Evaluating product panels 3 Product panels each with its own storyThis chapter presents the three product panels in the areas of electronics, goods transport and textiles. Because of substantial differences in work processes and results, the product panels are described separately. The presentation of each product panel is based on meeting minutes and interviews held with panel members. The aim of this chapter is to give readers a fundamental insight into the three product panels and their work. Chapter 4 contains a cross-cutting analysis of the product panel concept and its individual elements. 3.1 The Product Panel for ElectronicsThe Danish electronics industry operates under strong international competition with a global flow of goods. Danish electronics producers thus export about 90 per cent of their production, and vice versa about 90 per cent of all electronics products sold in the Danish market are imported. At the same time, the market for electronics products is also divided into two submarkets of almost equal size: a business-to-business market (sale to other companies or public-sector customers) and a business-to-consumer market (sale to retail consumers). The industry is growing in step with the rising consumption of electronics products. Producing electronics products generally entails heavy development costs. Many electronics products, particularly IT equipment, rapidly become obsolete both commercially and technologically often long before they lose their durability. This increases the volume of scrapped electronics products, which is considered an important environmental problem as scrapped electronics products are chiefly disposed of together with household refuse through incineration and depositing. Reusing electronics products is difficult since they are typically highly complex products consisting of a variety of materials. Moreover, many electronics products contain a number of materials brominated flame retardants and PVC, for example that produce adverse environmental impacts when disposed of/incinerated. The high complexity of electronics products also makes it difficult to assess their full effect on the environment. In addition to their disposal, the principal environmental life cycle impacts of electronics products are considered to originate from their use. For example, consumer electronics products have large standby power consumption, and the production of electricity for such consumption exerts considerable pressure on the environment. For some electronics products, energy consumption during use accounts for as much as 95 per cent of total life-cycle energy consumption.2 Eco-labels and environmental declarations are rarely used on electronics products in Denmark. A study on green electronics in public procurement (recommended by the electronics panel) from 2001 revealed that many public procurement officers recognised the Green Swan logo from other contexts; but the only electronics products to bear the Green Swan logo are photocopiers. On the other hand, relatively few public procurement officers are familiar with the "Blauer Engel" (a German eco-label), the environmental declarations of the Danish IT Industry Association and the environmental guidelines issued by the Danish EPA. The only eco-label familiar to public procurement officers and used for a number of electronics products is the US energy-saving label: Energy Star3. The public sector buys office electronics and IT equipment to the tune of about DKK 3.2 billion a year. According to the study on green electronics in public procurement, suppliers believe that the price of obtaining a Green Swan logo licence is too high and they also find application processing time too long. Moreover, the suppliers think that the market for eco-labelled electronics is too small. The study concludes that the use of eco-labels in the electronics area will have to be promoted in the long run. Small public procurement firms and retail consumers, in particular, have neither the time nor sufficient knowledge to make a fair assessment of the environmental impacts of different electronics products unless eco-labels are used. 3.1.1 Composition and organisation The electronics panel has eighteen members, including representatives of electronics companies, trade associations, consumer and environmental organisations as well as public institutions (appendix B lists all members of the electronics panel). The interviews with panel members indicate that this number may be slightly too high. On the other hand, the distribution of interests seems to balance. One person interviewed emphasised the good balance between professionalism and "feeling". Generally, the panel members represent no independent power of decision on behalf of the individual workplaces. This limits the type of decisions that the product panel can reach when it meets. The panel finds it important to reach consensus in situations where the members lack of decision-making power gives little room for negotiation and compromise. The electronics panel has discussed whether its members act as individuals or represent the individual workplaces. The Danish EPA does not see product panel participation as binding the companies/organisations, but the members themselves find it impossible to separate product panel work from their day-to-day work. Product panel members meet during working hours, meaning that companies/organisations are investing time and money as well. In the electronics panel, the same person is both the chairman and the secretary. The product panel members interviewed generally commend the Danish EPA on its handling of a difficult role in the panel. The persons interviewed find it positive that Danish EPA representatives have remained relatively neutral during panel discussions, while also providing adequate information about political developments in this area. Although presumably the Danish EPA has had no wish to be a controlling part of the electronics panel, the course of events suggests that the Danish EPA, despite its neutral starting point, has taken on a fairly leading role. This is probably due to a number of factors:
3.1.2 Action planThe electronics panel got off to a difficult start, frequently discussing its purposes and objectives. However, the product panel relatively quickly drew up an action plan, which several of the panel members interviewed considered very ambitious. The 1999 action plan listed a number of activities addressing communication with external players and panel work marketing. At the request of the electronics panel, initiatives were taken in 1999:
A contemplated study on alternatives to brominated flame retardants in electronics products was not implemented because of a lack of applications. Since then, this problem has been reconsidered through a large-scale initiative to substitute unnecessary chemicals. At the turn of 1999/2000, the electronics panel was facing a crisis, with some panel members believing that the panel had moved in a direction unsupported by the panel members workplaces. The first chairman also decided to resign and leave the panel, and the Danish EPA had to manage the panel until a new chairman had been found. The Danish EPA chose an outside person to chair the panel, the new chairmans first job being to reach consensus about a new action plan. The panel found it important to reduce the number of ongoing projects and initiatives and lowered its public profile in order to create a more balanced and consensus-seeking dialogue inside the panel. The new action plan aims to a higher degree to include both short-term and long-term perspectives, meaning that it is generally intended to apply until 2003. According to "Handlingsplan 2000-2003" (Action plan 2000-2003), the overall objective of the electronics panel is to:
The electronics panel has chosen not to delimit its product area and thus, in theory, takes all electric(al) and electronics products into consideration. In making this choice, the electronics panel has not followed the Danish EPAs recommendation that a product panel delimit its product area. In its thematic delimitation, the electronics panel bases its activities on a chain of values consisting of three links: production, sale and disposal. Against this background, the electronics panel has decided to focus on two vertical thematic pillars (technology and sale) as well as two cross-cutting activities (website and international relations). Table 3.1 outlines the electronics panels activities for 2000 and 2001 in relation to these pillars and cross-cutting activities: Table 3.1:
An area receiving little attention in the action plan is eco-labelling. The panel has no consensus about the use of eco-labels and/or environmental declarations. The electronics panel has launched a consumer survey to qualify a discussion and lay down a future strategy in this area. The electronics panel focuses on establishing international contacts in the light of the strong internationalisation occurring in the electronics industry and the huge influence that international legislation has on the industry. 3.1.3 Results and communicationNo single unifying trade association exists in the electronics industry. For this reason, the panel members interviewed are pleased to see the establishment of a systematised forum for dialogue for the industry, which also serves to create contacts and networks between market players along product life cycles. One of the electronics panels greatest achievements is that the environment has now really come on the agenda of the electronics industry. Because of its composition, the electronics panel has primarily become a professional/technical dialogue network. To date, the electronics panel has principally endeavoured to lay a foundation of information by building knowledge, methods and competence in the fields of environmental issues and electronics products. The panel puts particular focus on the supply side and on promoting the development of cleaner electronics products. The panel has taken a string of initiatives to pinpoint important activities in this product area, especially in the field of environmental impacts as seen from a life cycle perspective. The current 2000-2003 action plan reflects the electronics panels teething troubles and consensus-seeking line, the overall objective being so broad that no one can disagree with it. Alternatively, the panel focuses on generating results in the individual projects. The electronics panel widely seems to be involved in implementing activities and projects launched on the basis of action plan recommendations. A progress report and a project article were prepared for 1999, while a project article was drawn up for 2000. On the consumer side, the panel remains fairly inactive since it believes that it lacks the relevant knowledge or tools (such as eco-labels and/or environmental declarations) to make an information campaign successful. Several panel members find that this area should be given high priority in the near future. Rather than demonstrating its presence in the debate on environmental policy, the panel has lowered its public profile. The electronics panels external communication now focuses on marketing its work and disseminating knowledge accumulated through a variety of projects and other activities. The hub of its external communication is a website established and operated by the panel on the basis of its operating budget. The interviews held with the panel members suggest that the electronics industry welcomes having this single point of access to information about environmental issues and electronics. Furthermore, the trade associations have regularly made an effort to inform their members about the panels work and results. The table of the electronics panels activities for 2000 and 2001 shows that communicating information, including disseminating existing knowledge and results of new projects, accounts for a large share of the panels work, even though no actual market for environment-friendly electronics products seems to exist in Denmark as yet. A recent study on green electronics in public procurement (2001) revealed that suppliers of electronics products currently see no appreciable demand for products that are less harmful to the environment. In addition, few electronics products bear the Green Swan logo or the EU flower.4 3.2 The Product Panel for TextilesLike the electronics industry, the textiles and clothing industry in Denmark is highly internationalised. About 80 per cent of all textiles manufactured by Danish producers are exported, while approximately 80 per cent of all textiles sold in Denmark are imported. The Danish textiles industry also largely reflects "the international division of labour", meaning that low-paid workers in other countries carry out the most labour-intensive aspects of textiles production. The sewing industry has thus more or less disappeared in Denmark, whereas design and concept development is flourishing. Recent years have seen further value chain shifts, with an increasing number of shops selling textiles becoming chain retailers. At the same time, a large market for cheap clothing and other textiles has emerged in Denmark, dominated particularly by the large supermarket chains. Demand in the textiles industry differs from that of other industries in that "soft" parameters like fashion trends exert a high degree of influence. Textiles products pose substantial environmental problems throughout their life cycles. From the production of fibres to spinning, knitting, weaving, wet processing and sewing, textiles go through a large number of energy-absorbing processes typically involving the use of many chemicals, etc., that may have an adverse effect on the environment. Furthermore, the international division of labour in the textiles industry typically means that textiles are transported for thousands of kilometres in the course of their product life cycles. The mere use of textiles gives rise to considerable environmental problems linked to the consumption of water, detergents and energy for washing, drying and ironing. On the other hand, textiles are reused to a high degree; charity organisations, for example, ship second-hand textiles to third-world countries. From 1990 to 1997, 30 cleaner technology projects were implemented in the textiles industry under the Danish EPAs Cleaner Technology Subsidy Scheme. This has led to some improvements in production processes, especially in the field of textile wet processing, which accounts for the largest environmental effect during the life cycles of textiles products. Everything considered, the industry has accumulated experience and developed a number of methods and tools that provide a basis for developing and selling cleaner textiles. At the time of the panels inception, a few companies in the textiles industry had already come a long way in developing environment-friendly textiles. In the textiles area, eco-label criteria exist for the European eco-label, the EU flower, and the Nordic eco-label, the Green Swan logo, for a number of textiles. Furthermore, the Danish EPA has drawn up environmental guidelines for professional purchasing/procurement officers in respect of several textiles. So, in many ways, a solid basis of knowledge, tools and competence already seems to exist in the industry. The primary challenge facing the textiles panel is to create a market supply and demand for environment-friendly textiles. 3.2.1 Composition and organisationDuring the period, the number of members sitting on the textiles panel has averaged 20, including representatives of textiles companies, retailers, trade associations, consumer and environmental organisations, designers, laundries as well as public institutions (appendix C lists all members of the textiles panel). According to several panel members, this number is slightly too high. On the other hand, many panel members find that the broad representation and the high number of "angles" are advantages when it comes to obtaining support from external players. The composition of the textiles panel is based on the involvement of important market players, particularly in the retail trade. To a wide extent, the panel has managed to involve persons with some power of decision, whereas many of the panel members have no substantial professional experience in environmental issues. The starting point of the work process has been to reach consensus, and attempts have constantly been made to balance different interests. As one member said: "Thats why it took two years". The composition of the panel seems to have an overweight of commercial interests, but this has not impeded the panels work according to some panel members. Several of them even find that the panels composition has probably strengthened its dynamics. The textiles panel has had an independent secretarial function, performed by a consultant from a private consultancy firm. Several of the panel members interviewed point out the advantages of having a neutral person on the panel to take minutes, draw up proposals and mediate in conflicts and discussions that have reached a deadlock. The members generally commend the way that the Danish EPA handles its role in the panel. The two Danish EPA representatives have remained relatively neutral, and, as the interviews revealed, the textiles panel has not felt itself unduly constricted in its actions by "what is politically impossible". In terms of funding, the textiles panel has been relatively dependent on Danish EPA financial support because no panel members have had the time to submit applications for project funds to the Danish Ministry of Economic and Business Affairs/the Danish Agency for Development of Trade and Industry or the EU. However, the textiles industry has independently funded a knowledge centre. Having fulfilled its primary objective to launch a product range of eco-labelled textiles in early 2001, the textiles panel entered a new phase according to many panel members. In this second phase, the panel has decided to set up work groups to address a number of subareas. Subsequently, the entire panel is to meet a few times a year to revise its action plan and to lay down overall objectives. The individual work groups meet as required. This organisation resembles a board that has set up specific committees. With its new work group organisation, the textiles panel expects to involve new players in its panel work on a regular basis. Several panel members find it important that new members are added to the panel to ensure its renewal. The work groups can thus "test" the commitment of new members before they are appointed to sit on the panel. In the transition to the second phase, the first panel chairman chose to step down, and another panel member has now taken over the chairmanship. 3.2.2 Action planThe textiles panel agreed relatively quickly on an action plan aimed at creating specific results and showing what was practically feasible. Consequently, the panels main objective was to design/develop, produce, market and sell an environment-friendly product range. One key issue engendering some panel debate was the choice of eco-label. The panel members agreed that the product range had to be eco-labelled and that using only one eco-label would best serve the marketing objectives and the interests of consumers. Finally, the textiles panel chose the EU flower, which has won more international recognition than the Green Swan logo. At the same time, the EU flower increases the number of European producers and importers placing environmental demands on Asian and East European suppliers. In 1999, a number of projects were launched at the request of the textiles panel:
According to its action plan, the textiles panel pursues an umbrella strategy where all activities supplement one another and are embedded in an information strategy. All activities improve and support the final introduction of an environment-friendly product range in early 2001. Several of these activities started in 1999 and continued into 2000, meaning that no new projects were launched in 2000. On the other hand, the panel made efforts throughout 2000 to persuade as many textiles producers as possible to use the EU flower. The textiles panels objective to introduce a product range of environment-friendly textiles has widely focused on knowledge dissemination. A great many of the panels activities deal with knowledge dissemination and aim to integrate as many market players as possible for the purpose of introducing an attractive product range of environment-friendly textiles. Probably realising that its members cannot personally perform the key and comprehensive task of supporting these activities, the textiles panel decided to establish a knowledge centre employing one full-time person to handle the task. This knowledge centre is based at TEKO-Center Danmark and is funded by the Federation of Danish Textile and Clothing, a trade association. In addition to the introduction of an eco-labelled product range and the eco-labels information campaign, the textiles panel had three overall target areas in 2001 according to the priority plan of the Environmental Council on Cleaner Products:
The textiles panel will issue a new action plan in the autumn of 2001. 3.2.3 Results and communicationThe textiles panel has done much to promote the development of an actual market for cleaner textiles. As the overall objective of the product panels focuses on the supply side, the panel has concentrated on and tested the eco-labels instrument. The panel has largely used existing instruments and tools, thus emphasising implementation. The panel members interviewed generally agree that the panel has managed to create a well-functioning and relevant dialogue forum along product life cycles in the textiles industry. Furthermore, the textiles panel meets all other specific objectives for establishing product panels as specified in the functional description. This includes the preparation of two annual evaluation reports for 1999 and 2000. Several of the panel members point out that the environment has genuinely come on the industrys agenda, partly as a result of the fieldwork activities undertaken by the knowledge centre and the panel secretariat. The knowledge centre also gives the textiles industry easy access to knowledge, tools and advice concerning environmental issues and textiles. According to one panel member, establishing the panel has really boosted information in the area because the different parties have been able to resolve technically complicated discussions internally in the panel rather than participating in media mudslinging. This makes it easier for consumers to obtain information in this area. From its start to the introduction of a product range in early 2001, the panel helped increase the number of Danish producers using the EU flower on their products from one to eleven. A total of about sixteen retail chains and a number of specialty stores are now selling eco-labelled textiles, a number substantially higher than at the panels start. When introducing its product range, the panel launched a large-scale information campaign for eco-labels, including textile product eco-labels, under the auspices of the Danish EPA. This campaign succeeded in raising consumer awareness of eco-labels, but many panel members find that the sale of eco-labelled textiles remains unsatisfactory. Several of them believe that it will probably take a long time and a good deal of information/marketing efforts to raise general consumer awareness of environmental issues relating to textiles. In future, the panel members expect panel work to spread, thus encouraging producers to manufacture more eco-labelled textiles, for example in the areas of fashion and lifestyle textiles. Furthermore, the members find it important to raise the environmental awareness of a broader group of consumers, not only in Denmark but also internationally. According to one panel member, Danish producers using the EU flower will have an edge on other producers if a similar process is initiated in other countries. 3.3 The Product Panel for Goods TransportUnlike the other two product areas, transporting goods is a service industry involving both production and consumption of services (goods transport). Thus, goods transport does not have the same product life cycles as electronics and textiles products. On the other hand, goods transport is an important element of a products life cycle in most product areas. Road-based transport by lorry accounts for about 75 per cent of domestic goods transport in Denmark (involving loading and unloading within Danish borders). Transport by lorry is quicker and more flexible than transport by ship or train. Typically, this means door-to-door transport. But transport by lorry usually puts more pressure on the environment than transport by ship or train.5 In its work, the goods transport panel has chosen to focus on lorry transport. The lorry transport industry is characterised by many small and a handful of large operators. Following the recent liberalisation of the EU transport market, Danish hauliers are facing increasing competition from outside operators. This is one reason why competition in the transport industry has become relatively intense. The biggest environmental problems involved in lorry transport are CO2 emissions. Transport-industry CO2 emissions continue to rise even though the Danish Government set targets in 1996 to reduce the emissions by 25 per cent in the period until 2030. One environmental challenge facing the lorry transport industry is to increase capacity utilisation to allow the same amount of goods to be transported over as few kilometres as possible. A 1996 analysis of the capacity utilisation of domestic transport in Denmark revealed that only 38 per cent of total capacity was used on average.6 From a product life cycle perspective, goods transport can involve producers and production of such transport means as lorries. Even the design of a lorry affects the environmental impacts of transport services, as does the production of lorries. From 1993 to 1997, the Danish EPA supported five cleaner technology projects in goods transport. The results of these projects in relation to the Product-Oriented Environmental Initiative seem to be limited, however. Transport companies have been involved in the projects to a small degree only, and disseminating information about the projects has had little effect.7 3.3.1 Composition and organisation The goods transport panel numbers thirteen members at present. Several members have resigned during the panels life, so only one transport company is currently represented in the panel. DSB-Gods originally sat on the panel, but chose to cancel its membership following organisational restructuring. On the other hand, the panel boasts several representatives of the trade associations in the transport area as well as representatives of forwarding agents, the trade unions and a number of public institutions. NGOs are no longer represented in the panel (appendix D lists all members of the goods transport panel). Several of the panel members interviewed said that increasing the number of companies participating in the panel could contribute positively to the panels work, just as participation by NGOs could give broader access to environmental issues. According to some members, the transport industry would benefit greatly from having providers, purchasers and authorities sit down at the same table. The same person has performed both the chairmanship and the secretarial duties of the goods transport panel. The Danish EPA has three representatives in the goods transport panel, which also has representatives from the Danish Road Safety and Transport Agency and the Danish Maritime Authority. According to several panel members, many ministerial representatives have influenced the panels work. On the one hand, ministries have contributed environmental knowledge and a general insight into the goods transport area. But coordinating panel activities with three different ministries strategies for goods transport has been difficult. The panel therefore failed to discuss and lay down an action plan for 2000 because the Danish EPA and the Road Safety and Transport Agency announced that they had not agreed on a joint approach in this respect. Subsequently, the 2000 action plan was never reopened for discussion. The Danish Ministry of Transport (the Road Safety and Transport Agency) has set up a goods transport group consisting of different market players, its purpose being to raise awareness of environmental issues in goods transport. According to the members, the work of the goods transport panel has moved rather slowly, with inaction and uncertainty about the aim of the panel being especially prevalent in the first year. Figure 3.1 outlines the target areas, goals and activities of the action plan drawn up for 1999:
Figure 3.1: Other than the objects clause appearing in the functional description of the product panels, the 1999 action plan contains no overall objective for the panels work. The goals address the development of methods and tools capable of promoting the production and sale of cleaner transport services. No goals have thus been set for implementing such methods and tools. On the panels recommendation, the Environmental Council for Cleaner Products allocated funds for three projects in the goods transport area in 1999:
When the action plan was renewed in 2000, the chairman prepared a proposal, following discussions with the Danish EPA, to link the panels work and objectives more closely to the Governments catalogue of instruments, in a wish to bind participants to some overall, specific objectives. But, as mentioned earlier, the goods transport panel did not agree on an action plan for 2002, instead opting to focus on the following two areas:
In close connection with these two areas, the goods transport panel recommended the launch of a project to develop and implement a benchmarking system for road transport (in continuation of the preliminary project started in 1999). The 2001 action plan resembles a brief activity plan. Thus, it has no overall objectives. Instead, it outlines a number of panel activities:
All these activities are already underway with the exception of information activities, which are likely to commence in the second half of 2001. Unlike in the action plan for 1999, where one target area focused on the implementation of existing tools, implementation seems to have become a secondary element in the panels work. 3.3.3 Results and communication At present, the goods transport panel cannot present many results. The panel members are pleased with the dialogue forum and the better contact established between the industry and the authorities. Several members also state that the panels results should be assessed in a long-term perspective since its priority so far has been to develop methods and information systems that include the environmental impacts of goods transport in, say, green accounts, environmental management and benchmarking systems for the purpose of establishing a knowledge base accessible to all players. The results of this development work are only now emerging, for example in the form of a calculation tool for international transport and green purchasing guidelines. All panel members interviewed agree that, if this is the panels aim, then its project and tool orientation has worked well. In this context, the panel has also helped provide an overview of the area, according to its members. So far, the panel has deliberately made communication a low priority, simply because it has no results to communicate to the outside world as yet. However, in the second half of 2001, the panel expects to adopt a plan based on a web portal for communicating the results of the panels work to other interested parties in this area. 3.4 Product panels and formal frameworkThe product panel experiment was launched in 1998, following a deliberate strategy of making each product panel responsible, to a wide extent, for defining its own framework. So this serves to limit the number of requirements and objectives capable of curbing the panels activities. Even so, this evaluation report is still meant to assess whether the product panels presently meet the formal framework requirements applicable to them. Table 3.2 outlines the formal framework, while section 2.1 (Product panel framework) provides further details. Table 3.2:
The textiles panel has focused strongly on the sale of cleaner textiles, boasting the most visible market results in the form of an increasing number of eco-labelled textiles. This is because the textiles panel already had a solid foundation of knowledge, tools and competence in environmental issues at the outset. The textiles panel appears to meet all formal framework requirements although not all members of the panel have substantial technical experience. At present, the goods transport panel cannot present many results. It focuses on building knowledge, methods and competence at the development stage. To date, the goods transport panel has given knowledge dissemination a low priority, precisely because there are few results to disseminate as yet. As to its formal framework, the panel has failed to use the action plans adequately as management tools and has published no progress reports on its work. The product life cycle approach has proved difficult to reflect in the panels composition, and the question is whether its current composition represents all significant market players in the goods transport industry.
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