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Contents
Foreword ...................................................................................................................................................... 7
1.
Introduction ...................................................................................................................................... 9
1.1
1.2
1.3
1.4
2.
Ecodesign ...................................................................................................................... 9
The importance of ecodesign ...................................................................................... 10
Life cycle thinking ........................................................................................................ 11
Environmental considerations in ceramic products.................................................... 13
Ecodesign project step-by-step ...................................................................................................... 15
2.1
Introduction ................................................................................................................ 15
2.2
Step 1: Ecodesign project planning ............................................................................. 17
Objectives ............................................................................................................................ 17
Activities .............................................................................................................................. 17
2.2.1
Get top managements commitment for the project ......................................... 17
2.2.2
Setup the project team ....................................................................................... 17
2.2.3
Investigate the motivation factors for ecodesign ............................................... 19
2.2.4
Select the target product .................................................................................... 19
2.2.7
InEDIC resources.................................................................................................. 20
2.2.8
Results ................................................................................................................. 21
2.3
Step 2: Product analysis .............................................................................................. 22
Objectives ............................................................................................................................ 22
Activities .............................................................................................................................. 22
2.4
Step 3: Definition of ecodesign strategies for the product ......................................... 25
Objectives ............................................................................................................................ 25
Activities .............................................................................................................................. 25
2.5
Step 4: New product concept ...................................................................................... 27
Objectives ............................................................................................................................ 27
Activities .............................................................................................................................. 27
2.5.3
Definition of final product concept(s) ................................................................. 28
2.5.4
InEDIC resources.................................................................................................. 28
2.5.5
Results ................................................................................................................. 28
2.6
Step 5: Product detailing ............................................................................................. 29
Objectives ............................................................................................................................ 29
Activities .............................................................................................................................. 29
2.6.3
InEDIC resources.................................................................................................. 31
2.6.4
Results ................................................................................................................. 32
2.7
Step 6: Production and market launch........................................................................ 33
Objectives ............................................................................................................................ 33
Activities .............................................................................................................................. 33
2.7.1
Production ........................................................................................................... 33
2.7.2
Internal promotion of the ecodesigned product ................................................ 33
2.7.4
InEDIC resources.................................................................................................. 34
2.7.5
Results ................................................................................................................. 34
2.8
Step 7: Evaluation of the product and project ............................................................ 35
Objectives ............................................................................................................................ 35
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Activities .............................................................................................................................. 35
2.8.1
Evaluation of the ecodesign project.................................................................... 35
2.8.2
Evaluation of the final ecodesigned product ...................................................... 35
2.8.3
Report .................................................................................................................. 36
2.8.4
InEDIC resources.................................................................................................. 36
2.8.5
Results ................................................................................................................. 36
2.9
Step 8: Follow-up activities ......................................................................................... 37
Objectives ............................................................................................................................ 37
Activities .............................................................................................................................. 37
2.9.1
Integration of ecodesign in the companys processes and management systems
37
2.9.2
From eco(re)design to eco-innovation and design for sustainability ................. 37
2.9.3
InEDIC resources.................................................................................................. 38
2.9.4
Results ................................................................................................................. 38
3.
3.1
Motivating factors ....................................................................................................... 39
3.2
Which are the main motivating factors for ecodesign projects in a company? ......... 39
3.3
Internal drivers ............................................................................................................ 39
3.3.1
Cost reduction ..................................................................................................... 39
3.3.2
Innovation ........................................................................................................... 40
3.3.3
Quality ................................................................................................................. 40
3.3.4
Companys image ................................................................................................ 40
3.3.5
Companys environmental policy and environmental management systems
(EMS)
40
3.3.6
Motivation of employees .................................................................................... 41
3.4
External drivers ........................................................................................................... 41
3.4.1
Environmental benefits ....................................................................................... 41
3.4.2
Government policies, legislation and standardization ........................................ 41
3.4.3
Market demands ................................................................................................. 42
3.4.4
Suppliers .............................................................................................................. 42
3.4.5
Competitors......................................................................................................... 42
3.4.6
Social environment.............................................................................................. 43
4.
Innovation ....................................................................................................................................... 44
4.1
4.2
4.3
4.4
5.
Introduction ................................................................................................................ 44
Eco-innovation as a social process .............................................................................. 44
Types of innovation ..................................................................................................... 45
Six steps to the development of innovation projects development ........................... 48
Market analysis .............................................................................................................................. 49
5.1
Introduction ................................................................................................................ 49
5.2
Market analysis project ............................................................................................... 49
5.2.1
Market size .......................................................................................................... 50
5.2.2
Market growth rate ............................................................................................. 50
5.2.3
Market trends...................................................................................................... 50
5.2.4
Market profitability ............................................................................................. 50
5.2.5
Industry cost structure ........................................................................................ 51
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5.3
5.4
6.
Marketing management.............................................................................................. 52
Key success factors ...................................................................................................... 53
Environmental analysis .................................................................................................................. 54
6.1
Environmental analysis based on life cycle thinking ................................................... 54
6.2
Methods of environmental analysis of the life cycle .................................................. 56
6.2.1
Examples of tools for environmental analysis .................................................... 57
6.3
Life Cycle Assessment (LCA) ........................................................................................ 62
6.4
Examples of LCA application in ceramics .................................................................... 65
7.
7.1
Introduction ................................................................................................................ 69
7.2
Types of economic assessment: Life Cycle Costing and Cost-Benefit Analysis ........... 70
7.2.1
Life Cycle Costing................................................................................................. 70
7.2.2
Conventional Life Cycle Costing .......................................................................... 70
7.2.3
Environmental life cycle costing .......................................................................... 72
7.2.4
Societal life cycle costing ..................................................................................... 75
7.2.5
Cost-benefit analysis ........................................................................................... 77
7.2.6
Adjusting for the time dimension ....................................................................... 77
8.
8.1
Introduction ................................................................................................................ 79
8.2
Ecodesign strategies in the ceramic sector ................................................................. 82
8.2.1
Strategy @: Develop new concepts .................................................................... 82
8.2.2
Strategy 1: Select lower impact materials........................................................... 83
8.2.3
Strategy 2: Reduce the use of materials ............................................................. 85
8.2.4
Strategy 3: Reduce the environmental impact of production ............................ 87
8.2.5
Strategy 4: Promote environmentally friendly packaging and logistics .............. 89
8.2.6
Strategy 5: Reduce the environmental impact in the use phase ........................ 91
8.2.7
Strategy 6: Increase product durability ............................................................... 92
8.2.8
Strategy 7: Optimize the end-of-life system ....................................................... 93
8.3
Trade-offs between criteria ........................................................................................ 94
9.
Ecobenchmarking ........................................................................................................................... 95
9.1
9.2
9.3
9.4
9.5
10.
What is benchmarking?............................................................................................... 95
Why benchmarking? ................................................................................................... 95
What is environmental product benchmarking? ........................................................ 96
Steps of eco-benchmarking of products ..................................................................... 96
Product innovation through benchmarking ................................................................ 98
Creative thinking ............................................................................................................................ 99
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13.1
13.2
13.3
13.4
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Foreword
Ecodesign is a well established concept amongst environmental specialists in Europe, but there
is a lack of know how to support the systematic integration of environmental considerations in
the design of ceramic products. Despite its economic importance, the ceramic industry is
suffering the effects of the slowing down of the European economy and it reflects the effects
of the competition of products from countries where environmental and social standards in
manufacturing are considerably lower. The ceramic sector needs competitive products to
survive in the market and by addressing the environmental features good opportunities for
innovation and differentiation arise while the impacts along the life cycle are reduced.
InEDIC - Innovation and Ecodesign in the Ceramic Industry is a project funded by the EU
Lifelong Learning/Leonardo da Vinci Program (contract 2009-1-PT1-LEO05-03237), coordinated
by LNEG-UPCS (National Laboratory of Energy and Geology, Sustainable Production and
Consumption Research Unit) from Portugal. This project is a Transfer of Innovation from
another Leonardo da Vinci project (Transfer of Knowledge in the Field of Ecodesign,
Agreement n 2004 -CZ/04/B/F/PP-168002).
The projects primary goal is the development of ecodesign training materials and tools to
the ceramic industry in order to provide designers, training and education organizations and
businesses with the skills for the systematic integration of environmental considerations in the
development of their products.
This Manual is organized in a step-by-step approach to ecodesign, presented in Chapter 2
Ecodesign project step-by-step. The implementation of the eight proposed steps is supported
by theoretical chapters and practical tools, making it easy to follow and implement, adjust the
each companys reality and develop through further reading and learning (InEDICs resource
centre). A simplified version of chapter 2 and of the ecodesign tools has also been produced,
Page 7
aiming at potteries which may not wish to follow a more comprehensive approach as ceramic
industries, which were the primary target of the project.
The InEDIC project relies on the training/action principle, which proved to be the most
effective method in vocational training. It consists on combining in-classroom and practical
applications, preferably in real-life cases. With this in mind, ten demonstration projects have
been performed with partner industries and potteries, to test the InEDIC Ecodesign Manual,
thus ensuring its adequacy and applicability.
Besides the InEDIC Ecodesign Manual, projects results are: two databases of ceramic materials
and technologies, support material for trainers, ten case studies, a resource centre, a glossary
and additional information and explanations, available at the projects website
(www.inedic.net) in partners languages and English.
The InEDIC consortium involves an international partnership from Portugal, Spain and Greece,
totalling 18 partners with proven expertise in the area of ecodesign and in the ceramic sector.
The partnership includes research centres, training institutions, associations and companies.
This Manual was written by the InEDIC Core Partners:
LNEG, I.P., Portugal Cristina Rocha, David Camocho, Sofia Bajouco and Ana Gonalves. www.lneg.pt
CENCAL, Portugal Maria Helena Arroz and Manuela Baroso. www.cencal.pt
CPD, Portugal Isabel Brarens and Paula Gris Grais. www.cpd.pt
CTCV, Portugal Marisa Almeida and Pedro Frade. www.ctcv.pt
ESAD/IPL, Portugal Fernando Carradas, Jos Frade and Francisco Fernandes. www.esad.ipleiria.pt
ITC, Spain Irina Celades, Teresa Ros Dosd and Noelia Coll Bad. www.itc.uji.es
PROSPEKTIKER, Spain Ibon Zugasti, Olatz Errazkin and Xabier Eguskizaga. www.prospektiker.es
ARVIS, S.A., Greece Leonidas Somakos and Konstantinos Aravossis. www.arvis.gr
The team hopes that this project and Manual are useful to the target group and to all
interested in promoting design for sustainability, but is aware that there is always room for
improvement and learning. We therefore kindly welcome all comments that will help us
improve this kind of initiatives and better work towards a more sustainable society!
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Chapter 1
Introduction
1. Introduction
1.1 Ecodesign
Ecodesign is the systematic integration of environmental considerations into the design
process of products (both goods and services). The main purpose of ecodesign is to develop
products leading to sustainability by reducing their environmental impacts throughout the
entire life cycle, taking also into account other conventional product and customer
requirements, such as functionality, quality, safety, cost, manufacturability, ergonomics and
aesthetics (see Figure 1.1).
All products have some impact on the environment, which may occur at any or all stages of the
products life cycle, from raw material extraction to the manufacturing processes, distribution,
use and end-of-life. The life cycle impacts may range from slight to significant; they may be
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Chapter 1
Introduction
short-term or long-term; and they may occur at the local, regional or global level. Integrating
environmental considerations from the early phases of product development process is the
most effective way of introducing changes that positively affect all life cycle stages.
It is estimated that over 80% of all product related environmental impacts is determined by
design, so ecodesign is a very promising approach to sustainable consumption and production,
which has been applied in numerous products of many economic sectors. In the InEDIC
Ecodesign Manual, the ecodesign concepts and tools focus on ceramic products, of the
following sub-sectors:
While InEDIC is orientated to ceramic products, the concepts and tools presented herewith are
applicable or easily adaptable to other products. Despite the fact that the concept of
ecodesign is easily applicable to goods and services, InEDIC methodologies and tools are
deemed more suitable to physical products (i.e., goods).
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Chapter 1
Introduction
changes in procurement, manufacturing and distribution practices influence the supply chain
of every product and therefore have an impact on the environment.
Despite the fact that an ecodesign methodology has emerged and has been developing since
the 1970s, there are still some barriers for its implementation. The InEDIC project was
developed to tackle some of these impediments that are still persisting. These include:
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Chapter 1
Introduction
Consideration of the entire life cycle of the product aims to ensure that:
No materials are arbitrarily excluded;
All the environmental characteristics of a product are taken into account;
Focus is not only on the product itself, but also on the system in which the product will
perform;
Environmental impacts are not shifted from one life cycle phase to another or from
one medium (air, water, soil) to another.
To this endeavour, it is necessary to apply specific methods and tools based on scientific knowhow. Life cycle assessment will help identify the most significant impacts within the product
life cycle and therefore choose the most suitable strategies for product improvement. It helps
to define direction of design decisions, encouraging measures at the product life cycle points
where they are likely to result in greatest benefits to the environment and the company on a
business perspective.
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Chapter 1
Introduction
Activity or
solution
Incorporation of
waste
Examples
Image
Greenearth by Roca
Reduction of the
material use
Reduction in
products
thickness
Reduce the
environmental
impact of
production
Reduction of
losses and
consequently
losses of ecoefficiency.
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Chapter 1
Introduction
Ecodesign strategy
Optimizing
packaging and
distribution
Activity or
solution
Reduction of
packaging
Eliminating
distribution
activities
Examples
Image
Reduction of the
environmental
impact during the
use phase
High efficiency
construction
elements
Optimizing the
end- of-life system
New method of
installation and
dismantling
New concepts
development
Integration of
functions
CBloco by CTCV
Solar Tiles
University of Minho, CTCV, FCT-CENIMAT, LNEG,
Revigrs, Domin, Coelho da Silva, De Viris, ADENE
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Chapter 2
Ecodesign project step-by-step
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Chapter 2
Ecodesign project step-by-step
Figure 2.1 Relationship between the 8 ecodesign steps and the InEDIC supporting chapters and tools
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Chapter 2
Ecodesign project step-by-step
Activities
2.2.1 Get top managements commitment for the project
The involvement of top management in defining the strategic goals for a successful
development of the ecodesign project, as well as in allocating the necessary resources, is a key
factor. Top management should be committed not only in words, but also in actions. To that
end, top management needs convincing arguments for ecodesign and it is important to carry
out debates about the added value of ecodesign for the business in the short, medium and
long terms (see chapter 3 Motivation factors for ecodesign and chapter 4 Innovation).
If the company has an environmental management system (EMS) implemented, or is in the
process of implementation, this planning phase is a good opportunity to make the ecodesign
project a part of the system (see chapter 11 Environmental management systems and
ecodesign).
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Chapter 2
Ecodesign project step-by-step
Figure 2.2 Human resources required to implement ecodesign in the company: top management, the
ecodesign project team and the project support group
Typically the ecodesign support group involves the departments or functions presented in
table 2.1.
Table 2.1 Typical composition of the project support group
Department or
function
Quality
Laboratory
Purchasing
Marketing
Sales
Logistics
Human resources
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Chapter 2
Ecodesign project step-by-step
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Chapter 2
Ecodesign project step-by-step
Ecodesign step
Activities
Responsible
people
Resources
Deadline
Verification
1 Ecodesign
project
planning
2 Product
analysis
3 Ecodesign
strategies
4 New product
concept
5 Product
detailing
6 Production and
market launch
7 Evaluation
product and
project
8 Follow-up
activities
Tools
Tool 1 Investigation of motivating factors for
ecodesign
Tool 2 Product selection/ecodesign potential
questionnaire
Tool 3 Design brief
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Chapter 2
Ecodesign project step-by-step
2.2.8 Results
The top managements commitment regarding ecodesign in general and the specific
ecodesign project;
The establishment of the ecodesign team and support group;
The definition of the reference product that will be the object of the ecodesign project,
if applicable;
The definition of the design brief (reflecting the motivation factors, amongst others),
that will be used by the internal project team and/or external providers;
The ecodesign project plan.
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Chapter 2
Ecodesign project step-by-step
Activities
2.3.1 Definition of the functional unit
Comparisons between products from environmental and economic points of view are only
relevant when their functions are defined. Therefore, the ecodesign project team should
define the functional unit that will be the reference unit of the environmental life cycle
assessment and economic analysis. More information on this issue can be found in chapter 6
Environmental analysis.
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Chapter 2
Ecodesign project step-by-step
2.3.6 Ecobenchmarking
As part of the analysis process, the company may wish to compare the reference product with
best-in-class products produced internally or by competitors. When such comparison is based
on environmental features, it is called ecobenchmarking. This subject is further developed in
chapter 9 Ecobenchmarking.
Tools
Tool 3 Design brief
Tool 4 Market analysis
Tool 5 Environmental inputs and outputs
worksheet
Tool 6 MET matrix
Tool 7 Economic profile assessment
Tool 8 Product analysis worksheet
Synthesis
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Chapter 2
Ecodesign project step-by-step
2.3.9 Results
Environmental, economic and market analysis of the reference product;
Identification of legal and other requirements applicable to the ecodesigned product;
Reviewed design brief, if applicable.
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Chapter 2
Ecodesign project step-by-step
Activities
2.4.1 Analysis of the ecodesign strategies
The ecodesign strategies for ceramic products are presented in chapter 8 Ecodesign
strategies. For their analysis, selection and application to the reference product, a qualitative
tool is proposed (tool 9 Ecodesign strategies for ceramics). This is also a qualitative
environmental evaluation and communication instrument.
The analysis consists of the evaluation of the reference product according to the 8 strategies
and respective criteria of the InEDIC Manual. By applying tool 9, the most problematic
situations (i.e., those criteria according to which the reference product performs worse and
there is potential for improvement) are immediately identified. Drafting of the tool according
to directions should be done by the ecodesign team and later validated by the support group
and the results should be controlled against the environmental, economic and market analysis,
as well as the motivation factors for ecodesign in the specific company and product situation.
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Chapter 2
Ecodesign project step-by-step
The brainstorming session should not last more than 3-4 hours. It involves the whole group
and should follow the appropriate brainstorming techniques as described in chapter 10
Creative thinking. At the end, the ecodesign team summarizes the results and informs all
interested parties of the next steps.
Typically the brainstorming session generates a large number of ecodesign options, so
afterwards the ecodesign team should select between those that have good potential to be
implemented and will thus be subject to a feasibility analysis (tool 12 Improvement
options evaluation matrix) and those that would not be feasible in the short term, but may
be revisited in a subsequent project or may lead to research and development projects or
new business areas. In other words, even those ideas that do not actually work in the
context of the actual project at hand should nevertheless not be lost or forgotten.
Tools
Tool 9 Ecodesign strategies for ceramics
Tool 10 Brainstorming
Tool 12 Improvement option evaluation
matrix
2.4.4 Results
List with feasible improvement options for the product in the short term (inputs to the
conceptual design);
List of improvement options that may be used in subsequent research and
development projects or development of new business areas.
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Ecodesign project step-by-step
Activities
2.5.1 Develop concepts for the product
Within the design process, all the different aspects need to get attention and compromises are
required, in order to come to one or more solutions that satisfy all applicable criteria.
Using the insights gained in the analysis and strategies definition phases, this step aims to
develop ideas and proposals on how to improve the reference product or how to develop a
new environmentally-sound and cost-effective business idea or an eco-efficient service to
satisfy customer needs. Although the previously defined design criteria and requirements as
laid down in the design brief have to be taken into account, they should not constrain the
creative process. The task, somewhat paradoxically, is to let ones ideas and imagination run
freely without forgetting the criteria, the strategies and the analysis. Team work and the
ability to think out of the box are especially important in this phase.
Inspiration can come from a lot of different directions. It can be spontaneous or a little guided.
To find ways and tools to stimulate creativity during individual brainwaves or Group Creative
Sessions, please refer to chapter 10 Creative thinking in this manual. Relating supporting
tools are 10 Brainstorming and 13 Morphological box.
As a result of the idea generation phase, concepts and solutions are generated and described
clearly so that a rough assessment of the success potential can be determined. For this
conclusions (concepts and solutions) have to either be described in detail or presented and
that is why it is very important that the design team knows how to communicate the ideas
visually and verbally within the team, to the company and to the outside world. Therefore
sketches, hand drawings, 2D/3D computer drawings, storyboards, technical information,
documentation and models or prototypes can be prepared to support the communication. This
phase is essential, as good ideas can be discarded or overlooked if communication fails.
Designers in the ecodesign project team will be familiar with several other ways to
communicate ideas. The technique used to visualize the product concept should be selected
according to what has to be communicated from the concept or project.
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Chapter 2
Ecodesign project step-by-step
Tools
Tool 5 Environmental inputs and outputs
worksheet
Tool 6 MET matrix
Tool 7 Economic profile assessment
Tool 11 Economic feasibility assessment of
ecodesign
Tool 12 Improvement option evaluation
matrix
Tool 13 Morphological box
InEDIC Materials database
InEDIC Technologies database
2.5.5 Results
New product concept(s).
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Chapter 2
Ecodesign project step-by-step
Activities
2.6.1 Definition of product specifications
During this stage, the concept is developed further to meet the product design specifications
and to specify the product prior to production and introduction into market. Depending on the
complexity of the design and development process the number of participants (and their areas
of expertise) involved in this stage, within or outside the support group can vary. Usually,
designers, engineers, production planners, service providers and marketing personnel work
together to refine the design concept in order to meet the design specification.
Tools typically employed at this stage include:
Software and modelling tools, such as those used to estimate efficiency during use;
Material and technologies databases (see InEDIC databases);
Production and process optimization tools.
The level of detail achieved at this phase of definition of product specifications should
allow manufacturing of the product prototype(s) and provide information for the introduction
of the product to the market. The final specification should be a multi-criteria decisionmaking process considering specific company conditions, existing production processes,
business strategies and available resources.
This process with include the elaboration of documentation which describes technical aspects
of the product, ergonomic and functionality features required by customers, economic aspects
of the production and overall product marketing.
Aspects to be considered during the definition of product specifications:
Technical aspects
The technical description of the product design should provide a detailed definition of all
product components and technology processes necessary for manufacturing of the product.
As a minimum, this includes:
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Ecodesign project step-by-step
Environmental aspects
The detailed design of the new products should be assessed from an environmental point of
view, using the same methods and assumptions that were applied to the reference product
and new concepts, to enable comparisons. Furthermore, relevant environmental criteria such
as the absence of hazardous substances, the use of recycled materials, etc. should be part of
the products specifications.
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Chapter 2
Ecodesign project step-by-step
Economic aspects
At this stage, some of the economic aspects to be considered are:
Assessment of investments needed to the manufacturing of the ecodesigned product
including costs with lab analysis;
Assessment of investments needed to the market launch;
Assessment of costs related to the products entire life cycle (Life Cycle Costing);
Product sales forecast/qualified estimate;
Product costing and profitability analysis;
Other financial analysis.
2.6.2 Prototyping
Once the prototype is produced, it should be tested and evaluated, in order to determine
whether it actually conforms to the objectives defined in the brief. This step is an important
milestone in the product development process, and is an opportunity to check conformity to the
production plan and process engineering.
The environmental aspects of the product can also be assessed at this stage, again following the
methods and assumptions used previously. During this stage, any necessary adjustments and
changes in design can also take place.
Tools
InEDIC Materials database
InEDIC Technologies database
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Ecodesign project step-by-step
2.6.4 Results
Product specifications, with a sufficient level of detail to proceed to production,
including all technical documentation, models and prototypes, validated in terms of
environmental, technical, economic and other requirements;
Prototypes;
Production plan.
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Activities
2.7.1 Production
Preparation for production of the ecodesigned product is based on approved product
specifications. Most companies use standardized procedures when starting a new production
line.
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Ecodesign project step-by-step
Tools
2.7.5 Results
Final product, including packaging and user information;
Marketing and communication elements associated to market launch.
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Activities
2.8.1 Evaluation of the ecodesign project
This part of the evaluation process is aimed at analysing the effectiveness and procedural
aspects of the ecodesign project. Firstly, the company should consider whether the
methodology used for the project is actually appropriate. The step-by-step procedure for
ecodesign projects described in this manual is a general model that companies may want to
modify according to their specific needs. Some companies have their own internal project
management system that can incorporate aspects of an ecodesign project as described here.
The company also needs to evaluate the project team and support group. This evaluation
should specifically focus on its composition, the level of participation, available resources and
responsibilities. This process can also reveal knowledge and training needs in the project
team, especially in environmental topics. In this case, specific training actions are
recommended.
For further guidance see tool 14 Ecodesign evaluation questionnaire.
Companies should take into account the fact that often information about improvements is
not achieved soon after the completion of the project; it takes some time until they have
reliable and meaningful data.
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Ecodesign project step-by-step
2.8.3 Report
The evaluation of the projects results and of the product itself should be compiled in a report
prepared by the project team, so that lessons learnt during the implementation of the project
are not forgotten or lost. The report shall be distributed to all parties involved in the project,
including top management.
Tools
Tool 14 Ecodesign evaluation questionnaire
2.8.5 Results
Evaluation of the project;
Evaluation of the product;
Report about the evaluation of project and product.
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Activities
2.9.1 Integration of ecodesign in the companys processes and
management systems
Normally, the results of ecodesign projects are positive and top management will be interested
in pursuing these projects and integrate them systematically in the companys strategy and
business practice. This can result in the creation of a formal eco-design programme and the
integration of the projects methodology in the overall design process of the company,
following all necessary adjustments.
If companies implement or aim at implementing a quality or environmental management
system, it is important to integrate ecodesign as an integral part of these systems. For more
guidance on the link between ecodesign and environmental management systems (EMS) see
chapter 11 and tool 15 Environmental management systems and ecodesign checklist, both
of which provide support regarding the extent to which the EMS includes the product and life
cycle thinking in its elements, including the operational control of the design process.
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Chapter 2
Ecodesign project step-by-step
Tools
Tool 15 Environmental management
systems and ecodesign checklist
2.9.4 Results
Integration of ecodesign in the companys processes
Integration of ecodesign in the companys management systems
Environmentally and socially driven innovation of products and services
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Chapter 3
Motivating factors
3. Motivating factors
3.1 Motivating factors
It is important to investigate the reasons behind the eco-design project and the expectations
of all interested parties, from client to producers. Companies can reduce theirs and their end
users costs, increase the product quality, pursue innovation and comply better with
environmental legislation as well as with customers demands. These factors define the
business objectives and consequently the level of ambition and innovation of the ecodesign
process in your company. Therefore, the identification of motivating factors is an important
input to the design brief (tool 3).
3.2 Which are the main motivating factors for ecodesign projects in a
company?
Environmental improvement;
Policies, legislation and standardization;
Company environmental policy and environmental management systems;
Social environment;
Product innovation, differentiation;
Product quality;
Product cost reduction;
Available technologies;
Company image;
Customer demand;
Future trends;
New project challenge, motivation of employees.
These motivation factors can come from the business itself (internal drivers) or from its
surroundings (external drivers).
Page 39
Chapter 3
Motivating factors
reducing hazardous materials (which appear in glasses for aesthetic effects and normally have
a higher price), optimising manufacturing processes (energy and water efficiency, generation
of less waste) and improving logistics.
The energy consumption represents an important spending line in the ceramic manufacturing.
Through appropriate design measures it is possible to reduce energy consumption in
manufacturing, by for example reducing the maximum temperature with fluxes agents and
modification of ceramic bodies.
Another important cost is related to the raw materials whose price is constantly increasing.
Given that raw materials account for around a fifth of total ceramics manufacturing cost any
volatility in input prices has a marked impact on overall production costs and competitiveness.
3.3.2 Innovation
New considerations in the product development lead to innovative products giving them also a
longer lifetime; that enable the company to reinforce market shares over time and to open up
new market niches. There is a trend in the European ceramic sector to the development of
high added value products, for example ventilated facades, urban pottery, lightweight bricks,
solar tiles, etc. Ecodesign is part of product innovation in the ceramic sector.
3.3.3 Quality
Ecodesign can help to increase the product quality by means of improved surface quality,
straightness of sides, durability and so on.
Page 40
Chapter 3
Motivating factors
Page 41
Chapter 3
Motivating factors
3.4.4 Suppliers
The existing suppliers technology, materials or components could reduce the environmental
impact of products. These innovations impact should be analyzed and may represent a driver
for ecodesign.
3.4.5 Competitors
Environmental aspects are often part of a companys brand and product quality. Many leading
companies take into account those aspects and develop and sell products with the
environment in mind, thus achieving product and brand differentiation. Most companies
global competitiveness strategies are based in product differentiation, in cost, quality or
environment improvement. To this end, ecodesign is one of the tools for the ceramic product
differentiation.
Page 42
Chapter 3
Motivating factors
Page 43
Chapter 4
Innovation
4. Innovation
4.1 Introduction
Innovation is a change in the thought process of doing something, or the useful application of
new inventions or discoveries. It may refer to incremental or radical and revolutionary changes
in thinking, products, processes, or organizations. The goal of innovation is positive change, to
make something better. Innovation leading to increased productivity is the fundamental
source of increasing wealth in an economy.
Eco-innovation is a term used to describe products and processes that contribute to
sustainable development. Eco-innovation is the commercial application of knowledge to elicit
direct or indirect ecological improvements.
It is often used to describe a range of related ideas, from environmentally friendly
technological advances to socially-acceptable innovative paths towards sustainability.
Eco-innovation may include new production processes, new products or services, and new
management and business methods, including in other words all forms of innovation that
result in reducing environmental impacts. Leaders in many industries have been developing
innovative technologies in order to work towards sustainability. However, these are not always
practical, or enforced by policy and legislation.
Page 44
Chapter 4
Innovation
Page 45
Chapter 4
Innovation
Figure 4.3
Figure 4.4
It is estimated that if employed on a global level, product improvement in the short term can
lead to reduced resource use, waste and emission generation by a factor of 2.
Figure 4.5
Figure 4.6
Experience has shown that applying extensively product redesign a reduction of environmental
pressure by a factor of 5 could be reached, though on a longer time base.
Page 46
Chapter 4
Innovation
Examples would be: solar tiles (combining the use of ceramic materials with photovoltaic cells
for energy production in faades and roofs, figure 4.7); Eco-Active tile with anti-pollutant, antibacterial properties (figure 4.8); the development of way finding ceramic products like tactile
tiles, tiles with optical fibres or luminescent tiles (Figure 4.9 and 4.10).
Figure 4.7
Figure 4.8
Figure 4.9
Figure 4.10
In the medium term it should be possible to achieve improvement in the overall environmental
performance by a factor of 10.
Page 47
Chapter 4
Innovation
Page 48
Chapter 5
Market analysis
5. Market analysis
5.1 Introduction
The goal of a market analysis is to determine the attractiveness of a market and to understand
its evolving opportunities and threats, as they relate to the strengths and weaknesses of the
firm. In our case, the market analysis will determine the potential of the ceramic ecodesigned
products market and how to supply it.
From a marketer's perspective, marketing analysis consists of the consideration of every angle
of a specific market to determine policies, for example ecodesign European directive, that will
help a company capture a larger market share and/or make the share they already control
more profitable. The market analysis of customer desire and satisfaction is a large part of
marketing. Logit analysis, a statistical technique used by marketers to assess the scope of
customer acceptance of a product, attempts to determine the intensity or magnitude of
customers' purchasing intentions and to translate that into a measure of the customers actual
buying behaviour.
For companies, market analysis is crucial because investing too much money could create a
massive loss, while investing few monies could result in loss of customer satisfaction thus
opening the door to competitors.
Market analysis may also focus at the share a company holds in a particular market, with the
aim of determining how to augment it, for example by supplying new international markets.
Unlike logit analysis, this type of market analysis, known as market share analysis, is geared
more towards entrenched product lines. The goal of market share analysis is not to determine
whether a customer would purchase a product, but rather to examine customer loyalty levels,
brand perception, and the overall competitive edge of the company, and to come up with a
strategy on how to attract market share from competitors and use it to increase one's own. Its
known that some ceramic markets like the German, French and American ones are now mainly
supplied by a few manufacturers and this type of market analysis could help a new company to
find ways to introduce its products to these markets.
Page 49
Chapter 5
Market analysis
Government data;
Trade associations;
Financial data from major players;
Customer surveys.
The market size analysis should be done taking into account the evolution of the previous
years, to identify growth rates.
Page 50
Chapter 5
Market analysis
Michael Porter devised a useful framework for evaluating the attractiveness of an industry or
market. This framework, known as Porter's five forces, identifies five factors that influence
market profitability (figure 5.1):
Buyer power
Supplier power
Barriers to entry
Threat of substitute products
Rivalry among firms in the industry
Another tool to evaluate the attractiveness of the ecodesign product-market is the SWOT
analysis method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats
involved in a project or business venture. It involves specifying the objective of the business
venture or project and identifying the internal and external factors that promote or hinder that
objective.
Page 51
Chapter 5
Market analysis
Page 52
Chapter 5
Market analysis
It is important to consider that key success factors may change over time, especially as the
product progresses through its life cycle.
Page 53
6. Environmental analysis
6.1 Environmental analysis based on life cycle thinking
Every product has an impact on the environment during all stages of its life-cycle, e.g.
extraction of resources, acquisition of raw materials, production, distribution, use
(application), reuse, end-of-life treatment, including final disposal (ISO, 2008). The
environmental aspects are the elements of an organizations activities, products and services
that can interact with environment (ISO 14001, 2004 handbook):
Direct environmental aspects are those referring to the activity of an organization
which can be controlled;
Indirect environmental aspects are those referring to the activity of an organization,
which cannot be fully controlled by the organization.
The environmental impacts are the effects of the environmental aspects, that is, they are the
changes in the environment, either adverse or beneficial which can result wholly or partially
from environmental aspects (ISO 14001, 2004 handbook).
These impacts range from slight to significant; they can be short-term or long-term; and they
occur at global, regional or local levels (ISO, 2008). Provisions in product standards have an
influence on environmental impacts of products (ISO, 2008). The prediction, identification and
quantification of environmental impacts during the life-cycle is a complex process.
To identify and understand their environmental aspects, the organizations must collect
quantitative and/or qualitative data on the characteristics of their activities, products and
services, such as inputs and outputs of materials and energy, processes and technology used,
facilities and transports. In fact, organizations should consider the environmental aspects they
can directly control (direct aspects), as well as those they can influence (indirect aspects).
Direct environmental aspects include:
Page 54
Page 55
For each environmental aspect there are one or more environmental impacts (based on a
cause and effect relationship). In figure 2 there are some examples of environmental impacts
like climate change, acidification, eutrophication, ozone layer depletion, etc.
Figure 6.2 - Scheme of a products life cycle along the supply chain of production, the products useful
life and disposal procedures, as well as the related impact topics
Source: European Commission, 2007
Page 56
6.2.1
In this chapter, a short description of the most common environmental analysis methods is
provided. The comparison of these methods is presented in table 6.1.
Impact analysis/assessment
Semi-quantitative and objective
- MET (W): Materials, Energy, Toxicity (and Waste)
- MIPS: Material Input per Service Unit
- CED: Cumulative Energy Demand
Quantitative and objective
- Ecoindicator
- LCA: Life Cycle Assessment
- ReCiPe Method
Improvement analysis
Qualitative and subjective
- Ecodesign checklists
Page 57
Chapter 6
Environmental analysis
Table 6.1 Description and comparison of tools and methods for environmental analysis
Analysis tool
Ecodesign
checklists
Description
List of questions on relevant
aspects of the product life
cycle. It helps to identify
strengths and weaknesses.
Advantages
- Simplicity
- Easy communication of
improvements
- Useful for raising
awareness
LiDS Wheel
MET(W):
Materials,
Energy,
Toxicity (and
Waste)
- Initial quantification
- Results easy to
understand
- Easy detection of
critical points
Disadvantages
- Too much
subjectivity
- It may be
incomplete if it is
not adapted to the
sector
- Subjectivity
- Considers all stages
as equally
important
Results may vary
depending on the
capacity and
experience of the
team
Example
Distribution
Use
End of life
Page 58
400 g cardboard
40 g paper
10 g PE
7.2 kg paper
filters
1095 l water
--
1.03 MJ for
packaging
manufacture
3.2 MJ/coffee
--
Toxics
Wastes
PS: benzene
Flame
retardarnt
(printed
circuits)
Chlorine
(paper)
Plastic scraps
--
--
--
Chapter 6
Environmental analysis
Table 6.1 Description and comparison of tools and methods for environmental analysis
Analysis tool
MIPS: Material
per Service
Unit
Description
The MIPS concept can be used
to measure eco-efficiency of a
product or service and can be
applied in any project, from
the creation of a single product
to complex systems. The
calculation takes into account
materials required to produce
a product or provide a service.
The total material input (MI) is
divided by the number of
service units (S).
Advantages
- Initial quantification of
environmental aspects
- Easy understanding of
the results
- Quick check of
alternative products
Disadvantages
- It does not consider
the emissions over
the life cycle
Example
20000
CED:
Cumulative
Energy
Demand
- Easy understanding or
the results
- Quick check of
alternative products
- It is difficult to
include indirect
consumption
Page 59
Plastics
Total CED
MJ/kg
CED Nonrenewable
PE-HDPE
PE-LDPE
EPS
PP
PS
PVC
46.9
52.2
67.5
65.9
54.6
39.6
46.6
51.5
66.5
64.5
54.3
39.9
CED
renewable
CED Others
0.1
0.2
0.2
0.5
0.3
0.7
0.4
1.0
0.1
0.2
0.3
-0.6
Source: Ok-Institut, 2000
Chapter 6
Environmental analysis
Table 6.1 Description and comparison of tools and methods for environmental analysis
Analysis tool
LCA: Life Cycle
Assessment
Description
Assessment of products,
processes or services to
objectively quantify the
environmental impacts
throughout the life cycle, using
its materials and energy inputs
and outputs.
Eco-indicator
ReCiPe
Advantages
- System overview
- Identification /
quantification of
environmental impacts
Disadvantages
- It assesses
potential global
impacts, not real
- Complexity in the
development and
application of the
tool
Rating/weighting of
environmental impacts by
converting the results to a
single value.
- It quantifies
environmental impacts
- Results easy to
understand
- Relatively easy to
implement
- It quantifies
environmental impacts
- A degree of
subjectivity in the
weighting of the
impacts
Page 60
Example
Chapter 6
Environmental analysis
Table 6.1 Description and comparison of tools and methods for environmental analysis
Analysis tool
Description
environmental impact
category. In ReCiPe, two levels
of indicators are determined:
1. Eighteen midpoint indicators
2. Three endpoint indicators
Advantages
Disadvantages
Page 61
Example
All aforementioned methods of environmental analysis are based on life cycle thinking, i.e.
they analyze potential environmental impacts of a product during its entire life cycle, from its
cradle to grave. Life-cycle thinking refers to the consideration of all environmental aspects of
a product at all stages of its lifecycle. Particular improvements targeted at a specific life-cycle
stage can adversely affect environmental impacts at other stages of the product life cycle (ISO
Guide, 2008). Life Cycle Assessment (LCA) is the only standardized method for quantitative
environmental Life Cycle Thinking by ISO 14040 and ISO 14044.
The most detailed information is required; the most complete environmental analysis must be
applied. Therefore environmental analysis methods vary in their complexity, data
requirements and consumption of time and money. The simplicity and complexity of some
different methods is presented in figure 6.3.
Page 62
The functional unit, defined in the ISO 14040 as the "quantified performance of a product
system for use as a reference, corresponds to a reference flow to which all other modeled
flows of the system are related, so the aforementioned functional unit needs to be
quantitative. It should be remembered that the functional unit does not relate to production
or consumption volumes, only to product function.
This process also allows the comparison of data from LCA, considering different materials,
components, processes or products with the same function. For example if we want to
consider a ceramic tea pot for water, its functional unit could be: a product to contain and
serve one liter of tea twice a week during 5 years or if we consider a ceramic tile, its functional
unit could be X m2 to cover walls (or floors) for 40 years. Attention must be payed to
comparisons, since it is not possible to compare two LCA studies even of two products with the
same functionality, if they are not based on the same scenario or scope.
In LCA, the potential environmental impacts are expressed by impact categories. The impact
categories can be for example acidification, eutrophication, global warming, ozone depletion,
biodiversity or shorter length of life of humans.
The effect on the environment in each impact category is quantified through each categorys
impacts indicators e.g. kg SO2 in the case of acidification potential or Kg of equivalent CO2 in
the case of global warming potential.
According to ISO14040 and ISO14044, the four phases of a LCA study are:
a) Goal and scope definition,
b) Inventory analysis,
c) Impact assessment, and
d) Interpretation.
Page 63
a) The goal and scope definition of LCA, including system boundary and level of detail,
depends on the subject and the intended use of the study. The depth of a Life Cycle
Assessment can differ considerably depending on its goal.
The goals of an LCA can include: the intended application (e.g. ceramic brick for construction
works); the reasons for carrying out the study (e.g. improvement in the ceramic factory,
namely firing conditions), the audience (to whom the results of the study are intended to be
communicated), etc.
The following issues should be considered within the scope definition: product system;
function of the product system; functional unit, the system boundary, allocation procedure,
LCIA methodology, type of impact assessment and interpretation, data requirements,
assumptions and limitations data requirements; eventual limitations, assumptions, type of
critical review and reporting.
b) The life cycle inventory analysis phase (LCI phase) is the second phase of LCA. It is an
inventory of input/output data with regard to the system being studied. It involves the
collection of the data necessary to meet the goals of the defined study.
The inventory data may include, but is not limited to, the use of mineral resources (e.g. clay,
inert, feldspar, sand, kaolin), the use of services (like transportation or energy supply), the use
of ancillary materials (like lubricants), the consumption of water, the air emissions (carbon
monoxide, carbon dioxide, sulfur oxides, nitrogen oxides, fluorine, chlorine, etc), the water or
soil emissions etc.
As a general rule, process flowcharts are the essential part of this phase. Inventory data gives
the basis for the life cycle impact assessment.
Data collection is one of the most time consumering task/phase. Adequate documentation of
the data collection will assure the quality of the results.
c) The Life Cycle Impact Assessment phase (LCIA) is the third phase of the LCA. LCIA aims at
describing the consequences of the environmental loads quantified in the respective analysis.
The impact assessment is achieved by translating the environmental loads from the
inventory results into environmental impacts, in categories related to the data collected in the
previous phase (for e.g. acidification, global warming, ozone depletion, resources depletion,
eutrophication, etc). The level of detail, choice of impact categories and evaluation
methodologies, strongly depends on the goal and scope of the LCA study.
According to ISO 14044, the LCIA phase should include the following mandatory elements:
Selection of impact categories, category indicators and characterization models;
Assignment of LCI results to the selected impact categories (classification);
Calculation of category indicator results (characterization).
Page 64
d) Life Cycle interpretation is the final phase of the LCA procedure, in which the results of an
LCI or an LCIA, or both, are summarized and discussed on a basis for conclusions,
recommendations and decision-making in accordance to the goal and scope definition (ISO
14044).
Instito de Tecnologa Cermica. Asociacin de Investigacin de las Industrias Cermicas (AICE). Universitat Jaume I,
Castelln, Spain.
2
Grupo de Investigacin en Gestin Ambiental, Escuela Superior de Comercio Internacional. Universidad Pompeu
Fabra, Barcelona, Spain
3
Spanish Association of ceramic tiles manufacturers. Spain
Page 65
Impact category
Method
kg Sb-Equiv.
CML2001
kg SO2-Equiv.
CML2001
kg Phosphate-Equiv.
CML2001
kg CO2-Equiv.
CML2001
kg R11-Equiv.
CML2001
kg Ethene-Equiv.
CML2001
MJ
CML2001
kg
CML2001
As an example, figure 6.6 presents a graph showing the contribution of the life cycle phases to
each impact category as a percentage of the total environmental impact of a porcelanic tile.
Page 66
Porcelanic tile
B Transport
Figure 6.6 - Contribution of the life cycle phases to each impact category
The LCA study results show that manufacturing has the highest environmental impact for all
impact categories analyzed and for all types of tiles. The primary energy consumption of a nonrenewable origin (for instance the consumption of natural gas in the process of spray drying,
drying and firing, causing a 71% contribution on the indicator of Global Warming Potential
GWP) during the manufacturing of tiles is the largest contributor to the environmental impact
of this product.
Regarding the assessment of impacts during the use stage, it is worth indicating that the use of
tiles as covering materials in floors, walls or even exterior walls, has a great advantage over
other equivalent products, because their useful life is much longer. Moreover, the impacts of
the usage stage have been mainly attributed to the cleaning during a time span of 50 years;
moreover a ceramic tile product does not require any service, thus minimizing energy
consumption during its lifetime.
In order to identify significant environmental aspects and to establish improvement strategies
to minimize them, the relevance of each of them and their influence on the results have been
identified by a sensitivity analysis, where it was determined that the weight of tile, thermal
energy consumption and waste management are the critical points.
Another example of LCA (cradle-to-gate) in order to support EPD (environmental product
declaration) was performed by CTCV4 upon request of APICER 5.
This LCA examines the stages for the production of bricks, from cradle to customer's gate,
including the process of mining and mining facilities, transportation, production in factory and
its distribution to end users (based on scenarios). The methodology takes into account the ISO
14040 series, ISO 21930 and the EPD rules. In general, the impacts are mostly focused on air
quality, particularly at the production level during the firing operation.
The functional unit used was 1 tonne of bricks ready to be sold (for a brick 9, dimensions
30*20*09 cm, 1,000 kg is equivalent to 14,6 m2).
4
5
Page 67
A cut-off rule was established in order to decide which materials associated to these phases
should be included within the boundaries. Thus, the materials representing less than 0.5% of
the functional unit were left outside the boundaries.
The phases corresponding to consumer use and final disposal of the product were also
excluded, as along with transportation and final disposal of industrial waste. The construction
phases of the plant and the remaining infrastructure, production of manufacturing equipment
and personnel activities were also excluded.
Environmental indicators were obtained for the impact categories shown in table 6.3, together
with the indicator that quantifies them. The impact categories correspond to those proposed
by the EPDSYSTEM (www.environdec.com) and the characterization factors were those
suggested by CML 2001 method (www.cml.leiden.edu).
Table 6.3 Impact categories and units considered in the study
Impact category
Unit
Total
Global warming (GWP100)
kg CO2 eq
170
Ozone layer depletion (ODP)
kg CFC-11 eq
1.8E-05
Photochemical oxidation
kg C2H4
0,075
Acidification
kg SO2 eq
0,565
Eutrophication
kg PO4--- eq
0,076
Note: Data for the functional unit: 1 tonne, including 100 km of distribution to the customer
In the global warming category, the main contribution comes from the production phase,
namely the burning of natural gas in the stage of drying and firing. Transportation and the clay
mining process are less relevant.
In the ozone layer depletion category, the profile of contributions seem to be mainly due to
natural gas distribution and the emissions from the combustion of diesel in the transports
associated to clay consumption, brick storage and distribution.
The photochemical oxidation category is predominated by the drying and firing processes in
brick production that emit nitrogen oxides (NOx), sulphur oxides (SOx), carbon oxides (COx) and
hydrocarbons during the combustion of natural gas and also during the combustion of diesel
during the transportation. The emissions of SOx produced during the production of the
electrical power used by the machinery in brick production, play also an important role in this
impact category.
Acidification is mainly due to NOx and SO2 emitted during the drying and firing of the ceramic
brick and during the combustion of fuels in transports.
Eutrophication is mainly due to NOx emitted during the combustion of the natural gas used in
drying and firing of the ceramic brick and during the combustion of fuels in transports.
Page 68
Chapter 7
Economic analysis
7. Economic analysis
7.1 Introduction
When selecting the most appropriate ecodesign strategies, it is necessary to evaluate both the
environmental and the economic benefits as well as the effects they may have on users.
Aiming at potential eco-efficient product development, namely achieve greater environmental
impacts reduction through lowest possible cost, this manual proposes the development of a
chapter that provides basic facts about the economic analysis of environmental improvements
defined in previous chapters.
There are various tools and methodologies to analyze economic cost of products, applied
depending on the objectives, scope and applicant.
One of the key elements for each product development process is the economic evaluation of
proposed design concepts. Since the aim for ecodesign is to reduce the environmental impact
of products and services, the economic assessment focuses on the costs of the product life
cycle that can change due to ecodesign.
When working on ecodesign, designers try to reduce environmental impacts over the entire
product life cycle. This means that in economic terms, one inevitably has to address the
product life cycle as well. The term used for this assessment is Life Cycle Costing (LCC).
Recently, several approaches have been developed to assess the economic aspects of products
with better environmental profile. This chapter first reviews the methods currently available
and their interdependence. It then introduces a simple methodology to assess the economic
viability of an ecodesigned product.
Page 69
Chapter 7
Economic analysis
Page 70
Chapter 7
Economic analysis
Commission, 2004), ISO 15663, SAE-ARP4293/94, DoD 1973 (US Department of Defense 1973),
and AS/NZS 4536 (Standards Australia and Standards New Zeland 1999). In addition, different
methods for performing Conventional LCC have been described in literature, e.g. Dhillon, 1989;
Ellram 1993, 1994, 1995; Fuller and Peterson 1996; Riezler 1996; Zehbold 1996; Australian
Department of Defence 1998.
As an example of the conventional life cycle costing in the ceramic industry, a report drafted in
2005 by Giorgio Olivieri & Associati for Assopiastrelle (Italian Association of Ceramic Tiles and
Refractory Products) is presented. Some of its results are shown below:
Determining total average cost: the average cost is obtained by summing the costs of
manufacturing, commercial and administrative.
Table 7.1 Average manufacturing costs (per sqm of ceramic tile)
Manufacturing costs (Euros)
2003
Raw materials for ceramic body
1.01
Raw materials for glazes and colours
0.91
Electricity
0.45
Thermal energy
0.72
Maintenance
0.47
Packaging materials
0.25
Production personnel
1.53
Total manufacturing costs
5.34
2004
0.99
0.88
0.43
0.74
0.46
0.24
1.50
5.24
2004
0.54
0.86
0.34
1.74
2004
0.20
0.54
0.24
0.13
1.11
Total costs
Manufacturing costs
Commercial costs
Administrative costs
Total costs
2004
5.24
1.74
1.89
8.87
Page 71
Chapter 7
Economic analysis
Page 72
Chapter 7
Economic analysis
Two types of costs are differentiated in figure 7.2 (Rebitzer and Hunkeler, 2003):
Internal costs: implying that someone a producer, transporter, consumer, or other
involved stakeholder is paying for the production, use and end of life expenses, and
thereby, internal costs can be connected to business costs. This internal cost definition
refers to all the costs and revenues within the economic system (inside the fine line in
figure 7.2).
External costs that are already priced in monetary units, due to their to-be-internalized
character in the decision-relevant future, and remain so; there is no conversion from
environmental measurements to monetary measures or vice versa. There should be no
double counting of externalities in LCC and the complementary LCA.
Unfortunately, there are no publicly available examples of Environmental life cycle costing of
ceramic products. Since the LCC Environmental studies are considerably large to be included in
this manual, examples like the one available below are transferred from the book of Rebitzer
and Hunkeler, 2003:
Page 73
Chapter 7
Economic analysis
Figure 7.3 Model of the LCA system for municipal wastewater treatment.
Source: Rebitzer et al., 2002.
Figure 7.4 Costs of the different elements of the wastewater treatment system.
Source: Rebitzer et al., 2002.
Page 74
Chapter 7
Economic analysis
Page 75
Chapter 7
Economic analysis
Conventional LCC
Environmental LCC
Societal LCC
---
Consistent to
environmental assessment
(LCA) and consistent
approach for sustainability
assessment of products
System boundaries
Perspectives: actors
Reference Unit
Item or product
Functional unit
System
Costs categories
Mainly costs of
development, materials,
energy, machines, labour,
waste mgmt, emission
controls, transport,
maintenance and repair,
liability, taxes and
subsidies
Cost model
Generally quasi-dynamic
model
Steady-State model
Generally quasi-dynamic
model
Discounting results of
LCC
Recommended
(but usually not applied)
Recommended
Recommended
Recommended
Recommended
LCA according to
ISO 14040/44
No
Yes
Page 76
Chapter 7
Economic analysis
Page 77
Chapter 7
Economic analysis
A second adjustment is needed to account for expected changes of the level of pricing over
time.
For example, the future value of costs and benefits measured in todays Euros will be much
higher during a period of inflation. Without adjusting for these time-related differences, the
benefit-cost analysis would yield biased results, and any decision based upon them would be
misguided.
Consequently, decision makers must use forward thinking in their evaluation of any proposal
and therefore make projections about its future implications. For more information, please
refer to Annex I of this chapter.
Page 78
Chapter 8
Ecodesign strategies
8. Ecodesign strategies
8.1 Introduction
During the environmental assessment of the products life cycle, the most important
environmental aspects are identified and some ideas for improvement rise spontaneously.
However, the idea generation process would be incomplete if it relied on the results of the
environmental assessment only; it is necessary to re-think the product and its function as a
whole in order to further develop design solutions that potentially reduce the environmental
burden.
For this purpose, so-called ecodesign strategies or principles have been developed. There
are different categorizations, but 8 common and widely adopted ecodesign strategies are:
@.
1.
2.
3.
4.
5.
6.
7.
These generic strategies can be deployed in different criteria or measures. In this chapter, such
criteria and/or measures have been developed in close relation to the specific characteristics
of ceramic products (see table 8.1).
The ecodesign strategies and criteria or measures can also be used as a checklist to
qualitatively evaluate the environmental profile of a product.
Although they provide guidance based on best practices in the ceramic industry, the ecodesign
team should not be limited to the recommendations here presented; on the contrary, it should
be able to innovate and find other ideas and solutions. The application of the ecodesign
strategies in ceramic products, for idea generation and/or qualitative environmental
assessment, is supported by tool 9 Ecodesign checklists for ceramics.
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Table 8.1 Ecodesign strategies and related measures or criteria, adapted to the ceramic sector
Ecodesign strategies
4.Promote environmentally
friendly packaging and logistics
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Ecodesign strategies
There is a link between the ecodesign strategies and the five major stages of the life cycle,
illustrated by the following figure 8.1. For simplicity, only the major effects are shown; for
example, the stage recovery and disposal is influenced not only by strategy 7 but might also be
improved by strategies 1, 2 and 4.
Figure 8.1 The relation between ecodesign strategies and product life cycle.
Source: Adapted from Brezet and van Hemel, 1997.
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higher quality paste for more demanding purposes. This strategy is already quite
optimized in the structural sub-sector.
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An example is the use of plaster to make moulds for decorative ceramics and table
ware. The plaster, after use, can be recycled by the supplier, who collects used moulds
when delivering a new lot of plaster.
Examples of this measure are the incorporation of marble and granite sludge
generated in the ornamental stone industry, and the integration of bricks and tiles
from demolition waste in the ceramic body, use sludge from paper and pulp industry
in the thermo blocks manufacturing process, etc.
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displayed in the packaging for that purpose (e.g. type of material, recyclability,
disposal information, etc.).
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9. Ecobenchmarking
9.1 What is benchmarking?
Benchmarking is the process of improving performance by identifying, understanding,
adapting and implementing best practices and processes found inside and outside an
organization. Benchmarking involves the creation of partnerships to exchange information on
processes and measurements, resulting in the setting of realistic improvement goals. Effective
benchmarking is a process of continuous improvement.
In simple words, "benchmarking is the practice of being humble enough to admit that
someone else is better at something and being wise enough to learn how to match and even
surpass them at it".
Benchmarking is a valuable tool for assisting a company's management in strategy
development. Companies that compare their performance against others and identify best
practices are more able to gain strategic, operational and economic advantages by improving
their mode of operations and processes. This will also lead to higher levels of competitiveness.
Almost any process or activity of an organization is a candidate for benchmarking; work
processes, products and services, support functions, organizational performance, strategies,
etc. Here we focus on benchmarking products, as this is the scope of the InEDIC manual.
The goals of a benchmarking study should be based on stakeholders needs, whether they are
internal (departments within an organization, higher management levels, employees) or
external (consumers, citizens, regulators, legislators, local and national environmental groups,
investors). Conducting a benchmarking study is immaterial if it is not designed to meet specific
stakeholder requirements.
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improvements,
stimulating
creativity
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In our everyday life, we tend to use more our left cerebral hemisphere rather than our right
one, which is the reason for the existence of tools to stimulate creative thinking. One should
use these tools to gather as many ideas as possible, and should not kill them before they are
completely developed. It may so happen that the most stupid and crazy ideas might lead to
the ideas that are more appropriate for the solutions under investigation.
The creative process can be divided in the following stages:
1) Preparation problem definition and analysis
2) Intuitive phase incubation, illumination
3) Critical phase assessment and selection
The different functions of the human brain sides (Cerebral hemispheres) have been first discovered by Roger Sperry, Ph.D. in
the 1960-ties. It was discovered that the left side is responsible for logical thinking, language etc, while the right side for artistic
skills, creativity and intuition. In 1981 Roger Sperry received the Nobel Prize for Medicine for the research on the split brains.
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Criticism is part of the left brain side functions and should be used during the later stage of
the brainstorming, namely during the evaluation and selections of ideas, which is the
appropriate time for analysis and critical thinking (left side of brain).
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Verb
Eat
Run
Jump
Split
Play
Give away
These are well adapted and known techniques. Use the ideas from the first section to enrich
and stimulate the brainstorming sessions.
10.3.2 Brainstorming
A well-known tool in searching for new ideas is brainstorming (tool 10 of the InEDIC Manual).
Brainstorming sessions are held in all companies from time to time. Several people with
expertise in different disciplines come together as a team and try to come up with an answer
to a question asked by the group itself without any restrictions, during a time frame of
approximately 30 to 60 minutes (figure 10.3).
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Brainwriting
This variant intends to take advantage of the solitude participants might prefer, and requires
that everyone writes down or draws their ideas on paper, after a short discussion.
The 6-3-5 method is a technique whereby six participants set down three ideas on paper
(figure 10.5). These ideas are then passed on to the next participant (as per the seating of the
group) after five minutes. The second person then looks at the solutions and in turn thinks up
three new ideas. Having the group work in this way generates 108 ideas in a short time.
These ideas are subsequently assessed and the results are then fed back to the group. The
whole group then decides what should how these ideas can then be used or improved.
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Individual brainstorming
Some people think better when they work alone. In this case it can be very useful to use a
mind map to sort and develop the generated ideas, such as the one shown in figure 10.7
below.
Existing product
Alternatives
Packaging material
cardboard
bio plastic
plastic
cardboard
Means of protection
compartments
pre-shaped
foam
paper shred
airbag
shavings
chips
Packaging shape
cylindrical
hexagonal
triangular
Packaging color
various colors
natural
square
without
cuts
same as
company
local
coloring
idea
improved
idea
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10.4.2 Drawing
It is possible to use drawing as one of the tools for stimulating creativity. However, most of
the people that have never attended an art school or special courses, would struggle with it,
because the so called left regime, or logical working of the brain is usually dominant. To be
able to draw nicely, there is a need to switch to the right regime, e.g. the intuitive part of
the brain. One of the techniques developed by Prof. Betty Edwards7 while working with nonartistic students is to draw upside down. Select a rather complicated drawing, turn it upside
down and then let yourself (or others) draw it as it is (figure 10.8).
You will be surprised by the result (figure 10.9), which would not have been achieved if the
drawing was displayed in the correct position.
This kind of exercise allows the right side of brain to enter into working mode, since in our
everyday activities we tend to be more left side oriented and therefore find it hard to
generate genuine solutions to arising problems.
10.4.3 Improvements
7
Dr. Betty Edwards (born 1926) taught and conducted research at the California State University, Long Beach until she retired in
the late 1990s. During her time there, she founded the Center for the Educational Applications of Brain Hemisphere Research. Her
work has been widely cited in scholarly journals. She is also an art instructor whose classic work Drawing on the Right Side of the
Brain (originally published in 1979) has greatly influenced the teaching of drawing.
http://en.wikiquote.org/wiki/Betty_Edwards
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It is a creative technique aiming to improve the use and performance of existing products or
services. This technique (examples of which are available in table 10.3) focuses on identifying
the less obvious attributes of things.
Table 10.3 - Examples of improvements of an object or a service
Simplify, remove complexity
Reduce or eliminate drawbacks, bad side
Apply to new use
effects
Automate
Make more elegant
Reduce Cost
Provide better shape, style
Facilitate use, understand
Provide better sensory appeal (taste, feel,
Reduce fear to own, use
look, smell, sound)
Make safer
Provide better psychological appeal
Provide better performance and more
(understandable, acceptable)
capacity
Provide better emotional appeal (happy,
Make faster, less waiting
warm, satisfying, enjoyable, fun, likable,
Provide more durability, reliability
"neat")
Improve appearance
Aim toward ideal rather than immediate
Create more acceptance by others
goals
Add features, functions
Provide larger capacity
Integrate functions
Make portable
Make more flexible, versatile
Make self-cleaning, easy to clean
Increase / Reduce weight
Improve accuracy
Increase / Reduce size
Make quieter
Make more powerful
www.virtualsalt.com/crebook2.htm
10.4.4 Modifications
This technique comprises the identification of new ways and uses for objects, other than
those for which they were created (as per table 10.4 below).
Table 10.4- Examples of insights for further ideas
Objects
Other use
Hair clip
Bookmarker
Balloon
Water container
Plastic plate
Frisbee
10.4.5 Metaphors
Another creativity technique is the metaphors, which is simply about borrowing ideas from
other fields (figure 10.10). If brainstorming sessions or other creativity techniques do not
result in acceptable solutions, metaphors can be used to establish connections between
different objects and ideas, even between those which appear absurd. The use of metaphors
can generate radically new ideas.
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These connections can be used to create the structures of a new thought. Look, interpret and
relate what surrounds stimulates creative thinking and increases human capacity to generate
original ideas and innovative. (figure 10.11).
Sources of inspiration
Spiders make strong and tough silk
without using high heat, high pressure
or toxic chemicals.
Technical solutions
This can be used in parachute
wires, suspension bridge
cables, structures, protective
clothing etc.
Biomimicry is a science that studies natures models and then imitates or takes inspiration from these designs and processes to
solve human problems. www.biomimicry.net
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This technique consists of simulating a particular situation (figure 10.14) or a story and aims
at creating the opportunity to relate and interact directly with a problem or an idea, thus
learning by the experience.
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problems to understand that there are only perceptions, not physical rules).
Do not accept other people's definitions of problems; they may be either wrong or
biased or irrelevant.
If a problem definition is wrong, no solution will solve the real problem, despite how
many of them are offered.
What are the boundaries within which the solution must fit?
Are the boundaries perceptions or reality?
What are the possibilities if one pushes the boundaries?
What are the benefits/drawbacks incurred by small boundary changes?
Repeating the same wrong process again and again with more vigor does not work.
You can be very close to a solution without actually reaching it.
Thought is the solution.
Physical hard work will not work.
in http://www.brainstorming.co.uk/puzzles/ninedotsnj.html
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Therefore, there was a gap to be filled by ISO 14006, shown in figure 11.1.
Figure 11.1 Relationship between the standards and the areas of knowledge.
Source: Adapted from ISO/DIS 14006
This chapter of the InEDIC Manual will focus on the relationship between ecodesign and
management systems, taking ISO 14001 requirements and ISO 9001 clause on design and
development as the starting point. However the requirements of ISO 14001 and ISO 9001 will
not be transcribed here, so readers should consult these standards while reading this text. Put
in simple terms, in this chapter the product and life cycle orientation is highlighted in the ISO
14001 requirements, where relevant, and the environmental dimension is added to the ISO
9001 clause on design and development.
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Notes:
(1) Requirements in italics: no additional guidance is necessary as the original text in the standard fully
covers the needs of ecodesign activities.
(2) Emergency preparedness and response (ISO 14001) is not relevant in the context of ecodesign and
therefore was excluded from the picture.
(3) D&d: design and development
Figure 11.2 The continual improvement cycle based of ISO 14001:2004 and the design and
development clauses of ISO 9001:2008
This chapter follows closely ISO 14006 (draft international standard version as of April 2010),
and is complemented by a verification list (tool 15 of the InEDIC Manual) that can be used by
companies that perform design and development of their products and implemented or are in
the process of implementing an EMS.
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11.2.3 Planning
Environmental aspects
Under ISO 14001, organizations should identify the environmental aspects of their activities,
products and services that they can control and those that they can influence, and determine
which of them are significant, i.e., have significant environmental impacts. This requirement is
explicitly applicable to products and their life cycle (where environmental aspects can be
controlled or influenced), although in the annex ISO 14001 states that a detailed life cycle
assessment is not required. In any case, companies should establish a reproducible and
consistent method to evaluate environmental aspects (both inputs such as consumption of
materials, energy and water, and outputs such as waste, emissions and others) and related
environmental impacts (such as climate change, air pollution, resources depletion, toxicity,
acidification, etc.) of their products.
In ceramics, relevant aspects are raw materials consumption (clay, feldspar, sand, carbonates,
etc.), water consumption, energy consumption (both electricity and fuels like natural gas, fuel
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oil, sawdust), air emissions (particles, nitrogen oxides, sulphur oxides, fluorine, chlorine),
wastewater emission, noise, and waste (broken pieces, sludge, refractory, maintenance
materials, etc).
For further guidance on qualitative and quantitative life cycle assessment, see chapter 6
Environmental analysis.
When a company is performing the eco(re)design of an existing product, the evaluation of the
significance of environmental aspects should be done on the basis of the reference or initial
product. When the company is performing the ecodesign of a completely new product, the
evaluation should be done on the basis of a similar product existing on the market or a
hypothetical reference.
The results of the evaluation should be taken into account in setting environmental objectives
for the product which is the object of ecodesign and therefore are an important input to the
design process.
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For achieving objectives and targets, companies should implement programmes with defined
responsible people, means and time frame; an ecodesign project that the company performs
should be included in those programmes.
Regular updating (follow up) of objectives and targets ensures continuous improvement.
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Communication
Internal communication should include the products environmental performance and related
activities in the context of the EMS, and take place among the various levels and functions of
the organization including the departments responsible for product design and development.
As for external communication, companies should have procedures for receiving, documenting
and responding to relevant communications related to the products environmental profile
and ecodesign from external interested parties. In addition, companies may choose to
proactively communicate externally about their products significant environmental aspects
throughout the life cycle.
Although it is not a requirement of ISO 14001, the external communication may also include
information about actions to improve environmental performance of the product during its life
cycle, like guidance for proper use, maintenance and end-of-life treatment of the product
among others.
There are many standards that can help companies to address and shape external
communications, such as the ISO 14020 series (Environmental labels and declarations), ISO
14063 (Environmental communication) and ISO 21930 (Sustainability in building construction
Environmental declaration of building products). For more information see chapter 12
Green marketing and communication.
Operational control
The operational control should cover the operations with significant environmental aspects.
Operational controls may take various forms, such as procedures, work instructions, physical
controls or any combination thereof.
The operational control procedures of ceramic industries normally focus on water and
wastewater management, waste management, air emissions, noise, handling and storage of
chemical products such as oils, solvents and glazes, subcontracting and purchasing.
In order to ensure that the design and development process is carried out under specified
conditions, the company should establish, implement and maintain one or more documented
procedures for that purpose. Chapter 2 Ecodesign project step-by-step may be used as a
basis for such procedures. ISO 9001 requirements for design and development are also a
useful way to address such procedures, but they lack the environmental component, which is
covered in the text below.
Applicable design and development procedures should be communicated to suppliers,
including subcontractors. In case the company outsources design activities, it is important to
ensure consistency with internal procedures.
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11.2.5 Checking
Monitoring and measurement
The organizations must develop a systematic approach to monitor and measure their
environmental performance, and provide data to support or evaluate operational controls,
their objectives and targets, their environmental performance and the performance of their
EMS.
Monitoring involves collecting information, such as measurements or observations, over time.
Monitoring and measurement should include information on:
the environmental impact of products along the life cycle
the ecodesign process and how it is managed and up taken by the company;
This information is crucial for the company to assess the achievement of its environmental
objectives and targets and to perform the review, verification and validation of its design and
development processes. For this purpose, indicators should be defined; for further guidance
see chapter 6 Environmental analysis and ISO 14031:1999 on environmental performance
evaluation.
Evaluation of compliance
The evaluation of compliance includes legal and other requirements related to the
environmental aspects of the products related to other life cycle stages besides production
activities.
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environmental specifications in more than 1,000 criteria (EC GPP, 2011). The conclusions
obtained can be differentiated into three parts:
By participating countries: the countries that deal with the larger number of
environmental criteria are, Austria, Denmark, Finland, Germany, Netherlands,
Sweden and the UK;
By the obstacles encountered at the level of implementation of the "Green
Procurement";
the potential perception that green products can be more expensive, lack of
knowledge on the bases of recruitment, lack of managerial and political support,
lack of tools and information and limited training, both by buyers and sellers,
referring to knowledge and use of eco-labels, as well as the stimulation of analysis
tools such as life cycle assessment;
By group of products concerned: analyzing the environmental impact of different
product groups, concluding that 10 product groups are the best for "Green
Marketing", among which, are those related to the construction sector.
The European Commissions objective is to create a database, to gather all information available
on the subject, to give practical solutions and to clarify that it can be implemented at any time
and without obstacles, while complying with the Directives 2004/17/EC and 2004/18/EC, and
their specifications, clarifications and restrictions on the use of eco-labels.
In Europe, many governments have begun to include environmental, social and ethical issues in
their procurement legislation; the addition of these criteria results in direct environmental and
social benefits, ranging from the reduced consumption of natural resources to improving public
awareness, through the new requirements imposed on public procurement by the
implementation of this new legislation.
With respect to purchases and procurement under the aforementioned environmental
standards, priority has been given to computer equipment, cleaning products, recycled paper,
vehicles, construction, textiles, energy efficiency, furniture and transportation.
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Product
Products that are offered to the market have to fulfil mainly two criteria compared to competing
available products: they have to be greener throughout their life cycle AND they should have the
same or better performance, quality and functionality levels. Characteristics of green products
being offered for sale extend the physical products themselves; they also include packaging,
branding and services that accompany these products. Aiming to produce environmentally
friendlier products, companies first have to examine and evaluate the environmental impacts of
the products entire life cycle. There are many strategies to improve the environmental
performance of any product (see chapters 1 and 2 of the Manual) and there are different
options for marketing any green product (e.g. eco-labels).
Distribution of a product
Distribution decisions are related to the entire life-cycle of a product from the supply of inputs,
through manufacturing, packaging, distribution to the end user and finally product disposal. The
aim of product distribution (logistics) is the delivery of a product in the time, location and
volume requested by the customer. Logistic decisions also involve the use of transportation
packaging as well as systems for returned goods and the use of decentralized production
locations. Turning the distribution process more green is about saving logistics resources (e.g.
using different transportation systems and grouping bundling solutions for products) and about
reducing environmental impacts from transportation (i.e. short distances decrease the volume
of pollutant emissions).
Green pricing
Green pricing is a very complex issue. Although green products are often priced higher than
traditional goods, this does not always mean they cost more, especially when all costs
associated with these goods are considered. It usually means that initial expenses for green
products are frequently higher, but long-term costs are lower (e.g. energy saving light bulbs).
Moreover, quite often traditional products are not priced to include all environmental costs
(externalities). In many cases these externalities of traditional products are subsidized by society
and result in lower prices for consumers. In contrast, all costs related to less harmful products
are passed on to the consumers, usually in the form of a higher price. Green pricing of goods
needs to ensure that environmental value is considered important by and is adequately
communicated to consumers.
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Promotion
The final part of the green marketing refers to the process of informing consumers about the
products. It involves the communication of aspects of the product, such as price, location,
services etc.
Promotion may include a large number of activities, such as educating the consumer by
promoting responsible consumption, appealing to the consumers self-interests, organising
exhibitions, seminars and conferences or providing product performance and quality
reassurance, to name but a few. It is very important to establish product and company
credibility by using understandable and verifiable claims, considering third party certification
and/or the environmental impact of marketing methods.
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Definition
Is LCA required?
Need to be verified
by an independent
third party?
The eco-label
informs about
Standards
Improvement on a
specific environmental
aspect
ISO 14021
Environmental
Product
Declarations
(Type III)
Show standardized
information regarding
the life cycle of
products.
Yes
Not required but
increases credibility
Environmental profile
(life cycle)
ISO 14025
ISO 21930
prEN 15804
Logo
Communication to
final consumer
Communication
between companies
Green procurement
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Product category
EU Eco-label
Distintiu de Garanta
Qualitat Ambiental
Coverings
de
Ecomark
(Japan)
China ecolabelling
Green Label
Hong Kong
Flooring materials
Ceramic tile
Building products using recycled materials
Urinals
Eco-logo
(Canada)
EU eco-label for ceramic coverings has only succeeded in Spain, France but especially in Italy
where more than ten companies (around 30 models) have been accredited.
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12
13
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Design for sustainability
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Design for sustainability
In this last chapter of the InEDIC project, the idea is to revisit this topic, on the one hand, and
to address the subject of radical innovation and social criteria in design, on the other; this way
some hints are provided on new trajectories that companies and designers may wish to
consider for their future developments.
organizational governance,
human rights,
labour practices,
the environment,
fair operating practices,
consumer issues and
community involvement and development.
It states that these core subjects cover economic, environmental and social impacts that
are most likely to occur during business operations and should therefore be addressed by
organizations. One possible approach to cover all relevant criteria in design for
sustainability is to use this very same categorization (figure 13.1).
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Figure 13.1 The seven core issues of social responsibility according to ISO 26000
The figure indicates that all issues should be taken into account (the holistic approach) and
that they are interdependent. Nevertheless, the first one, organizational governance, will not
be used as a design approach because its nature is somewhat different from the other core
issues. As a matter of fact, effective organizational governance enables an organization to take
action on the other core issues, as its about the way organizations make and implement
decisions in pursuit of their objectives. One could say that the adoption of a product-oriented
environmental policy or ecodesign procedures, for instance, such as presented in Chapter 11
Environmental management systems and ecodesign are elements of good governance; but
this will not be tackled as a design for sustainability approach in itself.
Human rights
Human rights embrace two broad categories: civil and political rights (such as the right to life
and liberty, equality before the law and freedom of expression) and economic, social and
cultural rights (such as the right to work, to eat, to enjoy the highest attainable standard of
health, to be educated and to attain social security). While states have a duty and
responsibility to respect, protect and fulfil human rights, it is widely acknowledged that nonstate organizations can affect individuals human rights and hence have a responsibility to
respect them or even proactively contribute to their fulfilment.
How can product and service design support the respect of human rights?
Victor Papanek advocated that designers and creative professionals have a responsibility and
are able to cause real change in the world through good design. Already in the 1970s he wrote
about his ideas for ecologically sound design and designs to serve the poor, the disabled, the
elderly and other minority social groups.
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Labour practices
Labour practices include any policy or practice affecting conditions of work performed within,
by or on behalf of the organization, including subcontracted work. The principles involved in
this topic include the everyones right to earn a living by freely chosen work, and the right to
just and favourable conditions at work.
How can product and service design promote sound labour practices?
The choice of materials and production processes has a direct impact on the well being of
people in their workplace. By avoiding the use of toxic substances and dangerous equipments,
the designer is directly influencing health and safety of workers.
The environment
The InEDIC manual on ecodesign provides detailed information on how to address
environmental concerns in product design. No additional guidance will be provided here.
Consumer issues
Organizations providing products and services to consumers have responsibilities, such as
providing education and accurate information, using fair, transparent and helpful marketing
information, promoting sustainable consumption and designing products and services that
provide access to all, are safe and cater, where appropriate, to the vulnerable and
disadvantaged.
How can product and service design protect consumers?
This is of course a field where design plays a central role. Some considerations are:
Minimize health and safety risks in the design of products by:
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Identifying the likely user groups, the intended use and the reasonably
foreseeable misuse of the product or service, as well as hazards arising in all
stages and conditions of use of the product and/or service;
o Estimating and evaluating the risk to each identified user or group;
o Reducing the risk by providing (i) inherently safe design, (ii) protective devices
and (iii) information to users.
Contribute to sustainable consumption by offering consumers products and services
that remain socially and environmentally beneficial throughout their entire life cycle.
This is at the core of the entire InEDIC project. See also section 13.3 Product-service
systems.
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Categories
Ownership of the product
Category A: Product The product is owned by the
oriented Services
user/consumer
Category B: User
oriented Services
Category C: Result
oriented Services
14
Examples
Product extension service, the value of
a product is increased through
additional services, e.g. upgrading,
repair, guarantees, financing schemes,
supply of consumables, etc.
Advice and consultancy concerning the
most efficient use of the product.
Vertical Integration, modified
delivering strategies to supply products
to customers, retailer and/ or
customer who get directly involved in
the process of production, e.g.
production on demand.
Leasing. The provider retains
ownership and often is responsible for
maintenance, repair and control. The
leaser pays a regular fee for the use of
the product and normally has an
individual and unlimited access to the
leased product.
Renting or Sharing, similar to leasing
but the user does not have unlimited
and individual access to the product.
The same product is sequentially used
by different users.
Pooling, which is similar to sharing but
there is a simultaneous use of the
product.
Activity management, the supplier
gives incentives for the customer to
consume
more efficiently and optimises a
system e.g. by using modified payment
systems, e.g. contracting.
Functional result, products are
substituted by new solutions; the
delivery is a result which is not related
to a specific technology system
anymore. Examples are pest control
service instead of pesticides, delivery
of a pleasant climate instead of
selling heating or cooling equipments,
etc.
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Chapter 13
Design for sustainability
The PSS concept has been a matter of great attention for environmentalists due to its potential
to decouple revenues from material flows and to increase resource productivity. Stahel (2000)
for instance suggests that higher resource productivity can be reached through:
Sufficiency solutions (organising operations so that need for a good or service is
reduced or eliminated without compromising consumer demands e.g. not washing
unused hotel bath towels) (equals Category C, result-oriented PSS);
Systems solutions and more intensive utilisation of goods (these tend to go together
and cover selling utilisation, results or function instead of goods e.g. leases, carpooling, shared use of roads, railways etc.) (equals Category B, use-oriented PSS);
Longer utilisation of goods, using techniques such as product life extension,
remanufacture, reuse e.g. for furniture, automotive parts etc. (equals Category A,
product-oriented PSS).
But PSS are not environmentally sustainable per se. One important obstacle against ecoefficiency of services is transport intensity and it is therefore especially important to address
transportation-related aspects of service provision (Tukker and Tischner, 2006). Another
drawback for eco-efficiency of PSS relates to users being less responsible to carefully use any
product of the User Oriented Category, than they would be if they would actually own it (e.g.
in leasing) (Tukker, 2003).
Generally speaking the sustainability potential of PSS increases from category A to category C.
According to Tukker (2003) product-oriented services have probably only marginal
environmental benefits, due to better maintenance and extended life time of the product and
the same applies to activity management. Radical changes cannot be expected since the
technology system remains the same; it is simply managed in a more efficient way. Renting,
sharing and pooling can lead to higher environmental gains, especially if the burden is related
to the production of the product, since less units are necessary when the product is used more
intensively. In the case of pooling, the potential benefit is even higher, as consumables in the
use phase are beneficial for more persons at the same time. Leasing can lead to worsening the
environmental profile as mentioned before. The most promising PSS in environmental terms is
the function oriented PSS, which gives the service provider higher degrees of freedom to
design a low impact system.
Finally it should be stated that the exploitation of the environmental benefits of PSS is limited
by its market acceptance and dimension. Functional result services raise uncertainty and
liability questions that deter successful development and implementation. As for sharing and
pooling, market acceptance is still limited, due to low intangible user value (sense of
ownership and prestige).
Page 136
Chapter 13
Design for sustainability
Page 137
Tools
Annex tools
In the website of the InEDIC project (www.inedic.net) the following tools are available to
support the implementation of ecodesign, either in full or in simplified version:
Tool 1 Investigation of motivation factors for ecodesign: This tool helps the project team,
together with the support group and top management, to identify why ecodesign is important
for the company and therefore streamline the ideas on which product groups to work on and
what kind of improvements are necessary to be made.
Tool 2 Product selection/ecodesign potential questionnaire: This questionnaire aims at
supporting the ecodesign team in choosing the target product(s) for the ecodesign project, so
that the choice lies on the product(s) with higher potential for improvement and which are
strategically more adequate.
Tool 3 Design brief: The tool supports the development of the design brief. The design brief
is an essential document for the good understanding of the design problem to be tackled
because it provides the designer all the information needed for the development and
presentation of solutions that meet the needs and expectations of the company.
Tool 4 Market analysis: This tool provides guidance for the market analysis process, in order
to determine the current and future market potential of the reference product; it may also be
applied to the new ecodesigned product. It includes the analysis of previous and future
markets, the analysis of markets attractiveness according to the Porters Five forces model
and the SWOT analysis.
Tool 5 Environmental inputs and outputs worksheet: This tool is used to quantify the inputs
and outputs of materials, energy and water along the life cycle of the reference product (for
the defined functional unit). It is normally used for the environmental assessment of the
reference product and provides data for a quantitative life cycle assessment and for filling in
the MET matrix (tool 6). It can also be used to validate the new ecodesigned product from an
environmental point of view.
Tool 6 MET matrix: The MET matrix is a qualitative or semi-qualitative environmental
analysis method that is applied to get a general view of the inputs and outputs in each phase
of the product life cycle and to identify the main environmental aspects and possible
environmental improvement options. It is organized according to three environmental aspects
categories along the life cycle: materials (M), energy (E) and toxicity (T).
Tool 7 Economic profile assessment: This tool is useful for identifying the stages of life cycle
that are more problematic or more promising from the financial point of view. It is used for the
reference product as well as to the new ecodesigned product and it complements tool 12.
Tool 8 Product analysis worksheet Synthesis: The objective of this tool is to help
systemising and visualizing the results of the environmental, economic and market analysis
performed for the reference product. It should be used as an input to the brainstorming.
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Tools
Tool 9 Ecodesign checklists for ceramics: This is a qualitative tool, which allows an easy
integration of eco-efficiency criteria in the product development process. It closely follows the
ecodesign strategies and measures or criteria as presented in chapter 8, but introduces a
scoring system which provides, simultaneously, an evaluation of the reference product and
ecodesign hints for the new product concept.
Tool 10 Brainstorming: A well-known tool in searching for ideas is brainstorming.
Brainstorming sessions are held in all companies from time to time. Several persons with
expertise in different disciplines come together and try to come up with an answer to a
question asked by the group itself. This is a useful tool in searching for environmental
improvements and innovative solutions for the product.
Tool 11 Economic feasibility assessment of ecodesign: This tool is useful to asses the
economical viability of the proposed ecodesign measures and strategies. The tool follows the
structure of the ecodesign strategies presented in tool 9 and chapter 8, and lists the estimated
cost variation of each measure.
Tool 12 Improvement options evaluation matrix: The purpose of this matrix is to evaluate
the improvement ideas for the product that were generated during the brainstorming session
on what concerns their technical, financial, market and environmental feasibility.
Tool 13 Morphological box: This is another creativity tool. When searching for ways to
improve an existing product it can be particularly beneficial to use the morphological box
technique. It can also be used to improve the ideas that have emerged in a brainstorming or
brainwriting session.
Tool 14 Ecodesign evaluation questionnaire: this questionnaire evaluates the results of the
ecodesign project as well as of the new product. In addition, it provides support for an action
plan approach for further developments in ecodesign.
Tool 15 Environmental management systems and ecodesign checklist: with this tool it is
possible to check if product development and life cycle elements are adequately integrated in
the environmental management system and if there are environmental considerations in the
design and development procedure. Similarly to an audit checklist, it allows for assessing and
recording the level of implementation.
Databases: In the projects scope two databases were developed in order to provide
designers, environmental staff and product development staff, information on environmental
issues, best available techniques, ecodesign practices and information regarding recycled
materials and substitutes that could be used in the ceramics industry.
Technologies database: This database consists of a set of technical datasheets for
each operation of the ceramic process to the four sub-sectors covered. Each
datasheet contains a description of the operation, its relevant environmental
aspects, best available techniques for improving their environmental performance
and ecodesign measures that could be adopted.
Materials database: This database is divided into three categories: (i) Recycled
materials considered as by-products from the internal process (internal source) that
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Tools
can be used as raw material in new ceramic products, (ii) Recycled materials
considered as by-products from an external sources which can be used as raw
materials as well and (iii) substitute materials, which can replace a specific material
used in the ceramic process promoting the improvement of environmental product
performance of the product.
Page 140
References
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Page 150
Glossary
Page 151
Glossary
Dematerialization
In economics, dematerialization refers to the absolute or relative reduction in the quantity of
materials required to serve economic functions in society (www.wikipedia.pt). The
replacement of physical products by services or product-service combinations which are
capable of fulfilling the users needs is a dematerialization strategy.
Design and development
Set of processes that transforms requirements into specified characteristics or into the
specification of a product, process or system. The terms design and development are
sometimes used synonymously and sometimes used to define different stages of the overall
process of turning an idea into a product.
Sources: ISO 9000:2005. Quality management systems Fundamentals and vocabulary and
ISO/TR 14062. Environmental management Integrating environmental aspects into product
design and development.
Discount rate
Is an interest rate a central bank charges depository institutions that borrow funds from it.
Discounted cash flow
By discounting the future cash flow (i.e., using an interest rate that reflects the fact that money
in the future is worth less than money now), one can calculate, for example, net present and
net future values. The interest rate is a means of reflecting the opportunity cost of tying up
money in the proposed investment (from Economist.com 2007).
Discounting
Converts cost (and revenues or value) occurring at different times to equivalent (net) costs at a
common (or determined) point in time.
Ecodesign
Integration of environmental aspects into product design and development with the aim of
reducing adverse environmental impacts throughout a products life cycle.
Source: ISO/DIS 14006:2010. Environmental management systems Guidelines for
incorporating ecodesign.
Ecodesign strategies
Strategies that can be followed for ecodesign. In this manual, 8 ecodesign strategies are
presented and discussed:
Develop new concepts
Select lower impact materials
Reduce the use of materials
Reduce the environmental impact of production
Promote environmentally friendly packaging and logistics
Reduce the environmental impact in the use phase
Increase product durability
Optimize the end-of-life system
Ecoindicator
The Ecoindicator scores are based on an impact assessment methodology that transforms
inventory table data into damage scores, which can be aggregated (depending on the needs
Page 152
Glossary
and the choice of the user) to damage scores per each of three comprehensive damage
categories, or even to one single score.
Eco-innovation
A term used to describe products and processes that contribute to sustainable development.
Eco-innovation is the commercial application of knowledge to elicit direct or indirect ecological
improvements. It is often used to describe a range of related ideas, from environmentally
friendly technological advances to socially acceptable innovative paths towards sustainability
Eco-labelling
It is a way to distinguish the environmentally friendlier products, so that the consumers
decision processes are facilitated.
End-of-life (EoL) system
Set of processes a product may go through when its useful life time has ended, including
disassembly, refurbishing, recycling, incineration and final disposal.
Environmental benchmarking
It is effectively a tool for analysing environmentally related practices and indicators, leading to
superior environmental performance, while also enhancing economic performance. In other
words, benchmarking helps companies achieve good environmental performance by learning
from 'best-in-class' companies. The scope of environmental benchmarking should include all
areas of a company's activities and not be restricted solely to those activities that have an
obvious environmental impact. Therefore it may include an assessment of environmental
management systems (EMS), management performance, environmental accounting, resource
and waste management, product environmental quality, environmental education and
training, customer relations and emergency response.
Environmental impact
Simplified, an impact is any change, positive or negative, to air, water, land, ecosystems and
human health as a result of any action.
In organizational environmental management, environmental impact is defined as any change
to the environment, whether adverse or beneficial, wholly or partially resulting from an
organization's activities, products or services.
Source: Adapted from ISO 14001:2004. Environmental management systems Requirements
with guidance for use.
Environmental management system
Part of an organization's management system used to develop and implement its
environmental policy and manage its environmental aspects. A management system includes
organizational structure, planning activities, responsibilities, practices, procedures, processes
and resources.
Source: ISO 14001:2004. Environmental management systems Requirements with guidance
for use.
Environmental Product Declarations (EPDs or Type III)
Ecolabel Type III contains the environmental profile of the life cycle of products determined by
a Life Cycle Assessment. Verification of assertion must be made under specifically agreed upon
guidelines for each product category, known as Product Category Rules (PCR).
Page 153
Glossary
Page 154
Glossary
Hazardous substances
Solids, liquids or gases that can harm people, other living organisms, property, or the
environment. They are often subject to regulations.
Source: http://en.wikipedia.org
Inflation correction
Adjustments for changes of the general level of pricing over time.
Internal cost
Cost directly borne by an individual or organization when supplying or consuming a product,
paying for the value added by the firm (capital and labour costs). Complement of external cost.
LCA (Life Cycle Assessment)
Compilation and evaluation of the inputs, outputs and potential environmental impacts of a
product system throughout its life cycle. ISO 14040 and 14044 provide a generic framework.
LiDS wheel: is a tool to design an environmental friendlier product. Its a way of evaluating the
new product by using the old design as a benchmark. The LiDS wheel consists of 8 points to
improve a product.
Life cycle
Consecutive and interlinked stages of a product system, from raw material acquisition or
generation from natural resources to final disposal.
Source: ISO 14040:2006. Environmental management Life cycle assessment Principles and
framework.
Life cycle assessment
Compilation and evaluation of the inputs, outputs and the potential environmental impacts of
a product system throughout its life cycle.
Source: ISO 14040 Environmental management Life cycle assessment Principles and
framework.
Life cycle thinking (LCT)
LCT means thinking in terms of the entire life cycle of a product. It is a principle, not an
evaluation tool such as life cycle assessment.
Source: Adapted from TISCHNER, U., SCHMINCKE, E., RUBIK, F., PRSLER, M. How to do
ecodesign? A guide for environmentally and economically sound Design. Edited by the German
Federal Environmental Ministry. 2000.
Logit analysis
The purpose of logit analysis is to quantify potential sales of any particular product. It takes
survey data on consumers purchasing intentions and converts it into actual purchasing
probabilities. So, logit analysis defines the functional relationship between stated purchasing
intentions and preferences, and the actual probability of a purchase. A preference regression is
performed on the survey data. This is then modified with actual historical observations of
purchasing behaviour. The resultant functional relationship defines the purchasing probability.
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Present value
Is the value on a given date of a future payment or series of future payments, discounted to
reflect the time value of money and other factors, such as investment risk.
Present Value Determination
A procedure that discounts a future value (FV) into its present value (PV) equivalent, by
accounting for the opportunity cost of money.
Product benchmarking
It is the process of designing new products or upgrades to current ones. This process can
sometimes involve reverse engineering which is taking apart (dismantling?) competitors
products to find strengths and weaknesses.
Product category Rules (PCR)
Contain the necessary guidelines for the Life Cycle Assessment required to determine the
environmental profile of the product as determined in the Environmental Product Declaration
(EPD).
Source: BOXWELL Jr., R. J. Benchmarking for Competitive Advantage, New York: McGraw-Hill,
pp.225. ISBN 0-07-006899-2, 1994.
Product development
The process of taking a product idea from planning to market launch and review of the
product, in which business strategies, marketing considerations, research methods and design
aspects are used to take a product to a point of practical use. It includes improvements or
modifications to existing products or processes.
Source: ISO/TR 14062. Environmental management Integrating environmental aspects into
product design and development.
Product-service systems
A product-service system (PSS) is a combination of products and services in a system designed
to fulfil specific client demands and needs.
Source: Tukker and Tischner, 2006.
The PSS concept has been a matter of great attention for environmentalists and sustainability
experts, due to its potential to contribute to decouple revenues from material flows.
Product system
Collection of unit processes with elementary and product flows, performing one or more
defined functions, and which models the life cycle of a product.
Source: ISO 14040 Environmental management Life cycle assessment Principles and
framework.
Quality management system
Set of interrelated or interacting elements that organizations use to direct and control how
quality policies are implemented and quality objectives are achieved.
Source: ISO 9000:2005. Quality management systems Fundamentals and vocabulary.
Real value
A magnitude adjusted for the effects of inflation.
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ReCiPe Method
The primary objective of the ReCiPe method is to transform the long list of inventory results,
into a limited number of indicator scores. These indicator scores express the relative severity
of an environmental impact category. In the ReCiPe method, indicators are determined at two
levels:
1. Eighteen midpoint indicators
2. Three endpoint indicators
Recyclable materials
Materials that can be collected, separated and processed to be used as raw materials in the
manufacturing of new products.
Source: http://www.epa.gov/osw/wycd/catbook/you.htm
Recycled materials
A product's material recovered from pre- or post-consumer waste.
Source: http://www.ecodesign-company.com/documents/BestPracticeISO14021.pdf
Recycling
Any recovery operation by which waste materials are reprocessed into products, materials or
substances whether for the original or other purposes. It includes the reprocessing of organic
material but does not include energy recovery and the reprocessing into materials that are to
be used as fuels or for backfilling operations.
Source: Directive 2008/98/EC of the European Parliament and of the Council of 19 November
2008 on waste
Renewable resources
A natural resource qualifies as a renewable resource if it is replenished by natural processes at
a rate comparable to or faster than its rate of consumption by humans. Solar radiation, tides
and winds are perpetual resources that are in no danger of long-term scarcity. Renewable
resources may also include commodities such as wood, paper, and leather, if harvesting is
performed in a manner that does not deplete the health of system from which they are
harvested.
Source: Adapted from http://placersustain.org/fairfield%20strategic%20plan.pdf
Requirement
Specification which establishes criteria to be fulfilled.
Resource cascading
The sequential exploitation of the full potential of a resource during its use. Further use of
materials and/or components for second or more applications. This method extends the useful
life of a resource by repeatedly utilizing it.
Returnable packaging system
Systems design to allow the reuse of a packaging a certain number of times before it is
discarded.
Revenues
Inflows or other enhancements of the assessment of an entity, settlements of an entitys
liabilities, or a combination of both, deriving from delivering or producing goods, rendering
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Glossary
services, or engaging in other activities that constitute the entitys ongoing major or central
operations.
Social responsibility
Responsibility of an organization for the impacts of its decisions and activities on society and
the environment, through transparent and ethical behaviour that
contributes to sustainable development, including health and the welfare of society;
takes into account the expectations of stakeholders;
is in compliance with applicable law and consistent with international norms of
behaviour; and
is integrated throughout the organization and practiced in its relationships.
Source: ISO 26000:2010.
Stakeholder
Individual or group that has an interest in any decision or activity of an organization.
Source: ISO 26000:2010. Guidance on social responsibility.
Strategic green marketing
Strategic green marketing is about recognising, analysing and influencing opportunities for and
threats to the business associated with its environmental claims. The basic principles related to
strategic green marketing are: follow the latest fashions, trends, developments and future
legislation; consider the opinion of all relevant stakeholders; not only talk, but also act green;
look for continual improvements, open the company to the public and provide transparent and
reliable information.
SWOT analysis
It is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities,
and Threats involved in a project or in a business venture. It involves specifying the objective
of the business venture or project and identifying the internal and external factors that
promote or hinder that objective.
Tactical green marketing
Tactical green marketing is typified by shifts in functional activities such as production, pricing,
promotion and distribution. In this case, there is little if any change in organisational activities
and (short-term) attention can be paid to single marketing instruments.
Trade-offs
A trade-off is a situation that involves losing one quality or aspect of something in return for
gaining another quality or aspect. The environmentally-oriented design of products often leads
to trade-offs which make it difficult to decide between a certain material or method. Examples
of trade-offs are:
Durability versus product innovation
Product miniaturization versus ease of dismantling
Use of high value, durable materials versus inexpensiveness
Pollutant reduction during use versus material efficiency
Source: Adapted from TISCHNER, U., SCHMINCKE, E., RUBIK, F., PRSLER, M. How to do
ecodesign? A guide for environmentally and economically sound Design. Edited by the German
Federal Environmental Ministry. 2000.
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Transfer payment
Payments between governmental and private entities or organizations, involving taxes and
subsidies. Payments for public services, such as waste management services, may fall under
this heading, if paid (for example) by a local municipality from taxes or levies.
Value added
The difference between the cost of product purchased and the proceeds of products sold, as
gross value added, being the costs of labour and capital, including profits. Net value added is
obtained by subtracting depreciation from gross value added.
Waste prevention
Reducing the amount of waste generated at the source and reducing the hazardous content of
that waste automatically simplifies its disposal. Waste prevention is closely linked with
improving manufacturing methods and influencing consumers to demand greener products
and less packaging.
Source: http://ec.europa.eu/environment/waste/prevention/
Yield
Describes the amount of cash returned to the owners of an investment. Normally it does not
include price variations, at the difference of the total return. Yield applies to various stated
rates of return on stocks (common and preferred, and convertible), fixed income instruments
(bonds, notes, bills, strips, zero coupon), and some other investment type insurance products
(e.g. annuities).
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Where
Vt represents the cash flow of each period t.
I0 is the value of the initial investment.
n is the number of periods considered.
The interest rate is k. When the equation is equal to 0, k is renamed IRR (Internal Rate of
Return), which refers to the return the project yields.
The K rate is that you can see amended in line with the opportunity cost. If the project is at
risk, they shall refer to the type of fixed income, so that the NPV is estimated that the
investment is better than investing in something safe, with no specific risk. In other cases, use
the opportunity cost.
The result of this formula if multiplied with the Annual Net cash inflows and reduced by the
Initial Cash outlay, will yield the present value of the investment; however, if the cash flows
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are not equal in amount, then the previous formula will be used to determine the present
value of each cash flow separately. Any cash flow within 12 months will not be discounted for
NPV purposes.
NPV is an indicator of how much value an investment or project adds to the firm today. With a
particular project, if Rt is a positive value, the project is in the status of discounted cash inflow
in the time of t. If Rt is a negative value, the project is in the status of discounted cash outflow
in the time of t. Projects with a positive NPV but with an appropriately tolerable risk could be
accepted. This does not necessarily mean that they should be undertaken since NPV at the
cost of capital may not account for opportunity cost, i.e. through the comparison to other
available investments. In financial theory, if there is a choice between two mutually exclusive
alternatives, the one yielding the higher no-no should be selected.
Table A.7.1 Interpretation of the NPV
If...
It means...
Then...
NPV > 0
NPV < 0
NPV = 0
The internal rate of return of an investment or project is the annualized effective compounded
return rate or discount rate that makes the net present value of all cash flows (both positive
and negative) of a particular investment equal to zero.
In more specific terms, the IRR of an investment is the interest rate at which the net present
value of costs (negative cash flows) of the investment is equal to the net present value of the
benefits (positive cash flows) of the investment.
Internal rates of return are commonly used to evaluate the desirability of investments or
projects. The higher a project's internal rate of return, the more desirable it is to undertake the
project. Assuming all other factors are equal among the various projects, the project with the
highest IRR would probably be considered the best and undertaken first.
A firm (or individual) should, in theory, undertake all projects or investments available with
positive IRRs. Investments may be limited by availability of funds to the firm and/or by the
firm's capacity or ability to manage numerous projects.
On the other hand, the consideration of opportunity costs is one of the key differences,
between the concepts of economic cost and accounting cost. Assessing opportunity costs is
fundamental to assessing the true cost of any course of action. If there is no explicit accounting
or monetary cost (price) attached to a course of action, or the explicit accounting or monetary
cost is low, then, ignoring opportunity costs may produce the illusion that the investments
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benefits cost nothing at all. The unseen opportunity costs then become the implicit hidden
costs of that course of action.
Opportunity cost is the cost related to the next-best choice available to someone who has
picked among several mutually exclusive choices. It is a key concept in economics. It has been
described as expressing "the basic relationship between scarcity and choice." The notion of
opportunity cost plays a crucial part in ensuring that scarce resources are used efficiently.
Thus, opportunity costs are not restricted to monetary or financial costs: the real value of
output forgone, lost time, pleasure or any other benefit that provides utility should also be
considered as opportunity costs.
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