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Sustainable development
Facts about China
Sustainable development in China
Business role and responsibilities
Business implementation
“Sustainable development
meets the needs of the
present without compromising
the ability of future generations
Getting started to meet their needs”
Brundtland Commission, “Our common
future”, 1987
Q
Human activity = impacts
Ozone
Global Warming
Depletion
Population
Resource
Increase &
Depletion
Economic Growth
Sustainable development covers many topics
Demography Agriculture
Wealth Human rights
Nutrition Water
Health Urbanization
Education Mobility
Consumption Communications
Energy Labor
Pollution Democracy
Emissions and waste generation Accountability
Efficiency Privatization
Ecosystems Biodiversity
Climate change
A changing global landscape
“In a world of instant
communications, whistle
blowers, inquisitive media, and
Issues include: googling, citizens and
communities routinely put firms
• Communications – CNN world under the microscope.”
Tapscott and Ticoll (2003)
• Changing expecations of consumers
• Valuation – including intangibles and knowledge
• Free movement of goods and services
• Finite nature of resources – carrying capacity
• Changing demographics – haves and have nots
• Changing role of business and government
Context: Demography
80%
60%
40% Rural
Urban
20%
0%
1950 2000 2030
Context: Natural resource needs
Land Pollution:
Agriculture + industrial activities + waste generation
- Intensive use of chemical fertilizers
- Intensive land exploitation
120000
Ktons of NPK nutrient
80000
x 4.5 in 40 years
40000
0
1960 1970 1980 1990 2000
Ye a r Fertilizer consum ed
Air pollution
PARIS 14 14 57
NEW YORK .. 26 79
BOMBAY 240 33 39
TOKYO 49 18 68
STOCKHOLM 9 3 20
The Greenhouse Effect
Biodiversity
VALDEZ
SarbOx
The search for solutions is happening on a global scale and is being led by both
public institutions and as part of private initiatives. Solutions include new legislation,
stakeholder partnerships, voluntary agreements, codes of conduct, multilateral
agreements, interdependent actions, etc.
Key for success in sustainable development
Maintain the balance between economic growth, environment, and social aspects by:
Planet
Sustainable development
Facts about China
Sustainable development in China
Business role and responsibilities
Business implementation
Facts about China
China's population is 1.31 billion people.
GDP is US$ 1.41 trillion and expected to grow 8% in
2004.
Population growth
cameras and around 2/5 personal computers.
Population (Mill.)
400
Coal
300 Renewables
200
100
0
2005 2020
Energy efficiency
Less than 10% of new buildings are made according to existing
isolation standards
Power elasticity co-efficient should be less than 1.0 (opposite to current trend)
* Ref: UNIDO
Depletion of natural resources
Coal
• Largest producer and consumer in the world, Proven coal reserves
and…
• Consumption expected to rise further from
1.2 billion metric tons (2000) to 2.2 billion USA
ex-USSR
(2030) China
Rest of the World
• US$ 120 billion would be required to
modernize mines & install clean combustion
systems (IEA)
Reserves = 334.5 billion metric tons
(“only” 3rd in the world)
Pollution of natural resources: air pollution
NEW YORK .. 26 79
STOCKHOLM 9 3 20
Out of the 20 most polluted cities in the world, 16 are in China.Estimated annual health costs due to air pollution is 44 bln
RMB
* Ref: The Economist, + UNIDO
Urbanization and poverty
Rural poverty:
- while 60% of the population lives in rural areas, they contribute to only
16% of GDP
- income ratio urban-rural estimated at 3 to 1
80%
70%
60%
“urban poor class”.
50%
40%
30%
20%
10%
0%
Structure
Sustainable development
Facts about China
Sustainable development in China
Business role and responsibilities
Business implementation
Recent headlines
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China seizes the nuclear option
NC
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19.11.2004 e | 04.03.2005
Current SD issues in China
Population
growth Social distinctions and poverty
and change • Urbanization
in social Which • Health, safety
demands • Labor rights
sustainable
development
Depletion of natural resources
Limited issues could
natural • Land degradation / desertification
result from
resources • Environmental pollution (e.g. water, air)
the tension • Water supply & treatment
between
these 3 Regional distinctions in infrastructure
Fast
economic conditions ? • Urbanization
growth • Energy generation & utilization
Q
• Waste: solid, liquid, hazardous
Striking a balance
Ecological Good
lasting SD
Economic practice
Growth
Equity
Imbalance Balance
How to:
• Provide employment opportunities
Main Drivers: • Maintain economic growth
• Population Size & Growth • Remain a competitive business
• Globalization environment
• Cultural shifts • Reduce income inequalities
Yet also…
• Sustaining the environment
• Improving social aspects
Call to action….
Same issues apply to all countries;
their significance in China is the rate and magnitude at
which they create imbalances
Agenda 21
NPC
State Council
Q
- The China energy standards referenced to
determine the product’s degree of efficiency.
Do you know about Chinese environmental
legislation? II
Are Chinese companies required to submit
reports on their energy consumption?
The import of backward energy intensive technology is illegal… before 2008 the law will be
reinforced by incentives and disincentives towards businesses in order to promote energy
Q
efficiency…
Do you know about Chinese environmental
legislation? III
The approach to hazardous solid waste identification is defined by the law as the
prevention and control of environmental pollution by solid waste.
Q
submitted to legal control.
Do you know about Chinese environmental
legislation? IV
Movements of waste are strictly monitored and controlled. This is true for
trans-boundary waste shipment, as well as for waste movements
between Chinese provinces.
Q
Initiative taken in China - Sustaining natural
resources
Land and soil
Actions and programs
Sustainable development
Facts about China
Sustainable development in China
Business role and responsibilities
Implementation
The business environment
Life of major
consumer items
Lock-in caused by
urban design
Information, knowledge, people and goods move around the globe as never before.
Beyond compliance, businesses need to meet international agreements & standards
Opportunity to show the world that Chinese business practice includes sound environmental and social management
The business case for sustainable
development
Longer term
Sustainable use of finite resources
C
Example: Eco-efficient products
More efficient and eco-friendly products
Example: Energy Star products (the US)
Blue Angel (Germany)
C
Example: Health & safety
Healthy, happy
employees
& neighbors
C
Summary of business roles and opportunities
Challenge Opportunity
Conflicting time scale Meeting international standards opens
export opportunities
Shorter product life span
Access to capital: investors increasingly
Rapid developments concerned with SD
Conflicting demands from stakeholders Poverty alleviation creates opportunity to
External environmental value in $$$ expand business to unserved or
underserved population
Sustainable development
Facts about China
Sustainable development in China
Business role and responsibilities
Business implementation
Sustainable
Evolution of tools Livelihoods
Ec trum
Ins
Comm islation
CSR
Co-r eement
on en
Sustainability
A gr
o m ts
egu
Env.
Leg
ic
and &
lato
Footprint Responsible
Entrepreneurship
ry
Factor X
Contr
Agenda 21
ol
Our Eco-efficiency
Common
Future
Government Cleaner Production
Agenda
Compliance
Business EHS ICC- EMS Sustainability
Time
Agenda Auditing Charter Standards Strategy
Implementing sustainable development
Has your company taken any SD
initiatives?
Assess the Can you identify any gaps?
situation
What can you do as an individual, as
Measure Develop a a team, function or company, to
success strategy contribute to limit use of energy,
water and other resources?
Implement
What resources will enable you to
achieve this? Can you identify any
barriers?
T
sustainability management (www.projectsigma.com).
Benefits to be gained
from incorporating
sustainable
development into
Assessing: General checklist business management
practices
Does your company:
Q
investors, NGOs, etc.)
Questions for the board
Assessing:
CSR checklist
Q
Assessing:
eco-efficiency checklist Assessing:
eco-efficiency
checklist
Q
Assessing: Dow Jones Sustainability Index
The Dow Jones Sustainability Index was the first index to try to assess the ability of businesses to creates long-term shareholder value
by embracing opportunities and managing risks deriving from economic, environmental and social developments.
Its methodology looks for the “best in class” in specific sectors. It is forward looking and aims to capture not simply end-of-pipe
performance but the drivers and enablers which set sustainability leaders apart in their ability to achieve long-term shareholder value.
The index’s methodology appears to work in identifying future value potential: The DJSI has outperformed the base index over the past
three years.
Impacts Local
Economies
Pollutes Shared Supports Workers
Environments and Families
T
WRI
Developing:
eco-efficiency
One practical way of measuring the environmental
performance of business
Applicable to every area of activity within a
company or the entire value chain of a product
or service
• Should be an integral part of overall
business strategy
Principle: Doing more with less
Combination of environmental and economic performance
OECD definition:
The efficiency with which ecological resources are used to meet human needs
Higher eco-efficiency requires:
• Providing more value with less environmental impact
T
• Re-linking growth of welfare with the use of nature
• Improving both economic and ecological efficiency
Developing: Environmental Management System approach
Obtain management
commitment The recognized need
Organize project team for Cleaner Production
Identify barriers &
solutions
1.Planning and
Set objectives Organization
Pre-assess
Identify sources (where)
Analyse causes (why) 2.Assessment Sustain
Generate possible options
(how) & Continue
Evaluate options on: 3.Feasibility
Technical, environmental Analysis
and economic feasibility
Select best options 4.Implementation
Option implementation
T
Monitoring and Successfully implemented
evaluation Cleaner Production projects
Sustain and continue
Benefits of an environmentally sound business
practice (e.g. EMS)
Increases productivity
Reduces production costs
Produces safer and better products
Reduces levels of pollution and risk
Improves worker’s safety and health
Complies with Environmental Management Systems (ISO
14000) Recognition from business partners
Link-up with international markets
Improves company image
Implementation of EMS in all aspects
of business will make a company more
profitable and competitive
T
Implementing:
Chronos -- the WBCSD’s e-learning tutorial
The GHG Protocol Initiative comprises two separate but linked standards:
T
Measuring (codes, frameworks, guidelines):
Global Reporting Initiative
The Global Reporting Initiative (GRI) Sustainability Guidelines are the first attempt to
develop a generalized set of sustainability indicators for organizations.
It has become the main point of reference for companies that produce sustainability
reports, although only a minority are able to claim their reports are “in accordance”
with the Guidelines.
The GRI has well developed linkages with other standards within an emerging “global
architecture”. (e.g. AA1000 Assurance Standard, UN Global Compact, etc.)
(www.globalreporting.org).
T
Measuring (codes, frameworks, guidelines):
Global Compact
This international partnership brings together UN agencies, business, civil
society and public sector organizations. Membership is based on a highlevel
commitment to its ten principles, derived from key UN and international
declarations on labor, human rights, and the environment.
The principles themselves are not new, but by bringing internationally accepted
standards together and framing them as business commitments, the UN Global
Compact has set a principle-based global benchmark form corporate citizenship.
It is seen as one of the most significant institutions working to align business and
sustainable development. But while more than 1,200 companies have signed up,
including 200 large multinationals, very few major US companies have joined.
www.unglobalcompact.org
T
Measuring (codes, frameworks, guidelines):
OECD Guidelines for Multinational Enterprises
The OECD Guidelines for Multinational Enterprises are the closest
thing we have to an comprehensive global corporate code of
conduct. It is a key reference point of international norms for
business.
T
Case in Point
Stakeholder dialogue to partnerships: Degussa
C
Case in Point
Stakeholder dialogue to partnerships: ABB
Summary: ABB, with the Alliance for Global Sustainability, devised the China
Energy Technology Program (CETP), an extensive partnership program bringing
together a diverse group of participants to assess the relative costs and
environmental performance of different strategies for meeting power demand in
China.
Drivers/Benefits: To identify the true costs of electrical power generation and use
and develop cost-effective and efficient solutions for the future, to bring significant
environmental benefits, not just to China, but globally.
C
Case in Point
Energy recovery facilities: CH2M HILL
Summary: CH2M HILL was hired to assist the State Environmental Protection Agency of
China to advise on technical and economic feasibility and construction requirements for
energy recovery facilities at municipal waste landfills.
Key success factors: Commitment from all; quality communication and translation; careful
choice of the host country lead agency
C
Case in Point
Local and global standards: Lafarge
Summary: Lafarge and DuJiangYan Building Materials Co., joint venture
agreement to construct a new cement plant in ChengDu, Sichuan province, in
line with latest technology, quality and safety standards.
Drivers/Benefits: For Lafarge -- establishment of substantial & profitable
position in region, where an accelerated infrastructure development program
fuels increase in demand for high quality cement;
for Chinese government -- strategic importance for regional economic
development & to reduce persistent supply/demand gap in the region.
Challenges: Quality control during construction, cultural differences,
implementing safety practices, Song relics on site, heavy rains.
Key success factors: Financial strength and technical support; strong
management team; good working relations between Chinese and foreign
partners; Government support; listening to the different parties.
C
Case in Point
Introducing EMS: Automobile Company in Anhui
Summary: This Chinese automobile company first started production in 1968.
It went from a loss-making venture with revenue of less than 3 million RMB in
1990 to one of the most important Chinese automobile producers with 5 wholly
owned subsidiaries and revenues of 26 billion RMB in 2000.
Challenges: Investment in time and effort from both auditing company and service
supplier.
Key success factors: Systematic, realistic method and timescale, using principle of
risk = EHS performance x hazard potential; good collaboration between service
provider and (potential) customer.
C
Case in Point
“Global” standards: DSM
Summary: Jinling-DSM Resins is a Chinese-Dutch joint venture producing resins
in Nanjing. Employment conditions of its 17 temporary workers were improved to a
level in between those of surrounding temporary workers and employees.
C
Case in Point
Sustainable use of waste: Novozymes
Summary: Novozymes supplies treated wastewater and converted biomass from
its production processes free of charge to TEDA to be used for irrigation and as
biological fertilizer (NovoGro).
Drivers/Benefits: Sustainable use of wastes, reduced consumption of limited
resource, support for eco-industry, responsible neighbor and good company
reputation
Challenges: Infrastructure for storage and transportation of treated wastewater,
composting and expanded application of NovoGro to ensure more sustainable
use.
Key success factors: Close cooperation with TEDA, advanced waste treatment
technology, experience in the production and application of NovoGro from Europe
and US.
C
Case in Point:
Fuyang Chemical General Works
Summary: Chinese fertilizer plant, in collaboration with Chinese authorities and
CIDA implemented Cleaner Production, starting with zero- and low-cost
measures and continuing by implementing medium cost measures.
Drivers/Benefits: Enabled reduction of product losses, efficient use of raw
materials and energy, reduced emissions, reduced waste, healthier working
environment, increased revenues, improved company reputation.
Challenges: Collaboration between parties with different experience levels,
overcome initial investment requirements for medium cost measures.
Key success factors: Management commitment & employee participation,
tackling zero- and low-cost elements first, partnership with Chinese government,
training & sharing of information, stimulating gender equity.
C
From the China-Canada Cooperation Project in Cleaner Production
“Picking Low-hanging Fruit: The Strategic Role of CP in China” by
M. Osterman, LL.L.CEA
“There will be no sustainable world
without a sustainable China”