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The state of the art in eco-design - Sustainable Design

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The state of the art in eco-design - Sustainable Design

    The ‘state of the art’ in eco-design in the Japanese

    electronics sector

    Final report

    st1 November 2002

    Professor Martin Charter

    Director The Centre for Sustainable Design The Surrey Institute of Art & Design, University College

    Professor Eric Billet

    Head

    Department of Design

    Brunel University

    Joy Boyce

    Head

    Corporate Environmental Affairs

    Fujitsu Services Ltd

    Clive Grinyer Director

    Design & Innovation

     Design Council

     John Simmonds

    Managing Director

    Crawford, Hansford & Kimber

     An initiative of

The Surrey Institute of Art & Design, University College

    ? The Centre for Sustainable Design, Surrey, GU9 7DS, UK

    The ‘state of the art’ in eco-design in the Japanese electronics sector

Contents Page

Executive summary 1

1 INTRODUCTION 4

    1.1 Background 4

    1.2 Objectives 5

    1.3 Target organisations 5

    1.4 Content of the report 5

    2 ECONOMIC, POLICY AND LEGISLATIVE DEVELOPMENTS 6 2.1 The Japanese economy 6

    2.2 Research and development 6

    2.3 Development of policy and legislation 7 2.4 Other initiatives 10

3 COMPANY RESPONSES 13

    3.1 Introduction 13

    3.2 Strategies and action plans 13 3.3 Organisational integration 14

    3.4 Knowledge and learning 15

    3.5 Use of eco-design tools 15

    3.6 Green procurement and supply chain management 16 3.7 Environmental accounting and performance 18 3.8 Design, manufacturing, materials and recycling 18 3.9 Markets and marketing 18

    3.10 Communications and reporting 19

    4 DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS 20 4.1 Analysis and conclusions 20

    4.2 Recommendations 23

ANNEX 1: Company initiatives 24

    ANNEX 2: Discussion questions and notes 31

    ANNEX 3: References 41

    ANNEX 4: The Mission team 42

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    The ‘state of the art’ in eco-design in the Japanese electronics sector

Executive summary

During July 8-12 2002 a mission to Japan was undertaken to investigate the „state of the art‟ of eco-design in the

    Japanese electronics sector. The mission was sponsored by the Department of Trade and Industry (DTI), with support from the British Embassy (Tokyo) and the Production Engineering Research Association (PERA). The team for the mission consisted of representatives from The Centre for Sustainable Design (at the Surrey Institute of Art & Design, University College), Brunel University, Fujitsu Services (UK), the Design Council and Crawford

    thHansford & Kimber. On 8 July, the mission made a presentation at the British Embassy in Tokyo to over fifty companies and other organisations. Visits were then organised to the following organisations: Matsushita Electric (National Panasonic), NEC, Mitsubishi Electric, Sony, Ricoh, Hitachi, IBM, University of Tokyo, Ministry of Economy Trade & Industry (METI) and Japan Industrial Design Promotion Organisation (JIDPO).

Key findings

The environment an R&D priority

    Japan is going through significant economic and societal change. In spite of economic difficulties R&D continues to be regarded as essential for business and national competitiveness:

    ; Japanese companies and the government place more of an emphasis on R&D compared to the UK ; Industry leads R&D with 80% of spend

    ; Environment is one of the four key R&D priorities in the government-funded science and technology (S&T) plan ; In the past it was not normal for universities to collaborate with business but this is beginning to change and

    there have been some joint projects in the area of eco-design.

Development of a ‘Recycling Oriented Economic System’ – policies and new legislation

    Japan has been developing a legislative structure geared towards 3Rs (reduce, reuse, recycle); with the emphasis

    moving to the „front of pipe‟ or preventative, rather than „end of pipe „solutions to its waste problem (it has a severe

    landfill shortage). It has been moving from a focus on hazardous substances to new phases of greening, especially

    in the home appliance and electronic sectors:

    - Phase 1: Elimination of hazardous chemical substances

    - Phase 2: Recycling

    - Phase 3: Green new product development

    ; Since 2000 various laws relating to waste management and recycling have been enacted, or amended. These

    fall under four main categories:

    - Basic framework laws

    - Laws for proper waste management and recycling, including the Law for the Promotion and Effective

    Utilisation of Resources (LPEUR) which promotes 3Rs

    - Laws for promoting specific waste recycling eg the Home Appliances Recycling Law (HARL)

    - A law for promoting greater utilisation of recycled materials: The Green Purchasing Law requires

    government bodies to take a lead in procuring environmentally friendly products and materials. ; From an electronic perspective the initial focus of legislation has been on household appliance sector followed

    by office equipment

    ; The Home Appliances Recycling Law (HARL) seems to have been implemented relatively smoothly due to the

    existence of the „law abiding‟ society

    ; The implementation of the Green Purchasing Law (GPL) covering public procurement seems to be providing

    an impetus to the integration of environmental considerations into design engineering and therefore to

    development of greener products.

Responses by companies

    Japanese companies, especially the larger firms, appear to have responded positively to the new policy, legislative

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    The ‘state of the art’ in eco-design in the Japanese electronics sector

and business framework:

    ; There seems to acknowledgement by companies that improved environmental performance is part of a firm‟s

    responsibility. There is also recognition of the mutual benefits of eco-efficiency (environment and economy) ; A number of companies visited have been establishing „end of pipe‟ environmental technology businesses.

    There has been substantial investment and development of home appliances and office equipment recycling

    infrastructure

    ; Japanese companies in these sectors are placing more focus on green new product development with many of

    the companies visited having challenging goals over the next 5-10 years

    ; There are voluntary 3R initiatives for personal computers (PCs) for business use and photocopiers ; A range of green procurement initiatives have been implemented

    ; There seems to be considerable use of lifecycle assessment (LCA); however, the weaknesses of LCA do not

    seem to be acknowledged

    ; There is evidence of broader product-related environmental information systems incorporating data on

    materials, chemical, energy and packaging

    ; A standardised approach to environmental accounting appears to be evolving which is communicated in many

    corporate environmental reports. Environmental cost categories were defined by the Ministry of Environment in

    the late nineties

    ; Communications of product-related environment attributes seems to be increasing e.g. Type II labels; with

    possibly a push to increase the influence of Type III labels (LCA backed environmental information) ; Research into eco-services is in its initial stages which mirrors the rest of the world.

Key gaps

    A number of gaps were noted in relation to best practice:

    ; There was little evidence of environmental considerations being incorporated into the idea generation phase of

    product development. Most activity focused on continuous improvement while eco(re)design focused on

    design for recycling, remanufacturing and dismantlability

    ; There appears to be little involvement of marketing personnel in green product development and little

    involvement of product or industrial designers in eco-design. The key participation seems to be from design

    engineers

    ; Plastics recycling technologies have not been perfected

    ; As yet, there was no detailed information on the recycling of office equipment, mobile phones and other

    household appliances (which are not specified by HARL)

    ; There appears to be no research on environment or broader sustainability issues in business schools.

Future developments

    A number of observations can be made about future developments:

    ; There appears to be a learning curve developing in terms of recycling of home appliances and office

    equipment in Japan

    ; Japanese companies are likely to start looking at developing recycling infrastructure in Europe following the th October 2002 recent passing of the Waste Electrical and Electronic Equipment (WEEE) Directive on 11; Matsushita‟s Eco Technology Centre provides a very interesting model for the development of more

    multi-faceted recycling facilities

    ; There seems to be a shift to a focus on developing greener new products

    ; Japanese companies seem likely to covertly start to drive green as an area of competitive advantage in home

    appliances and office equipment (as part of „value added‟)

    ; Japanese companies may increasingly start to try to compete on good quality product-related environmental

    information

    ; METI indicated that it was interested in opening communication channels in relation to WEEE and Restriction

    of Certain Hazardous Substances (RoSH) Directives, and also on European perspectives on electronics

    recycling and eco-design

    ; There appear to be potential opportunities to form alliances in relation to research on the environmental

    implications of services and product-services-systems (PSS).

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    The ‘state of the art’ in eco-design in the Japanese electronics sector

Recommendations

    Some key recommendations arising from this report are as follows:

Business

    ; Develop management approaches to product-related environmental issues

    ; Develop product-related environmental information systems including more detailed data on environment

    costs

    ; Study Japanese approaches to household appliance recycling

    ; Develop systems to collect and learn about the recycling implications of new products.

Government

    ; Establish communication channels with METI in relation to experiences from HARL and other approaches

    linked to photocopiers, PCs, mobile phones and batteries

    ; Study the Green Purchasing Law in relation to learning lessons for progessing the Sustainable Procurement

    Initiative and the UK‟s approach to Integrated Product Policy (IPP)

    ; Develop eco-design competence amongst SMEs in the electronics sector

    ; Develop and fund two DTI missions to Japan to investigate in more detail:

    - home appliance and electronics recycling

    - environmental technology industry

Universities

    ; Business schools to research into management aspects of product-related environmental issues ; Consider cooperation with Japanese universities in relation to product-service systems (PSS).

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    The ‘state of the art’ in eco-design in the Japanese electronics sector

1 Introduction

1.1 Background

    The UK electronics sector is facing mounting environmental legislation from the European Commission (EC). The most significant are the Waste Electrical and Electronic Equipment (WEEE) and Restriction of Certain Hazardous

    thSubstances (RoHS) Directives passed on the 11 October 2002, the proposed Electrical and Electronic Equipment

    (EEE) Directive and Integrated Product Policy (IPP) framework which will all have major implications for design and recycling of electronics products. In addition, several leading-edge companies are now starting to require higher levels of information on the environmental impacts of materials, recycling policies and overall approaches to eco-design.2 This means that eco-design is becoming an increasingly competitive issue for UK electronics companies.

    Structural changes also mean that there is more assembly and less manufacturing in the UK. In addition, there is a move towards companies becoming 'systems integrators' or service suppliers. Both trends mean that there will be growing challenges in implementing eco-design requirements amongst outsourced, contract manufacturers and through complex networks of suppliers of components and sub-assemblies. Such suppliers are increasingly concentrated in South-East and Southern Asia.

    There have been various research initiatives that have been completed in Europe related generally to eco-design (e.g. ESTO) and specifically to eco-design in the electronics sector (e.g. CARE and ECOLIFE) initiatives. It was believed that Japan is making considerable strides in eco-design, recycling and materials development, alongside its already advanced programmes in lead-free soldering and technologies - but these trends had not been documented. The Lead-Free Soldering Mission in 2001 had discovered serious commitment at board level in Japanese electronics companies to developing greener products. This involved measures that went far beyond the

    use of lead-free solder. The recent implementation of the Japanese Home Appliance Recycling Law (HARL) in April 2001 means that there will be significant changes in product design and recycling practices amongst producers of televisions, air conditioning equipment, fridges and washing machines. The initial impact of this will be in relation to Japanese products supplied to the Japanese market. But, in time this is likely to impact on UK companies supplying to (and designing products for) the European plants of Japanese manufacturers.

    In view of the potential costs (between ?180 million and ?390 million 3) to UK industry of the WEEE Directive and the implications for competitiveness, it was thought that it was important to gain an understanding of how advanced Japanese electronics companies are dealing with eco-design and related issues. A Mission 4 was formed by the Department of Trade and Industry (DTI) to investigate the 'state of the art' in eco-design in the Japanese electronics sector and explore measures being planned and implemented in developing greener electronic products.

    The Mission was carried out between 8th and 12th July 2002 - It was sponsored by the Department of Trade and Industry (DTI), with support from the British Embassy (Tokyo) and the Production Engineering Research Association (PERA). The team for the mission consisted of representatives from the Centre for Sustainable Design (at the Surrey Institute of Art & Design, University College), Brunel University, Fujitsu Services (UK), the Design

    thCouncil and Crawford Hansford & Kimber. On 8 July, the mission made a presentation at the British Embassy in

    Tokyo to over fifty companies and other organisations. Various companies and other organisations were visited (see below)

    The Mission highlighted that the Japanese system is now well placed to drive innovation in eco-design and

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    The ‘state of the art’ in eco-design in the Japanese electronics sector

    recycling in the home appliance and office equipment sectors. The findings of the Mission are set out in this

     document.

Notes:

    1 Eco-design: The systematic consideration of life cycle environmental impacts in the design of products or services 2 Eco-design is often described by companies as „Design for Environment‟ (DfE) in Japan

    3 Recycling Policy Unit, Sustainable Development Directorate, DTI

    4 Lead-free issues are important but were only considered generally, as this was the focus of

    the Lead-Free Mission in January 2001

1.2 Objectives

The broad objectives of the Mission included investigation of the following:

    ; Government approaches to disseminating information on eco-design to the electronics sector ; The 'state of the art' in eco-design tools

    ; How companies are integrating environmental considerations into product development ; To investigate programmes focused on eco-services in the electronics sector (bearing in mind the increasing

    blurring of the edges of what is a product and what is a service in electronics) ; How companies are implementing eco-design requirements in a) supply chain management and b)

    procurement

    ; The extent of eco-design training for a) product designers, b) design engineers and c) management ; The extent and use of ISO14001 and ISO TR 14062 in relation to eco-design management systems.

1.3 Target organisations

    The Mission‟s strategy was to undertake a series of unstructured interviews with various companies and other

    ththorganisations in Tokyo and Osaka between 8 and 12 July 2002. During these interview sessions a range of other secondary material such as corporate environmental reports was provided. This material helped in understanding how the Japanese home appliances and office equipment companies are approaching eco-design and recycling.

The following organisations were visited and interviewed:

    ; Matsushita Electric (National Panasonic)

    ; NEC

    ; Mitsubishi Electric

    ; Sony

    ; Ricoh

    ; Hitachi

    ; IBM

    ; University of Tokyo

    ; Ministry of Economy Trade & Industry (METI)

    ; Japan Industrial Design Promotion Organisation (JIDPO)

1.4 Content of the report

    Section 2 provides an overview the economic situation in Japan and of policy, legislative and other relevant developments. Section 3 summarises responses among the companies spoken to, while Section 4 provides analyses and conclusions

    Annex 1 sets out some notes on specific company initiatives while Annex 2 sets out discussion questions and meeting notes for the interviews,

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    The ‘state of the art’ in eco-design in the Japanese electronics sector

2 Economic, policy and legislative developments

2.1 The Japanese economy

Japan has had 40 years of uninterrupted growth, which has made it the world‟s second largest economy. The

    „bubble‟ burst in the early nineties and economic problems were accelerated by the subsequent crash of the „tiger economies‟ and the fall of the yen in 1997. This has created a severe recession resulting in unemployment (a record 5.6% was predicted for FY2002) and societal change. In addition this has led to corporate restructuring and bankruptcies. The arrest of civil servants for improprieties and a range of other issues have produced a general lack of confidence in the system. This means that Japanese consumers have stopped spending due to overall uncertainty - particularly as a result of a breakdown in the „job for life‟ philosophy - even though retailers are cutting

    prices to attract customers. Businesses also appear to be cautious about significant investment and banks are suffering from the legacy of bad loans from the „bubble‟ period. Even so, money is cheap at present.

    In January 2002, the Cabinet announced a zero economic growth forecast. In an attempt to boost aggregate demand the government has introduced a series of fiscal spending packages, which has contributed to national debt being an estimated 130% of Gross Domestic Product (GDP), rising 6% yearly. The government is undertaking structural reform, particularly on the supply side, whilst trying to reduce unemployment and other social impacts. Despite, this Japan still remains the second largest economy (13-15% of world GDP and four times the size of the UK) with its success based on technological advance particularly in manufacturing technology, engineering and

    electronics. In a number of areas Japan continues to drive innovation: miniaturisation, flat panel displays, digital media, mobile communications and internet.

2.2 Research and development

    Japan accounts for 25% of the world‟s research and development (R&D), which represents 3.2% of its GDP,

    ndcompared to 1.9% in the UK. The 2 5 year Basic Science and Technology (S&T) Plan (2001-2006) is budgeted at 24 trillion yen (?140 billion) with the priorities being environment, life sciences, information communications and

    nanotechnology/materials. The government S&T budget for FY2002 is 3.54 trillion yen, an increase of 2.0% over the FY2001 budget. This is significant, as overall, government expenditure fell by 2.3%. However, industry leads R&D representing 80% of spend - with the top ten Japanese companies investing more than the whole of the UK (public and private sector).

METI‟s 15 largest research institutes have been amalgamated into the national Institute of Advanced Science and

    Technology (AIST) with a budget of an estimated $750 million and including 22 research institutes and 23 research centres with an applied focus. METI‟s R&D primarily goes to industry via collaborative projects – which tend to be of

    a „pre-market‟ nature – being closer to market than equivalent DTI support.

    Since 1995 there has been an upgrading of public sector research. The National Council for Science & Technology (NCSTP) was created in January 2001 within the Cabinet Office. NCSTP‟s role is to devise national S&T strategic

    policies and plans for budget allocation. The network of 80 national research institutes and 181 regional technology centres is now receiving new investment. Unlike the UK, a considerable amount of basic research is completed in companies rather than in universities. There has also been relatively little university-industry cooperation in the past but this is starting to change. Cooperation is now starting to be encouraged in areas such as technology transfer, in parallel to using the „old‟ METI approach of funding collaborative research and technology development in industry consortia. Some cooperation is also forming in relation to eco-design projects. For example, JEMAI have established the „Factor X‟ project (eco-services being an area of interest) and Tokyo University seem to be

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    The ‘state of the art’ in eco-design in the Japanese electronics sector

    working with Mitsubishi Electric on some qualitative tools focused on determining material, energy and toxicity (MET) reduction. There is also an eco-design project funded by METI with involvement from individuals from various organisations including, it is understood, from AIST, Tokyo University, Tokyo Agriculture University, Tsukuba University, Mitsubishi Electric, Mitsubishi Material, Shinko, Akita and Daicel.

    Within METI there is a two tier policy group focused on eco-design with involvement from individuals from companies, universities and research institutes. For example, two researchers recently toured Europe and seem to have produced an eco-design tool focused on the linkage between quality and eco-design.

    UK and Japan have a good business relationship with 46% of Japan‟s investment in the European Union (EU) in the UK with around 160 R&D centres being based in the UK.

2.3 Development of policy and legislation

    Japan is a small country with a large population. Consequently there are heavy demands on land and limits to landfill space. In July 1999, the Industrial Structure Council (ISC) predicted severe pressures on landfill with only 8.5 years of municipal waste and 3.1 years for industrial waste remaining. This has forced Japan to think about reduction of waste both at the „end of pipe‟ and now at the „front of pipe‟.

    In July 1999 the ISC, an advisory body to the former Ministry of International Trade and Industry (MITI) - now METI - put forward a recommendation entitled „Towards the Creation of a Recycling Orientated Economic System‟ (Vision of a Recycling-Orientated Economy). A key concept in the recommendation was the implementation of the 3Rs (reduce, reuse, recycle), with emphasis placed on waste reduction and resource reuse, in addition to waste

    recycling that was central to previous policies.

    Two recommendations are particularly interesting and give some insight into future thinking:

1.2 What is a ‘Recycling Orientated Economic System’ (Integration of Environment and Economy)

    - Maximising the efficiency of resources and energy

    - Partnership between industry, consumers and government

    - Establishing a new industrial technology structure

    - Advancing environment-related industries

3.3 Common tasks and action relating to reduce, reuse and recycle measures

    - Positive information disclosure

    - Positive promotion of inter-sector collaboration

    - Technology development

    - Removal of administrative obstacles

    - Promotion of efforts by local authorities

Source: METI 1999

    In 2000 the Diet (parliament) enacted or amended six laws related to waste management and recycling, establishing a set of rules for building a Recycling Orientated Economic System. The Basic Law for Promoting the Creation of a Recycling Orientated Society and the Law for the Promotion of Effective Utilisation of Resources (LPEUR) were put into force on June 2, 2000.

    The present legislative framework for promoting a recycling-orientated economy consists of nine laws which can be divided into four categories

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    The ‘state of the art’ in eco-design in the Japanese electronics sector

Legislative framework

    ; Basic framework laws

    - Basic Law on the Environment and Basic Plan for the Environment

    - Basic Law for Promoting the Creation of a Recycling-Oriented Society. This puts forward the basic

    philosophy and principles for building a recycling-oriented society

    ; Laws for proper waste management and recycling

    - Waste Management Law: establishes regulations for ensuring proper treatment of wastes

    - Law for the Promotion of the Effective Utilisation of Resources (LPEUR): promotes 3Rs (reduce, reuse

    and recycle)

    ; Laws for promoting specific waste recycling

    - Containers and Packaging Recycling Law

    - Home Appliances Recycling Law (HARL)

    - Construction Materials Recycling Law

    - Food Recycling Law

    - Automotive Recycling Law

    ; Law for promoting greater utilisation of recycled materials

    - Green Purchasing Law (GPL): requires government bodies to take the lead in procuring environmentally

    friendly products and material

LPEUR

    The Law for the Promotion of the Effective Utilisation of Resources (LPEUR) states that the competent minister

    (Minister relevant to the business area and the Minister of Environment) should promote: a) reduced generation of

    used products and by-products; and b) effective utilisation of recycled resources and reusable parts. The Law

    prescribes shared responsibilities and 3R (reduce, reuse, recycling) measures. In March 2001, seven new industries and 42 new product items were designated by the ordinance as subject to the provisions of the Law. This

    increased the designated industries from three to ten and the number of products from 30 to 69. Criteria were

    defined and businesses are required to implement programmes to achieve the 3Rs. LPEUR categories

    The seven key categories and manufacturers (and importers) responsibilities and the coverage in relation to home

    appliances, office equipment and electronics-related products are as follows:

    ; Designated resources-saving industries: are required to minimise by-product production

    - none

    ; Designated resources-reutilising industries (design for reuse): are required to take measures to use recyclable

    resources or reusable parts

    - photocopier manufacturing [new industry]

    ; Specified resources-saved products (design for waste reduction): are required to take measures to rationalise raw

    materials, prolong product life and to reduce the generation of „end of life‟ products

    - household appliances (televisions; air conditioners; refrigerators; washing machines; microwave ovens; and

    clothes dryers) [new item]

    - personal computers [new item]

    ; Specified resources-reutilised products (design for recycling): are required to promote the use of recyclable resources

    or recoverable parts by designing and manufacturing products that can be reused or recycled

    - household appliances (televisions; air conditioners; refrigerators; and washing machines) [existing items]

    - nickel-cadmium battery-powered devices (15 items such as electric tools and cordless phones) [existing items]

    - househould appliances (microwave ovens and clothes dryers) [new items]

    - devices using compact rechargeable batteries (16 items including mobile phone devices) [new items]

    - Japanese word processors and in-car communications [abolished items]

    ; Specified labelled products: are required to label their products to facilitate separation

    - compact rechargeable batteries (sealed nickel-cadmium batteries) [existing item]

    - compact rechargeable batteries (compact sealed lead storage batteries; sealed nickel-metal hydride storage

    batteries; and lithium storage batteries) [new item]

    ; Specified resources-reconverted products: are required to take measures toward the recovery and recycling on their

    behalf; manufacturers and importers that use batteries as a constituent part of their products must take autonomous

    measures to recover the batteries (this applies to 29 items such as mobile phone devices)

    - personal computers (including CRT and LCD monitors) [new item]

    - compact rechargeable batteries (sealed nickel-cadmium storage batteries; compact sealed lead storage batteries;

    sealed nickel-metal hydride storage batteries; and lithium storage batteries) [new item]

    ; Specified by-products: are required to take measures to use by-products as recyclable resources

    - None

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