Development of Eco-efficiency Indicators Regarding Products
Chie Nakaniwa, Japan Environmental Management Association for Industry (JEMAI) (nakaniwa@jemai.or.jp)
ABSTRACTIn Japan, some leading industries and companies have started to apply the eco-efficiency concept in their business decision-making and/or communication tools with stakeholders. Although still
experimental, eco-efficiency indicators are considered to be applicable at the sectoral /corporate level and at a product level.
In this poster, I first describe eco-efficiency indicators of corporate activities at a company level and at a product or level for which there are multi-attribute evaluation items. Second, I present anoverview of Project Factor X (supported by the Ministry of Economy, Trade and Industry of Japan and coordinated by the Japan Environmental Management Association for Industry), which is aneco-efficiency indicator project that deals mainly with electronics, chemical, metal and construction materials and ICT services. Finally, I introduce one of the project activities, an eco-efficiency
indicator handbook that has been issued recently and describe developing methodologies and steps in the development of eco-efficiency indicators.
The Project Factor X has been examining the establishment of common standards, keeping in mind the fact that the diversity of existing indicators should not be lost, and working toward thedevelopment of de facto standards. If the project is successful, the indicators are set to become powerful tools that will enhance the competitiveness of environmentally conscious and valuable
products in global markets and will also prove useful for purchasers and consumers. Several analyses have been conducted through the project: the principles of a product related to ecoefficiency, the practices of a product to improve its performance and the current product’s performances with regard to impacts on the environment and the value. The observation of a variety ofimplementation of eco-efficiency concept in Japanese industries is carried out.
In the early 2004, the Project Factor X has published a handbook about detailed calculation of the eco-efficiency indicators of products for the first time. The intention is to enhance the conceptand apply it into the product sustainability in the practical manner by presenting quantitative evaluation. The guidebook presents the methodological aspects and the selection of appropriate ecoefficiency indicators to help companies contribute to sustainability, as well as how the data can be used in the analysis. Economic value (sales, prices, profit etc.) cannot be always appropriate as
the evaluation items. Product function needs to be evaluated when the eco-efficiency concept is adopted for sustainable product evaluation.

Status on ecoeco-efficiency indicators in Japan

Table 1 Example of Eco-efficiency indicator (environmental impact)

The indicators have been so far mainly used as decision making/evaluation tools withincompanies, intending to give incentives for improvement and to serve as the driving forces. But
recently the companies start to use the indicators as communication tools with outside. Their
purpose is to demonstrate and capitalize on the competitive performance of the products andbring the concept of the eco-efficiency into the market. Such indicators can be conclusive andcommunicative tools for sales.
Eco-efficiency forcompany =Major items

Input

Sales amount
Environmental
impacts

Example; NEC, SONY, Canon, Ricoh, etc*Please refer to each company’s environmental report

Output

Items

Examples of items

Energy consumption

Energy consumption (electric power, fossil fuels, etc.)

Resourceconsumption

Materials (raw materials, solvents, intermediate products, etc.)
Water

Chemicals

Lead, toluene, mercury, etc.
Quantity of output of substances harmful to the ozone layer

Quantity of outputs

Quantity of output of greenhouse gasses
Acidification coefficient, Waste material

Eco-efficiency for
product =Product’s value
Environmental
impacts

Table 2 Comparison of existing eco-efficiency indicators for product

Example; Matsushita (Panasonic), Mitsubishi, Hitachi,
Fujitsu, Toshiba, Nippon Paint

Denominator*Please refer to each company’s environmental report

Each company’s indicator shows a slight difference in terms of system boundaries (gate-togate of life cycle basis ) and the environmental impact items selected (Table 1,2).

Resource
consumption

10yearsago

ExampleLife cycle
or notApplyor notLife cycle
or notApplyor not

Life cycle
or notApplyor not

Fujitsu

No-

Yes

Yes

No-

Yes

PC, scanner

Matsushita(Panasonic)

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Homeelectronics

Hitachi

Yes

Yes

Yes

Yes

Yes

Yes

Yes

WashingmachineYes

NoYes

NoYes

NoYes

Homeelectronics

Mitsubishi
Each environmental impact is integrated

Table 3 Results of examining various products Factor

Product’s value

New
Doubling therefrigerator
capacity
150 Æ 300L

Energy consumption

Productfunctions

Applyor not

The Project Factor X in Japan
Project Goals and Scopes;
Create Factor (indicator / index) for products and services:
1. To provide quantified environmental information as a single or several integrated numbers
2. To provide comparability across a wide range of industry sectors, companies, and products
3. To accelerate sustainability development of business segments
4. To serve analytical foundation as political tools
5. To link quantified evaluation provided by the factor with DfE and Eco label, orother environmental management tools, and promote them

Numerator
Toxicity(chemical use)

Eco-efficiency =ProductNominator of E.E.

Denominator of E.E.

Year ofevaluation

Year ofbaseline

FactorToiletWidth (cm2)Life cycle CO2

2002

1996

2.182

PC

MPU professing capacity,
hard disk capacity (GB)Life cycle CO2

2001

1998

7.800

Printer

Printing speed (ppm),
image quality (dpi)Life cycle CO2

2002

2000

3.314

DVD

No. of functions, weight

Electricity for use

2002

2000

2.995

Radiator

Ease of disassembly,
product service life,
number of parts (unit:coefficient)

WeightLatestPrevious

6.716

Paper

Amount of production

Life cycle CO22001

1999

0.933

Watch

Amount of sales

CO2 for production

2001

2000

0.987

Environmental load
Eco-efficiency of the assessed product (new)Factor =Eco-efficiency of the yardstick product (old)

Factor10
Annual electric power
consumption
Reduced to 1/5
1,000 Æ 200Wh/year

Fig.1. Operation of eco-efficiency and factor approach

In the project, probable Factors based on ecoefficiency were examined (Table 3). Historical trends
were tracked for some products. Economic value, pricewere also examined as the indicators. Prices cannot be
always appropriate as the evaluation items. Productfunction needs to be evaluated when the eco-efficiency
concept is adopted for sustainable product evaluation
so that planners and engineers are motivated to takean active role.

Release of “EcoEco-efficiency Indicator Handbook for Products”
Products” in 2004
Objective;
The “Eco-efficiency” and “factor” concepts were proposed
about ten years ago, but the definition of indicator and thestudy and application of the formulae and other specificmethods has barely begun in Japan. These concepts are at
the early stage in a sense, when companies where they havealready been introduced are working to increase their staff’s
understanding of them and encourage their staff to apply
them to their activities. But interest in the concept of ecoefficiency that aims to lower environmental impact andincrease value is growing steadily as a concept essential forcorporate management. This handbook responds to thisgrowing interest by introducing outlines of the significance ofthe eco-efficiency and factor concepts and of the benefits of
their application by explaining practical application methods.
The targeted readers are assumed to be primarily businesssectors. http://www.jemai.or.jp/english/eco-efficiency/

Table of Contents
1.What are eco-efficiency and factor
1.1 Why we focus on eco-efficiency and factor
1.2 Familiar examples of efficiency
1.3 Eco-efficiencies and their factor – in the case ofrefrigerators 2.How we calculate eco-efficiency indicators andfactors and present them
2.1 How to calculate
2.2 Presentation
2.3 Application of eco-efficiency and factors
2.4 Effective use of eco-efficiency and factors
3.Conclusions (future challenges)
4.Reference documents
Appendix 1. Model case eco-efficiency and factors
Appendix 2. FAQ about eco-efficiency and factors
Appendix 3. Overseas trends in eco-efficiency andfactors

The handbook points out the way of effective use, adding explanation that Factor concept
originally had a global perspective, but it is a concept that can be applied to products.
When it is applied effectively, it assists the progress in efforts to lower the environmental
impacts while increasing value;

Effective Use
1. Incentives for planners and developers
2. Driving force behind the creation of eco-products
3. Communication tools for responding to customer’s requests forenvironmental product information
Thorough experiences, the handbook suggests some principles for applying eco-efficiencyand Factor;

Principle for applying eco-efficiency and Factor
1. Clarify definition of eco-efficiency and disclose
2. Select items of eco-efficiency to ensure transparency and reliability
3. Clarify the definition of Factor
4. Clarify the baseline year or the product model name that is yardstickwhen disclosing Factor
5. Clarify the definition of Factor that discloses eco-efficiency calculation
data for both the nominator and denominator

CONCLUSIONSIt seems that methods for devising company-level eco-efficiency indicators are similar to each other. However, the boundaries for quantifying the emissions of CO2, for instance, are not universallyagreed on. If comparisons are to be made in the future, then standards or consensus with regard to methods are required. What kinds of data and what boundaries should be used are critical issues.
At a product level, the existing eco-efficiency indicators cover the same issues. There are still many unresolved challenges concerning eco-efficiency and Factor, but it is important to know they havejust begun. These challenges will not be overcome quickly. There are various conditions including products that are expected to rise in value rather than to reduce environmental impact, and others
whose environmental impact should be reduced while maintaining a constant value. Setting calculation rules for the environmental impact and product value for each group of products might be ashortcut to mutual understandings. Many items and calculation methods concerning eco-efficiency and Factor are being tried out, and the direction has been becoming clearer and closer. Attention
often focuses only on differences between calculation methods, but at corporations that have aggressively undertaken this task, they have become an important foundation for determining theorientation of the indicator. We hope that this handbook will be a valuable reference for corporations developing products that benefit the environment by introducing indicator in order to achievesustainable society.