The Relevance of Standards in Green Industry and Trade

Bernardo Calzadilla-SarmientoDirector

UNIDO Trade Capacity Building Branch

The context:Green Industry

The Challenge

The Solution – Green Industry

The Sustainable Development Pathway and Green Industry – A two-pronged approach

The Green Industry Initiative – A two-pronged approach

Benefits of Green Industry

Policy Matrix for the Greening of Industries

Green Industry and Standards

Environmental and Sustainability Standards: Historical Overview – ISO standards

In reaction to the Rio 1992 Earth Summit:

ISO set up in 1993 a Technical Committee (ISO/TC 207) with the scope of standardization in the field of environmental management systems and tools in support of sustainable development.

Development of the ISO 14000 series in 1996.

ISO 14000 is a family of standards that address various aspects of environmental management.

ISO 14001:2004 and ISO 14004:2004 focus on environmental management systems.

Other standards in the family focus on specific environmental aspects such as life cycle analysis, communication and auditing.

ISO 11064-6:2005: Environmental requirements for control centres

ISO 19011: Guidelines for quality and/or environmental management systems auditing

ISO 50001:2011: Energy management systems - Requirements with guidance for use; specifies requirements for establishing, implementing, maintaining and improving an energy management system; purpose: enable an organization to systematically achieve continual improvement of energy performance, including energy efficiency, energy use and consumption.

ISO/TC 242: set up in 2008; scope: standardization in the field of energy management, including energy efficiency, energy performance, energy supply, procurement practices for energy using equipment and systems, implementation of a measurement system to document, report, and validate continual improvement in the area of energy management.

Environmental and Sustainability Standards: Historical Overview – Ecolabels

EU Ecolabel: Established in 1992 by the European Commission (EC) to encourage businesses to market products

that meet high standards of environmental performance and quality. Part of a broader EU Action Plan on Sustainable Consumption and Production and Sustainable

Industrial Policy adopted by the EC in 2008 which also links the EU Ecolabel to other EU policies such as Green Public Procurement (GPP).

Helps consumers and public procurer's to easily identify environmentally friendly products. It is a voluntary scheme and represents the only EU-wide official ecolabel.

US Energy Star label: Available on energy-efficient appliances, TVs, computers, audio visual equipment/electronics, office

equipment, heating & cooling equipment, etc. meeting strict energy efficiency criteria set by the US Environmental Protection Agency; also available on energy efficient homes and buildings in the US.

US Appliance Standards Program: Set by the US Department of Energy (DOE); Must be met by all major home appliances. Manufacturers must use standard test procedures developed by DOE to prove the energy use and

efficiency of their products. Test results are printed on yellow EnergyGuide label, which have to be displayed on many appliances. Label estimates how much energy the appliance uses, compares energy use of similar products, and lists approximate annual operating costs.

Compliance with such standards started to become a requirement that buyers/importers imposed on suppliers

However, the development and imposition of public standards and regulations was only one, and an increasingly subordinated, part of the process

Consumer pressure and CSO/NGO movements and campaigns were even more prominent

The most important trend has been a drive for private standards and a successive increase in their scope and coverage

Environmental Sustainability Standards in Trade

Role of standards in industry and trade (I)

The ‘user-pays’ principle and the legal liability placed on businesses to supply products that comply with increasing health & safety regulations instigated a response from multinationals and especially big retailers towards setting stricter standards within their value chains.

Dynamics of these developments are most apparent in agro-product value chains. Good agricultural practices (e.g. GlobalGAP, ISO 22006) and food safety management and requirements in food processing and supply chains (e.g. Codex HACCP, GFSI, BRC, ISO 22000) as well as standards on packaging and labelling have been developed in response to these complex dynamics.

Consumer Awareness - Consumers in developed economies, as well as civil society organizations in those parts of the world, have growing concerns about the social and environmental conditions prevailing in countries participating in the supply chains of products that are sold into their markets

Governance Gap - Cases of misconduct indicate that national governments in developing countries often fail to enforce national and international norms and regulations. Consequently, globally operating companies find themselves faced with the challenge of responding to this governance gap.

Differentiation Tool – Many multinationals use private standards as an instrument of supply chain management and as a mechanism to gain market advantage over rivals.

Why are Private Standards growing in importance?Role of standards in industry and trade (II)

Legislation

Consumer / userhealth and safety

Environment

E.g. packaging, WEEE,

RoHS, cadmium

CE Marking

Social / fairtrade labels

SA 8000 / OHSAS

Codes ofconduct

ISO 9000 certificates

EN / IS0standards Eco labels IS0 14001

Quality Social accountability Environment

Buyer requirements

ISO 26000, GRI, Global Compact

Confronting and benefiting from sustainability standards in global markets

The basic steps for greening enterprises in developing countries are also relevant for the commercial challenge of attempting to enter – or remain in – world markets, and having to meet an increasing number of environmentally-related standards to do so. These standards require enterprises to reconfigure their products and/or processes to meet the requirements of international customers or the laws of the countries to which they wish to export, and to certify that they have done so.

In other words, they must be able to:

Redesign their products so that they meet any pertinent environment-related product standards;

Reconfigure their processes so that they meet any pertinent environment-related process (technology and management) standards;

Certify that their products and/or manufacturing processes meet these standards.

Trends

Dynamic relationship between technical regulations and private standardsMany standards on consumer health and safety have evolved into legislation. On the other hand, many legislative requirements have translated into stricter private requirements (illustrated by organic products labeling).

Transparency and traceability across the value chain Higher transparency within the value chain and traceability of products – the pressure to comply with private standards is transmitted down the value chain.

New sustainability concerns: water and energy efficiencyIn the past few years, many new demands related to climate change and the sustainable use of resources, such as energy and water, have emerged as a result of international concerns about sustainability. Buyers are responding to these concerns by factoring energy, water and carbon into their codes and requesting their suppliers to take certain mitigating measures.

Role of governments and policy makersTwo particular concerns for developing countries in this respect: Weaknesses in national capacity for conformity assessment: In order to benefit

from possible trade opportunities that voluntary sustainability standards can bring, countries have to access rather high-cost conformity assessment service providers (e.g. certification bodies and testing laboratories) from abroad.

Not all standard developers follow ISO Guidelines for standardization, certification and accreditation - leaving many developing countries voiceless in the process.

Possible measures for policy makers: Support establishment of necessary supporting institutions for industry that can

assist enterprises to meet standards and certify that they do so, Monitor the development of environment-related standards that affect trade, Use relevant international fora to ensure that the impacts of new standards on their

industry are minimized, Informing their industry of new standards that could impact it, and assist them to

meet these standards.

UNIDO activities inSPECA countries

UNIDO projects & initiatives on trade development in SPECA countries

SPECA Regional Network for Conducive Business Environment

Agro processing and marketing for small-scale producer groups, Kyrgyzstan

Strengthening Damu Center for Development of Industrial Enterprises, Kazakhstan

Fostering competitive clusters, Uzbekistan

Trade Capacity Building of ECO Member States in Standards, Metrology, Testing and Quality Infrastructure

Trade capacity-building training programme in Central Asia

SPS side event organized by STDF and UNIDO in Baku, Azerbaijan at the UNSPECA – at the Aid for Trade Ministerial Meeting

UNIDO activities in SPECA countries

UNIDO projects

UNIDO Trade

Capacity Building projects

UNSPECA – Aid for Trade related initiatives

SPS side event organized by STDF and UNIDO, 1-2 December 2010, Baku, Azerbaijan at the UNSPECA – at the Aid for Trade Ministerial Meeting

Managing Sanitary and Phytosanitary Measures (SPS) in SPECA Countries: Completing the Transition

Trade Capacity Building of SPECA Member States in Standards, Metrology, Testing and Quality Infrastructure – project proposal

To strengthen SMTQ infrastructure of SPECA member states through enhancing capacity of conformity assessment system including laboratories and building technical staff capacity on implementation of standards relevant to WTO requirements.

Trade Capacity Building for ECO Member States in Standards, Metrology, Testing and Quality (SMTQ)

Roadmap for better linking trade in ECO region

Quality infrastructure policies designed at regional and national levels to foster intra-regional trade

Regional quality infrastructure designated and division of labour and responsibilities agreed upon

Quality policy road map designed at the regional and national levels

Regional quality infrastructure framework proposed for standardization, metrology, accreditation and conformity assessment such as inspection, testing, certification plus technical regulations and specifically food safety

Promotion of ECO quality infrastructure programme at country level to mobilize human and financial resources.

Trade capacity-building training programme in Central AsiaTraining programme was designed to cover topics which are important for active participation of Central Asian countries in regional and global trade and benefiting from it. As a result of the training, the participants gained a better understanding of the following topics:

Liberalization of world trade and trade facilitation;

Trade and industrial potential for growth;

Competitiveness of national trade and industry;

The building blocks of national quality infrastructure, including standardization, metrology, accreditation and conformity assessment;

Development of regional and national quality policy;

WTO Agreements on Technical Barriers to Trade and Sanitary and Phytosanitary measures (TBT/SPS) and their implications;

Meeting international standards of production in order to gain access to markets;

The use of private standards and introduction to the voluntary sustainability standards.

Trade capacity-building training programme in Central Asia, 8-15 May 2013Participants The Training was attended by 25 participants from Government departments, trade organizations,

chambers of trade and industry, universities, consultancies and other organizations from the following countries (all of them SPECA countries): Uzbekistan (Total: 3, Female: 2, Male: 1) Kazakhstan (Total: 8, Female: 4, Male: 4) Kyrgyzstan (Total: 10, Female: 5, Male: 5) Tajikistan (Total: 4, Female: 2, Male: 2)

Lecturers The lectures were given by a group of international experts, including:

Mr. Jacek Cukrowski, Chief, UNIDO Capacity Building Institute Mr. Wojciech Sudul, Ministry of Economy, Poland Mr. Ian Dunmill, Assistant Director, International Organization of Legal Metrology (OIML) Ms. Lorenza Jachia, UNECE Ms. Dominika Dor, UNIDO Mr. Roman Mogilevski, Institute of Public Policy and Administration, University of Central

Asia Mr. Grzegorz Donocik, Senior Advisor to UNIDO Dr. Anwar El-Tawil, ex-Director, ISO Programme for Developing Countries

Trade capacity-building training programme in Central Asia, 8-15 May 2013