102 11.5.4 Relevant ECAP Projects
Case 2: ECOINNO2SME
2) The individual companies that make up the sector have low impact, but the overall impact of the sector is high because:
15.6 What is the potential for reductions in environmental impact?
15.6.1 Overview of findings in the report
The report concludes that up to 24% of SMEs actively engage in actions reducing their environmental impact; 0.4% of SMEs use a certified Environmental Management System.
The potential for reductions in environmental impact is estimated using a measure of “eco-efficiency”
and “eco-potential” in the report.
Eco-efficiency is calculated by dividing the environmental impact of a sector by the value added at factor cost. Thus, a sector which uses large amounts of energy to earn one Euro has low eco-efficiency. A scale of 1-4 is assigned, where 1 is the highest eco-efficiency.
Eco-potential is defined as the range between the maximum and minimum eco-efficiencies within a sector. A scale of 0-4 is assigned, where 4 is the highest eco-potential.
The eco-potential is used to determine which sectors have high potential for reductions in environmental impact. The key assumption is that companies within a sector operate in the same line of work, and therefore they should be able to achieve similar efficiencies. Thus, a high eco-potential (large variation in eco-efficiency) within a sector indicates that the worst-performing companies could reduce their environmental impact to match the better-performing companies.
According to these assumptions:
Most sectors appear to have potential for reductions in environmental impact (the average potential across all sectors for all indicators is 3.475, with a range of 2.5 to 4)
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o 100% of sectors have a rating of 4 (maximum potential) for at least one indicator o The following sectors have a rating of 4 (maximum potential) for all indicators: Other
mining & quarrying; Manufacturing of textiles; Tanning & dressing of leather; air transport.
Sectors with low eco-potential (small variations in eco-efficiency) may also be interesting to target, because the challenges faced by all companies may be similar. Any improvements in environmental performance might be applicable to the whole sector.
o Sectors with the lowest overall eco-potential were: Manufacture of non-metallic mineral products (2.5); land transport (2.75); Computer and related activities (2.63);
Other business activities (2.88).
Some of the most energy-intensive sectors also show the smallest eco-potentials. This is an intuitive result, because sectors with high energy use have an incentive to reduce energy costs through efficiency improvements. These include:
o Energy production;
o Basic metals; and o Land transport.
Taking advantage of eco-potential may require changes in technology, organisation, infrastructure, competencies or frameworks; further evaluation is outside the scope of the study. Clearly, investigating the reason for this variation is an important next step.
The database does not provide explanations for the variations – again, this is an important area for further research.
15.6.2 Recommendations for improvements
The report provides a simple rating method that is used to identify areas according to their eco-efficiency and eco-potential. It serves as a useful tool to test where reductions in environmental impact might be made based on relative performance within different areas. The key advantage is that no additional data on the systems, processes or machinery is needed to perform this analysis.
This approach is limited for the same reasons – there is no data on the processes in each sector, and therefore no recommendations can be made for practical solutions.
Table 35 shows the eco-efficiency and eco-potential for each of the environmental indicators, and allows the reader to compare the two values. In its current form, the reader‟s eyes must jump from one cell to another cell some distance away in order to make the comparison. This becomes very difficult and complex, particularly towards the bottom of the table which is a long way from the headings. It would be more useful to have the two numbers side-by side, so that comparisons could be made directly.
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Figure 15.7 Suggested changes to Table 35 of the report
Alternatively, a graph layout could be more useful. One interpretation is shown in Figure 15.8, where a separate figure would be produced for each environmental indicator. A data point is given for each NACE sector. Note that the number of data points could be reduced to show only the sectors of most interest.
Figure 15.8 Eco-efficiency vs. eco-potential, single indicator
Note: example data
If readers wish to look at all environmental impacts, then they can look at the total number which is provided on the right-hand side of Table 35. It would be useful to have separate overall numbers for eco-efficiency and eco-potential.
The ef f iciency and potential f or each indicator should be side-by-side to aid comparisons
Separate totals f or ef f iciency and potential would be usef ul
Low eco-efficiency
High eco-potential AA11
BB22
XX99
CC33
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outside the scope of the study. Further investigation should be carried out in this area.Evaluate how environmental reductions might be achieved in low eco-potential sectors
Sectors with low eco-potential may also have scope to reduce their environmental impact. Similar environmental performance suggests any improvements could be applied across the whole sector. The means of achieving this were outside the scope of the study. Further investigation should be carried out in this area.
Display of results:
(e.g. Table 35 in the report)
This table should be modified to make it easier to compare the eco-efficiency and eco-potential for each indicator. Suggested ways of doing this are:
1. Change the order of the columns so that the two numbers for each indicator are side-by-side;
2. Present data in a graph format.
A total should be provided for eco-efficiency and eco-potential, rather than just a total overall score for both indicators.