Carbon regulations in WPC Corporation (WPCC)

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Carbon regulations in WPC Corporation (WPCC)……………………………………………….. 2

  1. Introduction……………………………………………………………………………………………… 2

1.1      Background of the company……………………………………………………………… 2

1.2      Major product offering……………………………………………………………………… 2

  1. Company policy on the carbon emission……………………………………………………….. 3

2.1      The adoption of the internal energy efficiency scale……………………………… 3

2.2      Carbon emission survey…………………………………………………………………….. 4

2.3      Green credit policy in selecting suppliers and projects…………………………… 4

2.4      Environmental audit (EA)…………………………………………………………………. 5

  1. Periodicity and pattern of reporting carbon emission……………………………………… 5

3.1      Annual Consolidated Sustainability Report…………………………………………. 5

3.2      Financial report………………………………………………………………………………… 6

  1. Guidelines adopted……………………………………………………………………………………. 7

4.1      International regulation and guidelines for carbon reporting: the Kyoto Protocol  7

4.2      Malaysia national laws and regulations……………………………………………….. 8

4.3      ISO14001……………………………………………………………………………………….. 9

  1. Views of the management: Interview with Bénédicte Laurent (Vice Operation Manager of WPC Corporation (WPCC) Malaysia)…………………………………………………………………………………………… 9
  2. Conclusion………………………………………………………………………………………………. 11

Reference……………………………………………………………………………………………………… 12

Appendix REGULATIONS AND ORDERS ENFORCED UNDER THE ENVIRONMENTAL QUALITY ACT 1974…………………………………………………………………………………………………………….. 14

Carbon regulations in WPC Corporation (WPCC)

 

1.        Introduction

 

1.1    Background of the company

 

The WPC Corporation was set up by Takeyasu Kikuchi from the EIN Engineeing Co., Ltd in year 2004. WPCC is one of the largest global marketing firms in Japan in the product line related to the wood plastic composite products and technology with a strong focus on enlarging the marketing and sale of the new products which it believes is having great potential for future growth with the well receiving feature of being environmentally friendly through its major business operations that include research and development (R&D) activities, consultation service of the recycled wood plastic composite material as well as the design and building of the environmentally friendly building or architecture (einwood.com 2012). Wood Plastic Composite material is widely available today in Asia, and especially in Japan, where it holds a 60% market share in architectural landscaping in the public and private construction sectors (wpccorp.com.my 2011).

 

1.2    Major product offering

 

Figure 1 The major products (composite wood) offered in Malaysia market

Source: wpccorp.com.my 2011

 

The idea of inventing this new technology and new material of wood plastic composite came from the early environmental protection awareness in Japan in the 1990s as this new material made from the softwood waste and the recycled polymer resins was invented as an alternative for wood (einwood.com 2012). And it is believed that the new material offers the similar external looking as well as other major internal qualities with one of the most valuable wood in the world. The foamed profiles are the current major product development which had been released to the market since the year 2005 though a new application is expected this year for the concrete foam panels (woodplasticcompositefloor.com 2012). The figure above shows the major final products available in the Malaysia market using the technology of composite wood.

 

2.        Company policy on the carbon emission

Though the wood plastics composites as a new material is invented as a substitute to the wood which comes from the cutting of trees which further results in a number of environmental global environmental issues such as the deforestation, global warming, carbon emission and so on, and also the company makes use of the wood and plastic wastes as the raw material to create the wood plastics composites, due to the limitation of the production technology as well as the limitations in the project construction the company’s business activities would still result in some side effects and carbon emission is a key component of such side effects. But the company with an initiative to contribute to the creation, development and marketing of the more environmentally friendly wood material has adopted comprehensive company policy in reducing and also controlling the carbon emission during its business practices.

 

2.1    The adoption of the internal energy efficiency scale

 

There are already many energy efficiency scales designed to regulate the level of energy consumption for various products such as the energy efficiency scale for washing machines is calculated based on a cotton cycle at 60 °C (140 °F) with a maximum declared load. As the energy efficiency leader in the industry, the company has adopted an internal energy efficiency scale to evaluate the energy saving performance of a single functional department, a project and so on. And also these results of the internal energy efficiency performance and evaluation will be available internally and each employee would know the performance in this energy efficiency scale in his or her own department or project where he or she works. This policy is designed to stimulate the employees, functional departments and also the project teams to focus on energy saving and focus on offering improvements in this field.

 

2.2    Carbon emission survey

 

Besides the evaluation using the internal energy efficiency scale designed by the company itself, in order to get access to the source of the employees’ thinking about the carbon emission performance in their departments and projects, the company also has a company policy to regularly perform the carbon emission survey done among all its employees to collect their idea regarding the carbon emission performance of the company in difference departments and projects. In addition, the carbon emission survey will be done using an online mode and the respondents do not have to input their names but only the level of position and departments they are in, this will encourage the employees to provide honest answers to the survey questions.

 

2.3    Green credit policy in selecting suppliers and projects

 

The green credit policy in selecting suppliers is to evaluate the energy consumption performance, waste control capability and other environmental protection abilities of the suppliers that the company has cooperation relationship with. This policy was adopted since year 2004 by the company and all its subsidiaries and joint venture firm in which it has the power to influence the business decision making, under the green credit policy in selecting suppliers, each current supplier and potential supplier will be reviewed under the policy in the field of their ability of energy saving and also their performance in environmental protection in the past cooperation experiences. On the other hand, the Green credit policy in selecting projects will guide the marketing departments to add preference over those project that incur less energy consumption, various pollution and so on. This company policy is designed to guild the direction of business expansion as well as extending the energy saving idea to the supplier companies by imposing a number of relevant requirements and carrying out regular evaluation of their performance.

 

2.4    Environmental audit (EA)

 

The environmental audit (EA) refers to the management tool that consists of a systematic, documented periodic and objective evaluation of how well the management and equipment are performing according to the environmental terms to achieve the goal of protecting the natural environment (North 1997, p. 110). The company of WPC Corporation (WPCC) has voluntarily adopted the environmental audit (EA) as an important company policy to achieve the targets of performance optimization, recycling opportunities and improved public and customer relations.

 

3.        Periodicity and pattern of reporting carbon emission

 

3.1    Annual Consolidated Sustainability Report

 

WPC Corporation (WPCC) believes that the company’s long-term operational and commercial success is closely linked to the company’s ability to powerfully overcome the environmental and social challenges, control risks and seize the opportunities that the company’s operations face. One of its major patterns of reporting the carbon emission is the Annual Consolidated Sustainability Report. A sustainability report is an organizational report that gives information about economic, environmental, social and governance performance. The company issues its Annual Consolidated Sustainability Report to report the company’s overall performance and within which the environmental performance and carbon emission will be stated accordingly to inform the stakeholders about the company’s relevant effort to contribute to the sustainable economic cycle and social development. In detail, for example the report will state the carbon dioxide emission compared to the previous years as the following figure show.

Chart 1 Annual carbon dioxide emission

 

3.2    Financial report

 

Though the financial statement (or financial report) is traditionally known as a formal record of the financial activities of a business, WPC Corporation (WPCC) believes that it is necessary to add the environmental performance and sustainability performance of the company into the annual financial statements to educate and influence the shareholders and other financial report users about the importance of the carbon emission reduction as well as other environmental efforts. It is highly promoted in the company’s financial report that it will be of great importance to focus on carbon emission reduction in securing the long term profitability of the company business.

 

4.        Guidelines adopted

 

4.1    International regulation and guidelines for carbon reporting: the Kyoto Protocol

 

The Kyoto Protocol is a protocol to the United Nations Framework Convention on Climate Change (UNFCCC or FCCC), aimed at fighting global warming (Körber & Barth 2008). The Protocol went into effect since the beginning of 2005, it was designed to achieve the target of reduction of four types of greenhouse gases and two kinds of gases created from these greenhouse gases which are all listed below.

 

  • Carbon dioxide (CO2),
  • Methane (CH4),
  • Nitrous oxide (N2O),
  • Hydrofluorocarbons (HFCs),
  • Perfluorocarbons (PFCs),
  • Sulphur hexafluoride (SF6).

 

Table 1 Emissions targets for countries in Kyoto Protocol

Source: unfccc.int 2010

 

Above are the national emission reduction targets for those countries that have ratified the protocol, these targets are also clear guideline and targets to be followed by the companies operating in these countries. For example, WPC Corporation (WPCC) has followed the guideline of the Kyoto Protocol since the effective date of the treaty and since its many production procedures are majorly locating in its home country, Japan, it had set the target of more than 10% reduction for gas emission aiming at contributing to the national target of 6% decrease.

 

4.2    Malaysia national laws and regulations

 

The Environmental Quality Act of 1974 and other environmental laws are administered by the Division of Environment of the Ministry of Science, Technology, and Environment (harmonialam.com 2010) and they are enacted to protect the country’s worsening natural environments. The relevant regulations could be reviewed in detail in the appendix. For instance, the clause 31 in the Environmental Quality Act of 1974 regulates that when there should be any damaging pollutants to be exhaled or created by the business activities, the relevant responsible companies are required to:

 

(1) Install and operate any control equipment or additional control equipment

(2) Repair, alter or replace any equipment or control equipment

(3) Measure, take a sample of, analyze, record and report any emission containing pollutants (doe.gov.my 2009)

 

In addition in 2002, the Malaysia National Policy on the Environment was also endorsed to achieve the aims of continued economic, social and cultural progress and enhancement of the quality of life of Malaysians through environmentally sound and sustainable development.

 

4.3    ISO14001

 

ISO 14001 was first published in 1996 and specifies the actual requirements for an environmental management system. It covers the relevant environmental aspects which the company has ability to exert control over or could impose influence (Hillary 2000). ISO 14001 advises that environmental protection and improvement targets should be specific and measurable. An instance of a specific and measurable environmental protection and improvement target for a manufacturing business is to reduce carbon emissions by 10% in the three years term. And in term of the service firms, they also are responsible for the carbon reduction though the strategies to cut carbon emissions might be different for the two groups of them (Lloyd 2009). As for WPC Corporation (WPCC), the company also takes it upon itself to follow the ISO14001 regulations and requirement in its operations in Malaysia as well as in other countries.

 

5.        Views of the management: Interview with Bénédicte Laurent (Vice Operation Manager of WPC Corporation (WPCC) Malaysia)

 

Question 1. “Good Morning Mr. Bénédicte Laurent and thank you for spending your precious time with us. Today our interview topic will be around carbon emission in Malaysia and also in the world wide scale. To begin with may I ask in your opinion, does the manufacturing industry in Malaysia producing the wood material that your company is offering as well has significant impact over the carbon emission.

 

Answer: First of all, it’s my pleasure to be part of this research; it is good to have our future talents like you to understand the problem of environmental protection and importance of the now popular so called low carbon economy. The answer to your question is positive, as you may have already known about, the manufacturing industry in Malaysia is responsible for the around 5% of the country’s total carbon emission. Though speaking in this percentage, the proportion is not large, what we need to understand is another side of this problem, the reduction of woods rather than the direct exhale of the carbon gas such as the carbon dioxide. Let’s say, we are doing an entertainment convention center in Kuala Lumpur, the direct emission of the relevant gases mainly come from the installation procedures. But as you may witness from any convention center, the usage of wood cut from forest is large, hence the reduced ability of the forest and nature will be immeasurable and not reflected in the gas emission reports. Therefore, I will say that the manufacturing industry in Malaysia producing the wood material has significant impacts over the carbon emission issues.

 

Question 2. Thank you for your impressive answers, so talking about your company does it has any special department to handle the carbon emission issue?

 

Unfortunately, currently we do not have such a special departments dedicated to the carbon emission related problems. Such problems are all handled in the Corporate Social Responsibility Committee which has oversight of the Company’s attention to issues of social responsibility and the Company’s environmental policies.

 

Question 3. Does your company include any periodic reporting patters to report the carbon emission?

 

Sure, our business follows not only the international environmental guidelines and the national environmental policies where the business is operating, but also we strictly adhere to the ISO14001 voluntarily to regulate our business practices. And to present our environment related efforts, we have reported the data relevant to carbon emission and environment risks through our quarter and annual financial reports as well as the Environmental audit (EA).

 

6.        Conclusion

 

From the above analysis and interview data, we can see that WPC Corporation (WPCC) not only produces the environmental friendly wood composite material that helps reduce the reliance on the natural wood but it also has adopted comprehensive environmental guidelines in its company policy to oversight and monitor the environmental performance in term of carbon emission in particular to contribute to the company’s goals as well as the national’s environmental goals.

Reference

 

doe.gov.my 2009. Environmental Requirements: A Guide For Investors. Accessed on 15 May 2012. [online] http://www.doe.gov.my/portal/wp-content/uploads/2010/12/A-Guide-For-Investors1.pdf

 

einwood.com 2012. WPC Corporation: Origins. Accessed on 15 May 2012. [online] http://www.einwood.com/

 

harmonialam.com 2010. What is Environmental Quality Act 1974 (EQA)? Accessed on 15 May 2012. [online] http://harmonialam.com/our-services/11-malaysia-environmental-quality-act-1974-eqa.html

 

Hillary, R. 2000. ISO 14001: case studies and practical experiences. Sheffield: Greenleaf Publishing.

 

Körber, C. & Barth, S. K. 2008. The Kyoto Protocol. Germany: GRIN Verlag.

 

Lloyd, T. 2009. ISO 14001 – Environmental Management Systems. Accessed on 15 May 2012. [online] http://tracey-lloyd.suite101.com/iso-14001-environmental-management-systems-a140344

 

North, K. 1997, Environmental Business Management: An Introduction. Switzerland: ILO Publications. p. 110

 

unfccc.int 2010. Kyoto Protocol. Accessed on 15 May 2012. [online] http://unfccc.int/kyoto_protocol/items/3145.php

 

wpccorp.com.my 2011. Introduction Wood Plastic Composite a material of the future! Accessed on 15 May 2012. [online] http://www.wpccorp.com.my/

 

woodplasticcompositefloor.com 2012. Wood plastic composite innovation. Accessed on 15 May 2012. [online] http://www.woodplasticcompositefloor.com/wpc-knowledge/wood-plastic-composite-innovation/

Appendix REGULATIONS AND ORDERS ENFORCED UNDER THE ENVIRONMENTAL QUALITY ACT 1974