Role of Business in SWITCH-Asia Projects
Industry and business focus on manufacturing goods. Yet at the same time they are also key consumers. Entrepreneurs and managers steer innovation – one of the most important driving forces in business. Whenever modifying their business idea, they keep an eye on investments and estimated perceived profit opportunities. Business can create markets by convincing consumers they need a new product. They are able to improve their efficient use of resources and to orient economic growth so that it reduces waste and any negative impact on the environment. In all these fields, business can promote SCP. Putting long-term sustainability, comprehensive risk management, and corporate social responsibility on their agenda can mean a decisive business move towards SCP
Business driven action
- Dimitri De Boer, China Motor Challenge Project
The SWITCH-Asia Programme aims for a systemic change towards environment- and climate-friendly consumption and production. In the 30 ongoing projects business plays various roles in promoting SCP. The SWITCH-Asia project China Electric Motor Challenge, for example, demonstrates that a strong business case can convince entrepreneurs or managers to invest in efficient technology for more sustainable production. Dimitri de Boer, UNIDO project manager, explains: "Business plays a central role in achieving 1 million tonnes of CO2 emission reductions through industrial energy savings in the China Electric Motor Challenge project. The project makes industrial businesses aware of the energy savings that can be achieved by using more efficient electric motor systems, and brings them together with energy service companies – service providers that help other companies reduce their energy consumption – to make these savings a reality. All energy efficiency upgrades in the Motor Challenge are entirely business-driven." The project motivates motors users to upgrade their motor systems with economic arguments. Typically, an energy service company takes on all up-front costs, and is paid a proportion of the energy savings achieved, effectively eliminating all risk on the customer’s side.
CSR - a powerful tool to promote SCP
- Igor Darbo, Strengthening the Elcetric and Electronic Sector Project
Another way business contributes to SCP is through the corporate environmental and social responsibility movement. Driven by increasingly conscious consumers, and increasing interest from employees and investors, advanced companies have started to take on more responsibilities through core business planning and strategies. The project Adapting Corporate Social Responsibility for example promotes CSR in the Vietnamese leather and textile sector. It enables SMEs in Vietnam to comply with CSR procurement guidelines of large foreign buyers and to integrate into global supply chains by increasing awareness, understanding and adoption of CSR. CSR can include environmentally sound production, improved labor or social practices and enhancement of international competitiveness. In China, a SWITCH-Asia project promotes CSR in the electrical and electronics sector. In an interview in 2010, ESEEC project manager Igor Darbo from the Delegation of German Industry and Commerce in Beijing, highlighted the fact that CSR stimulates transparence in the supply chain for suppliers and larger producers: “It is important for bigger European companies in the sector to have an understanding of the performance of Chinese SMEs, for example, occupational health and safety. This is important both in terms of compliance with standards but also in terms of proactive measures in the development of safety measure both of workers and of products.”
Supply change management provides entry points to promote SCP
Businesses wanting to make social and enviromental improvements can approach global supply and value chains with integrated managment, using specific criteria to screen suppliers, and undertake quality audit. The ESEEC project developed guidelines to help enterprises improve their environmental and safety performance. By studying the guidelines, enterprises will obtain a comprehensive understanding of the national, regional and international laws, regulations and standards relevant to the environmental and safety performance of the electrical and electronics industry. By comparing environmental and safety performance of Chinese enterprises with that in developed countries and analysing the gaps, the guidelines help to improve the eco-efficiency, OHS and CSR of electrical and electronics SMEs in China.
Policy enables SCP in India
- Ashish Chaturvedi, WEEE-Recycle Project
In India, the SWITCH-Asia project Eco-friendly Electronic Waste Recycling (WEEE-Recycle) also wants to strengthen responsible producers but the project takes a different approach. Ashish Chaturvedi, project manager from GIZ, speaks of the influence that policy has on business: “The EU Switch-Asia project WEEE Recycle has contributed to the drafting of legislation on e-waste management in India. The draft rules put the manufacturers of electrical and electronic equipment at the centre of e-waste management. This is accomplished by introducing the concept of “extended producer responsibility” which makes manufacturers responsible for end-of-life management of e-waste. Also, by formalising the informal sector, tThe project envisages to link the private sector, both generators and recyclers of e-waste, to these formalized entities thereby enhancing efficiency in e-waste collection and recycling.”
Business Intermediaries offer opportunities to scale up efforts
However, businesses still faces significant challenges for incorporating SCP in their thinking and operations. Many SMEs across the world are preoccupied with immediate pressures on their business and find it difficult to focus on longer-term topics such as environment and sustainability. Business membership organisations (BMO), associations and other business intermediaries, therefore, have a key role to play in advancing SCP, especially by raising awareness amongst their members, and helping them to respond to new environmental and social challenges. Many business membership organisations have realised their responsibility.
The Dhaka Chamber of Commerce and Industry (DCCI), for example, is a dynamic umbrella organisation of SMEs, a vibrant platform for putting forward fact-based opinions, suggestions and recommendations in the sphere of trade, commerce and the overall economy. The chamber has grown rapidly and today it represents more than 5 000 members. DCCI’s activities centre on three main issues: representation, contacts and services. DCCI represents the private sector, helping its members to establish business contacts and linkages with all related partners around the globe. DCCI provides a wide range of advisory, consultancy, advocacy, information, training, and documentation services. One of the priorities of the chamber is to prepare members to face the challenges of the present changing business pattern. In order to prepare them to be ready for the competitive business world and how to be environmentally and socially compliant, the chamber initiates special projects with different donor organisations. DCCI organises training programmes regularly through its business institute where cleaner production, environment, safety measures, and compliance are some of the important topics addressed. In order to create awareness among its members about environment management systems, the chamber also conducts policy advocacy on behalf of the private sector so that environment-related policies can be helpful for the business community.
Chambers and associations provide networks and partnership for SCP
Colleagues from the Ceylon Chamber of Commerce (CCC) in Sri Lanka were at the forefront of promoting environmental responsibility in the private sector long before it became a regulatory requirement and a buzzword among the business community. The chamber has been actively involved in facilitating policy formulation, and in the recognition of the environmental responsibilities of the private sector. In addition, CCC offers direct technical and financial assistance to improve the environmental performance of the private sector through a number of donor-funded environmental improvement projects. Mr. Chandra Vithanage of the CCC summarises: “The Ceylon Chamber of Commerce considers the promotion of environmental responsibility as an essential prerequisite for private sector development and growth, and has made every possible attempt to encourage the private sector to follow best practices in environmental management. The main goal of all environmental programmes of the chamber is to promote resource efficiency and responsible production in Sri Lanka, thus contributing towards greater environmental responsibility as well as strengthening the market positions of the respective industries.”