functions and diversity cannot be systematically subjected to increasing concentrations of substances produced by society. Or simply put: Don’t make toxic stuff. System condition 3: In order for a society to be sustainable, nature’s functions and diversity cannot be systematically impoverished by physical displacement, over-harvesting, or other forms of ecosystem manipulation. Or simply put: Don’t pave paradise. System condition 4: In a sustainable society, resources are used fairly and efficiently in order to meet basic human needs globally. Or simply put: Be fair and thrifty.

The Oregon Natural Step Network, a project of the Northwest Earth Institute, focuses on publici- ty and education about TNS in the Portland metro-area and assists member companies with early stages of implementation.

Pilot Project Design DEQ decided to measure The Natural Step sus-

tainability conditions within an IS0 14001-comparable EMS, and assembled a team of professionals. With funds from EPA’s Pollution Preven- tion Incentives for the States, DEQ hired a consultant familiar with the Natural Step philosophy. A technical team familiar with EMSs and environmental regulations was assembled, including DEQ staff representing the air, water, hazardous waste, and pollution prevention programs. Wastewater and pollution prevention staff from the City of Portland rounded out the technical team. Staff from the manufacturing facility at Rejuvenation was dedicated to the project. Occa-

sionally, additional help from the Oregon Natur- al Step Network was also employed.

The design of the EMS began with the following critical questions (answers in italics):

Whether to seek I S 0 1.1001 third-party compliance certification, use I S 0 14001 standards but self-audit compliance, create an I S 0 14001-based self-audit system, or not be I S 0 14001 compliant? I S 0 14001 -based self-audit. Whether to incorporate the higher standards of Oregon’s Green Permits program requiring stakeholder involvement and a commitment to reporting results? Use highest Oregon DEQ standards. Whether to draw the boundaries of DEQ decided to measure The Nat- the EMS at Rejuve- ural Step sustainability conditions nation’s occupied within an IS0 14001 -comparable portion of Plant #5, EMS, and assembled a team of include the entire professionals. plant, include all of R e j u v e n a t i o n ’ s facilities, and/or include Rejuvenation’s direct suppliers and customers? Begin with entire manufacturing plant plus direct suppliers and customers. Whether to adopt “sustainability” goals into the environmental policy and, if so, how to define them? Adopt sustainability goals as defined by T N S . Whether to incorporate concepts or auditing systems of social responsibitty performance in order to integrate social concerns into environmental management? Considen‘ng use of a social accountability-auditing scheme known as SA 8000; have developed a formal commitment to “fair pay, ” Which of the identified indicators of environmental performance to adopt? Cardboard recycled, volatile organic compounds released, water

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usage, packaging materials used, natural gas

2000 I19

iisnye, electricity iisayr, scrap metd, solid waste, lead-bearirig biiffing dust, and srwaye sludge per dollar of sdes arid per iinit mniifuctiired.

Once the basic framework was chosen, Reju- venation’s custom-designed EMS emerged in detail over a period of months, during which time “eco-indicators” were designed in order to measure ongoing environmental performance and inform upper management reviewlapproval.

The intensity of managing Rejuvenation’s

The process of designing and then growing and writing an EMS that integrates TNS business stretched the

was not entirely a linear process, planning process Out

and benefited from a convergence to six months, resulting in a of timing, intent, and interest. slow but steady EMS development process. The process allowed

new ideas to percolate throughout the Rejuvena- tion manufacturing facility staff implementing the system, and permitted review and reconsider- ation by the technical design team.

See Exhibit 1 for Rejuvenation’s environmental management system document. Exhib- it 2 includes Rejuvenation’s environmental aspects analysis and the ranking system used for identifying significant environmental impacts in relation to sustainability. Exhibit 3 shows the operational plan developed to address the ranked impacts.

The process of designing and then writing an EMS that integrates TNS was not entirely a linear process, and benefited from a convergence of timing, intent, and interest. Developing positive working relationships with regulatory agencies was considered vital to evaluating Rejuvenation’s expected future growth and resultant potential environmental regulations. The technical team helped link company efforts to ongoing work sponsored by the TNS Network (e.& seminars on

20 / Autumn 2000 / Pollution Prevention Review

eco-indicators offered when Rejuvenation was ready to develop their own indicators).

Activities Developed by Pilot Participants

ment period are discussed below. Activities within the year-long EMS develop-

Incorporation of the “Material Balance ” Process into Rejuvenation’s Manufacturing and Accounting Systems

A material balance involves tracking a facility’s flow of physical materials to measure the “nonproduct output’’ (Le., waste and pollution) from the facility’s operations. It begins with mapping of all the separate processes within the facility and then weighs the input against the output.

This methodology is a standard component of pollution prevention techniques. Pollution prevention is one of three substantive commitments of an IS0 14001-compliant environmental management system (the others are continual performance improvement and legal compliance). A careful tracking of facility inputs is also necessary to establish the baseline for a company’s “eco- indicators.”

lntegrafion of Environmental Performance Indicators (“Eco-indicators”) into Business Accounting

Recognizing that “what gets measured gets managed,” any business needs to identify which key environmental performance indicators to track closely. Rejuvenation’s use of both an I S 0 14001-based EMS and TNS provided it with two screens to determine performance indicators.

I S 0 14001 requires objectives and targets for “significant” environmental impacts. TNS provided an objective method for determining significant impacts through comparison of Rejuve- nation’s various operations to compliance with the four sustainability conditions. TNS also pro-

Dave Kunz, John Klosterman, and Christopher Juniper

Exhibit 1. Rejuvenation's Environmental Management System (EMS) Document

Environmental Policy (IS0 14001 54.2)

Rejuvenation is committed to excellent environmental performance, continually improving toward environmental sustainability. We believe that preservation of natural capital is essential to human progress worldwide. Rejuvenation assures conformance with this policy through the use of its Environmental Management System (EMS), which is informed by International Standard IS0 14001.

Our Environmental Management System (EMS) is fundamentally based on The Natural Step's first-order scientific principles of, sustainability, and is further guided by pollution prevention, fairness and efficiency of resource use, waste reduction, legal compliance, and the application of emerging technologies. Rejuvenation adopts the following definition of sustainability, as established by The Natural Step:

In order for a society to be sustainable, nature's functions and diversity must not be systematically:

1. Subject to increasing concentration of substances extracted from the earth's crust; 2. Subject to increasing concentrations of substances produced by society: 3. Impoverished by over harvesting or other forms of ecosystem manipulation. 4. In addition, natural resources must be used fairly and efficiently in order to meet basic human needs worldwide.

lmplemenfafion and Results Expected results from this commitment are continual improvement of Rejuvenation's environmental performance in

the following areas: prevention of pollution, fairness and efficiency of resource use, waste reduction, legal compliance, application of emerging technologies, and effectiveness of the EMS. At a minimum, Rejuvenation expects compliance with all applicable environmental laws, while aiming for environmental results that are significantly better than those required by law.

Fair and efficient resource use includes (1) conscious preservation and restoration of natural capital, and (2) work compensation that supports sustainable living. Life cycle analysis incorporating The Natural Step will be utilized in major design and capital investment decisions, to the extent feasible. Rejuvenation considers it the responsibility of all owners and employees to implement its environmental commitments, but also recognizes that many of its employees will experience difficulty understanding the policy due to their limited command of the English language. In this case, visually oriented procedures will be emphasized to increase the understanding and contribution of these employees. The written policy will be effectively communicated both internally and externally.

The scope of the EMS will ultimately include all of the environmental aspects that Rejuvenation can control, and over which it can exert direct influence.

At the time the EMS is adopted, the scope will be limited to the operations of the manufacturing facility located at 2550 N.W. Nicolai Street, Portland, Oregon, 9721 0. The manufacturing operations are defined in this case to be the five operating departments (Engineering, Materials, Scheduling, Production, Distribution), and the direct vendors who provide products or services which are integral to Rejuvenation's daily manufacturing operations (Le., electroplating, powder coating, laundry services, and transportation services). The EMS will apply to the land and real estate assets of the Nicolai facility, and Rejuvenation's operations within the facility, but not any business operations at the Nicolai site, which are not owned by Rejuvenation Inc. Note that portions of the attached East Warehouse on the location are leased for tenant warehousing.

Further, it is Rejuvenation's intention to influence, to the extent reasonably possible, the environmental performance of the vendors, suppliers, and customers of business units covered by the EMS.

Rejuvenation's intent is to broaden its EMS to include the direct marketing and administrative functions by February 1, 2000 and the retail store by January 1, 2001. Through this broadening of the EMS and through its strategic planning process, the sustainability principles of The Natural Step will be applied throughout the company's operations.

Planning (IS0 14001 54.3)

Environmental Aspects (IS0 14001 94.3.1)

Rejuvenation will identify the environmental aspects of its activities, products, or services that,$ can control, and over which it can be expected to exert influence in order to determine those which have,,or can have, significant impacts on the environment. These aspects will be evaluated using the four system conditions of The Natural Step and other measures that provide clear, replicative, and informative evaluation of the significance of the impact. The methodology subjectively ranks the impacts against a quantified scale, and as such, does not represent the absolute significance of the impact. The purpose of the analysis is to identify the most significant impacts, and Rejuvenation will, as a rule, work to- improve the most significant impacts first. Particular consideration will be given to local environmental conditions and carrying capacity. The Chair and the CEO of the company shall approve the evaluation.

A re-evaluation of Rejuvenation's aspects, and the significance of its environmental impacts,,will be completed no later than 18 months from the date of the previous approved evaluation. However, it is expected to be performed on an annual basis at the beginning of each calendar year, which coincides with Rejuvenation's fiscal year. The approved eyaluation will serve as the basis for '(1) the designation of significant environmental impacts, (2) the setting of Reju- venation's environmental objectives and targets for the significant environmental aspects, and (3) annual strategic planning to meet the objectives and targets.

Exhibit 1. Rejuvenation's Environmental Management System (EMS) Document (contd.)

Legal and Other Requirements (IS0 14001 94.3.2)

Rejuvenation's Manufacturing Engineering Manager will maintain current information regarding legal and other requirements of its environmental aspects through routine communication with the Oregon Department of Environ- mental Quality, the City of Portland Bureau of Environmental Services, and other appropriate organizations. These communications are designed to be proactive and preventive in nature, and will be Coupled with a site inspection when possible, at least once a year. Accessing outside legal and technical expertise is an important element of Reju- venation's legal compliance strategy, and it simultaneously forms a partnership designed to improve environmental performance beyond the law. In addition, it is Rejuvenation's goal to anticipate new legal environmental requirements so as to meet new requirements at the earliest feasible date.

environmental sustainabiiity, a compensation policy committed to "Fair Pay" for all its employees.

Targets, Objectives, and Measurements (IS0 14001 94.3.3)

Rejuvenation will establish and measure environmental pertormance targets and objectives for the significant environmental aspects of operations covered by the EMS, as determined by the approved aspects evaluation. The targets and objectives will be reviewed as part of the periodic aspects evaluation, and are meant to move policy and purpose to action, consistent with Rejuvenation's Environmental Policy. The following shall be considered in the establishment and review of targets and objectives: legal requirements; technological options; financial, operational, and business requirements; views of stakeholders; the system conditions of The Natural Step.

The Manufacturing Manager is responsible for periodically communicating the targets, objectives, and measurements across the organization using the written procedures in control document EOP-00100. As the EMS expands to additional Rejuvenation operations, the appropriate operational manager shall be responsible for communicating that operation's targets, objectives, and measurements across the organization.

Environmental Management Program@) (IS0 14001 94.3.4)

Rejuvenation will plan its environmental strategies with a minimum of a three-year strategic horizon, and will work towards inclusion of longer (Le., ten year) timeframes into its annual strategic planning and continual environmental management work.

Following the annual strategic planning, the appropriate operations managers will devise an operational plan for the year which includes priorities, responsibilities, schedules, and resources required for (1) meeting targets and objectives for significant environmental impacts, and (2) making progress towards environmental excellence. The appropriate operations manager for the manufacturing operations is the Manufacturing Manager.

Implementation and Operation (IS0 14001 $4.4)

Structure and Responsibility (IS0 14001 94.4.1)

The Manufacturing Manager is the senior management position designated as responsible for the conduct and performance of the EMS at the manufacturing facility. As the EMS is expanded to other Rejuvenation operations, the senior manager of that operation will be designated as responsible for EMS conduct and performance in that area.

The Manufacturing Engineering Manager is responsible for implementing the EMS, including developing and complying with written procedures, assessing impacts, measurement and tracking of environmental performance indicators and communicating applicable requirements to senior management: Chairman, PresidenVCEO, Manu- facturing Manager.

Training, Awareness, and Competence (IS0 14001 34.4.2)

The EMS implementation and training programs will be designed to provide environmental management competence, appropriate to their work, far all employees and contractors covered by the EMS.

Employees and contractors will be expected to act in good faith on behalf of the environmental management mission, even if the actions required are outside of their normal work responsibilities.

Rejuvenation's human resource manager will oversee the development of appropriate training in environmental awareness, environmental management, legal compliance, and emergency management for people covered by the EMS in cooperation with the Manufacturing Engineering Manager. In addition, the human resource manager will annually review whether Rejuvenation's employee compensation and reward system sufficiently stimulates excellence in environmental management, and extraordinary actions that promote this mission.

Rejuvenation expects its training system to follow this outline:

Audience: Management Team and Contractor Principals Subject: Strategic importance of environmental management Purpose: Commitment and alignment to Rejuvenation's Environmental Policy

Rejuvenation recognizes one "other requirement" it has voluntarily undertaken in order to promote social equity and


Exhibit 1. Rejuvenation’s Environmental Management System (EMS) Document (contd.)

Audience: Employees and direct external contractors Subject: General environmental awareness Purpose: Gain commitment to environmental policy, The Natural Step, targets and objectives, and personal

responsibility Audience: Employees and direct external contractors with environmental responsibilities Subject: Skills enhancement Purpose: Improve environmental and overall performance in specific operational areas Audience: Employees and direct external contractors whose actions affect legal compliance Subject: Legal compliance Purpose: Ensure regulatory and internal requirements are met

environmental management systems.

Communication (IS0 14001 34.4.3)

The environmental policy, aspects analysis, significant impacts analysis. and environmental objectives, targets and monitoringimeasurement system will be available to the public upon request.

Rejuvenation will develop and implement a stakeholder involvement program that includes (1) proactive encourage- ment of public inquiries and comments regarding the facility’s environmental performance; (2) efforts to establish and maintain understanding, constructive dialogue, and partnership with significant stakeholders; (3) mechanisms, including a biennial environmental report, which discuss with stakeholders the environmental policy, environmental aspects and impacts, and environmental objectives and targets.

Rejuvenation will foster two-way communication with stakeholders and members of the public by considering and responding to the views expressed by public stakeholders. Rejuvenation will consider the views in its decision making, but is not committed to incorporating those views into its decision making.

EMS Documentation (IS0 14001 34.4.4)

The senior manager of each Rejuvenation operation using this EMS (or their designee) will be responsible for insur- ing that appropriate documentation is developed and maintained.

An easy to use and access documentation summary will be developed for all affected employees and contractors. The summary will serve as a permanent reference to EMS implementation.

Documentation will, at the minimum: (1) Clearly connect environmental policy, objectives and targets, and environmental indicators; (2) Identify key roles, responsibilities and procedures and their relationship to other aspects of the organization’s management system (as appropriate); (3) Provide direction to related documents; (4) Be subject to periodic review (maximum 3 years) for cost-effectiveness, competence, and completeness.

Rejuvenation intends to develop a core competence in sustainable business operations using The Natural Step and

Document Control (IS0 14001 34.4.5)

procedures. Document control methods will include the following: Documents to be controlled through the EMS include the Environmental Policy, EMS Manual, and environmental

Document origination, use, and identification by organization, division, function, activity and a contact per-

Dates of document origination and revisions (including authorizing signatures). Insurance that the latest version of documents is available to relevant operations, including removal of out-

son. Approval of documents by authorized personnel prior to their use.

dated documents.

Operational Control (IS0 14001 34.4.6)

An appropriate manager will determine which procedures are subject to documentation and will bversee document development and availability. In the manufacturing facility, the Manufacturing Engineering Manager is the appropriate manager. At a minimum, the documented procedures will cover operations that generate the significant environmental impacts of the facility, as covered by the EMS.

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Emergency Preparedness and Response (IS0 14001 34.4.7)

An appropriate manager will, on an ongoing basis, determine the potential for environmental emergencies and acci- dents, incorporate emergency prevention considerations into operational procedures, insure that emergency response procedures are included in operational ,procedures, and where practicable, will test the emergency procedures. For the manufacturing facility, the appropriate manager is the Manufacturing Engineering Manager.

Fbllowing an environmental emergency or highly unusual event that threatens to cause significant environmental impacts, the facility management team shall review the performance of the emergency procedures and make appropriate adjustments to better insure environmental protection in the future.

Natural Step

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Principles

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!* Pollution Prevention Review / Autumn 2000 / 23 ! t f

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Exhibit 1. Rejuvenation's Environmental Management System (EMS) Document (contd.)

Checking & Corrective Action (IS0 14001 94.5)

Monitoring and Measurement (IS0 14001 54.5.1)

The appropriate manager will establish and maintain a monitoring and measurement system of documented procedures to monitor and measure its significant environmental impacts on an annual basis. The monitoring and measurement system shall provide information which (1) tracks environmental performance (both prima facie performance and performance related to selected overall business performance measurements), (2) tracks compliance with relevant environmental legislation and regulations, and (3) tracks relevant operational controls and conformance with the objectives and targets selected during annual strategic planning. At the manufacturing facility, the appropriate manager is the Manufacturing Engineering Manager.

Nonconformance and Corrective and Preventive Action (IS0 14001 §4,5.2)

Each department adopting this EMS shall establish and maintain procedures that define responsibility and authority for handling and investigating nonconformance with (1) environmental legislation and regulations, and (2) this EMS.

Any corrective or preventive actions taken to reduce or eliminate the causes of actual and potential nonconformance shall be analyzed using the principles of The Natural Step, and be appropriate to the magnitude of the prob- lem or environmental impact created.

Any corrective or preventive actions shall be examined for inclusion in documented work procedures and other relevant documented processes at the Rejuvenation operation involved in the actions.

Records (IS0 14001 54.5.3)

Each Rejuvenation department adopting this EMS shall establish and maintain procedures for the identification, maintenance and disposition of environmental records, including training records, audit results, stakeholder input, and reviews of the EMS relating to conformance with legislation and regulations and the mandates of the EMS. The Manu- facturing Engineering Manager is responsible for these procedures in the manufacturing facility.

EMS Audit (IS0 14001 94.5.4)

conformance with this EMS and conveyance of the information to the Chair and PresidenVCEO.

Management Review (IS0 14001 s4.6)

Rejuvenation's Chair and PresidentCEO shall conduct a documented review of the EMS for adequacy and effectiveness on a semi-annual basis, or on the occasion of a significant failing of the EMS to protect the environment or promote continual improvement in environmental performance. The review shall address, at the minimum, (1) the environmental policy, (2) aspects analysis and determination of significant environmental impacts, (3) objectives, targets and measurements, (4) tracking and conformance with environmental legislation and regulation, and (5) overall progress towards compliance with the principles of The Natural Step and environmental excellence.

Identified eco-indicators will also be measured.

Rejuvenation will establish and maintain programs and self-audit procedures for periodic EMS audits that determine

vides a perspective from which to develop the appropriate measurement of the environmental impact. For example, cardboard use per dollar of sales is not as sensitive to the conditions for a sustainable society as is total amount of recycled cardboard used or amounts of cardboard recycled.

Rejuvenation decided to measure its eco-indi- cator ratios as of mid-1999 and again at the end of 2000 in preparation for its 2001 strategic management planning.

Incorporation of Sustainability Consideration' into Corporate Strategic Development

Rejuvenation conducts annual strategic planning events involving the management team from all divisions. Long-term strategies and investment decisions are generally made during this process. After learning more about The Nat- ural Step, Rejuvenation realized it needed to address its conventional time frame for strategic planning and develop approaches for incorporating longer term business planning and visioning.


Exhibit 2. Rejuvenation’s Manufacturing Operations: A TNS-based IS0 14001 Tool for Ranking Signifi- cant Environmental Impacts

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The spreadsheet that appears on the next page represents a TNS screening and rating system used to help an organization incorporate TNS system conditions to identify significant environmental impacts. This method will help when TNS is combined with an IS0 14001 or other EMS requiring identification of “significant” environmental impacts of the company by a reasonably objective and repeatable process.

For the method to work, the people doing the rating must have intimate familiarity with the operations being rated and with TNS system conditions. Executives and board members, managers, and employees must also understand the ratings. Simplicity is an important component of any rating system a company devises to achieve the same end: goals and objectives for reducing the operation’s significant environmental impacts.

the Rejuvenation ratings that follow. The ratings will be recalculated in late 2000 in conjunction with Rejuvenation’s annual strategic planning in order that revisions in the list of “significant impacts” can be made annually. It is envi- sioned that as some operations receive particular attention, others will (possibly by default of not getting investment attention by the company) rise to the “significant” level in coming years.

The purpose of this tool is to provide an objective and repeatable system for assessing the significance of identified environmental impacts of a business operation according to the TNS System Conditions of sustainabiiity. Each operation is rated according to how the operation performs in meeting each aspect of a System Condition shown in the columns.

For simplicity, this model requires only five TNS columns--one for System Conditions 1, 3, and 4 and two columns for system condition 2 because “toxicity” of man-made chemicals and “persistence” of man-made chemicals are separate issues, and because the toxicity and persistence of man-made chemicals is one of the most serious threats to our natural capital.

Rejuvenation’s Manufacturing Manager John Klosterman and Manufacturing Engineering Manager Jeff Shay made

The tool is used in the following way:

1. The identifiable operations of a company are defined and separated into separate “line-items” on the spreadsheet. 2. The.company (either internally, or through hiring of contractors) compares the operation through its life cycle with

the TNS system conditions and assigns a point value depending on what frequency and severity the System Con- dition aspect listed in the columns is “violated” by the operation. In this model, the greater the violation, the more points assigned on a 1-5 scale. Points are assigned using the following guidelines:

1 point if operations are substantially in compliance with the System Condition aspect 3 points if operations are partially in compliance 5 points if operations are substantially not in compliance

To guide consistent decision making, the points in each column are assigned examples of TNS compliance or non- compliance.

Exhibit 4 sets out a sustainability strategy checklist.

The pursuit of sustainability using TNS (or any other sustainability system) requires “out of the box” thinking in order to overcome the slow progress inherent in incrementalism. The TNS- developed concept of “back-casting” will serve as a tool for the next strategic planning work in December 2000. Exhibit 5 describes back-casting.

Development of Clarity Regarding Training for Employees, Management, and Direct Suppliers and Customers

Rejuvenation’s manufacturing operations include people speaking 16 different native lan- guages, presenting a clear challenge for explain- ing abstract sustainability concepts. Some organ-

Incorporating The Natural Step Principles

izations approach sustainability through basic training for all employees, with systematic follow-up to implement ideas generated from the ground up. Others have incorporated sustainability from the top down after senior management has perceived the competitive advantages available. Rejuvenation’s sustainability journey began with interest from the owner and manufacturing manager through attending Oregdn TNS Network seminars and presentations.

The EMS will be integrated into the manufacturing facility through training programs which specifically bring Rejuvenation’; operating policies, its EMS, its physical operating procedures, and TNS sustainability concepts together into a coherent “what do you do in your job” training manual.

Pollution Prevention Review / Autumn 2000 I 25

Exhibit 2. Rejuvenation’s Manufacturing Operations: A TNS-based IS0 14001 Tool!or Ranking Significant Environmental Impacts (contd.) Aspects Analysis

- 0,

i 0 P

W

e a m a 0 3

Incmdesccot Product Attnbute Packaging End-of-hfe Disposihon

Exhibit 2. Rejuvenation’s Manufacturing Operations: A TNS-based IS0 14001 Tool for Ranking Significant Environmental Impacts (cuntd.) Aspects Analysis

~ _ _ _ ~ _ _ - ~ - -__

~ _ _ _ _ I _ _ _ ~ 17 Yes Energy/Atr Qmhty - _ _ _ I ~- 13 4 - 3 3 3 3 5 3 3 2 2

5 - _ _ _ _ 2 1 14 4 18 No Sohd Waste

.

Exhibit 2. Rejuvenation's Manufacturing Operations: A TNS-based IS0 14001 Tool for Ranking Significant Environmental Impacts (contd.) Aspects Analysis

me Nahual Step Four System Conditions I In order for society to be sustainable, nature's functions and diversity are not systematically:

1) ..subject to increasing eoncentrations of substances extracted from the Earth's crust;

2) ..subject to increasing concentrations of substances produced by society; or

3) ... impoverished by overhanesting or other forms of ecosystem manipulation.

4) And, resources are used fairly and eMciently in order to meet basic human needs worldwide.

Extraction

Persistency & Toxicity

Biodiversity

Emciency & Social Wdty

Frequency of Activity What is the frequency of the activity during an average work day?

- a 1

2

3

4

5

-

100% Recycled

Mixed

Mined

Biodegrade < 1 day Base M a l Non-Toxic

Biodegrade <= 1 "h Moderately Toxic

Biodegrade > I monL Acutely Toxic

Biodiversity

Sustainably Harvested

Ecosystem Complex

Mixed

Nature is consumed

Ecosystem Simplified

Efficiency

Local source Small 9% Landfilled

High energy efficiency

Mixed

Distani Source

High 9i Landfilled Low Energy Efficiency

Social Equity

Min Compensation of Position's Range

has "Fair Pay"

M i d Compensation of Position's Range

has "Fair Pay"

Max Compensation

of Position's Range

has "Fair Pay"

Frequency

Rarely

Occasionally

Continuously

e

Development of Partnership with Regulators from State DEQ and the City

The pilot resulted in ongoing technical assistance to Rejuvenation regarding current environmental regulations, cost-effective compliance strategies, and long-range analysis relating to the future of environmental regulations. The success- ful prediction of, and corporate planning for, any upcoming new regulations are critical strategies for continuously complying with new regulations as they are developed. These steps are also important in maintaining the leading edge in environmental performance-a key part of realizing the competitive advantages available.

A company like Rejuvenation, which began a systematic approach to environmental management by developing an EMS while also beginning a journey towards sustainability, faces a much larger task. However, it has been shown that incorporating TNS

lessons learned by Pilot Participants Several lessons emerged from this pilot project

that other businesses can learn from if they wish to attain sustainability. These lessons are discussed below.

Sustainability Is a Long- Term Perspective That Requires a Long-Term Commitment

Some companies can achieve immediate payback for pursuing sustainable operations through implementing quick and easy pollution prevention measures that rapidly reduce costs by saving waste. But addressing many environmental aspects beyond the quick changes is more akin to turning a large ship in the water. TNS is described as a compass toward a sustainable and more prof- itable future. A company-even a relatively small manufacturing operation like Rejuvenation-is likely to make wide and slow turns in the new direction.

A company beginning to use TNS as a sustainability guide for its existing EMS has the option of incorporating TNS into a company culture that already understands and manages its environmental impacts. Existing environmental management approaches will be adjusted by the incorporation of sustainability concepts and goals.

POllUtiOn Prevention Review / Autumn 2000 / 29 Incorporating The Natural Step Principles

u

into an EMS from the very beginning may take less time than retrofitting sustainability into an existing EMS. For example, one company with an existing EMS decided to switch from using 30,000 pounds of a particular chemical, substitut- ing another chemical that required only 525 pounds. What this company did not take into account, however, was the toxicity or persistence of the new chemical, which would have been considered if the EMS had included TNS.

The competitive advantages for Rejuvenation are long term. Its customers, investors, neigh- bors, and employees are not currently demand- ing these changes. Rejuvenation could have simply continued to incrementally meet the state and local environmental laws without developing the TNS/EMS model. However, the company was internally driven to break new ground by the ethics of its forward-looking management team, who feel they must do their best to create a viable future for the planet while also earning a fair living. \

Since a TNS-based EMS is virtually a new business model, Rejuvenation chose to apply it only to the manufacturing division initially, since the model was likely to have the greatest impact on manufacturing and shipping processes. Rollout of a TNS approach to the rest of the company is being planned.

Subsequently, the one- to three-year development and assimilation period will require total

Some companies can achieve immediate payback for pursuing sustainable operations through implement-

ing quick and easy pollution prevention measures that rapidly reduce costs by saving waste.

Exhibit 3. EMS Operational Plan 2000-Setting Targets and Objectives

PoRland Water j Discharge Permit

I

antiquing solution Impact because process is central Discharge does in-house uslng solutlons are to our not leave confines

of building

lgnlflcant Impacts [Antiquing

require more malntenance and testing. ion

ILacquering I

materials. possibly VOC reduction) water borne. for an investment. performance I

Must meet

PolishingfT'ouch-up

25

onsidered

itatus. (3) Falls 'waste volume. tnder required 'ire Marshall eporting.

discharge soiutlons

!Change to eco.

I

i I

outside Impact in case of spill. If formulate in- house, llkely to bc transporting dry chemicals, which are controlled more easily.

(2) Separate collection stream of high-lead parts. I

management dedication to maintain momentum and complete the process. This dedication will require a strong management understanding of the competitive advantages and personal peace of mind that the completion of the process will bring. company-wide core strategy. The pilot project Ji

There Needs tu Be Company- Wide InVUlVe- menf as Well as Outside Help

There is a danger that TNS/EMS development will become pigeonholed in the environmental manager's job description, and not be seen as a

1

1,


Exhibit 3. EMS Operational Plan SOOhSetting Targets and Objectives (confd.) Measurements/ .-__

Target Objectlve Eco-lndlcatorr Project

Fix water meter, Ideally. find a benign Usage of water and ~ Reduce drag-out and develop baseline data lsubstltute or more in early 2000, with realistically institute a a monthly basis per 1 process water flows goal to reduce closed-loop recycling unit product output. via a quantified process water usage system. 1 routine that by % to be maximizes the use of determined. (We the process water, don't presently know and therefore reduce! what reduction is our flow-through. realistic.) Reduction Investigate ion of antiquing material exchange technology usage by 10% in 2000. heavy metals from

.~. -~

antiquing solution on increase control of

as a way to recover

Engineenng Manager, with Production Manager and Finishing Lead

By the end 01 2000, .Substitute with green VOC emmissions on a (1) Institute process reduce VOCs 20% in alternative. Eliminate monthly basis per controls. including comparison .Io 1999. VCX emmissions. unit product output. training on

procedures: dipping. mixing, spraying technique. (2) Institute an internal testing procedure on new product to determine process compatibility and finish performance.

i

I

process that will be complete before lequipment 1/1/00 Estimate 50 /(something to hours per month. for measure 6 months, needed in total for the project

'process control

concentration of contaminants in

(team I

j

(1) Production To be determined in Decision on a new Manager for annual budgeting matenal by 6/30/00 operational controls process that will be lmpiemtation by in process area. (2) complete before 9/30/00 (Goal is to Manufacturing 1/1/00 Estimate 50 convert to new Engineenng Manager hours per month total matenal before for R8D on green for the project team 7/01/01 catalog alternatives needed !drop)

I

process water) by 6/1/00 Begin ,researching in-house antiquing formulations by 6/1/00 Research ion exchange

team was valuable in continuing to push the executives who, while supportive, were unable to envelope and provide impetus for progress when focus on how to actually build a TNS/EMS model, Rejuvenation managers were nearly over- and instead simply provided appiovals of key rec- whelmed with competing demands. ommendations. The second tier included manu-

Ultimately, three tiers of sustainability aware- facturing and environmental managers, who ness emerged. The first tier was the corporate became the decision makers on EMS design and

I

Exhibit 3. EMS Operational Plan MOO-Setting Targets and Objectives (confd.)

substance, and provided the executives with rec- ommendations. The third tier was the pilot team, who focused on the day-to-day environmental performance and management.

All three tiers interacted well to create a groundbreaking model for other businesses to emulate. The third tier had to be careful not to do too much of the work for the second tier, who ultimately had to create the EMS themselves so as to properly understand it, implement it, and “own” its success. The EMS development work did not produce direct, dramatic environmental surprises. However, the stage is set for monitoring of, and dedication to, continual improvements through a systematic and robust approach.

Although Rejuvenation fits the usual definition of a smaller business when compared with multi- national operations, it is functionally a mid-sized business in that it has on staff a full-time environmental manager. Without this position, the design and future implementation of a TNS/EMS would have been much more difficult. The position brings to Rejuvenation a combination of scientific howl- edge, regulatory experience, and an inner motiva- tion to find ways for Rejuvenation to “do well by doing good” for the environment and society.

Some Environmental Impacts Are Not Con- trolled by the Business

Early in the EMS development process (based on the experiences of other TNS-oriented compa-


4

Exhibit 3. EMS Operational Plan 2000-Setting Targets and Objectives (contd.)

nies like Electrolux), Rejuvenation and the pilot team recognized that some of the largest environmental impacts of Rejuvenation’s manufacturing process were not under the direct control of Rejuvenation. For example, life-cycle analysis of a metal lamp fixture is likely to find that the largest environmental impacts are in the min- ing/smelting/forming of the metal parts and the use pattern of the consumer (i.e., how much wattage, how often used, how disposed). The environmental impacts of providing the energy to fuel these processes external to the business are likely to be a major component of overall environmental impact.

Clearly, as a medium-sized business import- ing raw materials from suppliers around the

globe, Rejuvenation’s influence on the environmental patterns of its suppliers is limited. Because of its dedication to continual improvement towards sustainability, however, Rejuvena- tion will be making ongoing efforts to influence its suppliers. Those efforts by themselves (i.e., without the support of other Customers of the suppliers) are not likely to’ change anything quickly. But the raised consciousness of overall environmental impacts, and the installation of a management system to drive and monitor ongoing progress, will steer Rejuvenation to doing everything they can do, .and their efforts may influence an entire industry. An early effort is to establish direct contact with suppliers, rather than reliance on a “middle man.”


Exhibit 4. A Sustainability Strategy Checklist: What a Company Should Address

This checklist is in the form of a series of questions, the answers to which will generate a strategy that can promote competitiveness through sustainable business practices. It is intended as a guide for businesses that are considering the use of the sustainability principles of The Natural Step, an environmental management system, and a general organizational commitment to sustainable business practices.

Like any change in the way of doing business, the implementation of sustainable business practices through an E M S involves all aspects of a business operation. Business operations are divided into the following sections:

A. Organization mission, policy and/or environmental policy, and management structure B. Planning and decision making C. Education: employees, suppliers, customers, investors D. Product Design E. Marketing/Sales F. Facilities G. Logistics (including transportation of goads and people) H. Manufacturing (both in-house and external)

For businesses considering establishing a system that implements sustainable business practices, consider the following questions in relation to the following operations in your business:

A. Organization mission, policy and/or environmental policy, and management structure Questions:

How will sustainability be defined and addressed in organizational mission statements and policies? What type of EMS best suits the organization’s structure for addressing sustainability and managing environmental impacts?

What are the organization’s current flows of materials through its operations (i.e., energy, raw materials, products-in-process, completed products, waste/pollution)? How will the organization monitor materials and energy flows in the future using the organization‘s EMS? What “eco-indicators” will the organization start using to measure environmental performance?

How will employees (existing and new), suppliers, customers, and investors be educated in sustainability practices and how will it be delivered? How is the organization’s environmental management system integrated into the training and education of employees?

D. Product Design Questions: - Will life-cycle assessment be used in product design efforts? How? How will sustainability be integrated with

life-cycle assessment techniques? Will product design changes be compared with other potential capital investments by the organization that may improve environmental performance? How?

* What competitive advantages might be gained from development of environmentally superior products andlor new markets? Which products and markets? How will the organization address these opportunities? Will products be designed for organization ”take-back of products?

How will opportunities to increase sales in existing markets or to create new markets through sustainable product design be integrated into organization saleslmarketing strategy?

Questions: How will sustainable practices be integrated into existing facility management and new facility development? - How are facility decisions and their environmental impacts addressed in the EMS?

G. Logistics (including transportation of goods and people) Questions:

How are sustainable principles and the EMS integrated into the movement of raw materials, productsin- process, and finished products? - How are sustainable principles and the EMS integrated into movement of people associated with organization operations, including meetings with outside organizations, commuting, and internal meetings? Will logistics planning include ‘rake-back of products?

H. Manufacturing (both in-house and external) Questions:

How will sustainable principles and the EMS be integrated into the manufacturing process-both constructing the product and deconstructing it? What approach will the company take to incorporate sustainability principles in external manufacturing processes (Le., manufacturing of product components or contracted product manufacturing by vendors)?

6. Planning and decision making Questions:

C. Education: employees, suppliers, customers, investors Questions:

E. MarketingEales Questions:

F. Facilities

34 I Autumn 2000 I Pollution 1 Prevention Review Dave Kunz, John Klosterman, and Christopher Juniper $j -P

A

Exhibit 5. Back-Casting to Maintain Progress Towards Sustainability

Companies launching themselves on a journey to sustainability need to avoid getting caught up in incremental thinking-r being captured by the existing unsustainable thinking such that only slight progress occurs each year. A company that is serious about improving environmental performance and/or pursuing an environmentally sustainable operation will often find some quick high-rate-of-return investments that immediately boost efficiency and profits. After these "low-hanging fruit" are picked, however, the constraints of how the company usually does its business can grind further improvements down to an incremental crawl. Somehow, the vision of the company operating in an environmentally sustainable manner needs to be developed and integrated into organizational strategic planning.

In his work with companies, consulting physicisthesource analyst Amory Lovins (co-author of Natural Capitalism and co-CEO of Rocky Mountain Institute) has found that, quite often, the big idea results in greater cost savings and resource efficiencies than incremental thinking:

When intelligent engineering and design are brought into play, big savings often cost even less up front than small or zero savings. There are two main ways to achieve this more-for-less result. The first is to integrate the design of an entire package of measures; the second is to piggyback on improvements being made anyway for other reasons.

Natural Capitalism, pp. 1 14-1 15

This sort of system optimization through big thinking is precisely the sort of process that is contemplated by using back-casting for strategic planning. Back-casting was developed by TNS Founder Dr. Robert as a strategic planning for sustainability technique for companies and organizations. As described by TNS US, back-casting is "framing goals with regard to a future desired outcome, and determining short-term decisions and investments needed to achieve that future."

Whereas forecasting. is taking existing trends and boundaries and predicting a future from them, back-casting takes a vision of a sustainable operation at some point in the future and asks the organization to think backwards from that point to become clear about what needs to be accomplished to get there.

Ahelpful technique for imagining a sustainable operation is to focus on the services provided by the product or by the organization itself, and ask how these services can be provided to customers with the least environmental impact possible. This approach recognizes that customers don't necessarily want to, for example, own and take care of an automobile as much as they wish to have convenient travel options. In some cases, the conclusion by the company will be that the company should itself "own" the products throughout their life, and lease the services of the products to customers. This strategy helps align the company with producer-responsibility laws in Europe that some have pre- dicted will become common in the U.S. in the future.

Back-casting needs to be incorporated into an organization's strategic planning. At Rejuvenation, plans were made to support the various managers who are preparing for the company's annual strategic planning sessions with expert TNS consultants who would help the manager apply back-casting and TNS system conditions to their strategic planning presentations. The Strategic Planning would then pull together the various company visions of a sustainable operation and adopt sustainability goals and the time frames and milestones required to reach the goal.

For example, let's suppose that one indication of Rejuvenation's sustainability would be the purchase of 100 percent recycled brass. Suppose also that both technical and logistical issues prevent this result from occurring today. The back-casting exercise would ask: When does the company believe it can attain 100 percent recycled brass con- tent in products if everything goes well? What milestones along the way need to be achieved'?

If the goal is to be attained by 2007, milestones might include initiating research on the technical issues in 2000; resolving technical issues by 2002 in the lab; resolving technical issues at the foundry by 2005; and resolving logistical issues (the foundry obtaining a reliable and cost-competitive source of brass) by 2004.

The objective of back-casting is to identify the barriers to achieving an environmentally sustainable operation, and to then set short-term milestones for surmounting the barriers in a timely and synergistic manner. Identifying the barriers years in advance of the milestone allows the company to creatively use resources other than its own to reach the goal. These might include efforts funded or conducted by government or by the company's industry association (since the same barrier is likely to be faced by most companies in the industry).

There Are Actual Costs and Benefits to Reju- venation Through the TNS/EMS Design and Adoption Process

Rejuvenation's costs for the EMS design process included the time spent by its management team, particularly the Director of Manufac- turing and the Manufacturing Engineering Man- ager. Both invested an estimated two to four hours per week for 12 months in the learning and

\

EMS design process. Costs of the first year of implementation include development of training materials and the time spent training manufacturing staff.

Additionally, the regulatory agencies incurred costs. Consultant fees of about $5,000 were funded by an EPA grant under the Pollu- tion Prevention Incentives for the States program. Staff time included about ten hours each


J

for the eight-person project team and about 50 trols, and tank and container lids), VOCs per hours each for the two-person project manage- unit have been reduced by about 25 percent ment team. The Oregon Natural Step Network compared to the prior year. provided assistance. Reduction in the volume of process waters

Benefits of the EMS process have included:

a raised awareness of legal environmental requirements for Rejuvenation’s growing manufacturing operations; enhanced relationships with regulatory agencies; progress towards development of lamps and fixtures using fluorescent light bulbs (reducing their electrical consumption); reductions in waste and pollutants; increased distinction and sustainability leadership in the marketplace (from a description of Rejuvenation’s environmental innovation and commitment in their 1999 catalog); and connection with nongovernmental organizations who can assist with the job of improving the environmental performance of suppliers overseas.

By focusing on processes (including dipping methods, solution controls, and tank and container lids), VOCs per unit have been reduced by about 25 percent compared to the prior year.

An important intangi- ble result is that Reju- venation has developed a system to assure their growth toward a socially and environmentally sustainable organization.

Beneficial Changes fu Manufacfuring Processes Have Been Implemented

The actual changes that Rejuvenation had made or planned to its existing manufacturing process and buildings as of October 1999 included:

Reduction in volatile organic compound (VOC) emissions. By focusing on processes (including dipping methods, solution con-

that need to be treated. By controlling solution concentrations, drag-outs, and replace- ment water in rinse tanks, water usage was reduced by an estimated 10 percent in 1999. Addition of two new energy-efficient fixtures (compact fluorescents) to the new and highly promoted “Shockingly Fast Fixtures” product line. Creation and distribution of an “Architect’s Binder” that promotes energy-efficient lighting designs to the trade (including architects,

, designers, and contractors). Ongoing work with compact fluorescent bal- last manufacturers on custom, energy-efficient ballasts that fit the physical constraints of period designs. Rejuvenation came very close to including a new-technology compact fluorescent in its recent catalog, but the product delivery system was not ready for mass distribution in time. Installation of a $110,000 improved water- based ultrasonic cleaning system. The entire capital research project was based on TNS. With cleaner parts, the expectation is that Rejuvenation will be able to switch over to water-based lacquer coatings. Sampling and testing of new water-borne, heat-cured, clear-coat materials to replace the present solvent-based lacquering process. Conversion to a hybrid of “lean manufacturing” increased process controls, and the ability to train operators and implement new processes and technologies that are controllable. Facility improvements budgeted for next year to reduce environmental impacts include:

parking lot improvements and replace- ment df catch basins to reduce impacts Of

stormwater run-off,

26 I Aiitiimn 3nnO / Pollution Prevention Review Dave Kunz, John Klosterman, and Christopher Juniper

weatherproofing of building to reduce heat loss, a vinyl door-curtain to prevent heat loss in the warehouse, and installation of ceiling fans to direct warm air back to floor-level workspaces.

Sustainability as a major company operational initiative in 2000. The initiative includes an effort to direct-source foreign components; this is a long-term project to reduce costs while working more closely with vendors so that Rejuvenation can assess vendors’ environmental commitment and exert influence to improve their environmental performance. Testing of new belt polishing equipment to reduce lead-bearing dust with less cut material arfd less belt degradation than that produced by cloth buffs. Improved point sorting of recyclable material in the assembly area. Selection and establishment of data collection for the “eco-indicators.” Research on ‘ more sophisticated energy-efficient manufacturing facility lighting controls and heat sources, and use of more environmentally friendly cleaning supplies, such as baking soda. Installation of a new precleaning process that should use less water (in an amount not yet quantified) by precleaning in water-based soaking tanks to preserve the chemistry of the ultrasonic solution longer. Evaluation of the purchase of a sludge press add-on for the flocculation water treatment system; expected to reduce the overall volume of waste floc material landfilled.

Environmental and Social Responsibility Have Been Integrated into the EMS

Rejuvenation has been active in Business for Social Responsibility and has pursued measures that are improving its socially responsible

behavior. The term “socially responsible” generally refers to compensation and policies regarding an organization’s labor, or “human capital,” and responsible corporate behavior in the wider community.

Prior to the TNS/EMS process, Rejuvenation’s commitment to social responsibility involved a voluntary commitment to “fair pay,” in addition to a variety of programs, including charitable giv- ing, Cash for Kids, Days of Service, Home Buyer Program, the Employee Assistance Program, Eng- lish-as-a-second language training, employee commute options (some of which are required), arts appreciation, and other innovative employ- ment policies.

TNS system condition four is a socio- Rejuvenation has been active in economic condition Business for Social Responsibility for sustainability and has pursued measures that are rather than a scientif- improving its socially responsible ic/ecological condi- behavior. tion. It is necessary because the world cannot achieve sustainability if people are unable to think long-term. People who are not getting a “fair share” of resources may do desperate things to the environment. Any firm adopting a sustainability business model such as TNS must grapple with the social aspect of sustainability and determine its own unique approach. This aspect of fully embracing TNS principles is often the most troublesome for private companies, since they don’t innately feel responsible fo’r a “fair and just distribution of resources.”

In October 1999, Rejuvenation decided to conduct a company censu; to fully understand how current compensation affects employees’ households. As they learn more about their employees they will continue to develop their commitment to “fair pay“ as part of implementing the fourth TNS system condition and their responsibility to the community. In addition,

Incorporating The Natural Step Principles Pollution Prevention Review I Autumn 2000 / 37

I a

Rejuvenation learned about SA 8000 through the EMS design process, and is considering its use.

Conclusions Rejuvenation-at 170 manufacturing employ-

ees, and growing-was at an ideal juncture to incorporate formal environmental management and sustainability goals into its operations. Reju- venation recognized that it needed systematic approaches and measurements for effective environmental management.

The process of developing an EMS was chal- lenging to Rejuvenation’s management from the perspective of both time and momentum. This was partly because the project involved breaking new ground, and partly because Rejuvenation has made choices to optimize its environmental and social responsibility approaches in a rigorous manner. When implemented, this project may represent the first working model in the U.S. of a TNS- and social accountability-based EMS that follows ISO-14001 standards.

With the pilot team’s assistance, Rejuvenation developed its environmental management system to capture The Natural Step principles. Devel- oping Rejuvenation’s internal expertise to handle environmental issues is an ongoing challenge. Historically, the company has not been able to afford to staff with dedicated professionals in environmental science. As a result, expertise in this field must be developed, or accessed exter-

nally, as was done in this pilot. With growth, spe- cialization in related fields is expected and planned.

Organizations like the Oregon Natural Step Network provide a powerful and inspiring forum for progress. Rejuvenation benefited from the shared experience of other companies aspiring to sustainability, and was motivated to higher goals through these associations.

Government should be included in this network of partnerships. A company that commits itself to sustainability will more likely welcome government inclusion and assistance, as the laws and mandates become a “lower common denom- inator” for environmental performance. Progress is more likely when solutions to environmental problems are formed in partnership, so that real- life business needs are attended to, along with government regulations.

Bibliography Council for Economic Priorities Accreditation Agency-Social Accountability 8000 (SA 8000). www.cepaa.org. Goodstein, E. (1999). Economics and the environment. New York John Wiley & Sons. Hawken, P., Lovins, M., & Lovins, L.H. (1999). Natural capitalism. Boston: Little Brown and Company.

Jackson, S. (1997). The IS0 14001 implementation guide- Creating an integrated management system. New York John Wiley & Sons. Nattrass, B., & Altomare, M. (1999). The Natural Step for business. Gabriola Island, British Columbia: New Society Publishers.

Sayre, D. (1996). Inside I S 0 14OO0, the competitive advantage of environmental management. St. Lucie Press.

Dave Kunz is a Natural Resource Specialist for the Oregon Department of Environmental Quality, specializing in systems planning and design with a focus on pollution and waste prevention; he can be reached at [email protected] or 503-229-6237. John Klosterman is Manufacturing Manager with Rejuvenation Inc., a specialty lighting manufacturing company in Portland, Oregon; he can be reached at [email protected] or 503-231 -1 900. Christopher Juniper is a consultant with Ecologic Resources specializing in The Natural Step and Natural Capitalism; he can be reached at [email protected] or 970-704-9355.

38 I Autumn 2000 / Pollution Prevention Review Dave Kunz, John Klosterman, and Christopher Juniper

http://www.cepaa.org

mailto:[email protected]

mailto:[email protected]

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