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Sustainability becomes a performance issue with Product Environmental Footprint5th of March 2014
In Brussels over the last few years DG Environment (Directorate General) has been working with the European Commission's Joint Research Centre to develop a Life Cycle Assessment (LCA) based method to calculate the environmental performance of products and companies. ECJ spoke to Sandy Smith of sustainability consultancy firm thinkstep AG about the new policy.
The cleaning industry is just one sector that is awash with ‘green' marketing messages, environmental claims by manufacturers about their products and confusing ecolabels. The buzzword ‘sustainability' has become so widely used it's meaning has become diluted, and customers have no real way of comparing the environmental impact of products they are purchasing.
The European Commission has now decided to address this with the introduction of the Product Environmental Footprint (PEF), a Life Cycle Assessment (LCA) based method to calculate the environmental performance of a product. It was developed by the Commission's Joint Research Centre based on existing methods. There is also a guide on environmental footprinting for companies - the Organisation Environmental Footprint (OEF).
Currently the project is at the pilot testing stage - the European Commission invited businesses throughout the EU to participate and the deadline was the end of July this year. ECJ spoke to Sandy Smith at sustainability consultancy firm thinkstep AG, which has worked with companies including Bosch, Deutsche Bank, Evonik, Kimberly-Clark, Nike, Shell, Siemens and Tesco.
"Categorising environmental performance of all products is a huge priority for the EU," he says. "There are far too many ecolabels now and they do not really tell consumers anything at all. The PEF will give real detail, the actual numbers - which enables transparency and comparison of data.
"It will allow consumers to make more informed purchasing choices because they will be able to directly compare one product with another. In addition, one system will be much more cost effective for manufacturers."
Large businesses often prefer to implement measures such as the PEF voluntarily because legislation is now always welcome. That means there was no shortage of companies willing to take part in pilot testing.
The objectives of the PEF pilot phases are to:
• Set up and validate the process of the development of product group-specific rules (Product Environmental Footprint Category Rules - PEFCRs), including the development of performance benchmarks
• Test different compliance and verification systems, in order to set up and validate proportionate, effective and efficient compliance and verification systems
• Test different business-to-business and business-to-consumer communication vehicles for Product Environmental Footprint information in collaboration with stakeholders.
Stakeholders (individual companies, industrial associations or any other private, non-governmental or public organisation both from the EU and outside of the EU) could volunteer to lead the process. Applications are currently being reviewed and a list of selected pilots will be available by the end of September.
The PEFCRs resulting from the EF pilot phase will become the product rules valid under the PEF, to be used by all stakeholders in the sector in the EU or internationally who decide to measure the performance of their products based on PEF.
Policymaking by the European Commission in this regard is becoming quicker and more aggressive, says Smith. "Despite all previous measures and initiatives greenhouse gases rose again globally last year - not in the EU but worldwide. Action must be taken.
"The basis of the PEF is simplification, which means companies that are already proactive should find the processes easier. Those which are not doing anything at all currently will have to adapt. For large companies it will be much cheaper than having to subscribe to many different labels."
The introduction of the PEF then, could mean that old debate about the environmental impact of warm air dryers versus hand towels, for example, will be settled definitely once and for all - there will be indisputable data involved.
The introduction of such a policy across Europe is well overdue he believes. "Companies are making grand statements but brands are increasingly a big part of the sustainability case, which is worrying. With all companies, what we really need is the numbers. People do not have the time or the interest to read long sustainability mission statements full of words. We want to look at one page and see your environmental performance figures."
Smith refers also to the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines, which are periodically reviewed to provide the latest guidance for effective sustainability reporting. The latest version - G4 - was released in May of this year and increases the emphasis on the need for organisations to focus the reporting process and final report on those topics that are material to their business and their key stakeholders. It has been designed to be universally applicable to all organisations, large and small, across the world.
The PEF must be affordable in operation, so that it does not constitute a barrier to trade for SMEs. "It will probably start at the top, with big business, then work its way down," Smith points out. "Modern software and data availability now make it more cost effective and easier to produce information so it should not be cost-prohibitive."
What will be the main obstacle of implementing the new PEF? "I believe there will be a great deal of lobbying against it, from companies and maybe governments," replies Smith. "The definition of product category rules will also be a real challenge - an enormous amount of work. Obviously there will be battles and strong leadership from the European Commission will be vital." He does feel the scheme is realistic however.
In the long run, Smith believes, the PEF could be used for defining performance classes and to establish a product labelling scheme.
Closely affiliated is the OEF, which will apply to company/organisational activities as a whole - so everything associated with the product portfolio from a value-chain perspective (including upstream processes such as extraction of raw materials and production on company-owned sites as well as downstream emissions such as distribution, use of products and final treatment of disposed goods).
"Without the PEF and OEF we will be in a very difficult situation because we are all simply buying advertising messages. We have no more evidence than that.," Smith emphasises. "We need a lifecycle approach and we must have numbers - businesses must start reporting.
"Let's drive sustainability as a performance issue, not a marketing issue," he concludes.