Eco-innovation for better business

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Are environmental labelling and information schemes driving eco-innovation - and better business?

Environmental labelling and management schemes first appeared in the 1970s and many corporations now see green labelling as a key part of marketing strategy. But are environmental labelling and information schemes driving eco-innovation - and better business?

SMEs leading eco-innovation

Research shows that eco-innovative companies of all sizes are growing, on average, at a rate of 15 per cent a year, at a time when their respective markets have remained flat. Small and medium-sized enterprises (SMEs) are particularly responsive to eco-innovation due to their adaptability and flexibility.

More than 99% of all European businesses are SMEs, providing two out of three of private sector jobs in the EU. Nine out of ten SMEs are actually micro enterprises with less than 10 employees. These micro enterprises are in fact the mainstays of Europe's economy - and clearly have a key role to play in transitioning to a resource efficient economy. What can eco-labelling do for them?

According to Victor Vázquez at the Andalusian Institute of Technology: "One of the most relevant benefits of environmental management schemes (EMS) is improved legal compliance and the capability of continuously monitoring compliance. In addition, some studies demonstrated that EMS support rationalization in the use of resources (such energy and raw materials) and, at the same time, reduction in CO2 emissions. Of course, the adoption of an EMS improves the image of a company and, consequently, its relations with customers and local communities. Companies that adopt an EMS also show increased employee motivation. All of these are factors affecting the competitiveness of SMEs."

Compliance and green public procurement

With environmental legislation set to increase in the coming years, compliance will be a recurring issue for many businesses. At European level, a legislative package for a ‘circular economy' was controversially withdrawn at the beginning of this year; however it is promised that a new, even more ambitious plan for enabling the circular economy and resource efficiency will be reintroduced later this year. Consultation begins this month with the European Commission launch of the roadmap for its revised Circular Economy Package.

In the meantime, green public procurement - a voluntary process whereby public authorities can include environmental criteria when tendering for goods, services and works - is providing opportunities to environmentally-credentialed companies.

Italian-based company, Mobilferro supplies furniture to schools in Europe, Central America and North Africa. In business for over 50 years and with 60 employees, Mobilferro's sustainability credentials include ISO 14001 compliance, Forest Stewardship Council certification and SA 8000 compliance. Mobilferro decided to apply for the EU Ecolabel in 2013 after assessing their clients' needs; the majority of their clients are from educational institutions participating in the EU's Green Public Procurement scheme.

Family business Gomà-Camps first started manufacturing paper in the mid-eighteenth century. Today this Catalan company produces 60,000 tons of paper and tissue products per year and has an annual turnover of EUR 170 million.

Half of Gomà-Camps products carry the EU Ecolabel; environmental manager Emma Mariné Ortiz explains why: "The key drivers are sales and marketing. The fact is that green procurement is becoming compulsory, not only in public service contracts but also in b2b (business to business) commercial agreements. This of course has a positive impact on the number of suppliers willing to obtain an official environmental accreditation such as the Ecolabel."

Support for business

Despite the potential business advantage, companies may shy away from going green due to upfront costs.

Laboratorio de Eco innovación opened last year in Barcelona to promote eco-innovation amongst Spanish companies. Jordi Oliver, Executive Director at Inèdit, the environmental consultancy managing the lab, said: "The main barrier companies face today while considering implementing eco-innovation measures is basically the long term return on investment of eco-innovation in comparison to other investment considerations. Nowadays private companies seek profitability in a time as short as six months. While an eco-innovation investment might have a fairly reasonable ROI, other priorities take the lead in the very large majority of decisions-taking processes in business."

However, there are a number of European public funding programmes available to support eco-innovation.

On 21 May at the 18th European Forum on Eco-innovation in Barcelona, Lana Žutelija from the European Commission's Directorate-General for Environment will present the funding opportunities for innovative business from European programmes such as Horizon 2020, LIFE+, COSME, ESIF, EFSI. (You can watch the event online - at http://live.ecoapforum.eu/18th-forum/live_en.html)

Guillermina Yanguas, Director-General at the Spanish Ministry of Agriculture is unequivocal on the value of environmental management schemes and labelling as drivers for eco-innovation: "Environmental management systems such as EMAS and Ecolabel are key tools for analyzing the life cycle of products, identifying new materials, reducing consumption and enabling closed production cycles by applying the principles of the circular economy.

"Reinvigorating the traditional sectors of our economy in terms of sustainability, processes and more efficient services, and identifying new business niches with eco-innovative and sustainable products are important strategies for the transition to a low carbon economy," concluded Yanguas.

On 20 and 21 May in Barcelona, the 18th European Forum on Eco-innovation will focus on the role of environmental labelling, management and information schemes. #EcoApForum @EU_ecoinno

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