Amanda Keogh

26 June 2014 — Office technology company Fuji Xerox’s eco-manufacturing plant in Sydney aims to enact the company’s resource stewardship policy that globally sees 97 per cent of products being remanufactured, upcycled or recycled. According to sustainability manager Amanda Keogh, that’s just the start of it’s commitment.

Fuji Xerox head of sustainability for Asia Pacific and Australia Amanda Keogh says the pursuit of perfection in environmental performance is core to her company’s values.

“Fuji Xerox has had a long-standing commitment to sustainability,” Keogh says. “There was a visionary company president in Japan who set a zero waste edict to landfill in 1991. This was well before Europe passed their e-waste rules.”

Keogh says the zero waste approach is driven by the Japanese culture of the company’s board and owners, which associates efficient performance with quality, and waste with inefficiency.

“There is a word in Japanese, ‘muda’, which means waste. And it is central – the focus on avoiding muda, avoiding waste, is exacting,” Keogh says.

“The efficiency mindset finesses business practices across the board, including quality management, which is part of the Japanese ethos.”

The company has also had an end end-of-life product stewardship policy in place since 1991, and an example of putting this policy into practice is the Sydney eco-manufacturing centre. Originally commencing operations in Zetland in 2000, the operation was moved into a new base in a refurbished 1930s industrial building at Rosehill in 2011.

The office section has a 5 Star Green Star rating under the office interiors tool version 1.1, while the industrial area of the eco-manufacturing itself was designed along the industrial tool principles but did not seek a formal rating.

Eco-manufacturing

The eco-manufacturing facility uses high value reassembly techniques to remanufacture new components from end-of-life parts. The centre provides approximately 50 full-time skill-based jobs, including roles where electro-mechanical assembly skills are required, in addition to trade qualified electronics and mechatronics/mechanics personnel.

The centre produces goods to the value of $10 million a year or more from Fuji Xerox office technology products, which are being dispersed across Australia, particularly the Sydney commercial district. The company has collection mechanisms whereby the end-of-life products are diverted from landfill by customers and sent back to the company.

Goods that are remanufactured at the centre include fusers, web cassettes and cleaners, low voltage power supplies, touch screens, waste bottles, circuit boards and other items. The typical reuse rate of materials is up to 80 per cent, with unusable materials such as steel, plastic, polystyrene and waste toner recycled.

The audit

Across all of the company’s global operations, the latest sustainability audit by Net Balance found the rate of waste to landfill across every aspect of operations was averaging just three per cent. A full 97 per cent of everything is being remanufactured, upcycled or recycled.

Return on investment has been $200 million

Keogh says the return on investment for the eco-manufacturing centre – based on savings from the sale of remanufactured parts compared with the cost of purchasing and recycling the parts from new – has been a substantial $200 million over 10 years on a $20 million investment.

Keeping track of the resources

In terms of product stewardship and responsible resource management, Keogh says one of the advantages of the eco-manufacturing centre has been the level of transparency the company can maintain in relation to product recycling.

There are offshore operations in China and Thailand that undertake the recycling of non-useable parts, and Keogh says a “lot of due diligence was required” to ensure they are firms that are using state-of-the-art techniques and adhere to high quality and environmental standards.

According to the company’s 2013 Sustainability Report, there is also ongoing relationship building in Australia to increase the amount of on-shore recycling to reduce the carbon footprint of transferring waste.

Greening a heritage industrial site

This focus on the fine detail of the footprint was also part of the motivation for the Rosehill relocation, according to Lachlan Feggans, Fuji Xerox national EMS manager corporate affairs.

Lachlan Feggans

Feggans says a detailed feasibility study was carried out on the option of building a new Green Star building in Western Sydney, or relocating into an existing building refurbished to purpose. This included factoring in the carbon cost of transporting used product for remanufacture if the centre was located further away from users of components.

“We decided to put the centre close to where people are producing the waste,” Feggans says.

“We knew an existing building would be more sustainable than a new building, as we would be retaining the materials and the embodied energy and carbon of a building.”

A detailed hybrid lifecycle assessment is currently being undertaken by Dr Caroline Noller, which will quantify the energy, water and waste aspects of the eco-manufacturing centre, and Feggans is confident the results will show the decision to refurbish an existing building represents a major sustainability win.

The LCA will factor in the entire spend of the project, including the fitout, consultants and materials.

The building, which has an extremely thick Art Deco brick facade that delivers a high degree of thermal massing, is not all that was retained.

The decision was also made to retain the existing HVAC system to service the office area, and while this meant the HVAC system did not qualify for the IEQ2 (carbon dioxide monitoring and control) point under the Green Star tool, Feggans says the analysis shows it saved 1000 tonnes of carbon reusing what was in place.

A new air-cooled system was installed for the industrial area, with a gas-fired option chosen, as the carbon footprint is lowered by burning gas to produce electricity for the system compared to running it directly from mains power.

In the office section, a combination LED T5 lighting system incorporating motion sensors and perimeter dimming has been installed, with the project’s lighting engineer, GHD, estimating this saves 40 per cent on power use compared with a standard system.

A lift needed to be installed to meet the access requirements under the Disability Discrimination Act, and this decision led to an unexpected sustainability gain. Feggans says that when the pit for the shaft was dug, it filled up with water. The immediate concern was this water may be contaminated waste water or contaminated groundwater, however testing showed it to be clean groundwater.

Instead of constructing a tanked basement, the decision was made to install dewatering equipment, which pumps the water up to the 100,000 litre rainwater storage on the building’s roof. From there, it is reticulated along with captured rainwater for amenities flushing.

Feggans says the pre-existing rainwater storage and reuse system was a key reason this particular building was chosen.

“The bottom line was about how can we do this [project] at least cost and get what we need,” Feggans says.

The lifecycle assessment challenge and big picture footprinting

The company pursued three of the new Green Star Innovation Challenges, and has been awarded the credits for both Marketing Excellence and Culture Heritage and Identity. The Marketing Excellence Credit was awarded on the basis of the company’s long standing commitment to opening up the centre for tours, which cover the history behind the centre as well as the sustainability aspects of the refurbishment.

An application is currently being assessed for a third Innovation Challenge, the Life Cycle Assessment Innovation Challenge credit.

Beyond the credit, Feggans is aiming to complete a more detailed LCA of the overall operations of the centre.

“The new project aims to measure the environmental benefit of what the Eco-Manufacturing Centre does, and also quantify what we are saving over buying new components. We think the benefit is significant,” he says.

This LCA may also incorporate the dimension of natural capital valuation, which is a growing focus among sustainability thought leaders. Feggans says this approach aims to quantify the value of the resources in a product, factoring in finite resource depletion, carbon, energy and the hard-to-quantify elements of air quality, water quality and water supplies. In effect, it “internalises the externalities”, he says.

“From my perspective this is where business will be going. Once an LCA is completed then natural capital valuations are applied to the results to present a more complete picture about the benefits and burdens of a particular business, project or investment. LCA really underpins this process therefore this needs to be more widely adopted before we can even move toward natural capital valuation.”

In terms of the centre, the new project aims to as far as possible analyse the complex and far-ranging footprint with the centre’s products and activities as the focal point.

The new LCA project will also potentially factor in the impact the remanufactured products have on the footprint of users.

“You’ve got to look at it from a contextual perspective, because it makes a real impact on the footprint of the supply chain of users,” Feggans says.

“The input-output analysis has just been done [on the centre].”

Feggans says the activities at the centre are a “step above” recycling, as they are repurposing existing materials to produce a quality product covered by warranty. This, he says, is an example of the circular economy, something the company’s sustainability policy has highlighted as an imperative given the certainty key natural resources such as the fossil fuels from which plastics are derived and the precious metals used in circuit boards and chips will inevitably run out.

“We are essentially stewards of the products’ materials from cradle to grave,” Feggans says. “It’s a matter of appreciating our resources.”

Feggans says that when the eco-manufacturing operation first commenced, there was quite a strong business case, based on the savings for end-users compared with having new parts shipped from manufacturing operations in the USA and Europe.

In recent years, however, the availability of cheap parts from Asian manufacturers has reduced the cost differential. Feggans says, however, the low price of these new items is to some extent illusory, as it does not factor in the externalities in terms of the value of the resources, carbon and energy embodied in the items.

He says that if costs accurately reflected the natural capital valuation element, the bill would instead be quite exorbitant for new parts compared to a remanufactured alternative, and therefore users would have a sound economic basis for making sustainable decisions.

Shared value

More broadly, Keogh says the sustainability future for the company is underpinned by thought leader Michael Porter’s concept of “shared value”.

Describing Porter as Fuji Xerox’s “strategy guru”, Keogh says the company’s management is “most excited by the concept.”

“I am convinced traditional corporate social responsibility needs to be complemented and supported by created shared value, and solving sustainability challenges because there is a business model in doing it,” Keogh says.

“Shared value means business should apply its business skills and its resources to resolve pressing social issues.”

An example of how this plays out is the lobbying the company undertook to get e-waste regulated in Australia, legislation which was finally created in 2012.

While this is regarded as a win, Keogh says it would be good if there was some financial incentive in place for companies that incorporate a certain percentage of recycled products, rather than a “line in the sand” approach.

Another example of this shared value approach to CSR is the company’s engagement with Eco-Patent Commons. This new global initiative involves companies freely sharing patented technology that can used for environmentally beneficial purposes under a creative commons license, similar to open source software.

Beyond tick-a-box compliance to engagement

Fuji Xerox’s Australian operation employs more than 2000 staff across major offices in Sydney, Brisbane, Melbourne, Perth and Adelaide. All of these offices have certified environmental management systems using ISO 14001, as have the majority of the companies warehouses, sales and marketing offices.

“It’s not just a matter of compliance, we have been very focused on bringing sustainability to life and really engaging our people in reducing the footprint in the offices,” Keogh says.

“The North Ryde head office is a good example. We moved to activity-based working when we refurbished, and the nice part is as a company it led us to adopt best practice technology of our own.”

This includes follow-me printing, which has brought about an immediate saving on printing of 20 per cent and a reduction in the amount of equipment needed in the office, with one multifunction device for every 15 people now the standard.

This technology is permanently in power-saving mode, with only the specific function the user needs warming up when it is required.

The pursuit of perfect zero energy waste

Keogh says the focus on energy efficiency is very much driven by head office policy, and is the subject of ongoing research and development.

“There is a man at head office in Japan who has dedicated himself to getting the warm up time to zero, and he’ll continue to refine that goal. Currently, it is down to three seconds, but he still believes it can go to zero.”

The next big challenge – greater diversity

Keogh says there is another sustainability frontier the company is also focused on, and that is the issue of gender balance.

“Women in the workforce is one of our challenges as a sustainability-focused company,” she says.

“In the Australian organisation, the employment rate of women is 30 per cent, in Japan it is only three per cent, and that reflects the culture.

“Diversity is a really important issue for companies. Progressive business leaders recognise the value of diversity at a board level, because you do get better decisions. Fuji Xerox have set targets around the representative level of women in senior management, so we are getting value out of the diversity in the organisation.”