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Budding romance or green myth?
Written by: David Creighton, Anita Lišková
Saving costs or saving the planet?
One line of thought holds that capitalism and environmentalism don't
mix, yet more and more Czech companies are "going green".
How will recent EU entry affect local eco-friendly development?
"SUSTAINABILITY", "environmentally-friendly",
and "ecological". Everyone is familiar with these buzzwords,
which started flying around with increasing frequency all over
the world about a decade ago. Opinion polls in the Czech Republic
in 1990 revealed that 83% of people asked replied that living in
a healthy environment was "very important". In business,
this global concern for the planet led to opportunities for setting
up environmentally-oriented companies, such as recycling firms
or organic farms, and a realization that commerce and ecological
protection were not mutually exclusive. "In 1989 there were
none (environmental businesses), now there are over 700 certified
companies," says František Dobeš of the Business Leaders Forum,
referring to the state certfication system.
Fourteen years later similar polls show that the relationship to
the environment and ecology is definitely not that straightforward.
A study on "satisfaction with the environment" conducted
by the Public Opinion Research Center (CVVM) of the Czech Academy
of Sciences in March this year indicated that only 25% of respondents
preferred environmentally friendly products of whom only 4% under
all circumstances. "People say they are willing to pay a higher
price for ecological products, but in fact they behave differently,
preferring lower prices," says Petr Saifríd of the Czech Environmental
Institute. The view of many companies is similarly controversial.
The common reasons for adopting environmental principles is that
it enhances the status of the firm and is used as part of their
marketing strategy. "An advantage of having an Eco-label is
that it definitely improves the image of the firm," says Saifríd,
when describing reasons why firms choose to apply for it.
Is it easy being green?
What does it actually mean to be "green"? Petr Nahodil,
director of the Department of Voluntary Tools under the Ministry
of Environment, says that there is no definition of an environmental
business, but in fact, all businesses can be environmentally-friendly
to a greater or lesser degree. It does not just mean a firm which
produces environmental products, but rather a firm which has an
overall approach which is environmental. For example, the production
methods can be "green", such as efforts to cut emissions
of greenhouse gases, or a more effective use of resources. "There
are industrial companies which behave in an environmentally-friendly
way, which means that they have established a system of environmental
protection according to international standard ISO 14001," explains
Dobeš.
In practice, the implementation of these principles varies from
company to company, as does the reasons for putting them into action.
And there are still disparities between Czech and Western European
markets. "Compared to 1989, any green sector has grown, naturally.
But when looking at Western Europe, I can hardly des-cribe the
Czech situation as 'rapid growth'," says Vojtěch Kotecký,
programs manager from the environmental group Hnutí Duha. "When
you look at organic food, green electricity or recycling, the Czech
Republic lags far behind countries like Germany, the UK, Scandinavia
and others." Zdeněk Soudný, account manager at Ogilvy PR agency
offers one possible reason for this: "Czech companies are
not under such environmental pressure as in Western countries,
so they don't need to present themselves as environmental, unless
it's really desirable."
Some larger firms also view environmental ideas as only of peripheral
significance. Petr Nahodil cites the example of Czech steel companies
who have been accused of dumping by the EU. Now they are trying
to comply with regulations that would make them acceptable on EU
markets. "I personally think that if there was no stick these
companies would not do anything, because it's a big investment," he
observes. However, large multinationals are used to communicating
their environmental goals, as they have adopted green policies
many years ago.
"Environmental protection on a global scale is one of the
six basic strategic priorities of our company," says Jakub Puchalský,
corporate communications manager for Unilever. Each year, his company's
production facilities has prepared a program of activities leading
to improvements in energy consumption, waste and water protection,
and it has been successful. "Recycling of wastes is commonplace.
Since the mid-nineties we've been able to reduce greenhouse gas
emission from 15 tons to today's approximately half-ton, and total
waste from 4000 tons to less than 2,000 tons last year, " Puchalský
adds. Unilever's stance is that a successful and responsible modern
multinational should address the principles of social and civic
concerns and make efforts to show how it is fulfilling them.
What customers want
But while environmental legislation is now in line with the EU,
so far it seems that emphasizing ecological principles or questions
of environmental friendliness
are currently of only marginal interest. "Czech customers do not perceive
ecology as such an important problem that would lead companies to actively
communicate in this field," Soudný points out. Other PR and advertising
agencies agree that ecology issues are not automatically used as a part of
marketing strategies in the Czech Republic. "Czech consumers haven't demanded
this information yet and firms stress it only when they have European backgrounds,
because it's corporate policy. Czech firms will have to adapt very soon," says
Emilie Pražáková, account director of PR firm AMI Commun-ication.
At the "Green Week" conferences, held at the beginning of this year
under the aegis of the EU in Brussels, statistics indicated that in the UK
11% of purchasers are consumers who take into account ecological and ethical
principles, and between 2001 and 2002 the share of sales of environmentally-friendly
goods in Europe increased by over 50%. There are no comparable figures for
the Czech Republic, but if we take the food sector as an example, there has
been a huge expansion in the market, although it is still small. "At our
hypermarkets we currently sell 26 organic grocery products," says Jérôme
Poussin, communication and customer marketing manager of Carrefour. "This
is a marginal phenomenon that accounts for less than 0.1% of sales. However,
we expect increases in the future," he adds.
This is echoed by Jana Matoušková, corporate affairs coordinator for Tesco
Stores CR. "These goods account for about 1% of our inventory," she
says, acknowledging that the sector is still growing, hand in hand with bio
products. "But in this range customers are put off by the high prices
as opposed to ordinary products, so the organic product share of total sales
is still very low," Matouš-ková adds.
Cost is definitely a key factor. Consumers may claim they would be interested
in buying environmentally-friendly products, but when it comes to paying more,
they often change their minds. It's a practical decision of simple economics.
According to Petr Nahodil, "environmentally-friendly business here is
connected with the overall economic production capacity of this country. If
people are at a certain socio-economic level then they can be concerned with
environmental issues. For example, a person in Germany has much more interest
in eco-friendly companies."
Yet environmental policies need not be merely side issues, but rather components
that should be central to the way a firm operates. And as our cases show there
are firms who profit from being ecological. Above all, green principles can
be sound business, as Kotecký of Hnutí Duha, points out: "Green technologies
improve efficiency, reduce energy and material costs, and help the bottom line."
| 100%
recycling
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František
Maška
Photo: Vojtěch Vlk
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The owner of the
firm František Maška-Construction Materials Production
in Svémyslice u Prahy pursued a fourteen-year family
tradition producing tennis-court clay. Like most
entrepreneurs, he started on a small scale with a
few employees, but with time became the largest producer
of the material in this country. The firm currently
supplies around 45% of the Czech market, and about
75% of Prague's.
While the clay surfacing material can be made from
bricks, thermoblocks, and other materials, František
Maška chose an ecological route - he makes it from
old roofing tiles. Why? "Customer satisfaction
is paramount to us, and they demand high quality.
Clay made from roofing tiles is incomparably better
than that made from other materials." By finding
a new use for old tiles the firm recycles an old
product that thus needn't be dumped. "It's more
or less 100% recycling," Maška says, adding
that their method is more labor-intensive and time-consuming
than if other materials were used. "Used roofing
tiles are hard to find, and prior to processing they
must be thoroughly cleaned and sorted. This requires
a lot of employees, so the final profit is lower."
Although the firm is so environmentally-friendly
it even uses recycled polyethelene bags for storing
and transporting the clay, it doesn't enjoy any more
advantages than those not so kind to nature. "Our
environment is terribly polluted by smog and waste.
If we're planning on staying on this planet in the
future, it would be reasonable to do something about
it," Maška observes. "Sadly, it's all about
money, of which there's never enough." Now,
with EU accession having brought new possibilities
for receiving various grants, he hopes his company
will have rights to some support. "If we get
a subsidy or tax relief, it'll be great, but I understand
that the government can't get involved in everything
and lead entrepreneurs by the hand," he says
realistically. He's not afraid of the future, as
sales of his product are ensured; according to internal
company research, 94% of its customers will remain
loyal. Covering a new tennis court requires about
seven to ten tons of clay, and annual maintenance
after winter seasons calls for another two to three
tons. Furthermore, he's planning on exports to Russia,
Poland, and Austria.
Monika Mudranincová |
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| Green copycats
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Milan Sedlák
Photo:
Andrea Horká
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For Milan Sedlák, society's seemingly
endless use of printers, copiers, and fax machines - on the
surface an environmental scourge - has a bright side in the
field of recycling. With this in mind, he founded Ecoprint
in Brno six years ago; today, working out of two more offices
in Prague and Ostrava, the company is a leader in the toner
cartridge recycling business in this country, with a CZK
29 million turnover.
"
We knew from the beginning that it had a great future," says
Sedlák, who stresses that the benefits of the business are
widespread. "Cus-tomers are pleased with the refills
because they save considerable money, we're satisfied because
it is profitable, and society as a whole benefits since our
work is environmentally friendly. Specialized publications
state that the production of one toner cartridge requires
about a half-liter of oil. That's certainly interesting from
an ecological point of view," says Sedlák.
If only a handful of companies were operating when Ecoprint
was founded, the increasing choice today - Sedlák says there
are between 30 and 50 to choose from - is an indication of
the growing popularity of the business. Never-theless, Sedlák
warns against going for deep discounts when choosing an ink
cartridge recycler. "Some of these firms that sell refilled
cartridges for suspiciously low prices often use low-quality
materials. They don't test their toners, don't develop their
own products, or they "produce" them in their garages." This
quickly shows up in the quality of the print and lifespan
of the cartridge. "As they say, you pay twice for something
that's too cheap, and in cases like this the customer pays
dearly," says Sedlák.
It's interesting to note that companies manufacturing original
cartridges have begun to do so in a way that makes them more
difficult to recondition or refill, and then they place ads
in trade magazines encouraging use of originals. This aspect,
says Sedlák, lags behind the US, in terms of a greater common
environmental aim. "In the US they are competitors,
but they work together."
Ecoprint has just received its ISO 9001:2001 certification,
which ensures proper attention was paid to the materials,
technological processes, and testing. With the sales curve
leveling, and the borders cleared, the firm is getting the
stage set to export. It made an investment into new equipment
at the beginning of this year which allows 600 ink-jet cartridges
a month to be recycled, and another investment planned for
the end of this year will yield a similar number for laser
cartridges.
David Friday |
| From bottles
to fibers
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Jaroslav
Lavička
Photo: Jan Vágner
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An opportunity to turn thousands of discarded plastic bottles
into something which will end up in automobiles is an idea
that was turned into reality by South Bohemian manufacturer
Silon. The company recycles PET bottles into material for
use in the automobile and hygiene industries.
Now an important recycling firm on the Czech market, Silon
mainly manufactures polyesters and compounds. "The company
is an important producer in Europe and has a monopoly position
in the Czech Republic," says the Production Manager,
Jaroslav Lavička. "Exports to the European Union accounted
for 62% of total production in 2003, and of this 28% went
to Germany," he adds.
The company operates under the IMDS system, which means that
it complies with a quality standard specific to the car industry,
although it is not considering applying for the Eco-Label
certification. Silon began to adopt a recycling approach
when "there was a demand for processing its own waste
material, above all polyester," says Lavička. "The
requirement to ensure this was economically effective led
to the idea of processing PET bottles," he adds. Silon
was also able to capitalize on background and know-how in
this respect.
This recycling approach has been a key issue for the firm's
clients. According to Lavička, the company "guarantees
many clients that the products are environmental, and without
the certification, cooperation with many customers today
is almost unthinkable." Lavička adds that "although
Silon is making products from secondary raw material, the
quality is just the same, and the added advantage is that
the products are environmentally-friendly."
Given that the firm has identified a new way of recycling,
what problems and opportunities does it see in producing
in an environmentally responsible way? One advantage is that
the processing of secondary raw materials or waste matter
is cheaper than primary raw materials," although he
mentions that "a disadvantage is the greater variety
of raw materials, and this means the process is technically
more demanding."
Silon's efforts have been recognized: it was a runner up
in the Healthy and Safe Environment competition run by the
Business Leaders Forum in 1998, and in 2002 the firm's Kompakt
Project was nominated for a European Environment Award.
David Creighton |
| Ecolabel
- a badge of honor
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Petr Saifríd
Photo:
Vojtěch Vlk
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Symbols with the words such as "RESY" appear on
products in the Czech Republic, making them seem environmentally
friendly. While consumers may be tempted to put them in their
shopping basket and help protect the environment, such labels
do not really have any meaning - RESY for example is valid
only in Germany.
In fact, the label "Environmentally-friendly product" is
the only official - guaranteed by the state - labeling for
environmental products," says Petr Saifríd of the Czech
Environmental Institute, an executive agency of the Ministry
of Environment. Set up in 1994 by the Ministry of Environment,
the scheme is a voluntary program that runs parallel with
the environmental labeling scheme run by the European Union.
The Czech Eco-labeling scheme is administered by the Agency
for Environmentally Friendly Products of the Czech Ecological
Institute.
"
Basically it is a certification system in which the Ministry
of Environment grants the company the right to use the Eco-label
on the basis that the product clearly complies with set down
criteria," says Saifríd. "There are 32 product
criteria, ranging from mirrors to water-soluble glues and
putties." The award applies for three years, when it
can be renewed, with many firms continuing with the scheme.
Since it was set up the program has grown, and Saifríd considers
the Eco-labeling program to be an overall success, although
some categories are more successful than others. "At
the beginning there were four or six product categories and
more were added. In 1994 the first four or five products
were awarded the standard", Saifríd points out. "Now
there are 300 products, with 70 firms taking part in the
program." Even companies which might not immediately
be identified with ecological awareness have recognised that
being environmental does have benefits. "Paint producers
are the common holders of the certification," says Saifríd.
On the other hand, "there are no recycling firms participating
in the scheme at the moment," he adds.
The use of labels masquerading as an indicator of environmental-friendliness
shows that companies at least realize the importance of the
claim, even though they have not gone through the same controls
that apply for certification under the Eco-labeling scheme.
However, according to Petr Saifríd, "the applicant only
pays a one-off fee of CZK 20,000. Costs for evaluating the
product in accreditation do not exceed CZK 30-50,000. In
comparison with the price of one-off advertisement in the
press, these are in no way high". And by meeting the
requirements of the program, the manufacturer of the product
can be seen as truly embracing proper standards.
There is still a lack of information, or sometimes a surplus
of information that is misleading. The labeling scheme for
environmental products is confusing, with only one official
and many copycat label programs. "We need laws that
would force producers to improve methods of informing consumers
on product origin, and the government should actively promote
ecological labeling to increase the awareness," argues
Vojtěch Kotecký, programs manager from the environmental
group Hnutí Duha.
David Creighton |
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State support
The state makes some efforts to motivate firms in order
to show them how it pays to be environmentally-friendly.
Apart from the Eco-labeling program there is also the Integrated
Production Policy (IPP), which aims to ensure that the production,
use and disposal of products has as little impact on the
environment as possible. "The Integrated Production
Policy is an all-round view of environmental behavior of
the company, because it is one of the parameters of organization
and management," says Petr Nahodil, director of the
Department of Voluntary Tools under the Ministry of Environment. "The
improvement of this process always leads to higher effectiveness
even though it is important here to incorporate costs linked
with environmental behavior."
Another way of promoting greater environ-mental awareness
is the EMS (Environmental Management Systems) certification,
under the ISO 14001 Series. EMS is a continuous system of
planning, implementation, review, and improvement of the
processes that a company carries out to achieve its business
goals. The scheme is voluntary, and so far around 800 firms
are participating. These are mainly manufacturers, but the
service sector is also represented. By adopting ISO 14001
a company can improve its position on the market, as its
products will then be in greater demand from consumers who
require some evidence of environmentally friendly standards.
David Creighton
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