Transcript UNDERSTANDING THE VALUE OF POLLUTION PREVENTION
APPLYING SUPPLY CHAIN ENVIRONMENTAL RISK MANAGEMENT IN TRANSITIONING ECONOMIES
Nicholas P. Cheremisinoff, Ph.D.
Princeton Energy Resources International, LLC Rockville, MD March 2004
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PRESENTATION OUTLINE
HOW AN EMS IS SUPPOSED TO WORK
REASONS FOR INTEGRATING P2
WHY THE NEED FOR SCERM
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Environmental Management Systems Overview
PLAN REVISE
The Continual Improvement Process
DO CHECK
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The Continual Improvement Process
REVISE
PLAN
DO
FORMULATE ENVIRONMENTAL POLICY
IDENTIFY ENVIRONMENTAL COMPLIANCE NEEDS
IDENTIFY AND PRIORITIZE OTHER ENVIRONMENTAL PERFORMANCE IMPROVEMENT NEEDS
DESIGN PROGRAMS/ACTION PLANS TO IMPROVE ENVIRONMENTAL COMPLIANCE AND PERFORMANCE CHECK
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The Continual Improvement Process
PLAN REVISE
DO
CHECK
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IMPLEMENT THE ENVIRONMENTAL PROGRAMS/ACTION PLANS
The Continual Improvement Process
PLAN REVISE
CHECK
DO
MONITOR ENVIRONMENTAL PERFORMANCE
EVALUATE PROGRESS OF THE ENVIRONMENTAL PROGRAMS AND ACTION PLANS
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The Continual Improvement Process
REVISE THE ENVIRONMENTAL PROGRAMS/ACTION PLANS
CONSIDER CHANGES IN THE ENVIRONMENTAL POLICY
CONSIDER NEW ENVIRONMENTAL COMPLIANCE AND OTHER PERFORMANCE IMPROVEMENT NEEDS
REVISE
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PLAN CHECK DO
The Five Steps and Elements of ISO 14001
Step 5 Management Review
Clause 4.6
Step 1 Environmental Policy
Clause 4.2
CONTINUAL IMPROVEMENT
•
Step 2 Planning
Clause 4.3
Environmental aspects
•
Legal and other requirements
•
Objectives and targets
•
Environmental management programs
•
Step 4 Checking and Corrective Action
Clause 4.5
Monitoring and measurement
•
Non-compliance and corrective and prevention action
•
Records
•
EMS audit
•
Step 3 Implementation and Operation
Clause 4.4
Structure and responsibility
•
Training, awareness, compliance
•
EMS documentation
•
Document control
•
Operational control
•
Emergency preparedness and response
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Pollution Management Hierarchy
• • •
LIABILITIES PUBLIC IMAGE WORKER SAFETY
• • •
CAPITAL INVESTMENTS INCREASED O&M COSTS NEGATIVE ROI
• •
LOWER CAPITAL INVESTMENT PARTIAL COST RECOVERY
•
COST SAVINGS
•
IMPROVED PRODUCTIVITY
•
IMPROVED QUALITY DISPOSAL TREATMENT RECYCLE
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P2
Principle Drivers Behind Accelerating EMS Adoption By U.S. Firms
Directly attributable operating cost reductions Response to market preferences or requirements Response to lender, insurer, and investor preferences Easier compliance and easier adaptation to growing stringency in environmental regulations Regulatory agency accommodation for temporary noncompliances Improved environmental security and emergency preparedness Better stakeholder relations
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Other Key Benefits Include
Enhanced public image
Increased productivity and efficiency
Reduced regulatory burden
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For the U.S. – Compliance and the Image of Being a “Good Corporate Citizen” Is Critical
Polluter pays principle Strict and several liabilities All forms of waste remain liabilities forever
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Organize for EMS implementation
Basic Elements Of Integrated EMS/P2 Programs
Organize P2 program implementation Conduct initial environmental review Conduct pre-assessment activities Confirm commitment to P2 and continual improvement Establish environmental policy P2 audit: Identify P2 cost savings opportunities Top management review Identify & prioritize environmental aspects and impacts, and compliance needs Top management review Monitor, evaluate, and revise environmental management programs Formulate environmental management program(s) Implement environmental management program(s)
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Monitor, evaluate, and revise P2 action plan(s) P2 Audit: Formulate P2 action plan(s) using Life Cycle Implement P2 action plan(s)
Good Environmental Performance Effects Competitiveness
Meeting the needs of the market and stakeholders transparency Environmental reporting and green claims ISO 14001 EMAS credibility performance Environmental Management Systems
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Elements of a SCERM Program
EMS Auditing of Suppliers Environmental Performance Pollution Prevention Environmental Security Regulatory Compliance Metrics
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Bottle Supplier
Impacts of Supply Chains
Coca Cola of Jordan
Excess Water + High Energy + High Labor + High Rejects = $40k
Monomer Supplier Rubber ROOT CAUSES Supplier Valero Refinery
Rejects (Solid Waste) + Fires = $10,000,000 + Bad Press + Litigation Costs
ROOT CAUSES ROOT CAUSES
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Other Parts of the World
Weak Regulatory Climate Subsidized Water and Energy Subsidized Industry Sectors Sectors Lack Capital Lack Regulatory Infrastructure Regulations Not Established
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Markets Struggling Lack Capital
P2 and EMS Needs Repackaging – It’s Not a Matter of Environmental Performance for Companies
Best Available Practices (BAPS) & technologies that eliminate all forms of waste and inefficiencies at the source: – High water demands – Lost raw materials (chemicals feedstocks) – Excessive turnarounds – Frequent job interruptions – Poor quality and high off-spec – Labor intensity – High energy demand – Costly waste and pollution treatment – Low throughput Waste and inefficiencies represent direct financial losses
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Integrated P2/EMS Programs Focus On Enterprise Competitiveness
TIER 1 USUAL OR NORMAL COSTS TIER 2 HIDDEN OR INDIRECT COSTS TIER 3 FUTURE LIABILITY COSTS TIER 4 LESS TANGIBLE COSTS
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Applying Metrics - What Companies Are Reporting
Air Emissions Effluent Discharges Waste Disposal Energy Conservation Accidents and Incidents Environmental Costs Environmental Benefits
18 35 45 54 53
0 10 20 30 40 50 PERCENTAGE (%) 60
Source: National Academy of Engineering - from a sampling of 220 companies
64
70
70
80
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Minimum Set of Metrics to Consider
Product-Use Metrics – Water Use/efficiency – Material Use/efficiency – Energy Use/efficiency – Pollutant Releases (Air, Water, Solid) – Greenhouse Gas Emission – End-of-life Disposition
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Companies Must Take a Holistic View of Their Businesses - Through Life Cycle and Pollution Prevention – As An Example
Consumption of produce Harvest Plant Uptake Return To Environment (Air, Water, Soil) Application Distribution Produce Mineral Fertilizers LIFE CYCLE OF POTASH AND PHOSPHATE MINING Beneficiation and processing to concentrate ore Society’s Need for Fertilizer Exploration Mine Development Mining
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How a SCERM Program Benefits
Reduces costs Reduces potential for environmental liabilities Strengthens relationships with suppliers Improves quality of products and services Reduces reputational risks Increases supplier sustainability Facilitates response to green market demands Makes businesses more competitive
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