CleanbusinessexperiencefromMalopolska, Poland –Helping SMEs improve their environmental performance as a contribution to sustainable development (EN) by Rafal Serafin,Polish Environmental Partnership Foundation , Poland

Abstract

Initiated in Malopolska in 1998, the Clean Business programme is a self-help scheme that helps SMEs improve their environmental performance as a means of improving their business performance. As of August 2006, 330 SMEs were actively involved in the programme. Member companies have access to a customized internet tool -- called Environment Manager -- which helps them assess and monitor their progress in improving their environmental performance. Clean Business companies are also encouraged to work together with one another and with community-based NGOs and local government on joint projects, which are in line with their own business objectives and with broader social, environmental and economic goals enshrined in the Malopolska Regional Development Plan. Clean Business demonstrates how “bottom-up” cross-sector partnerships involving business, local government and civil society can make important contributions to sustainable development by getting SMEs operating in Malopolska to treat environment as a business opportunity rather than as a bureacratic obstacle and additional cost to operations.

Article 174 of the Treaty provides for Community policy to be based on the “polluter pays” principle, i.e. the costs associated with protecting the environment should be internalised by firms just like other production costs. Public authorities must ensure that all companies, including SMEs, comply with environmental legislation in the most effective and efficient way. Meeting this obligation requires member states to focus on improving systems of compliance on the one hand, and on the other, finding ways of motivating companies to self-regulate and so increase their own environmental performance. As a new EU member, Poland must meet this challenge.

In Poland, public authorities have so far concentrated on harmonizing environmental policies, legislation and regulations with those of the EU. Strengthening environmental compliance has been primarily concerned with meeting EU obligations and drawing down EU funds for improving infrastructure. For the Polish Government the challenge has been seen as institutional or administrative, rather than economic. As a result, the challenge for Poland lies increasingly on finding ways of unlocking the potential of the business sector to play a more active role in environmental investment, reducing environmental impacts and creating a culture of compliance. Much of this effort can be achieved at the sub-national level -- at the level of regions or provinces, such as Malopolska.

To date, despite a growing private sector and increasing inward investment, there has been little encouragement from government for companies to increase their environmental performance as a basis for increasing their competitiveness. This is because environmental expenditure has still to be recognized as a significant contributor to economic growth, technological innovation and jobs.

With government-led efforts now losing momentum, engaging the private sector more directly in efforts of Poland to meet her environmental obligations should be considered as an important priority for both national and local government. How might this be done?

One answer can be found in the experience of the Clean Business programme (“Czysty Biznes” in Polish), initiated in Malopolska back in 1998, as a business-NGO partnership aimed at adding value to public sector efforts related to environmental improvement by making environment a business issue.

The Clean Business programme was designed as a self-help scheme that helps SMEs improve their environmental performance as a means of improving their business competitiveness. As of August 2006, 340 SMEs were actively involved in the programme, which provides advice, encouragement and opportunities to learn from the experience of others. Member companies have access to a customized internet tool -- called Environment Manager -- which helps them assess and monitor their progress in improving their environmental performance (

Initiated as a joint effort involving the Polish Environmental Partnership Foundation (PEPF), Groundwork UK and BP, Clean Business set out to find a way of encouraging Poland’s 2.3 million SMEs to make environmental action and community engagement part of their day-to-day business operations. The motivation and method was to demonstrate to companies how improving environmental performance and getting involved in the community helps in business development and does not necessarily mean additional costs and workload.

By teaming up with BP and Groundwork UK, the Foundation was able to draw on the resources, know-how and expertise of a large multinational highly committed to environmental action and a leading UK NGO experienced in mobilizing business and voluntary groups to work together on environmental improvement projects at the local or community level.

Clean Business provides important lessons on how to generate a culture of environmental compliance among SMEs and how to provide for the development of an environmental industry. Although developed in Poland, Clean Business has important implications for current efforts across Europe to engage SMEs more actively in reducing their environmental impact and in accelerating the development of an European environment industry that can compete successfully in global markets.

WHAT IS CLEAN BUSINESS?

Clean Business was designed as a self-help scheme to motivate SMEs to:

  1. improve their own environmental performance by achieving cost-savings and increasing their competitiveness through improvements in day-to-day business operations;
  2. undertake joint action with other companies to bring about environmental improvements in a specific geographic area, such as the surroundings of a factory or in communities, which are important for the company’s products or services;
  3. get involved with partners from the public and civil society sectors in longer term action for the environment and social revitalization of local communities.

Key benefits of the programme are in its emphasis on self-help rather than expensive consultancy (which SMEs can rarely afford), and by demonstrating that improvements can best be achieved through a company’s own employees. They can create a culture of good environmental practice in their day-to-day work that goes beyond the factory gate to benefit the wider community.

HOW CLEAN BUSINESS WORKS:

Companies join a Clean Business Club to access programme services, which provide advice, training and opportunities through an information center and a network of environmental advisors aimed at:

  • lowering production costs and increasing profits by improving management of waste, energy other resources;
  • reducing environmental impacts of business operations;
  • learning from the practical experience of other Clean Business companies.

In return for receiving advisory services, companies commit to improving their environmental performance based on an environmental review of operations carried out by Foundation specialists. On the basis of the review, the company is expected to introduce an environmental policy, undertake practical problem-solving in production processes and develop environmental management systems.

Each Clean Business Club operates in a specific geographic area and network member companies. Each Club has its own coordinator, whose task is to get the most out of Clean Business for member companies. As of August 2006, 16 Clean Business Clubs were in operation.with a membership of 330 companies. Two-thirds were in Malopolska.

By joining Clean Business, a company embarks on a journey from environmental awareness to environmental action through to environmental achievement (Fig 1).

Figure 1: The Clean Business Pyramid

A company joining Clean Business is helped on its journey through support customized to its needs and circumstances. This is achieved through advisory services, including environmental reviews and a help-line service, delivered to the company itself or indirectly through motivation provided by large companies, such as BP, which help set environmental performance standards (Fig. 2).

Figure 2: Responding to SME needs and circumstances

Companies are recruited to Clean Business through two avenues (Figure 3). Firstly, by providing companies with opportunities to interact with other companies in a specific geographical area. And secondly, by engaging companies in a specific specialized programme or project that is directly related to their business operations, such as waste minimization, dealing with specific legislation or green procurement.

In both cases, Clean Business companies are encouraged to achieve practical results by working with one another and with community-based NGOs and local government on joint projects, which are in line with their own business objectives and with broader social, environmental and economic goals enshrined in the Malopolska Regional Development Plan and other relevant public sector environmental programmes. These projects include:

  • Green Business Parks (companies on a single industrial site, engaging in environmental improvement activities, such as waste minimisation),
  • Green Procurement (integrating environmental criteria in buying from suppliers),
  • Green Office (applying the Clean Business approach to the office environment), and
  • Clean Tourism (companies in the tourism sector sharing experience and expertise with the aim of reducing environmental impact).

Figure 3: Recruiting SMEs to Clean Business

CLEAN BUSINESS ACHIEVEMENTS

The main momentum for Clean Business is generated by companies benefiting from the scheme in terms of achieving cost savings in operations and increased sales. Success stories generate case studies and other technical material that is used to motivate other companies to take environmental action. Both positive and negative experience gained by companies is recorded and made available to other companies through the Environmental Manager internet tool. This is achieved in a variety of ways that take full regard for confidentiality, including:

  • helpline service available to member companies responds to specific questions in part by drawing on the experience accumulated over the past years. A database of past questions and answers is available on-line on Environmental Manager;
  • practical experience is presented in the form of technical advisory/training manuals, which have been prepared for the following 8 industrial sectors: motor, mechanical, medical, food, construction, tourism, office, plastic processing. The manuals are updated regularly and available for download on Environmental Manager;
  • practical experience is presented in the form of technical advisory/training manuals for 8 environmental sectors: waste, packaging, water and sewage, raw materials, technological process management, regeneration of industrial areas, energy, transport. The manuals are updated regularly and available for download on Environmental Manager;
  • enabling direct contact with companies with most relevant experience through seminars, conferences, workshops and other events;
  • providing companies with an opportunity to benchmark environmental performance against other companies through Environmental Manager.

In addition, each company can view its own history of environmental achievement, which is recorded on Environmental Manager and available only to that company. This facility enables both the company and the Foundation to monitor delivery of advisory services.

Each year a survey of Clean Business members is used to monitor progress of the programme as a whole in raising environmental awareness among SMEs and also to identify key areas of environmental concern related to business performance (Fig 4). Coupled with analysis of helpline questions, concerns raised in environmental reviews and other comments received from Clean Business companies, advisory services are constantly being customised to the needs and circumstances of participating companies.

Clean Business has enabled companies to:

  • make more efficient use of their resources;
  • reduce pollution;
  • ensure compliance with environmental, health and safety regulations and adapt to EU standards;
  • access the latest international environmental technology;
  • motivate their workforce to take action on health, safety and environment;
  • develop business links with companies that place a premium on environmental performance and continuous improvement;
  • safeguard jobs and provide opportunities for staff development.

Fig. 4: Environmental concerns affecting business success based on survey of Clean Businbess Members in 2000 and 2005

BEST PRACTICE

In 2000, Clean Business launched an annual award scheme to celebrate the achievements of Clean Business companies. The motivation was to recognize companies which undertake practical action to improve their environmental performance, and so their economic performance and engagement in the wider community.

Many Clean Business Award winners have given companies confidence to go on to participate in regional, national and international competitions, such as the Malopolska Quality Prize, The Minister of Environment’s Leader of Polish Ecology, and Environmentally-Friendly Firm.

From 2005, the Clean Business Awards are organized jointly with the Confederation of Polish Private Employers ‘Leviatan’ and are open to all small and medium – sized enterprises operating in Poland. Winners of the Clean Business Awards go on to compete for the European Business Awards for the Environment organized by the European Commission.

Between 2000-2003, Awards were made in 6 categories:

1. Water, Energy and Waste Management

2. Promoting Environmental Care and Sharing Benefits with Local Community

3. Environmental Technology Transfer and Innovation

4. ‘Brightsite’ – Visual Improvement

5. Green Business Parks

6. Environment Management Systems

In 2004, 2 new additional categories were introduced:

1. Green Office

2. Clean Tourism

In 2006, Awards have been consolidated into 4 categories:

  1. Water, waste or energy management;
  2. Environmental technology transfer and innovation;
  3. Brightsite – visual improvements;
  4. Clean Tourism.

The Awards draw attention to practical examples of what small companies can achieve in terms of improving their environmental performance. Companies participating in the programme nominate and select the most inspiring examples from among their peers. Award winners are selected by a committee made up of government and business representatives. The purpose of the Awards is to recognise the achievements of companies active in Clean Business, especially where these are innovative and can be inspiring to others. 4 key criteria guide jurors:

  1. innovative character of environmental solutions implemented by a company,
  2. potential for replication in other companies,
  3. environmental improvements achieved,
  4. financial benefits generated.

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Award winners are living examples of how environmental improvement and economic success go together, whether this be through cost-savings as in the case of waste minimisation or through promoting a more positive public image to customers and partners. The Awards also serve as a national feeder scheme to the European Business Awards for the Environment.

Over the years 60 Awards have been granted, selected from over 400 candidates. Examples of Award Winners who exemplify the achievement of Clean Business include the following:

WATER, ENERGY OR WASTE MANAGEMENT

The 2000 Award Winner was ‘WAWEL’ (Clean Business Club in Kraków), a company making chocolates. The Award recognized achievements in modernization of the factory and education of employees related to changes inproduction technology and environmental improvement.

Wawel introduced energy, water and waste management into its production process to generate both environmental and economicbenefits. These included introduction of closed water circulation (generating annual savings of 80,540 PLN or approx. €17,000), noise level reduction, recycling condensate heat from heating water for production and individual use (generating annual savings of: 30,378 PLN or €7,000), upgrading sewage treatment and reducing thermal discharge, closure of an ammonia engine room (generating annual savings of 202,032 PLN or approx. €50,000; reducing the threat of chemical contamination and potential impact on human health, modernization of gas heating system (generating annual savings of 95,555 PLN or €20,000), closure of a coal-fired boiler house responsible (generating annual savings of 172,008 PLN or approx. €43,000). All the technological and process changes were associated with environmental education and awareness-raising programmes for employees and local communities.

The 2001 winner was Jan Ożga Bakery and "TARNAWA" Flue Construction (Clean Business Club in Tarnów) - Recovering waste heat from the Jan Ożga Bakery to provide hot water and central heating using a heat exchanger installation specially developed by TARNAWA Flue Construction

The initial environmental review of the Jan Ożga Bakery identified ineffective energy management as an opportunity for both cost savings and environmental improvement. Specialists from Groundwork Blackburn in the UK proposed installation of heat exchangers, which would provide considerable benefits. Unfortunately, these turned out to be beyond the financial means of the bakery, but mobilized the owner to search for another solution -- partial heat recovery from the flue emissions of the bakery oven. Another member of the Tarnów Clean Business Club, the TARNAWA Flue Construction company, agreed to develop a prototype heat exchanger customized to the needs of the bakery. The heat exchanger contains a double pipe arrangement, which extracts some of the heat from emissions to heat water flowing through the pipe. In addition, an extractor fan sends dry and hot air from above the baker oven to the finished products storage area. Thanks to introducing these simple solutions, direct monthly cost savings are approx. 1500 PLN (approx. Eur 400). Energy savings on central heating run at approx. 1000 PLN/month (approx. Eur 250), which means paying only 40% of previous energy bills. Additional cost savings result from solving the problem of excess humidity in the bakery, which impacted on final product quality and required painting of the walls 4-5 times per year. Other benefits include improved safety thanks to dry floors and reduced risks of boiler overheating.

The heat exchanger arrangement installed at the Jan Ożga Bakery has proven cheap, effective and easy to install when compared to the off-the shelf alternatives available on the Polish market-place. As a result, four other Tarnów bakeries have now followed the lead of the Jan Ożga Bakery and opted for a similar solution to their energy management problems.

The 2003 Award went to the Electric Engine Manufacturer “TAMEL” (Clean Business Club in Tarnów) in recognition of achievements in energy management improvements.

New air-compressors were installed as part of factory modernisation, minimising noise emission and vibrations in production processes. As a result, compressors could be placed inside the production hall, allowing simplification of the air distribution system (shorter pipelines). The heating system in the production hall was also modernized, allowing for recovery of hot air from the compressor cooling system. The new arrangement reduced energy consumption and the nominal power needs by 108 kW. The heat recovery system works automatically. By the second year of operation, the investment had paid for itself.