Green and Competitive - Environmental Protection … · Professor Michael Porter “Competitive...

Green and CompetitiveGreen and CompetitiveElvis AUElvis AU

Assistant DirectorAssistant DirectorEnvironmental Protection DepartmentEnvironmental Protection Department

Hong Kong SAR GovernmentHong Kong SAR Government

Why Organisations need to care about Why Organisations need to care about environmental management ?environmental management ?

consumer or community pressurepotential cost savingsenvironmental legislation

Conventional

Why organisations need to care about Why organisations need to care about environmental management ?environmental management ?

sustainability in the market : entry requirements;business or trade ethics in the world;environmental management as a core competence to create competitive advantage

Latest norms and thinking

Its about making business sustainableIts about making life sustainable

The World Trends in Environmental The World Trends in Environmental ManagementManagement

The 1991 Business Charter for Sustainable Development for Environmental Management by ICC;The 1992 Rio Declaration on Environment and Development;The Launch of ISO 14000 Standards in 1996;Increased Effort in Linking Trade/Finance with Environment in APEC, OECD, United Nation, and WTO Johannesburg Plan (2002) about enhance corporate environmental and social responsibility and accountability.

Examples of New TrendsExamples of New Trends

Adopt a policy document on the Environment and Economy in 1998Goal: sustainable, environmentally efficient economyDirection : decoupling of environmental pressure and economic growth: economic growth with a REDUCTION in environmental pressureWorld bench-marking of environmental leadership by sectors;EU Dutch presidency: 3 Cs Clean, Clever, Competitive movement

1. Netherlands


adopt the Basic Environment Plan in 1994;goal: socio-economic system fostering sound material cycles, a low environmental loadingsociety, and sound ecosystem20% club for sustainable cities : long term target of 20% reduction of environmental burdengreening government operations : demands for green productsThe 2004 Japans White Paper on Environment: 2.5 times increase of environment-related market by 2025, compared to 2000 !

2. Japan


President Hu Jintao delivered a speech at the APEC CEO Summit on 19 Nov 2004.

3. China (1)

The sustainable development of the world economy is a major issue of immediate and far-reaching significance. It bears on the current development of the countries and the future of the entire mankind. Visionary political leaders and responsible business leaders alike should work together towards this end.


development should be pursued on the basis of high technology content, good economic returns, low resource consumption level, minimum pollution of the environmentand fullest play of human potential. We should optimize the economic structure, change the way of achieving economic growth, pay closer attention to the conservation and comprehensive utilization of resources, advocate an environment-friendly way of production, life and consumption and bring about a virtuous cycle in both our ecological and socio-economic systems.

3. China (2)


State Environmental Protection Administrations Environmental Label

A national label for environmental friendly products. Developed technical standards for a total categories of 55, latest are furniture, wallpaper, shoes and ceramic products and glass dishware. In 2001, the number of labelledproducts reached nearly 1,000. It rose to 1,600 in 2002 and soared to 9,000 in 2003.

3. China (3)

Green and CompetitiveGreen and Competitive

Environmental management should become, where it is not already the case, one of the highest management priorities of business

World Business Council for Sustainable Development, 1996 Trade and Environment : a Business Perspective

Competitive Advantage in the 21st CenturyCompetitive Advantage in the 21st Century

cost leadershipdifferentiationquality & customerssatisfaction

long-term cost leadershipdifferentiation in favour of green products and practicesquality & stakeholderssatisfactionenvironmental performance of cities, firms, products or services

21st Century1980s and 1990s

Value ChainsValue Chains

Suppliervaluechains

Suppliervaluechains

Industry or firmvalue chains

Industry or firmvalue chains

Channelvalue chains

Channelvalue chains

Buyervaluechains

Buyervaluechains

Professor Michael PorterCompetitive Advantage -Creating and Sustaining Superior Performance

The Importance of Environmental The Importance of Environmental ManagementManagement

Managers must start to realiseenvironmental improvement as an economic and competitive opportunity, not as an annoying cost or an inevitable threat

Competitive and Green Ending the Stalemate, by Michael E.Porter and Claas Van Der Linde, in Harvard Business Review on Business and the Environment


The concept of resource productivity opens up a new way of looking at this complex issue (ie. Ecology vsEconomy)..


The Role of Environmental Management in Value ChainsThe Role of Environmental Management in Value Chains

Industryor firm value chains

Channelvalue

chainResourceExtraction

ResourceExtraction

Suppliervalue

chains

Buyer or community valuechains Di

spos

al

EnvironmentalManagement

Competitors Substitutes


Environmental progress demands that companies innovate to raise resource productivity.


Strategic Framework for Environmental ManagementStrategic Framework for Environmental Management

EIA

Environmental Management System

Green production and consumption(energy, materials and products)

Annual Environmental Reporting

Environmental Education

3 Dimensions of Environmental Challenges

3 Dimensions of Environmental Challenges Practical ToolsPractical Tools

Make present environmental

impact acceptable

Identify and realizepotential of

greener products

Change toa sustainable

business

Analyzeenvironmental

trends &pressures

Analyze companyactivities for

environmentalimpact

Vision of a Sustainable

Future

World Trends in ISO14001World Trends in ISO14001

(Source of data: The ISO Survey of ISO 9000 and ISO 14000 Certificates officially published by the International Organization for Standardization, ISO)

0

10000

20000

30000

40000

50000

60000

70000

80000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Year

(Growth rate highest 300% per year)

No. of ISO 14001 Certificates

Number of ISO 14001 CertificationsNumber of ISO 14001 Certifications

The number of ISO 14001 certifications of the world as of October 2004.(Source of data : provide by Mr. Reinhard Peglau at http://www.ecology.or.jp/isoworld/english/analy14k.htm)

16,696

54605,064 4,860

4,320 4,3183,890

3,404

2,3442,0411,500 1,484 1,417 1,266 1,250 1,250 1162 950 908 888 780

345

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

1 Japan

2 UK

3 China

4 Spain

5 Germ

any

6 Italy

7 USA

8 Sweden

9 France

10 Korea

11 Brazil

12 Canada

13 Taiw

an

14 Switzerland

15 Australia

15 India

16 Netherlands

17 Czech R

epublic

18 Thailand

19 Finland

20 Hungary

31 Hong K

ong

HK

Total: 74,004

Environmental Reporting Environmental Reporting --a part of environmentally responsible managementa part of environmentally responsible management

Environmental Accountability

Financial Accountability

Financial disclosure annual report

Financial performance

Revenues and liabilities

Environmental report

Environmental performance

Environmental benefits and liabilities

International Trend onInternational Trend on VoluntaryVoluntary Environmental Environmental Performance Reporting WPerformance Reporting Who are reporting?ho are reporting?

Nor

way

Swed

enFi

nlan

d

UnitedStates

SouthKorea

Hong Kong

South Africa

4

2

1015

6

1216

5

Japan

Canada

Taiwan

Continent

EuropeAsiaNorth AmericaSouth AmericaAfricaAustralia/New ZealandTotal

No. of countries1911344243

Mexico

Colombia

Brazil

ChileAustralia

New Zealand

IndonesiaPapa NewGuinea

Gabon

Nigeria

Oman

Russia

13

1413

9

ThailandMalaysia

Singapore

India

118

7

Costa Rica

Europe:1. Austria2. Belgium 3. Czech Republic 4. Denmark 5. France6. Germany7. Greece8. Hungary9. Ireland10. Italy11. Luxembourg12. Netherlands13. Portugal14. Spain15. Switzerland16. UK

Sources: www.corporateregister.comGlobal Voluntary Corporate Environmental Reporting

Examples of Mandatory Environmental Examples of Mandatory Environmental Performance ReportPerformance Report

Legislative Requirement1. Australia

Corporations Law section 299 (1) (f) (1999)Financial Services Reform Act (2000)National Pollutant Inventory (1998)

2. DenmarkThe Law on Annual Accounts (2001)The Law on Green Accounts (1996)

3. The NetherlandsThe Environmental Protection Act (1997)

4. USAEmergency Planning & Community Right-to-know Act (1986) -Toxic Release Inventory

Sources: www.kpmg.com KPMG International Survey of Corporate Sustainability Reporting 2002

New Trend onNew Trend on Sustainability ReportingSustainability Reporting WWho ho are reporting?are reporting?

Swed

en (1

3)Fi

nlan

d (1

0)

UnitedStates (51)

Hong Kong (3)

South Africa (19)

3

8

5

913

4

Japan (79)

Canada (13)

Continent

EuropeAsiaNorth AmericaSouth AmericaAfricaAustralia/New ZealandTotal

No. of Countries1810345343

Costa Rica (3)

Brazil (5)

Australia (22)

New Zealand (4)

11

Zimbabwe (1) Mauritius (1)

Uganda (1)Nigeria (1)

Argentina (1)

China (1)

Russian Federation (2)

Malaysia (2)

Nor

way

(2)

Cyprus (1)Israel (1)

Sri Lanka (1)

Thailand (3)Mexico (1)

Chile(2)

RepublicKorea (2)

Fiji (1)

Uzbekistan (1)101

26

7

12

India (2)

Bangladesh (1)

Sources: www.globalreporting.org Global Reporting Initiative

Europe1. Austria (4)2. Belgium (2)3. Denmark (3)4. France (23)5. Germany (19)6. Hungary (3)7. Ireland (2)8. Italy (10)9. Netherlands (15)10. Portugal (1)11. Spain (24)12. Switzerland (6)13. UK (54)

Environmental Reporting Environmental Reporting --Why corporations are reporting ?Why corporations are reporting ?

0

0.5

1

1.5

2

2.5

Ave

rage

Sco

re

Improvements inManagement

Strategy

ImprovedStakeholder

Relations

IncreasedCompetitive

Adantage

Public Recognition

BenefitAverage score based on 47 responses on a scale of 0-3

(Source of data : The 1998 survey on environmental reporting conducted by EAG ENVIRON, UK entitled Solving the cost puzzle)

Where are we in Hong Kong?Where are we in Hong Kong?

The progress of Environmental The progress of Environmental Management within the GovernmentManagement within the Government

appointment of green managers in 89 departments and bureaux since 19947 departments set up EMS; more in the pipelineall governments and policy bureaux to publish annual environment reports from 2000 onwards

The New Environmental Management The New Environmental Management Initiative in 1998 Policy AddressInitiative in 1998 Policy Address

All Government departments, agencies

and publicly-owned corporations to publish annual environmental

reports from Year 2000 onwards.

Environmental ManagementTo promote within the public sector

environmentally responsible management by requiring all controlling officers within the

Government to publish reports on their environmental policies and

actions and by encouraging government-owned public

corporations to do likewise.

Initiative Target

Policy Objectives1998 Policy Address

Local trend of ISO14001 Local trend of ISO14001 Certificates in HKCertificates in HK

345328

307288

273

265251

223206196

175165146

136118

9180

58

47

261 2 2 6 7

11 17 19 2339 42

74

1054140383331282422191110776511 3 3 3 5

0

50

100

150

200

250

300

350

400

9/96

3/97

9/97

3/98

9/98

3/99

9/99

3/00

9/00

03-01

09/01

3/02

9/02

3/03

9/03

3/04

9/04

Certificate by companies = 315Certificate withdrawnCertificate still valid

Annual increase 229%

Annual increase 104%

Average annual increase : 84%

Annual increase 94%

Annual increase 60%

Note :-

Annual increase 41%

Annual increase 33%

Annual increase 26%

Distribution of ISO 14001 CertificatesDistribution of ISO 14001 Certificates(by Business Sectors)(by Business Sectors)

Business Sector Cert. No. Business Sector Cert. No. Construction/Construction Materials

90 Landfill Related 7

Electrical/Electronic 64 Chemicals/Oil 5 Cleaning Services 23 Printing Services 5 Property Management 22 Hotel Services 4 Government Departments 21 Medical Services 4 E&M Engineering Services 17 Textile & Accessories 3 Transportation 13 Laboratories 2 Manufacturing 11 Toys 1 Sales/Trading 14 Food/Beverage 1 Metal Products 9 Recreational Club 1 Utilities (Electricity/Gas) 8 Others 13 Consultancy Services 7 Total: 345

, 2004, 2004121222An Environmental Protection Department SeminarAn Environmental Protection Department Seminar

Central Library, 2 Central Library, 2 ndnd December 2004December 2004

ISO 14001ISO 14001Environmental Information and ISO 14001 Support for Environmental Information and ISO 14001 Support for

Hong Kong SMEs in the Construction SectorHong Kong SMEs in the Construction Sector

Drivers for Change

SMESME SME

The Support Package

Bilingual !!!

Free !!!

Where do we go from here?Where do we go from here?

An Environmental Management Vision for An Environmental Management Vision for Hong Kong SAR in the 21st CenturyHong Kong SAR in the 21st Century

To become a centre of excellence in environmental management to create our competitive advantage and

sustain an acceptable quality of life.

How to turn the vision into reality ?How to turn the vision into reality ?

let every organisation own the environmental responsibility and count for environmental performanceembrace environmental management as a core business competencedevelop partnership among the government, the private sector and other institutionsset out and implement a business charter focusing on concrete, measurable environmental actions, with continuous improvement

You can make a difference as a citizenYou can make a difference as a citizen

purchases environmentally products and servicesasks for environmental performance of publicly listed companies, organisationsor individualssupports environmental initiatives and polluters pay principle

Closing

3 Real Stories

. Silent spring remains in the classic statement which founded a whole movement and should be read by everyone who is concerned about the future of the world.

Penguine Science

(1907 (1907 1964)1964)

Wangari Maathai won 2004 Nobel Peace Prize for her work to protect the environment

The Nobel Peace Prize 2004 The Nobel Peace Prize 2004 --Wangari Maathai (1)(1)

"for her contribution to sustainable development, democracy and peace"

Main theme: tree plantings slow desertification, preserve forest habitats for wildlife and provide a source of fuel, building materials and food for future generationsFounded the Green Belt movement, which has planted 30 million trees since 1977 Promote ecologically viable social, economic and cultural development in Kenya and in Africa Holistic approach to sustainable development that embraces democracy, human rights and women's rights

The Nobel Peace Prize 2004 The Nobel Peace Prize 2004 --Wangari Maathai (2)(2)

Founder and CEO of Body Shop Founder and CEO of Body Shop --Anita Anita RoddickRoddick (1)(1)

The business has existed for one reason only to allow us to use our success to act as a force of change, to continue the education and consciousness-raising of our staff, to assist development in the Third World and above all, to help protect the environment. What we are trying to do is to create a new business paradigm, simply showing that business can have a human face and a social conscience. - Anita Roddick (1991)

Founder and CEO of Body Shop Founder and CEO of Body Shop --Anita Anita RoddickRoddick (2)(2)

Retailer operating in some 50 countries with over 1,900 outlets spanning 25 languages and 12 time zonesRoddick vision and the uniqueness of the Body Shops fundamental green approachAmbassador for British Business for the UK Government since 2001Social responsibility, respect for human rights, the environment and animal protectionAbsolute belief in community trade are main values of The Body Shop company

ItIts for our next generations for our next generation

ItIts for you as well !s for you as well !3 Cs3 Cs

Clean !Clean !Clever !Clever !Competitive !!Competitive !!

Green and Competitive - Environmental Protection … · Professor Michael Porter “Competitive...

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