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Section of Environment, Energy, and Resources


Innovation, Management Systems and Trading Committee

Glossary and Reference Guide to Resources on Select "Second Generation" Environmental Law, Policy, and Management Strategy Topics

William L. Thomas
Pillsbury Winthrop LLP
Washington, D.C.

Benchmarking
Clean, or "Cleaner", Production
Corporate Environmental Reporting
Design for the Environment
Eco-Efficiency
Environmental Accounting
Environmental Auditing
Environmental Management System
Environmental Performance Evaluation
Extended Producer and Extended Product Responsibility
Factor Four/Factor Ten
Global Reporting Initiative
Industrial Ecology
International Organization for Standardization
The ISO 9000 Series of Quality Standards
The ISO 14000 Series of Environmental Standards
ISO 14001
Life Cycle Assessment
National Environmental Performance Track
The Natural Step
Pollution Prevention
Product Stewardship
Project XL
The Second, or Next, Generation of Environmental Law and Policy
Six Sigma
Sustainability Management System
Total Quality Management
Total Quality Environmental Management
The Triple Bottom Line
Voluntary Codes

Benchmarking

Benchmarking is the process of comparing and measuring an organization's business process and performance against a given standard, e.g., "best-in-class," with the objective of promoting process or product improvement. Any process or business activity can be a candidate for environmental benchmarking.

Clean, or "Cleaner," Production (See Pollution Prevention)

Cleaner production involves the continuous application of an integrated preventive environmental strategy to processes, products, and services to increase efficiency and reduce risks to humans and the environment. Cleaner production can be applied to processes, products, or services. It includes the conservation of raw materials and energy, reduction of toxic raw materials, and reduction of the quantity and toxicity of all emissions and wastes.

Corporate Environmental Reporting (See Global Reporting Initiative)

A corporate environmental report is a tool that can be used to communicate a company's environmental performance. It can also be used to describe the organization's environmental management systems, corporate responsibility, and the implementation of voluntary initiatives and codes of conduct. In addition to satisfying stakeholders' demands, such reports can be used by the company as a vehicle for tracking progress and identifying internal strengths and weaknesses

Design for the Environment

Design for the environment (DfE), or "eco-design," is a technique used by organizations to incorporate environmental considerations into the design of processes, products, and services. By assessing environmental impacts over the whole life cycle at the developmental stage, firms can use DfE to reduce material and energy intensity as well as emissions and waste. DfE also provides a framework through which to undertake eco-efficiency, pollution prevention, cleaner production, and other management efforts.

Eco-Efficiency

The World Business Council for Sustainable Development coined the term "eco-efficiency" to describe the delivery of competitively priced goods and services that satisfy human needs and bring quality of life, while progressively reducing ecological impacts and resource intensity throughout the life cycle, to a level at least in line with the earth's estimated carrying capacity.

Environmental Accounting

The term "environmental accounting" is susceptible to various definitions. It is used in connection with national income accounting, financial accounting, and internal business management accounting. The tool can be used to measure costs that directly impact a company's bottom line, as well as costs to individuals, society, and the environment resulting from a company's activities. There are three main types of environmental accounting: (i) national income accounting, which is a macro-economic calculation of national environmental costs for an external audience; (ii) financial accounting, which enables companies to estimate and report on environmental liabilities and financially material environmental costs to investors, lenders, and other external stakeholders; and (iii) management accounting, which is the process of identifying, collecting, and analyzing information principally for internal purposes, e.g., to integrate environmental costs into cost allocation, capital budgeting, and process/product design.

Environmental Auditing

An environmental audit is a systematic, documented verification process of objectively obtaining and evaluating verifiable information, records or statements of fact to determine whether specified environmental activities, events, conditions, management systems, or information about these matters conform with policies, practices or requirements, and communicating the results of this process to the client. See International Organization for Standardization, ISO 14050: 1998 Environmental Management Vocabulary.

Environmental Management System

An environmental management system, or EMS, is the part of the overall management system that includes organizational structure, planning activities, responsibilities, practices, procedures, processes, and resources for developing, implementing, achieving, reviewing, and maintaining an environmental policy. See International Organization for Standardization, ISO 14050: 1998 Environmental Management Vocabulary.

Environmental Performance Evaluation

Environmental performance evaluation (EPE) is a process to facilitate management decisions regarding environmental performance by selecting environmental indicators, collecting and analyzing the data, and assessing the information against environmental performance criteria established by the organization's management.

Extended Producer and Extended Product Responsibility (See Product Stewardship)

The principle of extended product responsibility states that actors along the product chain share responsibility for the life-cycle environmental impacts of the entire product system, including the upstream impacts inherent in selecting product materials, impacts from the manufacturers' production, and downstream impacts from the use and disposal of the products. As Gary Davis and Catherine Wilt explain, the concept is "to identify opportunities to prevent pollution and reduce resource and energy use in each stage of the product life cycle (or product chain) through changes in product design and process technology." As another commentator put it, extended product responsibility is pollution prevention applied to the product life cycle rather than to a facility. Extended producer responsibility is a narrower concept that places responsibility on producers and focuses primarily on post-consumer waste disposal.

Factor Four/Factor Ten (See Eco-Efficiency)

In their 1997 book Factor Four: Doubling Wealth, Halving Resource Use, Ernst Ulrich von Weizsäcker, Amory Lovins, and Hunter Lovins argued for a radical increase in resource and energy efficiency, contending that humanity could live twice as well while at the same time consuming only half the resources consumed today. In their view, an increase in eco-efficiency by a factor of four should be made a global goal. The notion underlying Factor Four is that resource productivity can and should grow fourfold. Factor Ten is the idea that per capita material flows caused by OECD countries should be reduced by a factor of ten, rather than a factor of four. Globally, claim proponents, material turnover should be reduced by 50%, but because OECD countries are responsible for material flows five times as high as developing countries, and world population is inevitably increasing, the OECD should set more aggressive long-term targets.

Global Reporting Initiative (See Environmental Reporting)

Convened in 1997 by the Coalition for Environmentally Responsible Economies in partnership with the United Nations Environment Programme, the Global Reporting Initiative (GRI) is an international, multi-stakeholder effort to create a common framework for economic, environmental, and social reporting that will elevate sustainability reporting practices worldwide to a level equivalent to financial reporting. More than 50 companies worldwide have volunteered to apply the Sustainability Reporting Guidelines announced by GRI in June 2000.

Industrial Ecology

Industrial ecology is a field of science that examines local, regional, and global flows of materials and energy in products, processes, industrial sectors, and economies. As Reid Lifset explained in launching the Journal of Industrial Ecology in 1997, industrial ecology "focuses on the role of industry in reducing environmental burdens throughout the product life cycle from the extraction of raw materials, to the production of goods, to the use of those goods, and to the management of the resulting wastes." Reid Lifset, A Metaphor, a Field, and a Journal, J. INDUS. ECOLOGY, Winter 1997, at 1. The focus is on achieving closed loop systems in which wastes from one part of the industrial system are reused or become raw materials for other parts.

International Organization for Standardization

The International Organization for Standardization (ISO) is a worldwide federation of national standards bodies. ISO develops voluntary technical standards intended to make the development, manufacture, and supply of products and services more efficient, safer, and cleaner. The work of ISO is carried out by experts on loan from the industrial, technical, and business sectors which have asked for the standards, as well as by others with relevant knowledge, e.g., representatives of government agencies and testing laboratories. The United States is a full voting member and is officially represented by the American National Standards Institute (ANSI).

The ISO 9000 Series of Quality Standards

ISO 9000 is a series of generic, internationally recognized standards for quality management. Any type or size of business in any industry can use the ISO 9000 standards to meet a customer's needs and expectations. As of June 2001, the number of ISO 9000 certificates of registration in the U.S. totaled over 37,050.

The ISO 14000 Series of Environmental Standards

The ISO 14000 series is a set of generic, internationally recognized standards for environmental management. The voluntary standards encompass environmental management systems and environmental management tools, such as environmental audits, environmental labeling and environmental performance assessments, as well as life cycle assessment and the use of specific terminology and definitions. The ISO 14000 standards aim to: (i) minimize barriers to trade resulting from disparate national standards; (ii) promote a common approach and language for environmental management; (iii) enhance organizations' ability to attain and measure improvements in environmental performance; (iv) place a uniform reqistration requirement on companies that need to meet the standard; and (v) reduce duplicative audits carried out by customers, regulators, companies, and registrars.

ISO 14001

ISO developed ISO 14001: 1996 Environmental Management Systems - Specification with Guidance for Use as a means to provide organizations of all sizes and types with the elements of an effective environmental management system (EMS). The core themes of ISO 14001 are: (i) environmental policy; (ii) planning; (iii) implementation and operation; (iv) checking and corrective action; and (v) management review. The requirements of the specification may be objectively audited for certification and/or self-declaration purposes. As of June 2001, the German Federal Environment Agency reports, the number of ISO 14001 certifications worldwide totaled over 30,000, with 1,489 certifications in the United States.

Life Cycle Assessment

Life cycle assessment or analysis (LCA) is a technique used to evaluate the environmental impacts of products from extraction of raw materials to disposal. The ISO 14000 series of environmental standards, see, e.g., ISO 14040, 14041, 14042, and 14043, divides an LCA into four main elements: (i) definition of goals and scope; (ii) an inventory quantifying the use of resources as well as the amount of waste and emissions created by the product over its entire life cycle; (iii) a life cycle impact assessment to evaluate the product's environmental impact; and (iv) an interpretive step, during which the results of the impact assessment are interpreted in light of the goals of the assessment.

National Environmental Performance Track

The National Environmental Performance Track is a voluntary program developed by the U.S. Environmental Protection Agency to encourage, and reward, companies that go beyond regulatory requirements. The Performance Track program consists of a National Environmental Achievement Track and a National Environmental Stewardship Track. The Achievement Track is for facilities that have implemented an environmental management system, have a sustained record of compliance, and have committed to both improving environmental performance and to public outreach and performance reporting. Facilities that participate will be eligible to receive various benefits, including the use of the Performance Track logo and streamlined monitoring, reporting, and administrative requirements. The Stewardship Track is still in development. If and when it is launched, the Stewardship Track will likely recognize broader and higher levels of environmental performance than those expected under the Environmental Achievement Track.

The Natural Step

The Natural Step (TNS), founded by Swedish oncologist Karl-Henrik Robèrt in 1989, is a nonprofit international organization that uses a scientifically based framework to help organizations and communities understand and move towards sustainability. The TNS framework is based on four "systems conditions" that describe the scientific underpinnings of all environmental problems and their solutions. Some commentators have suggested TNS provides a useful framework for government to take a more systems-based approach to environmental regulation.

Pollution Prevention (See Cleaner Production)

Like the term "cleaner production" used commonly in other parts of the world, the term "pollution prevention" is often applied in the United States to describe the strategy of continuously reducing pollution and environmental impact through source reduction, i.e., eliminating waste within the process rather than at the end-of-pipe. The U.S. Environmental Protection Agency defines "pollution prevention" in terms of source reduction, i.e., preventing or reducing waste where it originates, at the source, including practices that conserve natural resources by reducing or eliminating pollutants through increased efficiency in the use of raw materials, energy, water and land. Under the Pollution Prevention Act of 1990, pollution prevention is the national environmental policy of the United States.

Product Stewardship (See Extended Product Responsibility)

Product stewardship is a principle that directs all actors in the life cycle of a product to minimize the impacts of that product on the environment. Under product stewardship, all participants in the product life cycle - designers, suppliers, manufacturers, distributors, retailers, consumers, recyclers, and disposers - share responsibility for the environmental effects of products.

Project XL

Project XL, which stands for "eXcellence and Leadership," is a national pilot program that allows state and local governments, businesses and federal facilities to develop with EPA innovative strategies to test better or more cost-effective ways of achieving environmental and public health protection. In exchange, EPA will issue regulatory, program, policy, or procedural flexibility to conduct the experiment. XL pilot projects must meet certain criteria but are built around three key elements: (i) stronger environmental performance; (ii) meaningful stakeholder involvement; and (iii) flexibility in EPA regulations, policies, or procedures.

The Second, or Next, Generation of Environmental Law and Policy

Six Sigma

Six Sigma is an approach to quality and business management that looks to change the way an organization operates so as to satisfy customers, eliminate waste, and improve the processes of the organization and the roles of employees. The term "sigma" is a standard deviation from a mean, meaning the amount to which a process or product will not fall within acceptable ranges meeting customer and other specifications. The higher the sigma value, the better the business or manufacturing process is performing. Six Sigma is defined as a deviation of 3.4, or 3.4 defects per million opportunities. A Six Sigma program focuses on short-term projects and seeks to eliminate nonconformities within (and produce enhancements to) the processes of the quality management system and organization.

Sustainability Management System

The part of the overall management system that includes organizational structure, planning activities, responsibilities, practices, procedures, processes, and resources for developing, implementing, achieving, reviewing, and maintaining the sustainable development or sustainability policy.

Total Quality Management (See Total Quality Environmental Management)

Total Quality Management is a systematic approach to constantly improving the quality of products, processes, and services of the organization. Its key elements are: a high level of senior management commitment; a strong customer and stakeholder focus, employee involvement, teamwork, and empowerment; data-driven decision-making; prevention; continuous improvement; a systematic approach; and a long-term focus.

Total Quality Environmental Management (See Total Quality Management)

The Global Environmental Management Initiative coined the term "Total Quality Environmental Management" (TQEM) to describe the application of Total Quality Management practices to corporate environmental strategies. According to GEMI's TQEM Primer, four basic elements of TQEM provide guidelines for planning in business: (i) identify your customers: environmental quality is determined by customer preferences; (ii) continuous improvement: systematic, progressive improvement of environmental performance is necessary and desirable; (iii) do the job right the first time: recognize and eliminate environmental problems before they occur; and (iv) look at each part of environmental management as a system.

The Triple Bottom Line

John Elkington created the term "triple bottom line" to describe the integrative measurement of a company's economic, environmental and social performance. Triple bottom line reporting provides information to enable others to assess an organization's contributions to sustainable development. Indicators to increase accountability in these fields are gradually taking form. A recent survey of leading companies for The Conference Board found that 30 percent of respondents had started to track the triple bottom line performance of their organizations.

Voluntary Codes

Codes of conduct formalize and unify a company's commitment to short-term and long-term environmental goals. They can also be used as a model for a corporation's own policies. Some codes or standards include a comprehensive implementation and follow-up process while the guidelines serve as terms of reference and are most effective as a supplemental tool to inform and enhance current policies. Usually, these tools are issue-oriented and can apply to different industries and sectors.

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