Learn before making a costly mistake for your company.

 

With most annual business meetings over, it is time to take stock and read the tea leaves on sustainability. The challenges and changes are creating opportunity if you look beyond the compliance requirements.

Sustainability  An ever increasing number of companies issued sustainability reports this year. Most are standalone but some companies are including sustainability as part of their annual financial report. Addressing sustainability is seen as a basic business concern for most businesses but the leaders see it as a strategic advantage they can capitalize on.

Climate Change No new news that we don’t already know. CO2 levels are at historic levels and increasing (International Energy Agency, May 30, 2011 report) as levels of interest in concrete action stagnate. In the meantime, energy costs have slowed their rapid increase but still make energy efficiency an imperative for any business. Carbon will be an important metric and for those who will hit the wall on efficiency, renewables will be next focus area.

Regulatory Change Constant change in environmental regulations will be the norm prompting many of the impacts businesses are dealing with in regional markets, customers and their supply chain.   The changes to the RoHS Directive were finally approved last week; publication in the Official Journal will set the schedule in play.   The WEEE Directive is going back to Parliament this summer with a broadly expanded scope of covered products. REACH is restricting 15 substance which are commonly used in products today. 22 new substances are being considered for the Candidate list. Also note, the swift action this month the Commission took against Belgium for failure to enforce REACH.   REACH and the Packaging Directives will be coming up for revision. Is your company ready for these changes?

News you can use.

Weak Link You have heard the saying, “only as strong as your weakest link”. The multiple disasters in Japan underscore the truth of this old saw. The restriction of chemicals under REACH in the EU has smart companies quietly assessing their supply chains. They aren’t asking question to get a “feel good “answer, they want to know if your business has grasped the enormity of the changes ahead and if a simple call can get a straight answer. 

Do you have a program to manage the impacts of environmental requirements on your business or products? Is that information available through your web site or customer service? An important customer is quietly determining if you are a liability or an asset in their supply chain.

Conflict Minerals The SEC has quietly delayed finalization of the Conflict Minerals Reporting requirements for publicly reporting companies and, by extension, all their suppliers. The regulation is required by Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Itwas due out by April 15 and now is scheduled for this Fall. Additional time may be justified because of the complexity of the requirement, so use the time to prepare.

Compliance is expected   In our last News Note, we mentioned the multimillion $$$ compliance fines that some big box companies paid on the West Coast. In Massachusetts, a convenience store and power company paid ~$35K for asbestos violations and failing to get an air permit respectively.   Enforcement is on the rise, so don’t forget the basics.

Earth Day Hard to believe, but Earth Day (April 22) is 41 years old. Also hard to believe that a year ago we were watching the catastrophic oil blow out in the Gulf and a month ago the devastation of an earthquake and tsunami that continues to impact our high tech businesses, human health and the environment through collateral damage.   Too often we miss the collateral impacts until too late.

With oil at $108 per barrel can you take credit for putting in place energy efficiency and carbon management programs?

 

Last week we celebrated St Patrick’s Day – a significant holiday here in the Boston area. The Luck of the Irish is an old saying that reminded me that sometimes luck runs out as the world witnessed with the natural and anthropogenic disasters in Northern Japan.

Worse case With the events that transpired last week in Japan, it is hard to imagine planning for such an occurrence of events. While not as devastating, look at what the Icelandic volcano did to air traffic last April. Having the right information about your products or your processes can help you protect your employees and your business. Having robust information will help you manage your sustainability and conformance requirements. Sound silly? You will need to know specific suppliers to meet your Conflict Mineral reporting obligations - that same information can quickly help you assess a supply chain disruption. Sustainability is holistic management. 

A WEEE way to go The EU Council voted on a modified language for the WEEE Directive revision. Since their revision is different from the text passed by Parliament, the modified requirements will have to be agreed to by Parliament in 2^nd reading. For planning purposes, this will push WEEE recast out a minimum of six months and extend new compliance dates into 2013 and later.

Carbon and your Supply Chain   British Telecom and Sprint are joining the ranks of Walmart and the US General Services Administration. Supplier carbon emissions/foot print will be a decisive requirement in purchasing decisions. BT just announced that they will require suppliers to measure, report and reduce their carbon foot prints.

HGC News Note 030111

News you can use

Reading the writing on the wall – you just need to look up.

Walmart’s Other Shoe       Suppliers were informed three years ago – eliminate PBDEs.  Polybrominated diphenyls are a group of brominated flame retardants that are restricted by the EU RoHS Directive.  Walmart is applying their ban to all products (not just electronics) they buy for resale and begin actual testing June 1^st.

CLP      Classification, Labeling and Packaging is another EU regulation that will have impact on the hazardous chemicals that may be important to your business.  Have you addressed the changes that went in to effect January 1^st?

Restricted SVHS      In our last HGC News Note we reported that seven Substances of Very High Concern have been formally restricted.  The use of these SVHC sunsets in 2015.  Authorization request must be made in 2013.  Please note that the dates are each substance specific within those years.

 

HGC News Note 021811

Breaking News

EU Chemical Ban     The European Commission officially announced the first six substances of very high concern that will be banned.  These include commonly used plasticizers, a fire retardant and an epoxy hardener.  This announcement is part of the ongoing REACH implementation to eliminate substances of very high concern and replace them with safer alternatives.  Has your business plan anticipated the impact on your products?

 

HGC News Note 021611 

News you can use in your business.

Green and Sustainable       You should find the results of recent surveys of Fortune 500 and Fortune 1000 companies instructive.  The findings underscore the increasing role of environmental responsibility for these companies.  For many, the environment is now Board level concern.  Board response ranges  significantly from basic concern about the company’s public image to financial impact on the bottom line.   Many companies will be increasing their sustainability efforts this year; some are reacting by doing the minimum to manage risks, others see strategic advantage driven by environmental factors. 

While the leading companies see the potential market advantages, there are still many firms that are hoping the turmoil in congress will protect them.  You should remember what part of your anatomy is exposed when your head is buried in the sand.  Reactive adopters may not reap the benefits they could but at least they are not dead in the water. 

Whistleblower Protection       Publicly traded companies have a range of new obligations to meet under the Dodd Frank Wall Street Reform Act.  We have written about Conflict Minerals Reporting which will be an important public disclosure.  What you may not be paying attention to are the enhanced protections and rewards for whistleblowers.   Providing information directly to the SEC on misleading disclosures will be financially lucrative to a whistleblower, potentially many times their current pay.  Sections 748, 922 and 923 of the law go into more detail but also remember Sarbanes Oxley. 

Whether it is reporting on the source of some common materials in your products/processes or the materiality of climate change to your business, have defendable information for your investors.

 

HGC News Note 020711

News You Can Use

WEEE Revision Clears Parliament     With a very wide majority (580 to 37 with 22 abstentions, Feb 3^rd) the Waste Electronics and Electrical Equipment Recast passed in the EU Parliament and heads to the Council for final action.  The original WEEE Directive will be fully replaced by the new Directive.  The message on electrical waste is clear: recover more, stop illegal exports and make all the involved parties accountable.  The new Directive will be in effect in 2012.  Some keys points:

• With few exceptions (defense electronics, vehicles which are already covered, and solar photovoltaic panels which has an industry agreed recovery program) all ewaste is included and the collection rate will grow to 85%.
• A standard, single producer registration for the EU will save money and improve tracking of ewaste, compliance and reporting.
• Ecodesign requirements for recycling, recovery and reuse ease.
• Consumer responsibility to return ewaste for recycling.
• Recycling as an important element of resource conservation and sustainability.
• WEEE stands alone from the also freshly revised RoHS Directive (Restriction of Hazardous Substances).

 

HGC New Note 013111

 

News You Can Use

Blood Minerals    Does the title get your attention?  This is the EU equivalent (maybe) of our Conflict Minerals.  The European approach will include both transparency and a strategic approach to management of materials critical for high tech products. For the moment, the US is leading with requirements for disclosure of Conflict Minerals which as currently proposed include any amount of gold, tin, tantalum and tungsten in your product or process.  This will require web accessible public reporting for most companies selling electronic products.

If you have not commented, the comment period has been extended 30 days.  If you don’t comment, don’t complain when you find that you can’t claim to be “Conflict Free” but your competitor can.  Contact us if you need more information.

 

Product Claims    We have previously mentioned that the Federal Trade Commission is finalizing guidance on environmental claims.  Take heed that requirements already exist, especially for microbial and biocide claims.  EPA fined Crocs Inc $230,000 for unsubstantiated and unregistered antimicrobial claims related to some of its shoes.  EPA also ordered a hospital services company to stop using a registered product in a way that was not covered by the existing registration.

If you sell in the EU, you need to pay attention to changes resulting from the steady implementation of REACH and related cleaning product regulations.

ECHA Update    The European Chemicals Agency corrected the count on Classification, Labeling and Packaging (CLP) notifications.  The 3.1 million Classification and Labelling notifications received by ECHA cover a total of 107,067 substances, not 24,529 as they had published on 4 January.  There is no threshold on the volume shipped in the EU market.  Are you and your supply chain all set?  CLP is also an important step in the implementation of the GHS (the Global Harmonization System) for the shipment of chemicals.

The EU is developing a comprehensive inventory of chemical producers, users and uses of chemicals in the EU.  Web accessible information on the database will be on the ECHA web site later this year.

 

HGC News Note 010610

First and foremost – Best Wishes for 2011.   This year will be eventful as we transition into a number of environmental requirements that will be core business issues.  It will also be a pivotal year as the US wrestles with major environmental issues which have significant economic impact.

Energy     You can’t deny the rise in energy costs;  you see it at the gas pump.  This is at a time when the economy is just showing signs of improvement.  With oil at $90+ a barrel energy efficiency is key.  Efficiency will help if we reduce energy use overall.  Many companies will not change until a purchasing specification requires a Greenhouse Gas value or efficiency number for the product or service.  This will be problematic if required information is not readily available.  If you are looking at efficiency holistically, you will be prepared and will be saving money at the same time.  When the US Department of Defense reports the strategic importance of energy independence, you should be paying attention.

Chemicals      RoHS, REACH, TSCA, and CLP are acronyms that involve the management of chemicals in production and especially in products.  More information is being required and more will be publicly available with some of that chemical information coming from you.  Understanding what thresholds apply is critical.  US SEC reporting for tin, gold, tantalum and tungsten has no threshold.  If these metals are in your product, you must report.  The same is true in the EU for the Classification, Labeling and Packaging notification requirement for hazardous substances which closed on January 3^rd.  Were you among the  3.1 million notifications covering 24,000+ chemicals and mixtures placed on the European market?

Product Claims      Because of misleading and sometimes illegal product claims, the Federal Trade Commission and EPA are taking action.  FTC is in the last stages of new guidelines.  EPA has imposed $$ millions in fines against companies claiming biocidal properties of materials or products that are not registered with EPA.

If you missed my point, the energy that your business uses (including the energy used to make and sell your product), the chemicals important to your business or  in your products,  and the claims you make all require a new level of due diligence.  If you have not already done so, resolve this year to put in place programs that are defensible.

 

END 2010 Begin 2011

HGC News 122810

New Year Resolutions

CLP     The classification and labelling inventory is a database established and maintained by ECHA, which will contain basic classification and labelling information on notified and registered substances. It will also contain the list of harmonised classifications (Annex VI).

Manufacturers and importers are obliged to notify the classification and labelling information for their substances, which are placed on the market and are within the scope of CLP i.e. classified as hazardous, either on their own or in a hazardous mixture, regardless of tonnage,. In addition, substances subject to REACH must also be notified. If the classification and labelling information has already been sent to ECHA as part of a full registration in accordance with REACH, it does not need to be notified again.

For substances which are on the market on 1^st December 2010 the first deadline for notification is the 3^rd January 2011. You can of course submit your notification now, well before the first deadline.

EU Chemical Ban   The European Commission officially announced the first six substances of very high concern that will be banned. These include commonly used plasticizers, a fire retardant and an epoxy hardener. This announcement is part of the ongoing REACH implementation to eliminate substances of very high concern and replace them with safer alternatives. Has your business plan anticipated the impact on your products?

 

Green and Sustainable    You should find the results of recent surveys of Fortune 500 and Fortune 1000 companies instructive. The findings underscore the increasing role of environmental responsibility for these companies. For many, the environment is now Board level concern. Board response ranges significantly from basic concern about the company’s public image to financial impact on the bottom line.   Many companies will be increasing their sustainability efforts this year; some are reacting by doing the minimum to manage risks, others see strategic advantage driven by environmental factors. 

While the leading companies see the potential market advantages, there are still many firms that are hoping the turmoil in congress will protect them. You should remember what part of your anatomy is exposed when your head is buried in the sand.  Reactive adopters may not reap the benefits they could but at least they are not dead in the water. 

Whistleblower Protection    Publicly traded companies have a range of new obligations to meet under the Dodd Frank Wall Street Reform Act. We have written about Conflict Minerals Reporting which will be an important public disclosure. What you may not be paying attention to are the enhanced protections and rewards for whistleblowers.   Providing information directly to the SEC on misleading disclosures will be financially lucrative to a whistleblower, potentially many times their current pay. Sections 748, 922 and 923 of the law go into more detail but also remember Sarbanes Oxley. 

Whether it is reporting on the source of some common materials in your products/processes or the materiality of climate change to your business, have defendable information for your investors.

 

HGC News Note 121510

With 2010 coming to a close, here’s wishing you a Festive Holiday Season and the best for the New Year. 2011 promises to be a busy year as product environmental requirements expand into daily business.

Climate Change may be the last thing you want to deal with but the outcome of the international negotiations in Cancun has show grudging progress. Add $80 a barrel oil and you should have energy efficiency and carbon as part of your business plan. When energy is cheap and unaccounted for, you can gloss over shortcomings in your product or process. 

Restricted materials are just dawning. You might be able to hit the snooze alarm on RoHS substances, but there are enough other changes in the RoHS Recast to impact your products. What would it cost if you had to recall a non-compliant product? What if your customers use RoHS and REACH as their green standard? Are you playing Russian roulette with each new batch of REACH restricted materials? For the dwindling number of products exempt from RoHS, the supply chain will become a barren (or very expensive) place if you are not able to qualify RoHS compliant parts.

Just today the European Chemicals Agency has officially published the eight additional SVHCs (actually more, because some related compounds are included) that we had notified you about earlier. Your information obligations begin today for Cobalt(II) sulphate, Cobalt(II) dinitrate, Cobalt (II) carbonate, Cobalt(II) diacetate, 2-Methoxyethanol, 2-Ethoxyethanol, Chromium trioxide, Acids generated from chromium trioxide and their oligomers, and the Group containing: Chromic acid, Dichromic acid, Oligomers of chromic acid and dichromic acid.

Innovation can be a double edged sword when you ignore the cumulative impact of overlapping requirements. You create a performance advantage for your product through the clever blending of diverse technologies but you also bring along the restrictions that apply to those technologies. Have you factored in the additional costs or business impacts?   Worse is when your technology makes your product distinct, but it still has restrictions because it falls within a traditional product category.

 

 

 

 

HGC News Note 060606

“Leave Your Carbon Footprint At Home” was the heading of an article in the travel section of a recent Sunday newspaper. The spill in the Gulf is six weeks old and barely controlled. Are you sensing the approaching perfect storm in environmental regulations?

Are you too small to be concerned? 

When it comes to environmental requirements most small companies see these as something to be avoided and have failed to recognize the strategic value these requirements can provide. If you are below the radar screen and have no competition that might be one approach. Companies who recognize that staying in the pack provides some protection are doing the minimum to avoid trouble. They know that the customer (or rather the loss of one) is a bigger threat to their business than the regulatory agencies. The leaders have crafted strategies that are not reactive and are quietly changing the marketplace.

Please, contact me if you need additional information on any of these news items

HGC News Note 052510

 

What are your customers or competition doing on the environmental front?

 

Supply chain information    While Walmart was not the first corporation to require suppliers to provide environmental information, it is probably the most noteworthy. Walmart recently reported five years of progress including progress on its goal of removing 20 million metric tons of greenhouse gases from the supply chain. Ford and Ikea are doing the same. Ford has contacted suppliers who represent a third of its annual $65 billion supply chain spending. Ikea has shown that based on sales there is a reduction but not in absolute emissions. Where can this information be found? In these companies’ annual sustainability reports.

Key electronics firms support RoHS revisions. What do they know that you don’t? When Companies like Sony Erickson, HP, Dell and Acer support the rigorous changes proposed for the revision of the Restriction of Hazardous Substances Directive, you should be planning accordingly.

HGC News Note 05-07-10

A few news items that should be in your thoughts as you plan and conduct your business. 

Resource scarcity is on the minds of DoD as reflected in their Strategic Materials Security Plan. You may recall that the EU has been doing the same especially with the steep ramp up in some metal and rare earth prices. You may also remember that the DoD announced plans to reduce their “boot print”. A $10 a barrel increase in the price of oil adds about $1.2 billion in additional energy costs.  

A study on sustainability initiatives reports that regulations are a more important driver than competitive advantage. In addition to the impact of Greenhouse Gas reporting, the importance of Scope 3 reporting for their supply chain has increased when measured against the previous year’s report.

If you still dismiss sustainability as vague do gooder stuff, you should read the Harvard Business Review which listed environmental issues as the next business mega trend.

Walmart starts testing toys for Cadmium.

California is preparing its plan for declaring chemicals of concern and managing those chemicals in products or use under California’s Green Chemistry Initiative.

As this note goes to press (to server probably more current) the price of oil is at $77 per barrel). It only took Greece, a Gulf of Mexico well leak and a 1,000 point drop in the DOW to get the price down from $83. Energy costs and the environmental issues associated are important business considerations.

Preparedness is another consideration. Some areas in Massachusetts and Kentucky had unprecedented flooding. Two million people in the Greater Boston Area had a boil water order when a relatively new coupling blew out on a 10 foot diameter water supply pipe. Water supply was maintained and potable water returned to service in a few days. For either event, would you be prepared?

The RoHS and WEEE Recast (review) is looking at some very significant changes that will have a major impact on product design and end of life cost management. Use of the CE Mark and expansion to all electronic equipment is under consideration. Deliberations will continue this Spring.

Sony’s aggressive targets for energy, materials and Co2 reductions may be an indication of what to expect in the market place. Sony plans to have a zero environmental footprint by 2050. 2050 may not be your concern, but milestones in 2015 could be.

Today the European Chemicals Agency listed Acrylamide as a REACH SVHC . This listing is off schedule as it had originally been planned for January but was delayed because of pending legal action. See the January 31 HGC News Note.

Acrylamide is a carcinogen and mutagen used in wastewater treatment, paper processing and engineering grouts, among uses. Your information obligations are in effect today.

HGC News Note 011310

Green was mainstream at this year’s CES, considered integral to the product and an expected criteria. Because environmental considerations and energy efficiency are becoming widely adopted, manufacturers are actually saving money through design and innovation.   Many of the greenest products are also top of the line with best profit margins.  Some key learning from CES are energy efficiency, reduction of toxic chemicals, and managing product end of life.   These should be part of your design considerations.

The EPA Administrator announced “seven key themes” to focus the Agency’s work for 2010. Two of these themes will impact you. The first is Global Climate and Greenhouse Gas reduction, the second is safer chemicals. You may have been able to ignore European requirements but you won’t be able to ignore the EPA.

Effective today, January 13, 2010, the European Chemicals Agency formally added 14 of the proposed 15 Substances of Very High Concern. Your information obligation for the new additions commences immediately. Acrylamide has not been added today pending an order by the General Court of the European Union to terminate an interim relief order. For your sales in the EU you or your importer needs to be prepared to inform your downstream users or answer requests for SVHC declarations.   For more information contact Stephen Greene.

Most small businesses have not addressed the basic information requirements for conformance with generally accepted product stewardship and sustainability standards.  While these businesses have avoided the effort and potential expense of gathering and managing these requirements, they need to understand the business implications of restricted markets or the inability to address their customer’s requirements in a timely manner.

 

If the European market is important to your business, have you factored in new eco design criteria in your CE Marking requirements. At present this applies to external power supplies and some energy using products.

EPA is concurring with the voluntary production ban of Deca brominated fire retardant.