Ecoefficiency

The World Business Council for Sustainable Development (WBCSD) claims to have coined the term ecoefficiency in 1991. They defined ecoefficiency as

The principal objectives are as follows:

• Reducing the use of resources (energy, water, land, and materials), enhancing the recycling and reuse of lost resources, and closing material use/loss loops
• Reducing the impact on the environment by minimizing air emissions, water discharges, waste disposal, dispersion of toxic materials and heat, and fostering the sustainable use of natural resources
• Increasing product or service value by providing more benefits to customers through product functionality, flexibility, and modularity, providing additional services and focusing on selling the functional needs that customers actually want—raising the possibility of the customer receiving the same functional need with fewer resources used and lost in producing the product

[Page 154]Many companies use an environmental management system as a means to ensure that all the risks and opportunities relating to ecoefficiency are properly identified, efficiently managed, and made part an integral part of the way the business is operated. According to the WBCSD, the key elements that organizations can use to improve ecoefficiency are to (1) reduce energy, water, land, and material intensity; (2) reduce the dispersion of toxic substances and heat; (3) enhance the recyclability and reuse of the lost resources; (4) maximize the sustainable use of renewable resources; (5) extend product durability standards; and (6) increase service intensity of products and services.

Companies can achieve ecoefficiency by using various methods, including improving their processes to reduce the consumption of resources, reduce resource loss, and minimize operational risk, which should also help reduce costs. Process changes may also be made in other parts of the product life cycle, including supplier operations, distribution, customer use, and end-of-life considerations for the product. Additionally, companies can try to find by-product value in their wastes by seeking out companies that can use their lost resources as feedstock. Many companies have set zero-waste targets to create increased resource productivity and create additional cash benefits. It could be argued that this is ecoefficient because it allows for the creation of more value with fewer resources and less waste. Companies can also redesign their products in an attempt to dematerialize the product. Some have called this process “design for the environment.”

Although these ideals of business ecoefficiency deserve considerable merit, they have not yet become fully employed. However, mainstream attitudes regarding ecoefficient business practices began to alter in 1987 when the U.S. Congress voted to amend the Stevenson-Wydler Technology Innovation Act of 1980. The amendment called for the establishment of the Malcolm Baldrige National Quality Award, a presidential recognition for business performance excellence that includes criteria on demonstrating sustainable and efficient practices. The award was established at a time when the leadership of American manufacturing quality and cost was being challenged by foreign competition, and U.S. manufacturing productivity growth had improved less than that of other countries for two decades. Congress determined that poor quality was costing companies as much as 20 percent of their sales revenues, and that improved quality of manufactured goods and services would go hand in hand with improved productivity, lower costs, and increased profitability. Since this amendment, approximately 70 other countries have instituted performance excellence frameworks.

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