Climate leadership is the key to business success in the modern market of household goods, and the long-term economic growth largely depends on how well the companies understand the climate-related risks and implement appropriate mitigation strategies.
Climate change already has visible measurable impacts on our society: air pollution causes over 7 million premature deaths worldwide each year, and if we do not change our business practices urgently, the resulting health costs could amount to $4 billion per year by 2030. Any further increase in temperatures will pose major risks to human health, security, well-being, assets, economy, and ecosystems. Climate scientists predict that global warming of 1.5°C - 2°C will significantly disrupt human and ecological systems accelerating extreme weather events such as heat waves, heavy rains, floods, droughts, and wildfires, amplifying human morbidity and mortality, increasing the spread of vector-borne diseases, causing water and food supply shortages due to reduced crop yields and livestock.
Unabated climate change will also have devastating economic effects: the World Bank estimates the equivalent cost of extreme natural disasters globally as $520 billion loss in annual consumption, projecting that 26 million people would be pushed into poverty each year, and as many as 143 million people from developing regions could become climate migrants by 2050, especially communities that strongly depend on agricultural and coastal livelihoods.
Carbon neutrality implies achieving net zero carbon emissions by compensating the equivalent amount of greenhouse gases released during all the processes associated with energy consumption, industrial production, and transportation. Greenhouse gases (GHG) are measured in terms of their carbon dioxide equivalence reflecting the impact each GHG has on the atmosphere including methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC), perfluorocarbons (PFC), and sulphur hexafluoride (SF6).
To achieve carbon neutrality, we must adopt a new business approach using sustainable investment to develop adequate infrastructure and implement technological innovations that increase the resource productivity allowing lasting, balanced, sustainable, inclusive, and carbon neutral economic growth. Companies must reduce and avoid carbon emissions as much as possible by improving their resource efficiency and implementing energy conservation measures. The unavoidable emissions released from using fossil fuels can be balanced with producing a similar amount of renewable energy or switching entirely to renewable energy sources. Emissions can also be offset by paying other companies to remove or sequester the equivalent carbon dioxide, funding carbon projects that help prevent future greenhouse gas emissions, or buying carbon credits from recognised carbon trading schemes.
The 2018 Report of the Commission on the Economy and Climate concludes that limiting the cumulative global anthropogenic emissions of greenhouse gases will require an investment of US$90 trillion for developing climate neutral solutions and resilient infrastructure in the period up to 2030 in order to stay in a secure total global carbon budget. A big share of this investment will be programmed in the next few years, and the International Finance Corporation estimates that the climate investment opportunities will total $23 trillion in emerging markets by 2030.
CARBON POLICIES AND REGULATIONS
As the regulators are placing increasingly stringent restrictions on the industrial emissions and hazardous material use, companies have a higher risk of legal liability and litigation. are becoming more vulnerable to litigation and liability risks. To ensure compliance and stay competitive on the market, businesses must implement proactive strategies and sustainable work practices to make their products carbon neutral.
The 1997 Kyoto Protocol signed by 192 parties became the first legally binding intergovernmental agreement under the United Nations Framework Convention on Climate Change (UNFCCC) that obliged industrialised countries to reduce their collective emissions of greenhouse gases. Countries that ratified the Kyoto Protocol were assigned maximum carbon emission levels and could participate in the Clean development mechanism (CDM), Joint implementation (JI), and Emissions Trading designed to help stimulate green investment and meet emission targets in a cost-effective way.
In 2016, Kyoto Protocol was officially replaced by the Paris Agreement ratified by 183 Parties (174 countries and the European Union) with the aim to reduce greenhouse gas emissions and limit the global temperature increase to below 2 degrees Celsius (3.6 F) above pre-industrial levels by the year 2100. The Agreement acknowledges the urgent need for governments, cities, regions, businesses, and investors to scale up the global response to climate change and provides an international framework to reach a net-zero carbon market obliging countries to set ambitious goals for driving GHG emissions reductions and implementing national decarbonisation plans.
In 2015, China has declared an official commitment to the greenhouse gas reduction accord under a plan submitted to the United Nations in support of the Paris Agreement aiming to cut its greenhouse gas emissions per unit of gross domestic product by 60-65% from 2005 levels. The Chinese government is now introducing strong national policies, action plans, and regulations to combat climate change and minimise environmental degradation. The objectives for reducing the carbon emission intensity have been specified individually for different provinces and cities across China ranging from 12% to 20.5% by 2020. The long-term goal is to lower the carbon intensity of GDP by 60%–65%, increase the share of non-fossil energy carriers up to 20% and grow the forest stock volume by 4.5 billion cubic metres compared to 2005 levels by 2030.
China plans to launch a national carbon emission trading market this year aiming to lower the cost of achieving GHG reduction goals using a total carbon emission cap and quota for enterprises with annual energy consumption of at least 10,000 tons of coal equivalent. The Chinese carbon market is estimated to become the largest in the world, double the size of the current EU Emissions Trading System. The new rules will cover eight industrial sectors including electric power generation, aviation, chemicals, petrochemicals, construction materials, iron and steel, non-ferrous metals, and paper production. Based in Shanghai, trading will involve 1,700 power companies covering over 3 billion tonnes of carbon dioxide annually.
Additionally, 13th Five-Year Eco-environmental Protection Plan has been adopted to promote a cleaner and greener economy by improving the air, water and soil quality, expanding forest reserve and coverage, and reducing key pollutant emissions. The main goal is to reach more than 292 days a year of excellent and good air quality by 2020 in major cities across China.
The Central People's Government has confirmed that the Paris Agreement also applies to the Hong Kong Special Administrative Region. An ambitious carbon intensity target was set to achieve 65%-70% reduction by 2030 against the baseline from 2005. This is equivalent to 26%-36% absolute reduction and a decrease to 3.3-3.8 tonnes per capita. Meanwhile, Singapore has pledged to reduce emissions intensity by 16% from business-as-usual levels by 2020 and by 36% from 2005 levels by 2030.
RECOGNISED CERTIFICATIONS AND LABELS FOR HOUSEHOLD GOODS
China Environmental Label is a governmental approval symbol that establishes environmental standards for electronics, cosmetics, textiles, vehicles, construction materials, packaging, and more. The Label is awarded to products that maintain high-quality standards and meet the environmental protection requirements during the production, use, and disposal phases. The labelled products are considered less harmful, less energy intensive, and more resource-efficient when compared with the same type of products on the market. Product categories for labelling include electronics and electric appliances, building products, cleaning products, cosmetics, and personal care.
Hong Kong Eco-label is a product certification that validates whether the environmental performance of the product conforms to the relevant technical environmental standards.
It has been developed by the Hong Kong Federation of Environmental Protection to mark products and their packaging that comply with the quality standards, conform to the certain environmental requirements in the process of producing, use and recycle, and are proven to have superior environmental performance compared to similar products on the market in terms of energy conservation, contamination, and damage to the environment. The categories of household goods eligible for the certification include household furniture, toys, television sets, air coolers, and more.
Hongkong Eco-label integrates China National Standards and international standards for eco-labelling including ISO 14021, ISO 14024 and ISO 14025 aiming to establish technical requirements for products, lift the technical barriers to trade, and promote the certification business in accordance with the international best practices. The requirements to conform with Hong Kong Eco-label standard vary depending on the standard following ISO 17025 Testing and Calibration Laboratories, ISO / IEC Guide 65 Product Certification.
The Hong Kong Green Label Scheme (HKGLS) is an independent voluntary scheme for the certification of environmentally preferable products launched by the Green Council. The Scheme sets out environmental standards and awards "Green Label" to products that qualify in terms of environmental performance. “Green Label” encourages manufacturers to supply eco-friendly products and promotes sustainable consumption, offering a convenient way for consumers to recognise environmentally responsible products. Applicants are certified against the standard’s criteria before using the label. Conformity is verified by an independent organisation following ISO 17025 Testing and Calibration Laboratories, ISO / IEC Guide 65 Product Certification. HKGLS is an ISO 14024 Type 1 label that requires compliance with applicable legislation and a third-party certification with considerations of life cycle impacts.
Products eligible for HKGLS certification include computers, monitors, fax machines, printers, electronic and electrical appliances, refrigeration appliances, air-conditioners, air cleaners, and small home appliances. HKGLS certification has been granted to various new green label products including the ECO Toner Cartridge developed by Print-Rite.Unicorn Image Products Co., Ltd. of ZhuHai), bizhub C220, C280, C360, Multifunction Devices by Konica Minolta Business Solutions (H.K.) Ltd., EC CLEAN by Green Concept Limited, 288 Liquid Biological Multi-function Micro-organism Additive (Pro-Digest) by Champion Chemicals Limited, verifying that these products are recognised as safe and environmentally friendly.
BUSINESS BENEFITS OF CARBON NEUTRAL LABELLING
Manufacturers, distributors, and marketers selling certified environmentally sustainable products enjoy significant benefits from reducing their carbon footprint and contributing towards sustainable development goals.
Improved customer perception: a credible and independent ecolabel allows consumers to easily identify and distinguish your products among your competitors, highlighting your commitment to the highest environmental and quality standards.
Effective branding and marketing tool: an ecolabel improves your corporate image, brand recognition and reputation, demonstrates your social responsibility, confirms the product's safety and superior environmental performance, giving your brand a strong competitive advantage.
Reduced production cost: commitment to improving environmental performance during manufacturing typically leads to significant financial savings resulting from more efficient resource use, waste minimisation, material recycling, reduced risks, and legal compliance.
Sustainable procurement: greening the production process and establishing a sustainable supply chain uncovers new opportunities for business expansion and partnership with governments, commercial organisations, and industry associations.
INDUSTRY LEADERS IN SUSTAINABILITY
The household goods industry is experiencing an increasing demand for eco-friendly products and smart home solutions. Successful companies strive to stand out through smart brand management, sustainable innovation, improved product quality, and environmental safety. Leading companies proactively implement sustainable business models focusing on climate stewardship, operational eco-efficiency, sustainable material sourcing, enhanced transparency, environmental certifications and product labelling, as well as implementing end-of-life solutions for waste management.
In 2018, Electrolux AB and Essity AB have become the global sustainability leaders in the Household Products and Durables category of the RobecoSAM’s Corporate Sustainability Assessment based on their Total Sustainability Score. The Assessment identifies companies that create the most long-term sustainable shareholder value, evaluating crucial factors that impact a company’s value drivers, competitive position, and long-term financial performance, such as capabilities for innovation, environmental management, product stewardship in social dimension, and operational eco-efficiency improvements.
HOW TO MAKE YOUR BUSINESS CARBON NEUTRAL
Adopting a carbon neutral business strategy will send a powerful message to your customers, investors, employees, and other stakeholders about your commitment to environmental protection and industry best practices.
Start by introducing a carbon management strategy with clear measurable goals and action plans to assess, reduce, avoid, or compensate your GHG emissions. This involves calculating and tracking the total carbon footprint from your business activities, implementing a cost-effective carbon reduction program, conducting ongoing monitoring and evaluation of your environmental performance, and obtaining environmental product labels and certifications. You will also need to educate your managers and employees about sustainable business practices, and incorporate sustainability aspects into your marketing and communications strategy to promote your environmental achievements.
To learn more about the implementation of environmental regulations and best practices in the household goods industry, please see our sustainability section.
EXPERT SUSTAINABILITY SERVICES
API is a leading specialist in quality assurance for household goods with profound knowledge of sustainable manufacturing processes and a rich practical experience in environmental management and certification preparation. Our sustainability experts and specialists in household goods can help you develop and implement carbon reduction strategies, ensure legal compliance with environmental legislation, obtain recognised certifications, and implement long-term carbon management strategies.
We provide a comprehensive range of sustainability services focused on the evaluation of manufacturing processes, product life cycle assessment and carbon footprint calculation, independent verification and validation for environmental certification, sustainable supply chain management, and professional environmental training.
Contact us any time to discuss your business challenges and find the best solutions for your sustainable growth.