By Michael Kirschner, TFI Environment Consultant

So you need to comply with REACH — what do you need to do? Currently, REACH requires disclosure on 15 substances for many article manufacturers; soon more substances will need to be disclosed and then perhaps some will become restricted. In the meantime, regulators in other regions, such as Korea and California, are ramping up comparable chemicals policies that could have similar or different requirements. The same thing is happening with RoHS and WEEE, and eventually will occur with EuP.

While compliance with specific regulations is important, basing a company’s overall environmental-impact-reduction plan only on regulations is tactical and inefficient. Regulations’ detailed requirements are unpredictable.

My colleagues and I place regulations of product environmental performance into four categories:

1. Substance disclosure and restrictions
2. Waste and reuse / recycling
3. Energy use
4. Carbon/GHG (greenhouse gas) footprint

Regulatory trajectories for all four categories are generally predictable. We use predictive trends and endpoints that, while they many never be reached, are useful nevertheless to create strategies that achieve a level of, as our colleague Gil Friend of Natural Logic says “regulatory insulation.”

While specific details of future regulations in all locales can never be perfectly predicted, we generally know where they are headed:

• Many, if not all, chemical substances used to manufacture and build products can and probably will be regulated–either disclosures or restrictions. REACH is a strong step down this path.

• We’ve gone from recycling cans, bottles, and newspapers toward requiring that more products be kept out of landfills. The natural extrapolation is that we will be required to use more recycled materials in our products, and they themselves must increasingly be kept out of landfills.

• The use phase of a product’s life has typically been the focus of energy-related requirements, but Europe’s EuP Directive extends the energy profile across the entire lifecycle, back toward the mines and wells and forward toward energy and material recovery.

• Carbon footprint, while a function of energy use, is going from cap/trade regulations in some regions and voluntary corporate disclosure toward full taxation and disclosure for all manufactured products incorporating the entire supply chain.

You may be thinking, “These steps are too far out!” But consider that these are the “end points”; these steps are the ultimate extrapolation of these regulatory trajectories.

Amid the uncertainty, here is what you can do now: Start by investigating (1) the substances used in (and to manufacture) your products; (2) how easy or difficult it is to reuse and recycle significant parts of your product; (3) the amount of energy used, and how it can be minimized throughout the product lifecycle; and (4) how your supply chain looks when viewed in terms of carbon footprint. Afterward, you will be able to define and develop changes to your business processes that will take new environmental regulations in stride. You can invest in appropriate tools and education, and stay far enough ahead of regulations that compliance is quickly achieved by generating answers from data on-hand–rather than reactively and repeatedly scrambling to find a budget and resources to address new requirements. In the meantime, you’ll have a whole set of information that can be used for competitive advantage, as more and more markets demand improvements in product environmental performance.

We invite you to weigh in or ask questions about strategic approaches to profitable environmental compliance. (Leave a reply below.)

Note: One way to hear the strategic view is to join the upcoming tele-seminar, on which TFI President Pamela Gordon (author of Lean and Green) and Andrew Winston (co-author of Green to Gold) are speaking.

Posted by Pamela J. Gordon, March 19th, 2009

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