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United Nations Environment Programme / Division of Technology, Industry and Economics

Profiting fromProfiting fromCleanerCleaner ProductionProduction

GovernmentGovernment

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I. Cleaner ProductionCompetitive Advantages for CompaniesStimuli for National EconomiesDefinitionHidden Costs of WasteParallel ConceptsPractices

II. Case Study

III. Role of Government

IV. For More Information

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CleanerCleaner ProductionProductionCompetitive Advantages Competitive Advantages for for CompaniesCompanies

Cleaner Production helps companies:Increase productivityReduce production costsUse resources more efficiently Produce safer and better products and servicesReduce levels of pollution and riskComply with Environmental Management Systems and get ISO 14000 certified

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CleanerCleaner Production Production

Stimuli for National Stimuli for National EconomiesEconomies

Government agencies that support Cleaner Production encourage economic development and a healthier environment for everyone, helping developing economies developing economies growgrow in ain a sustainable waysustainable way.

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DefinitionDefinition

A preventive environmental strategy appliedto processes, products and services to:

Increase overall efficiency and productivityImprove business opportunitiesReduce human and environmental risk

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CleanerCleaner ProductionProduction

Hidden Costs of WasteHidden Costs of Waste

TreatmentTreatment & & disposaldisposal

CompanyCompany imageimage LiabilityLiability

Natural resourcesNatural resources

NonNon--compliance compliance Human resourcesHuman resources

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ParallelParallel ConceptsConcepts

PollutionPollutionPreventionPrevention

(P2)(P2) EcoEco--efficiencyefficiencyGreenGreen

ProductivityProductivity

Waste MinimizationWaste Minimization

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PracticesPractices

Applying good housekeeping

Changing technology or equipment

Redesigning products

Modifying or controlling processes

Substituting input materials

Recycling or reusing materials on-site

Producing useful by-products

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I. Cleaner Production

II. Case Study Tunisia’s GNP GrowthEnvironmental StandardsApproachFODEPCITET

III. Role of Government


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Case Case Study Study

TunisiaTunisia’’ss GNP GNP GrowthGrowth

6.0%1997-2002Target

4.6%1992-1996Actual

Average annualGNP growthPeriod

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EnvironmentalEnvironmental StandardsStandards

Raising environmental standards would improve Tunisian products and services, thereby:

Opening new markets to Tunisian products and servicesAttracting foreign investors Contributing to a better quality of life for inhabitants

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ApproachApproach

The Tunisian Ministry of Environment andLand Use Planning implemented a programme to improve environmental standards including:

Economic and financial toolsRegulatory measuresAwareness-raising programmes

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Case Case StudyStudy

ApproachApproach

The Tunisian approach to industrial pollution abatement is two-pronged:

The Polluter Pays principle

Support to companies reforming their environmental practices

Depollution Fund Tax breaks

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FODEPFODEP

Tunisia’s clean-up fund, FODEP, offers grants to:

Companies seeking to reduce or eliminate pollution

Companies implementing pollution abatement projects

FODEP has funded 227 industry projects worth a total of US $7 million.

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CITETCITET

CITET, Tunisian International Center for Environmental Technologies, promotes the country’s support of Cleaner Production practices through:

Public information campaignsAwareness-raising programmesTechnical assistance to companies

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II. Case Study

III. Role of GovernmentMisconceptionsRealities Actions


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Role of GovernmentRole of Government

MisconceptionsMisconceptions

Cleaner Production is difficult and expensive to implement

Companies respond better to end-of-pipe regulations

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Role of Government Role of Government

RealitiesRealities

Cleaner Production:Makes companies more profitable, improves products and services and lowers riskPromotes sustainable growthCreates new business opportunities Safeguards against risks to humans and the environment

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Role of Government Role of Government

ActionsActionsIntegrating Cleaner Production into all public policy domainsPromoting environmental regulations andinstitutions that encourage CleanerProduction practices Creating financial incentives Setting market-based pricing for utilities Leading by example, e.g. using green procurement policies

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II. Case Study

III. Role of Companies


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For More InformationFor More Information

UNEP DTIE Cleaner Production www.uneptie.org/cp

UNEP DTIE Cleaner Production Financing www.financingcp.org

United Nations Industrial Development Organization www.unido.org

Sustainable Alternatives Network (SANet) www.SustainableAlternatives.net


Profiting fromProfiting fromCleanerCleaner ProductionProduction

Financial Financial InstitutionsInstitutions

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I. Cleaner ProductionCompetitive Advantages for CompaniesBetter CientsBetter InvestmentsDefinitionParallel ConceptsPractices

II. Case Study A

III. Case Study B

IV. Role of Financial Institutions

V. For More Information

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CleanerCleaner ProductionProductionCompetitive Advantages Competitive Advantages for for CompaniesCompanies

Cleaner Production helps companies:Increase productivityReduce production costsUse resources more efficiently Produce safer and better products and servicesReduce levels of pollution and riskComply with Environmental Management Systems and get ISO 14000 certified

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Better Better ClientsClients

The financial and operating advantages of Cleaner Production make betterbetter clientsclientsof companies that implement CleanerProduction strategies.

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Better InvestmentsBetter Investments

The advantages of Cleaner Production also make companies using Cleaner Production strategies better investment opportunitiesbetter investment opportunities.

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Pollution Pollution Prevention Prevention

(P2)(P2) EcoEco--efficiencyefficiencyGreen Green



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PracticesPractices

Applying good housekeeping

Changing technology or equipment

Redesigning products

Modifying or controlling processes

Substituting input materials

Recycling or reusing materials on-site

Producing useful by-products

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II. Case Study ABackgroundSite ContaminationDecontamination CostsResultPrevention Measures

III. Case Study B



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CaseCase StudyStudy AA

BackgroundBackground

ABC Iron, Inc. manufacturesiron casings. To expand operations,the company takes out a $1.2 million mortgage from its bank. A year later, ABC files for bankruptcy.

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Site ContaminationSite Contamination

ABC’s bank would like to put the site upfor auction.

However, further investigation reveals:The ground and a nearby river arecontaminated by toxic leakageLarge amounts of toxic waste arestored on-site

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Decontamination CostsDecontamination Costs

Site purification Site purification $1.0 million$1.0 million

Toxic waste disposalToxic waste disposal$0.7 million$0.7 million

TotalTotal decontamination costsdecontamination costs$1.7 million$1.7 million

InitialInitial mortgagemortgage$1.2 million$1.2 million

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ResultResult

High decontamination costs make the site worthless.The auction is cancelled and the bank suffers a complete credit losscredit loss.

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Prevention MeasuresPrevention Measures

What ABC’s bank could have done:

Include environmental risk in overall risk assessmentIntegrate environmental criteria into loan applications

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II. Case Study A

III. Case Study BBackgroundQuality ControlResults



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CaseCase StudyStudy BB

BackgroundBackground

PR Labelmakers & Co. printspackaging labels.

During the printing process,ink, plastic film and metal foil are wasted. The process alsoreleases ink and glue emissions into the air.

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QualityQuality ControlControl

PR Labelmakers takes out a $105,000 loan from its bank to improve quality control.

It installs a camera system to detect printingerrors early in production, resulting in:

Fewer printing errorsReduced levels of wasted ink, scrap and emissions

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ResultsResults

PR Labelmakers quickly recuperates its investment and pays back its loan on time.

Waste and emissions reduced by 40%

Payback period: 2.7 years

Annual savings: $38,463

Initial investment: $105,000

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II. Case Study A

III. Case Study B



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Role of FinancialRole of Financial InstitutionsInstitutions


Cleaner Production entails high financial risk

Cleaner Production only applies toindustrial and service companies

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Role of FinancialRole of Financial InstitutionsInstitutions

RealitiesRealitiesCleaner Production:

Makes companies more attractive as clients and investments

Improved cash flow and reduced riskRapid return on capital or operating investments

Improves image of financial institutionsEmphasis on environmentally sound investments and sustainable development

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Role of FinancialRole of Financial Institutions Institutions

ActionsActions

Integrate environmental/Cleaner Productioncriteria into investment appraisal, creditrating and loan application process

Develop new financial products linked toenvironmental performance

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II. Case Study A

III. Case Study B



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Profiting fromProfiting fromCleaner ProductionCleaner Production

CompaniesCompanies

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I. Cleaner ProductionCompetitive AdvantagesDefinitionHidden Costs of WasteParallel Concepts

II. Case Study



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Cleaner ProductionCleaner Production

CompetitiveCompetitive AdvantagesAdvantagesCleaner Production helps companies:

Increase productivityReduce production costsUse resources more efficientlyProduce safer and better productsand servicesReduce levels of pollution and riskComply with Environmental Management Systems and get ISO 14000 certifiedImprove company image

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Cleaner Production Cleaner Production




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Cleaner ProductionCleaner Production

HiddenHidden CostsCosts of of WasteWaste

TreatmentTreatment & & disposaldisposal

CompanyCompany imageimage LiabilityLiability

Natural resourcesNatural resources

NonNon--compliance compliance Human resourcesHuman resources

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Pollution Pollution Prevention Prevention

(P2)(P2) EcoEco--efficiencyefficiencyGreen Green



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II. Case Study MET Foundry, Inc.Sand WasteSand ReclamationResults



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MET MET FoundryFoundry, , IncInc..

MET Foundry, Inc. produces electric motor components from iron and steel. During production, iron is melted and poured into moulds.Only 30% of sand used in moulds is recycled.

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Sand Sand WasteWaste

Sand contains phenolic resin which upon disposal contaminates soil and groundwater. The process also generates dust which contributes to air pollution.

0

20

40

60

80

100 30% recycled sand30% recycled sand

70% 70% unrecycled unrecycled sandsand

contaminationcontamination

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Sand Sand ReclamationReclamation

MET Foundry adds a sand reclamation process that allows the company to recycle approximately80% of used sand.

0

20

40

60

80

100 80% recycled sand80% recycled sand

20% 20% unrecycled unrecycled sandsand

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ResultsResultsThe sand reclamation process helps MET Foundry reduce sand consumption and pollution levels.

Air pollution from dust reduced by 22 tonnes/year

Sand consumption reduced by 710 tonnes/year

Payback period: 1 year

Annual savings: $20,580

Initial investment: $20,730

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II. Case Study

III. Role of CompaniesMisconceptions

Realities

Actions


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Role of CompaniesRole of Companies


Cleaner Production is difficult and expensive to implement

Cleaner Production is technologically complicated and applies mostly to large companies

Cleaner Production requires specialized skills and expertise

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RealitiesRealitiesCleaner Production:

Makes companies more profitableImproves products and services Lowers riskImproves company image

Emphasis on environmentally sound investments and sustainable development

Makes companies more attractive as clients for banks due to:

Improved cash flow Rapid return on capital or operating investments

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ActionsActions

Apply good housekeeping

Change technology or equipment

Redesign products

Modify or control processes

Substitute input materials

Recycle or reuse materials

Produce useful by-products

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II. Case Study



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