The aspects emphasised within each particular group of stakeholders are modelled along the following lines:

	Who is the stakeholder?
	How can the stakeholder influence the development and marketing of products with improved environmental properties?
	What is the visible consequence for the product initiative?

The following national and international stakeholders will be treated:

A. Know-how suppliers
B. The financial sector
C. Counties and municipalities
D. The government sector
E. Multinational manufacturers
F. Other nation states
G. The European Commission

A. Know-how suppliers

Knowledge is decisive to several aspects of the various stakeholders' potential to contribute to the development and marketing of products with improved environmental properties. All stakeholders who work on the environmental properties of products accumulate knowledge of significance to such efforts.

Given the limited internal knowledge-building resources available to manufacturers, businesses and consumers, the knowledge generated in the environment surrounding the stakeholders and the dissemination of that knowledge are prerequisites to their ability to take adequate action in terms of their own interests in product-orientated environmental initiatives.

The groups of stakeholders considered under the heading of know-how suppliers are those whose chief importance to product initiatives is their development and procurement of the knowledge disseminated to professional as well as private knowledge-users. It is thus a highly varied group, spanning universities to daily newspapers, and one that cannot possibly be treated as a single entity with an eye to reaching an in-depth understanding of its conditions and activities. This section discusses the most important suppliers and disseminators of knowledge whereas Chapter 7 will describe specific knowledge dissemination efforts, present and future.

The group of know-how suppliers includes:

	Research and educational establishments
	Consultants
	The media

	Research and educational establishments Universities and sectorial research establishments Universities and sectorial research establishments receive a significant portion of public financing, and their operating parameters are largely defined by the relevant ministerial departments. Researchers focus on the development of their subject areas "proper" through the procurement of new knowledge in dialogue with other (international) researchers as well as, potentially, the primary users (from the business community) of knowledge in the area, who in some cases also contribute to financing certain activities. The results of publicly financed work usually become public domain. The universities, sectorial research establishments and trade-related centres of expertise also act as disseminators of knowledge by virtue of their basic-level teaching and further education of the labour force involved in product-related work. These institutions also offer consultancy in connection with other stakeholders' specific assignments. Private research institutions Certain trades (e.g. butchers/meat processing plants) fund their own research institutions or know-how centres. This model makes it possible to make rather more effective use of the resources spent on research and development by businesses in the sector - also in relation to the efforts of the sector on the international market. The research results of these institutions are publicly available to the extent determined by those funding the activity.
	Consultants Private consultants Private consultants are both producers and disseminators of knowledge. The development and dissemination of knowledge by consultants is usually associated with specific client-defined assignments, and dissemination of the knowledge generated depends on the interests of the client. Publicly funded consultants The technological service system both develops and disseminates knowledge. This is publicly funded in part. It comprises both accredited technological service institutes such as DTI Environment, the Danish Academy of Technical Sciences (ATV) and dk-TEKNIK, which carries out consultancy and development projects for public and private clients, as well as local Technology and Information Centres (TIC), whose task is to advise small and medium-size businesses, e.g. by acting as guides to the additional consultancy available from the remaining GTS network (GTS - Approved Technological Service institutes).
	The media Trade journals The journals and newsletters of trade and other interest organisations generally enjoy high credibility with members and have a good background knowledge of the people receiving the knowledge to be disseminated. Moreover, they are able to use their narrow target group as a baseline on which to "tailor" information, avoiding irrelevant information. Specialised environmental media An example of an environmentally specialised disseminator is the Data Sheets from "Green Information"; funded by public means, this disseminates environmental information to the consumers. Daily newspapers etc. For all stakeholders, the general media - such as newspapers, television etc. - are the most significant vehicles of background knowledge on business and environmental issues. Together, they reach all the stakeholders and actually determine the proportion of knowledge acquisition not actively sought by the stakeholder himself. Thus, they are important partners in getting out to many stakeholders or in reaching stakeholders not accessible through other more specialised media. Conditions and potential for influencing the environmental impact of products Weak knowledge production The Danish research institutions make a handsome contribution to the general expansion of environmental knowledge in the natural sciences. But in specific areas - the development of products with less environmental impact and methods for systematically taking on board environmental considerations in product development - the research institutions contribute markedly less. Today, the research institution where the most significant efforts within the environmental assessment of products takes place is the Technical University of Denmark (DTU). The "Development of environmentally-friendly industrial products" project represents the first step in this area. Behavioural scientific insight into what moves the various stakeholders to implement product-orientated environmental initiatives and how the government might influence such conditions is an area where the production of knowledge is very scanty. Within the field of sociological environmental research and under the auspices of CeSaM [3], it has been attempted to integrate a series of disciplines with a view to attaining a greater understanding of the conditions governing the use and effectiveness of various means for any given behaviour, as well as a knowledge of the actual implementation of environmental policies. However, the Centre has not related its efforts specifically to the environmental impact of products. Moreover, work is being carried out in a series of other sociological research environments on various elements of the problem sketched above. Limited knowledge on the part of know-how suppliers Professional and specialist knowledge disseminators today have considerable insight into environmental conditions and technologies in general as well as some insight specifically relevant to work on the environmental properties of products. They usually have access only to the knowledge they themselves develop, along with publicly available knowledge. As there are very large areas of product areas that are not yet publicly accessible, the professional know-how suppliers' potential is correspondingly limited, of course. The general know-how disseminators such as the media etc. - with the exception of certain journalists - are weak on environmental, technological and commercial knowledge. They are generally unknowledgeable about specific aspects of the environmental properties of products. The knowledge they are desired to disseminate must therefore be supplied in a form that is comprehensible to them and ready to use in their editorial line. Consequences for product initiatives It is important to involve the know-how disseminators and producers in a dialogue about the way product initiatives are organised; partly to incorporate the knowledge each party represents, but also to ensure their active support for further efforts. Public funding is decisive for the production of publicly accessible knowledge and for the production of knowledge which there is no commercial interest in generating. In the context of overall research policy - including that of the strategic environmental research programme - thought must be given to whether it is possible to consolidate the production of that knowledge which is particularly relevant to product initiatives. Thefeasibility of setting up a know-how centre should be considered - possibly one without walls - to gather information on environmentally oriented product development and marketing of products with improved environmental properties etc. A media strategy should be devised, to include the supply of knowledge to the media, so as to support their dissemination of information related to product initiatives. B. The financial sector The development and marketing of products with improved environmental properties is dependent on capital supplied largely by the financial sector. The co-operation of the sector is therefore an important factor in product initiatives. And indeed, recent developments in the interest of the financial sector in general environmental issues augur well for positive collaboration. The financial sector comprises approx. 1,000 businesses of various size and can be divided roughly into three separate function groups, namely investors, lenders and insurance companies /1/. The three function groups participate with the rest of the business community in financing and consulting businesses in different ways and with different objectives. Investors There are a great number of private investors whereas institutional investors are dominated by a handful of large ones. Together, the large institutional investors such as the suprasectorial pension funds, the Danish Labour Market Supplementary Pension Fund (ATP) and the Employees' Capital Pension Fund (LD) administer mammoth assets (DKK 130, 120, and 30bn, respectively). As the main parties interested in funding Danish trade and commerce, they have the opportunity to play a significant role. There are certain pension funds and investment companies that have deliberately focused on developing more environmentally conscious companies, but environmental issues do not form a common feature of the investment assessments of the sector. Lenders There are some 150 Danish financial institutions, but it is a highly concentrated sector. Thus, the two largest banks represent half of the sector with respect to equity and balance-sheet figures. The twelve largest banks represent between 80 and 90%. The financial institutions perform a series of functions in connection with, i.a., savings and value storing, capital lending and banking and payment-handling services. The mortgage credit sector is also characterised by a very concentrated business structure. The four largest institutions thus represent over 90% of the market. Mortgage credit institutions play a well-defined but significant part in financing industrial property but their consultancy function is limited. Insurance companies The insurance sector is also very concentrated. In the sphere of general insurance, the ten largest companies represent over 90% of the balance-sheet figure. The insurance companies play an important role in insuring the securities and assets of the business sector. Claims worth approx. DKK 4bn/year are made good, and in some lines of business such as the automotive trade, these companies are very significant stakeholders and collaborators. Moreover, they furnish not inconsiderable amounts of loans and guarantees to the business community. Conditions and potential for influencing the environmental impact of financial sector products The financial sector has potentially great importance for corporate environmental initiatives. Through investment, lending and consultancy, financial firms can help modify the behaviour of all stakeholders whose accounts they handle. The sector can place stipulations on and/or call into question environmental behaviour/risks, policy and the inclusion of environmental considerations in management and product development. The past three years have seen a tendency to display greater interest in environmental conditions that can threaten the profitability of an investment or loan directly while broader interest in environmental issues with a potentially long-term impact is still to be seen. The challenge in planning product-orientated environmental initiatives lies in realising this potential. Lenders play an important part in relation to small and medium-size businesses, which cannot raise capital by increasing their equity, issuing shares or suchlike. They must therefore obtain financing through borrowing. Likewise, the sector often acts as the only external consultant to small and medium-size businesses and thus plays a central role in communicating the objectives of a product-orientated environmental strategy. The insurance sector plays several roles that may prove useful to the product strategy. The companies insure trade and commerce and therefore have the opportunity to insist on environmental ameliorations. In this context, it is judged that more rigorous and complex environmental legislation will mean that a number of businesses have to cover themselves, as well as needing consultancy on environmental protection and the prevention of environmental damage. The companies can thus function as meaningful consultants for small and medium-size businesses in particular. Finally, insurance companies are large purchasers in certain lines, and as purchasers of goods and services can therefore make demands in respect of environmental properties. Can the financial sector be expected to collaborate? Sectorial support for the strategy is conditional on the assignments of the sector not clashing with the overriding desire to achieve a good return on investments, as well as the wish to avoid losses on loans and insurance. At the same time, it is in the sector's own interest to avoid bad press from, e.g., providing the source of financing for environmentally degrading activities. Parts of the sector can be expected to try and create a positive image by making environmentally justified demands in connection with their services. Institutional investors are normally geared to long-term ownership. The close rapport between investors and company in the case of long-term investments means that investors have an intimate knowledge of the long-term development potential of the company and are interested in ensuring a sufficient financial foundation to guarantee that its developmental potential is fully exploited. Institutional investors can therefore be expected to have a great interest in procuring information on the environmental properties of products and hence on the long-term conditions governing development for the producers in whom they wish to invest. Short-term investors seldom have this kind of knowledge about businesses. As a rule, they will only be interested in environmental issues to the extent that they affect the immediate solvency of the business. Today, companies in the financial sector have a considerable knowledge of business relations and little or no knowledge of environmental factors or the importance such factors may have for the interests of financial concerns. In the area of education, the financial sector is characterised by being fairly isolated from other sectors of society. The financial institutions have their own educational system (the Finance, Education and Training Programme and Banking Diploma studies), and many from the sector are also pursuing advanced degrees in commerce (HD). Generally speaking, it is problematic that the educational system in the financial sector focuses on concrete banking affairs and only to a lesser degree on more general business relations - including environmental issues. The sector is poorly equipped to evaluate innovative projects, the emphasis being on more traditional financial criteria. Thus, social developments that could turn an innovation into a financially sound idea are not taken into consideration. The education and further training of employees in the insurance sector takes place mainly at the Danish Institute of Insurance Education, which is an independent, non-profit institution. The current training programme for financial and investment personnel does not touch on environmental issues. During the round-table discussions, the representatives of the financial sector expressed the view that their companies are not competent to provide appraisals or consultancy on environmental issues. There is, then, a great need to develop tools that will allow some environmental angle to be included. The further development of green accounting focused on products will surely contribute to the future inclusion of environmental data on products in the standard information required for decision-making related to investments/lending etc. Consequences for product initiatives It has been difficult to obtain the desired degree of financing for new projects - e.g. product development - from parts of the business community, especially the small and medium-size businesses. It is therefore important for the product strategy to contain elements that guarantee businesses wishing to develop and introduce products with improved environmental properties access to financing. Tools must be created to reduce the risks of the financial sector in such projects. The support of the financial sector for product activities requires a positive correlation between the product activities of the companies and their ability to honour their commitments to investors and lenders. It is important that the financial sector should be able to acquire the necessary competence in environmental issues. This will need to be done primarily in the form of efforts aimed at education and further training within the sector. C. Counties and municipalities Taking a number of their functions as a basis, the counties and municipalities can make a positive contribution to product-orientated environmental efforts. This is particularly true of the following activities: The production of welfare services and supplies The authorities' efforts pursuant to the legislation on environmental protection and planning Work on local Agenda 21 and other similar initiatives. Production of welfare services and supplies In terms of both finances and employment, the counties and municipalities contribute greatly to the local communities. Counties and municipalities are the dominant stakeholders in relation to the production of welfare services as the bulk of services within the social sphere as well as education and health are handled by the local authorities. The goods purchased by counties and municipalities in the welfare services field total more than DKK 30bn a year, making them a very significant buyer in combination. Purchases consist of more or less standardised products such as foodstuffs and furniture etc. as well as specialised equipment, particularly within the health sector. In supply terms, the counties handle operational and planning projects for the areas of roads, sewage and waste disposal. To a certain extent, the execution of projects in these areas is farmed out to municipal partnerships or private businesses. In the water, heat, gas and power field, supplies are provided to a greater degree by independent suppliers, though in many cases they are influenced by municipal interests. The county supply services include the road network and a series of planning projects, particularly in the area of water supply. Environmentally, these supply projects are of considerable importance. The field of waste and sewage disposal, especially, requires distinct attention as planning in these areas is decisive to the disposal phase of virtually all products. Efforts in this area are treated separately in the Industrial Waste Strategy, the Wastewater Report and the Domestic Waste Plans. Urban renewal and all publicly subsidised construction projects are another area in which the counties play a particularly important role, and one where they can exercise great influence on product choice and project implementation by laying down project conditions. Conditions and potential Taking the large purchasing volume of the counties and municipalities into consideration, they comprise a major cornerstone in the development of green public procurement policy. In this connection, it is imperative that they be provided with sufficient environmental information to enable them to make qualified choices in purchasing situations. In order to create a link between budgetary accountability and consumption, i.a., many counties and municipalities have recently decentralised purchasing from central buying functions to individual decentralised institutions. This decentralisation often entails a lesser degree of specialisation for the purchasing function; all other things being equal, that makes greater demands in terms of the availability of environmental information. When it comes to motivating individual institutions, one of the important factors in this context is the need for local authorities to communicate clear political signals and financial guidelines regarding environmental priority-setting in connection with purchasing. When purchasing specialised equipment within the health sector, e.g., there is relatively close collaboration between producer and buyer. As an extension of this, it is possible to identify a definite potential for the implementation of development contracts with environmental dimensions. Similar conditions apply to the supply area in which many of the orders - within the parameters of the EU Public Procurement Directive - are likewise placed in close collaboration with manufacturers. In public-sector terms, Indkøbs Service A/S is a significant stakeholder as a negotiator of purchasing agreements. Indkøbs Service A/S may eventually play an important role as a trend-setting purchaser positioned at the leading edge with regard to articulating demands in terms of the documentation needed for the environmental properties of the products. The stipulation of general environmental demands in connection with suppliers' purchasing and utilisation of various kinds of product has a clear and unambiguous effect on subcontractors, owing to the status of these enterprises as sole customers. This is true, for example, in the production of asphalt of which counties and municipalities are far and away the principal customers. This market situation is reinforced by the fact that the counties are part-owners of one of the production companies in the area. In relation to waste and sewage disposal, there is also some potential for creating differential rates and payment structures. That potential may motivate the use of products with a lesser environmental impact. Demands concerning product assortment and environmental management in publicly subsidised construction projects will be of great significance to product development throughout the construction field. During round-table discussions, support was voiced on the part of the counties for including environmental issues in all county activities to a greater extent - especially in the operation of supply companies. The authoritative role of counties and municipalities The responsibilities of counties and municipalities as environmental authorities in their dealings with the corporate and agricultural sectors centre around regulating the environmental load generated by businesses during the production phase of product life-cycles by means of the conditions stipulated in environmental approvals, directives etc. Added to this are the general provisions laid down by the counties in regulations and guidelines, usually aimed at regulating the disposal phase. In connection with the exercise of the authorities' functions, these are often supplemented with various forms of informative instruments. Conditions and potential In terms of reducing the environmental impact of the manufacturing phase, the counties and municipalities will continue to play a major part by regulating direct emissions and through their dialogue with companies on the utilisation of the cleanest technology possible. In the broader sense, the informative instruments are one of the primary means available to counties and municipalities with respect to a product-orientated environmental strategy. The xenobiotic substances found in the sludge from a sewage disposal plant will largely have been bought and used in the area surrounding the plant by residents or public and private businesses. Thus, local action can have a clearly visible effect on local environmental conditions. With information campaigns and other Agenda 21 activities at local level - targeting businesses and individuals alike - it is possible to focus on the use of specific products at the root of local environmental problems related to, e.g., the spreading of sludge, recycling of waste products or the recovery of clean drinking-water. At the round-table discussions, the counties and municipalities expressed a great and positive wish to help inform businesses about the basics of product life-cycle assessment and to make active use of these basics in the dialogue with the businesses. Consequences for the product initiative It is important to actively involve counties and municipalities in product-orientated environmental initiatives in their capacity as suppliers, environmental authorities and initiators in business promotion and Agenda 21 activities. Political and financial support will be required to actually activate the potential inherent in taking the environment on board in local authority purchasing. Moreover, increasing the use of less environmentally damaging products in the fields of supplies and social services requires a generally higher level of knowledge as to which products have less of an impact. In relation to the purchase of standard goods, the emphasis needs to be on user-friendly purchasing guidelines for institutions etc. In relation to the purchase of specialised goods, the emphasis needs to be on the buyers' general level of knowledge and on implementing development contracts for less environmentally degrading products. In relation to local use of a series of products containing environmentally burdensome substances that entail problems for waste and sewage plants, the municipality can play an active informative role by seeking to reduce local use of such substances. Dialogue should be initiated on ways in which urban renewal and publicly subsidised development projects can increase the inclusion of environmental considerations in planning, product choice, execution and management. D. The government sector Naturally enough, the product-orientated environmental strategy takes its point of departure in the Danish Ministry for Environment and Energy's purview. Other segments of the government sector also have a strong influence on the parameters governing product development and consumption, however, and therefore play a significant part in creating incentives for increased development and the use of less environmentally harmful products. In relation to consumers, the government exercises rather less influence over the conditions on which consumers purchase less environmentally burdensome goods. Integrating the product-orientated environmental strategy with the policies of the other sectors is therefore of great importance, as this will ensure that environmental considerations form a major constituent of those sector policies that influence the development and use of less environmentally damaging products. There is a certain, albeit limited degree of co-ordination between different initiatives today, and activities that appear uncoordinated or actually contradictory are regularly criticised. Purchases of materials for large infrastructure projects, so frequently highlighted, might be mentioned - with varying degrees of justification - as an example of a public purchasing policy that fails to take the environment into consideration. Further to this, the Danish EPA has examined other areas of activity within the Ministry for Environment and Energy as well as questioning other relevant ministries and agencies about ways in which they can contribute to supporting the development and use of less environmentally damaging products. The following section on the government's role as a stakeholder in relation to the product-orientated environmental strategy has been elaborated on the basis of the responses from individual ministries and agencies. The following classifications will be used for the most important governmental control instruments directly influencing the development and use of products: Product-orientated research and development Product regulation and the definition of norms and standards Official consumers information (labelling schemes) Government demand Manpower education and training There is also the fiscal aspect in the shape of government taxes, rates and dues, which naturally comprise a significant parameter, especially as regards the consumption of products. Taxes, rates and dues as a means of promoting cleaner products are not the focus of this report, but are discussed briefly in Section 7.5. It should be noted that the government's sectorial planning and infrastructural investments in the areas of e.g. traffic and telecommunications indirectly influence the production and consumption of products. It lies beyond the scope of the product-orientated environmental strategy to offer a description of these rather indirect means of control. Theaim of the following description is to show on the one hand that extensive and ongoing activities are in progress in many parts of the government sector, and on the other hand to emphasise the need for intensified intersectorial dialogue. The different ideas presented in the paper of various activities and their consequences for the product initiative should be seen as a constructive contribution to these discussions.
	Product-orientated research and development A number of Danish ministries administer schemes that support corporate R&D activities in the product area. These schemes focus on promoting various politico-commercial and/or sector-specific objectives, in part through direct grants and loans to businesses, in part by financing various kinds of R&D-orientated projects and institutions. First and foremost, it is the Ministry for Business and Industry, the Ministry of Agriculture and Fisheries, and the Ministry for Research and Information Technology who are in charge of these activities. The other important stakeholders include the Ministry for Housing and Building, the Ministry for Environment and Energy, and lately also the Ministry for Labour, which - in order to promote certain sector-specific goals - is offering various kinds of support to R&D-related objectives. The Ministry for Business and Industry's schemes can be divided into general business promotion and subsidies to individual companies. General business promotion includes regional commercial development and export promotion. Subsidies to individual companies include support for know-how and quality development projects, start-up assistance for entrepreneurs, "ice-breaker" schemes for small companies, and project support through the Danish Fund for Industrial Growth. Some activities have a certain environmental objective, but by far the majority focus on general commercial promotion. One thing common to all the tools for general commercial promotion is that environmental considerations are only included to a very limited extent in the evaluation of individual projects. Projects or initiatives with environmental dimensions are, however, eligible for support on an equal footing with other marketing, competence and product development projects. Thus, environmental concerns are not factored into the evaluation of the performance of the participating companies or assessed on a par with the financial strength of the applicants or the commercial relevance of the project. The same is true of those companies that are offered financing by the 13 development enterprises which the Danish Agency for Development of Trade and Industry furnishes with guarantee insurance. One exception, though, is the company Miljøudvikling A/S, which specifically targets the environment - including the development of "green products." In liaison with the Danish EPA, the Agency for Development of Trade and Industry manages two schemes that specifically target the environment. One is the programme entitled Miljøstyring og miljørevision i danske virksomheder ("Environmental Management and Auditing in Danish Companies"), which subsidises the work of disseminating environmental management. The second programme, Miljø og arbejdsmiljø i mindre virksomheder ("The Environment and Work Environment in Small Businesses"), grants direct subsidies to environmental activities in small businesses. With regard to more concrete product and process development, the publicly subsidised technological service institutes (the GTS and TIC network) play a significant part, especially for the more traditional production companies that only do a certain amount of product development in-house. As regards strengthening the environmental competence of the GTS network, the Ministry for Business and Industry has established a shared base-subsidy programme for four GTS institutes by the name of Miljøstyring og livscyklusvurdering ("Environmental Management and Life-cycle Assessment"). The Ministry of Agriculture and Fisheries has a series of schemes of relevance to the development of cleaner production technology as well as cleaner products in agriculture. The chief activities take place within the framework of the Danish Product Development Act, the Act on Support for Structural Development in Agriculture and Organic Farming etc., as well as the Act on Support for Small-scale Farming Investments to Improve the Environment etc. Moreover, a general move has been initiated to develop renewable raw materials in a number of areas. There are also a series of smaller subsidy schemes, i.a. for continuing education and consultancy services. From a product-development perspective, it is above all the schemes associated with the Product Development Act that call for attention. This Act is generally intended to promote the development of new agricultural and fishing products. The objectives of the Act do not mention promoting more environmentally sound production, though to a certain extent the Ministry of Agriculture and Fisheries does consider environmentally-orientated projects within the administrative framework of the schemes. Thus, environmentally-orientated projects receive an increased subsidy under the following schemes: "Product Development in Primary Agriculture" "Processing and Refinement of Agricultural and Fishing Products" The Danish R&D Development Programme for Food Technology (FØTEK) is based on interministerial collaboration between the Ministry of Agriculture and Fisheries, the Ministry for Research and Information Technology, the Ministry for Business and Industry, and the Ministry of Education. FØTEK's main aim is to secure and strengthen the position of the Danish food industry by supporting large, resource-intensive research projects with the potential to improve external constraints on the sector. Production methods compatible with the environment or work environment are one of the five areas of activity assigned priority. In collaboration with other relevant ministries, the Ministry for Research and Information Technology manages a series of research and development programmes - including development programmes on biotechnology, materials technology and, as mentioned above, food technology. From a product development angle, the inclusion of environmental considerations in these R&D programmes is particularly important as the results of these programmes may contribute to future product development within the areas involved. As an extension of this, the inclusion of environmental assessments in various subsidised programmes was embodied in the planning of the material technology programme. Preliminary evaluations of the first phase of the programme, however, have shown that only a limited number of environmental assessments have been conducted for subsidised programmes. A series of educational and research institutions and centres are increasingly being encouraged to include environmental considerations in their research programmes. For example, in its new strategy, the Risø National Laboratory plans to assign higher priority to environmental considerations in all programme areas, including those of materials research and plant production. In future, the Danish Technical Research Council also plans to carry out environmental weighting of each research project application. The Ministry for Environment and Energy administers a series of schemes which, to varying degrees, target the development of products with a lesser environmental impact. The role of the Danish Energy Agency in the area of subsidies hinges above all on its management of subsidies to reduce industrial CO2 emissions, subsidies to alternative sources of energy and to the Ministry of Energy's Research Programme (EFP). Moreover, if an agreement is reached on certain energy-conservation investments, the effect of administering the CO2 tax reduction rules will be similar to the impact of the subsidy schemes. In recent years, the Energy Agency has put in much intensive work in the product area, with the EFP, for example, having financed a series of projects targeted at the development of less energy-consuming products. Among other things, the refrigerator with the lowest consumption of energy on the Danish market was developed with support from EFP. In connection with the administration of subsidies, environmental considerations are being integrated on a wide scale. The new "energy ice-breaker" scheme will probably also contribute to a general improvement of competence in the fields of energy and environment in the small businesses targeted by the scheme. Planning and funding of product-related projects are done in collaboration with the Danish EPA. However, there is still scope for further alignment of thinking when it comes to long-term activities. The National Forest and Nature Agency's product development scheme for forestry and the timber industry subsidises development activities within primary forestry, and the processing and refinement of timber and wood-based products. In order to qualify for support, projects must not impact adversely on the environment or the work environment. What is more, a positive environmental impact is considered an asset for subsidy scheme applicants. It should be stressed that the environmental impact is examined at the time of developing new products, e.g. by drawing up a life-cycle assessment. The Danish EPA's product-orientated subsidy schemes include the three programmes under the auspices of the Danish Council for Recycling and Cleaner Technology, under which it is possible to grant subsidies for the development of products less degrading to the environment: Development of cleaner technology, associated with The Action Plan for Cleaner Technology, 1993-1997. Protection of the environment and working environment in small businesses, in which the implementation of measures to protect the environment and working environment in small and medium-size businesses is directly subsidised. Waste disposal and recycling projects associated with The Action Plan for Waste Disposal and Recycling, 1993-1997.
	Cleaner technology Since 1987, the Danish Council for Recycling and Cleaner Technology has subsidised projects aimed at developing and spreading cleaner technology among companies. Within selected industrial areas, the programme has succeeded in developing a series of cleaner technological processes that have been widely implemented in businesses. Activities under the cleaner-technology programme consist of the interaction of projects specifically aimed at technology development, implementation and diffusion on the one hand, and of more general projects concerning the establishment of know-how and methodological bases as well as information on and dissemination of cleaner technologies on the other hand. The current Action Plan for Cleaner Technology, 1993-1997, provides a framework for the cleaner technology programme. Under the aegis of this plan, the focal point shifts from developing cleaner technologies to disseminating and maintaining a strategy for cleaner technology in companies. At the same time, the programme has been reengineered away from developing cleaner technological processes towards developing products that are less damaging to the environment. Up to and including 1995, 638 projects received DKK 537m in subsidies. The focus of activity was the development of cleaner industrial engineering processes in a number of select trades. In a comprehensive external evaluation of activities from 1987 to 1993, activities in the technological development field were commended for being decidedly successful, 80% of the projects having yielded workable processes involving cleaner technology. In relation to other engineering development programmes, this must be considered a relatively high rate of success. Under the current action plan, support to projects falling within the areas of products, materials and chemical substances has increased markedly. Activity in these areas has focused on the development and testing of tools for product LCAs, a key role being played by the EDIP project (Environmental Design of Industrial Products). Moreover, the development of less environmentally degrading products is subsidised by means including the substitution of environmentally damaging materials. Finally, a series of projects to develop eco-labelling criteria and promote public green purchasing policies have also been subsidised. Under this programme, it has not been possible to subsidise more trade policy-orientated initiatives or product documentation, marketing and export promotion. In terms of generally strengthening the trade policy dimension of the product-orientated environmental strategy, these elements should be included in the new scheme, hand in hand with other existing trade policy schemes. The educational and training aspects of developing and implementing cleaner technology and products have been radically de-emphasised under the existing programme. Based on the importance of this area for the continued development of commercial environmental activities, the educational field must be prioritised with a view to establishing special LCA-orientated training and certifying courses. Since, for the most part, the project initiatives in the programme have addressed the methodological and explanatory level, relatively few attempts have been made to combine product innovations with increased market pull. In the new programme, a trade-off of this kind should play an important part.
	Environment and work environment in small businesses 1994 saw the implementation of a programme called "The Environment and Work Environment in Small Businesses", aimed at offering direct subsidies for the introduction of systematic environmental initiatives in small and medium-size companies. The programme was implemented out of a desire to promote the introduction of environmental management in small businesses of this kind so as to spread and maintain the cleaner technology strategy in a large yet - from an environmental strategy angle - weak group of businesses. The programme is based on standardised subsidies granted on objective terms. Projects are based on the appointment of a new employee (possibly as a substitute) for staff working on the project. The highest grant obtainable is DKK 400,000, assuming a self-financing ratio of 50%; otherwise, the criteria follow the minimum rules. To date, project subsidies have been granted to approx. 150 businesses. Over a four-year period, a total of DKK 80m was earmarked; because of the large number of applicants, this has now been almost exhausted. Given the large number of applicants, the positive feedback from the concurrent external evaluation and the results of projects completed to date, it is already possible to conclude that the programme has fulfilled its ambition of disseminating and maintaining the concept of cleaner technology among small businesses. As a consequence of the success of the programme, there are plans to continue it in revised form, supplementing it with a concept to spread the adoption of environmental factors in product development in small and medium-size businesses. In this connection, formalised collaboration on the creation of professional training or a certification course should be put in place, to train personnel to carry out LCA-orientated tasks. These projects must be supplemented with demands for more detailed feedback on the results obtained in the projects, with a view to disseminating those results.
	Waste and recycling Since 1987, the Danish Council for Recycling and Cleaner Technology has subsidised reuse. Until 1993, its funds were primarily spent on start-up grants for various recycling systems. The scheme was revised in 1993, so that only development and demonstration projects are presently subsidised, by analogy with the field of cleaner technology. As indicated in the Action Plan for Waste and Recycling, 1993-1997, the primary objective of the scheme is to subsidise projects aiming to decrease the amount of waste and to reuse materials, as well as those that diminish the impact of residual waste treatment on the environment. Most of the funding of DKK 20m went towards developing various kinds of recycling system. Only a few of the projects subsidised were aimed at creating more recyclable products or modifying products to reduce their impact on the environment during the waste phase. Activities will also target the development of techniques for separating and subsequently reusing product materials etc. In connection with the action plan "Clean Work Environment in the Year 2005," the Ministry for Labour has drawn up 7 overall visions for future work environment initiatives. In support of these visions, a number of specific funds have been earmarked. At present, funds have already been earmarked for Developmental Activities (DUA), and the National Labour Inspection of Denmark feels that money from this fund can be used to co-finance projects of relevance to both the environment and the work environment. Furthermore, a programme has been established in the field of monotonous repetitive work (RSI), targeting small and medium-size businesses. Some decision is expected to be reached on setting up an indoor climate fund. Ongoing discussions in the Standing Co-ordination Committee on the Environment and Work Environment will be used to study ways of reinforcing the collaboration between the various subsidisation schemes. In those of its subsidy schemes that target urban renewal, the Ministry for Housing and Building is increasingly stipulating environmental criteria as a prerequisite to funding. The Ministry for Housing and Building is working to strengthen the environmental dimension of its subsidy schemes. Publicly subsidised construction projects constitute a significant part of total construction and planning activity in Denmark, and the Ministry for Housing and Building's initiative in implementing environmental criteria - including product criteria - is therefore of great importance. In the area of transportation, the Danish Ministry of Transport spends a considerable amount of funds from the traffic pool, earmarked for development and experimentation, on developing methods of transport that are less damaging to the environment. For example, the traffic pool, in collaboration with the Danish EPA, has funded a large project on the use of cleaner fuel in buses. Product policy initiatives In conjunction with the use of public funds for various kinds of product development in the private sector, an environmental assessment of the projects needs to be carried out before any funds are granted. In this way, it will be possible to ensure that public funds are not spent on developing products and processes that are more damaging to the environment. For example, a broad overview of the general environmental factors is needed as well as the energy and work environment factors to be taken into consideration, so that such factors do not end up being counterproductive or obstructive. Many ministries are already implementing environmental criteria in their administration of subsidy and loan schemes. In particular, the Ministry for Housing and Building and largely also the Ministry of Agriculture and Fisheries have included environmental considerations in their product-orientated support schemes. No similar development has taken place to the same extent in the Danish Ministry for Business and Industry, which is one of the largest sources of subsidy and loan-financing schemes. In this connection, it is necessary to initiate a dialogue to promote more systematic environmental assessment of projects resourced through e.g. the Danish Fund for Industrial Growth. Carrying on from this, a variety of user-friendly tools must be developed to carry out environmental screening of such projects. Experience from evaluating R&D programmes shows that if environmental considerations are to be taken on board in research projects, those in charge of funding will need to set aside time and resources to perform such environmental assessments, perhaps using consultants. To ensure the adequate inclusion of environmental considerations in the product and process-orientated part of research, sufficient resources must be earmarked for the project evaluation process in order to carry out the necessary environmental assessments entailed in implementing the project. In the development area, resources should be set aside so that small businesses in particular can obtain qualified consultancy on life-cycle analyses for their products.
	Product regulation and the definition of norms and standards Nationally defined rules and norms for products are increasingly being replaced by international norms and standards, primarily laid down by the EU and CEN/ISO. To varying degrees, individual ministries participate in the negotiation of product standards within the respective relevant areas. For example, the Danish Directorate of Labour Inspection participates in international standardisation activities on a relatively wide scale with a view to ensuring that consideration is given to the work environment. Recognising the importance of standards in the development of less environmentally degrading products, the Ministry for Business and Industry has set aside funds for a continued and strengthened Danish contribution to the inclusion of environmental considerations in international standardisation initiatives. The Danish Energy Agency is particularly in evidence in the area of norms. The Energy Agency has done much work on the introduction of energy conservation norms in various energy- consuming equipment, and in the area of refrigeration and freezers new norms have recently been adopted under the auspices of the EU. However, a good deal of national norms and guidelines are still being drawn up in the product and materials area. This is the case in the area of construction, in particular, when the interest in integrating environmentally cleaner materials is increasingly being implemented in the guidelines elaborated under the auspices of the Ministry for Housing and Building. Product policy initiatives In this connection, it is important to support this development so that environmental considerations are included as a firmly integrated part of the product guidelines and norms elaborated within the relevant areas. Such inclusion must ensure that the rules under no circumstances act to block products that are less damaging to the environment. The ministries are responsible for a series of product and performance standards as well as being the main negotiators of EU directives within their areas of competence. It is crucial for the individual ministries to contribute, as a matter of form, to ensuring that environmental assessments are incorporated directly in the standardisation process. In connection with EU legislation, it is up to the individual ministries to ensure that environmental considerations are embodied in the process of drawing up directives, and that environmental assessments are included as a criterion in any mandates given to CEN.
	Official consumer information (eco-labelling schemes) Publicly accredited consumer information is a significant factor in creating a market for products less damaging to the environment. There are a number of official consumer labelling schemes today in the field of product labelling, from hazard-labelling of chemical products, to eco-labelling of foods. Other environmentally related labelling schemes include the energy labelling scheme, managed by the Danish Energy Agency. In terms of general official consumer information, of course, the National Consumer Agency of Denmark is the primary facilitator. Environmental aspects are increasingly being included in general consumer information from the National Consumer Agency. Product policy initiatives Since knowledge and information concerning the environmental properties of products rank among the central instruments of the product-orientated environmental strategy, continued collaboration with the National Consumer Agency must be strengthened, i.a. through co-ordinated campaigns. Likewise, co-ordination of campaigns is necessary in relation to activities in the field of energy.
	Governmental demand The dominant role of the government sector as a purchaser in a number of product areas opens up significant potential for influence. Initiatives concerning eco-conscious public procurement are described in Section 7.4. The Danish Ministry for Business and Industry's development contracts are another way of influencing product development through demand. Since 1994, development contracts have been used as a hands-on tool to enhance collaboration between businesses and public institutions while making public demand more quality conscious. The scheme enables public institutions to cover the extra expense of entering into agreements with private companies on the delivery of a new product or service. The public party to a development contract - a hospital, for example - is reimbursed for the extra expense it is incurred as a result of the development and purchase of newly developed hospital equipment as compared with standard equipment already on the market. In order to qualify for funds from the pool, the contract must stipulate that the business has to undertake sizeable development activities. In return, the public party can guarantee a buyer for the first "order" placed for the product. So far, however, there are only a few contracts with an environmental objective. In 1997, it is expected that DKK 90m will be set aside for development contracts. Product policy initiatives An ongoing dialogue is taking place with the Danish Agency for Development of Trade and Industry on the development contract scheme, with a view to making better use of the scheme in the field of the environment. In this connection, there needs to be ongoing co-ordination with the future development programme for cleaner products. A dialogue must be initiated with the Danish Ministry for Business and Industry, similar to that mentioned above on the subsidisation of product development, with a view to elucidating the possibilities of carrying out environmental assessments in connection with the drafting of future development contracts. E. Multinational manufacturers Of the stakeholders who are relevant to the collaboration on setting up international regulations governing the general exchange of goods and requirements governing the environmental properties of products, the multinational stakeholders are among the most important. They have the resources to both influence policy-making and participate actively in promoting the development of more environmentally sound products. The large multinational companies are especially to be found in chemical substances and agrochemicals, in the pharmaceutical industry, oil and gas, forestry, food and cars. The 500 largest multinationals employ a total of 35 million people (or an average of 170,000 employees each), with a total turnover of approx. USD 11 trillion (or an average of USD 23bn each), and assets worth a total of approx. USD 32 trillion (or an average of USD 65bn each). Over half of these companies are American or Japanese. After that, the countries best represented are France with 42, Germany with 40 and Great Britain with 32 companies /2/. Interests In international negotiations, the large multinationals traditionally defend the following interests: Operational autonomy, referring to freedom of choice with regard to one's own actions, which products to produce, how to produce them, where to market them, etc. Free movement of goods and capital. Competition in the areas in which they perceive themselves to be strong. This means they are willing to compete on delivering products with improved environmental properties if they feel that this is an area in which they are competitive. (For example, agrochemical companies are willing to develop pesticides with improved environmental properties, but not to develop alternatives to pesticides. Likewise, PVC manufacturers do not care to develop alternatives to PVC, but are willing to develop less environmentally damaging emollients for PVC.) Although the Danish market is small in relation to the turnover of the large multinational companies, they have still shown considerable interest in influencing Danish environmental initiatives in a series of areas. A good example is the interest shown by the agrochemical industry in Danish controls on the use of pesticides. This is probably due to their perception of the Danish market as a trend-setter in environmental issues. If regulations are implemented on the Danish market, that may have an inspiring effect, and other markets will then be expected to follow. That is why the Danish market is interesting and why they are willing to negotiate or fight for their perceived strategic interests. Some multinationals see small and medium-size Danish businesses as interesting pilot companies for new environmentally improved products. For instance, Danish textile and graphics businesses have acted as guinea pigs for large textile and printing-ink distributors, to the advantage of both parties. Significance The large multinational companies are significant stakeholders in the national and particularly the international arenas, partly owing to the following: First of all, they have many resources, both for participating in international negotiations and for providing whatever information accentuates their position most favourably. They are able to effectively threaten commercial consequences as they account for a great deal of jobs and can move their assets between different parts of the world. They are often research intensive and can therefore afford to be front-runners in the development of new, more environmentally sound technologies. They act as sizeable subsuppliers and buyers in relation to Danish producers and are thus keenly involved in stipulating the conditions of their product development. They have large capital assets bound up with existing production apparatus, giving them an incentive to use them until they have been written off. Consequences for product initiatives The large multinational companies are complex but important participants in the dialogue. It is important to be aware of those areas where a dialogue can be productive and of those where collaboration can be expected to be more conflictive. When negotiating with these businesses, it is important that the authorities should be ready to utilise the whole gamut of tools available to them as representatives of nation states by way of international alliances and agreements, taxes, prohibitive legislation, enforcement, subsidies etc. The various businesses and sectors have different interests and can therefore be used to balance interests in a productive dialogue. F. Nation states The national stakeholders naturally make up a very uneven group, which will only be discussed very superficially here. The nation state stakeholders can be divided into three main groups: The developing countries. Countries with rapidly expanding economies. The industrialised countries, the US, Japan and Europe. Resources In combination, they are decisive in international forums organised on the basis of nation states, such as the UN, EU, OECD, WTO, ISO, etc. Thus, they have the sovereign political power to set the conditions for the international exchange of products and to dictate the environmental considerations to be taken on board in that connection. The resources of the three groups are very different: The developing countries are generally weak stakeholders on the international stage. They have difficulty producing participants for negotiations, and those participants who do show up are usually poorly resourced in terms of information etc. On the other hand, there are many of them, so through sheer force of numbers they are able to play a decisive role in international negotiations. Countries with rapidly expanding economies are becoming more visible stakeholders in the international arena and their native resource bases are rapidly being built up. The industrialised countries are generally strong on resources and are well represented internationally. The US and Japan are the dominant individual stakeholders. Acting collectively, Europe has the resources to match the US as well as Japan. Interests In contrast to the multinational companies, the nation states cannot move, so their interests are tied to their own peoples, their own environmental conditions and the potential of their industry in global competition. This, of course, means that the interests of the three groups of nation states are very different. The developing countries generally have very weak industries, producing goods with a low level of know-how, and are forced to compete on low wages and low all-round overheads - including environmentally. They therefore worry that their goods will not succeed if environmental criteria are to be implemented. They find it difficult to influence negotiations where criteria for goods are defined and therefore regard such criteria with great distrust. Countries with rapidly expanding economies generally have more varied industries, whose products in many - but far from all - areas will be fully competitive, also environmentally. In international forums, they are often suspicious of environmental criteria governing international trade. The industries of the industrialised countries will generally benefit from environment-based competitive parameters. In many of the negotiations relevant to the development of product initiatives, the US and Japan act as a mouthpiece for their large multinationals and for their interests. The European countries are a mixed group, who all act more or less on behalf of their industries, although the Scandinavian countries are generally more optimistic about their industries than those of southern Europe - a reflection of their respective industrial strengths. In connection with efforts to develop a Danish product-orientated environmental strategy, a study has been conducted of the published experiences of other countries with product-orientated environmental initiatives. In this context, contact has been made with Swedish and Dutch environmental authorities with a view to gaining insight into the status of those countries with which we normally compare ourselves on environmental issues. The study of published experiences and the visits generally showed that the same kinds of deliberations are being made /3/. Consequences for product activities As concerns the collaboration between nation states, it is worth being alert to the fact that the long-term prospects of an expanding market for environmentally sound products mean that the collaboration is not a "zero-sum game." In an expanding market, one man's gain is not necessarily another man's loss. The focus will need to be on contacts and alliances with like-minded Europeans and with some of the countries with rapidly expanding economies. Support for the participation of developing countries in international negotiations should be considered, as for example the Netherlands and Finland have done in connection with ISO. G. The European Commission The European Commission is by far the most significant of the stakeholders in the international organisations. This is partly because Denmark participates in an agreement that gives the Commission an independent mandate to negotiate on Denmark's behalf, and partly because the Commission has resources for activities of its own. Under the terms of the treaty, the administration of the EU is required to promote the objectives of the Union and is entitled to perform initiatives of its own within current EU regulations as well as propose new regulations to the Council of Ministers. The Commission thus acts as an independent, significant stakeholder with considerable political, staffing and financial resources. The overall foundation of the EU's environmental policy up to the year 2000 is described in the Fifth EU Action Programme, including the following priorities, which match very well some of the needs that have been identified in terms of establishing a product-orientated environmental strategy: Strengthening the integration of environmental considerations in other policy areas, especially in relation to the 5 sectors of the action programme. Increased utilisation of cross-cutting control instruments, including in particular market-based and financial instruments. Consciousness-raising and behavioural change among producers and consumers, including the development of viable patterns of production and consumption. It will generally be attempted to harmonise individual environmental regulations, with the focus on avoiding the establishment of binding national environmental regulations or the establishment of environmental criteria that might act to obstruct commercial trade in connection with the demand for products. The EU's conditions and potential for influencing a product-orientated environmental strategy The Commission takes initiatives with respect to carrying out the above-mentioned policies in ongoing dialogue with nation states and lobbyists representing a series of various different nongovernmental organisations. In these dialogues, commercial interests clearly dominate over other non-national stakeholders. The Commission normally draws up proposals for new regulations and initiatives in general. In many cases, however, the Commission is not sufficiently qualified to evaluate needs and consequences etc. itself. Here, the Commission has to base its work on input from the nation states and selected consultancy firms. Similarly, more and more EU directives are being completed by having the Commission give its mandate to the CEN with a view to having the directive framework fleshed out. As the Commission has not yet drawn up procedures to follow up the CEN's completion of mandates, this mandating in reality results in a considerable amount of the Commission's competence being relinquished to the standardising groups. Consequences for product initiatives Broad contact with the Commission is of decisive importance. Moreover, this contact must take place during the early phases of deliberation by the Commission, before ideas turn into proposals. In all probability, this will actually be possible in the case of the product-orientated environmental strategy as considerations in this area have not progressed very far and only few of the other stakeholders have asserted themselves in relation to the Commission. Important areas in which it will be necessary to take the initiative to approach the Commission include the following: Environment and trade are significant areas with respect to product-orientated environmental initiatives, but also with respect to ensuring fair treatment for the developing countries in global trade. In standardisation activities, systematic lobbying of the 10,000 or so standards currently being processed by CEN with a view to implementing the Single Market will be decisive to the potential for including environmental considerations in future product development. Moreover, it will affect the potential for introducing eco-labelling. A considerable part of this effort will consist in influencing the Commission in connection with the mandating of standardisation initiatives. The EU Public Procurement Directive and internal purchasing policies must be influenced to make room for environmental considerations in public purchasing. Controls on the use of materials hazardous to health or the environment have been completely harmonised, and the creation of new, joint regulations as well as greater scope in which to carry out potential separate national regulations will depend on reaching a consensus with the Commission. References The information given in the section on the finance sector is based mainly on: Ressourceområdet serviceydelser ["The Services Resource Area"], Danish Agency for Development of Trade and Industry, March 1994, and on the 1994 and 1995 Business Reports, Danish Ministry for Business and Industry. Fortune 500, quoted from the Danish financial daily Børsen. Baggrundsnotat vedrørende litteraturstudium i forhold til den produktorienterede miljøstrategi ["Background Paper on the Study of Literature in relation to the Product-orientated Environmental Strategy"], Cowiconsult and Danish EPA, 1996. [3] CeSaM: The Centre for Social Science Research on the Environment. [Front page] [Contents] [Previous] [Next] [Top]