A Research Project of
The Centre for Sustainable Design

Integrated Product Policy (IPP)
and Eco-Product Development (EPD)

Prof. Martin Charter, Alex Young, Aleksandra Kielkiewicz-Young and Inga Belmane
Centre for Sustainable Design (CfSD)
Paper prepared for the 5th International "Towards Sustainable Product Design" Conference, 23-24 October 2000.

[Return to: IPP-EPD Discussion Papers]


The paper explores the current debate on Integrated Product Policy (IPP) and its relationship to eco-product development (EPD). IPP is a policy initiative of the European Commission (EC) that aims to address the environmental impacts of products from a market orientation and life cycle perspective. The paper gives a brief overview of IPP and key developments. The authors propose a simplified perspective which suggests that IPP is a strategy to green the marketplace through the integrated implementation of policy tools to green consumption (demand) and product development (supply). The co-ordination of tools on demand and supply sides is necessary in order to achieve optimal results. This approach has not yet happened and the IPP concept does not exist yet at either the EC or national level. The second part of the paper focuses on the concept of eco-product development (EPD) and how it relates to IPP developments with discussion over the relationship between IPP and supply chain management, communications, EMS (Environmental Management Systems) and innovation.


Integrated Product Policy (IPP) is a European Union (EU) level policy initiative aimed at reducing the environmental impact of products and services throughout their life cycles by using a toolbox of policy instruments to green markets through greening both the demand side (consumption) and the supply side (product development). IPP is part of a growing trend within environmentally advanced countries in Europe towards product-oriented environmental policies. Generally, existing environmental policy approaches have tended to focus on point-sources of pollution, i.e. production sites and production processes, using 'end-of-pipe' technologies and 'middle-of-pipe' solutions, such as waste minimisation, cleaner production, and pollution prevention. IPP considers the product development process from idea generation to product management and reverse logistics (i.e. 'end of life' management (EOLM)). IPP also aims to green the consumption side of the market by focusing on the way that customers (individual, business-to-business (B2), intermediaries and governmental) choose, use and discard products and services.

IPP is not seen as a new, stand-alone policy, but to be integrated into already existing EU policies and objectives. Its purpose is to develop an overall framework for all stakeholders involved in specific product groups to manage products in a more environmentally friendly manner. For this reason, IPP aims to be based on stakeholder involvement, market orientation and a life cycle perspective. However, IPP formulation at the EU level is still in its early stages and national approaches at the Member State level are more advanced in some countries.

The purpose of this paper is to examine IPP developments and how an active IPP may influence eco-product development (EPD). The article will begin by examining the background, definition, objectives, principles, strategies, components and potential toolbox of IPP. This is not supposed to be definitive, but explores some of the key discussion points in the IPP initiative. Finally, the paper explores the relationship between IPP and eco-product development in companies, using the electronics sector as an example.


It is important to make a clear distinction between IPP (Integrated Product Policy) and EPP (Environmental Product Policy). IPP is an European Union (EU) initiative currently being developed by the European Commission Directorate General (DG) Environment aimed at the formulation of a common product-oriented environmental policy at the EU level. EPP is a more generic term referring to product-oriented environmental policies at regional and national level inside and outside Europe.

Environmental product policies (EPPs) are receiving increasing attention from policy makers both nationally and internationally. At the international level, activities such as those carried out by the Organisation for Economic Co-operation and Development (OECD) (e.g. the Green Goods conferences and their work on public procurement and producer responsibility) and the International Standardisation Organisation (ISO) (e.g. their work on eco-labelling and life cycle assessment, and more recently ‘integrating environmental aspects into product development’ (ISO 14062)) highlight the international context of EPP.

Within the EU, the antecedents of EPP activities and the development of IPP reach back into the 1980’s. (See Box 1 for highlights of the key milestones in the development of IPP). However, it has only been in the 1990’s that EU Member States have begun to formulate product-oriented environmental policies. The most prominent among these are the Netherlands, Denmark and Sweden, which are considered to be the leading countries, followed closely by Germany and Austria. EPPs are also starting to emerge in Belgium, United Kingdom and Finland. Countries such as France, Italy, Spain, Portugal, Greece and Ireland seem to be lagging behind.

While there are significant similarities among the national policies developed so far, different elements and measures have been developed and different product groups targeted, which has resulted in a fragmented picture across Europe. One of the reasons for introducing a common approach to Environmental Product Policy across the EU (i.e. IPP) is the necessity of harmonising these national approaches. Therefore, the concept of IPP was introduced as a joint initiative between two European Commission Directorate Generals, Environment and Enterprise, as a blueprint for EPP harmonisation in Europe. The concept was originally based on the issues highlighted in a report by Ernst & Young (E&Y) and the University of Sussex's Science Policy Research Unit (SPRU), which was commissioned by DG Environment and published in March 1998 (Ernst & Young and SPRU, 1998).

Since then, several activities have helped to further develop the IPP concept. In December 1998, DG Environment held a workshop on IPP, attended by 180 participants from public authorities, industries, consumers and environmental organisations, to discuss the ideas in the original E&Y/SPRU report (European Commission, 1998). This was followed in May 1999 by the Informal Meeting of EU Environment Ministers in Weimar, Germany, during the German Presidency of the EU Council of Ministers. The German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) produced background and discussion papers (prepared by Frieder Rubik of the Institute for Ecological Economy Research (IÖW), Heidelberg) for this meeting (Federal Ministry of Environment, 1999a and 1999b). During the meeting, the Ministers endorsed the continued development of IPP at the EU level (Federal Ministry of Environment, 1999c).

In February 2000, two further workshops took place. The first was a workshop on IPP in Berlin, which was jointly organised by the German Federal Ministry for the Environment (BMU) and the Federation of German Industries (BDI). The outcome of this workshop was the acceptance by German industries of the concept of IPP and the decision to undertake several initiatives between BMU and industry (on a sector basis) to gather policy experience and to give input into the EU IPP debate (Rubik, 2000). The second event was the Nordic Council of Ministers’ IPP workshop, held in Saltsjobaden, Sweden. This was the second workshop held by the Nordic Council on developing a regional Nordic approach to environmental product policy. At the workshop, three studies were presented, "Proposal for a Common Nordic IPP," "Survey of Nordic Activities" and "Recommendations for a Nordic Product-Oriented Environmental Data and Information System" (COWI, ECON, and Östfold Research Foundation, 2000). The studies stressed the need and support for developing an IPP at the EU level, while proposing to continue developing an IPP at the Nordic regional level.

In May 2000, the Swedish government produced a Government Communication to the Swedish Parliament entitled "A Strategy for an Environmentally Sound Product Policy" (Swedish Ministry of Environment, 2000). The communication sets out the Swedish government's position on IPP, and presents a strategy for how it should be implemented in Sweden, the EU and worldwide. From its perspective, the purpose of the EU IPP initiative should be to harmonise Member State EPP approaches (to ensure an efficient single market) and to provide effective safeguards for human health and the environment. Furthermore, it should contribute to the greening of the international trade system and be integrated into the EU 6th Environmental Action Programme. This position and strategy is important given the fact that Sweden will hold the EU Presidency in the first six months of 2001 and have already stated that they will make IPP a priority issue during their Presidency.

In June 2000, E&Y in collaboration with SPRU produced an update on their original report published in 1998, entitled "Developing the Foundation for Integrated Product Policy in the EU" (Ernst & Young, SPRU 2000). The report indicated that there is a need for the European Commission to develop a vision for IPP as it is a new policy area characterised by an uneven and inconsistent implementation of policy instruments throughout EU. The report also highlighted the lack of consensus over practicalities and knowledge gaps related to the potential benefits. The report suggests that in the short-term Member States should implement individual approaches, although this may increase disparities. The report recognises that IPP will be a continuous and long term process and the European Commission’s role could be to ‘add value’ by providing a framework which: ·

  • provides leadership and dissemination of best practice ·
  • enables policy integration ·
  • mediates ‘internal market issues’ ·
  • ensures measurement and evaluation

Despite these activities and reports, the debate on IPP as an EU policy initiative is still at its initial stages and IPP needs to be further clarified and expanded. The next major step in the development of IPP will be the publishing of a Green Paper, which is currently being prepared by DG Environment and is expected in the 4th quarter of 2000. Until then, it appears that DG Environment will make no major decisions. In addition, there continues to be a ‘wait and see’ attitude amongst the majority of stakeholders, particularly business, as they wait for the publication of the Green Paper (Belmane and Charter, 1999b).

Box 1: The chronology of IPP developments

  • 1987: The Bruntdland report ‘Our common future’ was published, introducing sustainability as a principle of environmental policy.
  • 1987: Creation of the French prize ‘Ecoproduit’ [Eco-product], rewarding environmentally more benign products
  • 1992: The 5th European Environmental Action Programme (EAP) was published. Although it does not explicitly mention product-oriented environmental policy, numerous references are made to instruments and measures which are considered to be IPP measures.
  • 1992: Rio de Janeiro, Agenda 21 stresses the importance of a change in production and consumption patterns.
  • 1993: Foundation of ISO TC 207 ‘Environmental Management’ with subcommittees on e.g. Environmental Management Systems, Life Cycle Assessment, Environmental Labelling.
  • 1993: Foundation of the Swedish ‘Eco-cycle’ Commission, which delivered its final report ‘A Strategy for Sustainable Materials and Products’ in 1997.
  • 1993, Sept. 30-Oct 1: First international conference on ‘Green Goods’ in the Hague, The Netherlands. This workshop was the start of a tradition of conferences in the product policy field. Since
  • 1993, in total five ‘Green Goods’ conferences have taken place.
  • 1994: Publication of the ‘Policy document on Products and the Environment’ by the Dutch Ministry of Housing, Spatial Planning and the Environment (VROM).
  • 1992-95: Conceptual report ‘Product Policy in Europe. New Environmental Perspectives’ of Oosterhuis et al. (Germany) and ‘Instituut voor Milieuvraagstukken’ with support of DGXII within the ‘Environment and Climate’ programme.
  • 1995: The OECD’s Pollution Prevention and Control Group started its activities in the field of IPP, its important output includes the ‘Preliminary results of (Sustainable) Product Policy Survey’.
  • 1996: The Finnish Ministry of Trade and Industry published a discussion paper on ‘Production, Products and Consumption Patterns in Sustainable Development’.
  • 1997: Foundation of a Nordic IPP group (consisting of representatives from Denmark, Finland, Norway, Sweden and Iceland) and first Nordic IPP workshop.
  • 1997: ‘Common position’ of the Council of the EU ‘Towards Sustainability’ listing diverse product-related issues and supporting sustainable production and consumption patterns.
  • 1997: Adoption by the Belgian Federal State of the Law for the ‘Co-ordination of the Federal Policy on sustainable development’. A first attempt to manage classical policy approaches (from process to product) in an integrated way.
  • 1996-98 SPRU and Ernst and Young study on IPP, with the major report published in March 1998.
  • 1996: Publication of a discussion paper ‘An intensified product-oriented environmental initiative’ by the Danish Environmental Protection Agency. In 1997, the report ‘A product oriented environmental initiative’ was published.
  • 1998: The UK Department for the Environment, Transport and Regions (DETR) published a consultation paper ‘Consumer products and the environment’.
  • 1998: Adoption by the Belgian Federal State of the new Law on ‘Product Standards aiming at the promotion of sustainable production and consumption patterns to protect health and environment’.
  • 1998, Dec 8. IPP workshop organised by DGXI in Brussels, with approximately 180 participants. This is the first major stakeholder discussion of the IPP concept.
  • 1999, May 7-9: Informal Meeting of EU Environment Ministers, Weimar, Germany. This included a background paper and discussion paper on IPP prepared by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU). The conclusion of the meeting was an endorsement for DGXI to further develop IPP.
  • 2000, Feb 1: IPP workshop jointly organised by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) and the Federation of German Industries (BDI).
  • 2000, Feb 9-10: second Nordic IPP workshop organised by the Nordic Council of Ministers, presentation of a "Proposal for a common Nordic IPP."
  • 2000, Feb 13-14: expert meeting on product policy in Ottawa, Canada.
  • 2000, May 25: Swedish Government Communication to the Swedish Parliament entitled "A Strategy for an Environmentally Sound Product Policy" (Swedish Ministry of Environment).
  • 2000, June 22: Statement on IPP by the European Consultative Forum on the Environment and Sustainable Development.
  • 2000, June 23: publication of "Developing the Foundation for Integrated Product Policy in the EU" (Ernst & Young with SPRU for DG Environment).

Source: Adapted and updated from Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, 1999.

Integrated Product Policy

This section covers recent developments in the EU Integrated Product Policy (IPP) initiative. It is not aimed at explaining all the aspects or underlying issues associated with it, but instead to highlight some of its key parts. The section includes an examination of the definition, objectives and conceptual approach proposed for the IPP initiative, its principles and strategies, and the instruments and measures that may potentially make up an IPP toolbox.


As yet, there is no official definition of Integrated Product Policy (IPP). However, working definitions have been put forward for discussion. The first of these was in the "Integrated Product Policy" report written by E&Y and SPRU (Ernst & Young and SPRU, 1998) in March 1998. This report proposed to define IPP as:

Public policy which explicitly aims to modify and improve the environmental performance of product systems.

This definition was followed by a second definition advanced by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) as part of their "Background paper on product related environmental policy," prepared by Frieder Rubic of IÖW for the May 1999 Informal Meeting of Environmental Ministers in Weimar, Germany (Federal Ministry for the Environment, 1999a). This definition is:

Integrated Product Policy is public policy which aims at or is suitable for continuous improvement in the environmental performance of products and services within a life cycle context.

The new elements in this definition include:

  • services have now been added,
  • the life cycle perspective is now explicitly stated,
  • the principle of continuous improvement has been incorporated.

The major change in this definition is the inclusion of services, which represents a significant increase in the scope of IPP. Initially, the E&Y and SPRU report had proposed a very narrow focus on physical products rather than services. However, the IPP workshop in December 1998 identified the need to consider services as well, and this has been followed up in subsequent IPP discussions. The consequences of including intangible products (services) in the definition and scope of IPP will, at the least, require a longer time frame to formulate IPP strategies for services, as more research is needed to fill the significant knowledge gaps regarding the service sector and its environmental impacts (James, 1999). Of greater concern is the potential danger that the formulation of IPP may become unmanageable due to the high level of complexity of the issue.

The other changes in the definition, i.e. life cycle thinking and continuous improvement, are not as major, in that they are explicitly stating what was already implied in the first definition. However, they also highlight the importance of the conceptual relationship between IPP and quality and environmental management systems (EMS).

Objectives and Conceptual Approach

Ernst & Young (E&Y) and SPRU propose that IPP should be a new field of policy in the EU, clearly limited to objectives that explicitly deal with resource efficiency and the environmental impact of products (Ernst & Young and SPRU, 1998). The German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety and the Nordic Countries take a different approach to IPP. According to the Weimar background paper (Federal Ministry for the Environment, 1999a) and the proposal for a common Nordic IPP (COWI, ECON, and Östfold Research Foundation, 2000), it is proposed that IPP should not be a stand-alone policy with its own separate objectives. Instead, IPP should be an overall framework for those parts of existing EU policies (environment, health, trade and industry, waste, chemicals, etc.) that are relevant to the environmental aspects of products and services. Furthermore, IPP should be based on existing EU environmental (and social and economic) objectives, such as those laid out in the EU 5th Environmental Action Programme, with the ultimate goal being sustainable development. IPP should, therefore, be a policy framework for existing policies and objectives, rather than a separate policy with its own objectives and targets.

The differences in these two conceptual approaches correspond to the two main trends in national EPP approaches found by E&Y and SPRU, i.e. incremental and comprehensive approaches (Ernst & Young and SPRU, 1998). In the incremental approach, an initial policy framework is developed, which is then incrementally filled in with specific product policies that are separate from existing policies and contain their own objectives and targets. E&Y and SPRU propose this approach in their report. In the comprehensive approach, product policy is not seen as a separate and independent policy, but as a framework to integrate existing policies and objectives with a product orientation. The Weimar background paper and the Nordic proposal propose this approach.

Principles and Strategies

IPP is to be based on three fundamental principles (Federal Ministry for the Environment, 1999a; COWI, ECON, and Östfold Research Foundation, 2000), namely:

  • Market orientation
  • Stakeholder involvement
  • Life cycle perspective

This means that IPP should work with the market and involve all stakeholders in continually improving the environmental performance of products and services from a life cycle perspective. To do this, it is envisioned that IPP should develop an overall framework for all stakeholders in specific product groups to perform Integrated Product Management (IPM) in a co-ordinated manner. IPM differs from IPP in that IPP is a strategy for governments and authorities to encourage IPM, while IPM is the actions and measures taken by the different stakeholders (e.g. suppliers, manufacturers, distributors, retailers, customers, waste collectors, recyclers, disposal firms, financial institutions, consumer and environmental organisations, etc.) involved in the life cycle of a product (or service) (Federal Ministry for the Environment, 1999a).

From this perspective, IPP can be seen as a way for governments and authorities to instigate, facilitate and/or co-ordinate the actions of stakeholders in the product life cycle to improve the environmental performance of products and services, whether this involves "greening" their design and development, production, distribution, use or recycling and disposal.

Building blocks

The IPP building blocks represent common aspects of product-oriented environmental policy that have been observed in many national EPP approaches. The building blocks are composed of clusters of policy instruments that can be used in varying contexts to achieve the stated goals of the building block. Since product groups and their environmental impacts vary considerably, a building block approach, as opposed to a policy instrument approach, allows for the construction of consistent and integrated policies across varied product groups. The "Integrated Product Policy" report by E&Y and SPRU highlighted five key building blocks:

  • Managing wastes (e.g. take-back obligations),
  • Green product innovation (e.g. stimulating R&D, eco-design),
  • Creating markets (e.g. public procurement),
  • Transmitting environmental information (e.g. eco-labelling, product declarations),
  • Allocating responsibility (e.g. producer responsibility).

The Weimar background paper (Federal Ministry for the Environment, 1999a) added two more IPP building blocks:

  • Sustainable consumption,
  • Chemicals management.

It is questionable whether these new building blocks add value to what is still an emerging concept. It could be argued that both are already covered under the building blocks proposed by E&Y and SPRU. Furthermore, sustainable consumption could be considered one of the overarching concepts behind IPP, rather than just being one element in it. On the other hand, it is easy to see the political motivation for including these new building blocks, as they stress important political objectives. For example, relatively little research has been carried out on the ‘greening’ of consumption, compared to the ‘greening’ of products, and much remains to be done to understand and gain experience on this issue.

IPP toolbox

Until now, product policy tools have generally been applied within national and regional EPP approaches in an uncoordinated manner, which appears to have produced sub-optimal results. Eco-labelling is a good example of this. In certain geographical areas (e.g. Scandinavia, Germany) and product markets (e.g. white goods, laundry detergents, office paper) eco-labels have had an impact on the greening of consumption and product development. However, in other locations and/or markets the results have been more questionable. For example, eco-labelling schemes have not been as successful in countries such as the UK, France and Belgium. This is largely due to the varying contexts in which the eco-labelling instrument has been applied and the presence or lack of supporting measures (governmental, non-governmental and within the supply chain), such as consumer education. It is now understood that such policy instruments rarely work efficiently if they are not part of a wider policy approach.

The IPP concept proposes to remedy this situation by applying a range of policy instruments in a co-ordinated, integrated and complementary manner. Therefore, in the example used above, education and information campaigns to raise customer awareness, along with other instruments, would be used in conjunction with eco-labelling to ensure the effectiveness of the scheme. Furthermore, it has been realised in stakeholder discussions (Ernst & Young and SPRU, 1998; European Commission, 1998; Belmane and Charter, 1999a) that there will not be a ‘one-size-fits-all’ solution and the mixture of instruments will need to vary depending on the product group, the objectives and the shape of the market. Policy instruments will, therefore, need to be applied on a case-by-case basis.

The instruments would come from a large toolbox of different policy instruments, ranging from voluntary agreements to direct legislation. (Table 1 gives examples of possible instruments in the IPP toolbox). This toolbox would not be exhaustive. New instruments would be continually developed to suit specific purposes and situations.

Table 1: Examples of possible instruments in the IPP toolbox
Instrument: Including:
Voluntary Instruments
  • Voluntary Industry/govt agreements
  • Self-commitments
  • Industry award
Voluntary Information Instruments
  • Eco-labels
  • Product profiles
  • Product declarations
Compulsory Information Instruments
  • Warning labels
  • Information responsibility
  • Reporting requirements
Economic Instruments
  • Product taxes and charges
  • Subsidies
  • Deposit/refund schemes
  • Financial responsibility
Regulatory Instruments
  • Bans/phase outs
  • Product requirements
  • Mandatory take back

Uncertainty Surrounding IPP

There are still many questions and uncertainties surrounding IPP that need to be addressed. These include among others What are the objectives and best approaches for IPP? What are the priorities? How will IPP be implemented, monitored and measured (a key issue that has received very little attention so far)? What implications will IPP have for different stakeholders, such as national and local governments and authorities, industry, consumers, retailers and environmental non-governmental organisations (NGOs)? Even the most basic question as to 'what is IPP' is still being asked amongst stakeholder groups and a clearer vision and a practical interpretation of IPP needs to be formulated (Belmane and Charter, 1999b; DETR, 1999).

A further issue relates to where potential IPP implementation efforts should focus. Previous environmental legislation has tended to focus on laggards (particularly site-specific legislation). A key question is whether IPP should focus instead more on market leaders, by encouraging them through various incentives to produce greener products, as suggested by E&Y/SPRU (Ernst & Young/SPRU, 2000). Such incentives can be developed through, for example, regulatory or tax relief for more energy and resource efficient products.

On the other hand, care must be taken to deal with the potential 'rebound effect' of a successful incentive-based policy, i.e. where the environmental benefits of less hazardous, more energy and resource efficient products and services is lost by the over consumption of these products and services. An effective IPP framework aimed at market leaders could create a European market where ‘greener’ products are increasingly purchased. While this may help to 'green' the marketplace, without an equal emphasis on consumption issues the policy may have little or no long-term effect on the total environmental impact of products and services. From this perspective, there is a need to implement demand side measures to reduce consumption as well. There is also a need to monitor this 'rebound effect' on both macro and micro levels. On the macro level, this will mean shifting the concept of GDP to incorporate environmental (and other sustainability) issues, while on the micro level this may mean re-examining the ‘consumer basket’. Some Member States are already beginning to look at these issues, such as the Netherlands (Ernst & Young/SPRU, 2000).

IPP - A Different Perspective

The debate on IPP is new and evolving, and DG Environment has been seeking input from stakeholders for discussion on the further development of IPP. The authors would like to present their thinking as input in this process. The Centre for Sustainable Design (CfSD) has evolved a much simpler perspective on IPP compared to the current DG Environment approach. CfSD defines IPP as:

Public policy aiming at greening the marketplace through the integrated use of supply and demand side tools.

In this context, and based on the principles of a life cycle perspective and stakeholder involvement, the key building blocks are:

  • green(er) consumption (including the overall reduction of consumption levels)
  • green(er) product and service development

From this perspective, IPP is a policy initiative that includes both the supply and demand sides of the equation. Governments or policy makers can influence both sides of this equation by using various instruments from the IPP toolbox. By using a mixture of supply and demand side tools, it is possible to stimulate and facilitate and co-ordinate various actors along the product chain to engage in activities to reduce the impact of products throughout their life cycle. (Table 2 gives examples of supply and demand side measures).

It should be noted that the instruments listed in Table 2 are not mutually exclusive to their particular side of the equation. They do overlap and feedback on each other, which are key attributes in the greening of the marketplace. For example, public purchasing has the dual effect of greening the consumption side as well as sending a strong signal to producers and product developers to create greener products.

In this perspective, however, it can be seen that business has little control over the consumption side, except through brand, product or corporate communications (e.g. advertising). This is particularly true regarding reducing overall levels of consumption. Because of this, there sometimes appears to be a misperception in business that IPP only covers the supply side, e.g. eco-product development. To avoid the perception gaps that appear to be emerging, the continued and balanced use of a consultative approach by DG Environment, incorporating a wide range of stakeholder input, will be essential.

Table 2: Examples of Supply and Demand Side Measures
Eco-Product Development
(supply) side
(demand) side
  • Voluntary agreements
  • Information and Reporting
  • Standardisation
  • Environmental Management Systems (EMS)/Product-oriented environmental Management Systems (POEMS)
  • Eco-design competitions/awards
  • Grants/subsidies for eco-product development
  • Take-back requirements
  • Product requirements(content, quality, performance)
  • Regulatory bans/phase outs
  • Consumer information:
    • Eco-labels
    • Product profiles
    • Product guidelines
    • Information centres
  • Indirect taxation
  • Public purchasing
  • Deposit/refund schemes

IPP and Eco-Product Development (EPD)

The greening of the product development process is key to reducing many of the environmental impacts of products and services, as many of the environmental impacts of products are determined at this stage (Oosterhuis et al., 1996; Ernst & Young/SPRU, 1998). For example, products that are designed to be inefficient or difficult to dismantle and recycle limit the ability of downstream stakeholders, such as customers and recyclers, to reduce product-related environmental impacts. Therefore, the product design and development phase is a crucial issue for IPP.

From this perspective, understanding eco-product development (EPD), how it is managed and its relationship to IPP is a prerequisite for understanding how EPD can best be stimulated, facilitated and co-ordinated in an integrated manner through product policy measures. In addition, it is important to understand the relationship between EPD and eco-innovation at the company level, as eco-innovation (environmentally considered new product development) is an important part of the EPD process.

Defining Eco-Product Development (EPD)

To define eco-product development (EPD), it is necessary to first understand eco-design, i.e. the incorporation of environmental concerns and issues in the product design process. The concept of eco-design has developed in phases. The first phase tended to be focused in R&D departments and evolved from an engineering mindset. The outcomes of this approach tended to be interesting 'one-off' projects that have failed to be incorporated into ongoing design programmes within companies (Rocha, Brezet, 1999). The second phase of eco-design has focused on the integration of environmental considerations in the complete product development process, from the development of the new product strategy and idea generation to the consideration of 'end-of-life' management (EOLM) issues. This is called the 'eco-product development' (EPD) process (Charter, 1999).

EPD and Eco-Innovation

Eco-product development may lead to a range of innovative solutions, from eco(re)design of existing products to the development of completely new Product Service Systems (PSS). To a certain extent, this depends on the level of eco-innovation the company is willing and able to incorporate into its business strategy. Brezet, Cramer and Stevels break down eco-design activities into four levels of eco-innovation (Brezet, Cramer and Stevels, 1995).

At present, most EPD has focused on eco(re)design, the incorporation of environmental considerations into the redesign of existing products. There have been relatively few examples of eco-innovations beyond the incremental level, i.e. there are few cases of the development and launch of new products explicitly incorporating environmental considerations.

Part of the reason for this is because the environmental management function manages eco-design rather than environmental issues being integrated into the mainstream product development process. A key issue is lack of ‘buy-in’ from the marketing function - which plays a key role in the product development process. Unless environmental issues are integrated at the strategic level in companies and are incorporated at the earliest stages of the product development process, it is unlikely that eco-innovations will reach beyond the incremental level. So far, very few firms have done this.

Managing Eco-Product Development

Successfully incorporating an EPD programme into a firm involves following sound management practice. This includes establishing and maintaining the following:

  • Policy
    A set of principles and intentions should be established with respect to environmental product development (Roberts, Robinson, 1998).

Box 2: IBM Environmental Policy Statement on Products

Develop, manufacture and market products that are safe for their intended use, efficient in their use of energy, protective of the environment, and that can be reused, recycled or disposed of safely.

Source: IBM Environmental Report, 1998.

  • Objectives and Targets
    Broad goals should be set by the company in relation to the environmental performance of products e.g. 'to improve energy efficiency by 10% in the use phase of new products'. Targets should be measurable and quantifiable statements such as 'reduce the number of components used per product by 20% within two years' (Roberts, Robinson, 1998).
  • Strategies
    The company's business strategy should be the optimum use of human, material and financial resources in order to achieve competitive advantage. From an EPD perspective, it means developing 'green' products with a focus on reduced costs and improved efficiency, reduced environmental impact and market differentiation if price, performance, quality, etc., are as good or better than the competitor. Interestingly, adding the green dimension may also create innovative solutions and new business opportunities (Banerjee, 1999).
  • Programmes
    For a given objective, the EPD programme should identify how targets will be met, who is responsible for each of the activities required to meet that target and when those activities should be completed.
  • Responsibilities
    Roles, authority and inter-relations of key personnel should be clearly defined to ensure the achievement of objectives. In addition, the appropriate organisational structure should be designed to enable EPD to happen efficiently.
  • Budgets
    Appropriate budgets must be allocated to EPD.

Box 3: Philips Eco-Vision

An example of an EPD programme is the Philips Eco-Vision programme (1998-2002). It focuses on green product development (Green Flagship products) and manufacturing. These 'flagship' products are defined as products with demonstrably superior environmental performance in one or more of five green focal areas, which are:

  • Weight (reduction)
  • Hazardous substances (reduction)
  • Recycling (increase)
  • Energy consumption (reduction)
  • Packaging (reduction)

Philips has also realised that green products can bring financial benefits:

  • Bill of materials = -5%
  • Market share = +2%
  • Price premium = +3%

In addition, Philips understands that EPD can improve the environmental performance of its products and also generate new business opportunities that may emerge from eco-innovation.

Source: Philips, Environmental Report, 1998; Philips presentation at OECD conference, Sydney, Australia, March 1999.

Implications of IPP for EPD

At present, eco-design has not been widely adopted by industry (Clark, Charter, 1996 and 1999), particular in small and medium sized enterprises (SMEs) (Clark, Charter, 1999a). Furthermore, it is unusual to find eco-product development (EPD) as an integral part of a company’s business strategy. This is because many companies, on the one hand, lack knowledge in environmental issues and eco-design strategies and tools, and, on the other, feel little legislative, business-to-business (B2B) or market pressure to incorporate environmental issues into their product development process.

However, EPD is a supply side issue and is susceptible to demand side pressures, including legislative, supply chain and competitive pressures. It is, therefore, likely that broader implementation of product-oriented environmental policies, such as IPP, may act as a driver for greater EPD implementation. This would come not only through the threat of possible new ‘producer responsibility’ legislation or regulation, but more likely through market pressure from customer (B2C) demands for greener products and through the supply chain (B2B) from voluntary initiatives, such as environmental management systems (ISO 14001 or EMAS) and product stewardship initiatives.

Therefore, in a new IPP landscape, those who have developed EPD approaches will be better prepared for the opportunities arising from greener markets, as well as for threats from new regulations and economic measures and demands from the supply chain. Although the IPP approach at the EU level is new and unclear, national approaches are moving fast, e.g. 'we are not waiting for the EU' (Ahlner, 1999). Furthermore, many product policy tools (e.g. greener purchasing, national eco-labelling schemes, consumer education, green taxes, 'producer responsibility', etc.) are being applied irrespective of overall EPP or IPP frameworks. This means that companies will have to be prepared for emerging policies in national states regardless of how IPP develops in the future at the EU level.

Environmental management systems (EMS), such as ISO 14001 and EMAS, have predominantly been focused on site related issues. However, a number of companies, such as IBM and Lucent, are beginning to use their environmental management systems to focus on product-related issues and to implement eco-design in their companies.

The concept of linking EPD to EMS is also the basis of Product-Oriented Environmental Management (POEM) concept, which links EMS with product development (Ministry of Housing, Spatial Planning and the Environment, 1998) developed by Dutch government and industry.

Box 4: The Dutch Approach: Integrating product development with Environmental Management Systems

The Dutch government and industry have introduced a new component of environmental management: POEM (Product Oriented Environmental Management), an instrument to integrate product aspects into environmental management systems in companies. POEM should systematically monitor and control the environmental impacts of products and should be considered as an extension and elaboration of EMS.

Source: Ministry of Housing, Spatial Planning and the Environment, The Netherlands, 'Product-Oriented Environmental Management - Its Theory and Practice', 1998.

The reasons for introducing the POEM concept were:

  • Around 1000 eco-design projects have been completed in the Netherlands and the majority of them appeared to be ‘ad-hoc’ projects without continuation (Rocha, 1999).
  • Therefore, a more systematic approach was needed, incorporating both technical and management eco-design considerations (Ministry of Housing, Spatial Planning and the Environment, 1998).

The preliminary findings on POEMS are:

  • POEMS can easily be integrated into EMS,
  • POEMS requires higher co-operation amongst different business functions compared to conventional product development,
  • The business benefits of POEM are not clear (Rocha, 1999).

An International Standards Organisation (ISO) working group on ‘Integrating environmental aspects into product development’ (ISO 14062) in working on a document – a ‘technical report for information only’ - that highlights environmental considerations at each stage of the product development process to be published in 2001 (Lehmann, 1999). The working group agreed that it should be informative and provide guidance to companies but should not be an ISO standard. ISO 14001 is seen as not providing sufficient coverage of eco-product development issues and assessers focus primilarily on site-based, process issues.

There seems to be four key issues in EPD: supply chain management, communications, links EMS and innovation.

Supply chain Management
Supply chain management (SCM) and procurement might have a real opportunity to reduce eco-impacts since overall environmental performance in many product/markets is closely related to how EPD is managed up and down the supply chain.

Poor environmental communication both internally and externally has been one of the major obstacles of developing and promoting ‘greener’ products. Can IPP help to tackle these issues?

Environmental Management Systems (EMS)
The integration of EPD into existing EMS schemes is being tried in the Netherlands (i.e. POEMs). Similar discussions are evolving within the International Standardisation Organisation (ISO), where there is the preperation an ISO information and guidance document on EPD – ISO 14062. However, it is too early to derive any major conclusions from these initiatives since the work is just started.

Innovation is an important business driver in the electronics sector as well as one of the key eco-efficiency challenges on the supply side. Eco-innovation should be regarded as one of the strategic elements in greening of the supply side.

Next step: Sustainable Integrated Product Policy (SIPP)?

A key issue in the IPP debate is how does IPP fit within the context of policy discussions on sustainable development. IPP is presently focused on the environmental aspects of product policy and does not refer to the social or ethical dimensions of sustainability. The creation of a Sustainable Integrated Product Policy (SIPP) would require incorporating social and ethical concerns into the policy initiative. This may mean focusing on the proactive development of more sustainable markets or providing gentle steering to more sustainable consumption and product and service development. Within this framework it means moving beyond environmental to ‘triple bottom-line’ thinking.

Box 5: Sustainable Integrated Product Policy (SIPP) and 'triple bottom-line' considerations:

How do we incorporate ‘triple bottom-line’ considerations into: Consumption (demand) side:

  • product labels e.g. moving beyond eco-labels
  • public education e.g. asking questions about energy efficiency (CO2 emissions) or the use of child labour in manufacturing
  • information e.g. sustainable purchasing manuals

Product development (supply) side:

  • R&D subsidies, e.g. developing more sustainable products
  • Information, e.g. education/training for product developers

A key issue here is what do we mean by a sustainable product or service?



  • The IPP approach is new and discussions are still in their infancy. Some key questions are: What are the objectives and priorities of IPP? How it will be incorporated in legislation and other policy measures? And how is the success/progress of IPP measured?
  • IPP is a government policy approach to green the market by greening product development (supply) and consumption (demand). However, manufacturers have little or no control over the consumption side. Environmental Product Policies (EPP) often appear to be focused more on the 'greening' of supply rather than the consumption side. The recognition of the importance of the consumption side in achieving sustainability goals is becoming more and more important.
  • The majority of stakeholders have adopted a ‘wait and see’ approach to IPP until the Green Paper is published by DG Environment (expected 4th quarter of 2000).
  • The synergies and overall benefits resulting from IPP will be achieved through the integration of supply and demand side measures. The development of greener products without greener markets is sub-optimal. Care must be taken to avoid the 'rebound effect' of increased over-consumption of more energy and resource efficient products.
  • Companies should develop their own EPD programmes, which can bring financial benefits and generate new ideas and business opportunities. However, the issue needs to be managed and new tools need to be developed to enable environmental considerations to be integrated into product development from the idea generation to the 'end-of-life' management (EOLM) phase. Companies with EPD in place will be better prepared for new policy developments (e.g. new market opportunities, producer responsibility, etc.) that might emerge from the EPP or IPP debates at either national or EU level.
  • There are several ways that governments can help progress the EPD process, such as though funding and subsidies, public information and education campaigns, co-ordination of information flows and support for greener purchasing. It has also been realised that increased environmental considerations can result in competitive advantage so there is more room to link environmental requirements to industrial development.
  • It is important to remember that all stakeholders must ‘buy into’ the IPP process, since IPP is based on ‘shared responsibility’ rather than ‘producer responsibility’.
  • The IPP at the EU level is progressing slower in comparison to national EPP approaches in different EU (e.g. Sweden, Denmark, Austria, Germany, The Netherlands) and non-EU (e.g. Japan, Norway) countries. Therefore it is important for companies to develop and to continue to work on their own EPD programmes without waiting for developments at the EU level.
  • In its original form IPP has been developed as an European Commission policy initiative. However, the principles might be used as a basis for a transferable policy model. For countries just starting to experiment with product-related policy tools, e.g. eco-labels, IPP may be a useful policy planning framework.

This paper is an edited and updated version of Charter. M, Young A, Kielkiewicz-Young . O, Belmane. I, Integrated Product policy (IPP) and Eco-product development, in Sustainable Solutions, Charter. M, Tischner. U, Greenleaf Publishing, 2000.


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