1. Profiting from Cleaner Production
Financial Institutions
United Nations Environment Programme / Division of Technology, Industry and Economics

2. I. Cleaner Production
Competitive Advantages for Companies
Better Cients
Better Investments
Definition
Parallel Concepts
Practices
II. Case Study A
III. Case Study B
IV. Role of Financial Institutions
V. For More Information

3. Cleaner Production Competitive Advantages for Companies
Cleaner Production helps companies:
Increase productivity
Reduce production costs
Use resources more efficiently
Produce safer and better products and services
Reduce levels of pollution and risk
Comply with Environmental Management Systems and get ISO certified

4. Cleaner Production Better Clients
The financial and operating advantages of Cleaner Production make better clients of companies that implement Cleaner Production strategies.

5. Cleaner Production Better Investments
The advantages of Cleaner Production also make companies using Cleaner Production strategies better investment opportunities.

6. Cleaner Production Definition
A preventive environmental strategy applied to processes, products and services to:
Increase overall efficiency and productivity
Improve business opportunities
Reduce human and environmental risk

7. Cleaner Production Parallel Concepts
Pollution Prevention (P2)
Eco-efficiency
Green Productivity
Waste Minimization

8. Cleaner Production Practices
Applying good housekeeping
Changing technology or equipment
Redesigning products
Modifying or controlling processes
Substituting input materials
Recycling or reusing materials on-site
Producing useful by-products

9. I. Cleaner Production
II. Case Study A
Background
Site Contamination
Decontamination Costs
Result
Prevention Measures
III. Case Study B
IV. Role of Financial Institutions
V. For More Information

10. Case Study A Background
ABC Iron, Inc. manufactures iron casings.
To expand operations, the company takes out a $1.2 million mortgage from its bank.
A year later, ABC files for bankruptcy.

11. Case Study A Site Contamination
ABC’s bank would like to put the site up for auction.
However, further investigation reveals:
The ground and a nearby river are contaminated by toxic leakage
Large amounts of toxic waste are stored on-site

12. Case Study A Decontamination Costs
Toxic waste disposal $0.7 million
Site purification $1.0 million
Initial mortgage
$1.2 million
Total decontamination costs $1.7 million

13. High decontamination costs make the site worthless.
Case Study A Result
High decontamination costs make the site worthless.
The auction is cancelled and the bank suffers a complete credit loss.

14. Case Study A Prevention Measures
What ABC’s bank could have done:
Include environmental risk in overall risk assessment
Integrate environmental criteria into loan applications

15. I. Cleaner Production
II. Case Study A
III. Case Study B
Background
Quality Control
Results
IV. Role of Financial Institutions
V. For More Information

16. Case Study B Background
PR Labelmakers & Co. prints packaging labels.
During the printing process, ink, plastic film and metal foil are wasted. The process also releases ink and glue emissions into the air.

17. Case Study B Quality Control
PR Labelmakers takes out a $105,000 loan from its bank to improve quality control.
It installs a camera system to detect printing errors early in production, resulting in:
Fewer printing errors
Reduced levels of wasted ink, scrap and emissions

18. Waste and emissions reduced by 40%
Case Study B Results
PR Labelmakers quickly recuperates its investment and pays back its loan on time.
Waste and emissions reduced by 40%
Payback period: years
Annual savings: $38,463
Initial investment: $105,000

19. I. Cleaner Production
II. Case Study A
III. Case Study B
IV. Role of Financial Institutions
V. For More Information

20. Role of Financial Institutions Misconceptions
Cleaner Production entails high financial risk
Cleaner Production only applies to industrial and service companies

21. Role of Financial Institutions Realities
Cleaner Production:
Makes companies more attractive as clients and investments
Improved cash flow and reduced risk
Rapid return on capital or operating investments
Improves image of financial institutions
Emphasis on environmentally sound investments and sustainable development

22. Role of Financial Institutions Actions
Integrate environmental/Cleaner Production criteria into investment appraisal, credit rating and loan application process
Develop new financial products linked to environmental performance

23. I. Cleaner Production
II. Case Study A
III. Case Study B
IV. Role of Financial Institutions
V. For More Information

24. For More Information UNEP DTIE Cleaner Production www.uneptie.org/cp
UNEP DTIE Cleaner Production Financing
United Nations Industrial Development Organization
Sustainable Alternatives Network (SANet)