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June 02, 2000
Oekom Surveys Environmental Performance of Electronics Industry
by Philip Johansson
The German environmental research firm finds Ricoh and Electrolux to be environmental leaders among
30 international electronics and IT companies.
SocialFunds.com --
As investors and consumers subject corporations to greater scrutiny on corporate responsibility
issues, there is a growing need for accurate and comprehensive environmental performance data. A
recent report from Oekom Research provides the most comprehensive analysis yet of environmental
performance in the electronics industry.
 Oekom Research, a global leader in
environmental-rating that emerged from the German environmental publishing house, ökom, presented
the results of its environmental report at a recent press conference. The report itself, detailing
the environmental performance of 30 manufacturers of computers, mobile phones, entertainment
electronics, and household appliances, will be available in another week or so.
The Oekom
report rates global companies from the U.S., Japan, Korea, and Europe, including such household
names as Apple Computer, IBM, Electrolux, Philips Electronics, and Mitsubishi. Oekom's findings
suggests that, overall, the electronics industry is at least open to the idea to environmental
protection, particularly in the area of environmental management.
"The sector's commitment
to introduce Environmental Management Systems is laudable," says Dirk Reinhard, Chief Environmental
Analyst at Oekom. "Contrary to other industries, the majority of these companies have already
introduced company-wide management structures according to international environmental standards."
The criteria used for rating companies include environmental management, environmental
data, and environmental aspects of their products and services, including energy efficiency,
hazardous materials, recyclability, and packaging. Companies receive an overall "grade," a weighted
average of their performance in all of these areas, baseed on a 25-page questionraire,
environmental reporting, and company interviews.
Ricoh, the Japanese electronics giant,
and Electrolux, the Swedish appliance manufacturer topped the ranking with a "B," closely followed
by Xerox, Sony, Nortel Networks, and Siemens, rated with "B-." Cisco Systems and Tandberg, a
Norwegian company, brought up the rear with a "D" and "D-," respectively. Nine additional companies
did not participate in the rating, including 3COM Corp., Gateway Inc., and Lucent Technologies.
The industry-wide attention to environmental management noted in the Oekom report is a
clear improvement compared to their first electronics industry rating, which was carried out 18
months ago. Ricoh, the industry leader, achieved its good overall score thanks to its leading
position in this particular area, among other criteria.
Other areas of environmental
performance, however, are still being neglected to a large extent, particularly in the sphere of
product responsibility. Environmental product and service development is one of Oekom's main areas
of investigation, contributing at least 50 percent to the final score of companies.
"Other research providers often do not put any emphasis on this field or even do not assess
this point at all," said Daniela Stark, Marketing Director at Oekom. "However, in our opinion
companies are laying the foundations to sustainable business with new products and environmentally
compatible technologies."
The large volumes of waste originating from obsolete computers,
fax machines, CD players or mobile phones will increase dramatically in the future, and the Oekom
report finds that, at present, the industry still gives little attention to this problem.
Only manufacturers of copiers, such as Ricoh, Xerox, and Océ, a Dutch company, demonstrate what
Oekom asserts should become industry standard in the long term: the guaranteed take-back of all
used devices. While Japanese legislation will soon require take-back quotas for producers of
entertainment electronics, a similar European Union-wide decree with binding guidelines is slow to
evolve and the U.S. is moving even slower.
Other areas of product responsibility that
demand attention include the reduction of heavy metals and other dangerous substances and the
optimization of energy consumption by electronic devices. Especially striking is the fact that the
devices need too much energy in stand-by mode, and even consume power when switched off.
"This is an unnecessary waste of energy, which could have been avoided for a long time," said
Reinhard, citing technology already developed to reduce stand-by consumption. He suggests that in
Germany alone, two nuclear power plants could be shut down if companies changed their thinking in
this respect.
As the direct environmental consequences from obsolete devices and high
energy consumption are severe, protection of the environment must not be limited to the production
process. Although Oekom's report suggests that there is positive movement in the electronics
industry toward environmental readiness and responsibility, company commitment to product
stewardship remains low overall.
It is striking that the environmental commitment in
fast-growing companies with tremendous future impacts, such as Cisco Systems, supplier of network
solutions, is at present quite low. Oekom's report will provide a valuable tool for both investors
and consumers to make choices based on the environmental performance of electronics corporations.
"Our industry reports allow investors to identify the environmental leaders and laggards
of the industry," said Reinhard, "In the long run, environmental leaders will have less problems
facing the environmental challenges in the industry and therefore will be the better investment."
©
SRI World Group, Inc. All Rights Reserved.
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