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Profiting from Cleaner Production

Profiting from Cleaner Production. Financial Institutions. I. Cleaner Production Competitive Advantages for Companies Better Cients Better Investments Definition Parallel Concepts Practices II. Case Study A III. Case Study B IV. Role of Financial Institutions V. For More Information.

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Profiting from Cleaner Production

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  1. Profiting fromCleaner Production Financial Institutions United Nations Environment Programme / Division of Technology, Industry and Economics

  2. I. Cleaner Production • Competitive Advantages for Companies • Better Cients • Better Investments • Definition • Parallel Concepts • Practices • II. Case Study A • III. Case Study B • IV. Role of Financial Institutions • V. For More Information

  3. Cleaner ProductionCompetitive Advantages for Companies • Cleaner Production helps companies: • Increase productivity • Reduce production costs • Use resources more efficiently • Produce safer and better products and services • Reduce levels of pollution and risk • Comply with Environmental Management Systems and get ISO 14000 certified

  4. Cleaner Production Better Clients • The financial and operating advantages of Cleaner Production make better clientsof companies that implement Cleaner Production strategies.

  5. Cleaner Production Better Investments • The advantages of Cleaner Production also make companies using Cleaner Production strategies better investment opportunities.

  6. Cleaner Production Definition • A preventive environmental strategy applied to processes, products and services to: • Increase overall efficiency and productivity • Improve business opportunities • Reduce human and environmental risk

  7. Cleaner ProductionParallel Concepts Pollution Prevention (P2) Eco-efficiency Green Productivity Waste Minimization

  8. Cleaner Production Practices • Applying good housekeeping • Changing technology or equipment • Redesigning products • Modifying or controlling processes • Substituting input materials • Recycling or reusing materials on-site • Producing useful by-products

  9. I. Cleaner Production • II. Case Study A • Background • Site Contamination • Decontamination Costs • Result • Prevention Measures • III. Case Study B • IV. Role of Financial Institutions • V. For More Information

  10. Case Study ABackground • ABC Iron, Inc. manufactures iron casings. • To expand operations, the company takes out a $1.2 million mortgage from its bank. • A year later, ABC files for bankruptcy.

  11. Case Study ASite Contamination • ABC’s bank would like to put the site up for auction. • However, further investigation reveals: • The ground and a nearby river are contaminated by toxic leakage • Large amounts of toxic waste are stored on-site

  12. Case Study ADecontamination Costs Toxic waste disposal $0.7 million Site purification $1.0 million Initial mortgage $1.2 million Total decontamination costs $1.7 million

  13. Case Study AResult • High decontamination costs make the site worthless. • The auction is cancelled and the bank suffers a complete credit loss.

  14. Case Study APrevention Measures • What ABC’s bank could have done: • Include environmental risk in overall risk assessment • Integrate environmental criteria into loan applications

  15. I. Cleaner Production • II. Case Study A • III. Case Study B • Background • Quality Control • Results • IV. Role of Financial Institutions • V. For More Information

  16. Case Study BBackground • PR Labelmakers & Co. prints packaging labels. • During the printing process, ink, plastic film and metal foil are wasted. The process also releases ink and glue emissions into the air.

  17. Case Study BQuality Control • PR Labelmakers takes out a $105,000 loan from its bank to improve quality control. • It installs a camera system to detect printing errors early in production, resulting in: • Fewer printing errors • Reduced levels of wasted ink, scrap and emissions

  18. Initial investment: $105,000 Annual savings: $38,463 Payback period: 2.7 years Waste and emissions reduced by 40% Case Study BResults • PR Labelmakers quickly recuperates its investment and pays back its loan on time.

  19. I. Cleaner Production II. Case Study A III. Case Study B IV. Role of Financial Institutions V. For More Information

  20. Role of Financial InstitutionsMisconceptions • Cleaner Production entails high financial risk • Cleaner Production only applies to industrial and service companies

  21. Role of Financial InstitutionsRealities • Cleaner Production: • Makes companies more attractive as clients and investments • Improved cash flow and reduced risk • Rapid return on capital or operating investments • Improves image of financial institutions • Emphasis on environmentally sound investments and sustainable development

  22. Role of Financial Institutions Actions • Integrate environmental/Cleaner Production criteria into investment appraisal, credit rating and loan application process • Develop new financial products linked to environmental performance

  23. I. Cleaner Production II. Case Study A III. Case Study B IV. Role of Financial Institutions V. For More Information

  24. For More Information • UNEP DTIE Cleaner Production www.uneptie.org/cp • UNEP DTIE Cleaner Production Financing www.financingcp.org • United Nations Industrial Development Organization www.unido.org • Sustainable Alternatives Network (SANet) www.SustainableAlternatives.net

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