Why

y Resource Efficiency?
y

Achieving Operational Efficiency

and Performance Excellence
Contents
1.The global (macro) imperatives
2.The industrial (micro) imperatives
3 The
3. Th Institutional
I tit ti l (meso)
( )
imperatives
p
4. Resource Efficiency through
continuous
ti iimprovement?
t?
1. The Global (macro) imperatives
Major
j Global Trends
• Global population which stood at 1.65 billion in 1900
grew to 6 billion in 2000 and is expected to reach about
9 billion in 2050
• Between the years 1900 and 2000 world Gross
Domestic Product (GDP) at constant prices increased
about 19-fold
19 fold
• During the same period industrial and manufacturing
output increased by more than fifty fold
• Total world consumption of marketed energy is
projected to increase by 44 percent from 2006 to 2030
The state of global ecosystem
• 60% of world ecosystem services have been degraded
• 15 out of 24 key eco
eco-system
system services are degraded or used
unsustainably, often with negative consequences for the poor
• People now use between 40 percent and 50 percent of all available
freshwater running off the land. Water withdrawals have doubled
over the past 40 years
years.
• Over a quarter of all fish stocks are overharvested.
• Nutrient pollution has led to eutrophication of waters and coastal
dead zones
• Species extinction rates are now 100-1,000 times above the
background rate
• Human activities have taken the planet to the edge of a massive
wave of species extinctions,
extinctions further threatening our own well-being.
well-being
• The loss of services derived from ecosystems is a significant barrier
to the achievement of the Millennium Development Goals to reduce
poverty, hunger, and disease.

Source: Millennium Ecosystem Assessment,

Driver: Unsustainable model of growth

Economic
Use of growth
nature

Quality
of life

Source: Wuppertal Institut

Globally
• 90% of extracted resources
b
become waste
t immediately
i di t l

• 80% of products will be

thrown away after one-time
one time
use

• A toothbrush produces
1 5 kkg off waste
1.5 t

• A cellphone produces
75 kg of waste

• 1 metric ton of paper

uses 100 metric tons of water
Source: Wuppertal Institut
Global warming
World Ecological Footprint

Source: WWF Living Planet Report 2006

Projected need for 2 planet by 2050

1900 2002 2050 2100

Source: Wuppertal Institute

Greening the global economy
Global imperative for
reversing the linear Quality Economic
dependency of economic of life growth
growth and resource
consumption

Use of
nature
2 The industrial (micro) imperative

• Resource scarcity: Growing resource

scarcity (energy, water, etc.) and
increasing cost of resources;
• Market: Consumers and market
preference to products produced in an
environmentally sound/efficient processes;
• Regulation: Increasing awareness and
regulation resulting in growing
environmental management cost/liability..
/
Business opportunity
“Our
Our central message is that…
... managers must start to recognise environmental
improvement as an economic and competitive
opportunity ...
... it is time to build on the underlying economic
logic that links the environment,
environment resource
productivity, innovation, and competitiveness”.

Michael Porter
Harvard Business School
Author of Competitive Advantage of Nations
Companies benefit from RE through

– Higher output (products and by-products)

by products) per unit
input
– Reduced cost of production per unit product
– Improved competitiveness in the market
– Reduced volume of waste resulting in lower treatment
and disposal cost
– Effective employee motivation through improved
working environment and motivation
– Improved public image for the company
and its products
3 The institutional (meso) imperatives
• Increasingg number of gglobally
y and regionally
g y
binding treaties, conventions and protocols;
• More stringent national and regional
environmental and trade regimes;
• Products and systems certifications as a
requirement for trading;
• Global voluntary initiatives such as Global
C
Compact t and
d th
the Gl
Global
b lRReporting
ti IInitiative
iti ti
(GRI).
International Regulations Requiring
Resource Efficiency
• The Kyoto Protocol on Climate Change which puts a limit to the emission
of Green House Gases to an agreed level and provides flexible incentive
mechanisms for the reduction of GHGs.
• The Stockholm Convention on Persistent Organic Pollutants (POPs)
that puts a global ban on the use of selected chemicals that are believed to
be persistent and highly polluting to the environment
environment.
• The Montreal Protocol on Ozone Depleting Substances (ODS) which
promotes the phasing-out of substances that are depleting to the Ozone
layer.
• REACH (Registration,
(Registration Evaluation
Evaluation, Authorization and Restriction of
Chemicals): is a new European Community Regulation on chemicals and
their safe use (EC 1907/2006). It deals with the Registration, Evaluation,
Authorization and Restriction of Chemical substances. The new law entered
into force on 1 June 2007.”
• WEEE (Waste Electrical and Electronic Equipment): EU legislation
restricting the use of hazardous substances in electrical and electric
equipment (Directive 2002/95/EC) and promoting the collection and
recycling of such equipment (Directive 2002/96/EC) has been in force since
F b
February 2003
2003.””
Human Rights
• Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights
• Principle
Pi i l 2 2: make
k sure ththatt th
they are nott complicit
li it iin h
human rights
i ht abuses.
b
Labour Standards
• Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to
collective bargaining;
• Principle 4: the elimination of all forms of forced and compulsory labour;
• Principle 5: the effective abolition of child labour;
• Principle 6: the elimination of discrimination in respect of employment and occupation.

Environment
• Principle 7: Businesses should support a precautionary approach to
environmental challenges;
• Principle 8: undertake initiatives to promote greater environmental
responsibility;
• Principle 9: encourage the development and diffusion of
environmentally friendly technologies
Anti-Corruption
• Principle 10: Businesses should work against all forms of corruption, including extortion and bribery.
4. RE through continuous improvement
Resource efficiency:
• is a systematic and integrated approach to managing
energy, water, environmental and financial resources,
eliminating or minimizing waste and emissions to the
environment on a sustainable and cost
environment, cost-effective
effective basis.
basis
• enhances the means to meet human needs while
respecting the ecological carrying capacity of the earth
by producing more wellbeing with less material
consumption.
• is measured by the reduction of the resource use
and the environmental impact p from materials,,
emissions, and accidental releases per unit of production,
trade, and consumption of goods and services over their
full life cycles.
Continuous improvement cycle

Act Plan
Review goals
and targets

Measure &
report progress
Check Do
Prepare detailed plan
A step-by-step
step by step approach
Phase Key steps and approaches
Plan 1. Get organized, set policies, procedures and teams
2. Conduct review and assessment of your production process
and operations
3. Set an overall and specific goals and targets for improving
resource efficiency
Do 4. Conduct feasibility study and prioritize short, medium and
long-term improvement measures
5. Prepare a detailed operational plan for the effective
i l
implementation
i off theh proposedd measures
6. Implement improvement measures as per the plan
Check 7. Identify/define the most relevant (internal and external
benchmarks) for measuring progress
8. Measure performance improvement as per the agreed
benchmarks
Act/Adjust
j 9. Review goals and targets
10. Take decisions on next-steps
Concluding notes
• Promoting Resource Efficiency has become an economic
i
imperative
ti ffor any business
b i tto survive
i and d flflourish
i h iin th
the
coming decades.
• Every industry, irrespective of its scale and sector, has the
possibility for improving its production efficiency through a
systematic intervention.
• Improvement of the resource efficiency of small and
medium-sized enterprises in developing countries has a
strong social contribution besides its economic and
environmental benefit.
• The first-step towards resource efficiency is to recognize
that there is a room for improvement and engage the
workforce in a creative thinking process
process.