The concept of a circular economy, whereby products at the end-of-life are recycled or ‘up cycled’ is emerging as a desired outcome and a potentially enforceable requirement for trade. Europe was naturally the first region to legislate as they were the first with concentrated industrial areas. Along with worker safety, community engagement is one of the key factors of employee satisfaction. Environmental concerns with manufacturing and design have been outsourced to low cost regions which are also releasing laws as they see their natural resources diminished or health compromised. Today, responsible companies are using a mixture of global measuring sticks such as the OECD Due Diligence Guidance for supply chain management, and EU REACH, RoHS, and CLP as a footprint for gathering information on Substances of High Concern found in the raw materials that comprise or are used to manufacture products. EU is planning to launch a 2018 enforcement project for OSHA and REACH obligations. Meanwhile, the list of officially regulated substances grows, required communication to consumers and governments increase, and NGOs push for companies to use the 10 year old advocate group developed SIN List, which has over 900 chemicals listed.
Certain chemicals are already restricted, even if still contained in your products. DecaBDE, a popular flame retardant is prohibited above 0.1% in EU after March 2019. Many phthalate plasticizers will also have expiring authorizations or exemptions in the next few years. How can you assure you don’t fall prey to a regrettable substitution? Or spend a fortune to qualify an alternative only to find that chemical banned and have to start over. As for the above picture, while rats do like wiring, apparently there is a huge uptick in warranty claims across many car companies due to a soy-based additive found in the wiring insulation. At the time, this was touted as a bio-based, great alternative to a ‘bad’ chemical. Ultimately the consumer will pay these costs, even as manufacturers and suppliers are getting sued for repairs which can be thousands of dollars for some vehicles.
Finally, we all know that sustainability will pay off in the long run. It’s the short run that is harder to quantify. Any changes to product designs or proven processes must be sold on their own merits. Life cycle costs of alternatives have tradeoffs that may be found in manufacturing, during use, or disposal (ex. Lithium batteries aren’t recyclable, yet). There are also internal, hard costs such as validation testing or warranty as compared to external societal costs of health effects due to emissions or toxic exposures. It is important to periodically perform a deep dive into these costs to make sure your firm is not optimizing one area at the expense of another, or risking the future market by postponing addressing it at all. I hope that B Cubed Consulting can help make sense of this for your organization in 2018. Have a Happy Holiday Season!