Risky business

4th July 2014


Resource efficiency

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Author

Wendy McClure

the environmentalist checks out the key messages from the new IEMA guide on sustainable resource management

The 28 member countries of the EU use on average about 16 tonnes of materials per capita each year. Some 10 tonnes go into stocks, such as infrastructure, houses and durable goods, while the rest leaves the economy as waste. Improving resource efficiency is a key policy objective for the European commission (see Commission eyes new targets below).

Its 2011 document, A resource efficient Europe, makes it clear that the current linear, “take-make-use-discard” model of production and consumption is no longer an option. Instead, new ways ought to be developed to reduce inputs, minimise waste, improve management of resource stocks, change consumption patterns, optimise production processes, management and business methods, and improve logistics.

To assist the transition from the take-make-use-discard model to a circular or regenerative model, which reuses the materials to reduce the need for virgin materials, IEMA has published a guide, From waste to resources, on implementing sustainable resource management (SRM) in an organisation. Launched on 19 June, it sets out the opportunities of taking such an approach; the value that environment and sustainability professionals can add; the need for strong leadership and strategic support from senior management; and the necessary core systems, including procurement and supply-chain management.

Efficient and effective

All businesses can take advantage of the opportunities offered by SRM, says the report, but it acknowledges that too many remain focused on managing waste rather than recognising it is the consequence of an ineffective system. Securing the financial and other potential benefits of a circular economy requires all organisations to engage in the transition to resource management to ensure they begin viewing waste and unused/end-of-life products as viable raw materials, says IEMA.

It outlines the drivers that are reshaping how organisations view resources. These include:

  • Substantial growth in demand for all resources, led by the growth in middle-class consumers and rapid urbanisation, particularly in the Asia Pacific region.

  • Exceptional demand for key enabling materials to support the significant and ongoing expansion in technologically advanced products and services – for example, smartphones, renewable energy, and hybrid and electric transport.

  • The rising costs of resource extraction and supply as accessible, high-grade deposits are exhausted and extraction moves to more challenging locations with higher associated costs.

  • Increasing constraints on production both in countries (where environmental factors, such as competition for water, will limit production) and on the international market (where resource politics and trade restrictions already influence the flow of resources around the globe).

“The outcome of these game-changing trends is that organisations will be exposed to increasing risks related to the materials they rely on,” says IEMA, adding that responding successfully to these risks will require organisations to change how they purchase and use materials, and how they perceive waste.

IEMA advises organisations to take action in the following areas:

  • Resource efficiency and effectiveness – resource efficiency is about maximising the use of materials with minimal waste production, while resource effectiveness goes further in optimising the efficient use of resources across their lifecycle to minimise harm to the natural environment and society and increasingly generate sustainability benefits.

  • Resource security – maintaining a reliable supply of key materials.

  • Resource cycling – managing material flows so they replenish supply.
Six steps to success
  1. Enable your environment and sustainability professionals to catalyse your organisation’s progress on resource management by developing an action plan identifying departmental and individual responsibilities.

  2. Provide the leadership required to create a positive culture around a clear vision.

  3. Involve your entire workforce in sustainable resource management initiatives, particularly those in research and development, and the design of products and services.

  4. Ensure your business maintains a clear understanding of its potential exposure to resource security risks, which are dynamic in their nature.

  5. Embrace the circular economy in your long-term business strategy to identify ambitious targets and initiatives that actively seek to disrupt the traditional approach to resource management.

  6. Align your systems to deliver effective performance improvements in management of resources – resource data collection and analysis, procurement of materials, and control activities across the value-chain.

Spotlight on practitioners

The report identifies the practical steps that organisations can take to move to SRM. First, senior management, particularly the chief executive, needs to ensure resource thinking becomes embedded in the company’s ethos and strategy. Second, it highlights the key role of environment and sustainability professionals.

It is practitioners, argues IEMA, who will ensure businesses systems adapt to meet the new strategy. Through their knowledge and cross-cutting roles, environment and sustainability practitioners have the potential to act as change agents to drive action. Finally, the rest of the workforce needs to be fully engaged and appropriately incentivised to improve resource management.

Research by IEMA has found that the initial actions required to begin the transition to SRM can often be driven by a small number of staff, or even a single individual. Inevitably, these are environment and sustainability professionals because they generally have the skills and knowledge to help stimulate the transition. These competences, which are typically demonstrated by Full membership of IEMA (iema.net/membership-full), include: an understanding of environmental and sustainability issues from global to local, and from short to long term; skills to collect, analyse and report data effectively; ability to communicate a compelling case for action across different parts of a business; leadership that positively influences the culture of individuals and the organisation; and experience of using core environmental and sustainability tools, such as environment management systems, lifecycle thinking and sustainability reporting.

A survey of 500 IEMA members reveals that many organisations employing skilled and qualified environment and sustainability professionals are already achieving significant benefits by taking action on resource efficiency. Nineteen per cent of practitioners working in very large companies indicated that their company had saved more than £1 million a year by improving their resource efficiency; more than 20% of large companies report annual savings of £100,000 a year; and 63% of small and medium-size enterprises saved at least £5,000 a year, with nearly 70% reporting annual savings of more £10,000.

These figures suggest that annual savings of more than £108 million have been achieved by organisations that employ environment and sustainability practitioners.

A systems approach

Gathering meaningful data and reporting it is vital to managing materials and waste effectively, says IEMA, adding that collecting the data is not enough; it needs to be reported in a comprehendible way across the business to those who can implement an appropriate response.

Environment and sustainability practitioners should be at the forefront of collecting and disseminating such information, says the report, but acknowledges that in many organisations such activity focuses on waste, not materials. “The current focus on waste data and reporting poses significant risks to an organisation’s ability to efficiently transition to resource management,” warns IEMA. This is because the professionals responsible for driving performance improvements base their decisions on evidence.

With access to waste data and little equivalent information on material usage, it is inevitable that many will prioritise improving waste management, such as increasing recycling rates, over resource management initiatives like reducing resource intensity.

Tools of engagement
IEMA has created the resources action maturity planner (RAMP, iema.net/rmramp) to help organisations evaluate their position in relation to resource management. The Institute has also established a resource hub at iema.net/rm, where practitioners can go for more information, including the full report and a summary for businesses, and sign up to become a member of its resource management group.

Although IEMA has discovered examples of where environment and sustainability professionals have ensured that the resource management information systems generate high-quality data, its research indicates that most of the practitioners lack access to key data to make an effective assessment of their organisation’s performance.

As well as ensuring the necessary data on waste and materials is collected and reported, IEMA recommends that organisations seeking to adopt SRM prioritise procurement activities.

To effectively manage the risks and opportunities associated with resource use, organisations must significantly improve their understanding about purchased materials, says the report. This extends beyond an organisation’s own operations to activities, risks and opportunities across its value chain. The report advises developing a strong working relationship between the environment/sustainability team and the procurement team to ensure “green” purchasing criteria – for example, setting minimum requirements for recycled content and agreeing supplier take-back arrangements – are applied to all purchased goods and products.

To truly manage its resources, an organisation must understand the impacts, risks and opportunities of the lifecycles of its materials, says IEMA. This involves going beyond conventional thinking to consider a material from its source, through the supply chain and the organisation’s activities, on to clients and the end-user and the potential for it as a future resource.

The revised ISO 14001 standard, due to roll out next year, should help generate such thinking. It is expected to require organisations to embed lifecycle thinking and value chain engagement with stakeholders.

Commission eyes new targets
On 2 July, the European commission launched its proposals to overhaul EU waste legislation. These are designed to move the EU to a more circular economy and deliver the roadmap to a resource-efficient Europe, published in 2011. The proposals include:
  • member states to recycle 70% of municipal waste by 2030;
  • 80% of packaging waste to be recycled by 2030;
  • ban on burying recyclable materials – paper, metals, glass, paper and cardboard, and biodegradable waste – in landfill from 2025.
  • material-specific recovery targets will gradually be increased between 2020 and 2030 to: 90% of paper and cardboard by the end of 2025; and 60% of plastics, 80% of wood, 90% of ferrous metal, aluminium and glass by the end of 2030;
  • the virtual elimination of landfill by 2030; and
  • a 30% reduction in food waste generated by 2025.

Outgoing environment commissioner Janez Potonik made it clear during EU green week at the start of June that a circular economy would become the “new order of things”, pointing out that continuing with the current take-make-use-discard model, in which 80% of what is produced is used once and discarded, is no longer an option.

Championing the cause

The financial benefits of improving resource efficiency are clear. A report from Defra and resource efficiency consultancy Oakdene Hollins in 2011 found that £23 billion could be saved across the UK economy if organisations put in place low- or no-cost actions to manage resources more efficiently. Using raw materials more efficiently and minimising waste would generate 80% of these savings. In addition, including measures with a longer payback would raise potential savings to £56 billion. As well as these, the IEMA report highlights how adopting SRM can help drive competitive advantage, reduce business risks and support growth.

The Institute now wants all environment and sustainability professionals to champion the transition to SRM in their organisation.


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