A Research Project of
The Centre for Sustainable Design
An Initial Discussion Paper
by: Prof. Martin
Charter and Inga Belmane, May 1999.
Centre for Sustainable Design (CfSD)
1 Background
Product-oriented environmental policy is receiving increasing attention as a new and emerging environmental policy field. Different policy measures have been applied in different member states of EU e.g. ‘producer responsibility’, take-back obligations, economic measures, etc. These different approaches amongst national countries call for harmonised measures across the EU in order to avoid market distortions and other problems that might arise between the states. Integrated Product Policy (IPP) is being proposed as a basis for a common framework for EU and national countries product policies. However, the debate on IPP is still in its infancy.The IPP approach suggests that
governments and companies should address all product systems throughout
the whole life cycle. One of the key issues addressed in the current discussion
on IPP is the development of ´greener products´ or eco-product
development.
2 Project objectives
The IPP concept is new and needs more input from actors involved to facilitate its development. CfSD is undertaking a study on the eco-product development (EPD) role in IPP (IPP-EPD project), with a particular focus on electronics and white goods sectors. The objective is to encourage a two-way information and knowledge exchange process between different stakeholder groups and CfSD. The main objectives of study are:- to define the IPP toolbox for products (supply) and consumption (demand),
- to interpret what IPP might mean for industry (implications on product development),
- to gather views of main stakeholder groups (industry, policy makers, consumer groups, distributors (e.g. retailers), and NGOs) on IPP and EPD,
- to develop recommendations for further development of IPP,
- to develop recommendations
for further research in IPP and EPD.
3 Scope
StakeholdersThe IPP-EPD project focuses on the following stakeholder groups:
- Industry, with particular focus on electronics sector. These sectors have been chosen since they appear to be most influenced by forthcoming ‘producer responsibility’ legislation (e.g. proposed Waste from Electric and Electronic Equipment (WEEE) Directive) and national legislation,
- Policy makers: European Union, national states, OECD, UNEP, EMAS, ISO, and other relevant organisations,
- Consumer groups,
- Distributors, e.g. retailers,
- Environmental non-governmental organisations (NGOs).
Eco-product development in the context of IPP is a main focus of this study. The issues of social and ethical considerations (e.g. sustainable product design) are not incorporated. The electronics and white goods sectors will be covered in more detail as compared to other sectors. This study primarily focuses on physical products rather than services.
Geographical
The report is focused on EU countries, mainly where product-related environmental
policies are more developed. The study will use information from other
countries where significant product-related environmental policy developments
are in place (e.g., Japan, Switzerland, and Norway).
4 Your participation
If you would like to participate please let CfSD know. Areas of co-operation
might include:
- information about IPP developments in EU and national states,
- information from industry regarding IPP and product development practices, and examples of EPD,
- information from the electronics sectors on how the Waste from Electrical and Electronic Equipment (WEEE) Directive and national ‘producer responsibility’ legislation is going to influence them,
- information from consumer groups on how do they see their role in IPP (i.e., greener purchasing, awareness raising),
- information from distributors e.g. retailers, on how do they see their role in IPP, and what are implications for them,
- information from environmental NGOs how do they see their role in IPP,
- expectations and viewpoints on how IPP should be formulated and what should be the objectives of IPP.
5 Definitions
5.1 Integrated Product Policy
Major report on IPP was completed by Ernst and Young and Science Policy Research Unit, University of Sussex, UK (EU, DG XI, March 1998). The IPP in the report is defined as follows:Public policy which explicitly aims to modify and improve the environmental performance of product systems. [1]The report suggests that IPP should cover all product systems and their environmental effects, taking a life cycle perspective as the lead principle. It is important to avoid transferring environmental problems between different media between the various stages within the life cycle of a product.
As IPP is a policy framework
in which all actors are encouraged to work towards a continous improvement
of all product systems within their own areas of responsibility, it must
consider and involve all relevant stakeholders along the product chain.[2]
5.2 Eco-design and Eco-product development (EPD)
Eco-design is one of the several tools on the product side, aiming at
the systematic incorporation of environmental life cycle considerations
into product development. Eco-design has been more focused on specific
aspects of particular products, such as reducing in-use consumption of
energy and water by household appliances, increasing the amounts of recycled
or recyclable materials, and reducing material intensity for given products.[3]
At present most activity has been eco(re)design, i.e., improving particular
aspects of existing products.
EPD is a broader concept than eco-design. EPD considers the integration of environmental considerations through the product development process, in each stage of product development:
- idea generation
- concept development
- evaluation
- prototype building
- testing
- manufacturing
- launch
- product management
- ‘end-of-life’ management.
EPD does not focus only on existing products, but it also examines at the function of the product and whole product system, thus influencing the existing patterns of consumption and behaviour. Life cycle thinking is a basis for EPD.
6 Integrated Product Policy (IPP)
6.1 Strategy
- Environmental policy has been generally focused on ‘middle of pipe’ (waste minimisation/cleaner production) and ‘end-of-pipe’. IPP aims to focus on ‘front of pipe’.
- IPP is a governmental policy tool to facilitate the development of greener markets through demand (consumption) and supply (products) side measures. To create greener markets there needs to be:
- greener consumption
- greener products.
- The IPP instruments therefore must consider measures on both product (development) and consumption sides.
6.1.1 Examples of IPP
EU levelAt the EU level, no explicit environmental product policy yet exists. The Packaging Directive, proposed WEEE Directive, EU eco-labelling scheme, the funding schemes under the 5th Action Framework programme (e.g., scheme “Competitive and Sustainable Growth”) can be regarded as the vertical elements of IPP at EU level.
National States
Some national states are developing IPP frameworks, or product related
environmental policies. The leading countries are the Netherlands, Denmark,
Sweden, Germany, Austria. Some of the country policy examples are given
below.
Austria
- National eco-label
- Green purchasing (at local authorities level)
- ‘Producer responsibility’ legislation on packaging, lead in batteries, CFCs in fridges, mercury in light bulbs)
The Netherlands
- Support from government for greener purchasing
- National eco-label
- Discussion about VAT differentiation based on eco-labels
- Discussion how to integrate product environmental management within environmental management systems (Product Oriented Environmental Management - POEM)[4]
- Investments into Dutch Product Management Programme, covering:
- pilot projects and feasability studies how to integrate product management into EMS,
- research and development.
| The Dutch Approach:
Integrating product management with Environmental Management Systems
The Dutch government
and industry is introducing a new component of environmental management:
|
Denmark
- Green public purchasing – all government levels required to have green purchasing policies since 1995
- Nordic Swan (Sweden, Denmark, Finland and Iceland) eco-label
- Green products subsidy scheme
- Product information (environmental declarations for consumers)
- Nordic Swan and national eco-labelling scheme
- Green public procurement
- ‘Producer responsibility’ legislation (cars, electric and electronics equipment, batteries, tyres, packaging, paper). Universal ‘producer responsibility’ is being considered for all manufacturers.
- Investment/funding programmes for green product development.
6.2 Eco-product development
- EPD (usually understood as eco-design) is a corporate activity driven by various issues, such as regulations, stakeholder pressure, economic and environmental benefits. Drivers/pressures are dependent on given industrial sectors and each company.
- There is a growing recognition that EPD can lead to financial benefits, market advantage, cost savings, ‘added value’ to customers, and future environmental compliance.
|
Philips: Green Product Successes:
In the first three quarters of 1998, green product sales accounted for 15% of the Swedish group’s product sales and 21% of the gross margin – about double 1997’s sales figures. The products with premium environmental features were above company averages in profitability. The consumers realise the benefits of saved costs, for example, of water and electricity for washing machines. The company’s ‘green product gallery’ includes 15 selections, including patented solar mower, a dry washing machine, and cadmium free NiMH batteries. |
- EPD is a more evolved concept in certain sectors, e.g. electronics, where there are a critical mass of companies with strategies in place. In other sectors activity relates to specific companies e.g. furniture, Wilkhahn (Germany).
- Definitions of EPD differ from broad-based to specific
Philips
five focal areas of eco-product development in its EcoVision Program
(1998-2002):
|
6.3 Eco-product development in IPP
- The development of greener products is one of the key objectives of IPP. To be successful, EPD needs support and action from governments.
- The governments can stimulate EPD by:
- Greener purchasing
- Business to business
- Intermediaries
- Government
- Information instruments, e.g. eco-labels, product declarations
- Education programmes and campaigns
- Indirect taxation
- Establishment of purchasing networks and advice centres
- Funding support
- Research and development
- Direct regulations
- ‘Producer responsibility’ legislation (e.g., Packaging Directive, Draft Waste from Electrical and Electronics (WEEE) Directive).
| Eco-innovation and
‘Producer Responsibility’
Over six years of experience of Packaging Covenant (1991) in the Netherlands, it demonstrates that at least a few hundred innovative adaptations to packaging systems have been implemented. (OECD, 1998) On the other hand, Nordic experiences with ‘producer responsibility’ suggest that “‘producer responsibility’ has so far not lead to significant changes in design of “greener” products”. (IPP Workshop, 1998) |
6.4 What does IPP mean for the firm?
Companies that have a proactive approach to corporate environmental strategy and EPD are likely to be better prepared for national and international approaches to IPP.There have been different environmental product policy instruments applied in different countries, however, it has been hard to evaluate their impacts. The evaluation of policy tools is in its infancy, mainly because of the new nature of product environmental policies.
Initially observations indicate that there appears to be a different understanding of IPP between the EC and companies. The IPP toolbox aims at incorporating both supply (e.g., eco-design, EMS) and demand (greener purchasing, eco-labels, raising customer awareness) side measures. The producers can control the supply side of products, however, companies have little/no control on consumption side.
Some of the IPP tools and examples of applications are given below.
Greener Consumption Tools
Eco-labelling
To function efficiently, there is likely to be a need for significant government investment in a public awareness campaign to educate markets about eco-labels. However, companies still need to make a decision about investing in gaining an eco-label. There is a question about what are the business benefits of achieving eco-labels.Indirect Taxation
In Belgium, there is a national eco-tax applied to several products (e.g., packaging, disposable cameras, shavers). The instrument stimulates the producer to develop more recyclable products in order to be eligible for complete or partial tax exemption.Green Public and/or Corporate Purchasing
For producers, the “greening” of the demand from public institutions may offer market opportunities (Oosterhuis, Rubik, Scholl, 1996). Some of local and central government organisations use eco-labels as environmental criteria for purchasing decisions (e.g., Austria), as well as corporate purchasers (e.g. ICA – retailer distributor chain in Sweden).It is increasingly being recognised by producers that there is an ‘action-awareness’ gap in greener purchasing at all levels:
- domestic
- business to business
- governments
- distribution chain.
Green Product Tools
Grants and Subsidies
- Ireland - Enterprise Ireland has developed a grant scheme of up to 25 K (£ IRE) per company to be match-funded to intensify EPD.
- EU - Research and Development: within the EU 5th Framework Program “Sustainable and Competitive Growth” there are opportunities for companies to develop eco-design projects.
- Denmark – Investments into “Environmental Design for Industrial Products” programme, covering:
- environmental assessment tools
- databases to support design for environment
- standardisation of eco-design approaches
- developing software.
The concept of PR is becoming more popular in the European environmental policies. For example, Sweden has considered universal PR for all products. EU has proposed WEEE Directive, and there is national PR legislation in several countries (The Netherlands, Denmark, Norway) in the electronics sector.
| ‘Producer Responsibility’
‘Producer responsibility’ is the concept that manufacturers and importers of products should bear a significant degree of responsibility for the environmental impacts of their products throughout the life cycle, including upstream impacts inherent in the selection of materials for the products, impacts from manufacturers’ production process itself, and downstream impacts from the use and disposal of the products. (OECD, 1998) |
Inter-relationship of tools
The use of a mix of different instruments, dependent on different products and markets, is central to IPP concept. For example, without education and information campaigns to raise customer awareness, eco-labelling schemes will not function efficiently. Without funding for research and development, there is likely to be less progress in eco-innovation and product development.
Policy Makers- Objectives of IPP
- Update on the product policy toolbox in EU and national countries, and the effectiveness of the existing approaches.
- National governments: main past/future trends of product policy in the given member states
- Identification of responsible bodies for IPP in the national countries – e.g. ministries of environment, industry or other.
- Expectations on IPP EU framework
- Product management practices:
- eco-design’s role in product development
- EPD tools used in companies, their efficiency and usefulness
- EPD and links with other functions (e.g. POEM in the Netherlands)
- Product policy tools and their actual effects on product development practices in companies e.g.:
- PR
- Eco-labelling
- Taxation
- Funding
- Greener purchasing policies
- Other
- Industry response to IPP and expectations of IPP
- Identifying main consumer groups
- The role of consumer groups in IPP
- Barriers and opportunities for greener purchasing
Distributors
- IPP implications on distribution chain
- Role of distributors in IPP
- Environmental NGOs’ role in IPP
- products side
- consumption side
8 Key Points
Objectives
What is the overall objective of IPP? At present, there appears to be
no clear objectives for IPP.
Status of IPP in EU
IPP is still in the debate stage. It is not clear how IPP will be incorporated
in legislation and what will be the implications for the actors involved.
Understanding and terminology
Is EC’s definition of IPP the same as business? Are there communication
barriers?
Responsibility
Who should have responsibility for IPP in national countries in governments?
(e.g., industry, environmental departments, other?)
Greener markets
There is no point in both IPP and EPD unless there is a demand for greener
products. How will this be addressed in IPP?
Eco-product development
tools
There is a need to support eco-product development at each stage of product
development, from idea generation to ‘end-of-life’ management.
Role of eco-innovation
To achieve higher levels of energy and materials reduction will require
higher levels of creativity and innovation.
- Products side
- breakthrough, e.g., solar powered lawn mower,
- technology adjustment, e.g., catalytic converter added,
- continuous improvement, e.g., more energy efficient lawn mower.
For example, Electrolux has three levels of eco-innovation (e.g. lawn mower):
- Consumption side (behavioural change)
The innovative, efficient technology and technical changes in products will not bring the results if the users of products will are not involved, informed and educated. For example, the technical efficiency of a car improves by 1 to 1.5% per year, but this is outstripped by growth in travel (2 to 2.5% per year) and the upgrading of vehicle power (0.5% per year).[5]
Large industries are mainly involved in current discussion over IPP. However, in many cases the suppliers are small and medium sized enterprises (SMEs), or suppliers from developing countries (e.g. Far East in electronics sector). How will IPP address supply chain issues and how it will influence the environmental performance of these companies?
Competence levels
IPP will require higher competence levels in relation to ‘product and
environment’ issues in businesses. Is industry ready for IPP and where
are the gaps in understanding, training and information? Is there enough
competence in governments to formulate and implement IPP?
9 Conclusions
- At present the EC framework to IPP is unclear and it is understood that a Green Paper will be published in the last quarter of 1999.
- There are different stages to development of IPP in national markets and the extent of co-ordination and integration of consumption and product tools.
- There needs to be clear objectives of IPP both at an EC and national level.
- There are diverse attitudes in industry regarding IPP, from pro-active to zero response. This largely appears to depend on two factors - the industrial sector and the scale of the operation.
- Integrated Product Policy, European Commission, DGXI, Ernst and Young and Science Policy Research Unit, March 1998.
- Workshop on Integrated Product Policy, Final Report, European Commission, DGXI, Dec 1998.
- Product Policy in Europe, New Environmental Perspectives, Frans Oosterhuis, Frieder Rubik, Gerd Scholl, 1996.
- Extended and Shared Producers Responsibility, Framework Report, Phase 2, OECD, 1998.
- Towards Sustainable Product Design, 3rd International Conference, October 1998 (conference proceedings).
- Sustainable Products: from re-design to sustainable development, Editorial, UNEP Industry and Environment, January-June 1997.
- Product-Oriented Environmental Management – Its Theory and Practice, Ministry of Housing, Spatial Planning and the Environment, The Netherlands, 1998.
- Sharing the World – Sustainable Living and Global Equity in the 21st Century, Michael Carley and Philippe Spapens, Earthscan Publications Ltd, 1998.
- Philips, Eco-Vision Program, Leaflet.
- Tomorrow Essentials, 1999.
11 Contact information
Martin Charter/Alex YoungThe Centre for Sustainable Design
Surrey Institute of Art and Design
Falkner Road
Farnham, Surrey
GU9 7DS
United Kingdom
Tel.: +44 (0) 1252 892772/3
Fax +44 (0) 1252 892747
E-mail: mcharter@surrart.ac.uk or ayoung@surrart.ac.uk
Internet: http://www.cfsd.org.uk
[1] "Integrated product Policy," European Commission, DG XI, March 1998.
[3] "Sustainable Products: from re-design to sustainable development," Editorial, UNEP Industry and Environment, January-June 1997.
[4] "Product-Oriented Environmental Management - Its Theory and Practice," Ministry of Housing, Spatial Planning and the Environment, The Netherlands, 1998.
[5] Carley, M., and Spapens, P., "Sharing the World - Sustainable Living and Global Equity in the 21st Century," Earthscan Publications Ltd., 1998.
[Back to Top] [IPP-EPD Discussion Papers] [CfSD Projects] [CfSD Home]