Sustainable Consumption and Production along Global Value...

UNEP/Wuppertal Institute Collaborating Centre on Sustainable Consumption & Production

Sustainable Consumption and Production along Global Value Chains:Trends and Focus Areas

Michael KuhndtHead, CSCP


SCP on the international agenda

Supporting the Switch to SCP

SCP in global value chains


3Michael Kuhndt cscp | www.scp-centre.org SCP Conference, Vilnius, March 2008

Role of business for enabling sustainable lifestyles World Summit on Sustainable Development identifies changing C&P patterns as overarching theme (chapter 3)

2002UN Guidelines for Consumer Protection extended by Chapter G: Promotion of Sustainable Consumption

1999

SCP on the international agendaInternational attention to Sustainable Consumption & Production

Human Development Report: Consumption for Human Development, problem analysis

1998Roundtable on SC in Oslo involving businesses, NGOs and governments

1994Agenda 21: Develop a better understanding of the role of consumption and how to bring about more sustainable consumption patterns

1992


Role of business for enabling sustainable lifestyles

Marrakech Process

10-year framework of programmes in support of regional and national initiatives to accelerate the shift towards sustainable consumption and production

SCP on the international agendaThe four elements of the Marrakech Process

Organizing regional

consultationsin all regions to identify needs

and priorities for sustainable

consumption and production

Building regional

strategies and

implementation mechanisms with regional and national ownership;

Implementing concrete

programmes and projects

on the regional, national and local levels;

Monitoring and evaluating progress

and exchanging information and experience at

the international level.



MarrakechMeeting

2003

Costa RicaMeeting

2005

International

Regional

National

Latin America

Buenos Aires (2003)Managua (2003)Managua (2005)

Asia-Pacific

Yogyakarta (2003)Seoul (2003)

Europe

Lithuania (2004)Belgium (2004)Berlin (2005)

2003 2005

Africa

Casablanca (2004)Nairobi (2005)

Addis Ababa (2006)

National RoundtablesChina, India (2006)

South Africa, Brazil (2007)

SCP on the international agendaThe Marrakech Process at the international, regional and national level

20062004

StockholmMeeting

2007

2007

Marrakech Task Forces

Cooperation Dialogue



Preparation

Extension

Mainstreaming

Agenda Setting

60s 70s 80s 90s 00s

Europe Production

Consumption

SCP on the international agendaStrategies for SCP – Governments


SCP in global value chains Supporting the

SWITCH to SCP





SCP in global value chains Ecological footprint and human development

Source: adopted from WWF 2005

Hum

an Developm

ent Index

Ecological Footprint per person

Sustainable Development

High demand on biosphere per person


Low human developmentWithin carrying

capacity

Low human development

Minimum acceptable level of Human Development

Wor

ld a

vera

ge b

ioca

paci

ty

avai

labl

e pe

r per

son

‚Developed Countries‘

‚Developing Countries‘

leap frogging

traditional



Ecological footprint and HDI Baltic and Eastern European countries

Source: Global Footprint Network 2006

Hum

an Developm

ent Index




Development of Baltic / Eastern European average

2003

1975



Ecological footprint and HDI Baltic and Eastern European countries


Hum

an Developm

ent Index





Low human developmentWithin carrying

capacity



Wor

ld a

vera

ge b

ioca

paci

ty

avai

labl

e pe

r per

son



Czech Rep.Estonia

Hungary

Latvia

Lithuania

Bulgaria

Rep. Moldova

Romania

Russian Fed.

Ukraine

Poland

Belarus



SCP in global value chains Resource Consumption in different Countries



SCP in global value chains Increasing evidence for burden shifting – an European Perspective

European consumption – global burden

Source: Wuppertal Institute

Global systems of production and

consumption lead to rising resource

extraction in developing countries....



Industrialised countries~ 20% of ecological backpack~ 80% of value added

Developing countries~ 80% of ecological backpack~ 20% of value added

End-of-life Managers ConsumersRetailersProducersResource

Extraction

SCP in global value chains Burden shifting: Inequalities along global value chains



Sustainability impact along value chains

SCP in global value chains Opportunities in value chains

high

low

Pote

ntia

l con

tribu

tion

to

sust

aina

bilit

y

Value Chain

UsageDistributionIn-house production

Supplierproduction

Raw materialextraction



SCP in global value chains Management focus in value chains

Man

agem

ent R

espo

nse Focus of current

management effort

only ad hoc and sporadic management

high

low

Value Chain

Current management efforts

End-of-lifeUsageDistributionIn-house

productionSupplier

productionRaw material

extraction



SCP in global value chains Classic mismatch between opportunities and efforts

Opp

ortu

nity

for r

esou

rce

effic

ienc

y

Policy, performance and reputation opportunities

80% of overall efforts focus on 20% of the total risk

high

low

Value Chain

Natural Resources Transportation Manufacturing

sitesProduct

distribution ConsumersConsumption DistributionManufacturingTransportationNatural Resources

Sustainability in the supply chain?

Sustainability during consumption?



Resource efficiency can strengthen local

enterprises

SCP in global value chains SME in developing countries

Expenditures including merchandise

4%

1%

26%

42%

10%

10%

7%

36%

PremisesMachinery maintenanceMaterialsMerchandise for saleSalaryWater, ElectricityOther

Cost structure of micro-enterprises :

Costs for material & energy 3.6 as high as salaries paid.




Opp

ortu

nity

for r

esou

rce

effic

ienc

y



high

low

Value Chain


sitesProduct





BhutanGermany

SCP in global value chains Lifestyles in different countries



SCP in global value chains Consumption Cluster

source: Wuppertal Institute

material intensityper capita per year

76 tonnes =

0 224 46 6810tonnesper capita

100 % mineral rawmaterials

fossilefuels

residence

food

clothing

health

education

leisure

community

others

6

11

13

5

9

6

20

29

biological rawmaterials

visible material loadhidden material “backpack”

unconvertedmaterials

earthdisplacement

erosion



SCP in global value chains Housing: The right for more energy efficient housing

Source: Enerdata (2004) in EEA (2006)

• In countries of temperate and cold climates, typically 80-90% of total life cycle energy use in housing is consumed during the use phase of a building’s life.

• Potential energy efficiency lies in electric appliances and lighting.

Energy use in the use phase of housing is typically 80-90% !

Distribution of energy use in housing use phase in %



SCP in global value chains Mobility: The right to have affordable low-carbon mobility

Source: WWF-UK Evidence Base 2006

Use phase is the most important lever for change in private road transport !

CO2 emissions over the life-cycle of a vehicle



SCP in global value chains Global Consumer Class in Asia

The GCC – a new ‘lower middle-class’

Source: Territory size shows the proportion of all people living on PPP US$ 20-50 a day (US$ 7000-17.800 / year) worldwide, that live there.



SCP in global value chains Fostering new markets

Base of the Pyramid

Poor / extreme poorBase of the Pyramid= 4 billion customers

Traditional business focus

Neglected markets

Middle class

High income

Go for inclusive consumption?

Anwara Begum, a Grameen 'telephone lady'

(Credit: Nurjahan Chaklader)



SCP in global value chains Tapping the Fortune at the Base of the Pyramid



Supporting the SWITCH to SCP





Combine macro- and micro elements!


Support research and

concept development

Pilot project implementation and monitoring

Best practice assessment and

exchange

Implementation tools and

instruments

Dialogue platforms and

network building

Enabling framework and

policy implications

MACRO

MICRO






concept development



exchange


instruments


network building


policy implications

MACRO

MICRO



Supporting the SWITCH to SCPBuilding a supportive knowledge framework

Life Cycle Assessment

Life Cycle Design

Supply Chain Management

Management System

Performance Evaluation

Sustainability Reporting

Internalfocus

Stakeholderfocus

Product chainfocus

Cl. Prod.Assessm.

Env. Cost.Account.

Mea-sure

Com-muni-cate

Source: CSCP/Wuppertal Institute



Accounting for Consumption

Individual resource budgets for awareness

raising

Scenarios: Individual consumption decisions

Comparison … my parents, me, my kids ... me at different

lifetimes

Individual level What impacts does

my consumption

have?

How would this change

if...?

Supporting the SWITCH to SCPBuilding a supportive knowledge framework






concept development



exchange


instruments


network building


policy implications

MACRO

MICRO



Supporting the SWITCH to SCPThe role of financial support models

Financial support matters...• Lack of funding / credit restrictions as a barrier to realising

SCP• Overcome short-term perspective of SMEs• Technology transfer depends on funding availability

Directly

Indirectly

• Financial institutions role in setting the framework for SME operations

• Financial institutions’ assessment of business success (e.g. considering environmental responsibility considered as better risk management)

• Diffusion of SCP concepts through credit officers, investment guidelines, technical specifications, ...

• Self-interest to support financially viable environmental or social entrepreneurs



Supporting the SWITCH to SCPThe role of new financial models

SCP-funds for SMEs?Example: TMB Bank

Advice on investment planning to projects on• energy conservation, • environmental management, • innovative projects, • business for social concern, etc.

Financing in following programmes:

Loan for investment in factory waste treatment and use of cleaner production technology

Loan for biogas technology in industries such as tapioca, palm and huge pig farms

Grant to SMEs for new non- CFC equipment & working capital loan for using new technology

Credit for Waste Treatment

Credit for Investment in Biogas System

Ozone Project Trust Fund



Supporting the SWITCH to SCPThe role of Marketing

Advancing Sustainable Lifestyles through Marketing and Communications

UNEP on Sustainable MarketingManual talkthewalk.net

Online database of ads for sustainable products

• How can marketing foster sustainable consumption?

• How companies do it: Case studies

• How can I do it? Tips, tools and resources



Nutrition

fields of demand

Housing

Clothing

Tourism

Mobility

Communication

...

Mining

Manufacturing

Logistics

Business services

Consumer services

Retail

...

sectorsMultiple

relationships

No clear matching of sectors and

fields of demands

Promote sector co-operation in

fields of demand?

Current focus of policy makers and businesses

Behaviour change on consumer level needed!

Agriculture

SCP in sectors and companies Matching sectors and field of demands






concept development



exchange


instruments


network building


policy implications

MACRO

MICRO



Supporting the SWITCH to SCPBuilding a supportive policy framework

Soft

Har

d Finance mechanisms

Fees and User Charges

Voluntary agreements

SCP Taxes

Norms and Standards

SCP Liability

Certificate Trading Technology Transfer

Research andDevelopment

Subsidies

Education and Training for SCP

Eco-Labelling

Sustainability Reporting

Consumer Advisory Services

Information Centres

SupportReward / Penalise Motivate

Det

erm

inin

g fa

ctor

s

Government strategy

Green Public Procurement

SCP Monitoring



Resource efficiency innovation for enhancing competitiveness

Environmental reform of fiscal systems, covering all instruments

Integrate public policy and business strategies Dialogue between businesses and policy makers

Example: Resource efficiency1. Phase: Preparation 2. Phase: Extension 3. Phase: Mainstreaming

Singular economic instruments to promote resource efficiency

Finance

Consumer responsibility for reaching resource efficiency

Consumer ProtectionResource efficiency as a driver

for structural innovation

Resource efficiency as cost issue for enterprises

Economy

Resource efficiency key to wide range of environmental issues

Early environmental concerns about resource consumption

Environment

Technical solutions and potential for resource efficiency

Research



Supporting the SWITCH to SCPOpportunities and challenges

Challenges

Develop financial models for SCP

Strengthen national policy

instruments

Towards SCP

Enable Sustainable

Consumption

Tangible and visible project

results

Include SCP in policy making

Include SCP in business &

investments

Next steps

Up scaling ofproject results


Thank you for your attention !!!Michael Kuhndt

CSCP

[email protected] + 49 - 202 . 45 95 8 - 20Fax + 49 - 202 . 45 95 8 - 30

www.scp-centre.org



SCP on the international agendaSCP in the EU

EU SCP Action Plan (of the DG Environment and the DG Enterprise)

Towards a Green Paper • Background Document released• Consultation process ongoing

Communication• In 2008• Based on consultation

TimelineLeveraging Innovation

“...Build on, bring together, and improve coherence of existing policies...”

Better Products

Leaner And Cleaner Production

Smarter Consumption

Global Markets

Dynamic Performance Requirements, Sustainability Labels, Eco-Design Instruments, Standardisation

Lead Market Initiative, Networking Of Innovation Stakeholders

Resource Efficiency Targets, Eco-Innovation and Environmental Technologies, Review of EMAS, SMEs

Retailer agreements, Market-Based Instruments, VAT rates, EU Eco-Label, Advertisement, Green Procurement,

“Exploiting first mover advantages and leveling the playing field worldwide for sustainable technologies and products”



Supporting the SWITCH to SCPModes of engagement – online repositories for SME tools

Easy access to range of targeted and tested tools

Different level of complexity and resource requirements

Avoid ‘one-fits-all’, but consider different ‘customer-groups’ and project setups

Reference publications, newsletters, guidelines

Helpline / expert networksInformation clearinghouse

Databases (listing technologies, products and services, providing

institutions)On-site visit and audit

Consultancy services (feasibility studies, finance models, legal

advice)Seminars, trainings, workshops,

symposiumsTrade fairs and exhibitions

Demonstration projectsFact-finding tours

Local business networks



Models for poverty-oriented SCPModels for addressing key challenges

Providing access to products and services

Developing innovative products and services

Knowledge and education

Infrastructure and good governance

food

construction

financeenergy

healthsanitation

footweartextile & apparel

Create local income



Environment and developments in global value chains Asian countries


Hum

an Developm

ent Index




Within carrying capacity



Wor

ld a

vera

ge b

ioca

paci

ty

avai

labl

e pe

r per

son



Bangladesh

Cambodia

China

India

LaosNepal

Myanmar



Supporting the SWITCH to SCP... a common learning process

Mutual learning

Learning processes

EuropeanEnvironmental

awareness

Sustainability Management

Tools and instruments

AsianManagement

traditions

Local institutions, norms, values

‘Asian economic success story’

AsianTangible and visible

improvements

Local capacity development

Political framework conditions

EuropeanImport- and export

regulations

Demand for sustainable

products

Technological cooperation

Experience Framework


The SWITCH to SCP

Introducing the CSCPIntroducing the CSCP

Environment and global value chains




Federal Ministry for the Environment, Nature

Conservation and Nuclear Safety

United Nations Environment Programme

for Climate, Environment and Energy

Introducing the CSCPOrganisational Setup

CSCP

A collaboration by

Supported given by

UNEP/Wuppertal Institute Collaborating Centre on

Sustainable Consumption and Production (CSCP)

Wuppertal Institute UNEP

North Rhine-Westfalian Ministry for Environment,

Agriculture and Consumer Protection

NRWFederal Ministry

for Economic Cooperation and

Development

German state

Business and Employment

Support Agency

Wuppertal



Companies

Introducing the CSCPConsumption, production and policy choices

Consumers

Finance

Institutions

&

Govern-ments

&

Others

Companies

End-Of-life managers

Consumers

Retailers

Producers

Resource Extraction

Production choices

Supply

Consumption choices

Demand

Policy choices

Local and National Development



Introducing the CSCP Thematic approach



Introducing the CSCP Strategic Priority Areas

Encouraging SMEs to engage in SCP activities

Guiding industry sectors on their role to achieve SCP

Exploring an effective, market based instrument mix for promoting SCP along global value chains

Awareness-raising and capacity-building for governments;

Collaborating with local sustainable development agencies;

Incorporating SCP into micro- and development finance.

Encouraging sustainable lifestyles;

Communicating SCP to consumers effectively;

Strengthening role of government in promoting lifestyles.



Supporting the Switch to SCP






Opp

ortu

nity

for r

esou

rce

effic

ienc

y



high

low

Value Chain


sitesProduct


Sustainability in the supply chain?


Sustainable Consumption and Production along Global Value...

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