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Life Cycle Assessment as part of Strategic Sustainability for Product Design
Sustainability in Manufacturing and Product Design
Several decades ago, the quality revolution hit the manufacturing sector before the others, crippling the US auto sector, whose leaders didn’t see it coming, and creating an economic boom in Asia. Similarly, the sustainability movement is affecting the manufacturing sector first. The reasons are straightforward.
Manufacturing often deals with hazardous chemicals, uses a lot of energy, depletes natural resources, generates tons of waste and employs factories around the globe. Usually, those most in the cross-sights, and thus prompted to be more active in the sustainability movement, are multinational corporations selling branded products to the general public (eg Nike, Toyota) or industries formerly reviled by environmentalists, whether associated with energy and fossil fuels (BP, Royal Dutch Shell), natural resources (Louisiana Pacific, the Collins Companies) or the chemical industry (Monsanto, DuPont). Just as with the quality revolution, those who got on board first have tended to benefit the most and those who wait risk losing market share.
HAT YOU SHOULD KNOW ABOUT SUSTAINABILITY
Some of the hottest growth industries in the manufacturing sector are part of clean-tech, a term that didn’t exist until recently. This industry crosses over multiple sectors, including renewable energy, cleaner transportation, water conservation, and materials engineering.
They share a focus on making money from innovations that reduce pollution and conserve natural resources. According to Ron Pernick, author of The Clean Tech Revolution, clean tech is now one of the largest areas for venture capital investment in the US. Clean-tech is simply sustainability as seen through the lens of manufacturing.
Manufacturing companies are implementing sustainability for a variety of reasons. Here are a few of the benefits they have realized:
Uncovering innovations that provide competitive advantage. When you examine your product through the lens of sustainability, you unleash creative thinking that often results in startling innovations. C&A Floor coverings, for example, was getting uncomfortable questions from their customers about end-of-life issues associated with carpeting, since construction waste is a significant percentage of what goes into landfills and carpeting may last 20,000 years there. When they set a goal of creating new carpet from old carpet, they had to challenge a number of long-standing assumptions in the industry. One such assumption was that to recycle commercial carpet, you needed to separate the vinyl backing from the nylon nap. When one of their operators decided to melt down and extrude the whole carpet, combining both materials, they discovered the resulting carpet performed better and, after some tinkering, actually cost less to manufacture. Now they are eager to take back used carpeting instead of having it go to the landfill.
Saving energy. Even if your organization implemented energy conservation measures half a dozen years ago, you should do it again. Technologies are changing so fast that you are undoubtedly leaving money on the shop floor. For example, BP set a goal of meeting the Kyoto Protocol in ten years and achieved that in only two years at no net expense. The energy savings they discovered are going straight to their bottom line, giving them an edge over their competitors. If an energy company had this many opportunities to conserve, you have to wonder about the rest of us!
Improving product reliability. Philips Microelectronics designs a ‘flagship’ green product in every product category. While trying to decide how to eliminate fire retardants (which are accumulating in human body tissue) in TV housings, they discovered a simple way to eliminate the hot spots in the unit. Since heat is the major cause of electronic failure, they simultaneously improved the life span of their products.
Reducing hazardous materials. The use of toxic materials costs you more than you probably realize. Unless you have an activity-based cost accounting model, you may have never added up all the costs associated with training, spill response, special equipment, permits, disposal fees, community outreach, health-related expenses and insurance costs.
Eliminating a toxic material can save you money in many budget line items.
Eliminating waste. A number of organizations have achieved the goal of zero waste to landfill, so don’t need dumpsters (or skips, to use the British term). Even more have at least reduced their waste by 90 per cent. While all processes have some residual by-products, that doesn’t mean the resulting material is necessarily waste. An Epson plant in Hillsboro, Oregon diverted all of their waste from landfill and saved about $300,000 in the first year. As a manager of an electronics manufacturer once said, ‘If you haven’t found someone to take all your waste, you’re not trying hard enough.’ In some cases, the recipients will pay for the material as well as removing it, turning a waste stream into a revenue stream. Manufacturers also pursue sustainability to manage their risks. Here are some examples of situations that could have been avoided had the manufacturer been more aware of sustainability and its implications: Losing customers. Customers are increasingly aware of and concerned about what’s in the products they buy, and nowhere is this stronger than when their children are concerned. The repeated Mattel recalls in 2007 sent parents running from anything made in China. Media coverage of concerns about bisphenol-A had the Born Free baby bottle – priced at about three times a typical feeding bottle – flying off the shelves.
Bad press. Nike was raked over the coals by the media for their international labor practices. Nike doesn’t manufacture anything themselves – they use suppliers, mostly in Asia, to manufacture shoes and clothing. They had assumed that they were not responsible for the practices of their suppliers. The public jury was not influenced by the Nike defense. After stories about worker abuses hit the papers, Nike’s image took a dive. This experience drove them to wonder what other issues might catch them off guard. Sarah Severn, director of corporate responsibility, decided that the environmental arm of sustainability could be their next public relations debacle unless they did more.
Shut out of large markets. Sony experienced an expensive embarrassment in 2001 when, just in time for the holiday season, The Netherlands banned Sony Play stations because their cables contained too much cadmium, causing a media uproar and earning Sony a hefty fine. But their biggest problem was one of corporate image: do you want to buy your child a toxic toy for Christmas? The European Union in particular is passing more and more legislation about toxics in products. (See, for example, the Restriction of Hazardous Substances (RoHS) Directive and the Registration, Evaluation and Authorization of Chemicals (REACH) Directive, which switches the burden of proof regarding the safety of a chemical on to the manufacturer.)
Harassment by an NGO. In 1995 Royal Dutch Shell became the focus of international controversy for their plan to scuttle the Brent Spar platform, an oil storage platform in the North Sea. Even though the plan had been carefully developed by scientists to minimize environmental impacts and all the appropriate ministries had approved the plan, Greenpeace staged a made-for-TV protest. The intensity of the public reaction stunned Shell executives. In Germany, the sales at some Shell petrol stations dropped by 50 per cent. Phil Watts, Shell Group’s regional coordinator in Europe at the time called this ‘a life-changing experience in business terms’. Even though Greenpeace later acknowledged that their statements about the toxicity of the platform were inaccurate, his ‘awareness level on the broader, softer issues went up by a factor of 10 to 100’. The experience left a lasting impression on Shell employees. ‘[It was] like being in a plane crash,’ said Watts.
Pressured by customers. It’s not just the large multinationals that are being affected – the shock waves cascade down the supply chain. Royal Philips Electronics recently extended their own sustainability principles to their 50,000 suppliers. This goes far beyond just expecting them to have an environmental management system, something many manufacturers already expect of their vendors. Their criteria include minimum expectations on the environment, health and safety, and labor issues. ‘Adhering to these minimum requirements will be an important factor in the company’s decisions to enter into or remain in business relationships. In 2004, a self-assessment tool and audit methodology will be introduced to Philips’ suppliers.’
Proliferation of regulations. E-waste is a current battleground. Certain countries and US states are banning electronics, especially monitors and batteries, from landfills because of the high levels of hazardous materials, in particular heavy metals, which could leach into groundwater. Several US states are already considering imposing ‘take-back’ legislation similar to regulations in place in Europe to force manufacturers to take responsibility for their products at the end of their useful life. But in the US, manufacturers have not been able to reach a consensus on a product stewardship strategy. Until they do, or until the government imposes a solution, recycling seems like a logical response. In the interim, most of the equipment is sent to China, where environmental protection is nil. There, they burn off the plastic, generating dioxin, and let toxic sludge flow into their rivers. All this was documented in a damning video, ‘Exporting Harm: The High-Tech Trashing of Asia’.
Losing insurance coverage. Similarly, the issue of greenhouse gases and global climate change is generating attention. Even before the Kyoto Protocol was ratified, insurance companies and regulators were worrying about the risks. Swiss Re, the largest property and life insurance reinsurer in the US (and second largest worldwide) considers climate change the next big litigation risk, following asbestos and tobacco. They worry not only about property damage from weather events but also possible disease outbreaks associated with climate change. To manage their own risks, they are targeting the energy industry and large emitters of greenhouse gases:
Company executives could find themselves losing protection against climate change-related liability claims brought by shareholders. Swiss Re has announced it will withdraw coverage against such claims for senior executives of companies that fail to adopt adequate climate change policies.
Being sued. When the wells ran dry in Kerala, India, citizens were quick to blame Coca- Cola’s recently opened bottling plant for misuse of water resources. While lower courts have sided with the company, the case is still working its way through the appeals process. The incident led Coca-Cola to do some soul-searching. ‘We realize that the world’s operating environment is much smaller than it used to be. With today’s communication technology, everything you do is known all over the world very quickly,’ says Perry Cutshall, director of operations, global public affairs.
