a methodological framework for the initial ...

Journal of Environmental Assessment Policy and Management Vol. 1, No. 4 (December 1999) pp. 505–532 © Imperial College Press

J. Env. Assmt. Pol. Mgmt. 1999.01:505-532. Downloaded from www.worldscientific.com by Prof. Enrico Cagno on 10/21/13. For personal use only.

A METHODOLOGICAL FRAMEWORK FOR THE INITIAL ENVIRONMENTAL REVIEW (IER) IN EMS IMPLEMENTATION

ENRICO CAGNO,* AUGUSTO DI GIULIO† and PAOLO TRUCCO‡ Department of Mechanical Engineering, Politecnico di Milano Piazza Leonardo da Vinci, 32 - 20133 Milano, Italy *E-mail: [email protected] †E-mail: [email protected] ‡E-mail: [email protected]

Organisations are increasingly interested in understanding the impact of the environmental issues associated with their sites on company competitiveness and strategies. Within the implementation of an environmental management system (EMS), the initial environmental review (IER) is a first step in which a company begins to consider systematically all the factors driving the complex relationships between its production system and the external environment. Therefore, IER plays a crucial role in the definition of effective environmental policy and programmes and demands significant company resources. The paper focuses on the identification of the main objectives of the IER and the features characterising a methodological approach. These are then used to develop a methodological framework for IER that allows to integrate business strategy in establishing significant environmental aspects of a specific site. Indeed, companies are increasingly involved in managing the environment as an opportunity for competitive advantage, that requires to highlight the relationships between environmental impact of their processes and company strategy and objectives. The methodology is presented by means of a real-world case concerning the IER of a large aluminium alloy foundry. Keywords: Initial Environmental Review (IER), Environmental Management Systems (EMS), ISO 14000

Introduction The conservation of the eco-system and the creation of conditions for sustainable growth (Schmidheiny, 1992; Shrivastava, 1995) already constitute an integral part of the expectations of the large majority of stakeholders and, although the climate of opinion is very uncertain, an increasing number of companies are beginning to look at the environment as one of the potentially most important 505

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E. Cagno, A. D. Giulio & P. Trucco


factors in their long-term competitiveness (Hunt & Auster, 1990; Schmidheiny, 1992; Clarke et al., 1994; Walley & Whitehead, 1994; Porter & Van der Linde, 1995; Lawrence et al., 1998). Indeed: — customers and society are paying ever more attention to environmental protection: markets for green products and services are growing (Muller & Koechlin, 1992) and there is increased hostility from local communities towards high polluting companies (or believed so); — in the medium period, there will be a progressive increase in the cost of raw materials, energy and, in general, environmental resources (e.g., the cost of waste disposal); — the authorities have changed their legislative strategy from “direct & control” to more proactive and market-oriented policies, e.g., the US Government’s Environmentally Preferable Purchasing (EPP) program (EPA, 1997, 1998a, 1998b; Federal Register, 1998) and the European Community’s EMAS regulation (GUCE, 1993). All of these factors have an ever greater impact on companies economic systems, affecting profitability and competitiveness (Porter & Van der Linde, 1995; Klassen & McLaughlin, 1996) and requires drastic revisions to management paradigms. The evolution and diffusion of environmental management systems (EMS) and total quality environmental management (TQEM) represent a significant part of this commitment in rethinking company management. Within the implementation process of an EMS, the initial environmental review (IER) is the first step by which the company begins to consider systematically and strategically all the aspects underlying the complex relationship between its production system and both eco-system and social life. Indeed, the findings constitute the fundamental information, which is the basis used by management to adopt a specific environmental policy and set its objectives. This site analysis is called initial environmental review (IER) or preliminary environmental review (PER) in ISO 14001 (1996) and BS 7750 (1992) standards, respectively. It enables the identification of environmental aspects of site activities that have (or potentially have) significant environmental impacts and liabilities, thus supporting the establishment of appropriate improvement policies and programmes (ISO 14004, 1996). Alongside the decision support provided by the IER, it should be remembered that it consumes a significant part of the overall resources needed to start an EMS, and is therefore a time and cost intensive task. IER is thus an indispensable pre-requisite for establishing effective environmental management practices (Fig. 1). Nevertheless, systematic and congruent methodological approaches to the IER have yet to be documented in literature. To date, common approaches analyse the production site as a “black box” in

A Methodological Framework for the Initial Environmental Review (IER) in …

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Initial Environmental Review (IER) Management Decision Process (Strategies)


Environmental Policy

Audit and Review

ENVIRONMENTAL MANAGEMENT SYSTEM

Environmental Program

Action and Monitoring

Fig. 1. Role of the IER in the EMS implementation process.

which the consumption of resources and the undesired output are measured without linking impacts to the processes characterising the site activity. The most frequently used tools are check-lists, questionnaires and databases (ISO 14004, 1996; Rothery, 1995). Such an approach, however, presents a number of limitations which have negative effects on the EMS effectiveness: — the static vision of the production system leads to identify end-of-pipe-oriented objectives and measures, based on information with short-term validity and difficult to update as the context changes; — there is little integration with other company objectives, thus reducing the strategic potential of environmental management. Indeed, IER is felt and used just as a technical tool, not considering that overlooking dependencies with other company problems means lower effectiveness. Therefore, to be really effective, IER scope should be somehow enhanced to include company overall strategy. These factors make the IER a critical activity for which methodological development is necessary in order to — increase the information content of the results of the analysis (i.e. Quality of the IER results), to support the subsequent activities of defining and implementing environmental management policies, designing and implementing specific measures, and thus establishing an EMS; — rationalise the time and resources needed to carry out the study (i.e. IER process efficiency).

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These two objectives can be achieved by means of congruent actions concerning three main areas:


(i) development of a systematic analysis as a result of a consistent methodological approach; (ii) modellisation of the processes and activities of the site; (iii) improvement of the methods and tools used to implement the IER.

Identification of the Main Features of the IER The coherence of the process and thus the reliability of the results provided by the IER essentially depend on the used methodology to carry out the study. Consequently, various essential characteristics which must guide the methodological development and practical implementation of the IER have been identified. Exhaustive. The greater the breadth of the initial spectrum of potential environmental aspects considered, the more exhaustive the IER, so ensuring an adequate knowledge base for possible subsequent simplifications. Complete. Whenever relevant (e.g., process industries) the study should be complete even with respect to the different operational conditions which may arise (normal operations, accidents and emergencies). Selective. The methodology adopted to implement the IER must be able to identify as quickly as possible the significant environmental aspects among the entire (exhaustive and complete) spectrum set at the start of the study. Selectivity directly influences the overall duration of the analysis, and thus also the overall cost, and can be facilitated by a correct structuring and management of the process which avoids useless measurements and re-calculations following an erroneous elimination or the overlooking of important factors. Process modelling-based. The IER must envisage the modelling and description of the processes of the site. The level of detail must be chosen in function of a number of factors, such as the size of the site, the process complexity, the typical level of environmental impact of the technologies and workings used, the expected results, the stage of development of environmental management within the company, etc. Adequate modelling of the site allows the characteristic features of site activities to be linked to environmental impacts and the most effective corrective measures to be implemented. It also provides a “dynamic” dimension to the analysis, making it possible to monitor over time changes in site activities, using the model itself as a planning and control support tool within the EMS.


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Transparent. In order to facilitate understanding and communication for all interested parties (stakeholders), it is important that the study is developed in such a way as to document and justify all the intermediate phases. The transparency of the study improves both internal (with regard to audit activities) and external environmental communication, facilitating the certification process. Important factors are therefore — correct documentation of all IER phases; — consistency in the adopted inventory and assessment methods; — involvement of management at least in the final phase to evaluate the data collected. Integrated. As far as the operations of the study are concerned, and in particular the data collection phase, the information already available within the company for other purposes should be exploited as far as possible. Useful information can be found in the quality system (e.g., data on process efficiency, materials and product scraps) in the safety system (e.g., materials and substances safety data sheets) or in production management and management control systems. As shown in Table 1, the identified features of IER are directly linked to the main objectives of methodological development mentioned above (i.e. quality of IER results and IER process efficiency).

Table 1. Relationship between IER objectives and its main features. IER Objectives Quality of IER Results IER Process Efficiency Exhaustive Complete Process modelling-based Transparent

Selective Integrated

A Methodological Framework for the IER IER can be seen as a process involving (i) an input — i.e. the entire set of potential environmental aspects, (ii) an output — the selected significant environmental aspects, and (iii) various intermediate phases. The conceptual framework is illustrated in Fig. 2.

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E. Cagno, A. D. Giulio & P. Trucco Process modeling Integrated Transparent


Potential Site Environmental Aspects

Exhaustive & Complete

Phase 1

Phase 2

Phase 3

Selection

Inventory

Assessment

Significant Site Environmental Aspects

Selective

t0

tF

time

Fig. 2. IER conceptual framework and corresponding features.

The most important dimension is the time axis, which shows the overall duration of the study. At the starting point (t0), the breadth of the spectrum indicates the group of environmental aspects considered (on which the exhaustiveness and completeness depend). The figure describes the progressive reduction in the breadth of the spectrum over time (selectivity) until (at tF) the final set of significant environmental aspects is reached. The process is divided into three phases with different objectives and increasing levels of detail. Indeed, the IER is an increasingly precise and detailed assessment of the environmental aspects of the site, which progressively eliminates elements that are marginal and less important, so as to concentrate on the assessment of environmental impacts of those that are effectively significant. Figure 3 illustrates the scheme of the proposed IER methodology. In the first phase, termed selection, the limits of the study are defined (i.e. the breadth of the initial spectrum which defines the group of environmental aspects to analyse). There follows an initial selection of impacts using general criteria (e.g., sector, geographic location). In the second phase, termed inventory, the main site processes are modelled by means of flow-charts, highlighting relations between various important process phases and the amount of the induced impact factors. This is the phase in which, with the help of inventory tools (Van Berkel et al., 1997), the impact factors are quantified and their sources identified. In the third and final phase, assessment, the significant environmental aspects of the site are highlighted by means of an assessment process based on specific


Analysis Tools

PHASE 2

PHASE 3

SELECTION

INVENTORY

VALUATION

General Criteria

Site Modelling

Valuation Criteria

Processes


Register of Regulations

PHASE 1

Industry Selection criteria - mass - energy - etc. Other information

Variables Interactions

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Environmental impact - Technology - Regulations - Company strategy - Cost savings - etc.

Significant Site Environmental Aspects

Fig. 3. Proposed methodological framework of the IER.

criteria. The relative importance of the latter is defined by management with reference to site conditions, company strategy and objectives. Below, the individual phases of the methodology are described with reference to a specific case, concerning a large-size foundry which produces aluminium alloy castings for the production of automotive engine parts (cylinder heads, exhaust collectors, etc.) and for large format pieces used in mechanical systems of varying nature (e.g., tank parts). The main technological processes are sand and shell casting. As a supplier of the automotive and the heavy engineering industries, the company has been under considerable pressure to adopt specific management systems that are able to monitor improvement in environmental performance (i.e. reduction of environmental impacts).

Phase 1: Selection The first phase aims to select among all the potential environmental aspects in the initial spectrum, those which are pertinent to the specific case. A systematic approach to this selection begins by taking account of two principal aspects: a. the features and effects of the main site processes and activities (industry, technologies, facilities, etc.), including not only the production process, but also all the site utilities — e.g. as reported in the Register of Effects (BS7750, 1992); b. the environmental regulations to which the site is subject — e.g. as reported in the Register of Regulation (BS7750, 1992).

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In detail, the selection phase is divided into three steps:


• data collection • identification of main processes • definition of the process/impact matrix Note that Phase 1 is potentially the most important one of the overall IER process since it allows to model the site reality, thus strongly influencing the design and carrying out of the other phases, and to rapidly focus on major site environmental impacts (see curve in Fig. 2). Data collection The analysis of the production site requires that a considerable amount of data and information be collected. In general, close collaboration with other company functions and with existing management systems ensures that collection times and/or assessment costs can be considerably contained. For example the following should be considered: — — — — — — —

the waste disposal register; the chemical analysis of gas and liquid emissions; acoustic measurements outside the site; data of main products: quantity, mix, costs, etc. materials used in the last year divided by type of production; material safety data sheets (MSDS) of used substances and raw materials; percentage of discarded and recycled materials (quality system).

Together, this information provides a starting point for a detailed analysis of the environmental impact generated by the site. Identification of main processes Analysis by process is one of the main features determining the quality of an IER. In this initial phase, one of the most important aims is the identification of the relations between specific impact categories and the existence of activities and processes causing these impacts. As a result, the focus is brought rapidly to the most significant environmental aspects. In order to assess effectively the environmental impacts of a site, the analysis must also be extended to the major up-stream and down-stream processes, following a life-cycle management approach (Fig. 4). Attention must be paid to the incidence that production choices and limitations may have on the environmental impact


Production Site

Site management & administration

Other site Services

Plant Utilities


Raw Materials

Inbound Logistics

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Production & Maintenance

Outbound Logistics

Product Use

Product Disposal

Product Life Cycle

Fig. 4. View of site processes within the IER.

of processes outside the site. This means, for example, that the inbound logistics phase will include not only goods reception and warehousing, but also an assessment of the impact of up-stream processes in raw materials acquisition (e.g., material rucksack). Downstream, use and disposal processes (including any on-site recycling) should be considered. In this initial phase, in which detailed quantitative data is still not available, the assessment will be a general identification of critical processes with respect to the specific industrial sector in which the company operates (SIC, 1972). As environmental management practices and scientific knowledge grow, it will be possible in the future to map critical processes more precisely and exhaustively, providing valuable guidelines. Other support tools that can be used in this phase are: expert interviews, environmental benchmarking and reports. The main processes in the foundry were identified by reference to studies and data in the literature on the sector (Yoshiki–Gravelsins et al., 1993a, 1993b; Nicodemi & Zoja, 1981; EAA, 1996; BUWAL, 1996; ETH, 1994) and to the experience of company management. The most important company processes in terms of the environmental impact are — — — — —

sand casting; shell casting; maintenance; quality control; plant utilities.

Each of these processes must be described in depth in the site modelling phase. As in the case study, context aluminium scrap cannot be used in the foundry, in view of the quality requirements of the specific products, the use and disposal phases were not considered.

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Definition of the process/impact matrix The impacts associated to the selected processes can be traced systematically and unambiguously by defining the process/impact matrix (Table 2):

The matrix is also the reference framework for the inventory data collection phase (inventory matrix) and the final assessment phase (assessment matrix).

Table 2. Process/impact matrix. Impact Categories

Input Logistics

activity 1 … activity n

Production


Output Logistics


Solid Waste

Waste Water

Air Emission

Output Materials

Processes

Water

Input Energy


— the rows indicate the main site processes and activities and/or other specific phases in the product life cycle (environmental aspects); — the columns indicate the environmental impact factors to be considered.

Product Use Product Disposal

Phase 2: Inventory The aim of the Inventory phase is to systematically collect and analyse quantitative data concerning the entire set of impact factors of the selected site processes.


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Generally, this is the step of the study that absorbs the most resources. The Inventory phase is divided into three steps: (i) selection of impact factors on the basis of general criteria; (ii) modelling of the site processes and data identification; (iii) collection and processing of inventory data.


Selection of impact factors on the basis of general criteria Once the main processes have been defined, the level of detail and the impact factors must be selected for each one. Starting with a full check-list, it is possible to identify criteria (e.g. mass or energy) defining a minimum impact threshold. In the foundry studied, all materials with a usage less than approximately 200 kg/year were excluded. This threshold was set by reference to the safety data sheets and the judgement of environmental experts so as not to overlook highly toxic substances, undermining the significance of the analysis. Modelling of the site and data identification In order to collect and manage the data dynamically, the site must be modelled in flow diagrams for each main process (Figs. 5, 6 and 7). Although the level of detail depends on the importance of the process and the data available, some basic guidelines for developing life cycle inventory analysis could be adopted (Vigon et al., 1993).

PREPARATION REPAIR OF MODELS

FLASK MOULDING

MELTING

COLD-BOX CORE MOULDING

CASTING

CORE VARNISHING

PREPARATION OF COOLANTS

(A) Sand casting process

CASTING

OF MOULDING

CO2 CORE MOULDING CO2

HOT BOX

FLOGGING

MOULDING

STRIPPING FLOGGING

MELTING

REMOVAL OF RISERS AND CUTTING

(B) Shell casting process

Fig. 5. Flow diagrams of the casting processes.

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E. Cagno, A. D. Giulio & P. Trucco Electrical energy Methan Water


Catalyst Paste release agent Melting Powder resin Varnish

HOT-BOX CORE MOULDING

Core

Sand and grit

Furfuryl alcohol V.O.C

Fig. 6. Hot box core moulding process.

Electrical energy Varnish Nitrogen Boro-titanium Kaolin Melting pot Magnesium Lubrificants Refractories Sodium Talc Aluminium (scrap)

Methan Water

SHELL CASTING

Lead Aluminium V.O.C

Aluminium casts Aluminium waste Sludge Grit Used Melting pot

Fig. 7. Shell casting process.

Collection and processing of inventory data The last step in the Inventory phase is the processing of the quantitative data for all the impact factors, generating a complete inventory matrix (Table 3, cf. Table 2). The content of each cell is a set of impact factors for each process and impact category, highlighting the distribution of the site’s environmental impact in the various activities. In the present case, the main impact categories are: materials, energy, waste and emissions. Materials. To reduce the consumption of pure aluminium, all discarded production is re-cast. Due to final product quality requirements, however, it is not possible to use second cast aluminium. Energy. The company uses energy for production, heating, factory lighting and other utilities. The sources used are: electrical energy and methane gas. There

Table 3. Part of the inventory matrix for the aluminium alloy foundry.

Name

Kg /year

Energy Electrical kWh/year

Shell Casting

13,920 Varnish 3,120 Nitrogen Boro6,000 titanium 2,100 Kaolin Melting 158,400 pots 2,760 Magnesium Lubricating 612 oils 1,380 Refractories Metallic 3,600 sodium 3,528 Talc

Methane m3/year

2,817,000 1,084,000

Waste Class

Sludge containing heavy metals

Sand and grit

Pollutant waste from melting pots

Waste Water kg/year

Substance

Aluminium Ammonic nitrogen 12,980 Nitrose nitrogen Nitric nitrogen Phosphor 1,430,560 Mineral oils BOD5 COD Materials in suspension .

480 43,000 2,515

1,107,000

Substance

mg/N m3

mg/h

0.02

Lead Aluminium Powders V.O.C.

0.5 0.34 3.4 4.1

1,000 9,201 372,227 231,370

Furfuryl alcohol V.O.C.

2 18

15,600 81,000

0.2 0.07 2.8 0.8 1 6 28 22

15,887 m3/year

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Hot-Box Core Moulding

10,000 3,144

mg/litre

13,875 Total waste

Catalyst Paste Releasing agent Resin Varnish

Air Emissions A Methodological Framework for the Initial Environmental Review (IER) in …


Materials

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Table 4. Energy consumption of the aluminium alloy foundry (Year: 1996). Methane Gas [m3/year]

Processes

Electrical Energy [kwh/year]

Sand casting

904,850

67,769

Shell casting

2,816,975

1,084,224

Quality control

1,107,275

General services TOTAL

Use

Melting furnaces Melting furnaces, holding furnaces, core baking burners

0

Treatment furnaces, other machines

489,000

280,000

Heaters, lighting, etc.

5,318,100

1,431,993

Table 5. Classification of waste produced at the site. Waste

Quantity [Kg/year]

Disposal Cost [$/ton]

Exhausted non-desilvered fixing baths Exhausted developing baths Basic solutions and mixtures Mineral and/or synthetic oils Sludge containing heavy metals Sludge containing phenols Foundry sand and grit Hazardous waste Household waste

318 270 3,300 1,538 14,580 1,000 2,318,560 231,250 8,380

156 156 370 166 195 195 21 40 220

are no systems to recover energy lost in heat. The 1996 consumption is given in Table 4. Waste. The types, quantities and relative disposal costs for waste in 1996 are given in Table 5. Foundry sand and grit, which cannot be re-used, are the main items. Water disposal. Industrial water is mainly contaminated with aluminium powder and is therefore transported separately to a sediment tank, while water contaminated with penetrating liquids is treated in an active carbon filter and thus has no direct impact on the environment.


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Air emissions. During cold-box core moulding, SO2 is released which is removed in humid conditions with automatically fed water and soda. In addition, the mixer, used to prepare the mix for CO2 core moulding, produces powders which are passed along a suction tube to a sleeve filter. Traces of furfuryl and isobutyl alcohol derived from the core moulding and varnishing are also present. The emissions generated by the melting and holding furnaces are rich in lead and aluminium. Other powders derive from the degasification, modification, and refining treatments with nitrogen, metallic sodium and boro-titanium, respectively.

Phase 3: Assessment The last phase is devoted to the identification of significant environmental aspects by means of the assessment of the inventory data. Starting from the inventory matrix (Table 3) and using appropriately chosen assessment criteria, judgements are elicited to rank the environmental aspects in function of their criticality. All the judgements come from company management (in particular HS&E and production managers) or environmental experts (consultants); in this respect the elicitation process is subjective as it mainly depends on their competence and experience and not on detailed impact assessment methods. Indeed, coping with IER scope and environmental management focus, the intended goals of the assessment phase are to translate expert judgements into a simple quantitative ranking index and to integrate environmental impact judgements with other strategic objectives of the company. The Assessment phase is divided into the following steps: (i) (ii) (iii) (iv)

definition of the assessment criteria; definition of the assessment matrix; determination of the criteria weightings; impact ranking.

Definition of the assessment criteria The main criteria in the assessment of the significance of an impact factor is its Environmental Impact (EI ), i.e. any change to the environment, whether adverse or beneficial, wholly or partially resulting from organisation’s activities, products and services (ISO 14001, 1996). Although the assessment of the criticality and, consequently, the priority of counter measures derive principally from the environmental impact of the factor, these can be considerably modified when viewed in the overall context of the company. Plant management and operations requirements, together with pressure from internal and external stakeholders,

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Environmental Impact (EI)


External Amplifier Factors (EAF)

Internal Amplifier Factors (IAF)

Regulatory limits

Process cost

Future legislation

Company strategy

Social acceptability

Critical technology and know-how

Criticality Index (CI) Fig. 8. Scheme to define the significance of environmental aspects.

have a considerable effect in determining the criticality of an environmental aspect. Criteria which may amplify the importance of a factor can be divided into two categories (Fig. 8): • External Amplifier Factors (EAF ): regulatory limits and evolution, company image, social acceptability, etc. • Internal Amplifier Factors (IAF ): incidence on process cost, technology and know-how, company strategy, etc. Three criteria have been identified for the first category (EAF): — Proximity to regulatory limits (EAF1). As compliance with legislation is an essential element in environmental management, this criterion assesses the criticality of an impact factor in terms of the proximity to limits imposed by the law. — Trend towards more restrictive regulations (EAF2). The introduction of this criterion is linked to the possibility of early exploitation of medium-term changes in regulations. — Social acceptability (EAF3). The criterion assesses the external perception – by customers, public opinion, the press, the local communities, etc. – of the environmental impacts generated by the site.


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For the internal amplifier factors (IAF), the following criteria have been defined: — Process costs (IAF1). The criterion assesses the incidence of costs induced by the impact factor with respect to total process costs. — Company strategic objectives (IAF2). Within the site, the criticality of an environmental aspects may be greater or less depending on the strategic importance of the activity by which it is generated. — Critical technology and know-how (IAF3). An impact may be associated with a specific technology or know-how, which is considered critical because it is irreplaceable, particularly difficult to manage, or the main source of the company’s competitive advantage. Definition of the assessment matrix Each criterion produces for each individual element of the process/impact matrix a qualitative assessment of the impacts, which can be transformed into quantitative terms by means of an appropriate scoring system; a possible scale is shown in Table 6. The choice of a multi-criteria assessment method, associated with a simple four-score scale, is justified by the fact that, not only is IER a screening analysis and not a detailed environmental impact assessment, but also that management looks for a strategic assessment of the site environmental aspects. For each criterion, a matrix identical in form to the inventory is constructed, in which a points score for each impact is recorded.

Table 6. Assessment scale with linguistic — numeric equivalents. 1

2

3

4

Hardly important

Modestly important

Reasonably important

Extremely important

Environmental impact (EI ). The measure of the environmental impact is defined with reference to the judgement of environmental experts who attribute levels of potential damage to the different impacts (Table 7). For the materials category, reference was made to technical characteristics, production processes employed and material safety data sheets (MSDS). For atmospheric emissions, danger, toxicity and the emission factor were considered. The weighting attributed to energy was taken as dependent on consumption by the individual processes.

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E. Cagno, A. D. Giulio & P. Trucco Table 7. Environmental impact matrix. Impact Categories Input


Company Processes

Output

Input Materials

Energy

Waste

Liquid Emissions

Air Emissions

Sand casting

1.00

2.00

4.00

2.00

1.00

Sand core moulding

3.00

2.00

4.00

2.00

2.00

Shell casting

2.00

3.00

4.00

2.00

2.00

Shell core moulding

1.00

3.00

4.00

2.00

1.00

Quality control

1.00

2.00

4.00

2.00

1.00

Maintenance

2.00

0.00

0.00

2.00

1.00

General services

0.00

1.00

1.00

2.00

1.00

Production

Criticality was associated to waste on the basis of the amount and type of disposal required. Liquid emissions were given a criticality of 2 in view of the presence of aluminium (albeit at low concentrations) and all processes were given the same values, as only aggregate data for the site were available. Proximity to regulatory limits (EAF1). For this criterion, reference was made to a quantitative driver defined as: RL =

emission amount . regulatory limit

Different points scores were given to the different values of RL as shown in detail in Table 8. When more than one impact factor was present, the highest value of RL was taken (thus overlooking potential cumulative effects). For the impact categories for which a simple indicator cannot be constructed, reference is made to more qualitative information. Starting with the legal limits for the individual impact categories, an indicator matrix was defined (Table 9). This was used, for example, to attribute a score of 1 to the categories air emissions,


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Table 8. Points score for the proximity to regulatory limits (EAF1) criterion.


Range

Score

No legal limit (R = 0)

0

0 < RL < 0.5

1

Category

0.5 < RL < 1

3

RL > 1

4

Liquid, atmospheric and sound emissions

Special – Municipal waste

1

Waste

Toxic noxious

4

No regulation

0

Regulation

4

No restrictions

0

Materials

Energy

Table 9. Indicators for EAF1 (t: RL approximately nil). Indicator Index

Input Materials

Energy

Waste

Liquid Emissions

Air Emissions

Sand casting Sand core moulding Shell casting Shell core moulding

0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00

special special special special

0.28 0.28 0.28 0.28

t t t t

Quality control Maintenance General services

0.00 0.00 0.00

0.00 0.00 0.00

special 0.00 special

0.28 0.28 0.28

t 0.46 t

waste and liquid emissions. A score of 0 was attributed to the categories materials and energy, as they are not subject to regulation (Table 10). Trend towards more restrictive legislation (EAF2). Reference was made to credible legislative scenario in the short-medium term within the European Community. Social acceptability (EAF3). To attribute a points score to the individual impacts, the factors contributing to the definition of criticality must be highlighted. These may include complaints, inspections, reputation, brand image/value, bad press, commercial relations (as customer or supplier) with companies known to cause environmental damage, use of technologies with a negative environmental image (e.g., the chemicals industry), etc.

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E. Cagno, A. D. Giulio & P. Trucco Table 10. Proximity to regulatory limits (EAF1) matrix. Impact Categories Input


Company Processes

Output

Input Materials

Energy

Waste

Liquid Emissions

Air Emissions

Sand casting

0.00

0.00

1.00

1.00

0.00

Sand core moulding

0.00

0.00

1.00

1.00

0.00

Shell casting

0.00

0.00

1.00

1.00

0.00

Shell core moulding

0.00

0.00

1.00

1.00

0.00

Quality control

0.00

0.00

1.00

1.00

0.00

Maintenance

0.00

0.00

0.00

1.00

1.00

General services

0.00

0.00

1.00

1.00

0.00

Production

To compile the matrix, the factors having the greatest influence on company image were identified. For air emissions, a score of 4 was attributed to sand core moulding and maintenance, as these are the main causes of complaints by the local community because of the strong smell they caused, even if the emissions were well below legal limits. The other processes which cause less air pollution were given a score of 2. Process costs (IAF1). This criterion makes reference to an indicator giving the ratio of the environmental cost to the total process cost: RC =

environmental cost [$/unit] . total process cost [$/unit]

The “environmental cost” means the sum of the costs sustained by the company for the use of environmental resources. These costs include two items. The first, referring to operational activity, includes — cleaning-up costs; — waste disposal costs;


525

— energy costs; — environmental taxes. The second, referring to support activities, includes


— environmental monitoring costs; — costs to control environmental emissions; — costs to prepare documentation required by law. The “total process cost” means the total cost sustained to realise an equivalent unit of a single reference product. To determine the indicator (RC), the following were taken as annual environmental costs: — — — —

total energy consumption expenditure; total costs for waste disposal; costs for waste water purification and water analyses; general costs of the plant to reduce atmospheric emissions.

The total production costs of 1 kg of a generic piece in aluminium alloy was taken as the denominator of the RC ratio. Company strategic objectives (IAF2). Within the site, the processes whose efficiency directly influences company competitiveness are identified and these are assigned a points score in function of their influence. For processes for which the criterion is not applicable, a score of zero is given. The company under study is making considerable efforts to improve the quality and efficiency of the shell-casting process in order to expand in the European market. For this reason, the shell casting and moulding processes were given a criticality of 4. Quality control was given a score of 1 and sand casting and moulding a score of 1, as they have less relative strategic value (Table 11). Critical technology (IAF3). This criterion analyses the inventory matrix by row, that is bringing attention to the processes considered and identifying those that use critical technologies. It should be noted that the criterion was excluded from the analysis because it was not relevant to the case of the aluminium alloy foundry. Determination of the criteria weightings The job of environmental experts, HS & E and production managers is to estimate the impact of environmental factors and to express judgements on the relevance of external and internal amplifier factors. On the other hand, as environmental

526

E. Cagno, A. D. Giulio & P. Trucco Table 11. Company strategy (IAF2) matrix. Impact Categories Input


Company Processes

Output

Input Materials

Energy

Waste

Liquid Emissions

Air Emissions

Sand casting

1.00

1.00

1.00

1.00

1.00

Sand core moulding

1.00

1.00

1.00

1.00

1.00

Shell casting

4.00

4.00

4.00

4.00

4.00

Shell core moulding

4.00

4.00

4.00

4.00

4.00

Quality control

2.00

2.00

2.00

2.00

2.00

Maintenance

0.00

0.00

0.00

0.00

1.00

General services

0.00

0.00

1.00

0.00

0.00

Production

management is a competitive lever for the company, it is top management which must subsequently assess the relative importance of the environmental impact and the internal and external amplifier factors in the light of business strategy, company culture and stakeholder requests. The basic judgement of criticality, given by the environmental impact estimated by an environmental expert, is thus modified to take account of internal and external amplifier factors estimated by HS & E and production managers. The direct responsibility of management is the attribution of importance weightings to the criteria classes (EI, EAF, IAF). Under these circumstances, the determination of the importance weightings of the criteria is highly subjective, as it depends on management’s environmental sensitivity. To determine the weightings, the problem is structured as a hierarchy (Fig. 9). First, the values of the three weightings (WEI, WEAF, WIAF) are determined as a unitary sum, defining the contribution of environmental impact (EI), external and internal amplifier factors (EAF and IAF, respectively) to the criticality of the environmental aspects (Fig. 9, level 1; Table 12, row 1). Second, the values of a second group of three weightings (WEAF1, WEAF2, WEAF3) must be determined as a unitary sum indicating the contribution of the individual external amplifier factor (EAF1, EAF2, EAF3) to the importance of the groupings



527

(EAF — Fig. 9, level 2; Table 12, row 2). The procedure is repeated for the internal amplifier factors (IAF — Fig. 9, level 2; Table 12, row 4). Finally, the direct contribution (e.g., W*EAF1 — Table 12, row 3) of the individual factors (e.g., EAF1) to the criticality of the environmental aspects (Criticality Index — CI) is calculated. This is obtained by multiplying the weighting of the single factor with respect to the group of factors (e.g., WEAF1) by the weighting of the group of factors with respect to the criticality (e.g., WEAF). Unitary sum weightings were chosen in order to obtain a final points score for criticality in line with the scale used for the assessment of each impact factor (e.g., between 1 and 4). The weightings can be calculated in various ways, from pair-wise comparison (Saaty, 1980) to assess the relative importance between criteria, to direct determination of the weightings by management. Table 13 shows an example trend of the values for the first level weightings in function of the evolution of the company environmental management (Hunt & Auster, 1990). The first column represents the increasing weight attributed to environmental impact with a more active effort in environmental

MANAGEMENT

IC

1st level

EAF

EI

IAF

2nd level

EAF1

EAF2

EAF3

ENVIRONMENTAL EXPERTS, HS&E and PRODUCTION MANAGERS

EI

IAF1

IAF2

IAF3

Process / Impact Matrix

Fig. 9. Hierarchy to determine weightings and actors involved in the estimates.

Table 12. Local (bold) and absolute (italic) weightings of assessment criteria. WEAF

0.4

WEI

0.3

WIAF

0.3

WEAF1 W*EAF1

0.324 0.130

WEAF2 W*EAF2

0.075 0.030

WEAF3 W*EAF3

0.601 0.240

WIAF1 W*IAF1

0.533 0.160

WIAF2 W*IAF2

0.467 0.140

WIAF3 W*IAF3

0 0

528



Table 13. Criteria weightings with respect to the evolution of company environmental management. Evolution of Environmental Management

WEI

WIAF

WEAF

Passive strategy Protective strategy Unplanned management strategy Preventive strategy Pro-active strategy

0.1 ÷ 0.2 0.2 ÷ 0.3 0.2 ÷ 0.3 0.3 ÷ 0.4 0.4 ÷ 0.6

0.6 ÷ 0.7 0.5 ÷ 0.6 0.4 ÷ 0.5 0.3 ÷ 0.4 0.2 ÷ 0.3

0.2 ÷ 0.3 0.3 ÷ 0.4 0.3 ÷ 0.4 0.4 ÷ 0.5 0.2 ÷ 0.3

Table 14. Criticality index (CI) matrix. Impact Categories Input Company Processes

Output

Input Materials

Energy

Waste

Liquid Emissions

Air Emissions

Sand casting

0.70

1.41

2.11

0.89

1.08

Sand core moulding

1.30

1.41

2.11

0.89

1.86

Shell casting

1.48

2.05

2.87

1.37

1.86

Shell core moulding

1.18

2.05

2.87

1.37

1.56

Quality control

0.86

1.29

2.27

1.05

1.24

Maintenance

0.84

0.09

0.62

0.73

1.53

General services

0.24

0.53

1.05

0.73

0.92

Production

management. In the company case considered, the relative importance assigned to the various criteria categories (Table 12, row 1) highlights management’s greater sensitivity to external factors (0.4) and, in particular, to the level of social acceptability (which contributes 60.1 per cent to the importance of EAF, generating 24 per cent of the CI for the environmental factor). These judgements are in line with the company’s objectives following the introduction of an environmental management system which is essentially centred on improving the company image and its relations with customers.



529

Once management’s importance weightings have been obtained, these are integrated with the estimates by environmental experts, HS & E and production managers. Thus the process/impact matrix for the environmental impact is multiplied, as is the corresponding weighting WEI (= W*EI), obtaining the criticality quota of the factor determined exclusively by its environmental impact. The same thing is done for the individual amplifier factors, multiplying the corresponding matrix by the weight W*. The sum of the resulting matrices gives the overall judgement of the criticality of each factor. These are shown in the matrix of the CIs (Table 14). The individual contributions of the environmental impact, the external amplification and the internal amplification are also given in Table 15.

Table 15. Points score for environmental impact (EI), external (EAF) and internal (IAF) amplification. Impact Categories Input Company Processes

Input Materials Sand casting Sand core moulding Shell casting

Production

Shell core moulding Quality control Maintenance

General services Legend:

1.00 0.53 0.60 3.00 0.53 0.60 2.00 2.13 0.60 1.00 2.13 0.60 1.00 1.07 0.60 2.00 0.00 0.60 0.00 0.00 0.60

Environmental impact judgement Internal amplification judgement External amplification judgement

Output

Energy

Waste

2.00 2.40 0.23 2.00 2.40 0.23 3.00 3.53 0.23 3.00 3.53 0.23 2.00 2.00 0.23 0.00 0.00 0.23 1.00 0.47 0.23

4.00 1.00 1.53 4.00 1.00 1.53 4.00 3.53 1.53 4.00 3.53 1.53 4.00 1.53 1.53 0.00 0.47 1.20 1.00 0.47 1.53

Liquid Emissions

Air Emissions

2.00 0.53 0.32 2.00 0.53 0.32 2.00 2.13 0.32 2.00 2.13 0.32 2.00 1.07 0.32 2.00 0.00 0.32 2.00 0.00 0.32

1.00 1.00 1.20 2.00 1.00 2.41 2.00 2.60 1.20 1.00 2.60 1.20 1.00 1.53 1.20 1.00 0.47 2.73 1.00 0.47 1.20

530


For example, waste in shell-core moulding has a total CI of 2.87, the sum of 1.20 (= 0.3 × 4.00; that corresponds to the 41.8 per cent of CI) for environmental impact, 0.61 (= 0.4 × 1.53; 21.3 per cent) for external amplifier factors and 1.06 (= 0.3 × 3.53; 36.9 per cent) for internal amplification.


Impact ranking The significance of the environmental aspects of the site is given by the criticality index (CI): the higher the points score, the more critical the factor and the greater the importance of the associated measure (Table 16). To identify significant environmental aspects, an assessment scale that associates a judgement and a possible improvement measure to a given CI is proposed. To determine the group of impact factors to be considered in the drafting of an environmental policy, reference is made to the assessment scale given in Table 16. The environmental improvement programme — i.e. where to intervene, with what aims and with what level of resources — will be a management decision. The ranking of the impacts can be shown in a target plot graph (Fig. 10). Within each circular sector of the graph, the criticality judgements associated to the different processes at the site are shown. This gives a simple and immediate view for a qualitative assessment of the overall impact of the foundry in question: — the points are mainly concentrated on the internal circumferences, meaning that the overall environmental criticality of the site is modest; — the processes which are most responsible for the environmental criticality are shell-core moulding and casting (in particular in energy consumption and waste production). With comparisons over time, the target plot can also be used to assess improvements in the site’s environmental performance. Comparisons with target values will show the extent to which objectives have been realised.

Table 16. Assessment scale of environmental impacts. Criticality Index (CI)

Assessment

0÷1 1÷2 2÷3 3÷4

Negligible Not critical — monitor Critical — measures in the short term Extremely critical — immediate measures


II 3

I

1

4

1 2

5

3 4 5

III 1

2

2 3 4


5

5

4 3 2 1

1 IV 2 3

VII

4

5 4

5 3

2 1

5

4 3

2

1

V

531

I - Sand casting II - Sand core moulding III - Shell casting IV - Shell core moulding V - Quality control VI - Maintenence VII - General services 1 - Materials 2 - Energy 3 - Waste 4 - Liquid emissions 5 - Air emissions

VI Fig. 10. Target plot for the aluminium alloy foundry.

Conclusions The application of the methodology at the aluminium foundry highlighted the strengths and effectiveness of the proposed framework and tools. In the case, the IER traced the main processes and flow at the production site, identified significant environmental aspects and defined priorities for measures. For the given size of the company, the overall commitment in terms of time and resources to complete the initial study was comparable with that required for similar contexts, but the amount and the quality of information generated was superior. The major-proved advantage of the methodology concerns the assessment phase: the use of a broader set of indicators, than merely the environmental impact index, and the overall elicitation process, results in more coherence between company objectives, assessment criteria and IER results. Indeed, the use of assessment criteria linked to other company objectives — production cost reduction, technological innovation, marketing strategy and better relation with local community — proved to be of help in explaining, understanding and rationalising company strategy, highlighting the strategic role of environmental management (integration). Moreover, the information provided by the IER using the proposed methodology is not limited to the identification of potential environmental aspects and the selection of the most significant, but also provides a production site model which can be easily updated and used for verification and monitoring within the EMS.

532


Finally, in the case of the aluminium foundry the systematic and transparent IER model improved the audit process undertaken by the third-part certification body, thus supporting ISO 14001 certification process of the site.


References BS7750 (1992) Specification for Environmental Management Systems. London: British Standards Institute BUWAL (1996) Oekobilanzen von Packstoffen, Schriftenreihe Umwelt 250, Switzerland Clarke, R.A., Stavins, R.N., Greeno, J.L., Bavaria, J.L., Cairncross, F., Esty, D.C., Smart, B., Piet, J., Wells, R.P., Gray, R., Fischer, K. & Schot, J. (1994) The challenge of going green. Harvard Business Review, July–August EPA (US Environmental Protection Agency) (1997) Environmentally Preferable Purchasing Program, Update #.1, EPA 742-F-96-002, Pollution Prevention and Toxic, Washington, DC EPA (US Environmental Protection Agency) (1998a) Background Document for Proposed Comprehensive Procurement Guideline III and Draft Recovered Materials Advisory Notice III, EPA 530-R-98-003, Solid Waste and Emergency Response, Washington, DC EPA (US Environmental Protection Agency) (1998b) Environmentally Preferable Purchasing Program — Quick Reference Fact Sheet, EPA 742-F-98-001, Pollution Prevention and Toxic, Washington, DC ETH (1994) Energy version 2 — Ökoinventare von Energiesysteme, Bern, Switzerland EAA (1996) Ecological Profile Report for the European Aluminium Industry, European Aluminium Association Federal Register (1998) Executive Order 13101 — Greening the Government Through Waste Prevention, Recycling and Federal Acquisition, 63(179) GUCE (1993) Regolamento (CEE) n.1836/93 del Consiglio del 29 Giugno 1993, Gazzetta Ufficiale delle Comunità Europee, N.168 Hunt, C.B. & Auster, E.R. (1990) Proactive environmental management: Avoiding the toxic trap. Sloan Management Review, Winter, 7–18 ISO 14001 (1996) Environmental Management systems — Specification with Guidance for Use, ISO/TC 207/SC ISO 14004 (1996) Environmental Management Systems — General Guidelines on Principles, Systems and Supporting Techniques, ISO/TC 207/SC Klassen, R.D. & McLaughlin, C.P. (1996) The impact of environmental management on firm performance. Management Science, 42(8), 1199–1214 Lawrence, L., Andrews, D. & France, C. (1998) Alignment and deployment of environmental strategy through Total Quality Management. The TQM Magazine, 10(4), 238–245 Muller, K. & Koechlin, D. (1992) Green Business Opportunities — The Profit Potential. London: Pitman Publishing



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Nicodemi, W. & Zoja, R. (1981) Processi ed impianti siderurgici. Italy: Masson Editori Porter, M. & Van der Linde, C. (1995) Green and Competitive: Ending the stalemate. Harvard Business Review, September–October, 120–134 Rothery, B. (1995) ISO 14000 and ISO 9000. Aldershot (UK): GOWER Saaty, T.L. (1980) The Analytic Hierarchy Process. New York: McGraw-Hill Schmidheiny, S. (1992) Changing Course: A Global Business Perspective on Development and the Environment. Cambridge: MIT Press Shrivastava, P. (1995) The role of corporations in achieving ecological sustainability. Academy of Management Review, 20(4), 936–960 SIC (Standard Industrial Codes) (1972) Numerical table of SIC codes, USA Van Berkel, R., Willems, E. & Lafleur, M. (1997) Development of an industrial ecology toolbox for the introduction of industrial ecology in enterprises — I, J. Cleaner Production, 5(1–2), 11–25 Vigon, B.W., Tolle, D.A., Cornary, W., Latham, H.C., Harrison C.L., Boguski, T.L., Hunt, R.G. & Sellers, J.D. (1993) Life Cycle Assessment: Inventory Guidelines and Principles. EPA Report Number EPA/600/R–92/254, Risk Reduction Engineering Laboratory, Cincinnati Walley, N. & Whitehead, B. (1994) It’s not easy being green, Harvard Business Review, May–June, 46–52 Yoshiki-Gravelsins, K.S., Toguri, J.M. & Choo, R.T.C. (1993a) Metals production, energy and the environment — Part I: Energy consumption. JOM, May, 15–20 Yoshiki-Gravelsins, K.S., Toguri, J.M. & Choo, R.T.C. (1993b) Metals production, energy and the environment — Part II: Environmental impact. JOM, 23–29

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