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Measuring Pollution-Prevention Performance
Thomas W. Zosel
The demand for effective measures of pollution-prevention performance has increased with industry's concern about environmental issues. Many corporations spend significant portions of their capital and operating budgets to address environmental issues, and corporate managers need ways to measure the results of these efforts. It is the job of the environmental staff within a corporation to determine what measurements need to be made and reported to top management.
Many others are also interested in the environmental performance of a company or facility. For example, the communities in which plants are located may be extremely concerned about what is released into the environment. Customers, too, have an interest and potentially a legal right to know what materials are in products or are used during their manufacture. Of particular legal interest today is whether chlorofluorocarbons are used in a product's manufacture. Finally, environmental agencies have a distinct interest in tracking environmental performance. However, because agencies' interests are manifested in legal and regulatory requirements, companies have little choice in the type of measurements they make. Permits, plant operations, and—because the criminal sanctions in many laws are enforced—employees' personal freedom may depend on making and reporting the required measurements. Given the number of stakeholders, no single environmental metric or measurement system is likely to meet everyone's needs.
Toxic Release Inventory
Perhaps the data that have received the most publicity in the past few years are the Superfund Amendments and Reauthorization Act of 1986 (SARA) Toxic Release Inventory (TRI) reports. These reports list quantities of selected toxic
chemicals that have been released by a facility into the environment. Such data provide some information about environmental performance. However, SARA TRI numbers do not take into account the fact that quantity is not the only measurement of risk. A small quantity of a potent carcinogen might pose a significantly greater health risk than a large quantity of a mild irritant.
Even with that inherent limitation, TRI reports have become the focal point for environmental groups, local communities, and the media, primarily because the numbers are easy to understand. The media find the numbers of particular value. Current and historical releases, expressed as pounds per year of a particular chemical, can easily be compared. In addition, because all major manufacturing facilities are required to file these reports annually, facilities can be compared with one another.
Such comparisons are used by environmental organizations to push plants with high releases to meet the lower emissions levels achieved by comparable facilities. There have even been suggestions that performance comparisons be required by law. Today, in air regulation, new sources of emissions in nonattainment areas are required to meet lowest-achievable rate standards—the lowest emission rate that is achieved in practice or is required by any law or regulation in that state.
Similarly, new plants could be required to meet a lowest-achievable release rate. This would be the release rate to all media achieved by a similar manufacturing facility with the best performance. This type of regulation could be extremely burdensome and raises some very disturbing issues regarding proprietary information. The basic concern is that the plants that perform best may be achieving these exceptional results through the use of proprietary technology. Could this type of legislation require these companies to share their superior yet proprietary technology with a competitor? Even if a licensing fee were offered, the mandatory sharing of such technology would create a significant monetary and competitive loss for the company that developed it.
Although there are many ways to use the SARA TRI information, data requirements and report formats are mandated by regulatory agencies. These data may not satisfy a company's needs. Thus, companies may also want to consider developing other metrics that are more useful for internal measurement of environmental performance.
Pollution Prevention at 3M
At 3M, we have quantitatively measured environmental performance since 1975. The system in use quantifies the pollution that has been prevented under 3M's Pollution Prevention Pays (3P) program and the resulting monetary savings. Within this system, 3M defines pollution prevention as source reduction and environmentally sound reuse and recycling. Although this metric does not indicate total environmental performance, it does address an extremely important issue for top management. What it tracks is the amount of pollution that has been
prevented through cost-effective projects. Since 1975, 3M pollution-prevention projects have stopped roughly 700,000 tons of pollutants from entering the environment and saved the company over $750 million.
The 3P program emphasizes to all employees that they can take actions both to reduce the actual volume of pollution being generated and to increase the monetary savings that result from these actions. However, this metric did not tie reductions in pollution to specific production activities, and it did not include reductions that were achieved but not reported.
In the late 1980s, 3M began looking at ways that it could measure and report waste generation and waste reduction that would better fit into a total quality management (TQM) program. The system needed to be simple, accurate, and reproducible. It needed to be indexed to production so that the waste was viewed in relationship to total plant output. Also, the system needed to measure the reduction in waste resulting from pollution-prevention efforts. Measurements needed to be made before the waste was treated, controlled, or disposed of. The system had to allow the establishment of goals at both the corporate and the division levels. And, perhaps most important, the system needed to motivate employees.
After considerable discussion and trials of pilot projects that used different measurement schemes, 3M implemented such a system in 1990. The system classifies all outputs from a production facility into one of three categories: product, or the intended output from the manufacturing facility; by-product, or residuals that are productively used through some form of recycling or reuse; and waste, or material that is subjected to waste treatment, pollution control, or is directly released into the environment. Together, these items represent the total output from the manufacturing facility. The metric reported is the waste ratio:
waste ratio = waste/(waste + by-product + product) = waste/total output.
This metric is, in a manner of speaking, a measurement of manufacturing efficiency. If the waste ratio is zero, then all raw materials are being productively used. This does not mean that the plant's processes are 100 percent efficient or that all raw materials are being converted to product. For the majority of operations, the latter is impossible.
At 3M, the waste ratio is reported by division, not merely by plant. Manufacturing employees can make significant contributions to reducing waste, but the participation of many other workers is necessary to fully implement waste reduction and pollution-prevention efforts. Through research and development, company scientists develop new products and processes that generate less waste. 3M engineers design more-efficient equipment that will accept recycled or reused materials. Finally, the company's sales force preferentially sells products that generate the least waste. In short, waste reduction and pollution prevention are everyone's job. If the objective is to change the corporate culture and the way
that companies view environmental waste, then each and every employee must play an integral part in the program.
The objective of the 3M waste-measurement system is to obtain a single number for each division. Existing databases contain extensive information that, if properly integrated, can be used to calculate the amounts of waste generated. Taking advantage of that information, 3M divides waste measurement into five easily measured categories: chemical waste, trash, organic waste (in air and water), particulate waste (in air), and water waste (excluding the water itself). (We do not need to measure each specific waste stream, but we do need to measure all of the wastes generated by a division or facility.)
Chemical waste is defined as all the material included on a Resource Conservation and Recovery Act manifest. Determining the quantity generated is as simple as tapping into the database that contains the manifest information. If this information is not in a database, the quantities can be calculated by hand. If manifest information is not available, the facility and the company's management have a much greater problem than measuring waste.
Most major landfills in the United States weigh the amount of trash sent to their facilities, normally with a truck scale. Therefore, it is generally fairly easy to make arrangements with the landfill operator to obtain this information. If the local landfill does not weigh the trucks, it is relatively simple and inexpensive to find a local truck scale that can make the necessary measurements.
Measuring organic wastes can be difficult, especially for releases into the air from fugitive sources. The problem can be considerably simplified by taking a materials-balance perspective. Organic waste is the amount of organic material brought into the plant, minus the amount that goes out as product, is shipped off site as chemical waste or for recycling, and is consumed or transformed in a chemical reaction. Each of these individual items is relatively easy to calculate. Purchasing records should show the amount of total volatile organics brought into the plant. The amount shipped as chemical waste should be available from the manifests. The amount shipped for recycling should be available from shipping records. The amount consumed in chemical reactions should be available from production- or process-engineering yield data. The remainder is the volatile organic material that is waste before it is subjected to treatment or pollution con-
trol. This information may not indicate the final disposition of the waste, but for the purposes of this metric, that kind of detail is not necessary.
The majority of particulate waste will actually be measured in the other waste categories. Material that is collected from dry control systems, such as bag houses, will be either in the chemical-waste measurement if the material is hazardous or in the trash measurement if the material in nonhazardous. If a wet control system is used, the material will end up in the water-waste measurement. With this in mind, the actual particulate waste that is in an air stream is very small and, in most cases, can be ignored. In those few cases where it is relevant, an actual measurement system may be needed.
Because the objective is to obtain a measurement of the total waste, not of the individual components, the amount of waste in the water can be determined by a simple analysis of total dissolved solids. This also takes into consideration that any organics in the water have been previously accounted for in the organics categories.
Progress in Waste Reduction
The metric and measurement system was implemented throughout 3M in 1990. 3M management established a goal of reducing waste by 35 percent by 1995. The company's Challenge 95 asked each division to accomplish a 7 percent per year reduction in the rate of waste generation during each of the next 5 years.
By the end of 1995, 3M achieved 30 percent waste reduction compared with 1990 levels in the United States and a 32.5 percent reduction worldwide. The waste-ratio measurement system and the establishment of waste-reduction goals have clearly motivated 3M employees to reduce the generation of waste. The company's new goal is to reduce waste production to 50 percent of the 1990 level by 2000.
The metrics required by laws and regulations can be useful indicators of environmental performance, but they are not always suitable for internal corporate purposes. Using existing databases, 3M has developed a waste metric that conforms to a TQM structure, is simple yet accurate, is a good employee motivator, can be utilized to establish goals, and, after 5 years of experience, has proved effective in accomplishing waste reduction and pollution prevention.