Integration of Environmental Considerations at Different Levels of
Decision Making
Annex D: Industry sector
| D.1.1 | Stakeholder analysis |
| D.1.2 | Key envirionmental issues |
| D.1.3 | Framework for market based decisions |
| D.1.4 | Decision flow analysis |
The industry sector includes a wide range of actors involved in manufacturing and services (1) . Industry activities include:
 | raw material sourcing eg mining; |
| primary manufacture /processing eg chemicals; |
| end product manufacturing eg electronic goods; |
| service provisions (e.g. dry cleaning, catering); |
| waste management. |
In recent decades, services emerged as the dominant industry sub-sector in place of manufacturing, aided by the development of information technology.
Macro level actors include the European Commission, Ministry of Environment and Energy and the Danish Environmental Protection Agency. Historically, their influence has largely been implemented through the setting and enforcement of a policy framework based on a ‘command and control’ approach.
International NGOs such as Greenpeace also have a major influence on the environmental performance. Confrontational name and shame approaches have now been replaced by constructive dialogue between NGOs and industry. Similarly, the policy framework has changed to incorporate a more flexible and co-operative element, using tools to encourage improvements rather than requiring them in the first instance, and thus placing increased responsibility on meso and micro level actors in terms of environmental decision-making.
Elements of both approaches are now, the emphasis depending on the severity of the environmental impact and framework conditions such as industry composition and willingness to act by both industry and consumers. Hence consideration for the environment is integrated into industry activities both via regulation and numerous other policy and market-based tools.
Meso level actors include:
| municipalities - undertake monitoring and enforcement, implement macro level policy; |
| environmental and consumer NGOs eg Danish Consumer Council, Danish Ecological Council, Danish Society for the Conservation of Nature, European Environmental Bureau - these organisations undertake public awareness campaigns, provide guidance and bring pressure to bear on industry (2) |
| industry organisations eg Confederation of Danish Industries, CEFIC - encourage and oversee industry collaborative efforts, establish sector environmental policies and guidelines, negotiate voluntary agreements. |
In addition, meso level actors represent the views of their members in policy discussion forums and consultations at all levels. For example, the Danish Consumer Council represents consumers on more than 200 committees, boards and councils and has an extensive dialogue with the business community (3) .
The micro level actors are businesses and households. Businesses have a dual-role as producers and consumers. Businesses are extremely diverse, ranging from Small and Medium sized Enterprises (SMEs) (4) to major multinationals. Key features of Danish industry include the dominance of SMEs (70-80%) and the service sector, and the importance of export markets. These will all affect which approaches and tools can most effectively address industry’s environmental impacts.
Table D1.1 Danish GDP composition by sector, 1997 (1)
| Sector | % |
| Services (private and public) | 69 |
| Manufacturing industry | 19 |
| Building, construction | 6 |
| Agriculture | 4 |
| Other | 2 |
Key manufacturing industries in Denmark include food processing, chemical products, electronics, metal processing and products. The most expansive industrial sectors are biotechnology, information technology and software, and food and beverages. On the service side, tourism is building on its already strong position and is likely to become an important sub-sector in the next decade. Table D1.1 illustrates the importance of the industry sector in terms of contribution to GDP.
Households take key decisions in terms of the products they buy, how they use and finally dispose of them. Depending on household composition and the nature of the product or service, these decisions may be taken individually or collectively. Households as consumers have a strong influence on industry via demand for products or services, and particular aspects of those products or services. The influence and impacts of household decisions are escalating as consumerism continues to grow and as the number of households increases.
D.1.2 Key Environmental IssuesIndustry has been identified as the cause of many environmental problems including pollution, resource use and waste issues. Environmental impacts will vary across EU member states depending on the past and present composition of national industry sectors, and those of neighbouring countries since industrial pollution is often transboundary. Key environmental impacts include:
Long term:
| use of non-renewable resources, most notably oil, aggregates, metal ores and minerals; |
| waste generation and disposal; |
| contaminated land as a legacy of heavy industry ; |
| groundwater and marine pollution by heavy metals and persistent synthetic chemicals; |
| contribution to climate change through the release of a range of greenhouse gases, most notably CO2; and |
| ozone layer depletion caused primarily by the release of chlorofluorocarbons (CFCs) used as a refrigerants but now banned. The use of HCFCs remains a concern. |
Short or medium term:
| surface water pollution e.g. discharges from food processing installations; |
| air pollution e.g. SO2 emissions |
Table D1.2
Identification of main Danish industries and their environmental impacts
| Main industry sub-sectors | Key Impacts |
| Food products and beverages | Water use Waste water (high BOD effluent) Waste – packaging Transportation Agriculture |
| Chemicals and chemical products | Direct health hazards esp. vulnerable groups Air pollution - combination of chemicals Water pollution - groundwater and marine Land pollution - contaminated land |
| Iron, metal processing, foundries, metal products | Air pollution - SO2 etc. Water pollution - groundwater and marine Land pollution - contaminated land Resources – ore Energy use Noise |
| Construction | Noise Air pollution – dust Resources – aggregates Energy use |
| Electrical, electronic and optical equipment |
Use of hazardous substances End-of-life product disposal |
| Biotechnology | GMO impacts on wildlife/biodiversity GM impacts on health e.g. resistance |
| Textiles, clothing and leather | Water pollution - surface, groundwater and marine |
| Paper, wood products, furniture | Resource depletion Wildlife/Biodiversity impacts Energy use |
| Services | Transport Resource Use - e.g. by tourists Energy use |
The decision flow analysis in Section D1.4 considers a key environmental issue for both the EC and Denmark:
|
Eight million tonnes of chemicals, comprising 20 000 different substances, are used by industry and consumers in Denmark each year (5). The long term environmental and health impacts of many chemicals are unknown. This is of particular concern due to the potential for damage caused by non-biodegradable, persistent, bio-accumulative chemicals entering groundwater, which is an important source of drinking water in Denmark and once contaminated, extremely difficult to treat.
D.1.3 Framework for Market Based Decision MakingMacro level policy actors set a framework which consists of a mix of regulatory and ‘softer’ tools. Tools used by macro level actors may target industry directly (eg prohibitions, discharge consents, fiscal incentives, voluntary agreements) or indirectly via increasing pressure from other actors (eg public awareness campaigns, ‘green’ public procurement, granting legal standing to NGOs and local communities).
Across the member states, the majority of environmental regulations are formulated at the EU level due to the transboundary nature of environmental issues, trade interactions and need for a level playing-field in terms of competition. However, certain key Member States lead the policy debate with the implementation of more stringent national regulations and development of innovative policy tools and concepts, some of which are later adopted at EU level. This can be seen for chemicals policy aimed at reducing adverse environmental impacts.
In Denmark, legislation and action plans are in place for specific media and issues such as:
| waste (Waste 21); |
| the aquatic environment (Aquatic Environment Plan II); and |
| contaminated land (Act on Contaminated Soil). |
In addition, key policies and legislation specifically addressing chemicals are: (6):
| Danish Chemical Act - translates certain EU directives into national law. It regulates notification, classification and labelling of substances and preparations. It also regulates safe handling, producer and manufacturer responsibility and provides for restrictions on dangerous substances and products. | ||||||
| Danish Environmental Protection Act - enforces substitution of harmful substances with less harmful substances, the principle of best available technology and the use of cleaner technologies and products based on LCA. The act provides for national guidelines to establish principles for assessment of chemical risk and set limit values for the chemical content of drinking water, groundwater, air and soil. | ||||||
| Danish Chemicals Strategy - in January 1999, the Danish Minister for Environment and
Energy issued a strategy aimed at reducing the production and use of substances hazardous
(or potentially hazardous) to health and/or the environment. It contains a list of
‘undesirable’ chemicals which may be the subject of further research and future
legislation, and identified actions which needed to be taken at the national, EU and
international level. These included:
|
The focus on chemicals policy in Denmark has been driven by pressure from NGOs and concerned citizens. Regulations are traditionally viewed by industry as restricting innovation and growth, however this view is gradually changing as companies with good environmental performance recognise the potential to gain competitive advantage. In addition, opinions are moving towards favouring the use of regulations to set minimum standards, accompanied by more flexible, voluntary tools and public/consumer pressure to encourage further improvements. Specific initiatives have been established to encourage industry actors to produce cleaner products and to increase consumer interest in purchasing less environmentally damaging products.
D.1.4 Decision Flow Analysis
Decision flow analyses for the industry sector for households, businesses and municipalities in relation to chemical are presented in Tables 1.3 - 1.6.
Although the questions facing industry and household consumers are the same and they share many similar parameters, the key parameters and drivers are sufficiently different to warrant separate decision flow analyses.
The decision flow begins with a question which is of fundamental importance for sustainable consumption, namely is the product required/needed? The key parameters for this decision are:
| For households, societal aspirations/expectations and personal awareness and attitudes have a significant influence. This parameter can manifest itself in several forms. Households will often fail to make a conscious decision regarding whether a product is needed, especially if the product is low cost, if behaviour patterns and/or societal norms which view the product as a necessity, have become so established that the decision is subconscious. Alternatively, society may regard the product as something to aspire to, and hence desirable. Consumer awareness and concern over the environmental impacts of the product acts against this, and if high will lead consumers to consciously decide whether the product is necessary. |
| The equivalent parameter for industry is cost. Industry is more likely to question whether products that represent large spends (high unit cost and high volume) are needed, making those products less attractive. This parameter can be influenced by fiscal measures set by government eg ‘green’ taxation. |
These two parameters will drive other parameters identified such as availability and suitability of alternatives. Subsequent questions (which product is purchased, how is it used and how is the product, or contaminated product packaging, disposed of?) follow, and although they are presented in sequence there are interlinkages and feedback loops between all questions.
The complementary consideration is sustainable production, which addresses the problem at source rather than the process-focused or end-of-pipe approach. Hence the key question is which product/service is produced?
Apart from market opportunities, the main parameter influencing this decision is compliance, although corporate culture, ethics and company reputation are increasingly important. Regulations may prohibit or restrict the production and use of chemicals which have unacceptable environmental or health impacts. Certain tools have been developed which facilitate compliance by industry and improve the effectiveness of regulations. For example, providing clear signals of the direction of future environmental policy and legislation enables industry to prepare in advance and may reduce the cost of compliance for leaders and fast followers. Voluntary agreements can play a similar role if uptake rates are high and they are backed up by the possibility of legislation. Compliance by SMEs requires particular framework conditions in order to succeed, namely awareness, guidance and support.
Table D1.3
Household Consumers Look here!
Table D1.4
Business as Providers/Producers Look
here!
Table D1.5
Business Consumers Look
here!
Table D1.6
Municipalities as Regulators Look
here!
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(1) Services are categorised as part of the
industry sector in this report due to the need to consider service provision as an option
for reducing the environmental impact of products.
(2) The Danish Society for the Conservation of Nature, Denmark’s principal environmental NGO, also undertakes a ‘monitoring’ role due to its ability to bring an appeal to the Danish EPA if it considers a pollutant to be having an unacceptable impact on the surrounding environment or a permit to be less stringent that is possible suing the best environmental technology
(3) Danish Consumer Council, http://www.fdb.dk
(4) An SME is defined as an enterprise with less than 250 employees. This can be further broken down into small enterprises with <50 employees and micro enterprise with <10.
(5) The Environment in Denmark: selected indicators (Danish Environmental Protection Agency)
(6) 'Denmark - Implementation of Agenda 21: information provided by the Government of Denmark to the United Nations Commission on Sustainable Development' (1997)
(7) Danish Nature and Environment Policy, 1999