DOSEGANJE EKOLOŠKE UČINKOVITOSTI PRI POSLOVANJU

DOSEGANJE EKOLOŠKE UČINKOVITOSTI PRI POSLOVANJU Ševala Korajčević (sevala.korajcevic@bhas.ba), Agencija za statistiku Bosne i Hercegovine POVZETEK Določanje prioritet in ciljev gospodarske politike, pri katerem so okoljska vprašanja obravnavana na koncu procesa odločanja, je prispevalo k mnenju, da je gospodarska rast v konfliktu z varstvom okolja. To je privedlo do nove oblike razvoja, imenovane trajnostni razvoj. Filozofija trajnostnega razvoja se začne z razumevanjem povezave med gospodarstvom in ekologijo. Izraz eko-učinkovitost izhaja iz potrebe po orodju, s katerim bi prenesli trajnostni razvoj z mikroekonomske na makroekonomsko raven. Danes koncept eko-učinkovitosti temelji na učinkoviti rabi virov; ta povezuje dve razsežnosti: na eni strani povečevanje učinkovitosti proizvodnih procesov in zmanjševanje negativnih okoljskih učinkov, na drugi strani pa primerjava različnih alternativ (primerjalno primerjanje), ki pokriva socialno razsežnost. V ekonomski teoriji je osrednje vprašanje, kako meriti razvoj in kateri kazalniki so potrebni za to. Tradicionalni kazalniki merijo dosežke na raznih področjih (družba, okolje in gospodarstvo), ne da bi analizirali medsebojen vpliv in odnose med temi področji. Z napredkom nove smeri razvoja trajnostnega razvoja nastaja cela vrsta novih kazalnikov, ki skušajo odstraniti pomanjkljivosti običajnih kazalnikov in celoviteje meriti dejanski napredek. Kazalniki eko-učinkovitosti temeljijo na primerjavi dveh neodvisnih spremenljivk, okoljske in finančne. Prilagojeni so posebnim potrebam industrije in zagotavljajo primerjavo med raznimi sektorji gospodarstva, državami in regijami. Prispevek predstavlja kazalnike eko-učinkovitosti (ustvarjeni gradbeni odpadki / neto dodana vrednost v gradbenem sektorju) za Bosno in Hercegovino, Slovenijo in Hrvaško. Za ta namen so bili uporabljeni uradni statistični podatki o dodani vrednosti v gradbenem sektorju v BDP in tudi razpoložljivi podatki o količini gradbenih odpadkov v teh državah. Rezultati bodo uporabljeni za analiziranje mednarodne primerljivosti eko-učinkovitosti na sektorski ravni in za to, kako je mogoče spremljati prihodnji napredek in sedanje stanje v državi v primerjavi z najboljšimi državami, kako je mogoče doseči izboljšanje ipd. Ključne besede: eko-učinkovitost, kazalnik eko-učinkovitosti, gradbeni odpadki, neto dodana vrednost 1

ACHIEVING ECO-EFFICIENCY IN BUSINESS ABSTRACT Setting priorities and defining the objectives of economic policy, where environmental issues considered at the end of the decision making process, was contributed to the view that economic growth is in conflict with protection of the environment. Extracting phenomena environment, led to the growth of a new form of development - sustainable development. Philosophy of sustainable development starts with understanding the interaction between economy and ecology. The term eco-efficiency is derived from the need for a tool that can translate sustainable development from micro to macro economic level. Today, the concept of eco-efficiency based its approach on the efficient use of resources which connects the two dimensions: one that can be viewed as maximizing the efficiency of production processes and minimize negative environmental impact, and another that compares the different alternatives (benchmarking) which recognizes the social dimension. In the theory of economic development, one of the central questions is how and what indicators for measuring of development. Traditional indicators measures separate achievements in different areas (society, environment and economy), not going into the analysis of mutual influences and relationship of these areas to each other. With the advance of the new direction of development - sustainable development, there is a whole range of new indicators that attempt to remove the defects of common indicators and a more comprehensive measure real progress. Eco-efficiency indicators are based on a comparison of two independent items, environmental and financial. They are adapted to the special needs of the industry and are provided for comparison across different sectors of the economy, states and regions. This paper presents the eco-efficiency indicators (generated Construction & Demolition waste / net value added in the sector F- Construction), for Bosnia and Herzegovina, Slovenia, and Croatia. For this purpose, the official statistics data were used for the value added of construction in GDP, as well as available data on the volume of construction and demolition waste for theses countries. The results should be used for the analysis of the international comparability of eco-efficiency on sectoral level and refer to the future, how we can monitor progress and current position of the country compared to the best ones, which are identified and ways to improve. Key words: Eco-efficiency, Eco-efficiency Indicator, Construction&Demolition waste, Sustainable Development 2

ECO-EFFICIENCY IN A WIDER CONTEXT The term of eco-efficiency was first introduced and discussed in 1990 and arrived as a result of the need for instruments that can translate sustainable development from micro to macro- economic level. The basic purpose of the tool at the micro economic level is promotion of sustainable development which is one of the basic principles of social responsibility. The World Business Council for Sustainable Development (WBSCD) defines eco-efficiency as: Eco-efficiency is reached by the delivery of competitively priced goods and services that satisfy human needs and bring quality of life, while progressively reducing ecological impacts and resource intensity.... The WBCSD goes one step further by including a clear target level: an ecoefficiency state is reached when economic activities are at a level at least in line with the earth`s estimated carrying capacity (WBCSD 1996). In short, it is concerned with creating more value with less impact. An broader perspective on environmental issues is taken by Organisation for Economic Cooperation and Development (OECD). They feel that eco-efficiency expressed by WBSCD is a flexible approach, but insufficient as a basis for policy making. It is essential a deeper understanding of the relationship between economics and environmental impact, the driving forces of change and ethical motives of producers and consumers behaviour. So, they express ecoefficiency as: the efficiency with which ecological resources are used too meet human needs (OECD 1998). More micro and firm oriented is president of WBSCD, Bjorn Stigson. He sees eco-efficiency as a management philosophy designed to encourage businesses to be more competitive, more innovative, and more environmentally responsible (Stigson 1997). Here is the importance of producing more goods and services by using less resources. Eco-efficiency is primarily a business concept, because it calls business to achieve more value from lower inputs of materials and energy and with reduced emissions. It refers to a complete enterprise marketing and product development as much as to manufacturing or distribution. It is concerned with three broad objectives: reducing the consumption of resources, reducing the impact on nature, increasing product or service value. Generally speaking eco-efficiency can be defined as: Eco efficiency = environmental performance / financial performance The ratio of these two items should be measure the environmental burden per unit of economic value. Eco-efficiency indicators measure the enterprise`s efficiency in the consumption of resources with reference to the ability to produce economic value. This view is consistent with the WBCSD definition of eco-efficiency mentioned earlier. Therefore, eco-efficiency indicators gave indication on a company`s eco-financial performance consisst of a combination of two independent variables; a environmental variable measuring the environmental performance and a financial variable measuring the economic performance. The main problem in understanding and defining the concept of eco-efficiency, in scientific circles of the nineties, that eco-efficiency was included only two dimensions (ecological and economic) and social dimension is ignored and set aside. The role of business is to satisfy human needs, it expects to be rewarded with profits for doing so. But, responsible businesses also aim to improve quality of life. The challenge is to do this without increasing the overall use of resources and having an bad effect on the environment. 3

Today, the concept of eco-efficiency based his approach on the efficient use of resources which connects two dimensions: one that can be viewed as maximizing the efficiency of production processes and minimize negative environmental impact, and another that compares the different alternatives (benchmarking) which recognizes the social dimension. There are many definitions of benchmarking but primarily those involving learning from each other, sharing information and adopting best practices in order to gradual improvements in performance. The simplest, benchmarking is a "personal improvement based on learning from others." ECO-EFFICIENCY INDICATORS Eco-efficiency is a strategy that allows to reduce dependence of resource use and economic growth to meet human needs, while at the same time use of resources remains within the carrying capacity (maximum number of users that a natural resource may be submitted, and not endanger its natural quality). At the same time eco-efficiency is a tool to measure the use of resources to meet human needs. For this reason, the eco-efficiency is considered as ratio output / input or the strategy / policy. Policy contains the goals and measures should be taken to improve through: adoption of legislation promoting clean technologies, changes in ways of thinking through education programs, work on strengthening the awareness of responsibility of producer. Sustainability will only be achieved by business working together with governments and external stakeholders such as suppliers, customers, sharing the responsibility. Governments can contribute by formulating economic and industrial policies which encourage eco-efficiency in business as well as reduce energy and resource use throughout the economy. Strategies of eco-efficiency company trying to meet the production needs, at the same time trying to spend less resources. This theory of eco-efficiency is emphasized economic terms because it refers to economic activities such as production and consumption. Even though eco-efficiency is more or less designed for the business sector, work is also going on at the macro level. Interesting questions has been raised whether eco-efficiency only on firm levels is sufficient for reaching sustainable developmnet and whether it is convenient to try to measure eco-efficiency on national level as well. What works for business, can also work for national economies. Setting targets and measuring progress toward achieving them are very effective management tools for governments. Indicators can tell what needs to be changed and by how much. Such indicators are important for measuring the progress in linking governmental and business actions. To monitor the execution of these strategies are used eco-efficiency indicators. Indicators of eco-efficiency provide feedback and ultimately enable improvements in the strategies. An eco- efficiency indicator is the ratio between an environmental and financial variable. These two items are adapted to the special needs of given industry or for comparison across different sectors of economy, states and regions. In real terms this means that in ratio of eco-efficiency, we can consider small products or services, or specific sectors of economic activity, i.e., these two items are adjusted to the special needs of the given industry or company. The Figure 1. shows ratio of environmental and financial variables (generated Construction&Demolition waste (C&D) / net value added in sector Construction), where were shown the international comparability eco- efficiency on sectoral level. The aim is to show, how in the future to monitor progress and current situation of the country compared to the best ones, which identify ways to improve. 4

For calculating, it were used official statistical data for the value added of sector Construction in GDP, as well as, available data on the generated construction and demolition waste. For Bosnia and Herzegovina, is taken the data on the quantities of construction and demolition waste, obtained by estimation methods for C&D waste generation. It was made a comparison of eco-efficiency indicators for 2006, 2007 and 2008 among the countries (Slovenia, Croatia, Bosnia and Herzegovina). Eco-efficiency = Generated C & D waste net value added (in sector F - Construction ) Figure 1. Indicators of eco-efficiency, comparison between countries Source of data: www.bhas.ba ; www.dzs.hr; www.stat.si/ (access 20/06/2009) The approach is based on value added, allows countries to focus on decisions that will lead to long term success, not just to creating the current positive results. Value added is calculated separately for each activity is present in the economy. It provides an important economic activity in the general valuation level. Added value can be defined as the difference between the sales value of goods and services and the value of purchases of inputs (costs of raw materials, energy costs, services and other operating costs). That is, the added value is the value, added by the manufacturer of inputs before they are sold as new products. The strategic goal of any economy is the production of equal or greater output with less consumption of natural resources and creating less waste. The relationship between value and performance sector of the economy is clearer when the analysis of the influence of applied strategies that affect the achievement of success. It seems that Croatia has the highest eco-efficiency, which means that produces the least amount of construction&demolition waste per unit of value, and eco-efficiency is increasing. What are the reasons for that, requiring additional analysis. One reason for this may be that in Croatia in early 2007 entered into force on the national Regulation on the disposal of construction waste, where the Ministry establishes a system that should ensure that 80 percent of construction waste recycled. However, before adopting this Regulation, the awareness of the national interest of using recycled materials in construction is very strong, and contractors on demolition were using recycled demolition material long before it became public in a politically and environmentally correct thing. The fact is that the amount of construction waste in Croatia in 2008 on the same level as in 2006, or less than in 2007, and it might be just the entry into force of the Regulation on the disposal of 5

construction waste which establishes a system for recycling and reuse of this waste at the site of waste which inevitably leads to a reduction of the total. To display the evaluation of eco-efficiency at the sectoral level of any country, it is necessary to have comparable and reliable indicators of eco-efficiency. Comparability and reliability can be achieved by standardizing the relevant environmental and financial of indicator. First should be used the same methodology for calculating the eco-efficiency indicators at sector level within a certain period of time. Secondly, the method for calculating the indicators should be consistent when using financial items (value added sectors in GDP). At the international level to compare eco-efficiency is very interesting at the level of industrial sectors, in this case is construction sector, because it allows the international comparability of the analysis of environmental progress. The problem with this concept is that there are no agreed rules or standards for the calculation of certain items of environmental economics, i.e., do not take into account changes in the environmental specifics of sectors of countries. Basically, a little has been done on the international standardization of calculation of eco-efficiency. Standardising an eco-efficiency indicator requires the standardisation of two single items; one environmental and one financial. The impossibility of comparing the measurement makes it difficult to progress with others, through a period of time. Information that can not be compared with others may lead a false image of their own eco-efficiency. However, analysis of indicators, allow countries to observe their data in a different way. This is also a good way to increase knowledge about the specifics of other countries, their economies in order to be better understand the differences in waste generation. On the other hand, indicators should meet the following criteria: To identify environmental problems, Related environmental issues that are relevant for the entire industry at the macro level with activities of the company at the micro level, Allow directly or indirectly affects on development of international harmonization and standardization of relevant environmental and financial items. Table 1. Indicators of eco-eficiency 1) for C & D Waste, 2004 Austria 0,46 Spain 0,53 Ireland 1,31 Belgium 0,95 Finland 3,23 Italy 0,78 Germany 2,4 France 5,01 Netherlands 1,20 Denmark 0,58 Greece 0,34 Portugal 1,57 Sweden 1,03 Czech Republic 4,03 Lithuania 0,34 Bulgaria 4,53 Estonia 4,14 Latvia 0,11 Cyprus 0,55 Hungary 1,63 UK 1,14 Source: ETC/SCP working paper 2/2009, Website: http://scp.eionet.eu.int 1) 1000 tons of waste / mil. EUR-a added value in sector Construction Indicator of eco-efficiency is considered in the context of waste per unit of economic value, expressed as kg / EUR. The indicator includes the total amount of waste, hazardous and nonhazardous waste. Also, it should primarily be related to the primary waste to exclude secondary waste. In Table 1. were given the eco-efficiency indicators for some EU countries. Significant 6

variations across countries may raise doubts in the validity and comparability of indicators between countries. The main reasons for the wide range of values can be: differences relating to the collection of waste data statistics (using different methodologies for data collection); differences in the price level of countries; differences in the structure of national economy (trends of economic activities and their share in GDP, ie changes in the participation of various sectors in the structure of GDP). the impact of implementation of various strategies of efficient waste management Influence of the structure of the economy must be viewed through the time series data. The high price level contributes to the high value added sectors of the economy and thus affect on the indicator. Differences in data collection on waste can also contribute to oscillation indicators among countries. The effect of these differences is difficult to estimate but in future will become less important as a result of the upcoming attempts for harmonization. It is assumed that differences in amounts of construction and demolition waste (environmental items) can occur due to differences in the tradition of building in country, the difference in the geographical position of countries, the geology of the terrain for construction. Generally, though we can not make reliable international comparisons, if the information enables measurement within the same sector of the economy of the individual country to assess the results of different strategies, then an indicator of eco-efficiency has significant value. SUMMARY It is obvious that eco-efficiency should be established both, at the macro level and business entities. Eco-efficiency is about increasing the added value while reducing environmental impacts. It is important that industries that are primary responsible for achieving eco-efficiency, take responsibility. Responsibilities will be achieved when companies engage in their business expectations which society requires of them. Whether or not it is possible to measure the eco-efficiency on macro level, the governments and municipalities will have an importnat role in implementing eco-efficiency initiatives (Peck&Associates 1996) by: Regulation Financial instruments and incentives Education programs Voluntary agreements (extended producer responsibility) Social responsibility is a concept where all business entities voluntarily make positively influence on workplace, social and natural environment. Positive impact in fact means to increase awareness of the importance that businesses have in society, and responsibilities that stems from it. In order to achieve eco-efficiency at the macro level, social responsibility must be part of everyday company management process aimed at maximizing the efficiency of the production process and minimize negative environmental impacts. It is achieved by introducing new technologies that reduce the inputs per unit of product (water, energy) and introducing a measure of recycling of waste and its reuse. The social dimension of eco-efficiency at the macro-level can be seen as a tool that allows analysis and comparison based on facts. It is a process of identifying and understanding the best practices of countries that have effective waste management, and acceptance practices with the aim of improving the process. 7

At a very effective way we achieved the evaluation of the current position of the country compared to the best ones, which identify ways to improve. Benchmarking is the practice of humble acceptance that someone else is better at something, and the wisdom of trying to learn from others. That means constantly measuring and comparing the results - through monitoring targets and measures for the execution of various strategies. Each country should develop its own approach to achieving eco-efficiency. There is no universal approach with regard to different countries are at different levels of development, where there are different pressures that are directed towards achieving business success, as measured by increased levels of economic growth. If growth is enabled through a minimum negative impact on the environment, may be talking about eco-efficiency. If we make comparison with others, constatntly, in order to improve business processes that will lead to reducing the negative environmental impacts, then we talk about the social dimension of eco-efficiency. REFERENCES: [1] Brattebo, Helge: State of the art-p2005 Industriell Okologi, NTNUs Industrial Ecology Program, 1998. [2] Eurostat: Other waste indicators, Doc.Waste WG 6.2.1, 2010. [3] H.A. Verfaille and R. Bidwell: Measuring eco-efficiency, a guide to reporting company performance, Technical report, WBCSD, June 2000. [4] Kaspar Muller, Andreas Sturm: Standardized Eco-Efficiency Indicators, Ellipson AG, Basel Switzerland, 2001. [5] Orelie Mahot, Valentina Masin,Omid Tayyeba,Urmat Makulov: Construction & Demolition Waste in European Countries, KTH, Stockholm, 2008. [6] Peck&Associates: What is eco-efficiency?, 1996. [7] S. Schmidheiny:» Eco-efficiency, creating more value with less impact«, Technical report, WBCSD, August 2000. [8] UNCTAD: A Manual for the Preparers and Users of Eco-efficiency Indicators, Technical report, UNCTAD, 2003. 8