Archived — IC-SDS - 2000-2003 Productivty through Eco-efficiency

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3.1 Productivity Through Eco-Efficiency

Objective: Enhance the capacity of Canadians, industries and firms to develop and use eco-efficient practices, tools, technologies and products that contribute to increased productivity and environmental performance.

Target: Work in partnerships with industry and others to demonstrate the contribution of eco-efficiency to enhancing productivity and environmental performance through capacity building in R&D and skills, applying the tools in the marketplace, and measuring success initiatives. By 2003, this will be achieved through the following:

Capacity Building in R&D and Skills (two deliverables)

  • supporting the establishment of Research Chairs
  • supporting the establishment of NCEs.

Applying the Tools in the Marketplace (four deliverables)

  • assisting SMEs to use eco-efficient practices, tools and technologies, and promoting the adoption of environmental standards
  • developing and encouraging the use of voluntary non-regulatory initiatives
  • assessing the extent to which environmental labelling assists consumers
  • identifying opportunities for the Internet and associated information and communications technologies to contribute to eco-efficiency.

Measuring Success (two deliverables)

  • furthering the development of eco-efficiency and sustainable development indicators, and examining the environmental reporting practices of Canadian industry
  • encouraging industry's social responsibility through an assessment of best practices as well as improving guidelines and indicators.

Eco-Efficiency and Innovation: Keys to Sustainable Productivity Growth

Canada continues to experience a productivity gap vis-à-vis other advanced industrial economies due to our poor innovation performance. Specifically, Canadian industry is slow in successfully developing, applying and marketing innovative products, processes and services. Innovation is a key driver of productivity growth and competitiveness and, therefore, must be addressed if Canadians are to experience employment growth, a higher standard of living and an improved quality of life.

Industry Canada's mandate to help make Canadians more productive and competitive in the knowledge-based economy, and thus improve the quality of life in Canada, revolves around a number of elements. One of these is the Department's innovation agenda. Innovation is the key to productivity growth, and our innovation performance hinges on our ability to learn new skills, adapt to new conditions, create new ideas and discoveries, and seize new opportunities.

Eco-efficient practices, as defined by the World Business Council on Sustainable Development (WBCSD), include reducing materials, energy and toxic dispersion, and increasing material recyclability, use of renewable resources, product durability and the service intensity of goods and services. Eco-efficiency is an important business practice and management tool that provides business with the means to increase productivity and competitiveness while making measurable progress in environmental performance. Specifically, it challenges business to achieve more value from lower inputs of materials and energy while reducing emissions. It also involves designing products that are easily disassembled and recycled, and extending their durability, service life and functionality.

The link between innovation and competitiveness and eco-efficiency is becoming increasingly clear. Companies are realizing cost savings, managing risk effectively and expanding their business thanks to the development and implementation of tools such as environmental management systems (EMSs), life-cycle analysis, design for environment, eco-industrial networking and environmental performance indicators. The benefits of eco-efficiency are being realized by leading multinationals, particularly U.S. and European firms, from a variety of industrial sectors. Their eco-efficient improvement strategies typically involve innovations in technology, production processes, product design and business organization. Benefits include lower per-unit costs, improved product/service quality, enhanced brand image and customer loyalty, new market opportunities, lower environmental-related liability, and increased interest by investors and the financial community. They are a clear indication of eco-efficiency's contribution to improving the economic, environmental and social components of sustainable development's triple bottom line.

Eco-industrial networking is emerging as an important approach to improving eco-efficiency through partnerships. Eco-industrial networking involves developing new local and regional business relationships between the private sector, government and educational institutions to use new and existing energy, material, water, human and infrastructure resources to improve production efficiency, investment competitiveness, community and eco-system health. By examining the flow of resources between facilities, new untapped opportunities for eco-efficiency improvements can be identified and implemented.

Intergovernmental organizations are also making eco-efficiency a key part of their work to increase competitiveness and improve the environmental performance of industry. In partnership with the WBCSD and other industry groups, the European Commission has launched a multi-year action plan to promote eco-efficiency as a leading business and policy concept across Europe. Individual countries, for example Australia, are also working through organizations such as the SDS to examine experiences with government programs and initiatives by individual firms aimed at improving eco-efficiency. Furthermore, eco-efficiency was one of the key issues of focus of the President's Council on Sustainable Development in the United States. The world is moving ahead, and Canada must continue to be responsive or risk falling behind major competitors.

While many large companies in Canada have embraced one or several eco-efficient practices, there are challenges related to achieving further progress on their use. There is a lack of understanding of the opportunities presented by eco-efficient practices and related tools such as life-cycle assessment and design for the environment, particularly by SMEs. There are also indications that Canadian universities could be better prepared to lead in innovative research and teaching on the latest environmental tools and management systems that contribute to eco-efficiency.

A more systematic approach to the adoption of eco-efficient practices and tools by Canadian industry could yield significant benefits in terms of improved competitiveness and reduced environmental risk. Eco-efficiency will play a part in ensuring Canadian industry maintains its competitiveness in global markets where access is increasingly being shaped by environmental issues. In such a globalized market, companies will increasingly be asked to demonstrate that they are operating to high environmental standards, such as ISO 14000, to have access to and operate in markets. International corporate customers are under pressure to report on their environmental performance, and they will put demands on their suppliers to meet those same high environmental standards, as well as to document that fact.

Industry Canada's Role

In this second, new sustainable development strategy, Industry Canada has selected eco-efficiency as one of three areas where we believe we can achieve the most in advancing sustainable development. We believe this because it promises to contribute to Canada's innovation performance, productivity growth and environmental performance, and because the Government of Canada has identified innovation and eco-efficiency as priority areas in the 1999 Speech from the Throne. This commitment was reinforced in the 2000 budget, which included new funding for investing in research and innovation, and for promoting environmental technologies and practices.

Furthermore, eco-efficiency was one of eight themes discussed at the April 2000 Leaders' Forum on Sustainable Development, which aimed to promote greater cooperation among federal departments concerning their sustainable development strategies. Industry Canada is leading the eco-efficiency agenda for the federal government and, as such, the Department will support the development of innovations that promote productivity through eco-efficiency in Canadian business. Moreover, the advisory committee established to review the preliminary draft of Industry Canada's strategy strongly supported Industry Canada's emphasis on eco-efficiency within the strategy.

Industry Canada has also worked under the leadership of Environment Canada and in coordination with other departments in the development of SDS II. Examples of horizontal issues promoted by Environment Canada include greening operations, EMSs and eco-efficiency. These issues and others appear in the sustainable development strategies of Natural Resources Canada, Agriculture and Agri-Food Canada, Transportation Canada, Western Economic Diversification Canada, etc. Therefore, in partnership with industry, federal departments, consumers, and other stakeholders, this strategy addresses eco-efficiency through capacity building in R&D and skills, applying the tools in the marketplace and measuring success.

In its first strategy, Industry Canada recognized the importance of eco-efficiency as an effective way for industry to produce more valuable products or services while using fewer material and energy inputs and creating less pollution. The Department began to develop an effective case to encourage business to implement EMSs such as ISO 14000. It also worked with industry and other stakeholders to identify opportunities to use eco-efficiency indicators, and supported the development of the voluntary standards system as an effective means to advance sustainable development, communicating it through information products and outreach. Industry Canada has targeted developing partnerships with industry and other government departments to enhance awareness, identify opportunities for action, and encourage the use of eco-efficient practices, tools, technologies and products, to increase productivity and improve environmental performance. The key lesson learned is that eco-efficiency has become a more credible and promising vehicle for proactively advancing sustainable development in our economy.

The Department's sustainable development strategy was reinforced by funding decisions by TPC. TPC's Environmental Technologies component encourages eco-efficiency by financially supporting the development and application of sustainable alternatives such as better conservation of energy, water and non-renewable resources, and pollution abatement -- technologies that reduce waste or harmful emissions.

Industry Canada will aim to enhance the capacity of Canadian firms to develop and use eco-efficient practices, tools, technologies and products that contribute to increased productivity and environmental performance. This will be achieved by focussing on modernizing management approaches, demonstrating and diffusing eco-efficient practices, improving the knowledge infrastructure and skills, and by increasing awareness and knowledge diffusion about eco-efficiency, within the framework of capacity building in R&D and skills, applying the tools in the marketplace and measuring success.

3.1.1 Capacity Building in R&D and Skills

Strengthening R&D and skills in the area of eco-efficiency involves advanced applied research, education, technologies and practices. The demonstration and the diffusion of innovative and tested technologies can play an important role in addressing resource efficiency and making Canadian industry more productive. The action areas below will support R&D and skills in institutions and industry to build up technical expertise and expand the application of eco-efficient practices, tools and technologies. These action areas may reinforce or complement some of the specific action areas outlined under the environmental technologies objective.
Research Chairs

"We aggressively seek out eco-efficiencies -- ways of doing more with less -- because it makes us more competitive when we reduce and eliminate waste and risk from our products and processes. And it saves us money. By developing products that are as safe as possible for people and the environment, we improve our market share."
-- Samuel C. Johnson, Chairman of S.C. Johnson & Son, Inc.

One of the gaps in Canada's innovation system is the shortage of people with the skills and knowledge to make innovation and eco-efficiency happen. For example, we lack design engineers familiar with environmental design and the latest tools and practices. Design engineering is a key enabler of innovation in that it creates the concepts and designs, and develops the new and improved products, processes, tools and technologies that industry needs to improve productivity and eco-efficiency. Recently, the Natural Sciences and Engineering Research Council of Canada (NSERC) introduced a program to establish chairs in design engineering that will make an important contribution to addressing these issues. However, more needs to be done to increase the knowledge of eco-efficiency in environmental and business faculties, to ensure graduates are familiar with the latest environmental tools and eco-efficiency practices, and to strengthen the related research capacity of the universities. Efforts also need to be undertaken to strengthen research networks between universities, industry and research institutions through existing vehicles such as the emerging Canadian Design Engineering Network or new networks.

Action Plan Item

  • In consultation with the Canadian Council for Human Resources in the Environment Industry, NSERC and other stakeholders, Industry Canada will assess the needs of knowledge workers to enhance the capacity of Canadian industry to adopt eco-efficient tools and technologies. This analysis will be used to support decision making for key skills initiatives, including Research Chairs. Responsibility: Environmental Affairs Branch

Networks of Centres of Excellence

The Networks of Centres of Excellence (NCE) is a federal program administered jointly by NSERC, the Canadian Institutes of Health Research, and the Social Sciences and Humanities Research Council Canada in partnership with Industry Canada. The NCE program seeks to mobilize Canada's best research talent in the university, private and public sectors, and has become a cornerstone of Canada's innovation system. The networks themselves provide Canada with a highly productive mechanism for developing and commercializing technologies in a much shorter time frame than if the research were conducted independently by industrial partners.

New NCEs have been targeted in three new research fields to help generate direct economic benefits and to expand Canada's expertise in the following areas:

  • Research on the "Automobile of the 21st Century" will extend Canada's capability to contribute to the development and use of increasingly efficient, safe and environmentally friendly automobiles in response to new design criteria that are reshaping the industry (e.g. emission level reductions). A network in this target area should improve Canadians' health, accelerate the rate at which Canada achieves emission-reduction targets and increase the participation of Canadian industry in opportunities generated by changes in the automotive sector.
  • Research in "Genomics Technologies and Society" will help Canada respond to biotechnology opportunities in the global, knowledge-based economy and will improve our understanding of the critical issues for society as related technologies are developed and introduced. A network in this target area should enable Canada to develop and exploit knowledge in genomics for social and economic benefits in areas such as agriculture, the environment, forestry and health.
  • Research in "Meeting Environmental Challenges for Clean Water" will strengthen Canada's international leadership role in addressing environmental challenges to manage and preserve access to clean water. A network in this target area should broaden Canadian expertise in the effective management of water resources and should preserve or improve our environment through the development of innovative technologies. It should also increase the health and socio-economic benefits derived from clean water resources.

Action Plan Item

  • Industry Canada will participate in the management process for approving and supporting three NCEs recommended from an arms-length peer review process in the following new research fields:
  1. The Automobile of the 21st Century;
  2. Genomics Technologies and Society;
  3. Meeting Environmental Challenges for Clean Water.

The new networks will be funded only if they pass the research excellence test of the NCE program. Responsibility: Innovation Policy Branch

3.1.2 Applying the Tools in the Marketplace

Applying the tools in the marketplace involves actively encouraging the transfer, adoption and implementation of eco-efficient production tools, practices, processes and technologies at the firm level to achieve measurable improvements in productivity and environmental performance. The action areas in this section outline Industry Canada's goals in order to empower business and consumers with the knowledge required to make eco-efficiency a part of daily life and common business practice. The modernization of business management approaches, including voluntary partnerships, are important because they encourage companies to go beyond compliance with the law, and they provide opportunities to find new and better ways of doing business in a profitable and sustainable manner.

Research undertaken by Industry Canada indicates that significant gains in cost savings, productivity and environmental performance could be realized if eco-efficiency were transferred to the many SMEs that have not yet recognized the concept. It further indicates that initiatives aimed at transferring knowledge and technology from one sector to another, as well as from large to small business, are possible areas for government/industry partnerships to ensure that Canadian industry maintains its competitiveness in global markets shaped by concern for the environment, health and social issues.

Eco-Efficiency Tools

Environmental concerns are raised by domestic and international customers around the world, creating both benefits and costs. To remain competitive in the global market, many large firms are implementing EMSs and using life-cycle analysis and design for environment tools in their operations. Industry Canada supports the development of management tools to assist industry in identifying environmental and advanced manufacturing technologies and solutions to achieve eco-efficiency. However, to adopt eco-efficiency innovations, manufacturers need detailed knowledge of management tools and practices that are best suited to their own manufacturing processes. Frequently, and especially in the case of SMEs, firms lack the resources necessary for developing, finding and implementing the right tools and partnerships.

In its first strategy, Industry Canada began demonstrating and communicating the business case to implement ISO 14000 as a way to acquire effective EMSs and, thereby, advance sustainable development. In SDS II, Industry Canada will go beyond these efforts and promote such management tools to a wider base of firms.  

Action Plan Items

  • Industry Canada will work with stakeholders, the National Research Council and other organizations (e.g. the Ontario Centre for Environmental Technology Advancement) to assist SMEs to improve their competitiveness and environmental performance through the use of innovative eco-efficient practices, tools and technologies. Responsibility: Strategic Policy Branch and Environmental Affairs Branch
  • In partnership with other government departments, Canadian industries, the Standards Council of Canada, the Federation of Canadian Municipalities, and other relevant agencies, Industry Canada will initiate activities aimed at increasing the credibility and adoption of environmental management standards. Industry Canada will work with the Strategic Steering Committee for the Environment of the Canadian Standards Association to identify priority actions for the expanded use of environmental standards and to examine the feasibility of implementing a pilot project in a selected Canadian municipality. Responsibility: Environmental Affairs Branch