Review of sustainability management initiatives within Finnish forest products industry companies—Translating Eu level steering into proactive initiatives

Resources, Conservation and Recycling 76 (2013) 1–11

Contents lists available at SciVerse ScienceDirect

Resources, Conservation and Recycling journal homepage: www.elsevier.com/locate/resconrec

Review of sustainability management initiatives within Finnish forest products industry companies—Translating Eu level steering into proactive initiatives R. Husgafvel a,∗ , G. Watkins a , L. Linkosalmi b , O. Dahl a a b

Clean Technologies Research Group, Department of Forest Products Technology, School of Chemical Technology, Aalto University, Finland Wood Product Technology Research Group, Department of Forest Products Technology, School of Chemical Technology, Aalto University, Finland

a r t i c l e

i n f o

Article history: Received 29 October 2012 Received in revised form 19 April 2013 Accepted 21 April 2013 Keywords: Sustainability management Forest products industry Environmental steering

a b s t r a c t Sustainability has become a major focus area within forest products industry. The European operational environment and national environmental steering in EU member states highlight the importance of sustainable development and the development of associated new management approaches to promote sustainability. This article reviews some key elements of sustainability management, covering examples of both Finnish forest products industry initiatives and public environmental steering at the European level. An assessment is made of the current situation and an outline of a future outlook for sustainability management, with special emphasis on bridging the gap between industry initiatives and environmental steering in the form of legislation, policies and strategies at the EU level. This study applied a hybrid approach comprising a review of EU sustainability initiatives, a policy and legal review and a questionnaire survey of forest industry actors. The results of the future outlook indicate that energy efficiency is perceived to be the most important focus area in addition to e.g. environmental and waste management and recycling. Less than half of the companies aim at applying sustainability management. Life-cycle management is also considered to be important whereas product-based approaches, climate change and local industrial symbiosis receive very little attention. All responding companies aim to integrate the principles of sustainability into their operations and most companies consider that lifecycle thinking, management and assessment are useful for them. Energy efficiency is identified as the most important focus area with energy and materials efficiency seen as the most crucial factors for the achievement of responsible competitive advantage and building of sustainable value-added. The findings indicate that sustainability and life-cycle management are not receiving enough management focus at the moment and neither is the industry receiving enough guidance at either the EU level or via national steering and regulatory frameworks. © 2013 Elsevier B.V. All rights reserved.

1. Introduction Sustainable development has been established as the leading development goal and principle at the international level with direct consequences for all branches of development including industrial development and particularly sustainability management. Sustainable development is part of efforts to integrate environmental, economic and social considerations into a new development paradigm characterised by a dynamic process, normative aspects and steering of change (Baker, 2006). Graedel and Allenby (2010) recognised that sustainable development requires paying attention to integrated industry–society–environment interactions to promote responsible approaches to industrial

∗ Corresponding author at: Aalto University, P.O. Box 16400, FI-00076 Aalto, Finland. Tel.: +358 400970402; fax: +358 947024259. E-mail address: roope.husgafvel@aalto.fi (R. Husgafvel). 0921-3449/$ – see front matter © 2013 Elsevier B.V. All rights reserved. http://dx.doi.org/10.1016/j.resconrec.2013.04.006

activities. In this respect, more and more companies are reporting various sustainability aspects as an integral part of their strategic management and public relations. International, intra-regional (e.g. EU) and national operational environments place strong focus on addressing sustainability challenges such as the sustainable use of natural resources, climate change and material and energy efficiency. Companies can gain many benefits through sustainability management including better economic and environmental performance based on efficient use of resources, materials and energy, and an improved public image, as well as better fundamental business sustainability. In the long-run, some claim that society and its industry must recognise the boundaries of a finite planet and its resource availability encompassing, for instance, the establishment of limits to resource use to address the problems caused by inefficient use of natural resources and by designing new methods to measure progress towards sustainability (Daly and Farley, 2007; Jackson, 2009). In general, progress towards sustainable resource

2

R. Husgafvel et al. / Resources, Conservation and Recycling 76 (2013) 1–11

use and material efficiency are among the key prerequisites for sustainable development and they usually go hand in hand with energy efficiency, another key aspect. Better environmental, economic and social performance can be major elements of overall encouragement in the development of the competitive advantage of forest products companies. Company level informed decisionmaking can be supported significantly by the application of sustainability management tools such as comprehensive sustainability indexes and life-cycle assessment (LCA). Notwithstanding the general environmental sustainability perspective and the spin-off business advantages it can offer, there is also the issue of fundamental or true business sustainability, i.e. the ability of the form of a particular industry, technology or business approach to continue in the medium to long term with respect to its energy and raw material demands, process and product environmental impacts. Here the ability of businesses to be strategic rather than reactive in their outlook means that they may be more able to anticipate future pressures and the competitive advantages that could arise. That environmental pressures and social awareness are defining features of a changing future economic climate is not in doubt. Adaptation is key here, with sustainable strategically orientated businesses likely to enjoy competitive success, and here the forest industry is in a particularly enviable position, with respect to both its basic raw materials and access to major proportion of its energy being from renewable sources. This is in stark contrast to most other process industries that are unable to use or access suitable renewables. Businesses have incentives to seek efficiencies, so with a strategic outlook and vision as a destination there are business management tools that can help with the journey i.e. mapping out a route. The development of momentum for effective drivers in establishing such business visions for sustainability management will rely on institutional aspects at all levels and identifying unifying issues for industry and public bodies. Within the EU, sustainable development and related integrated approaches are key objectives together with achieving a high level of protection and improvement of the quality of the environment and protecting human health (EC, 2006). This encompasses sustainable natural resources management (EC, 2005, 2006). In general, the current developments at the EU level highlight strongly the goal of achieving a recycling society and improved material efficiency (EC, 2005, 2008a, b, c, d, 2010a, 2011a, b, c) as well as the essential role of extended producer responsibility and resource efficiency (EC, 2011b). In addition, heavy emphasis is also being placed on ‘lifecycle thinking’ and continuous improvement of the environmental performance of products throughout their whole life-cycles (EC, 2003, 2009).

2. Aims of the study This study aimed at reviewing some of the main elements and emerging challenges of sustainability management within Finnish forest products industry, covering both domestic industry initiatives and public environmental steering at the EU level. The assessment focused on identifying potential gaps between industry initiatives and public environmental steering (in the form of legislation and policy) and on suggesting how these gaps could be bridged. The present approach was based on the following assessments: (1) a review of industry initiatives and case studies from the Finnish forest products industry, (2) an assessment of potential management implications of selected EU policy and legal instruments, and (3) a questionnaire survey covering sustainability management within the Finnish forest products industry. The potential management implications of selected EU policy and legal instruments were assessed by applying a matrix-based assessment approach aimed at identifying and suggesting main

focus areas, key premises and key challenges associated with these instruments. The overall goal was to produce information to support informed decision-making and strategic management within industry covering the key elements of each instrument. Additionally, this assessment also attempts to outline the main issues and key challenges associated with new paths towards a more holistic management approach to encourage sustainable industrial development. The questionnaire survey (Annex 1) focused on reviewing the current status of, and future outlook for, sustainability management (within the Finnish forest products industry) encompassing both large multinational corporations and smaller companies. 3. Research approach 3.1. Review of Finnish forest products industry’s sustainability initiatives This review focused on the latest developments in sustainability management within the Finnish forest products industry and aimed at identifying some of the main focus areas and development challenges in this field. The idea was to discuss these development trends and associated topics at the general level based on literature review. In addition, a case study on company level sustainability management approaches is presented based on the review of latest Aalto University thesis studies on addressing sustainability challenges in wood products industry. In general, sustainability research aims at contributing to the understanding of sustainability problems and developing and supporting the implementation of solutions to these problems. Baumgartner (2011) stated that sustainability science has to be both strategic (both identification of sustainability problems and addressing them) and based on scientific principles and methods. 3.2. Potential management implications – EU policy and legal review In the assessment of potential management implications of the selected EU policy and legal instruments a matrix-based approach (presented as a table) was applied aimed at identifying and suggesting some of the main focus areas for attention, key premises and challenges associated with these instruments. This approach was chosen based on the aim to support informed decision-making and strategic management within industry through comprehensive and integrative approach involving future-oriented and normative aspects in accordance with the principles of sustainability science (Ascher, 2006, 2007; Kates et al., 2001; Komiyama and Takeuchi, 2006). It is recognised that systemic approaches to management and resources contribute to sustainable development and to increased sustainability of all operations through more integrated and strategic management planning covering the full life-cycle perspective (Kiely, 1998; Brady, 2005). Salvato et al. (2003) also noted that comprehensive planning takes into account multiple aspects and benefits to support integrated management approaches. 3.3. Questionnaire survey – sustainability management within Finnish forest products industry The questionnaire survey (Patten, 2011) was sent to 60 forest industry companies covering both large multinational corporations and small to medium sized companies. The questionnaire comprised 17 questions and related sub-elements. The response rate was 26.6%. This survey aimed at determining some of the main elements that reflect the current status of, and may indicate future outlook for, sustainability management within Finnish forest products industry. These elements cover many topics (Annex 1) such as

R. Husgafvel et al. / Resources, Conservation and Recycling 76 (2013) 1–11

changing international and EU operational environments and sustainability, life-cycle and environmental management. Other issues covered were industrial ecology, industrial symbiosis and material and energy efficiency. Answering option were agree, disagree, do not know and there was also voluntary own comments section. 4. Results 4.1. Review of industry initiatives 4.1.1. General trends Sustainable development has often been seen more as an obligation than an opportunity. However, it has been suggested that it is possible to achieve a win–win situation in which sustainable development can lead to economic benefits (Esty and Porter, 1998). Industry can achieve economic benefits through sustainable management practices and this means that also the shareholders and markets in general benefit from this more sustainable state of affairs in terms of all dimensions of sustainability. Further, the demand for enhanced sustainability management may come from customers or shareholders creating increased pressure and ‘market demand’ for the incorporation of sustainability into corporate strategy. Forest industry companies operate globally and they need take into account economic, ecological and social aspects of sustainable development and associated sustainability management. It is therefore worthwhile to place more emphasis on the development of sustainability management as an integral part of corporate responsibility in this sector. During recent decades, forest industry companies have committed themselves into environmental management systems, sustainable forest management and applied environmental certificates and labels for their products. There are two main environmental management systems in use: ISO 14001 and EMAS (Hillary, 2004) and there are two operational systems for sustainable forest management in Europe: the Programme for the Endorsement of Forest Certification (PEFC) and the Forest Stewardship Council (FSC) (Rametsteiner and Simula, 2003). Additionally, Fet and Skaar (2006) noted that the industry also uses environmental labels classified as official (e.g. EU level and Nordic Council labels) and as unofficial labels (i.e. recyclability, other declarations and origin labels). Industry organisations have also started to promote sustainability management and environmental management (e.g. the Confederation of European Paper Industries (CEPI) and the European Confederation of wood working industries (CEI-BOIS) and some others) through specific working groups in these fields. A survey of the webpages of major companies indicates that nearly all companies have some sort of sustainability and related reporting approaches. Small and medium-sized enterprises focus more on sustainable forest management and use of natural materials instead of actual sustainability reporting. In sum, corporate responsibility reporting has become more and more important to companies covering also sustainability and environmental aspects. There was a slowdown in improvement of the Finnish pulp and paper industry’s environmental performance over the period 2001–2006 (Silvo et al., 2009). By and large, best available techniques (BAT), concerning emissions control, had already been integrated into operations during the 1990s, with large step-change decreases in emissions having not occurred in the industry since. New types of actions from the public and private sectors are therefore needed to push forward the development of further environmental innovations. Environmental performance in the forest products industry needs to be supported by technological innovations, environmental policies and due consideration of customers’ requirements (Kivimaa, 2007). Research and development cooperation is another means of developing and improving the competence of forest industry in

3

the fields of sustainability and environmental management. Many companies are involved in this kind of cooperation and in recent years the focus has been on e.g. process efficiency and management of residue streams from an environmental point of view. Process oriented research has covered material, energy and carbon efficiency. In addition, there has been research into the efficient and sustainable utilisation of residues and by-products as well as on the effective purification of wastewaters. De Benedetto and Klemes (2009) recognised that companies are interested in the economic benefits of research results, but often fail to integrate the findings into production and process development or into decision-making and marketing. This means that significant potential is lost when the full market potential of sustainability and environmental management is not duly recognised and/or understood. Environmental legislation and various systems and standards also guide and set the base level and best practices within forest industry companies at the general level. 4.1.2. Review of case studies from Finnish wood products industry Three case studies from the Finnish wood products industry are presented which focus on carbon footprint related sustainability management aspects in the context of specific wood-based products. In our first case Haaparanta (2011) noted that the significance of green values is growing and customers are demanding environmentally friendly products. The price of electricity is high and therefore it is important to pay attention to energy efficiency and continuous development of production processes. Haaparanta (2011) studied the carbon footprint of plywood processes in the Koskinen Oy mill and made the following findings and conclusions: Carbon footprint results can be utilised in (1) the development of production processes, (2) the design new marketing arguments related to eco-efficiency and to confirm the positive image of wood products, (3) the determination of optimal utilisation ratio of the plywood mill and (4) the improvement of cost efficiency and differentiation from competing products. Life-cycle methodologies can (1) indicate the energy efficiency improvement options with the most potential in the production process (e.g. veneer drying in the manufacturing process of plywood), (2) contribute to improved competitive advantage and more value added, and (3) promote an environmentally friendly corporate image through better product information. By-products are utilised as bioenergy (own plant or some other plant). In our second case Fomkin (2010) carried out a life cycle assessment of wooden kitchen furniture assemblies with an emphasis on both global warming potential and use of natural resources. This study also aimed at identifying potential improvement options in the overall production process covering its various phases and alternative courses of action. The data on materials and energy was partly collected from industry (Koskinen Oy and Puustelli Group Oy). The results indicated, for example, that alternative production options such as new options for surface treatment, use of renewable energy sources and reduction of transport distances could reduce the carbon footprint. Heat treatment of material was also a significant source of carbon emissions in this case. In the future, the application of nanotechnology and alternative modification options could lead to improved energy efficiency. In addition, the costs and marketability of products are important drivers jointly with environmental aspects. In a third study Tikka (2013) conducted an assessment of sustainable wood construction in Finland, pointing out that the environmental aspects and impacts of construction have received growing attention in recent years. Sustainable construction covers many issues such as material and energy efficiency, in addition to ecological sustainability and addressing environmental impacts. The results of the assessment indicate that although basic

4

R. Husgafvel et al. / Resources, Conservation and Recycling 76 (2013) 1–11

Table 1 EU policy instruments – potential management implications. EU instrument

Main focus areas and key premises

Potential challenges

Sustainable development strategy

- Integration of the principle of sustainable development into policy-making - Sustainable natural resources management

EU thematic strategy on the sustainable use of natural resources

- Sustainable use of natural resources

- Integration of sustainability principles into strategic management and informed decision-making - Sustainable production patterns - Sustainability management and assessment - Environmental performance of products - Resource-efficient and low carbon solutions - Integration of environmental impacts into decision-making and strategic management

- Life-cycle thinking

Thematic strategy on the prevention and recycling of waste

Integrated industrial policy (IIP)

- Application of life-cycle thinking and criteria (resource-specific) to measure progress towards more sustainable management practices jointly with impact assessments

- Efficient resource use, material efficiency, waste recycling (less to landfills) and more sustainable consumption and production patterns - Comprehensive approach to waste prevention and recycling covering issues such as the utilisation of waste as a valuable resource to be recycled for further use in the manufacturing industry

- Transition of EU industry to a low carbon and resource-efficient economy - Focus on the whole value and supply chain from access to energy and raw materials to the recycling of materials

- Reduction of greenhouse gas emissions and increased resource and energy efficiency - Product policy based on a life cycle perspective

Resource efficiency flagship initiative

- Resource efficiency (sustainable use of limited resources) - New products (less inputs)

- Low-carbon technologies (less emissions)

EU raw materials initiative

- Waste minimisation - Sustainable supply of raw materials

- Substitution of primary raw materials - Reduced negative environmental impacts - Life cycle thinking

- Reduction of the environmental impact caused by products through continuous improvement of the environmental performance of products throughout their whole life-cycle - Full stakeholder involvement (whole life cycle of products)

ecological aspects are taken into account in wood construction companies, there are no written strategies or proactive measures to address regulatory or operational environment driven changes. Energy efficiency as an easy measuring stick for the improvement of environmental performance had received attention however (Tikka, 2013).

4.2. Policy and legal review The assessment of potential management implications of the selected EU policy and legal instruments applied a matrix-based

- Implementation of minimum standards for recycling activities and recycled materials - Prevention of waste generation and promotion of recycling and waste recovery (avoiding landfilling) - More resource and energy efficient production - Increased use of secondary raw materials - Development of new low-carbon production technologies and techniques for energy-intensive material processing industries - Reduction of CO2 emissions - Strong focus on recycling and raw material substitution - Full life cycle perspective in production planning and product design - Business model sustainability (existential)? - Incorporation of resource efficiency into decision-making and strategic management - Recycling to (1) reduce demand for and pressure on primary raw materials, (2) support re-use of valuable materials instead of disposal as waste and (3) reduce energy consumption and greenhouse gas emissions - Improved product design for decreased raw materials and energy demand and easy recycling - Incorporation of sustainable use of raw materials into decision-making and strategic management - Resource/energy efficiency and recycling of end-of-life products (life cycle thinking) - Institutional acknowledgement and promotion of status of renewable materials via business incentives?

- Utilisation of secondary raw materials

Integrated product policy (IPP)

- Application of life-cycle thinking to waste management

- Incorporation of life-cycle perspective and sustainable production planning into decision-making and strategic management - Development of management approaches for improved environmental performance and minimum environmental impacts of products - Implementation of the full stakeholder involvement during the whole product life cycle

approach aimed at identifying and suggesting main focus areas, key premises and key challenges associated with these instruments. In terms of policy instruments, the results highlight that the potential management implication of EU policy instruments (Table 1) include, for instance, the need for new approaches encompassing the integration of sustainability into industrial management and operations, including e.g. sustainable use and management of natural resources and jointly with strong emphasis on increased recycling and waste utilisation. Further, key issues comprise life-cycle thinking and whole life-cycle management in accordance with the overall goal of achieving an integrated approach to sustainable industrial development and products. The

R. Husgafvel et al. / Resources, Conservation and Recycling 76 (2013) 1–11

5

Table 2 EU legal instruments – potential management implications. EU instrument

Main focus areas and key premises

Potential challenges

Ecodesign directive

- Application of a life-cycle perspective with a focus on the main environmental aspects over the life-cycle of products (energy and resource efficiency) - Integration of environmental aspects into product design with environmental performance of the aim of improving the product throughout its whole life cycle

- Incorporation of life cycle management into strategic management and decision-making

Directive on industrial emissions (IED)

- Reduction of industrial emissions - Integrated approach to environmental performance

Waste framework directive (WFD)

- Waste hierarchy

- ‘Recycling society’

REACH regulation

- Chemicals safety and related procedures

reduction of CO2 emissions and low carbon solutions are also highlighted in the context of new industrial policies. The EU Thematic Strategy on the Sustainable Use of Natural Resources (EC, 2005) anticipated a shift towards sustainable use of natural resources and reduction of the negative environmental impacts associated with increasing use of natural resources. Resources, materials, raw materials and energy efficiency are among the main elements of all the assessed instruments. In this respect the more recent Raw Materials Initiative (EC, 2008d) hoped to encourage sustainable supply of raw materials and to reduce primary raw materials consumption covering, for instance, the creation of enabling conditions for increased recycling and reuse of materials. The Resource Efficiency Flagship Initiative (EC, 2011c) further claimed that resource efficiency refers to sustainable use of limited resources and the initiation of a change towards more sustainable resource management, development of new products, reduction of inputs, low-carbon technologies to reduce emissions, minimisation of waste and more sustainable production processes are needed. The Sustainable Consumption and Production, and Sustainable Industrial Policy Action Plan (EC, 2008c) aims at integrating sustainability into broad industrial policy, encompassing a move towards more sustainable consumption and production patterns, as well as increasing resource and energy efficiency. Further subsequent policy in the form of the Integrated Industrial Policy (IIP) also looks to enable the transition of EU industry to a low carbon and resource-efficient economy with a focus on the whole value and supply chain (a life-cycle perspective) from access to energy and raw materials to the recycling of materials (EC, 2010a). Key IIP focus areas comprise, for instance, of recycling and increased use of secondary raw materials. This approach also claims to advocate ‘life-cycle thinking’ and hopes to promote good environmental performance with special emphasis on products. In this respect the allied EU Integrated Product Policy (IPP) aims to reduce the environmental impact caused by products specifically, through continuous improvement of their environmental performance throughout their whole life-cycle (EC, 2003). Turning to legal instruments, the results indicate that the potential management implication of EU legal instruments (Table 2) comprise the need for new approaches, such as life-cycle

- Continuous improvement of the environmental performance of products throughout their whole life cycles - Improved energy and resource efficiency - Environmental performance of an industrial plant as a whole in environmental permits - More focus on material efficiency (raw materials) and energy efficiency - Integrated approach to (1) pollution prevention and control and (2) emissions, waste management, accident prevention and Best Available Techniques (BAT) - Waste prevention and recycling (in accordance with WFD) - Implementation of the waste hierarchy – i.e. the application of life-cycle thinking and prioritisation of waste prevention, utilisation and recycling/recovery operations over disposal - Implications of the End of Waste (EOW) legislation and criteria for product systems with multiple residue streams – whether EOW status applies or not - Status of (1) highest volume residue streams likely to be utilised as “raw materials” and (2) low volume, low value residue based products as “articles” (each requiring own REACH risk assessment)

management, and a focus on both integrated and whole life-cycle approaches to environmental performance. In addition, resources, materials (raw materials in particular) and energy efficiency are clearly essential elements of all EU instruments jointly with environmentally oriented product design and more comprehensive approach to environmental permits. The Ecodesign Directive (EC, 2009) also claims to apply a ‘lifecycle perspective’ with a focus on the main environmental aspects over the life-cycle of products, particularly energy (improvement of energy efficiency) and resource use of products. In more recent developments, the directive on industrial emissions (IED 2010/75/EU) looks to further reduce industrial emissions with special emphasis on an integrated approach encompassing emissions, waste management, accident prevention and energy efficiency, and on the application of best available techniques (BAT) and related reference documents (EC, 2010a, 2010b). In this context, the integrated approach refers to addressing the environmental performance of a specific industrial plant or installations as a whole in environmental permits. Thus, environmental permitting may now therefore include focus on the use of raw materials (i.e. material efficiency) according to Lilja et al. (2013). The basic obligations of the operators of industrial production installations comprise e.g. waste prevention and recycling in accordance with the Waste Framework Directive (WFD) (EC, 2008a) and energy efficiency. Industrial waste management now requires new approaches based on the waste hierarchy and life-cycle thinking as well as offering clarification on when residues can achieve so called ‘End-of Waste’ (EoW) status and be more easily used a secondary raw materials to increase resource efficiency and reduce waste disposal problems. In brief, the EU instruments aim to encourage a comprehensive approach to sustainability including consistency between various instruments. 4.3. Questionnaire survey The results of the survey indicate that almost all responding companies see the development of the international and EU operational environment as both creating new challenges and providing new opportunities. Development of the EU operational

6

R. Husgafvel et al. / Resources, Conservation and Recycling 76 (2013) 1–11

Fig. 1. Results of the questionnaire survey (16 companies).

environment has implications for the forest products industry and many companies consider it to be difficult to obtain information on the practical implications involved and new opportunities associated with the latest EU and national developments. Life-cycle thinking, management and LCA were considered useful by most of the companies. All companies claim to aim at promoting sustainable development and integrating the principles of sustainability into their operations. In addition, every company highlighted the role of sustainable forest management as a foundation of sustainable industrial operations. Almost half of the companies were

familiar with the broad concept of industrial ecology (IE) and activities related to local industrial symbiosis (IS), but many of the companies were still unsure or unaware of IE and IS concepts in general (Fig. 1). Some of the respondents anticipate some changes, but are not yet sure what to expect. The results of the current status of strategic management and company operations indicate that the main current focus areas encompass waste management and recycling; certification, environmental labels and supply-chain management (e.g. origin of raw materials); corporate responsibility;

R. Husgafvel et al. / Resources, Conservation and Recycling 76 (2013) 1–11

7

Fig. 2. Results of the questionnaire survey (16 companies) on strategic management.

materials efficiency and sustainable forest management (also subcontractors), whereas product-based environmental management received relatively little attention. The results of the future outlook indicate that energy efficiency is perceived to be the most important focus area in addition to e.g. environmental and waste management and recycling. Less than half of the companies aimed at applying sustainability management (Figs. 2 and 3). The results indicate that energy and materials efficiency were seen as the most crucial factors for the achievement of responsible competitive advantage and the building of sustainable value-added, followed by the sustainability of all operations and improvement of environmental performance e.g. through the reduction of environmental impacts of industrial activities.

Climate change was not considered to be an important factor in this context. Furthermore, the results indicate that the current status of sustainability, life-cycle and environmental management in companies is mostly influenced by changes in the operational environment and by development within industry. Only 25% of the companies considered that their management approach was proactive and self-driven (Figs. 4 and 5). The results indicate that the most important future goals within forest products industry and individual companies encompass sustainability of all operations and the improvement of environmental performance as well as energy and materials efficiency, and sustainable forest management. Life-cycle management was also considered to be important, whereas product-based approaches,

Fig. 3. Results of the questionnaire survey (16 companies) on future-oriented aspects.

8

R. Husgafvel et al. / Resources, Conservation and Recycling 76 (2013) 1–11

Fig. 4. Results of the questionnaire survey (16 companies) on responsible competitive advantage.

climate change and local industrial symbiosis received very little attention (Fig. 6). 5. Discussion The findings of the review of sustainability management initiatives within Finnish forest products industry indicate that both customer/stakeholder demands and developments within the regional (EU) and global operational environment has created ‘pushing’ forces to advance sustainability management. It has become more and more evident that sustainability is closely connected to competitive advantage and long-term success of a business. The broad field of sustainability management covers multiple intertwined issues and areas, and in this respect the findings highlight the importance of an integrated approach to sustainable industrial development. The findings of the EU policy and legal review indicate unsurprisingly that the EU advocates sustainable

development and associated approaches to sustainability in all sectors of European development. This implies that companies can gain competitive advantage by adopting a proactive approach to sustainability management in accordance with the changing operational environment. The results of the questionnaire survey indicate that Finnish forest products companies consider that the development of the EU and overall global operational environment creates both new challenges and opportunities. Many companies consider it to be difficult to obtain information on the practical implications of, and new opportunities associated with, the latest EU level developments. All companies aim at integrating the principles of sustainability into their operations and most companies considered that lifecycle thinking and management and LCA are useful for them. Energy efficiency is identified as the most important focus area and energy and materials efficiency were seen as the most crucial factors for the achievement of responsible competitive advantage and

Fig. 5. Results of the questionnaire survey (16 companies) on current management status.

R. Husgafvel et al. / Resources, Conservation and Recycling 76 (2013) 1–11

9

Fig. 6. Results of the questionnaire survey on future goals.

building of sustainable value-added. In addition, it was evident that respondents considered that sustainable forest management must be the foundation of sustainable wood processing. New priorities in strategic management and company operations also point to encompassing corporate responsibility and environmental and waste management including recycling. It was surprising that less than half of the companies aimed at applying sustainability management and that product-based environmental management had received relatively little attention so far. Further, the fact that only 25% of the companies considered that their management approach was proactive and self-driven was also surprising because it indicates that companies are mostly influenced by changes in the operational environment and by development within industry. The present findings indicate that IS and related efficient recycling and increased waste recovery and utilisation activities (e.g. Mäkelä et al., 2010; Sokka et al., 2010; Watkins et al., 2010) deserve more focus as a part of overall sustainability management. In general, the findings support the idea that sustainable development as a new development paradigm is characterised by a dynamic process, steering of change and normative aspects encompassing the integration of multiple elements and considerations (Baker, 2006). In general, the findings support the points made within the sustainability science discourse about the need for more focus on comprehensive and integrative approaches, identification of interconnected elements at all levels, multiple stakeholders and incentives for the implementation of sustainable practices (Kates et al., 2001; Komiyama and Takeuchi, 2006; Ascher, 2006, 2007; Baumgartner, 2011). It has been recognised that sustainability indexes (Diaz-Balteiro and Romero, 2004; Sheppard and Meitner, 2005; Mayer, 2008; De Benedetto and Klemes, 2009) can measure and help to monitor the sustainability of industrial activities such as the performance of a single installation based on the assessment of environmental, economic and social indicators. Holistic life-cycle approaches

covering the whole value chain and full product life-cycles can contribute to sustainability management of all operations and individual activities (Finnveden and Ekvall, 1998). Broader and more systemic approaches can promote sustainability at the overall system level (Reuter et al., 2005; Ashton, 2009). Rojas-Briales (2012) stated that sustainability is the basis for the utilisation of the full potential of forests in accordance with the overall aim to achieve a forest-based green economy. More innovative and strategic management approaches are therefore needed to tackle the challenges presented by current global economic recession including introduction of company-specific measures to promote sustainability (Vlosky, 2012). 6. Conclusions and recommendations Our findings indicate that sustainability and life-cycle management are not receiving enough management focus at the moment and that the forest products industry is not receiving enough guidance at either the EU level or via national steering and regulatory frameworks. In addition, these results indicate that many companies are not taking into account the potential benefits offered by life-cycle thinking and methodologies, local IE/IS opportunities, efficient recycling, product-based and low carbon solutions, for example, to address climate change challenges. This implies that more companies could potentially benefit from adopting a more proactive, strategic and self-organised approach to sustainability management. Defensive reaction to external pressures still appears to be the norm. To achieve competitive advantage through sustainability and environmental management, companies should realise their potential and aim at both exceeding the norm level and at continuous improvement in this field, including benchmarking, and strive towards industry leader position in their own sector. Sustainability management covering all dimensions of sustainability has gained more focus and many companies have put a lot of

10

R. Husgafvel et al. / Resources, Conservation and Recycling 76 (2013) 1–11

emphasis on new initiatives. The operational environment of forest products companies encompasses instruments such as certification schemes and environmental labels in addition to various standards. The overall EU framework highlights the importance of sustainable development and associated principles of sustainability. The EU integrated approach to sustainable industrial development covers many key topics such as resource and material efficiency, life-cycle thinking, low carbon solutions and especially the integration of sustainability into management including sustainable use and management of natural resources. The main focus areas in product development comprise continuous improvement of the environmental performance of products throughout their whole life-cycle, covering all potential environmental impacts caused by products. Sustainable production patterns involve strong emphasis on increased resource and energy efficiency. New approaches to waste management stress the prioritisation of waste prevention, utilisation and recycling/recovery operations over disposal (e.g. to landfill). The following recommendations for future sustainability management can be made based on the present results: • Irrespective of size, forest products companies should proactively engage in sustainability management covering all dimensions of sustainability to gain competitive advantage. • Priority focus areas comprise energy and material efficiency, life-cycle thinking, carbon efficiency and sustainable waste management with due emphasis on recycling/utilisation and waste prevention. • The EU operational environment highlights the importance of sustainability and associated links to sustainable development and therefore sustainability should be the foundation of longterm industrial development in the forest products sector, as well to underpin business/sector sustainability. • An integrated approach to sustainable industrial development should be adopted in the forest products sector covering lifecycle thinking, resource and material efficiency, low carbon solutions, corporate responsibility, increased recycling and waste utilisation, product-based environmental management, and sustainable use and management of natural resources in particular. • Principles of sustainability and supply-chain management covering and sustainable forest management, amongst others, should be integrated into all operations.

Annex 1. Questionnaire survey. Question 1. Development of the international and EU operational environment lays down new challenges for leadership and management (agree, disagree, don’t know and voluntary own comments) Question 2. Development of the international and EU operational environment opens new business opportunities Question 3. Development of the EU operational environment has influenced our operations (e.g. Integrated Product Policy, REACH, extended producer responsibility and other environmental steering and regulation) Question 4. Development of the EU operational environment will influence our operations (e.g. Integrated Product Policy, REACH, extended producer responsibility and other environmental steering and regulation) Question 5. Life cycle thinking, management and assessment (LCA in accordance with ISO 14040/14044) are already a part of our operations Question 6. Life cycle thinking, management and assessment (LCA in accordance with ISO 14040/14044) will be a part of our operations

Question 7. Life cycle thinking, management and assessment can support product development, product chain management and production management in a meaningful way Question 8. Sustainable development is an important goal for use and we aim to integrate the principles of sustainability into our operations Question 9. Industrial Ecology (IE) perspective refers to a comprehensive, systemic and cross-industrial approach to industrial systems as ecosystems which encompass a network of processes and flows. Is the concept of IE previously familiar to you? Question 10. Industrial Symbiosis (IS) is a part of IE looking at the interaction and utilisation of processes and flows within the industrial ecosystem such as recycling of residues for the development of new symbiosis products. Have you carried out or do know anyone how has assessed or carried out activities regarding local IS potential (e.g. recycling of materials and energy)? Question 11. Sustainable forest management is the foundation of sustainable wood processing Question 12. Which of the following are a part of your strategic management and operations? Sustainability management Life-cycle management Corporate responsibility Environmental management Product-based environmental management Materials efficiency Energy efficiency Waste management and recycling Combating climate change (e.g. Carbon Footprint) Sustainable forest management (covering sub-contractors) Certification, environmental labels and supply-chain management (origin of raw materials) Question 13. Which of the following will be a part of your strategic management and operations? Sustainability management Life-cycle management Corporate responsibility Environmental management Product-based environmental management Materials efficiency Energy efficiency Waste management and recycling Combating climate change (e.g. Carbon Footprint Sustainable forest management (covering sub-contractors) Certification, environmental labels and supply-chain management (origin of raw materials) Question 14. Achievement of responsible competitive advantage and building of sustainable value-added requires (pick three most important points) Ensuring sustainability of all operations Focus inputs on the improvement of environmental performance (e.g. reduced environmental impacts) Knowhow in life-cycle management (e.g. better control of the whole product chain and full product life-cycle) Product-based approach to environmental management Focus on combating climate change (e.g. lower Carbon Footprint) Focus inputs on materials efficiency Focus inputs on energy efficiency Reduction of landfilled wastes and promotion of more efficient recycling Development of local industrial symbiosis (e.g. cross-industrial recycling of materials and energy and new symbiosis products) Question 15. Which of the following descriptions is most suitable for sustainability, life-cycle and environmental management in your company?

R. Husgafvel et al. / Resources, Conservation and Recycling 76 (2013) 1–11

Self-organised and proactive (e.g. anticipatory, active and innovative) Reactive and guided (changes in the operational environment and development of the branch of industry/business) Passive and mainly a marginal part of other operations Question 16. It is difficult to obtain information on the practical implications of and new opportunities associated with the EU and national steering and regulation? Question 17. Which of the following are the most important future goals within industry and companies (pick three) Ensuring sustainability of all operations Improvement of environmental performance (e.g. reduced environmental impacts) Life-cycle management (e.g. better control of the whole product chain and full product life-cycle) Product-based environmental management Combating climate change (e.g. lower Carbon Footprint) Materials efficiency Energy efficiency Reduction of landfilled waste and more efficient recycling Development of local industrial symbiosis (e.g. cross-industrial recycling of materials and energy and new symbiosis products) Sustainable forest management (e.g. certification and supplychain management covering the origin of raw materials) References Ascher W. Long-term strategy for sustainable development: strategies to promote far-sighted action. Sustainability Science 2006;1(1):15–22. Ascher W. Policy sciences contributions to analysis to promote sustainability. Sustainability Science 2007;2(2):141–9. Ashton WS. The structure, function, and evolution of a regional industrial ecosystem. Journal of Industrial Ecology 2009;13(2.):228–46. Baker S. Sustainable Development. Routledge Introductions to Environment Series. Routledge; 2006245. Baumgartner RJ. Critical perspectives of sustainable development research and practice. Journal of Cleaner Production 2011;19(8):783–6. Brady J, editor. Environmental Management in Organizations. The IEMA Handbook. The Institute of Environmental Management and Assessment (IEMA), Earthscan; 2005. p. 459. Daly H, Farley J. Ecological Economics, Second Edition: Principles and Applications. Island Press; 2007544. De Benedetto L, Klemes J. The environmental performance strategy map: an integrated LCA approach to support the strategic decision-making process. Journal of Cleaner Production 2009;17:900–6. Diaz-Balteiro L, Romero C. In search of a natural systems sustainability index. Ecological Economics 2004;49:401–5. EC. Integrated Product Policy, Commission outlines its strategy to stimulate greener products; 2003, IP/03/858, 18/06/2003. EC. Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions. Thematic strategy on the sustainable use of natural resources. COM(2005) 670 Final, Brussels; 2005, 21.12.2005. EC. Review of the EU sustainable development strategy − renewed strategy. Council of the European Union, Brussels, 26 June 2006; 2006, 10917/06. EC. Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives. Official Journal of the European Union 2008a, L312/3, 22.11.2008. EC. Directive 2008/1/EC of the European Parliament and of the Council of 15 January 2008 concerning integrated pollution prevention and control; 2008b. EC. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the Sustainable Consumption and Production and Sustainable Industrial Policy Action Plan. Brussels; 2008c, 16.7.2008. EC.Communication from the Commission to the European Parliament and the Council. The raw materials initiative – meeting our critical needs for growth and jobs in Europe, European Commission, Brussels; 2008d, 4.11.2011, COM(2011) 699. EC. Directive 2009/125/EC of the European Parliament and of the Council of 21 October 2009 establishing a framework for the setting of ecodesign requirements for energy-related products; 2009. EC. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, an integrated industrial policy for the globalisation era putting

11

competitiveness and sustainability at centre stage, European Commission, Brussels; 2010a, COM(2010) 614. EC. Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution prevention and control); 2010b. EC. Industrial policy. Industrial competitiveness, Europe 2020 flagship: an industrial policy for the globalisation era; 2011a. EC. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, a resource-efficient Europe – flagship initiative under the Europe 2020 Strategy. Commission, Brussels; 2011b, 26.1.2011, COM(2011) 21. EC. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, tackling the challenges in commodity markets and on raw materials, European Commission, Brussels; 2011c, 2.2.2011, COM(2011) 25 final. Esty DC, Porter ME. Industrial ecology and competitiveness. Journal of Industrial Ecology 1998;2(1):35–43. Finnveden G, Ekvall T. Life-cycle assessment as a decision-support tool—the case of recycling versus incineration of paper. Resources, Conservation and Recycling 1998;24:235–56. Fet AM, Skaar C. Eco-labeling, product category rules and certification procedures based on ISO 14025 requirements. International Journal of Life Cycle Assessment 2006;11(1):49–54. Fomkin A, 2010. Erään keittiön ympäristövaikutukset (Life cycle assessment of the woodwork of a kitchen – case study). Master’s Thesis, Aalto University, Espoo, p. 77. Graedel TE, Allenby BR. Industrial ecology and sustainable engineering. International edition Upper Saddle River, Prentice Hall: Pearson Education Inc.; 2010425. Haaparanta L. Life cycle assessment of plywood process – carbon footprint of two plywood products. Master’s Thesis, Aalto University, Espoo; 2011, p. 85. Hillary R. Environmental management systems and the smaller enterprise. Journal of Cleaner Production 2004;12:561–9. Jackson T. Prosperity without growth. Earthscan 2009:264. Kates RW, Clark WC, Corell R, Hall MJ, Jaeger CC, Lowe I, et al. Environment and development: sustainability science. Science 2001;292(5517):641–2. Kiely G. Environmental engineering. Irwin & McGraw-Hill; 1998979. Kivimaa P. The determinants of environmental innovation: the impacts of environmental policies on the nordic pulp, paper and packaging industries. European Environment 2007;17:92–105. Komiyama H, Takeuchi K. Sustainability science: building a new discipline. Editorial. Sustainability Science 2006;1(1):1–6. Lilja R, Saloranta M, Watkins G. Promoting material efficiency in environmental permits – present state and new opportunities (Teollisuuden Materiaalitehokkuuden Lupaohjaus – Nykytila ja Uudet Mahdollisuudet) (in Finnish), Ympäristöjuridiikka 4/2012; 2013, pp. 45–76. Mayer AL. Strengths and weaknesses of common sustainability indices for multidimensional systems. Environment International 2008;34(2):277–91. Mäkelä M, Watkins G, Dahl O, Nurmesniemi H, Pöykiö R. Integration of solid residues from the steel and pulp and paper industries in forest soil amendment products. Journal of Residuals Science and Technology 2010;7(4):191–8. Patten ML. Questionnaire research: a practical guide. Glendale, CA: Pyrczak Publication; 2011. Rametsteiner E, Simula M. Forest certification – an instrument to promote sustainable forest management? Journal of Environmental Management 2003;67:87–98. Reuter M, Heiskanen K, Boin U, van Schaik A, Verhoef E, Yang Y, et al. The metrics of material and metal ecology. Amsterdam: Elsevier Science; 2005706. Salvato JA, Nemerow NL, Agardy FJ. Environmental engineering. Wiley; 2003. Sheppard SRJ, Meitner M. Using multi-criteria analysis and visualisation for sustainable forest management planning with stakeholder groups. Forest Ecology and Management 2005;207(1–2):171–87. Silvo K, Jouttijärvi T, Melanen M. Implications of regulation based on the IPPC directive – a review on the Finnish pulp and paper industry. Journal of Cleaner Production 2009;17:713–23. Rojas-Briales E. Global and European challenges of forests moving towards green economies. In: 2012 IUFRO Conference Division 5 Forest Products. 8–13 July 12 Estoril Congress Centre, Lisbon, Portugal. Final program, proceedings and abstracts book. International Union of Forest Research Organizations; 2012. p. 19–23. Sokka L, Lehtoranta S, Nissinen A, Melanen M. Analyzing the environmental benefits of industrial symbiosis. Life cycle assessment applied to a Finnish forest industry complex. Journal of Industrial Ecology 2010;15(1):137–55. Tikka HM. Kestävä rakentaminen – arviointi, markkinat ja tulevaisuus (sustainable construction – assessment, markets and future), Master’s Thesis, Aalto University, Espoo; 2013, p. 103. Vlosky R. Competing in the global economic recession. 2012 IUFRO Conference Division 5 Forest Products. 8–13 July 12 Estoril Congress Centre, Lisbon, Portugal. In: Final program, proceedings and abstracts book. International Union of Forest Research Organizations; 2012. p. 41–5. Watkins G, Mäkelä M, Dahl O. Innovative use potential of industrial residues from the steel, paper and pulp industries – a preliminary study. Progress in Industrial Ecology: An International Journal 2010;7(3):185–204.