Manual on the Development of Cleaner Production Policies ... - Unido

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DEVELOPMENT OF CP POLICY MODULE 5: POLICY TOOLS AND INSTRUMENTS • Corporate environmental policies, stating that a multinational company will apply in its overseas operations the same environmental standards as in the home country. There exist high-profile organizations set up and managed by the industry itself that deal explicitly with environmental performance. Since the early nineties, the World Business Council on Sustainable Development (WBCSD) has been promoting the concept of eco-efficiency, which is directly based on improving competitiveness and profitability. The WBCSD recently moved a step further, to the concept of eco-effectiveness, which addresses not only the question “Are we efficient?” but also “Are we doing the right things?” The rationale is to avoid optimizing, in an incremental way, an ineffective system. EXAMPLE World Business Council for Sustainable Development The World Business Council for Sustainable Development (WBCSD), with its headquarters in Switzerland, is a coalition of about 150 international companies committed to, and involved in, work on environmental protection, social equity and economic growth. Members come from more than 30 countries and 20 major industrial sectors. WBCSD also cooperates with a global network of national and regional business councils and partner organizations. In broad terms, WBCSD aims to develop closer cooperation between business, government and all other organizations concerned with the environment and sustainable development. Another goal is to encourage high standards of environmental management in business itself. The declared objectives of WBCSD are to provide business leadership, to participate and contribute in policy development, to share and disseminate best practices and to ensure global outreach. http://www.wbcsd.org The International Network for Environmental Management (INEM) is another global industry-funded programme, with almost 30 countries represented. In addition to involvement in the setting of international environmental standards, participation in policy development activities within Business Agenda 21, and carrying out global environmental management surveys, INEM produces a wealth of interactive materials, information and tools on how to improve environmental management in companies. INEM has a strong commitment to improving environmental performance, especially in small and medium enterprises. Among other things, INEM developed the ISO 140001 Speedometer, which is a tool to monitor the implementation worldwide of the ISO 140001 standard. http://www.inem.org It is also worth noting that, in many countries, industry itself is financing technical assistance centres on issues of interest. Such centres, sometimes located within an industrial association, sometimes operating as an independent entity, can provide clients with low-cost consultancy services and advise on topics such as quality management, implementation of EMS, resource efficiency and productivity, energy efficiency and others. Interestingly, national productivity centres are common in the countries of East Asia, where they play a strong role in increasing the competitiveness of domestic industry. PAGE 126
DEVELOPMENT OF CP POLICY MODULE 5: POLICY TOOLS AND INSTRUMENTS SLIDE: The finance sector and the environment • Financing environmental expenditures; • Environmental considerations at international financing institutions; • CP beneficial both for the lender and the borrower; • Banking statement on environment and sustainable development. This slide presents issues related to financing environmental expenditures, and shows how the position of the finance sector has been changing, from an initial lack of interest in the environmental aspects of lending, to more active participation. Background Financing environmental expenditures In many countries, the environmental sector is mainly subsidized by government funds, with resources coming from national budgets, donations, grants, fees and fines, environmental taxes and product charges as well as other resources determined in the legislation. Support can take the form of grants, soft loans, specialized credit lines, or financial or technical assistance for project preparation and implementation. In recent years, there has also been important support from international aid and bilateral technical cooperation programmes, aimed mainly at setting up and strengthening environmental institutions. Most environmental expenditures in developing countries have been directed at national-level public programmes, such as water and waste-water infrastructure, sanitation, biodiversity and nature protection, among others. Securing funding for environmental protection in industry, especially private industry, tends to be left in the hands of companies themselves. However, in many developing countries, weak financial institutions and limited access to credits are significant limiting factors for the development of businesses. As a consequence, the availability of funds for environmental projects, especially CP, is limited. CP as a benefit for both lender and borrower Initially the financing sector was not very concerned with the environmental aspects of their lending, and consideration of environmental issues by financial institutions is a fairly new phenomenon. Even in developed countries, banks have only recently started to draw up environmental policies, and very few have established detailed procedural guidelines on how to include environmental issues in lending and investment. The main incentive for financial institutions to include environmental aspects in lending would be if the country had high environmental standards and a corresponding system of enforcement. Companies could then avoid stiff penalties through better plant management. Unfortunately, in most developing countries this is not the case, and this tends to stifle initiatives to take environmental aspects into account in lending. Even without the framework and enforcement mentioned above, the adoption of Cleaner Production by enterprises may still bring cost savings and better financial viability through reductions in raw material usage, energy savings, process efficiency and waste minimization. Cost reduction, avoidance of expenditure on end-of-pipe treatment, modernization and upgrading production, risk minimization and better management result in improved efficiency and enhanced competitiveness. This is good both for the enterprise and for the lender, as it could mean that an enterprise will be in a better competitive position and thus better able to repay a credit. PAGE 127
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Manual on the Development of Cleaner Production Policies ... - Unido

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