Miljøprojekt, 1063/2006 - Integrated Supply Chain Information

Both EMAS and the EU Eco-label focus on continuous improvement of the environmental performance of the company and its products. In this chapter it is analysed how companies can profit from having both an EMAS registration and an Eco-label license and how synergies between EMAS and the EU-Eco-label scheme can be further developed to achieve a more intelligent integration.

A study concerning similar issues ^[5] was carried out in 2002 using tourist accommodation and printing paper as cases. In the text box below a brief summary of the study is given.

Summary of an earlier study

The study included interviews with the companies and organisations on the potential synergy and interaction between the EU Eco-label and the EMAS regulations on the operational, performance and marketing level and if there are any barriers for that synergy to be established. The study was limited to two sectors - namely the services from hotels and youth hostels and production of printed matters. These two sectors were chosen because they have experience with both schemes. The study gave a clear picture of how the participants work with the two schemes. They have integrated the two schemes in the daily routines as far as possible. EMAS serves as an instrument to ensure that the correct data are collected and ensure continuous improvements. The Eco-label criteria document is the instrument that helps companies identify significant environmental aspects and set the target for improvements.

Many possible synergies were found at company level, and several recommenddations were made to improve the synergies between the schemes especially at administrative and verification level. According to the interviewed, the administrators of the schemes do not always see the same synergies and are not willing to accept an integrated approach.
The general impression of the schemes is that they are appropriate but implemented in an inappropriate manner and promoted much too weakly. There is a marked wish for a joint verification process and a less bureaucratic process. Several of the interviewed have ideas as to how the schemes can be further developed.

The interviewed companies also reported, that their stakeholders either do not know or have misunderstood the concepts. Some have not understood that the concepts are to reward "the best in the class" and thereby direct product and technology development in an environmentally sound direction through the market forces. Another often met misunderstanding is the concept of the environmental impact of a product. It is not understood that the concept includes environmental impact of the product in the entire life cycle and not just the environmental impact of the final product.

The present study extends the former study with 2 additional case-areas: Textiles and paint & varnish producers.

In both sectors several companies have experience in EMAS and a number of companies have also one or more licenses for the EU Eco-label.

EMAS and the EU Eco-label scheme have the same overall objective, which is to reduce pollution and to help the front-runners, who want to go beyond the regulatory demands to obtain a competitive advantage, but the approach of the schemes is in the outline completely different.

EMAS requires that organisations set up a management system including targets for continual improvements but without specific environmental performance requirements, such as emission limit values. In EMAS, the organisations set their own performance level.

The eco-label requires organisations to meet specific environmental performance requirements set by an independent third party. The requirements of the products are intended to leave only 30% of the products capable of complying with the requirements. The EU eco-label includes no requirements for a complete and certified management system, but some criteria documents require elements or parts of an Environmental Management System.

In the following, a short introduction to EU Eco-label criteria on textile and paint & varnishes is given including relations to the EMAS requirements.

5.2 The textile industry

In Europe, there are 49 textile companies registered in EMAS and 55 textile products holding the EU Eco-label. The sector has also several other labels and declarations used for environmental claim, for instance Öko-tex. This shows a sector for which the environmental profile of the company has been and still is an important factor in the general management of these companies. It shows an interest in environmentally sound products in the market place, although the environmental factor is never the only and decisive factor in the strategic and market related decisions.

Due to this, many companies in this sector have experiences with both EMAS and an eco-label and they are able to identify areas at both operational and strategic level. They can tell where synergies exist and could be further exploited and what the potential barriers might be.

5.2.1 The EU Eco-label textile criteria document

In the criteria document there are several criteria, and the specific assessment and verification requirements are indicated within each criterion. Where the applicant must provide declarations, documentation, test reports, or other evidence to show compliance with the criteria, the documents states where these should originate.

As part of the introduction to the criteria document it is said: “The Competent Bodies are recommended to take into account the implementation of recognised environmental management schemes, such as EMAS or ISO 14001, when assessing applications and monitoring compliance with the criteria”. This recommendation is not mentioned and developed further throughout the document. However, for a company marketing products with and without eco-labelling several sets of documentation are required, and it would not be possible to manage all requirements without some kind of management system.

As a help to the applicant the competent bodies have developed a common user manual and an application form available from the EU Eco-label homepage. The purpose of the Users Manual is to describe the requirements in form of data and documentation to be compiled by the applicant in order to apply for the EU Eco-label for textiles. In addition, the manual describes the requirements for demonstrating continued compliance once the label has been granted. From this document, the applicant will get an impression of the kind of (quality) management system it would be appropriate to establish in order to secure that for instance the correct environmental impacts are controlled and that control of documents is in place. However, there are no specific requirements concerning an environmental management system.

The criteria document is based on a background report from 2002, which evaluate the various environmental impacts in relation to available technology. This is valuable reading for companies interested in possibilities for environmental performance improvement.

The criteria document is based on a life cycle assessment and covers what the experts and competent bodies agreed on as being the most significant aspects for environmental improvements (for a given time period). The performance level is set with respects to what is technologically and economically viable. Other environmental aspects are left out. This is how the criteria development works in general; it is not a specific issue for the textile product group.

The criteria are divided into three main categories concerning textile fibres, processes and chemicals, and fitness for use. In each of the three main categories there are several requirements to be met and documented that they are met.

There are also limitations of the use of substances harmful for the environment in the production, use and end of life of the textiles. There are for example limitations in the level of impurities, limitations in the level of pigments, limits for formaldehyde, heavy metals, PAH and COD in wet-processing.

This means that the Eco-label applicant or holder must ask for different declarations and test reports from his suppliers ensuring that one or more criteria are met. But the applicant will not necessarily get the actual data, which may be used for an Environmental Product Declaration, Product Oriented Environmental Management System (POEMS) or LCA based product development in general.

5.3 The paint and varnish Industry

The paint and varnish industry is facing a challenge from the consumer who is increasingly aware of the health and environmental risk from the use and disposal of the products.

On the research and development front, the emergence of the public environmental debate has been central in pushing manufacturers towards producing more environmental compliant products. This product group is therefore among those with the highest number of licences.

The product group comprises indoor decorative paints and varnishes, wood stains and related products for use by do-it-yourself and professional users. (Criteria document, Article 2)

5.3.1 The indoor paint and varnish criteria in the EU Eco-label

Paint is defined as a pigmented coating material, in liquid or in paste or powder form which when applied to a substrate, forms an opaque film having protective, decorative or specific technical properties.

Varnish is defined as a clear coating material which when applied to a substrate forms a solid transparent film having protective, decorative or specific technical qualities.

The criteria have been established based on lifecycle evaluations of 11 paints with the purpose of identifying the greatest potentials for environmental impact. The eleven products selected are considered to be a typical selection of paints and varnishes on the market. They are however, from Germany and Denmark only. Based on these evaluations, the criteria have been established at levels that take into account both the environment and the industry. The life cycle evaluation was performed in 1991 and has not been updated since. This seems very inadequate in relation to the technology innovations during the last 14 years

The criteria for indoor paints and varnishes are divided into 8 main categories:

In each of the main categories there are several requirements to be met and it must be documented that they are met. The applicant must provide a declaration of compliance for each criterion.

The ecological criteria define limitations of substances harmful for environment and health e.g.:

These criteria are in detail and form very similar to the criteria in the textile criteria document. The applicant is recommended to take into account the implementation of recognised environmental management schemes, such as EMAS or ISO 14001. It also means that the applicant or holder must ask for different declarations and test reports from his suppliers. And again the applicant will not necessarily receive the actual data.

As a support to the applicant the competent bodies have developed a common application package and user manual available from the EU Eco-label homepage. It includes application forms and declaration sheets, which the applicant may use to prove that the criteria are met. There is no guidance on how to obtain the information and declarations from the suppliers and there is no reference to EMAS or ISO 14001 as a management tool, which could be used to meet the criteria.

5.3.2 Interview with Danish textile and paint and varnished producers

Eight Danish textile and paint and varnish industries having obtained both EMAS (or ISO 14001) and one or more eco-label license have been interviewed. The person interviewed was the environmental manager of the company.

The textile companies are SME's with both EMAS and eco-label certificates. There are no Danish EMAS registered paint and varnishes companies, but many have ISO 14001. These companies differ from the textile industries in terms of how they use their environmental profile in the market and how they use the ISO 14001 and the Eco-label. It is in general bigger companies delegating the environmental work to different people. As an example, the production manager of one of the companies is responsible for ISO 14001, the marketing director is responsible for the EU Eco-Label license and the laboratory manager is responsible for the tests and declarations required.

Especially for the textile companies the synergies are obvious, because all environmental responsibilities are placed at only one manager. Their general conclusion is that the combination of EMAS and the EU Eco-label has improved the effect of both EMAS and the Eco-label. They find that EMAS gives management procedure, discipline and documentation and ensure continual improvement of performance – The label criteria identify the level of environmental performance. It is applicable working tools inside the company and gives credibility outside the company.

When the companies regularly are reviewing their list of significant environmental aspects according to EMAS requirements, one of the tools is the EU Eco-label criteria document. The criteria document is based on international expertise and together with other literature and experts assessments it gives a credible view of which significant aspects to pinpoint. But the criteria document does not cover all possible environmental aspects. BREF documents may be another option for inspiration but these documents are not widely used.

The criteria document can be used for setting targets in the period of time – until the companies have a renewed license for the label and the criteria are met. In the application process for the Eco-label, one of the companies made this objective a target in EMAS. For this company, the next target in EMAS in relation to the Eco-label license could be to extend the Eco-label to more product groups or to meet new requirement in the next set of criteria, when they are revised.

The company also identifies environmental targets in EMAS other than those included in the Eco-label criteria. Most of the criteria in the Eco-label are not related to the company itself, but to the suppliers.

Another company mentioned that for instance an EMS target could be to phase out the chemical APEO, which is also required in the Eco-label. But as an EMS target, it could cover all products, not only the licensed ones.

The suppliers are very different – some are at a very high level of environmental performance, others are in a learning process. One of the companies had a procedure for supplier assessment as part of their EMAS. The suppliers are sometimes audited up against the criteria document or the criteria document is used as a tool in the knowledge transfer from the company to the suppliers. The company is demanding that the supplier carries the burden of documentation - now and then after an initial learning process.

Many companies are using their environmental management system to manage both a product label and the eco-label. This means that documentation from suppliers is controlled through their EMAS/ISO 14001 system. For those companies who had a management system in place at the time they began to prepare for the application of the EU Eco-label, they were able to use the existing procedures and routines. At that time they needed general advice in the Eco-label user manual on how to build up a documentation system. It would also help if all company's suppliers and verifiers had the same reference guidance manual.

The general experience of the companies is, that the dialogue with the suppliers has been extended when working with the Eco-label application, and at this stage the synergy between the two schemes is most evident. The collection of data not only at the site, but in the whole product chain has overlapping tasks in EMAS II and the Eco-label.

Also for the verification and certification process the synergies are very evident. Both the EMAS verifier and the Eco-label controller are looking for the same information and documentation in relation to supplier management. It would be less time consuming both in relation to preparation of the visits and the visits themselves if both verifications could be made at the same time.

Several of the interviewed companies underlined that they are not interested in a complete integration of the two schemes. EMAS allows the company to have a broader view on its environmental aspects while the Eco-label is narrowed to the selected environmental aspects. The Eco-label on the other hand allows the company to focus on a selected product category– not the whole variety of product – for instance only the products made from cotton – not the products made from polyester.

5.4 Synergies of EMAS and Eco-label

Based on both the present and the former study it can be concluded that EMAS and the Eco-label, as tools are very helpful to the organisations for their internal environmental work. Most organisations using both tools find that the combined use creates synergy.

Both schemes require that the participant collects data on environmental performance. In EMAS, the participants must identify its significant environmental aspects and set up criteria for how these were identified. The criteria document as well as the background analysis for the criteria identifies several aspects, which may be significant aspects for any company in the related supply chain and therefore help the EMAS companies identify the significant aspects.

Also the emission limits stated in the criteria documents could assist the EMAS company regarding objectives and targets. As the emission limits are proposed by experts and adopted by authority, the credibility is high. They are valuable bench markers, as they are selected in a way that only the best can meet them.

EMAS helps eco-label applicants with documentation and supply chain management

EMAS management system may likewise help the eco-label holding company in managing all documentation and measurements required to meet the eco-label criteria.

EMAS also set requirement for how the company may communicate with its suppliers. A procedure for supply chain management will also help the Eco-label applicant.

It is well-known that the criteria documents for each product group in the Eco-label scheme are not made from the same template and vary a lot in structure and level of detail in the description of the single criterion.

For some product groups there are examples of EMAS and Eco-labels setting the same requirement for the same issues. The requirement might not be expressed in the same wording, but there is a clear correspondence and overlap. For example several criteria documents have requirements for controlling procedures and training or awareness among employees.

Similarities in requirements of EMAS and the Eco-label - example from printing industry and printed matters

EMAS and eco labels set requirement for the same issues, but at different levels of detail. This is illustrated by the following examples of the demands made on the suppliers:

EMAS I-A.4.6:
"Ensures that activities are carried out under specified conditions by establishing and maintaining procedures related to the identifiable significant environmental aspects of goods and services used by the organisation and communicating relevant procedures and requirements to suppliers and contractors."
EMAS Annex XI 6.3:
"The organisations should endeavour to ensure that the suppliers and those acting on the organisations' behalf comply with the organisations' environmental policy within the remit of the activities carried out in the contract."
Extracts from the Nordic Swan label criteria on printed matters:
"Documentation requirement: 1) Certificate from the manufacturers/supplier of plastics (e.g. specification of plastics) that the plastic present in the printed matter (e.g. lamination) does not contain chlorine or phthalates. 2) Certificate from the license applicant stating that no metal dyes or foil printing is present in the printed matter (exception on book covers, binders, folders and official documents). 3) Certificate from the license applicant stating that no carbon papers are present in the printed matter. 4) Certificate or technical specification from the manufacturer/supplier of plastics that plastics used in packaging (also tapes and plastic foils) does not contain chlorine or phthalates."

For some product groups, there is a complete overlap in requirements. These are found in service oriented product groups e.g. in the tourist accommodation sector.

More and more criteria documents are referring to elements of an environmental management system as helpful for complying with Eco-label criteria. EMAS does not yet have the same recommendation although the product dimension is included in EMAS II. EMAS has a set of guidelines on several issues of building up a management system, but still not a guide on how to incorporate the product dimension. Here a useful reference to the EU-Eco-label should be made.

Table 5 shows some examples of links between EMAS and Eco-label requirements as they are presented in the regulations, criteria documents and other guidance.

Table 5 Links between EMAS requirements and criteria in four criteria document in the EU Eco-label and the Nordic Swan label

All the interviewed companies were interested in an integrated verification process, especially the SMEs. In the SMEs, often one single person is in charge of and carries out all the work in relation to environmental management, including dialogue with authorities, application for Eco-label, internal audits etc. When it comes to verification, the authorities, the Eco-label verifier and the EMAS verifier have their site visit at different times and the environmental manager must prepare each meeting individually although they are looking for more or less the same issues and the same documentation. This question is further discussed in section 8.3.

[5]Possible interaction and synergy between environmental management systems and Eco-labels. Report presented at IPP authority informal meeting in Copenhagen, Valør & Tinge, 2002