Legislation is not the only route

At times, the world’swater and wasteproblems seeminsurmountable. In

developing countries, popu-lation growth and risingincomes are putting pres-sure on water supplies andgenerating more waste. Therapid growth of mega-citiesis creating headaches forthe companies and authori-ties trying to meet demandfor water and managemunicipal and industrialwaste water.

By 2030, if no efficiencygains are made, globalwater requirements couldexceed current accessible,reliable supply by 40 percent, according to a studypublished in November bythe Water Resources Group,whose members includeMcKinsey, the InternationalFinance Corporation – partof the World Bank – and aconsortium of companies.

Meanwhile, the GreatPacific Garbage Patch – anexpanse of floating debristwice the size of Texas – isan indication that theworld’s waste is becomingunmanageable, with seriousimplications for the envi-ronment.

But while the PacificTrash Vortex consistsmainly of plastic rubbish,the world’s waste also con-sists of less visible refuse,such as agricultural run-offand nuclear waste.

And if much pollution

from waste is invisible,awareness is also growingof the volumes of hiddenwater that go to makemany consumer products.According to Waterwise, aUK non-profit organisation,it takes 2,400 litres of wateron average to produce onehamburger, while a cottonT-shirt consumes about4,100 and pair of leathershoes some 8,000 litres.

Legislation will play arole in both water efficiencyand waste management.Companies already pay ahigh price in many placesfor polluting rivers andlakes. In some cities, localadministrations charge feesfor water and are tighten-ing rules on how wastewater is managed.

Many think more couldbe done through legislationto encourage greater effi-ciency in the use of water.The case for pricing hasoften been made, withmany arguing that estab-lishing a fair price for waterwould help secure adequatesupplies for the world’spoorest people and create

more powerful incentivesfor business to conserve it.

However, water pricinghas proved politically sensi-tive. In Bolivia, protestserupted in the city ofCochabamba in 2000 inresponse to privatisation ofthe city’s water supply.

More recently, some haveargued that a cap-and-tradesystem similar to Europe’semissions trading scheme

could be introduced, grant-ing businesses a quota ofwater rights. Companiesthat use more than theirallocation, such as agricul-tural businesses, wouldhave to buy extra rightsfrom other members of thetrading system.

Water trading could provechallenging, however, as –

unlike emissions, which aretraded virtually – water isheavy and difficult to trans-port over great distances.And access is closely tied toland ownership.

When it comes to waste,legal restrictions are alsotightening, particularly inEurope. The EuropeanUnion landfill directive, forexample, puts governmentsunder pressure to increasemarkets for recycling andimplement large-scale com-posting.

In addition, the WasteElectrical and ElectronicEquipment (WEEE) regula-tions place responsibility onproducers and retailers toretrieve and recycle theirproducts at the end of theirlives (see page 4).

While legislation may bea catalyst for clean-ups,industry will need to playan active role in conservingwater and cutting waste.

In the UK, for example,business and the construc-tion sector account formore than half of the 330mtonnes of waste producedannually, according to theUK Environment Agency.

Businesses have a varietyof incentives to act onwater and waste – businesscontinuity, preservation ofprofitability and reputationmanagement. For miningcompanies, for example, thedanger is reputational, ifthey release toxic sub-stances into communities.

And with industry highlydependent on water, somecompanies are taking thesecurity of their supply seri-ously. Coca-Cola includeswater scarcity among thematerial risks it highlights

Industry isincreasingly takingthe initiative out ofself­interest, saysSarah Murray

Inside this issuePeasants offer lessonsfor multinationals Sometraditional farming methodscan minimise environmentaldamage effectively andinexpensively, reportsRowenna Davis Page 2

Designed for successSustainablility shouldbe built in, writesStephen Pritchard Page 3

In need of fine­tuningProgrammes for thedisposal of electronicsproducts are being

rebalanced, findsMike Scott Page 4

How green is my tally?Charles Batchelor checks inand checks out themeasures being taken bythe hotel industry (below)Page 4

Plastic shock: a polluted river in India that used to supply drinking water to Bangalore Getty Continued on Page 2

WATER & WASTEMANAGEMENTFINANCIAL TIMES SPECIAL REPORT | Tuesday January 26 2010

www.ft.com/water­waste­2010

Incentives includepreservingprofitability andreputationmanagement

2 ★ FINANCIAL TIMES TUESDAY JANUARY 26 2010

Water & Waste Management

Contributors

Andrew JackPharmaceuticalsCorrespondent

Charles BatchelorJane BirdRowenna DavisSarah MurrayStephen PritchardMike ScottFT Contributors

Patrick StilesCommissioning Editor

Steven BirdDesigner

Andy MearsPicture Editor

For advertising details,contact:Liam SweeneyPhone +44 020 7873 4148Fax +44 020 7873 4006liam.sweeney@ft.comor your usualrepresentative

Industrystarts totake theinitiative

in its annual filing to theUS Security and ExchangeCommission.

Tools are available tohelp companies assess theirwater risk and implementconservation measures. TheGlobal Environmental Man-agement Initiative’s onlinetool helps companies assesstheir dependence on water,identify potential risks, anddesign strategies to managetheir consumption.

However, the role compa-nies play in reducing waterconsumption and wastegeneration also extends tothe way consumers usetheir products.

Unilever, for example, hasdeveloped more concen-trated laundry detergentsthat require up to 20 percent less packaging perwash. In India, its SurfExcel Quick Wash deter-gent saves up to two buck-ets of water per washbecause it produces lesslather and so needs lesswater for rinsing. The com-pany says this offers poten-tial water savings in Indiaof about 14bn litres a year.

Reducing waste andincreasing the recycling ofwater also present compa-nies with opportunities tocut costs. The UK construc-tion industry, for example,could cut its waste disposalcosts by 40 per cent byreducing waste by 20 percent, according to Enviro-wise, the UK government-backed consultancy.

Technology will help withwater use, and the first stepis introducing systems totrack and manage consump-tion. In Malta, as part of a€70m smart grid schemebeing implemented by aconsortium led by IBM,metering will be integratedinto the network, enablingwater use as well as energyto be monitored and man-aged more efficiently.

Water-saving technologiesdo not have to be costly orcomplex. Global Easy WaterProducts has developed alow-cost drip irrigation sys-tem for farmers in Indiathat generates water sav-ings of up to 50 per centwhile increasing yields by30 to 70 per cent.

New technologies arehelping cities replace failingwater infrastructure. Pipingsystems allow polymer-based materials to beinserted into old pipes torepair faults and reduceleaks without having to digup and lay new pipes.

When it comes to manag-ing waste water, new sys-tems are emerging, such asAdvanced Immobilised CellReactor technology, whichuses a system based on theimmobilisation of bacteria,reducing the power andland area needed for con-ventional waste water treat-ment systems.

And companies have real-ised that much can beachieved by re-examiningtheir products at the devel-opment stage. By designingitems that can be more eas-ily picked apart and thatuse fewer different materi-als in their construction,companies can increase therecyclable content of whatthey produce, cutting wasteand generating cost-savingsby being able to re-use partsand materials (see page 3).

However, much remainsto be done. In the UK alone,businesses are failing tomake collective savings ofup to £10m a day throughwater efficiency, accordingto Envirowise, which hasfound that two-thirds of UKbusinesses do not measureor monitor their water useand 85 per cent have set noreduction targets.

Moreover, market mecha-nisms alone may not be suf-ficient to tackle the risingvolumes of global waste.Prices achieved by recycledrubbish tend to mirrorthose of original commodi-ties such as plastic andmetal, so any fall in pricesfor those materials makesrecycling less profitable too.

However, failing to actwill not only accelerateenvironmental degradationbut also – particularly asregards water – lead tovastly increased costs

According to the WaterResources Group report, ifdemand and supply meas-ures are implemented, thecosts of meeting projecteddemand in 2030 will be$50bn-$60bn, compared with$200bn if only traditionalsupply-side measures aretaken – double what is nowspent on water provision.

Stream of solutions for husbanding liquid assets

Despite its fundamental impor-tance to life, water is often takenfor granted, particularly as abusiness issue. Yet the availabil-ity and quality of water is cru-cial for companies in an increas-ing number of sectors.

The United Nations forecaststhat by 2030 almost half theworld’s population will live inareas facing water stress orwater scarcity. Less than 1 percent of the world’s supplies iseasily accessible fresh water and“the effects of climate change,increasing population, urbanisa-tion, per capita demand, and pol-lution damage to supplies willput even greater pressure onthese limited resources,” saysMarcus Norton of the CarbonDisclosure Project.

The CDP, which collectsdetails of businesses’ carbonemissions, so that investors canassess their exposure to climatechange issues, has just launcheda Water Disclosure initiative todo the same thing with water.

Water scarcity is a growingproblem in many parts of theworld, says Mr Norton. “Atpresent, however, businessawareness of the issues, risksand opportunities is limited andinvestor understanding of thethreats and opportunities is evenless developed.”

Recently, the issue of waterhas been overshadowed by cli-mate change, but the first impacton businesses of climate changemay well be a decline in waterquality and availability. Whileagriculture is responsible for 70per cent of water use, the CDPhighlights a whole range of eco-nomic activity that will beaffected, from heavy industriesto high-tech areas such aspharma and semiconductors.

The food and beverage sectorwill be one of the most affected,

but Andy Wales, head of sustain-ability at global brewer SAB-Miller, points out that “we donot need to see this as an alarm-ist story. There are solutions. Ifwe are water-smart, we can man-age the challenge in a way thatwill not affect growth.”

Certainly, water is a sectorthat investors like, attracted byits strongly-regulated nature andthe breadth of opportunities.

According to a report by Marc-Olivier Buffle, analyst at SAM,the sustainable investmentspecialist, the development ofthe water market is being shapedby four big trends: explosive pop-ulation growth; the need toreplace infrastructure in devel-oped countries; higher standardsof water quality; and climatechange, which will change rain-fall patterns, cause glaciers tomelt and bring other disruptionsto supplies.

“This situation opens upopportunities to all businessesoffering products and servicesfor the treatment, supply or useof water,” says Mr Buffle.

SAM identifies four main seg-ments of the market: distributionand management; advancedwater treatment; demand-sideefficiency; and water and food.

The sector provides opportuni-ties right across the value chain,says Bruce Jenkyn-Jones, invest-ment director at Impax Asset

Management, investment manag-ers for the environmental sector.These range from metering toirrigation.

One area that is attractinginterest is water recycling,which has become much moreviable because of a fall in theprice of the technology that fil-ters pollutants from waste water.

Few regions go to the lengths

of Singapore, which collects itswaste water, treats it and re-usesit for industrial applications.

NEWater – the name given bythe Singaporean Public UtilitiesBoard to its fully recycled wastewater – is pure enough to bedrunk from the tap. Singaporehas built a strong water treat-ment sector. However, elsewherethere remains widespread cul-tural resistance to recycledwater and indeed, many coun-tries ban the re-use of water,says Mr Jenkyn-Jones.

A more palatable, but muchmore energy-intensive, solutionis desalination, which is attract-ing a lot of attention in the Mid-dle East. Desalinated water sup-ply was 9.8bn cubic meters in2000 and is set to reach 54bncu m by 2020, according to LuxResearch. Companies looking toexploit the demand include Mod-ern Water, which has commis-sioned a plant in the Gulf stateof Oman, while a start-up com-pany called Subsea Infrastruc-ture is developing a floatingdesalination plant.

Another promising area isinformation about usage, whichfurnishes some of the simplestsolutions for managing waterresources, Lux says. Water infor-mation technology is a $530mmarket, but is set to grow, thegroup says, providing opportuni-ties for companies such as Derc-eto, which offers technology forreducing energy usage.

When SABMiller analysed itswater usage, it discovered thatthe biggest proportion went ongrowing the crops used in itsbeer, so it focuses on lower techsolutions such as working withfarmers to improve water use.“Much of what you can do to cutwater use is not about water atall, it is to do with improvingfarming practices.”

In Africa, it is increasing itsuse of indigenous crops, cassavaand sorghum, as feedstocks forits beers, because they are morerobust than barley. “When youtake a water lens to your valuechain, you find opportunitiesthat you would not have other-wise considered,” says Mr Wales.

Resource managementMike Scott considersdevelopments intreatment and supply

‘Much of what you cando to cut water use isnot about water, itis to do with improvingfarming practices’

Traditionalremedies areback in vogue

When India’s AndhraPradesh region suffered adrought in the middle of thedecade, GlaxoSmithKlinecame up with an unusualform of help. It filled thetankers that deliver milk toits Rajahmundry factory tohelp make Horlicks withclean, recycled water, andsent them back to the strug-gling local villages fordrinking and irrigation.

The plant is one of sev-eral operated by the com-pany in drought-proneareas, including Australia.They have been at the fore-front of the UK-based phar-maceutical group’s effortsto recycle water as part of abroader strategy to reducewaste of all sorts.

GSK, which has set theglobal objective of cuttingwaste water in its manufac-turing operations by 3 percent a year, had alreadyintroduced systems at theIndian facility to reduce thevolume of water used inproduction, and to recyclethe amounts consumed.

It cleans the water – pro-ducing methane then usedfor cooking in its staff can-teen – and combines it withcollected rainwater to irri-gate gardens that grow foodfor its employees.

Similar initiatives aretaking place across thepharmaceutical sector, as itfaces the twin pressures ofgood corporate citizenshipand improved efficiency.

“It was the idea of sus-tainability that drove theidea,” says Jim Hagan,GSK’s vice-president forenvironmental health andsafety. “You improve theenvironment and cut costs.”

Marc Jones, vice-presi-dent of global operations atAstraZeneca, says manufac-turing was for years the“fat and happy” part of theindustry. With productionsuch a tiny proportion ofthe cost of researching,developing and marketingmedicines, it was longneglected. Ensuring con-stant, high-quality productwas all that mattered.

Now, efforts to boost sav-ings have reached into thefactories too. AstraZeneca,like a number of its peers,has spent considerableeffort ensuring newer medi-cines are produced moreefficiently, using fewersteps requiring less energyand raw materials. “Oursupply processes are a hid-den gem,” says Mr Jones.

Novo Nordisk of Den-mark, which drew up itsfirst environmental policy aquarter of a century ago,issues regular progressreports, which show carbondioxide emissions as a pro-portion of sales have fallenby two-fifths in the past fiveyears, and overall waste hasreduced even further.

More efficient use ofingredients is central to cut-ting waste. Medicines usedto be made from plants, buta shift took place from themiddle of the last century

to more intensive resource-consuming synthetic chemi-cal production.

Mr Hagan at GSK saysthere is significantly lesswaste in the production ofdrugs than of industrialchemicals. Nonetheless, thecomplex, multi-step proc-esses required mean that100 kilograms of wastematerials are typically gen-erated for a single kilogramof final medicinal product.

His company has set tar-gets to cut that level to lessthan 50 kilograms on itsnew products by the end ofnext year, and as low as 30kilograms by 2015. Thatinvolves changing thechemical approaches usedand modifying processes –notably switching fromwasteful stop-and-start pro-duction in small batches tocontinuous manufacturing.

The company says itimposes similar demandson its contract manufactur-ers, auditing their environ-mental controls alongsidehealth and safety, risk man-agement and human rightsissues.

The launch of biologicalmedicines, and the broaderuse of processes such as fer-mentation even for smallermolecule, chemically-baseddrugs, is tilting the balanceto more sustainable formsof production.

Stefan Doboczky, presi-dent of anti-infectives atDSM, the Dutch manufac-turer that provides theactive ingredients for manypharmaceuticals, says thatsince the start of the decadehis company has switchedthree-quarters of productsto “white biotechnology”.

Of China, he says: “Thewaste is humungous, withsolvents ending up in theair or water. I have seenrivers that don’t look asthough they carry waterany more.”

By moving from organicchemical production thatrequires large quantities ofsolvents to fermentationtechniques, he reckonswaste can be cut by 90 percent, and costs halved.

Difficulties include delaysby regulators in authorisingnew approaches to manu-facturing products. Mr Dob-oczky says this means somecountries with less wellestablished controls such asChina may be able to leap-frog EU and US authoritiesby approving greenerapproaches more swiftly.

But while the “middle” ofthe production process con-trolled by the pharmaceuti-cal groups may be makingprogress, the “ends” lagbehind.

GSK concedes it has yetto impose its own targets onsuppliers of raw and inter-mediate materials. Andjudging by the hefty pack-aging of its products, suchas the weight-loss drug Alli,there is scope for considera-ble slimming.

PharmaceuticalsThe industry isreturning to itsroots, reportsAndrew Jack

‘Adoptingfermentationtechniques cancut waste by90 per centand halve costs’

Multinationals are learninglessons from peasant farmers

Josephine Kavitafarms the slopes justoutside the town ofKola, about 40 miles

south-east of Nairobi, theKenyan capital. Her plotmight be only a few acres,but her environmental cre-dentials outstrip those ofmany agribusiness giants.

While many largemonocrop fields leach pesti-cides, chemical fertilisersand topsoil into local watersupplies, her neat terraceskeep nutrients efficiently intheir place. Organic ferti-liser from her goats pre-vents chemical contamina-tion; extensive cover crop-ping prevents soil erosion;and her border plants put astop to water run-off.

Big names in global agri-business, increasingly anx-ious about global water sup-plies, have recently startedpaying more attention tosuch practices.

SABMiller, one of theworld’s biggest brewers andowner of such brands asGrolsch and PilsnerUrquell, has formed a part-nership with the worldwidefund for nature (WWF),focusing on traditionalways of reducing run-off.

The partnership’s firstproject aims to clean up thecompany’s sugar cane pro-duction in Honduras. Run-off from fields finds its wayinto rivers, contaminatingwater supplies and damag-ing ecosystems.

In Honduras, the Meso-American Reef (MAR) isparticularly vulnerable tosuch pollution. Eutrophica-tion – the process by whichleaching fertiliser causesincreased plant growth inrivers, starving water wild-life of vital oxygen supplies– also occurs in the region.

SABMiller has agreed toreplace its toxic pesticideswith metarhizium anisop-liae, a fungus that attacksthe notorious froghopperthat plagues sugar caneplantations. This funguskills the pests, withoutharming ecosystems.

Other solutions includeprecision farming – a tech-nique used to give cropsexactly the right amount ofwater and fertiliser and nomore – and to invest inweather forecasting sys-tems, to insure that agricul-tural treatments are appliedwhen the chance of run-offfrom rainfall is lowest.

Meanwhile, cover andborder cropping – as usedby Ms Kavita in Kenya –are being introduced in thecompany’s plantations inLatin America. Traditionalcommonsense approachesto reducing agricultural pol-lution, it seems, are prevail-ing over gimmicks andgadgetry.

Sasha Koo-Oshima, waterquality and environmentofficer at the Food andAgricultural Organisationof the United Nations (FAO)believes that many multina-tional agricultural compa-nies can learn lessons fromtraditional practices.

She points out: “Big agri-cultural models are oftenmisapplied in developingcountries, where they mayresult in huge landscapechanges and run-off.Smaller traditional systemsoften make agricultural andenvironmental policy sitbetter together.”

The problem with somemore traditional agricul-tural methods is that theywork out more expensive.Mixed cropping may pre-vent topsoil loss, but it

makes the mechanisedploughing – on which mod-ern agriculture depends –very difficult. Biologicalpest management may bean option, but is unlikely towork better than chemicalalternatives in every case.Leaving strips of land fal-low may prevent ecologicaldamage, but cuts output.

One study, from the UKEnvironment Agency, esti-mated that leaving threemetre fallow strips betweenrows of crops reduces pro-duction between 2 and 6 percent.

In such a context, agricul-tural businesses maychoose to continue passingcosts on to others, and mov-

ing when the problem startsto affect production. Suchproblems help explain whythe private sector is soreluctant to change.

However, there are casesof companies reducing pol-lution out of self-interest.Vittel, the drinks company,pays French farmers $250(£150) for every hectare thatreduces contaminated run-off into its water suppliesfor example. Unfortunately,they remain rare.

Even SABMiller, seen asa “leader in water sustaina-bility” by the World WaterCouncil is working with theWWF in only six ofthe 31 countries in which itdoes business.

Other companies notedfor their good work onwater scarcity had almostno information to offer onthe subject of water quality.For instance, Nestlé said itwas the business of its sub-contractors.

According to the FAO,more hopeful results areseen when companies havean opportunity to profitfrom their environmentalactivities.

In Scandinavia, the shell-fish industry is feedingmussels and clams on thealgae that result from agri-cultural run-off.

This is not just an effi-cient way of doing business;it also prevents eutrophica-tion.

In the Netherlands, a newaccounting system fornitrates has given farmersthe tools they need to usefertilisers more efficiently,saving them money oninput costs.

In the US, a new “safesalmon” certification hasbecome available for farm-ers who reduce their run-off, allowing them to chargepremium prices for theirproduce.

Robin Farrington, WaterPolicy Adviser at the WWF,says the private sector isset to do more to tackleagricultural pollution.

“Increasing water scar-city will give companies theincentives they need to callfor greater regulation, notjust on their own sites, butacross the board,” he says.

He adds: “It is importantthat businesses do whatthey can on their individualsites, but without action toimprove the governance ofthe wider basin, they’ll stillbe exposed to water-relatedrisks.”

AgricultureBig companies arerethinking theirtechniques, saysRowenna Davis

The problem withmore traditionalagriculturalmethods is thatthey work outmore expensive

Broad sweep: bigger is not always better when it comes to sustainable practices Alamy

Continued from Page 1

FINANCIAL TIMES TUESDAY JANUARY 26 2010 ★ 3

Water & Waste Management

Local authorities are crucialin tackling a global problem

It would be easy to imagine that legis-lation to govern the treatment ofwater and the handling of waste wasof recent vintage. Governments havebeen prolific in recent decades, creat-ing and refining the regulationsrequired to keep their citizens safeand, more recently, save the planet.

Yet concern for such matters pre-cedes by millennia the arrival of theindustrial society and the growth oflarge cities. More than 2,500 years ago,officials in Athens opened a municipallandfill site and decreed that wasteshould be carried at least a mile fromthe city gates.

German cities in the Middle Agesrequired wagons bringing in produceto take out waste when they left,while in 1515 Shakespeare’s fatherwas fined for “depositing filth in apublic street”.

Local authorities around the worldstill play an important role in devis-ing by-laws and implementing legisla-tion to manage water and waste,although the main responsibility hasmoved to national and supra-nationalbodies such as the European Union.

Regulation of waste in much ofEurope is driven by the EU’s WasteFramework Directive of 1975, revisedin 2008. This sets a target for memberstates to recycle and re-use 50 per centof household waste by 2020.

This directive created a five-tierhierarchy for dealing with waste,explains Mike Webster of WasteWatch, a UK environmental charity. Itrequires waste management to startwith preventing or minimising waste– such as packaging – in the firstplace; re-using or refurbishing goods;recycling materials such as scrapmetal; recovering energy from incin-eration; and, finally, disposing of whatis left.

Water, meanwhile, is covered by theWater Framework Directive of 2000,which requires governments to iden-tify the river basins in their territoryand produce management plans thatprovide pricing incentives to ensurewater is used efficiently. However,these policies, which should havebeen in place at the start of this year,may prove difficult to implement insome southern European states withextensive irrigated agriculture.

The US is not without its federalregulation. The Environmental Pro-tection Agency (EPA) was called intobeing by the Nixon administration in1970, while a cornerstone law govern-ing the disposal of solid and hazard-ous waste, the Resource Conservationand Recovery Act, dates from 1976.

However, the individual states haveoften made the running and some-

times even challenged the EPA to dobetter. In 2005, nine states sued theagency for being too easy on mercuryemissions from power plants and sev-eral brought in their own controls.

“In the US, legislation is dealt withmostly by the individual states not bythe federal government,” says JacquesLabre, vice-president for institutionalrelations at Suez Environnement, aFrench environmental managementcompany active in many countries.

“California is very active,” he con-tinues. “In the US, there is still a bigproportion of solid waste that goes tolandfill. Incineration is only done inthe densely urbanised parts of thecountry. Western Europe is ahead.”

Australia is closer to Europeanpractice than to the US, with a highlevel of environmental awareness. InNovember, Australian state govern-ments agreed a national waste policyto cover the period to 2020.

The first comprehensive approachto this issue was adopted in 1992, butwaste generation has continued toincrease. Actions to be taken includewaste avoidance, reduction of landfilland three-yearly reviews of progress.

China has been progressing fast interms of awareness of waste andwater management, driven in part byrecent incidents of river pollution andserious declines in air quality in largecities. Water quality was so poor inChina’s 28 largest lakes that almost 40per cent was rated level 6, the lowestranking and unfit even for farm irri-gation, according to a recent survey.

Legislation by governments andcross-border agencies such as theEuropean Commission is oneapproach to dealing with waste andwater. Another often more wide-reaching mechanism is the interna-tional convention, which can beagreed by states around the world.

One such is the Basel Conventionon the Control of TransboundaryMovements of Hazardous Wastes andtheir Disposal, which took effect in1992. Trade in hazardous waste hadgrown steeply in the two previousdecades, driven – perversely – bytighter environmental controls indeveloped countries, the globalisationof shipping and a desperate search forrevenues by poorer countries.

The convention was prompted byscandals during the 1980s, includingthe dumping of incinerator ash fromPhiladelphia on a Haitian beach andthe shipping of 8,000 barrels of hazard-ous waste from Italy to Nigeria. Simi-lar incidents still occur, but are lessfrequent than before the convention.It has been bolstered by a number ofsupporting treaties.

International conventions can helpachieve global consensus on how todeal with the issues thrown up by theneed to manage waste and water.

But in recent years most progresshas been achieved by regulation at anational and regional level. This maynot always look tidy, but it reflectslocal priorities and differing stages ofeconomic development.

LegislationCharles Batchelor onprogress in national andregional regulations

‘In the US, legislation isdealt with mostly by theindividual states not bythe federal government’

Let sustainability in at the ground f loor

Purveying a productthat is environmen-tally friendly winsplaudits. Designing

one in such a way that itsmanufacture minimisesenvironmental impact oftengoes unnoticed.

According to AMRResearch, which specialisesin manufacturing and thesupply chain, more than 70per cent of a product’s costis committed at the designphase. So it is worth design-ing a product so it can bemade efficiently.

Designing to reduce wasteshould be an inherent partof good business practice,and go hand-in-hand withlean manufacturing, whichsets out to ensure that busi-nesses only use the mini-mum of materials andenergy to produce an item.

But the trend to outsourc-ing and global manufactur-ing can undermine this: sto-ries abound of companiesthat moved manufacturingto lower cost markets,including south-east Asiaand China, only to find thatinadequate quality controland manufacturing tech-niques led to large quanti-ties of substandard prod-ucts or sharp rises in waste.

Sometimes these short-comings only becameapparent when the brandowner audited the supplier,because the supplieraccepted more waste, andre-manufacturing, as anacceptable cost of doingbusiness.

Quality control and envi-ronmental standards haveimproved over the past fewyears especially in low-costmanufacturing centres, andwestern companies havebecome more proactive inensuring that their ethicaland environmental stand-ards are observed by con-tractors and sub-contrac-tors.

Better supply chain tech-nologies have also made iteasier for manufacturers tomonitor how their materi-als and components aremade.

But companies have alsocome to realise that makinga greener product is notenough if the manufactur-ing process harms the envi-ronment. The focus is turn-ing to reducing waste, cut-ting energy use, and usingless harmful materials,

such as glues, solvents andpackaging.

This can bring dual bene-fits. With materials that areless damaging, the productis easier to break down atthe end of its life.

James Dyson, the UKdesigner, (see case study onthe Dyson Airblade), forexample, strongly believesthat good design and envi-ronmental responsibility gohand in hand, and shouldhelp determine how a prod-uct looks and works.

“We design our machinesto minimise their size andweight, so we use fewermaterials, but the machinesoffer strength, durabilityand ease of use,” he says.“Slimmer components alsorequire fewer materials andless energy in the manufac-turing process. Greendesign is not just aboutusing recycled materialswhich in some cases con-sume as much energy asnew materials.”

In the US, Nike and Tim-

berland, the clothing andfootwear manufacturers,have moved to water-basedadhesives because theymean greener manufactureand a greener end-product.

Businesses that maketheir designs more efficientshould see environmentalbenefits. Focusing on the

environmental impact leadsto cheaper or more efficientmanufacturing techniques.A close liaison betweendesign and production,makes it possible to reducethe cost of materials, andcut down consumables andwaste.

According to AMR, Wal-Mart is asking its suppliers

to label products, explain-ing the environmentalimpact of ingredients.

“A significant part of thebenefit of measuring theenvironmental impact of amanufacturing process isthat it helps focus minds onwhere resources are beingconsumed,” says Mike Bar-ber, partner for corporateresponsibility services atDeloitte, the professionalservices firm. “It identifiesareas where processimprovement may have asignificant benefit.”

Some of these changes --such as switching to water-based glues – do mean radi-cal departures from conven-tional manufacturing tech-niques and materials.

The mobile phone indus-try is rapidly adopting newmaterials to reduce theenvironmental impact of itsproducts. With more than3bn devices in use world-wide, even small changeswill have a significant envi-ronmental impact. But

changes have to be bal-anced against functionality,durability and consumerappeal.

“There is always a trade-off,” says Mitti Storckovius,sustainability director forthe devices division ofNokia, the Finnish mobiletelephony group.

“We are very strict aboutproduct quality. So, forexample, with bioplastics[plastics based on organicmaterials that bio-degrade]

we have to ensure withstrict testing that it per-forms as well. If it is not ashigh quality, the customeris disappointed, and it hurtsour brand.”

Reducing packaging canmake significant savings ina product’s lifetime carbonfootprint. Nokia has signifi-cantly reduced the size ofits packaging, especially forits high volume, lower-endphones. This saves bothcosts and materials, but the

new packaging was notimmediately popular, MsStorckovius admits.

Sony, the Japanese elec-tronics group, has devel-oped a technique for recy-cling old CDs into polycar-bonate product casings, andhas programmes to reduceenergy and water use andgas emissions at its sites.

But sometimes, it is smallcommonsense steps ratherthan big changes that bringthe most practical benefits.

For example, Sony nowships its TVs without theirstands attached, for thebuyer to assemble at home.This approach means 215,rather than 100, 50-inch TVscan fit on a truck.

As Deloitte’s, Mike Barberpoints out: “If you have agood handle on the truecost of manufacture, includ-ing energy and wastage,you do not need separatelyto account for environmen-tal impact.”

DesignProducts should bedevised so as to cutwaste, reportsStephen Pritchard

Airblade dryer team takes a long­term viewDyson, the British manufacturer of domesticappliances, is known for reinventing thesimple vacuum cleaner. Its machines workwithout a bag, so as not to lose suction,and put much of their innards on display,turning the workings into a design feature.

The Airblade, the company’s revolutionaryhand dryer, was an accidental spin­off. In2002, engineers had come up with theconcept of an “air knife” – a thin, powerfulblade of air – for use in another project.The design team realised it could providean alternative to inefficient, and sometimesnot very hygienic, conventional hand driersin public or office washrooms.

Much of the appeal of the Airblade, apartfrom being effective in drying hands, lies inits low running costs. The companycalculates the Airblade uses up to 80 percent less energy than conventional,warm­air hand dryers. But a product thatsells at least partially because of itsenvironmental credentials has to bedesigned so it can be made in an efficient,and environmentally friendly, way.

The design had to meet a number ofcriteria, according to John Churchill, seniordesign manager on the project. It had to behygienic in use in the public washroomenvironment. This meant designing thecasing with as few seams as possible.

It had to be robust, as equipment inpublic places can be subject to roughtreatment, and even abuse. The Airbladeneeded to be easy to maintain and repair,for the same reasons, and also had toaccommodate Dyson’s own digital motor.This motor was developed to last twice aslong as a conventional, brushed motor. As aresult, the rest of the Airblade also neededto be designed for a long working life.

Originally, Dyson’s designers intended tomake the main casing for the Airblade outof die­cast aluminium, because of itsdurability, and the fact that the metal iseasy to recycle. The Airblade 01 model isnow made from the material, but the designteam calculated that a plastic model could

be developed for less demandingenvironments, despite plastics’ poorenvironmental reputation.

“Not all bathrooms need the same levelof robustness, and not everyone was astough on the Airblade as we expected,”says Mr Churchill. “So to make it moreefficient, as aluminium is energy­intensive toprocess, we turned to plastic. We havegood knowledge of plastics from ourvacuum cleaners. We didn’t want a cheapplastic that breaks, so we used PC­ABS.That material makes a casing for theAirblade that is OK for an officeenvironment, and which doesn’t use thehigh amount of energy required to producethe aluminium version.”

Another consideration, and one that is notalways to the fore in product design, iswhere the Airblade could be made. Dysonmakes its motors in Singapore, so toreduce transport costs and carbon dioxideemissions, the Airblade is made in Malaysia.

“We could make the motors morecheaply elsewhere, but the trade­off is notworth it,” says Mr Churchill. “They areassembled in a clean room, more like a labthan a production line. We don’t want tocompromise by using a cheaper and dirtierlocation.”

Perhaps surprisingly for a “green”product, recycled materials and end­of­liferecycling were not top priorities. Thecompany would not use a recycled material,in order to appear “green”, if the result wasa less effective product. At the same time,efficient and environmentally responsiblemanufacturing should go hand­in­hand on awell­designed product.

“We do measure the amount of plasticused in the product, and in its bill ofmaterials,” Mr Churchill says. “Recycling isconsidered, but in the design hierarchy,making the Airblade last as long as possibleand making it efficient, is more importantthan making it easy to take apart.”

Stephen PritchardDyson’s Airblade: slimmer components require fewer raw materials and less energy

Offering a greenerproduct is notenough, ifmaking it harmsthe environment

4 ★ FINANCIAL TIMES TUESDAY JANUARY 26 2010

Water & Waste Management

Relax with a clear conscience

Travellers will be familiar with therequest displayed in many hotel bath-rooms to re-use towels for the benefitof the environment. They may be lessaware of the scale of measures beingtaken by some hotel chains toimprove their green credentials and ofthe impact such a simple action canhave on water use.

InterContinental Hotels calculatesthat its towel re-use programme saves199m litres of water a year in the USalone. Marriott International, with3,200 hotels worldwide, reckons itslinen re-use programme saves 11-17per cent on its water and water treat-ment costs. As well as urging gueststo re-use towels, some hotel chainsurge customers not to demand freshbed linen every day.

Lower water use can have knock-oneffects by cutting energy used topower washers and dryers and reduc-ing the quantity of detergents needed.Marriott says that laundry savings atits central European hotels hasreduced phosphate discharge into thewaste water system by 100,000 kilos.

The attentions of regulators andgreen activists may have focused onother aspects of the tourism industry– notably aviation – but hotels arewell placed to make a contribution toreducing environmental damage.More than 900m international touriststravelled in 2007 and the UnitedNations World Tourism Organisationforecasts 1.6bn tourists by 2020.

When they reach their destination,travellers are more profligate in theiruse of water than the local population.A survey of water consumption on theSpanish island of Mallorca in 1994showed that while a country dwellerconsumed 140 litres of water a day anda city dweller 250 litres, the averagetourist used 440 litres and a luxurygolf resort 880 litres for each visitor.

For hotel managements, waterissues can do more than influencetheir premises’ appeal to guests. Inextreme cases, they can determine thehotel’s very survival. In many devel-oping countries the water infrastruc-ture may not be highly developed. Alarge hotel may have difficulty obtain-ing adequate and regular supplies ormay only achieve it by depriving thelocal residents and farmers.

Imagine having to tell your gueststhat they can only shower every otherday, that supplies of bottled waterhave become hard to obtain and thatproviding clean laundry has becomeimpossible, suggested Green Hotelier,the magazine of the InternationalTourism Partnership (ITP), a businessgroup that promotes environmentaland social responsibility.

“It is not as unlikely as may seem,”the magazine explained. “Puerto Ricoand St Lucia experienced dry spells in1995, resulting in cancellations andhotel guests cutting short their holi-days. Some resorts were even forcedto close their doors.”

Waste water can also pose a seriousthreat to a hotel business. Stomachupsets, vomiting and ear and skininfections can result from swimmingin polluted water. Discharge ofimproperly treated waste water intothe sea can lead to algal outbreaksand damage coral reefs.

Tour operators often check a hotel’sfresh and waste water managementprocesses as a part of their contract.Hotels put water to a wide of range ofuses, with only 5 per cent estimated togo to drinking and cleaning food.Some goes to guests taking showersand washing; some to irrigating gar-dens and golf courses; filling swim-ming pools and jacuzzis; cooling anddecorative use such as fountains; andirrigating land used to produce foodfor tourists. Water accounts for 15 percent of the total utility bill of manyhotels.

“You can install showers if you arebuilding a new hotel,” notes MilesQuest of the British Hospitality Asso-ciation, a trade body. “But people whootherwise would not take a bath oftendo so when they stay at a hotel.”

For many travellers a hotel stay is aluxury experience. They might scrimpat home but they do not want to do soon holiday.

This puts the onus on the hoteloperator to take initiatives that willsave water without obviously imping-ing on the pleasure of the stay.

De Vere Venues, the conference armof the De Vere hotel group, is triallingdevices installed in the pipework toshowers in its 3,310 rooms to add airto the water. The strength of the flowis maintained but water use isreduced.

It is also introducing “liquid poolcovers” in its seven swimming pools.These are unnoticeable to the swim-mer but when the water surface isstill the molecules form an invisiblesurface on the pool that retains heatand prevents evaporation.

“We are also in the throes of awater scanning project to detect leaksbecause a lot our premises are old,”says David Greenhill, head of healthand safety. “But this involves capitalinvestment and we are progressingslowly, given the current financial cli-mate.”

“Water management is a huge issuefor the industry,” says Stephen Far-rant, director of the ITP. “Some of themore enlightened companies havefocused on it but there is huge scopeto do more.”

HotelsA raft of improvementsis being floated,reports Charles Batchelor

Spot the liquid pool cover Reuters

Disposal programmes are in need of some fine­tuning

One obvious sign of “progress”in the past 30 years is theincrease in the amount of con-sumer electronics in the houseof today compared with its 1979counterpart.

As well as multiple televisionsets, DVD players, a microwave,tumble dryers and fridge-freezer, today’s home will havea range of MP3 players, a desk-top computer, maybe a laptop,computer games console, broad-band connection and a digitalvideo recorder.

Disposing of all these gadgets,as well as the IT equipmentthrown out by businesses as it

becomes obsolete, is becomingan increasing problem. TheUnited Nations estimates thatup to 50m tonnes of electronicgoods are discarded globallyeach year, while in Europe“e-waste” is increasing at 3-5 percent a year – three times fasterthan the total waste stream.

The EU’s WEEE (Waste fromElectrical and Electronic Equip-ment) directive aims to ensurethat the waste created by con-sumers buying 9.3m tonnes ofelectrical gadgets a year doesnot end up in landfill.

WEEE was a groundbreakinglaw but it had a troubled devel-opment. Agreed in 2004, thedirective was subject to longdelays in its introduction inmany member states and theEuropean Commission said in2008 that only a third of e-wastewas being treated in line withthe legislation, with the restgoing to landfill or sent abroad.

The directive, which called forEU countries to ensure that 4kgof e-waste per person was col-lected each year, has been heav-ily criticised and poorly imple-mented. The focus on weighthas meant that collectors havenot concentrated on collectingenergy-saving light bulbs, forexample, but on bulky, heavyitems such as washingmachines and refrigerators thatare more difficult to transportand have little value.

Another problem is that the4kg requirement is the same forall EU countries, even thoughfor some newer entrants it isclose to 100 per cent of thee-waste they produce, while forsome of the older member statesit is about one-fifth of the total.

The European Commission isrevising the directive, andwants to introduce new collec-tion targets equal to 65 per centof the average weight of goods

placed on the market over theprevious two years.

“We have a [new] target thatis much more ambitious andreflective of a member state’scircumstances,” says the Com-mission. It also wants toincrease the responsibility of

producers to collect the waste.This will be unworkable, says

Dr Kirstie McIntyre, of Hewlett-Packard’s EMEA EnvironmentalCompliance department, be-cause so much e-waste is ille-gally disposed of outside theproducer compliance system.

E-waste is not just a EuropeanUnion problem, of course. Simi-lar regulations are in place inJapan, while China and Koreaare among countries looking atintroducing their own regula-tions. A number of US statesalso have “producer take back”laws. However, just 18 per centof computers and TVs wererecycled in the US in 2007 – andonly one in 10 cell phones.

Globally, the Basel Conven-tion seeks to minimise themovement of waste across inter-national borders. Under theConvention, the export of haz-ardous waste from rich coun-tries to poor ones is illegal,unless the receiving governmenthas given explicit consent, saysCharlotte Steel, of Impax, aninvestment company. However,it can easily be circumvented byrelabelling e-waste as second-hand goods.

E-waste is becoming a prob-

lem in African and Asian coun-tries, where it is sent for recy-cling.

Electronic equipment containsa significant amount of heavymetals that can contaminategroundwater, impair air qualityand cause health problems ifnot dealt with properly.

HP, which collected 1.5m prod-ucts last year in the EMEAregion, has been working on aproject in South Africa, lookingat ways communities can han-dle e-waste safely and createemployment at the same time.

“We have no control over howthis waste ends up in Africa, butit is not good for our products tobe dumped in other countries,”says Ms McIntyre of HP. “How-ever, there is a demand fore-waste in places such asGhana, South Africa andMorocco because the raw mate-rials can be used.”

She says the company’s South

African project has shown thatwith proper training, e-wasterecycling can provide good jobsand protect the environment.Some of the company’s prod-ucts, such as printer cartridges,are made entirely from recycledplastic, she says. “Waste willbecome more important, as com-modity prices go up and up.”

IBM, which has been recyclinge-waste since 1989, says earlyaction on e-waste has createdbusiness opportunities. In 2003,it became the first company tohave collected more than 1bnlbs of e-waste, says WayneBalta, vice-president, corporateenvironmental affairs and prod-uct safety. It has a target ofsending no more than 3 per centby weight of its waste to landfillor incineration.

“If you anticipate regulation,you have opportunities insteadof having to react,” says MrBalta.

ElectronicsRecycling schemesare being refined,writes Mike Scott

Just 18 per cent ofcomputers and TVswere recycled in theUS in 2007 – and onlyone in 10 cell phones

Leftovers offerhope to hungry

Those filling theirsupermarket trol-leys for the weeklyshop or buying

their groceries online areunlikely to ponder howmuch of their purchasesmay end up thrown away.

In the US, it could be upto 40 per cent, or 1,400 kilo-calories a day for eachAmerican, according toresearch just published bythe National Institute ofDiabetes and Digestive andKidney Diseases, inBethseda, Maryland.

In the UK, 8.3m tonnes of

food and drink are wastedeach year, of which 5.3mcould have been consumed,according to Wrap (Waste &Resources Action Pro-gramme), a governmentfunded initiative.

The cost of this waste isat least £12bn, or £480 foreach household, and £680for families with children.

Food waste is so wide-spread that experts believeif it could be eliminatedthere is already enough tofeed the expected worldpopulation of 9bn in 2050.Moreover, there would behuge environmental advan-tages: a saving of 20mtonnes of carbon dioxide ayear in the UK, the equiva-lent of taking one in fourcars off the road.

The main reasons house-holds throw away food isbecause we cook or preparetoo much (£4.8bn a year) or

we let food go off (£6.7bn ayear). Much of this is due tolifestyle change, says Rich-ard Swannell, Wrap’s direc-tor for retail and organics.

“You plan a midweeklasagne, then get asked out,or the children have a partyand you forget to put themince in the freezer.”

We have also got out ofthe habit of using leftovers,he says. “A shrivelled applecan go in a crumble or beused to make a smoothie;the remains of a Sundayjoint can make sandwichesor shepherd’s pie.”

“Sell by”, “best before”and “use by” dates addto the problem. There isconfusion between safetyand quality, which meansthat safe food, which maynot be of the best quality, isthrown away, says FrancesBuckingham, manager atSustainability UK, a consul-

tancy. She says: “Peoplerely too much on the labelswithout using their com-monsense,” adding that,while supermarkets areconvenient, “the model oflarge weekly shops has anelement of wastage builtinto it”.

The issue is being takenseriously by food producers,retailers and government.“Buy one, get one free”offers are gradually being

replaced with a variety of“half price”, “buy one, getone free later”, and multi-buy deals that combine dif-ferent items rather thanjust offering more of thesame.

Supermarkets are startingto print storage informationon packaging, for examplepointing out that appleskeep longer in the fridgeand cucumbers can last anextra two weeks if kept intheir plastic wrapping.

Packaging is also beingused to prolong product life.M&S has replaced the plas-tic tray in which beef jointswere sold with a ‘skin pack’film that fits tightly andkeeps the meat fresh forfour extra days.

Tetra Pak has developed apackage with a gabled topfor drinks that gives asmooth flow to juice or milkrather than splashing whenpoured. Resealable packetsthat help keep food freshare becoming more com-mon.

Reducing instore waste isanother key focus for super-

markets, many of whichhave committed themselvesto stop sending waste tolandfill by 2015.

It is inefficient to throwaway food that could besold, says Jack Cunning-ham, environmental affairsmanager at J Sainsbury,which produces 56,000tonnes of instore food wastea year. “Our store manag-ers are incentivised to mini-mise waste, and we cutprices as food nears its useby date.”

Like many retailers,Sainsbury gives to charitiesunsold food that is withinits use-by date. It alsoworks with suppliers, forinstance encouragingpotato growers to mash lowgrade produce for use inready meals, and avocadofarmers to process rejectavocados for face masks.

Transport offers furtherareas for improvement. AWaitrose project with 100banana growers in theWindward Islands hasreduced wastage fromshipped fruit from 40 per

cent in 2002 to less than 3per cent in 2008. NorthernFoods cut the number ofpizzas damaged beforebeing sold by 75 per cent byredesigning packaging sopallets can be stacked moreefficiently.

“Waste won’t get to zerobecause there’ll always bebones, tea bags, banana

skins and eggshells,” saysMr Swannell. The answer isfood waste collection andtechnology such as anaero-bic digesters that turn itinto methane, carbon diox-ide and solid fertiliser.

The UK is learning frombest practice in other coun-tries. For example Italy haspioneered door-to-door foodwaste collections, while

Switzerland and Germanyare advanced in their use ofanaerobic digesters.

The ideal approach seemsto be weekly collections offood waste only. This canbe processed cost-effectivelyin anaerobic digesterswhereas a mixture of foodand garden waste collectedfortnightly is less efficient,says Dr Swannell. Thisapproach creates methanein a form that can be usedto generate energy or beinjected into the gas grid.

At present, 66 localauthorities in the UK col-lect food waste separately(15 per cent) and a further72 authorities (17 per cent),collect it with garden waste.

If all the 5.8m tonnes ofUK municipal food wastewere recycled in anaerobicdigesters it would generatethe energy for up to 164,000households, or 26 per centof that generated by windpower in the UK in 2005.

But as Wrap’s Dr Swan-nell says: “The best thing isnot to produce it in the firstplace.”

FoodThere is alreadyenough to feed theworld in 2050,reports Jane Bird

Sell­out: best before and use by labels can cause confusion and lead to safe food being thrown away Getty

‘The model of largeweekly shopshas an elementof wastagebuilt into it’