Ms Deni Greene, Deni Greene Consulting Services
prepared for the 2006 Australian State of the Environment Committee, 2006
The earliest environmental roles of the private sector generally related to pollution control and stemmed from regulations on emissions from industrial facilities and other operations. These roles have expanded over time as regulations have consistently grown more stringent.
Occupational health and safety requirements are also longstanding, and have become more rigorous over the years. The community now generally expects companies to go beyond their legal requirements for protecting the safety of their own workers, and also holds them accountable for ensuring that safe working conditions are provided by their contractors, whether in Australia or overseas.
Over the past decade, the issue of protection has taken on an increasing prominence. The community now has much higher expectations for product safety than ever before, and many of today’s demands were not even considered a decade ago. The private sector’s role in ensuring protection covers a wide range of issues and environmental concerns.
The private sector is developing new products and modifying existing ones to meet community demand for products and services that reduce exposure to toxic chemicals. They are supplying paints, coatings, glues and office products with low levels of volatile organic compounds. Many types of cleaning products are now offered with reduced toxicity compared to their traditional counterparts. Several Australian companies are producing microfibre cleaning products, which avoid the need for added chemicals.
Building products that do not release toxic chemicals have attracted considerable interest. These include particleboard and fibreboard that do not use formaldehyde in their manufacture. Use of treated pine is being restricted because of safety concerns about the effect on children of the chemicals used in treatment (APVMA 2005). Termite control now relies on products that do not include organochlorine pesticides for termite control because of regulations adopted in recent years (DoHA 2004).
Probably the most widespread evidence of community interest in reducing exposure to toxic chemicals has been the extraordinary growth of the organic food industry. According to Australian Certified Organic, which certifies most organic produce in Australia, the organic industry is worth about $390 million annually and is growing by 25 per cent each year. Consumers have demonstrated a keen interest in buying food that is produced without the use of synthetic chemicals or genetically modified ingredients. Land devoted to organic farming has increased from 0.15 million hectares in 1990 to 15 million hectares today (Munro 2005).
The phasing-out of lead in petrol, begun in 1986, was completed in 2001. The lead industry has launched the Green Lead™ project to address ongoing concerns about lead exposure. The project aims to define a standard and audit system for the third-party certification of companies in the lead–acid battery lifecycle so as to provide assurance that the production, use and recycling of lead in batteries can be achieved safely (Toyne undated).
Nearly every household in Australia recycles some wastes, according to Australian Bureau of Statistics’ surveys (ABS 2004). This high level of awareness of recycling and waste issues led to many calls for the banning of plastic bags because of their contribution to litter and their effect on marine life. In response to public concern, supermarket chains are promoting the use of reusable bags to encourage reduction in the number of plastic bags used. The Australian Retailers Association, which represents most big supermarkets, has agreed to substantial reductions in plastic bag use (Australian Retailers Association 2003).
The National Packaging Covenant was adopted in 1999 to reduce the use of packaging. It is a voluntary agreement between key stakeholders in the packaging industry and the Australian, state, territory and local governments. After a review of progress, a new strengthened covenant was adopted in July 2005 for a period of five years. Signatories have committed to a national recycling target of 65% for packaging and no further increases in packaging waste disposed to landfill by the end of 2010 (DEH 2005b).
Some industries have adopted product stewardship programs for the return of used products for recycling. MobileMuster, the official recycling program of the mobile phone industry, started full-scale operation in 1999. By the end of 2005 it had collected 330 tonnes of handsets, batteries and accessories for recycling (AMTA 2006). Recycling of non-returnable crop production and on-farm animal health chemical containers is facilitated through the drumMUSTER program, sponsored by the National Farmers’ Federation, CropLife Australia, Animal Health Alliance (Australia), the Veterinary Manufacturers and Distributors Association, and the Australian Local Government Association (drumMUSTER 2002).
Design for disassembly facilitates recovery and recycling by making products easy to take apart at the end of their useful life and ensuring that materials are not contaminated with substances or other materials that would inhibit recycling. Fuji Xerox has put this principle into practice, and reclaimed parts from its old machines are remanufactured or rebuilt to current standards. Remanufactured components now account for 80% of the company’s spare parts requirements. This has resulted in large savings and reduced requirements for imported products, and has led to a major export business into Asia (Fuji Xerox 2004). Office furniture manufacturers are increasingly designing their products for disassembly so that usable parts can be put to good use, and worn-out materials can be recycled. Holden is helping the motor vehicle industry work towards the establishment of systems for the disassembly, sorting and recycling of plastic vehicle components by labelling all plastic parts with a code number that identifies the type of plastic used.
Cleaner production techniques prevent waste and often create other environmental benefits, such as reduced energy use and greenhouse emissions, through changes in processes and procedures, products and/or packaging. They are based on using resources more efficiently to reduce environmental impacts and costs. Successful partnership programs related to cleaner production have been conducted by the Environment Protection Agency (EPA ) in New South Wales, EPA Victoria, the Centre for Excellence at Curtin University of Technology (with support from the Western Australian Government’s Waste Management and Recycling Fund), as well as agencies in other states. Many of the projects carried out under these programs have resulted in cost savings as well as reduced environmental impacts.
Manufacturers are providing a wide range of products made from recycled materials for use by business, government and individuals. Visy Industries has been recognised for its commitment to the use of recycled materials in the manufacture of paper, cardboard and plastic beverage containers. The price of some products has decreased markedly. An example is recycled paper, which is now competitive with paper from virgin sources.
ETree was initiated by financial sector company Computershare in partnership with Landcare, and now has over 60 member companies. The companies encourage shareholders to adopt electronic delivery of annual reports and other communications to reduce the cost and environmental impacts of paper use. They donate funds to Landcare Australia for every shareholder that accepts electronic delivery. The initiative has so far resulted in the planting of over a million trees (Computershare 2004).
Hotels in Australia are trying to reduce waste by moving from single-serve packaging of shampoos and soaps to refillable containers.
Australians surveyed in October 2005 felt that global warming is the most important environmental issue facing the world today (although water conservation is seen as even more important for Australia than global warming). Private sector organisations are taking voluntary action to reduce their greenhouse gas emissions through programs such as the Greenhouse Challenge as well as through activities related to their products and services (Morgan and Levine 2005).
The building industry, property managers, occupiers of commercial buildings and house buyers have demonstrated a great deal of interest in ‘green building’ over the past few years. Some of the reasons for this interest are concern about energy efficiency, greenhouse gas emissions and social responsibility, coupled with recognition of the reduced cost of operating an efficient building. There has also been increased government pressure to improve the energy efficiency of houses and commercial buildings.
Although some builders have been supportive of moves towards more efficient buildings and have produced new homes and commercial buildings that incorporate features to reduce energy use, the industry in general is apprehensive about the effect of energy requirements on the cost of buildings, particularly housing. Energy efficiency requirements for housing were built into the Building Code of Australia in 2004 and were adopted by most states. Some states adopted more rigorous requirements. Starting in 2006, the building industry is required to meet stringent new requirements for energy efficiency of housing and commercial buildings to conform to provisions of the Building Code of Australia that form part of the Building Code of Australia 2006 (DEH 2005a).
To comply with the Mandatory Renewable Energy Target (MRET ), energy suppliers must source a minimum of 2% of their electricity supply from renewable sources. Most suppliers have gone beyond these requirements to offer business and residential consumers the opportunity to buy Green Power, electricity supplied from renewable sources above the amount required under MRET. Accredited Green Power is from ‘new’ renewable energy sources, that is, from sources that have been built since 1 January 1997. Purchasers of Accredited Green Power contribute to further investment in renewable energy and reduce greenhouse gases from electricity generation (Department of Energy, Utilities and Sustainability 2005).
Several programs aim to reduce greenhouse gas emissions from cars. Companies participating in Greenfleet donate funds to plant native trees in order to offset the emissions created by their travel. Since its inception in 1997, Greenfleet has planted more than two million trees. Greenfleet has committed that these forests will not be harvested and will create an investment in rural Australia for future generations (Greenfleet 2005).
Car sharing is a way of providing people with ready access to cars without the need for car ownership. Research overseas has shown that it changes people’s travel patterns, reducing car use and increasing use of public transport. Two car-sharing companies offer these services in Australia: GoGet in Sydney and Melbourne, and Flo Carshare in Melbourne. The firms allow members to rent a car for as little as one hour. As the program is a pay-as-you-go service, members have an incentive to avoid car use unless it makes economic sense, leading to reduced car usage. Use of smart cards permits members to reserve their car by phone or Internet, walk to the car, use the smart card to unlock the car doors and drive off, because the keys are already in the car (GoGet undated; Flo 2006).
Many companies facilitate the use of bicycles for commuting to work by providing showers and bicycle racks for employees. Some provide sponsorship for bike-to-work days.
Actions that reduce waste and encourage recycling are frequently also energy efficiency measures, because much less energy is generally required to manufacture a product using recycled materials than with virgin materials.
As the 2006 AustraliaState of the Environment Report describes in detail, loss of biodiversity is a major environmental issue facing Australia. One of the key contributing factors is land clearance. Major industries associated with land clearance are agriculture, mining, forestry, and housing and land development. The approaches taken by these industries vary considerably.
The mining and minerals industry has adopted a program called Enduring Value—the Australian Minerals Industry Framework for Sustainable Development, based on a set of sustainable development principles developed by the International Council on Mining and Metals. One of the ten principles is ‘contribute to conservation of biodiversity and integrated approaches to land use planning’. An important mechanism for conservation of biodiversity is detailed scientific assessment of the biological values of areas to be cleared and sharing of information and knowledge about techniques for conservation and protection. This helps in the preservation of key elements, where possible, and in the restoration and rehabilitation after mining. It may lead to use of offsets or land trades to replace native vegetation lost during mining (Minerals Council of Australia 2004).
A large number of Australian farmers are involved in the Landcare program. Activities include the use of agricultural practices that protect biodiversity, the restoration of degraded soils, revegetation with native plant species, fencing of creeks and many other diverse activities. Agriculture, more than any other industry, has been affected by legislation to restrict land clearing. The introduction of stronger clearing legislation The introduction of stronger clearing legislation and its implementation over the next few years should result in a slowing of the rate of deforestation. Industry groups have formed partnerships with conservation organisations and government to focus on the methods for protecting biodiversity.
The forestry industry has been closely involved with government in identifying areas to be protected and in developing approaches to protect biodiversity while maintaining forestry activities.
Housing and land development may involve clearance for new residences, roads and other facilities. Some developers have set aside areas of biological significance for protection, and have taken measures to protect or enhance biodiversity. Decisions about specific developments are usually worked out on a case-by-case basis and involve individual agreements between developers and local governments.
Some manufacturers of furniture and other timber products take efforts to ensure that they are protecting biodiversity by choosing only timber from sustainably managed forests or recycled timbers. They avoid the use of rainforest timbers and timber from native forests. Certification by an external independent body is generally considered the criterion for sustainable management.
A growing area of private sector activity is based on Australia’s native species and natural environment. Some of the products or services include native foods (both plant- and animal-based), essential oils, natural body care products and services, aquaculture, arts and crafts, native flowers, and nature-based or wildlife tourism.
Many manufacturers and retailers now recognise that they are accountable for ensuring acceptable working conditions both for their own employees and the employees of the contractors who produce goods for them. These conditions may cover payment of a living wage, hours of work, prevention of child labour and freedom to organise, among others. Recruitment and retention of skilled staff is an issue of growing importance to Australian companies, and many have come to recognise that there are significant financial benefits in implementing progressive workplace strategies.
Companies have developed a variety of systems to provide them with assurance about the conditions provided by their contractors. These may involve direct auditing by their own staff or agreements with organisations that conduct such audits and provide detailed information on contractors.
Companies are also taking measures that take account of employees’ needs for a balance between work and other aspects of their lives. These measures are designed to encourage people to stay in the workforce and to retain valuable employees. They are intended to ease pressures on parents that might otherwise discourage them from workforce participation, starting a family, or adding to it. A Business Council of Australia work–family survey (BCA 2003) identified a number of measures being taken by their member companies, including:
- flexible working hours
- paid maternity and paternity leave
- assistance with childcare
- family support services
- job-share schemes
- work-from-home opportunities.
The private sector has taken action to meet community concerns about the treatment of animals, particularly in research and product testing. Many companies have phased out testing of their products on animals. Others have adopted more benign practices than were used in the past. The poultry industry has acknowledged concerns about the conditions in which animals are raised, and is meeting consumer demand for free-range eggs and poultry. The livestock industry has worked with government to develop new procedures for the export of live animals.
A number of companies in Australia are taking steps to ensure good environmental performance by their suppliers. As customers and investors are increasingly holding them responsible for actions by suppliers and contractors, companies are adopting measures to provide some certainty about their suppliers’ activities and management systems. Companies also recognise that their own sustainability efforts will be greatly helped if their suppliers are committed to similar goals.
The South Australian Wine Industry Association, with support from the South Australian Government and Wine Industry Suppliers of Australia, has developed a new Internet-based toolkit to help the wine industry implement better, smarter and more efficient supply chain management and in turn reap economic and environmental benefits. This toolkit is the first step towards promoting wider industry adoption of sustainable purchasing (EPA (SA) 2006).
Insurance company Insurance Australia Group Limited (IAG ), working with its suppliers, has introduced guidelines for selecting suppliers that provide standards of sustainability performance. Performance assessments of principal suppliers are conducted every six months using a number of criteria, including sustainability criteria. The company also works with its suppliers to help them improve their environmental management and safety performance (IAG 2005).
The Ford Motor Company of Australia Ltd imposes environmental requirements on its suppliers, including the development of an environmental management system certified under ISO 14001 (Ford 2003). Some companies specify that particular chemicals or substances may not be used in products supplied to them. A number of companies work with suppliers to encourage the return of packaging.
Green purchasing is a form of supply chain management, but the term is most often used to refer to the purchasing of products for direct use rather than as inputs to a manufacturing process. Many companies have adopted green purchasing techniques for products such as recycled paper and toner, energy-efficient office equipment and water-efficient appliances. The Victorian ECO-Buy Business program is built on the model of the successful ECO-Buy program for local government, and provides assistance to companies in implementing green purchasing programs (ECO-Buy 2005).
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