Resource extraction and land conversion - SUM: Sustainability Management Wiki

Authors: Giuliano Ditel, Michelle Mennenga, Markus Schulte
Last updated: June 22, 2022

1 Motivation and definition

The topic of resource extraction and land conversion is becoming increasingly important in the context of environmental and climate protection. Natural resource extraction and processing make up approximately 50% of total greenhouse gas (GHG) emissions. Moreover, an estimated 11% of existing species will become globally and irreversibly extinct due to global land use activities. The consumption of water contributes to water stress, threatening the sustainable supply of freshwater to humans and ecosystems.¹ Other impacts of resource use include eutrophication and eco-toxic effects caused by the overuse of fertilizers in certain areas, which can ultimately lead to biodiversity loss.

1.1 Land conversion

Land conversion is a general term for large-scale geographic change.² It focuses on the general physical and biological aspects of land-use change. The larger categories are conversion to building land and conversion to agricultural land. These two categories are explained below.

1.1.1 Conversion to building land

The conversion of land to building land is usually accompanied by the construction of roads, which leads to the removal of topsoil, soil compaction, and a change in the chemical composition of the soil. This is due to the fact that the soil has to be stabilized by the conversion measures, and thus, among other things, impermeable surfaces are created, which can lead to more surface water. This water may also be polluted. Increased surface sealing can lead to flooding. Construction activities often lead to the sealing of a large part of the soil from rain and the nutrient cycle, making the developed land infertile, whether through buildings or roads. The construction works result in fewer tall plants in these areas, as the areas are sealed by asphalt or concrete surfaces.³⁴⁵

1.1.2 Conversion to agricultural land

In the production of agricultural land, former forests, savannahs, or grasslands are converted. It is much less common for wastelands or deserts to be converted into agricultural land because the soils in these areas are not very fertile. If the land was previously forested, slash-and-burn agriculture is often used to convert the former tree area into arable land. Conversion to agricultural land also involves the construction of roads so that people and machinery can access the relevant land. However, hydrological measures, such as land leveling, irrigation, drainage, and protection against landslides and floods, are also part of this type of conversion. In order to ensure a high-yield harvest, soil improvement methods in the form of fertilization are also used. This also involves the risk of overfertilization and contamination of groundwater.³⁴⁵

1.2 Resource extraction

In the context of this work, natural resources are materials that are used, for example, for the production of materials such as steel or concrete. However, air and water are also considered natural resources.⁶ Resource extraction is the extraction of natural resources from nature for human use. The resources extracted by humans can be rocks, minerals, and fossil fuels, such as coal, gas, or oil. Biomass is another resource that is extracted through the clearing of forests for the extraction of wood, whether for construction or for use as fuel, or through fishing or hunting of wild animals. The extraction of water, which is essential for humans, is also part of resource extraction. In some parts of the planet, there are already distribution struggles regarding the resource of water, such as in California or between some Arabic countries and Israel concerning the water of the Jordan River.⁷⁸ Since the beginning of industrialization in the 18th century and the extraction of coal to run steam engines, the level of abstraction has intensified around the globe.⁹ With the integration of countries such as China into the globalized world, the rate of extraction has reached yet another higher level.⁹ With an ever-increasing global population[1] and a greater proportion of this population wanting to achieve a higher standard of living, the rate of extraction is projected to double from 2015 to 2050.⁹

Resource extraction can lead to the destruction of habitats. This affects humans as well as flora and fauna. An example of this is the collapse of old shafts in former mining areas in Western Germany.¹⁰ Destruction has an impact on species, distribution areas, biodiversity, and the interaction between organisms. However, the way in which extraction takes place makes a big difference in its impact on the environment. For example, large-scale deforestation leads to the disappearance of species and the destruction of soil, whereas sustainable timber management has minimally invasive impacts. The same applies to different fishing methods. For example, the use of different fishing methods can significantly reduce the number of bycatch.¹¹

However, the increase in the rate of extraction also increases the amount of pollutants released into the air, soil, and water, thus affecting the health of humans and other living creatures. As explained in the Land Conversion subchapter, the extraction of raw materials also leads to a decrease in soil quality. Deforestation for timber as a raw material or coal mining can destabilize the soil and make it less fertile, leading to soil erosion, as discussed above.

The decrease in the availability of fresh water leads to impacts on people and the environment, such as distribution struggles. In addition, sinking groundwater due to water extraction can lead to land subsidence. Even seismic changes in the form of increased earthquake frequency can result from the use of extraction flaring, which is the process of extracting oil and gas deposits deep below.¹²

2 Measurement and key performance indicators

Key performance indicators (KPI) are used to measure whether previously defined goals have been achieved. For this purpose, various scientific key indicators have been developed to make the current status of development transparent.¹³ In the following section, the most important KPIs are presented and explained, and the differences in measurement at the state level and at the company level are discussed. The focus here is on resource efficiency; supply chain management is only dealt with secondarily.

The Energy Efficiency indicator shows the ratio between a certain result, e.g., a product, and the energy required to produce it.¹⁴ The recycling rate indicates the proportion of materials actually reused from waste. A distinction is made between the reuse of entire components and the reuse of raw materials.¹⁵ In the case of secondary raw material use, the aim is to increase the use of these secondary raw materials instead of primary raw materials. It comprises two indicators and shows not only how many secondary raw materials have been used, but also how many primary raw materials have been replaced. It uses the quotient of the indicators Direct Effect of Recovery (DERec) divided by Direct Material Input (DMI) and Direct and Indirect Effects of Recovery (DIERec) divided by Raw Material Input (RMI).¹³ Resource intensity is the measure of how many resources were needed to produce a good and is therefore a measure of the efficiency of its use¹³. The Total Raw Material Productivity indicator shows how much added value can be generated per tonne of raw material input. It relates the value of all goods sent to the final use to the mass of raw materials used for production at home and abroad in tonnes.¹³ The Material Use or Raw Material Consumption indicator (RMC) shows the mass of raw materials used for domestic purposes. It includes both consumption and investment. Using Germany as an example, it fell between 2000 and 2014, which can be explained by a decline in the construction industry.¹³ The use of anthropogenic stock indicators measures the extent to which resources stored in so-called anthropogenic stockpiles can be used again in the form of raw materials and materials. This storage can take place in durable products, buildings, or infrastructure. The process of reusing these materials is also called urban mining.¹³ The amount of waste indicator shows the amount of municipal waste generated in a given period of time. It serves as a measure of whether the goal of waste prevention is successful.¹⁴ The hazardous substances indicator specifies how high the proportion of hazardous substances is in production. Substances are declared hazardous substances according to the definition of the German Chemicals Act.¹⁶

3 The role of companies

The relationship between global resource extraction and the corporate level can be represented by the fact that global resource extraction is equivalent to global resource consumption, which results from the production of goods and services, as well as from the construction of infrastructure regarding socioeconomic systems.⁶¹⁷ In 2009, approximately 60 billion tons of natural resources were extracted to meet our consumptive needs, which equals the weight of more than 41,000 Empire State Buildings.[20] In the period from 1970 to 2017, the extraction of natural resources increased from 27.1 billion tons to approximately 92 billion tons.¹⁸ The term natural resources in this context refers to nonmetallic minerals, biomass, fossil fuels, and metals.¹⁹ Arranging these natural resources according to decreasing importance for the economy, nonmetallic minerals take the greatest importance, with a share of material use of one-third, containing the subgroups of constructive minerals (e.g., sand, gravel, and crushed rocks) and industrial minerals (e.g., salts and fertilizers), which are important for constructive industries.¹⁹ Biomass represents the second most used material and covers wood resources, feed, and food, which are necessary for agricultural activities, while fossil fuels like coal, oil, and natural gas continue to have great economic relevance in terms of energy demand. The lowest share of material use is related to metals, such as iron, copper, and gold, which are of great importance for the manufacturing industry.¹⁸¹⁹ It is predicted that the value of resource extraction, which equals the global demand of resources, will probably double by 2060, because the world population will increase to nearly 10 billion people and developing countries will need a lot of resources to build infrastructure and raise the standard of living.¹⁹

The central role of companies in resource extraction and land conversion is illustrated in Fig. 1. Natural resources are necessary to produce goods and services. If the world population and the world economy grow, more resources are needed to meet demand. The more resources are extracted, the higher the environmental impacts of extraction, such as landscape changes or soil degradation (left side of Fig. 1). Greater amounts of extracted resources also relate to more extensive environmental impacts of production, such as emissions to water or waste disposal (right side of Figure 1). The environmental impacts of production then prompt climate change or the loss of biodiversity.⁶¹⁸ In this context, it is necessary to consider the entire life cycle of goods and services. This includes natural resource extraction, production of goods, the use phase, and the disposal of the final product.⁶ For instance, resource extraction and production account for 50% of global greenhouse gas emissions and 90% of biodiversity loss due to land use.¹⁸

Looking now at the production phase, companies have the opportunity to use natural resources more efficiently to decouple resource consumption from economic growth. This more efficient use of resources through technological improvements has already led to a relative decoupling, whereby fewer resources are needed to produce one euro of GDP. Regarding Fig. 2, between 1980 and 2005, resource extraction increased by 50%, while world economic output increased by 110%.

In 2005, the global economy already needed 30% fewer resources than 30 years ago to produce one euro of GDP.[20] Correspondingly, resource intensity has decreased due to technological improvements, which means that resource efficiency has increased globally, even if this does not apply equally to all regions of the world. There are currently limitations to this statement, as seen in Fig. 3, where material productivity (blue line), i.e., the generated euro per kilogram of material use, declined around the year 2000 due to the fact that economic output shifted from highly resource-efficient countries to less resource-efficient countries like China.¹⁸ Additionally, rebound effects are not to be neglected, because if production requires fewer resources, then the production costs fall, which lowers the price of the product. If the product price has fallen, then an increase in consumption by end consumers could occur. In this case, an absolute reduction in resource consumption is prevented.¹⁷

Consequently, taking into account the ongoing absolute increase in resource extraction due to population and economic growth, as well as the convergence of living standards, pure technological improvements alone are not sufficient to solve environmental challenges.¹⁷¹⁸ This is underlined by the fact that the absolute environmental impacts still increase despite the observed relative decoupling.¹⁸ Further, well-designed and coordinated policies and actions are necessary to support the decoupling of material use from economic activities.¹⁸ This includes the promotion of research and development, the support of demonstration projects, and the introduction of legal requirements, such as technical standards and norms.¹⁸

Besides the political level, companies also have a great responsibility to turn linear material flows into circular material flows by reusing or recycling materials, redesigning products, and offering more services instead of purely material products.⁶ In the succeeding section, the entrepreneurial perspective is presented.

4 Corporate measures and instruments

This chapter gives an overview of the reasons why companies practice resource management, which prerequisites must be met for the implementation of measures, and which measures are used by companies to improve resource use. Useful CSR standards, management systems, and tools for process and product optimization are presented.

4.1 Resource extraction and sustainability management

Companies progressively consider the efficient use of resources and the improvement of raw material productivity for several reasons. First, companies are increasingly confronted with societal expectations as well as the expectations of other internal (e.g., employees) and external (e.g., customers) stakeholders, who expect companies to take responsibility for global challenges like climate change and environmental protection. ²⁰ Accordingly, a company is expected to act as sustainably as possible and to incorporate not only the economic perspective, but also the ecological and social perspectives into decision-making processes. ¹⁹ In order to meet these stakeholder requirements, companies are increasingly engaged in sustainable management, which seeks to improve ecological, social, and economic challenges. ¹⁹ Secondly, companies face an increasing scarcity and volatility of commodity prices. The high global demand for resources is accompanied by rising commodity prices, which means that companies have to anticipate future supply risks. ²⁰ An essential component of a more sustainable orientation of a company is resource management, which not only reduces production costs, but also increases innovation and improves the image of the company. For these reasons, the efficient use of resources is one of the most important and most commonly implemented sustainability topics ¹⁹ ²⁰

4.2 Conditions and perspectives for the implementation of measures and instruments

If a company wants to achieve improvements in a sustainability topic—in this case, resource management—the management board has to express a clear commitment in the form of a more sustainable corporate strategy and the associated mission statement. ²⁰ The operationalization of the topic and the monitoring of the defined objectives regarding resource efficiency are possible through indicators and key figures within the framework of sustainability reporting.²⁰ A company’s sustainability strategy and its core topics need to be integrated into the value chain as well as into the corporate identity and the associated values and attitudes of the employees. It requires acceptance by all relevant internal and external stakeholders. ²⁰ Two further perspectives are a prerequisite for the application of measures to improve resource consumption in a company. On one hand, it is essential to look at the entire value chain of product manufacturing and the underlying processes to identify the areas of the company in which the potential for savings exists. ²⁰ In this case, the potentials are in all areas, including product design, production, material processing, and disposal. ²¹ On the other hand, the resulting product has to be assessed regarding its environmental impact along its entire life cycle, considering all stages, from resource extraction until disposal. This life-cycle perspective includes all inputs, such as materials, energy, and raw materials, as well as outputs in the form of waste. ²² To produce a sustainable product, the following phases must be considered: 1. Sustainable Design, 2. Sustainable Procurement, 3. Sustainable Production, 4. Sustainable Logistics and Supply Chain, 5. Sustainable Use Phase, and 6. Sustainable Disposal. ²⁰

4.3 Measures and instruments

The following subchapter presents measures and instruments at the company level that are frequently used in practice. Company examples are also provided.

4.3.1 Sustainability standards and management systems

The first important instrument for the implementation of measures of any kind is the collection of practice-relevant information and guidance for companies. In the field of sustainability, many different frameworks are available that provide the necessary understanding and guiding principles on sustainability topics, provide recommendations for management approaches, and offer indicators for operationalization, monitoring, and reporting.²³ Furthermore, sustainability standards can be divided into three areas: Guiding Principles, Management Systems and Reporting Standards.²³ For example, the United Nations Global Compact (UNGC) and the OECD Guidelines for Multinational Enterprises mainly propose guiding principles regarding different sustainability topics, but they do not propose implementation tools and measures in a direct way. For this reason, various supplementary management systems exist, such as the management systems published by the International Standards Organization (ISO), namely ISO 14001 (Environment) and ISO 50001 (Energy), and the Eco-Management and Audit Scheme (EMAS) of the European Union, which offer concrete processes for the implementation of improving measures and the monitoring of environmental performance.²³²⁴ The UNGC offers companies not only the 10 principles of human rights, labor, environment, and anti-corruption, but also the largest network of companies and further assistance, such as seminars, training, and studies.²³²⁵ Currently, around 13,000 companies have joined the initiative, which makes their progress and undertaken measures transparently available in the database, thereby allowing other companies to receive practically applicable sustainability knowledge.²³²⁶ In this context, the eighth principle of the UNGC describes that companies should apply resource-saving processes and technologies, provides further advice for implementation, such as the introduction of a management system and the implementation of sustainability reporting, and refers to further documents and studies on the topic.²⁷ However, a company could also integrate an operational resource management system to identify material flows that can be made more efficient through derived measures. In practice, certifiable environmental management systems, such as ISO 14001 and EMAS, are introduced to evaluate the environmental performance of the company.²⁸ The use of a certified environmental management system is voluntary, but a commonly used instrument to improve environmental performance.

A total of 320,000 companies worldwide are certified in accordance with ISO 14001, while approximately 4,000 companies are certified in accordance with EMAS.²⁸ In terms of requirements, EMAS covers ISO 14001 but has been expanded by aspects of environmental law compliance, employee participation, and public reporting of environmental objectives and their implementation.²⁰²³ The EMAS focuses in its higher requirements on continuous improvement of the entire environmental performance with subsequent external environmental auditing, while the ISO aims at improving the management system and its processes. Therefore, the EMAS is discussed in more detail in the present section.²⁹ An increase in resource efficiency is made feasible by first analyzing the current situation.³⁰ In this context, the environmental impacts of production and products are assessed, while the current structures and processes of the company are highlighted.³⁰ Based on this, essential environmental aspects are identified, and an environmental program covering measures and defined targets for improvements is developed.³⁰ This is followed by the implementation of the measures, which include, for example, the introduction of new processes that are implemented through process descriptions and work instructions for employees.³⁰ The management system is monitored through the collection of data, whereby resource consumption is monitored as well.³⁰ Additionally, indicators are used to evaluate the performance of the management system so that corrective and follow-up measures can be developed.³⁰ Finally, the management system is checked for functionality by an external third party, the certifier.³⁰

The indicators shown in the table on the left are central to the EMAS management system. As outlined in previous chapters, the energy efficiency indicator is relevant to the extraction of fossil fuels, material efficiency and waste in terms of metal and nonmetal resources for production, water consumption, since water is also a natural resource, and the impact on biodiversity through land use.

Compared to EMAS, ISO 14001 does not focus on improving environmental performance, but rather on the management processes themselves. In the same way as EMAS, the key environmental aspects are identified, targets are set, and implementation programs are initiated. Implementation is monitored, reviewed, and corrected if not convincing.²⁹

Standardized core indicators could not be retrieved via the ISO website because further documents are not available for a fee.³¹ Furthermore, ISO 14001 is part of the ISO 14000 family of standards, which also contain several specific standards for environmental management, such as the life cycle impact assessment of the product (ISO 14040–14043).²⁰ Moreover, the framework of ISO 50001 helps companies improve energy efficiency by offering a systematic approach to planning and managing energy use. Implementing ISO 50001 leads to improved production processes and requires a survey to analyze current energy use and a commitment to continuously improving energy performance. Basically, the structures of ISO 14001 and ISO 50001 are the same. ISO 50001 focuses on energy performance indicators, such as energy consumption divided by output.³²

Although the introduction of environmental or energy management involves high costs due to internal personnel expenses, investments in environmentally friendly technologies, and costs for certification, there is potential, depending on the industry, for material savings of approximately 7% on average and energy efficiency gains between 2% and 5% (EMAS, 2020; UBA, 2021).²⁸³⁰ EMAS in particular provides an environmental management system that has a major impact on the company’s resource efficiency.³³

A best-practice case for the establishment of EMAS is the Ebswien wastewater treatment plant, which was able to significantly reduce its electricity consumption and, consequently, its CO2 emissions. Wastewater treatment is a very energy-intensive process, and during the determination of the environmental impacts, the analysis made it clear that wastewater treatment is responsible for 1% of Vienna’s total energy consumption. Based on this, the company installed thermal and photovoltaic solar panels, a Kaplan turbine, a hydropower screw, and a small wind turbine. By then, electricity consumption had been reduced by 11%, and 2,800 tonnes of CO2 had been saved. Subsequently, the wastewater treatment plant implemented combined heat and power from sewage sludge and now covers its entire energy consumption autonomously. This positive development was made possible by the financing of the European Investment Bank, the expertise of other important stakeholders, and the establishment and optimal implementation of a management system for obtaining the necessary environmental information and setting targets to achieve.³⁴ A similar approach, but with a different purpose, is taken through the implementation of public sustainability reporting. The most widely used reporting standard worldwide, the Global Reporting Initiative (GRI), aims to present a company’s sustainability performance in a balanced, transparent, and comparable manner. At the same time, a company is confronted with numerous indicators from the areas of economy, ecology, and society, but receives background information for the formation of more sustainable corporate approaches, processes, and structures.

Overall, the GRI focuses on the measurement and assessment of key sustainability aspects.²³³⁵ In relation to the topic of sustainable use of resources, the GRI offers indicators on the topics of material consumption, recycling, and reuse of products and packaging (GRI Indicators 301-1 to 301-3); on internal and external energy consumption, energy intensity, reduction of energy consumption, and reduction of energy demand (GRI Indicators 302-1 to 302-5); on water withdrawal, recycling, and consumption (GRI Indicators 303-1 to 303-5); and on the impact of corporate buildings on areas with high biodiversity values (GRI Indicator 304).³⁶

In this context, the Institute for Ecological Economy Research and the entrepreneurial initiative Future e.V. publish rankings of the best sustainability reports of large- and medium-sized German companies at regular intervals. Based on a comprehensive set of criteria related to social, ecological (including ecological aspects of production and product responsibility), management, and communication aspects, the best reports in Germany are determined. The best practice cases of 2018 were Rewe (512 points out of a maximum of 700) for large companies and Vaude (671 points out of a maximum of 700) for medium-sized companies.³⁷

Another tool for assessing a company’s sustainability performance and the undertaken improvement measures is a sustainability rating, as provided by EcoVadis.³⁸ Based on company-specific information (sector, geography, and size), supporting documents, such as guidelines, certificates, and reports, are controlled. In addition, news monitoring and expert interviews are conducted in order to define the implementation level of measures as well as to create a final company-specific, but industry-related, scorecard.³⁸ The scorecard includes topics of the environment, labor and human rights, ethics, and sustainable procurement.³⁸ In total, 21 sustainability criteria were assessed, including indicators of material and energy consumption, water consumption, and product end of life.³⁸ The maximum score is 100 points. The company also receives concrete corrective measures to further improve its sustainability performance.³⁸

4.3.2 Product optimization

Sustainable product development can be a great economic and ecological lever for a company. At the product design stage, 80% of the total environmental impacts along the entire life cycle and the material costs are determined, which are classically 42% in the manufacturing industry.³⁹ By designing the product in a more sustainable way, material costs can be saved, and resources can be conserved by applying appropriate principles, such as recyclability, repairability, and durability.²⁸ Nevertheless, it must be considered that product optimization can only refer to specific impact areas of the product (e.g., energy, and material use), because otherwise the product designer would fall into a complexity trap.⁴⁰ Additionally, the product characteristics and related processes that a product possesses given by the pre-chain (e.g., used materials, mining process of the resource), its usage (e.g., intensity of use), and its disposal (e.g., separability of the materials) must be considered.⁴¹ In general, the optimization of a product always depends on the type of product, such that an extremely short-lived product, such as clothing, must be designed to be more durable, a long-lived product must be designed to be repairable, or the use phase must be optimized in terms of environmental impact and energy consumption.²⁸⁴⁰ All in all, the application of eco-design principles is intended to improve the environmental impact and resource efficiency, but in many cases, it does not result in a truly new sustainable product.⁴⁰

Best practice cases in the area of more sustainable product design are Patagonia and Bauknecht. Patagonia is a pioneer in the textile industry in the use of environmentally friendly materials and recycling. In the 1990s, Patagonia discovered that 76% of energy could be saved by using recycled polyester fibers. Patagonia likewise uses pesticide-free organic cotton for its clothing and is involved in the development of a process in which fibers can be recycled endlessly. In a different industry, Bauchknecht managed to make household equipment 50% more energy-efficient with its Greenkichten technology concept. Among many other things, sensors were used to determine the weight and consistency of the food, thus allowing for the regulation of the amount of water and energy. Similarly, hobs that adapt to the size of the pot and consequently minimize energy and heat loss were developed.²⁰

The following resource-saving criteria can be applied to reach a more sustainable product design:²⁰⁴⁰

Material efficiency: Material substitution, lightweight construction, multifunctionality
Material friendliness: Local and renewable materials, avoidance of animal and plant products that endanger livestock
Energy efficiency: Reduction of energy consumption along the life cycle, use of renewable energies
Low-polluting and waste-avoiding: Low-pollutant material selection, low-pollutant operating and auxiliary materials
Durability and repair-friendly: Modular design, use of high-quality materials, avoidance of throwaway products, time-resistant design
Logistics-friendly: Reduction of product and packaging volume, transport-friendly form
Circulation capability and disposal-friendly: Recyclability, use of biodegradable materials, reuse, material selection

In most cases, successful implementation of such criteria is only possible along the value chain and requires the involvement of all key stakeholders.⁴²

In the context of material substitution, biotic raw materials offer enormous potential for replacing organic compounds from fossil raw materials. Biotic raw materials (sugar, starch, vegetal oils, or cellulose) are already used today in bioplastic production and offer numerous other possible applications that must be further researched. It is also conceivable to use biotic raw materials (polylactic acid) as a substitute for mineral and metallic raw materials or to use biogenic materials in lightweight construction. One obstacle, however, is that biogenic materials may not be used in packaging because the assessed life cycle of the materials is inferior to that of conventional raw materials. High amounts of energy are required for production, and materials can only be decomposed very slowly. The land required for cultivation is also problematic, because conflicts with agriculture arise.²⁸

Also, exemplarily mentioned, lightweight construction offers a high potential to save resources and costs. The aim of lightweight construction is to develop products that are lighter by themselves or made of lighter materials in order to save resources and energy. Applications are found in the automotive industry, where carbon fiber–reinforced polymers can be used to reduce fiber cuts (i.e., scrap).²⁸ In lightweight construction, the miniaturization of technologies in machines and systems also plays a major role, which could be applied in practically all industries.²⁸ The existing barriers are the high investment costs in production technology, as well as the design of new production processes, which do not offer quick returns on investment. There are also information deficits in the operational capability of the new production processes and in terms of the value chain.²⁸

Regarding the design criterion circulation capability, the integration of the circular economy at the company level also plays an overriding role. Measures such as reuse (secondhand markets), remanufacturing (disassembling the product to reuse individual parts), and recycling in manufacturing (e.g., scraps and waste) are intended to extend the life cycle of a product and prevent the product and its materials from becoming linear (production to use to disposal).⁴² A pioneer in this area is Ikea, because they have defined their own circular product design principles, and they take them into account during the product design process.⁴³

4.3.3 Process optimization

Another measure is sustainable process optimization in the company, which is intended to improve processes in the company and, at the same time, reduce the environmental impact. Process optimization is about designing, controlling, and measuring processes to release potential for improvement. Sustainable process optimization deals with the questions of which processes are essential for the product and which processes are unsustainable and can be eliminated or redesigned.²⁰ Here, it is not only about the production processes of manufacturing, but also about procurement and logistics processes.²⁰ In procurement, the proper selection of suppliers must be used to ensure that a more sustainable product can be produced at all. In addition to reliability and adherence to delivery dates, ecological (packaging materials) and social criteria (human rights, occupational safety, health) are also included in the supplier selection process, which are then checked in assessments and audits.²² The same applies to logistics issues because attention must be paid to how products are packed, stored, and transported. It may also be possible to close loops so that packaging or products flow back into the company.²²

Lean management, developed by Toyota, offers an approach for the sustainable improvement of business processes at all levels of the company, which has an enormous impact on the resource efficiency of the company. This is a holistic management philosophy designed to make processes leaner and more sustainable, in addition to optimizing costs, quality, and delivery capacity. The focus is on avoiding waste and on value-adding activities.⁴⁴ If processes should be harmonized and optimized, then according to Lean Management, it is important to design these processes in a balanced way according to muda (waste), mura (imbalance), and muri (overuse). Muda comprises seven types of waste in a company: overproduction, waiting, transport, inventory, movement, remachining, and rework. These types of waste have a direct impact on the consumption of resources, energy, and water. Mura, on the other hand, are types of loss that relate to insufficient production control, whereby high production variability and inharmonious processes contribute to waste. Muri targets the excessive use of employees and machines. All three elements must be aligned, because even if a process is waste-free, it can lead to worker fatigue, which in turn creates waste.

Other central elements of lean management that support the avoidance of waste are the standardization of processes, just-in-time to avoid overproduction and high inventories, and the concept of jidoka, which promotes the consistent avoidance of errors and deviations in processes. All these elements are dependent on the strong participation of the employees, who become motivated to actively participate in the design of the processes and in waste avoidance.⁴⁴

A great potential for increasing resource efficiency in processes is offered by the digitalization of production. The basis for the application of digital hardware and software solutions to determine saving potentials requires the integration and interaction of sensors for long-term data collection with subsequent analysis. In the metals industry, for example, once such sensors and measurement tools have been installed, greater efficiency can be achieved in the recycling process. A sensor-based sorting system for metal extraction increases the recovery of reusable metals from the shredder scrap by 6 percentage points by weight and reduces the energy consumption for sorting the materials by up to two-thirds. Furthermore, the energy consumption of electric motors for operating pumps and compressors can be reduced by about one-quarter through electronic rotation speed control. In this context, intelligent control concepts can switch off machines at off-peak times and help further reduce energy consumption.⁴⁵ Many other possibilities arise from process-relevant real-time monitoring for the intelligent control of industrial processes. A comprehensive data monitoring system allows production processes to be recorded over time and enables, for example, immediate messages to be sent when errors occur so that direct intervention in the production process is possible and reject rates can be significantly minimized. Real-time measurements allow an efficient use of materials and energy in various manufacturing industries.⁴⁵

5 Drivers and barriers

After discussing various measures and instruments in the previous chapters, the focus is now on the drivers of and barriers to resource extraction. This addresses why some companies become active in this area in the first place or why they do not. In order to be capable of analyzing this in more detail, the internal and subsequently external drivers and barriers of a company are discussed.

5.1 Internal drivers and barriers

The internal barriers and drivers of the sustainability topic of resource extraction and land conversion can be defined very generally and are also applicable to other topics. For example, a lack of openness, innovation, and experimentation within corporate culture hinders sustainability management efforts. Such companies often have inflexible ways of thinking and refer to old and tested approaches. Lack of knowledge and experience are among the more straightforward barriers.⁴⁶ In particular, new technologies needed for resource extraction represent a risk for companies. Investments in the research and development of these technologies are costly, and possible misinvestment hinders companies from acting. Furthermore, the potential cost savings are not obvious at first glance and require time to determine. In this context, the image of a company plays an important role. This can be seen as both a driving and a hindering factor. If reputation is neglected over a long period of time in relation to sustainable efforts, this can lead to high marketing costs.⁴⁷ In the chapter “internal drivers,” the positive aspect of image is discussed.

In the company’s internal view of the drivers, possible increases in revenues and profits should be mentioned in particular. These can be achieved in different ways. On one hand, sustainability-oriented measures can lead to more intensive customer loyalty, and new customer perspectives can be addressed. The certifications mentioned in the chapter “Measures” can play an important part in this and create a competitive advantage. In this context, the reputation already mentioned in the barriers is an important factor. Competing companies follow the trend, and substitute products cause prices to decrease. Market leadership ensures a good reputation in the area of innovation and uniqueness, and can thus bind customers.⁴⁷ Efficiency gains can also be achieved through process optimization and new innovations. Improved technologies try to save resources in this way.⁴⁸ However, the so-called rebound effect can also occur here. If technological innovations consume less energy to manufacture a product, all other things being equal, the costs per unit of output fall. This often leads to more consumption, and some of the efficiency gains are lost.⁴⁹

5.2 External drivers and barriers

In contrast to the internal operating environment, several different areas have an impact on the company in the external environment. Different areas use measures and instruments to influence the company. In the following section, the three areas of political, economic and financial, and social environment will be discussed in more detail.

5.2.1 Political framework

In particular, the political environment of companies provides a framework for sustainable interaction. In this way, more and more international, European, and national guidelines and directives that guide resource extraction and land development have been developed in recent years. At the global level, the heads of state and governments of the United Nations agreed on the 2030 Agenda in 2015, better known as the Sustainable Development Goals. These goals aim to enable a decent life worldwide and, at the same time, secure the natural basis of life. A total of 17 sustainability goals deal with economic, ecological, and social aspects.⁵⁰ Across 169 targets, the goals are defined in more detail and can be analyzed by means of the appropriate indicators.⁵¹

As a framework, companies can integrate them into their corporate strategies and communicate them externally.⁵² For almost every main goal, there is a target that addresses the topic of resources. An example of this can be found in Goal 9, “Industry, Innovation, and Infrastructure.” Target 9.4 states: “By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes, with all countries taking action in accordance with their respective capabilities.”⁵¹ The indicator used was CO2 emissions per unit of value added.⁵¹

At the European level, the European Green Deal is leading the way. This was presented by the European Commission on November 11, 2019, and contains a roadmap for a more sustainable European economy. This roadmap contains measures intended to enable a more efficient use of resources. Furthermore, the economy is to be more cycle-oriented, climate change is to be halted, and the loss of biodiversity is to be stemmed. The ambitious goal is to become the first climate-neutral continent by 2050 and to address all economic sectors.⁵³ The European Commission’s Communication on the European Green Deal explains the measures in more detail. According to this, the textile, construction, electronics, and plastics sectors are more resource-intensive and thus more affected by circular economy measures. The action plan aims to encourage companies to produce reusable, durable, and repairable products. The construction sector is also considered a resource-intensive sector and should save resources in the future through legal provisions in the area of energy efficiency.⁵⁴

At the national level, the German Resource Efficiency Programme was adopted in 2012. The program deals with goals, guidelines, and approaches for the protection of natural resources. Every four years, the federal government is obliged to report to the German Bundestag on the development of resource efficiency in Germany and to further develop it. One of the goals is to decouple economic growth from resource use. Particular importance is attached to voluntary measures and incentives. Representatives of social groups, associations, and the Länder have the opportunity to directly influence the update by commenting on the draft and contributing their own ideas.⁵⁵ To measure the increase in resource efficiency over the years, a total of four indicators are used in the current ProgRressIII. Total raw material productivity looks at how much value is created per tonne of raw material input. In particular, the decoupling of economic growth from resource use should be monitored. The calculation of raw material consumption per person should make it possible to look at Germans’ raw material consumption in an international comparison. Another indicator is the use of secondary raw materials, which should show whether fewer secondary raw materials are used for the production of products. The last indicator is anthropogenic stocks. Here, it is assumed that durable products, buildings, and infrastructures will be used as secondary raw materials in the future. Furthermore, the program defines concrete possibilities for using resources more efficiently.⁵⁶

The Circular Economy Act (Kreislaufwirtschaftsgesetz) came into force in 2012 as a concrete law and thus, a mandatory requirement. In this way, the circular economy is to be driven forward, and natural resources are to be protected. An amendment to the Act in October 2020 passed the Bundesrat and served to implement the new EU Waste Management Law. Special emphasis is placed on the new duty of care.⁵⁷ In the third part of the law, concrete regulations are laid down with regard to product responsibility. For example, in the future, it must be ensured that products remain fit for use and do not become waste (§23ff KrWG).

5.2.2 Economic and financial framework

As a barrier, companies are confronted with the financial burden and additional costs of measures related to better resource extraction and land conversion. In order to overcome this challenge, the possibilities of economic incentives are examined within the framework of the abovementioned resource efficiency program.

A primary building materials tax is intended to ensure that fewer primary building materials are used in the most resource-intensive sector. The price increase is intended to reduce demand and thus drive the use of resource efficiency measures, recycling, and alternative building materials. Similar taxes have already proven to be successful in countries such as Denmark and the UK.⁵⁸

Another instrument being considered is a reduction in VAT for resource-efficient products and designs. In this way, the demand for resource-efficient products will be strengthened. The basis for assessment could be a further developed “Blue Angel.” The reduced VAT rate of 7% is then to be charged on the 10–20% of the most resource-efficient products in a product class. However, the effectiveness of the measure is largely dependent on the price sensitivity of consumers.⁵⁸

To promote the recovery of important precious metals, such as copper and aluminum. There are still serious gaps, especially in the recycling of electronic equipment. The main reasons for this are incorrect disposal of household waste or hoarding of old devices in the household. A possible refund system could therefore address the return rates of such products and thus minimize resource extraction abroad.⁵⁸

For financial support, the European Investment Bank (EIB) offers loans at reduced rates. The aim is to implement projects that pursue the objectives of the European Union.⁵⁹ For example, within the framework of these opportunities, the EIB granted support of 30.5 billion euros in the period from 2013 to 2017 for biobased value chains and the protection of natural capital in the field of agriculture.⁶⁰

5.2.3 Social framework

On the social level, consumers and their buying behaviors have a particular impact. Rapidly increasing population growth, energy, and economic crises and the effects of the climate crisis are causing part of society to rethink the concept of limitless growth. Overall, this is leading to a change in values that can already be seen in the population. More and more people are becoming aware that personal consumption has far-reaching ecological and social consequences. In the process, immaterial goods, such as health and time sovereignty, come to the fore and detach themselves from financial prosperity. Increasingly, people are overwhelmed by the number of newly produced products and consumer goods and strive to minimize their own new purchases.⁶¹

Additionally, pressure from social movements and non-governmental organizations (NGOs) has also increased in recent years. NGOs are increasingly developing into “cultural enterprises” and in this way are influencing norms and expectations of corporate social responsibility.⁶² This influence can be seen in the scandal surrounding Shell and the Brent Spar oil platform. The 14,500-tonne oil platform was sunk in the Atlantic Ocean in 1995, following approval by the British government. After the occupation of the oil platform by 12 activists from Greenpeace, the news about it was spread to the public with media attention. As a result, according to a survey, three-quarters of the German population said they would join the boycott. Even Angela Merkel, then the environment minister, spoke out against the sinking of the platform. In the end, the Brent Spar has not been sunk and was removed from service in an orderly manner.⁶³

References

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2
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3
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Davis, D., & Davis, D. (2008). Land Development Handbook. McGraw-Hill Professional Publishing. Retrieved on 30/08/2021: https://public.ebookcentral.proquest.com/choice/publicfullrecord.aspx?p=4657121
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Kone, D. L. (2006). Land development (10th ed). BuilderBooks.
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ARD (2021). Extreme Trockenheit: Kalifornien stellt Bauern das Wasser ab | tagesschau.de. Retrieved on 30/08/2021: https://www.tagesschau.de/ausland/amerika/duerre-kalifornien-109.html
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BMK (2017). Trends der globalen Ressourcennutzung. Retrieved on 27/08/2021: https://www.bmk.gv.at/themen/klima_umwelt/nachhaltigkeit/ressourceneffizienz/un_report.html
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1
UNEP SETAC (2016)
2
NWRM (2015). Land use conversion. Retrieved on 26/08/2021: http://nwrm.eu/measure/land-use-conversion
3
Colley, B. C. (2005). Practical manual of land development (4th ed). McGraw-Hill.
4
Davis, D., & Davis, D. (2008). Land Development Handbook. McGraw-Hill Professional Publishing. Retrieved on 30/08/2021: https://public.ebookcentral.proquest.com/choice/publicfullrecord.aspx?p=4657121
5
Kone, D. L. (2006). Land development (10th ed). BuilderBooks.
6
International Resource Panel (IRP) (2017). Assessing global resource use: A systems approach to resource efficiency and pollution reduction. Retrieved on 30/08/2021: https://www.resourcepanel.org/reports/assessing-global-resource-use
7
ARD (2021). Extreme Trockenheit: Kalifornien stellt Bauern das Wasser ab | tagesschau.de. Retrieved on 30/08/2021: https://www.tagesschau.de/ausland/amerika/duerre-kalifornien-109.html
8
WDR (2021). Wassernot: Konfliktstoff Wasser. Retrieved on 27/07/2021: https://www.planet-wissen.de/natur/umwelt/wassernot/pwiekonfliktstoffwasser100.html
9
BMK (2017). Trends der globalen Ressourcennutzung. Retrieved on 27/08/2021: https://www.bmk.gv.at/themen/klima_umwelt/nachhaltigkeit/ressourceneffizienz/un_report.html
10
WDR (2021). Wenn plötzlich die Erde aufbricht. Retrieved on 30/08/2021: https://www1.wdr.de/archiv/bergbau-spaetfolgen/index.html
11
WWF (2018)
12
Berkeley (2020). Understanding Global Change. Retrieved on 27/08/2021: https://ugc.berkeley.edu/background-content/resource-extraction/
13
Bundesministerium für Umwelt, Naturschutz und nukleare Sicherheit (BMU) (2018). Deutsches Ressourceneffizienzprogramm III 2020 – 2023—Programm zur nachhaltigen Nutzung und zum Schutz der natürlichen Ressourcen. 87.
14
UBA (2020). Indikator: Abfallmenge – Siedlungsabfälle [Text]. Umweltbundesamt; Umweltbundesamt. Retrieved on 29/08/2021: https://www.umweltbundesamt.de/daten/umweltindikatoren/indikator-abfallmenge-siedlungsabfaelle
15
UBA (2020). Indikator: Recycling von Siedlungsabfällen [Text]. Umweltbundesamt; Umweltbundesamt. Retrieved on 19/08/2021: https://www.umweltbundesamt.de/daten/umweltindikatoren/indikator-recycling-von-siedlungsabfaellen
16
Bunke, D. (2003). Ein Indikator für den Einsatz gefährlicher Stoffe in Produkten und Prozessen: Monoethylenglykol-Äquivalente. Umweltwissenschaften und Schadstoff-Forschung, 15(2), 106–114.
17
Sustainable Europe Research Institute (SERI), Austria & Global 2000 (2009). Overconsumption? Our use of the world’s natural resources. Retrieved on 30/08/2021: https://friendsoftheearth.uk/sustainable-living/overconsumption-our-use-worlds-natural-resources
18
International Resource Panel (IRP) (2019). Global Resources Outlook 2019: Natural Resources for the Future We Want. Retrieved on 30/08/2021: https://www.resourcepanel.org/reports/global-resources-outlook
19
Englert, M. (2019). Road to Excellence: Potenzial des Sustainability Management im 21. Jahrhundert. In M. Englert & A. Ternès (Ed.), Nachhaltiges Management (pp. 3-23). Berlin, Germany: Springer Gabler.
20
Pufé, I. (2017). Nachhaltigkeit (3rd edition). Konstanz, München, Germany: UVK.
21
Verein Deutscher Ingenieure Zentrum Ressourceneffizienz (VDI ZRE) (2016). So einfach geht Ressourceneffizienz. Retrieved on 30/08/2021: https://www.ressource-deutschland.de/fileadmin/user_upload/downloads/Broschueren/VDI_ZRE_Managementleitfaden_4.Aufl_2019_Web_bf.pdf
22
Belvedere, V., & Grando, A. (2017). Sustainable Operations and Supply Chain Management. Hoboken, USA: Wiley.
23
Bundesministerium für Umwelt, Naturschutz, Bau und Reaktorsicherheit (BMUB) (2014). Gesellschaftliche Verantwortung von Unternehmen. Retrieved on 30/08/2021: https://www.bmu.de/fileadmin/Daten_BMU/Pools/Broschueren/csr_iso26000_broschuere_bf.pdf
24
Batz, M. (2021). Nachhaltigkeit in der Sozialwirtschaft. Wiesbaden, Germany: Springer.
25
United Nations Global Compact (UNGC) (2021). The Ten Principles. Retrieved on 30/08/2021: https://www.unglobalcompact.org/what-is-gc/mission/principles
26
United Nations Global Compact (UNGC) (2021). Participation. Retrieved on 30/08/2021: https://www.unglobalcompact.org/participation
27
United Nations Global Compact (UNGC) (2021). The Ten Principles of the United Nations Global Compact. Retrieved on 30/08/2021: https://www.unglobalcompact.org/what-is-gc/mission/principles/principle-8
28
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29
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