First Movers Reap the Benefits
The European Commission's Integrated Product Policy (IPP) is aimed at improving the environmental performance of products over their life cycle. In June 2004, the Commission selected Nokia's mobile phones as one of two products to which the new approach is to be applied in a one-year pilot project. The other pilot product is the Carrefour retail group's wooden garden furniture.
"We wanted to work with industry leaders that can make a difference to the whole market. It was very important that they were companies with a track record of paying attention to environmental sustainability in their operations," says Timo Mäkelä, Director of the Directorate on Sustainable Development and Integration at the European Commission's Environment Directorate-General.
According to Mr Mäkelä, IPP complements the more traditional legislative approach as a tool for assessing where and what type of action may be most effective to improve the whole life cycle of environmental performance of products. This requires careful analysis of the life cycles of different products and the close involvement of the different stakeholder groups.
The emphasis is on voluntary and market-based action to encourage producers to develop and consumers to demand greener products. Possible policy instruments range from taxation and eco-labeling, aimed at helping the consumer to make informed choices, to voluntary schemes and commitments by producers. Mr Mäkelä says there is already evidence from elsewhere that voluntary environmental benchmarks for products can be an effective 'name, fame, and shame' instrument operating through consumer choices.
"This project gives Nokia the opportunity to lead in the environmental field in the same way as it is the leading producer of mobile phones," he adds. He stresses the importance of engaging the various stakeholders involved at the different stages of the product life cycle. The stakeholders participating in the pilot projects include competitors.
"We don't want to compromise Nokia's commercial confidentialities, but at the same time we want to have an open and transparent process involving the other producers in the sector, as well as the consumer organizations and other NGOs." According to Mr Mäkelä, the transformation towards greener products is already underway in the consumer electronics sector.
The material restrictions and the take-back and recycling obligations enacted through the EU's RoHS and WEEE directives, respectively, drive this development as legal instruments fashioned through dialogue between the Commission and the producers. The IPP approach puts the emphasis on the carrot of market benefits through greener consumption.
"We want to demonstrate to the consumers that they can make educated choices assisted by eco-labeling, information campaigns, and also marketing by the companies. This is the direction the markets are moving. The first movers will get the benefits and the laggards then have to follow." Mobile phones are trend-setting products, and according to Timo Mäkelä, they can also be environmental trendsetters.
"Their very trendiness makes mobile phones such an attractive pilot scheme. Mobile phones have an image of being hi-tech, and we need to send the message that hi-tech is environmentally sustainable. Consumer electronics has a lot of potential to move towards more sustainable production and consumption. At the same time, the companies that are the first movers are set to reap the market benefits of it.