- Email: [email protected]
Indicators of sustainable production
Journal of Cleaner Production 9 (2001) 447–452 www.cleanerproduction.net
Indicators of sustainable production V. Veleva *, M. Hart, T. Greiner, C. Crumbley Lowell Center for Sustainable Production, Kitson Hall, Room 200, University of Massachusetts Lowell, One University Avenue, Lowell, MA 01854, USA Accepted 15 May 2000
Abstract Over the past 10 years, firms, government and the public have increasingly focused on measurement tools to assess the environmental aspects of sustainability. While there are numerous lists of environmental performance indicators (see, for example, International Organizations for Standardization’s ISO 14301, Global Reporting Initiative, and World Business Council for Sustainable Development), these lists provide little insight into how firms might revise the indicators they currently have to more accurately measure sustainability. The Lowell Center for Sustainable Production at the University of Massachusetts Lowell has developed a tool to enable companies to evaluate the effectiveness of sustainability indicator systems. The tool includes a framework that consists of five levels for categorizing existing indicators relative to the basic principles of sustainability. The purpose of the framework is not to rank indicators as better or worse, but rather to provide a method to evaluate the ability of a set of indicators to inform decision-making and measure progress toward more sustainable systems of production. In its current state, the framework focuses on environmental, health and safety aspects of production. Work is underway to expand it to include social and economic aspects. 2001 Elsevier Science Ltd. All rights reserved. Keywords: Indicators; Sustainable production; Indicator framework; Indicators of sustainable production
1. Introduction The concept of sustainable production emerged in 1992 at the United Nations Conference on Environment and Development (UNCED) and is closely linked to the concept of sustainable development1. The conference concluded that the major cause for the continued deterioration of the global environment is the unsustainable pattern of consumption and production, particularly in industrialized countries [2]. Agenda 21 Action Plan called on governments, business and others to implement measures for more sustainable production and consumption patterns. However, the term sustainability is still very vague, particularly in the business context where it
* Corresponding author. Tel.: +1-978-934-3275; fax: +1-978-9343050. E-mail address: [email protected] (V. Veleva). 1 Although the term sustainable development has been used for many years its meaning still defies simple explanation. The most commonly cited definition is “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” [1, p. 40].
has been used to describe everything from organic yogurt to petroleum production. Regardless of how it is defined, market leaders in a number of industries are realizing the strategic advantages of being more sustainable and measuring their progress [3,4]. Many other companies are beginning to understand the importance of sustainable development although they are not certain how the concept applies to their business activities. This challenge was one impetus behind the establishment of the Lowell Center for Sustainable Production (LCSP)2 at the University of Massachusetts Lowell. The Center focused its work on sustainable systems of production. In 1999 it began developing a framework for indicators of sustainable production. This paper presents the framework and
2
The LCSP was started in 1996 to promote new forms of industrial production that are safe, healthy, environmentally sound, socially responsible, and economically viable over the long term. The Center is composed of a core of faculty and staff from several academic departments and research centers that work directly with industrial firms, non-profit organizations, and government agencies to promote sustainable production.
0959-6526/01/$ - see front matter 2001 Elsevier Science Ltd. All rights reserved. PII: S 0 9 5 9 - 6 5 2 6 ( 0 1 ) 0 0 0 0 4 - X
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V. Veleva et al. / Journal of Cleaner Production 9 (2001) 447–452
describes the key findings from using it in a series of trainings so far. It is still a work in progress. As presented here the framework only addresses environmental aspects of sustainable production. Work is underway to expand the framework to include the social and economic aspects as well. The LCSP is interested in receiving comments and suggestions for improvement.
2. Sustainable production The LCSP defines sustainable production as: the creation of goods and services using processes and systems that are: non-polluting; conserving of energy and natural resources; economically viable; safe and healthful for workers, communities, and consumers; and, socially and creatively rewarding for all working people. The LCSP principles of sustainable production, derived from this definition, are presented in the side bar. They emphasize the interconnections between the environmental, social and economic systems within which production and consumption occur. The LCSP’s definition and principles of sustainable production present a vision and the long-term objectives for companies that choose to become more sustainable. However, the vision and long-term objectives alone may not be sufficient for a company to develop a more sustainable production system. There is a need for tools to assist companies in understanding the problems with existing production systems and then defining specific objectives and measuring progress toward sustainable production. One such tool, being developed by the Lowell Center, is a framework for indicators of sustainable production. Its purpose is to increase companies’ understanding of the concept of sustainable production and promote its practical application.
3. Indicators, indicators, indicators everywhere Indicators are typically numerical measures that provide key information about a physical, social or economic system. They go beyond simple data to show trends or cause-and-effect relationships. Indicators have three key objectives: 1. to raise awareness and understanding; 2. to inform decision-making; and 3. to measure progress toward established goals. Indicators have increasingly been used as a tool to measure progress toward sustainable development at different levels — national, regional, local and company/facility.
Examples include the Organization for Economic Cooperation and Development [5], US Interagency Working Group on Sustainable Development [6], Sustainable Seattle [7], International Organization for Standardization ISO 14031 [8], Global Reporting Initiative [9], among others. This paper focuses only on company/facility level indicators. Given the difficulty some have defining sustainable development, one can imagine the greater difficulty in measuring it! While numerous environmental indicators exist — such as the ones developed under the International Organization for Standardization Environmental Performance Evaluation Guidelines ISO 14031, Global Reporting Initiative, or World Business Council for Sustainable Development [10] — none of them advances our understanding of corporate sustainability. They provide simple lists of indicators with little or no guidance as to how to select or apply them over time in order to become more sustainable [11]. For example, indicators of corporate compliance rates and permit exceedences, while useful, provide little “sustainability information.” A firm can be in full compliance with government requirements but still making little progress in reducing its impacts on global or local sustainability. Additional indicators are needed to examine, for example, the firm’s greenhouse gas emission over time and include estimates of supply chain and product life-cycle contributions. Other examples of indicators of sustainable production specifically related to the environment include: 앫 앫 앫 앫
percent of raw materials from renewable resources; acidification potential, measured in SO2 equivalent; kilograms of emissions to the air; amount of energy used per unit of product made or service provided;
Existing business-related sustainability indicators tend to emphasize the environmental aspects of production [11,12]. However, indicators of sustainable production (ISPs) should include not only production measures but also measures of the relationship between production and the economic, social, and environmental systems within which it exists. The types of issues that ISPs should address include energy and material use, natural environment, economic viability, social justice, community and worker development, and product life cycle. Such indicators can show the extent to which an organization is moving toward more sustainable production practices. In this respect, ISPs are a useful tool both for companies and community groups, as well as government. Companies need to “measure” in order to “manage” their achievements. NGOs, community organizations and government need to evaluate companies’ performance in order to reward the leaders and determine how best to encourage the laggards to improve their performance.
V. Veleva et al. / Journal of Cleaner Production 9 (2001) 447–452
4. LCSP indicator framework The LCSP framework presently focuses primarily on the environmental, health, and safety aspects of sustainable production. Additional work is underway to expand the framework to include the social and economic aspects of production. Underlying the framework are three basic assumptions: 앫 developing sustainable systems of production is a continuous, evolutionary process of setting goals and measuring performance; 앫 different companies and different industries are starting at different places in the evolutionary process; and 앫 developing truly sustainable systems of production cannot be achieved by companies or industry alone but rather requires cooperation and coordination among companies, communities and government at many different levels — local, regional, national and international. These assumptions are reflected in a framework of Indicators for Sustainable Production that consists of the following five levels (see Fig. 1): 앫 앫 앫 앫 앫
Level Level Level Level Level
1: 2: 3: 4: 5:
Facility Compliance/conformance Facility Material Use and Performance Facility Effects Supply Chain and Product Life-Cycle Sustainable Systems
Note that the levels are evolutionary. As a company begins to develop indicators at higher levels, the framework does not suggest dropping indicators at the lower levels. It is necessary for companies to comply with regulations and industry standards (Level One). It will always be important that companies monitor their
449
efficiency and productivity (Level Two). In order to move toward sustainable production, however, an organization needs to look beyond its boundaries at the impacts of suppliers, distributors and products (Levels Three and Four) as well as its contribution in moving toward sustainable society (Level Five). Level One: Facility Compliance/Conformance includes measures that many companies already track. They evaluate the extent to which a facility is in compliance with regulations (e.g., Toxic Release Inventory, Occupational Safety and Health Act, Clean Air Act) or in conformance to some industry/association standards. The environmentally oriented indicators at this level tend to be measures of activities undertaken by the Environmental Health and Safety (EHS) staff or the regulatory agencies. They are primarily focused on activities within facility boundaries but are often developed in response to external regulations or requirements. Examples of Level 1 indicators include: 앫 Number of reportable spills 앫 Number of notices of non-compliance 앫 Number of employees receiving hazardous material training 앫 Number or dollar value of fines paid. Level Two: Facility Material Use and Performance includes measures of facility/company inputs, outputs and performance, such as emissions, byproducts, waste, or occupational injuries. These indicators are commonly used and often critical for maintaining a competitive advantage, since they measure resource use efficiency. Level two indicators can be reported as a total or adjusted for production amount (per unit of product/service or per value added). Examples include: 앫 Tons of TRI (toxic release inventory) emissions released to air 앫 Total kWh energy consumed per kilogram or dollar of product output 앫 Tons of sludge generated 앫 Number of facility accident-free days. Level Three: Facility Effects indicators are a step further and measure the potential effects of a facility on environmental, worker and public health, community development and economic viability. They can be reported as a total or adjusted for production amount (per unit of product/service). Examples of EHS oriented indicators at this level include:
Fig. 1. work.
Lowell Center for sustainable production indicator frame-
앫 Kilograms of greenhouse gas (GHG) emissions per year measured in CO2 equivalents (Global Warming Potential — GWP) 앫 Kilograms of photochemical ozone creating emissions
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V. Veleva et al. / Journal of Cleaner Production 9 (2001) 447–452
per year measured in ethylene equivalents (Photochemical Ozone Creating Potential — POCP) 앫 Kilograms of acidifying substances per year measured as SO2 equivalents (Acidification Potential). Environmental effect categories parallel those developed in the Netherlands and include climate change, ozone depletion, acidification, eutrophication, dispersion of toxic substance, solid waste, and disturbance of local environments [13]. Note that up to this point, the indicator levels have been focused primarily on the company’s internal production processes. Even at level three, indicators are developed to measure effects of the internal production processes on the external environment. Unlike level one and two, these measures aim to aggregate the contribution of different sources of these effects. For example, methane and CO2 emissions can be added to calculate global warming potential. At Level Four: Supply Chain and Product Life-Cycle, the measurement focus goes beyond the boundary of the company/facility processes to look at supply chain as well as product distribution, use and ultimate disposal. These indicators aim to measure impacts throughout the product life cycle. At this level a company or facility can use indicators found in levels one through three but include the impacts from suppliers, distributors and end users. Level four indicators look at using raw materials from renewable sources and/or reusing or recycling products at the end of their life. Examples of level four indicators include: 앫 Percentage of products designed to be easily reused or recycled 앫 Percentage of suppliers receiving safety training per year 앫 Embodied energy in key raw materials and packaging 앫 Tons of GHG emissions generated during product transportation. Level Five: Sustainable Systems contains indicators that show how an individual company’s production processes fit into the larger picture of a sustainable society. Sustainable production is not an isolated activity. It is a part of the larger economic, social and environmental systems of a community. In this context community refers to both local community (where a company’s facility is located) and global community (where a company sells its products or receives raw materials and parts). Level five indicators measure the effects of production on the long-term quality of life and human development within the ecological carrying capacity. They look at the extent to which materials and ecosystem services used by the company (throughout the supply chain and life cycle of the products) have been consumed within the renewable rates or assimilation capacity of nature. In most cases, level five indicators cannot be developed by an individ-
ual company but rather need input from community and government in determining limits and thresholds. Examples of level five indicators include: 앫 Percent of water from local sources used within average local recharge rate 앫 Percent of total energy used from renewable sources harvested sustainably
5. Using the framework Over the last 6 months, the LCSP has used the framework in two types of training: 1. awareness raising; and 2. skill building. The awareness raising training introduces the concepts of sustainable development, production and consumption. It defines indicators and outlines their key dimensions. Specific exercises are included to improve participants’ understanding of indicators. This type of training also includes illustrative cases of companies developing sustainable production indicators as well as a bibliography on alternative indicator frameworks and resources. The skill building training focuses on metrics and measures and how existing indicators fit within the LCSP framework. Participants are provided with some existing sets of indicators (e.g., 3M, Amoco, Global Reporting Initiative, Center for Waste Reduction Technology), and asked to classify them according to the LCSP five-level framework. This type of training involves developing sustainable production indicators within the LCSP framework, where participants are listing indicators that they presently use and indicators that they would like to use. The training also includes examples of companies developing sustainable production indicators and bibliography of additional sources of information and quantitative data for indicator calculation. Training workshops and presentations have been given for the Northeast Business Environmental Network (NBEN), the National Pollution Prevention Roundtable (NPPR), Massachusetts Toxics Use Reduction Planners Conference (TURP), the Coalition for Environmentally Responsible Economies (CERES), the Greening of Industry Conference, and the Northern Sustainable Community Network. Participants have included companies’ EHS staff, representatives from local, state, and federal environmental agencies, and community activists. According to participants, the framework is extremely useful in raising their under-
V. Veleva et al. / Journal of Cleaner Production 9 (2001) 447–452
standing of sustainable production and indicators and how to apply these in practice. Other key findings from the sessions given to date include: 앫 Most firms in the US are using Level One and Two indicators only. This is due to the fact that US firms are not required by law to prepare higher level indicators. In the few cases where there is such an interest, firms typically lack the expertise to develop the indicators. 앫 Workshop participants find that classifying indicators into the five levels reveals much about their company/facility indicator systems. Placing an indicator within the five-level framework is not always easy. However, the process of discussing different viewpoints about where an indicator fits within the framework has proven very successful in increasing participants’ overall understanding of sustainable production. 앫 Level Five indicators (sustainable systems indicators) are difficult for companies to understand, develop and implement, since these require community and government support, expanded databases and information on limits and thresholds. Without such support, business will only be able to make limited progress towards developing truly sustainable systems of production. 앫 Indicators relating to the social and economic aspects of sustainability are not currently accommodated easily by the framework. There is a need to expand the framework and include these aspects as well as worker well-being and product sustainability. 앫 Management indicators are of particular interest to organizations and are not well accommodated by the framework in its current state. 앫 The term “indicator” is not always understood well and is sometimes confused with goals or issues. For example, workshop participants sometimes mention “safety” or “increase energy from renewables” as indicators. However, “safety” is an issue for which an indicator might be “number of accident-free days”, and “increase energy from renewables” is a goal for which an indicator might be “percent of energy from renewables”.
6. Conclusions There are many questions that need to be addressed in the future in order to improve the LCSP indicator framework. Testing of the framework is of key importance. The LCSP is presently working with two companies and is interested in identifying additional ones to pilot the application of the framework. The Center wel-
451
comes all comments and suggestions for improving its training curriculum and the indicator framework. Regardless of the long road ahead, our work with industry shows that there is a need to clarify and simplify the numerous indicator systems in the literature today. The Lowell Center Framework is one attempt to do so. Its use as a training tool — particularly for reviewing existing indicators sets — heightens awareness about sustainable production and promotes learning and improved measurement practices.
Acknowledgements The authors would like to acknowledge the funding for this research from the Merck Family Fund and the Switzer Environmental Fellowship Program of the New Hampshire Charitable Foundation.
Appendix A Principles of Sustainable Production (adapted from the Lowell Center for Sustainable Production) 앫 Products and services are: 앫 safe and ecologically sound throughout their life cycle; 앫 as appropriate, designed to be durable, repairable, readily recycled, compostable, or easily biodegradable; 앫 produced and packaged using minimal amounts of most environmentally benign materials and energy. 앫 Processes are designed and operated such that 앫 wastes and ecologically incompatible byproducts are continuously reduced, eliminated or recycled on-site; 앫 chemical substances or physical agents and conditions that present hazards to human health or the environment are continuously eliminated; 앫 energy and materials are conserved, and the forms of energy and materials used are most appropriate for the desired ends; 앫 work spaces are designed to continuously minimize or eliminate chemical, ergonomic and physical hazards. 앫 Workers are valued and 앫 their work is organized to conserve and enhance their efficiency and creativity; 앫 their security and well-being is a priority; 앫 they are encouraged and helped to continuously develop their talents and capacities; 앫 their input to and participation in the decisionmaking process is openly accepted. 앫 Communities related to any stage of the product lifecycle (from production of raw materials through
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manufacture, use and disposal of the final product) are respected and enhanced economically, socially, culturally and physically; and 앫 Continued economic viability does not depend on ever-increasing (i.e., unsustainable) consumption of materials and energy.
References [1] World Commission on Environment and Development. Our Common Future. Oxford: Oxford University Press, 1987. [2] United Nations. United Nations Conference on Environment and Development, Rio de Janeiro, Brazil. In: Agenda 21: Programme of Action for Sustainable Development. New York: United Nations, 1992. [3] Farrow P, Johnson R, Larson A. Enterpreneurship, innovation and sustainability strategies: The case of Walden Paddlers, Inc. Greening of Industry Network Conference, Chapel Hill, North Carolina, 13–16 November 1999. [4] Greiner T. Indicators of sustainable production: The case of Stonyfield Farm. Greening of Industry Network Conference, Chapel Hill, North Carolina, 13–16 November 1999.
[5] Organization for Economic Cooperation and Development (OECD). OECD work on Sustainable Development. A discussion paper on work to be undertaken over the period 1998–2001, 1998. www.oecd.org/subject/sustdev/oecdwork.htm. [6] US Interagency Working Group on Sustainable Development Indicators. An experimental set of indicators. Washington DC: US Interagency Working Group on Sustainable Development Indicators, 1998. [7] Sustainable Seattle. 1998. www.scn.org/ip/sustainable/index.htm [8] International Organization for Standardization (ISO). Draft International Standard ISO/DIS 14031. Geneva: ISO, 1998. [9] Global Reporting Initiative (GRI). Sustainability Reporting Guidelines on Economic, Environmental, and Social Performance, 2000. http://www.globalreporting.org/ [10] World Business Council for Sustainable Development (WBCSD). Eco-efficiency indicators and reporting. Report on the status of the project’s work in progress and guidelines for pilot application, 1999. http://www.wbcsd.ch. [11] Veleva V. A proposal for measuring business sustainability: Addressing shortcomings in existing indicator frameworks. Greening of Industry Network Conference, Chapel Hill, North Carolina, 13–16 November 1999. [12] Veleva V, Ellenbecker M. Indicators of sustainable production: A new tool for promoting business sustainability. New Solutions (in press). [13] Adriaanse A. Environmental policy performance indicators: A study on the development of indicators for environmental policy in the Netherlands. Den Haag, Sdu Uitgeverij, 1993.
Indicators of sustainable production V. Veleva *, M. Hart, T. Greiner, C. Crumbley Lowell Center for Sustainable Production, Kitson Hall, Room 200, University of Massachusetts Lowell, One University Avenue, Lowell, MA 01854, USA Accepted 15 May 2000
Abstract Over the past 10 years, firms, government and the public have increasingly focused on measurement tools to assess the environmental aspects of sustainability. While there are numerous lists of environmental performance indicators (see, for example, International Organizations for Standardization’s ISO 14301, Global Reporting Initiative, and World Business Council for Sustainable Development), these lists provide little insight into how firms might revise the indicators they currently have to more accurately measure sustainability. The Lowell Center for Sustainable Production at the University of Massachusetts Lowell has developed a tool to enable companies to evaluate the effectiveness of sustainability indicator systems. The tool includes a framework that consists of five levels for categorizing existing indicators relative to the basic principles of sustainability. The purpose of the framework is not to rank indicators as better or worse, but rather to provide a method to evaluate the ability of a set of indicators to inform decision-making and measure progress toward more sustainable systems of production. In its current state, the framework focuses on environmental, health and safety aspects of production. Work is underway to expand it to include social and economic aspects. 2001 Elsevier Science Ltd. All rights reserved. Keywords: Indicators; Sustainable production; Indicator framework; Indicators of sustainable production
1. Introduction The concept of sustainable production emerged in 1992 at the United Nations Conference on Environment and Development (UNCED) and is closely linked to the concept of sustainable development1. The conference concluded that the major cause for the continued deterioration of the global environment is the unsustainable pattern of consumption and production, particularly in industrialized countries [2]. Agenda 21 Action Plan called on governments, business and others to implement measures for more sustainable production and consumption patterns. However, the term sustainability is still very vague, particularly in the business context where it
* Corresponding author. Tel.: +1-978-934-3275; fax: +1-978-9343050. E-mail address: [email protected] (V. Veleva). 1 Although the term sustainable development has been used for many years its meaning still defies simple explanation. The most commonly cited definition is “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” [1, p. 40].
has been used to describe everything from organic yogurt to petroleum production. Regardless of how it is defined, market leaders in a number of industries are realizing the strategic advantages of being more sustainable and measuring their progress [3,4]. Many other companies are beginning to understand the importance of sustainable development although they are not certain how the concept applies to their business activities. This challenge was one impetus behind the establishment of the Lowell Center for Sustainable Production (LCSP)2 at the University of Massachusetts Lowell. The Center focused its work on sustainable systems of production. In 1999 it began developing a framework for indicators of sustainable production. This paper presents the framework and
2
The LCSP was started in 1996 to promote new forms of industrial production that are safe, healthy, environmentally sound, socially responsible, and economically viable over the long term. The Center is composed of a core of faculty and staff from several academic departments and research centers that work directly with industrial firms, non-profit organizations, and government agencies to promote sustainable production.
0959-6526/01/$ - see front matter 2001 Elsevier Science Ltd. All rights reserved. PII: S 0 9 5 9 - 6 5 2 6 ( 0 1 ) 0 0 0 0 4 - X
448
V. Veleva et al. / Journal of Cleaner Production 9 (2001) 447–452
describes the key findings from using it in a series of trainings so far. It is still a work in progress. As presented here the framework only addresses environmental aspects of sustainable production. Work is underway to expand the framework to include the social and economic aspects as well. The LCSP is interested in receiving comments and suggestions for improvement.
2. Sustainable production The LCSP defines sustainable production as: the creation of goods and services using processes and systems that are: non-polluting; conserving of energy and natural resources; economically viable; safe and healthful for workers, communities, and consumers; and, socially and creatively rewarding for all working people. The LCSP principles of sustainable production, derived from this definition, are presented in the side bar. They emphasize the interconnections between the environmental, social and economic systems within which production and consumption occur. The LCSP’s definition and principles of sustainable production present a vision and the long-term objectives for companies that choose to become more sustainable. However, the vision and long-term objectives alone may not be sufficient for a company to develop a more sustainable production system. There is a need for tools to assist companies in understanding the problems with existing production systems and then defining specific objectives and measuring progress toward sustainable production. One such tool, being developed by the Lowell Center, is a framework for indicators of sustainable production. Its purpose is to increase companies’ understanding of the concept of sustainable production and promote its practical application.
3. Indicators, indicators, indicators everywhere Indicators are typically numerical measures that provide key information about a physical, social or economic system. They go beyond simple data to show trends or cause-and-effect relationships. Indicators have three key objectives: 1. to raise awareness and understanding; 2. to inform decision-making; and 3. to measure progress toward established goals. Indicators have increasingly been used as a tool to measure progress toward sustainable development at different levels — national, regional, local and company/facility.
Examples include the Organization for Economic Cooperation and Development [5], US Interagency Working Group on Sustainable Development [6], Sustainable Seattle [7], International Organization for Standardization ISO 14031 [8], Global Reporting Initiative [9], among others. This paper focuses only on company/facility level indicators. Given the difficulty some have defining sustainable development, one can imagine the greater difficulty in measuring it! While numerous environmental indicators exist — such as the ones developed under the International Organization for Standardization Environmental Performance Evaluation Guidelines ISO 14031, Global Reporting Initiative, or World Business Council for Sustainable Development [10] — none of them advances our understanding of corporate sustainability. They provide simple lists of indicators with little or no guidance as to how to select or apply them over time in order to become more sustainable [11]. For example, indicators of corporate compliance rates and permit exceedences, while useful, provide little “sustainability information.” A firm can be in full compliance with government requirements but still making little progress in reducing its impacts on global or local sustainability. Additional indicators are needed to examine, for example, the firm’s greenhouse gas emission over time and include estimates of supply chain and product life-cycle contributions. Other examples of indicators of sustainable production specifically related to the environment include: 앫 앫 앫 앫
percent of raw materials from renewable resources; acidification potential, measured in SO2 equivalent; kilograms of emissions to the air; amount of energy used per unit of product made or service provided;
Existing business-related sustainability indicators tend to emphasize the environmental aspects of production [11,12]. However, indicators of sustainable production (ISPs) should include not only production measures but also measures of the relationship between production and the economic, social, and environmental systems within which it exists. The types of issues that ISPs should address include energy and material use, natural environment, economic viability, social justice, community and worker development, and product life cycle. Such indicators can show the extent to which an organization is moving toward more sustainable production practices. In this respect, ISPs are a useful tool both for companies and community groups, as well as government. Companies need to “measure” in order to “manage” their achievements. NGOs, community organizations and government need to evaluate companies’ performance in order to reward the leaders and determine how best to encourage the laggards to improve their performance.
V. Veleva et al. / Journal of Cleaner Production 9 (2001) 447–452
4. LCSP indicator framework The LCSP framework presently focuses primarily on the environmental, health, and safety aspects of sustainable production. Additional work is underway to expand the framework to include the social and economic aspects of production. Underlying the framework are three basic assumptions: 앫 developing sustainable systems of production is a continuous, evolutionary process of setting goals and measuring performance; 앫 different companies and different industries are starting at different places in the evolutionary process; and 앫 developing truly sustainable systems of production cannot be achieved by companies or industry alone but rather requires cooperation and coordination among companies, communities and government at many different levels — local, regional, national and international. These assumptions are reflected in a framework of Indicators for Sustainable Production that consists of the following five levels (see Fig. 1): 앫 앫 앫 앫 앫
Level Level Level Level Level
1: 2: 3: 4: 5:
Facility Compliance/conformance Facility Material Use and Performance Facility Effects Supply Chain and Product Life-Cycle Sustainable Systems
Note that the levels are evolutionary. As a company begins to develop indicators at higher levels, the framework does not suggest dropping indicators at the lower levels. It is necessary for companies to comply with regulations and industry standards (Level One). It will always be important that companies monitor their
449
efficiency and productivity (Level Two). In order to move toward sustainable production, however, an organization needs to look beyond its boundaries at the impacts of suppliers, distributors and products (Levels Three and Four) as well as its contribution in moving toward sustainable society (Level Five). Level One: Facility Compliance/Conformance includes measures that many companies already track. They evaluate the extent to which a facility is in compliance with regulations (e.g., Toxic Release Inventory, Occupational Safety and Health Act, Clean Air Act) or in conformance to some industry/association standards. The environmentally oriented indicators at this level tend to be measures of activities undertaken by the Environmental Health and Safety (EHS) staff or the regulatory agencies. They are primarily focused on activities within facility boundaries but are often developed in response to external regulations or requirements. Examples of Level 1 indicators include: 앫 Number of reportable spills 앫 Number of notices of non-compliance 앫 Number of employees receiving hazardous material training 앫 Number or dollar value of fines paid. Level Two: Facility Material Use and Performance includes measures of facility/company inputs, outputs and performance, such as emissions, byproducts, waste, or occupational injuries. These indicators are commonly used and often critical for maintaining a competitive advantage, since they measure resource use efficiency. Level two indicators can be reported as a total or adjusted for production amount (per unit of product/service or per value added). Examples include: 앫 Tons of TRI (toxic release inventory) emissions released to air 앫 Total kWh energy consumed per kilogram or dollar of product output 앫 Tons of sludge generated 앫 Number of facility accident-free days. Level Three: Facility Effects indicators are a step further and measure the potential effects of a facility on environmental, worker and public health, community development and economic viability. They can be reported as a total or adjusted for production amount (per unit of product/service). Examples of EHS oriented indicators at this level include:
Fig. 1. work.
Lowell Center for sustainable production indicator frame-
앫 Kilograms of greenhouse gas (GHG) emissions per year measured in CO2 equivalents (Global Warming Potential — GWP) 앫 Kilograms of photochemical ozone creating emissions
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V. Veleva et al. / Journal of Cleaner Production 9 (2001) 447–452
per year measured in ethylene equivalents (Photochemical Ozone Creating Potential — POCP) 앫 Kilograms of acidifying substances per year measured as SO2 equivalents (Acidification Potential). Environmental effect categories parallel those developed in the Netherlands and include climate change, ozone depletion, acidification, eutrophication, dispersion of toxic substance, solid waste, and disturbance of local environments [13]. Note that up to this point, the indicator levels have been focused primarily on the company’s internal production processes. Even at level three, indicators are developed to measure effects of the internal production processes on the external environment. Unlike level one and two, these measures aim to aggregate the contribution of different sources of these effects. For example, methane and CO2 emissions can be added to calculate global warming potential. At Level Four: Supply Chain and Product Life-Cycle, the measurement focus goes beyond the boundary of the company/facility processes to look at supply chain as well as product distribution, use and ultimate disposal. These indicators aim to measure impacts throughout the product life cycle. At this level a company or facility can use indicators found in levels one through three but include the impacts from suppliers, distributors and end users. Level four indicators look at using raw materials from renewable sources and/or reusing or recycling products at the end of their life. Examples of level four indicators include: 앫 Percentage of products designed to be easily reused or recycled 앫 Percentage of suppliers receiving safety training per year 앫 Embodied energy in key raw materials and packaging 앫 Tons of GHG emissions generated during product transportation. Level Five: Sustainable Systems contains indicators that show how an individual company’s production processes fit into the larger picture of a sustainable society. Sustainable production is not an isolated activity. It is a part of the larger economic, social and environmental systems of a community. In this context community refers to both local community (where a company’s facility is located) and global community (where a company sells its products or receives raw materials and parts). Level five indicators measure the effects of production on the long-term quality of life and human development within the ecological carrying capacity. They look at the extent to which materials and ecosystem services used by the company (throughout the supply chain and life cycle of the products) have been consumed within the renewable rates or assimilation capacity of nature. In most cases, level five indicators cannot be developed by an individ-
ual company but rather need input from community and government in determining limits and thresholds. Examples of level five indicators include: 앫 Percent of water from local sources used within average local recharge rate 앫 Percent of total energy used from renewable sources harvested sustainably
5. Using the framework Over the last 6 months, the LCSP has used the framework in two types of training: 1. awareness raising; and 2. skill building. The awareness raising training introduces the concepts of sustainable development, production and consumption. It defines indicators and outlines their key dimensions. Specific exercises are included to improve participants’ understanding of indicators. This type of training also includes illustrative cases of companies developing sustainable production indicators as well as a bibliography on alternative indicator frameworks and resources. The skill building training focuses on metrics and measures and how existing indicators fit within the LCSP framework. Participants are provided with some existing sets of indicators (e.g., 3M, Amoco, Global Reporting Initiative, Center for Waste Reduction Technology), and asked to classify them according to the LCSP five-level framework. This type of training involves developing sustainable production indicators within the LCSP framework, where participants are listing indicators that they presently use and indicators that they would like to use. The training also includes examples of companies developing sustainable production indicators and bibliography of additional sources of information and quantitative data for indicator calculation. Training workshops and presentations have been given for the Northeast Business Environmental Network (NBEN), the National Pollution Prevention Roundtable (NPPR), Massachusetts Toxics Use Reduction Planners Conference (TURP), the Coalition for Environmentally Responsible Economies (CERES), the Greening of Industry Conference, and the Northern Sustainable Community Network. Participants have included companies’ EHS staff, representatives from local, state, and federal environmental agencies, and community activists. According to participants, the framework is extremely useful in raising their under-
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standing of sustainable production and indicators and how to apply these in practice. Other key findings from the sessions given to date include: 앫 Most firms in the US are using Level One and Two indicators only. This is due to the fact that US firms are not required by law to prepare higher level indicators. In the few cases where there is such an interest, firms typically lack the expertise to develop the indicators. 앫 Workshop participants find that classifying indicators into the five levels reveals much about their company/facility indicator systems. Placing an indicator within the five-level framework is not always easy. However, the process of discussing different viewpoints about where an indicator fits within the framework has proven very successful in increasing participants’ overall understanding of sustainable production. 앫 Level Five indicators (sustainable systems indicators) are difficult for companies to understand, develop and implement, since these require community and government support, expanded databases and information on limits and thresholds. Without such support, business will only be able to make limited progress towards developing truly sustainable systems of production. 앫 Indicators relating to the social and economic aspects of sustainability are not currently accommodated easily by the framework. There is a need to expand the framework and include these aspects as well as worker well-being and product sustainability. 앫 Management indicators are of particular interest to organizations and are not well accommodated by the framework in its current state. 앫 The term “indicator” is not always understood well and is sometimes confused with goals or issues. For example, workshop participants sometimes mention “safety” or “increase energy from renewables” as indicators. However, “safety” is an issue for which an indicator might be “number of accident-free days”, and “increase energy from renewables” is a goal for which an indicator might be “percent of energy from renewables”.
6. Conclusions There are many questions that need to be addressed in the future in order to improve the LCSP indicator framework. Testing of the framework is of key importance. The LCSP is presently working with two companies and is interested in identifying additional ones to pilot the application of the framework. The Center wel-
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comes all comments and suggestions for improving its training curriculum and the indicator framework. Regardless of the long road ahead, our work with industry shows that there is a need to clarify and simplify the numerous indicator systems in the literature today. The Lowell Center Framework is one attempt to do so. Its use as a training tool — particularly for reviewing existing indicators sets — heightens awareness about sustainable production and promotes learning and improved measurement practices.
Acknowledgements The authors would like to acknowledge the funding for this research from the Merck Family Fund and the Switzer Environmental Fellowship Program of the New Hampshire Charitable Foundation.
Appendix A Principles of Sustainable Production (adapted from the Lowell Center for Sustainable Production) 앫 Products and services are: 앫 safe and ecologically sound throughout their life cycle; 앫 as appropriate, designed to be durable, repairable, readily recycled, compostable, or easily biodegradable; 앫 produced and packaged using minimal amounts of most environmentally benign materials and energy. 앫 Processes are designed and operated such that 앫 wastes and ecologically incompatible byproducts are continuously reduced, eliminated or recycled on-site; 앫 chemical substances or physical agents and conditions that present hazards to human health or the environment are continuously eliminated; 앫 energy and materials are conserved, and the forms of energy and materials used are most appropriate for the desired ends; 앫 work spaces are designed to continuously minimize or eliminate chemical, ergonomic and physical hazards. 앫 Workers are valued and 앫 their work is organized to conserve and enhance their efficiency and creativity; 앫 their security and well-being is a priority; 앫 they are encouraged and helped to continuously develop their talents and capacities; 앫 their input to and participation in the decisionmaking process is openly accepted. 앫 Communities related to any stage of the product lifecycle (from production of raw materials through
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manufacture, use and disposal of the final product) are respected and enhanced economically, socially, culturally and physically; and 앫 Continued economic viability does not depend on ever-increasing (i.e., unsustainable) consumption of materials and energy.
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