Ecofinancing causes or motivates businesses to adhere to environmentally friendly business practices and technologies through financial leverage. The underlying concept is that funds and related opportunities are available to only ventures that are environment friendly or meet environmental protection requirements. The three major vehicles for ecofinancing are: 1) lending and investment funds; 2) government-initiated environment-related subsidies and funds; and 3) mechanisms related to international agreements. The ecofinancing concept is under the broad concept of sustainable financing, also known as sustainable and responsible financing, which advocates financial leverage to promote business practices to safeguard social justice, protect the environment, and reduce poverty.
Due to the growing awareness among consumers and investors of the need to protect the environment and reduce mitigation costs, ecofinancing is becoming an effective investment-related tool. The size of the ecofinance market in Europe and the USA is steadily increasing. However, in Asia it is still a comparatively new concept.
Ecomapping is a visual process to identify the environmental aspects in a plant or industry quickly and simply. An ecomap is a reference to a diagram that uses the plant layout to express graphically the locations where attention must be given to improve production or environmental performance. Eco-maps are useful because they permit rapid understanding of where the major problems are within an organization. They do not require significant training to use and can be implemented in a day. This way, more energy can be spent on problem solving rather than on problem identification.
Ecodesign is a method of designing products which takes into account their impact on the environment at all stages of their life cycle. This means attempting to lower the environmental impact and improve the performance of products. The life cycle of a product is usually divided into procurement, manufacture, use, and disposal. Thus ecodesign includes environmental objectives that are treated as major design objectives. Ecodesign may result in the choice of a recyclable or biodegradable material for packaging or the development of a washing powder effective in cold water to reduce the energy consumption of washing machines.
Ecoefficiency in resource utilization to produce the same level of goods/services was introduced by the World Business Council of Sustainable Development in 1992. It reflects the issue of sustainability of resource utilization in manufacturing. Ecoefficiency is achieved by the delivery of competitively priced goods and services that satisfy human needs and improve the quality of life while progressively reducing ecological impacts and resource intensity throughout the life cycle to a level in line with the earth’s estimated carrying capacity.
See also: Ecosustainability
An ecological footprint refers to the land and water area required to support a defined human population and their material standard indefinitely using prevailing technology. While first developed as a planning tool for communities, refinements are being made to apply this to single organizations and individuals. It accounts for the size and effect of the impact, i.e., footprint, on the earth’s ecosystems made by an organization. It is a simple way to represent relative sustainability based on a number of complex interlinked factors such as human population numbers, consumption patterns, and technologies used.