UK Environmental Protection Expenditure by Industry …webarchive.nationalarchives.gov.uk/20130123162956/http:/... · ENVIRONMENTAL PROTECTION EXPENDITURE BY INDUSTRY: 2003 UK

Ref: 5645R/46059003-784/SV

FINAL REPORT (2003) For: ENVIRONMENTAL PROTECTION EXPENDITURE BY INDUSTRY: 2003 UK SURVEY Submitted to: Department for Environment, Food and Rural Affairs June 2005

St George's House, 2nd Floor 5 St George's Road Wimbledon London SW19 4DR Tel: 020 8944 3300 Fax: 020 8944 3301 Email: [email protected]

5645R/46059-003-784/SV Final Report June 2005

The views and recommendations expressed in this report are those of the authors and do

not necessarily represent the views of the Department for Environment, Food and Rural

Affairs, its ministers or officials.

i 5645R/46059-003-784/SV Final Report June 2005

EXECUTIVE SUMMARY

Introduction

This report presents the findings of a study commissioned by the Department for Environment, Food

and Rural Affairs (Defra) and undertaken by URS Corporation Limited (URS), to estimate expenditure

by UK industry on environmental protection in 2003.

The primary objectives of the study are:

• To provide Defra with annual estimates of environmental protection expenditure by UK industry;

and

• To enable Defra to provide these estimates to the European Commission as required under the

EU Structural Business Statistics Regulation 58/97.

In addition to these broad objectives, annual data from the survey may be used to assess how

expenditure is changing and to compare the competitiveness of UK industries relative to other EU

countries. The data also enables companies and trade associations to benchmark their own

environmental performance against that of the industry as a whole, both in the UK and the EU.

This is the seventh survey of this type; previous surveys were carried out in 1994 (a pilot survey),

1997, 1999, 2000, 2001 and 2002. The 2003 survey was conducted in 3 phases between April 2004

and July 2005, steered by a group with representatives from Defra, Department for Trade and

Industry (DTI), Environment Agency, Scottish Environmental Protection Agency (SEPA) and the Office

for National Statistics (ONS).

Methodology

The industry sectors follow the Standard Industrial Classification (SIC) codes and are covered by the

survey as follows:

SIC code Industry 10 – 14 Mining and quarrying15 & 16 Food, beverages and tobacco products 17 – 19 Textiles, clothing and leather products 20 Wood and wood products 21 & 22 Pulp and paper, printing and publishing 23 Coke, petroleum and nuclear fuel 24 Chemicals and chemical products 25 Rubber and plastics 26 Other non-metallic minerals 27 & 28 Basic metals and metal products 29 – 31 Machinery and equipment 32 & 33 Electrical, medical and optical equipment 34 & 35 Transport equipment 36 Furniture manufacture 40 & 41 Energy production and water

ii 5645R/46059-003-784/SV Final Report June 2005

The Government’s Inter Departmental Business Register (IDBR) provided a stratified random sample

of 8,142 companies from the above industry sectors and these were invited on a voluntary basis to

complete and return a postal questionnaire. The total number of validated responses was 1,591,

giving a valid response rate of 19.5 per cent, which is approximately the same as in previous surveys.

The responses were subjected to a range of detailed validation checks.

The survey analysed the following expenditure patterns in UK industry: • Operating expenditure (OPEX), which includes the in-house operating costs of a company’s own

environmental protection activities, and also payments to others for environmental protection

services including waste disposal; and

• Capital expenditure (CAPEX), which consists of ‘end of pipe’ investments (expenditure on

equipment to clean up at the end of the production process) and integrated investment

expenditure (expenditure on equipment which reduces or eliminates emissions and discharges as

part of the production process).

Also identified were the following:

• Income and savings resulting from environmental protection activities carried out in 2003;

• The environmental media (areas) affected by the spending, namely waste water, air, solid waste,

soil/groundwater, noise/vibrations and nature protection; and

• The use of Environmental Reporting Systems.

Main results for 2003

• Gross spending on environmental protection in 2003 by UK industry amounted to an estimated

£3.4 billion;

• The primary spending sectors were food, beverages and tobacco products (12 per cent of total

spend), power industries (14 per cent of total spend) and chemicals and chemical products (18

per cent of total spend);

• Operating expenditure accounted for 85 per cent of the total environmental protection

expenditure, with capital expenditure making up the remainder;

• 40 per cent of the total expenditure was spent on solid waste, with a further 27 per cent spent

on wastewater, and the remaining 33 per cent spent on air, soil/groundwater, noise and nature

protection and other areas;

• This spending was offset by an estimated income of £178 million from the sale of by-products

and estimated cost savings of £265 million from environmental protection measures undertaken

during the year;

iii 5645R/46059-003-784/SV Final Report June 2005

• 22 per cent of companies surveyed separately identify environmental protection expenditure in

their management accounting system. The use of environmental reporting systems is more

widespread amongst companies with over 250 employees; and

• 22 per cent of companies surveyed publicly report on their environmental expenditure in their

annual accounts (12%) or an environmental / sustainability report (10%).

Comparisons between years

Direct comparisons between survey years are not possible because the estimates are subject to wide

confidence intervals and because of improvements made over time to the questionnaire design and

estimation procedures. In the light of this, the following charts show differences in the percentage

shares of total spending reported in each year, rather than the absolute figures. It should be noted

that efforts are made each year to reduce confidence intervals as well as to keep the questionnaire

and methodology consistent.

A summary of total environmental protection expenditure by businesses for 2000, 2001, 2002 and

2003 is presented in Figure E1. Ranges indicating the 95 percent confidence intervals associated

with each value are provided in parenthesis where available. Gross spending on environmental

protection in 2003 by UK industry amounted to an estimated £3.4 billion, plus or minus £0.6 billion at

95 per cent confidence. The estimates of previous years were £4.2 billion in 2000, £3.9 billion in

2001, and £2.6 billion in 2002. Although a reduction in spending might have been expected as a

result of the general downturn in the manufacturing sector over the period, it now appears as if the

2002 figure is a bit of an anomaly. A summary of the proportion of total expenditure for 2000, 2001,

2002 and 2003 by the main industry groups is presented in Figure E2.

Figure E1 Summary of Environmental Protection Expenditure by Businesses: UK 2000 to 2003

2000 2001 2002 2003

Total expenditure (£M)

% of gross Total expenditure (£M)



% of gross

Capital expenditure

End of pipe

627 (470-784)

15 489(257-721)

13 276(169-383)

10 355(228-482)

10

Integrated processes1

795 (580-1,010)

19 639(399-880)

16 222 1

(121-324) 8 1771

(113-240) 5

Total CAPEX1

1,442 (1,122-1,721)

34 1,128(762-1,493)

29 498 1

(350-647) 19 5321

(387-676) 15

Operational Own account 1,150

(927-1,373) 27 1,222

(903-1,542) 31 888

(687-1,088) 34 1,369

(1,075-1,663) 40

Payment to others 1,492 (1,201-1,784)

35 1,455(1,202-1,708)

37 1,176(989-1,363)

45 1,459(1,145-1,773)

42

R&D 163 (67-258)

4 81(51-112)

2 77(51-103)

3 82(41-124)

3

Total OPEX

2,805 (2,343-3,266)

66 2,759(2,282-3,236)

71 2,140(1,784-2,496)

81 2,911(2,373-3,448)

85

Gross expenditure Total gross spending

4,226 (3,587-4,865)

100 3,887(3,162-4,612)

100 2,639(2,191-3,086)

100 3,442(2,835-4,049)

100

Subsidies 2 3 (1-5)

0 4(1-8)

0 N/a 2 N/a 2

By-products 207(122-291)

5 198(127-269)

5 232(134-329)

9 178(82-273)

5

Total net expenditure

4,016 (3,365-4,667)

95 3,599 (2,837-4,361)

93 2,407 (1,915-2,899)

91 3,264 (2,644-3,884)

95

Cost savings 3 180 (130-230)

4 113 (78-148)

3 296 3

(186-406) 11 265

(185-344) 8

Note: Comparisons between years should be treated with extreme caution. 1. Questions on integrated processes changed in 2002 leading to reduction in estimates – total spend on integrated processes was estimated to be £2.3 billion in 2002 and £1.4 billion in 2003. 2. Question on subsidies excluded from questionnaire for 2002 and 2003. 3. Questions on cost savings from environmental protection activities changed in 2002 leading to increase in estimates.

iv 5645R/46059-003-784/SV Final Report June 2005

Figure E2 - Proportion of Total Environmental Expenditure by Standard Industrial

Classification (SIC) sectors: UK 2000, 2001, 2002 and 2003.

02468

101214161820

Sector

Pro

port

ion

of T

ota

l Sp

end

(%)

2000

2001

2002

2003

In all four years the primary spending sectors were food, beverages and tobacco products (ranging

from 12 to 19 per cent of total spend), power industries (ranging between 11 and 17 per cent of total

spend) and chemicals and chemical products (ranging between 15 and 19 per cent of total spend).

The detailed analysis of these results is presented in Section 5 of the report.

Figures E3 and E4 show the proportion of expenditure across environmental media for operating

and capital expenditures respectively in 2003.

v 5645R/46059-003-784/SV Final Report June 2005

Figure E3 - Proportion of Operational Environmental Expenditure by Environmental

Media: UK 2000, 2001, 2002 and 2003

vi 5645R/46059-003-784/SV Final Report June 2005

OPEX

0

5

10

15

20

25

30

35

40

45

50

Water Air Solid Solid/Groundwater Noise Nature Other

Media

Prop

orti

on

of T

ota

l Sp

end

(%

)

2000

2001

2002

2003

The “other” figure for external expenditure includes regulatory charges.

Operating expenditure accounted for approximately 85 per cent of the overall proportion of the

expenditure, which is a higher proportion than in 2002 and 2001, with capital expenditure making up

the remainder.

The highest proportion of expenditure was on solid waste, accounting for about 46 per cent of the

total, with a further 27 per cent spent on wastewater and the remaining 27 per cent spent on air,

soil/groundwater, noise, nature protection and other areas. This pattern is consistent throughout the

period 2000 to 2003.


Figure E4 - Proportion of Capital Environmental Expenditure by Environmental Media: UK

2000, 2001, 2002 and 2003

vii 5645R/46059-003-784/SV Final Report June 2005

CAPEX

0

5

10

15

20

25

30

35

40

45

50

Water Air Solid Solid/Groundwater Noise Nature Other

Media

Pro

port

ion

of T

ota

l Spe

nd (

%)

2000

2001

2002

2003


Capital expenditure accounted for about 15% of the overall total environmental protection

expenditure in 2003. The highest proportion of expenditure was on air, accounting for approximately

40 per cent of the total, with a further 27 per cent spent on wastewater, 10 per cent on solid waste

and the remaining 23 per cent spent on soil/groundwater, noise, nature protection and other areas.

The highest areas of capital expenditure were broadly the same in 2000, 2001, and 2002. As

previously noted, the large differences between years in the amounts of capital expenditure recorded

in the survey is in part attributable to changes in the ways the survey questions have been asked in

different years.

The highest proportion of operating expenditure was on solid waste, whereas the highest proportion

of capital expenditure was on air. This could result from the Integrated Pollution Prevention Control

(IPPC) permit increasing the capital expenditure on air protection measures.


TABLE OF CONTENTS

5645R/46059-003-784/SV

viii Final Report June 2005

Page No

EXECUTIVE SUMMARY I

1 INTRODUCTION 1 1.1 OBJECTIVES 1 1.2 SCOPE AND BACKGROUND 2 1.3 DEFINITION OF ENVIRONMENTAL PROTECTION EXPENDITURE 3 1.4 REPORT STRUCTURE 4

2 SURVEY METHODOLOGY AND PREPARATION 5 2.1 MODIFICATIONS INTRODUCED IN THE 2003 SURVEY 6 2.2 SAMPLING METHODOLOGY 7 2.3 DATABASE DESIGN 7 2.4 SURVEY PROMOTION 8

3 CONDUCTING THE SURVEY 9 3.1 METHODOLOGY 9 3.2 TOP COMPANY FOCUS 11

3.2.1 Impact of the Top Company Focus 12 3.2.2 Lessons learnt from the Dedicated Top Company Follow-up 13

3.3 SME SIMPLIFIED APPROACH 14 3.4 HELPDESK SUPPORT 15

4 ANALYSIS OF RESPONSES 17 4.1 RESPONSES 17

4.1.1 Response Rates 17 4.1.2 Weighted Response Rates 20 4.1.3 Repeated Responses 20 4.1.4 Response Bias 22 4.1.5 2002 vs. 2003 Methodology 23

4.2 STANDARD ERRORS AND CONFIDENCE INTERVALS 23

5 SURVEY RESULTS AND ANALYSIS 25 5.1 TOTAL EXPENDITURE 25 5.2 EXPENDITURE BY ENVIRONMENTAL MEDIA 27 5.3 EXPENDITURE BY INDUSTRY SECTOR 31 5.4 COST SAVINGS AND INCOME 32 5.5 ENVIRONMENTAL PROTECTION EXPENDITURE BY INDIVIDUAL (SIC) SECTOR 35

5.5.1 SIC 10 to 14: Mining and Quarrying 36 5.5.2 SIC 15 & 16: Food Products and Beverages, and Tobacco Products 39 5.5.3 SIC 17, 18, and 19: Textiles, Clothing and Leather Products 41 5.5.4 SIC 20: Wood and Wood Products 43 5.5.5 SIC 21: Pulp and Paper 45 5.5.6 SIC 22: Publishing and Printing 47 5.5.7 SIC 23: Coke, Petroleum and Nuclear Fuel 49 5.5.8 SIC 24: Chemicals (Basic, Pharmaceuticals and Other) 51 5.5.9 SIC 251 and 252: Rubber and Plastics 54 5.5.10 SIC 26: Other Non-Metallic Minerals 56 5.5.11 SIC 27: Basic Metals 58

TABLE OF CONTENTS (Continued) Page No

5645R/46059-003-784/SV ix Final Report June 2005

5.5.12 SIC 28: Fabricated Metal Products 60 5.5.13 SIC 29, 30 and 31: Machinery and Equipment, Office Machinery and Apparatus and Electrical Machinery and Apparatus 63 5.5.14 SIC 32 & 33: Radio, TV and Comms, and Medical, Precision and Optical 66 5.5.15 SIC 34 & 35: Motor Vehicles and Other Transport Equipment 68 5.5.16 SIC 36: Furniture Manufacture 71 5.5.17 SIC 40: Electricity, Gas, Steam and Hot Water 73 5.5.18 SIC 41: Collection, Purification and Water Distribution 75

5.6 COMPARISON OF CURRENT EXPENDITURE WITH SUPPLY SIDE ESTIMATES77 5.7 ENVIRONMENTAL REPORTING SYSTEMS 80

5.7.1 Separate Identification of Environmental Expenditure in information systems 80 5.7.2 Findings 82

6 RECOMMENDATIONS FOR FUTURE SURVEYS 83 6.1 GENERAL 83 6.2 QUESTIONNAIRE DESIGN 85 6.3 VALIDATION PROCESS 86

LIST OF ABBREVIATIONS 87

LIST OF STANDARD INDUSTRIAL CLASSIFICATION (SIC) CODES 88


1

1 INTRODUCTION

This report presents the results for the seventh annual study commissioned by the Department for

Environment, Food and Rural Affairs (Defra) and undertaken by URS Corporation Limited (URS), to

estimate expenditure by UK industry on environmental protection in 2003. Previous surveys were

carried out in 1994 (a pilot survey), 1997, 1999, 2000, 2001, and 2002. The following sections of the

report summarise the findings from the analysis of the 2003 questionnaires completed by

participating UK companies.

The 2003 data is shown in contrast to the results from the 2000, 2001 and 2002 surveys. Direct

comparisons between survey years are not, however, possible because;

• The estimates are subject to wide confidence intervals; and

• Improvements have been made to the questionnaire design and estimation procedures.

In light of these discontinuities, comparisons are shown as percentage shares of the total spending

reported in each year, rather than the absolute figures. However, comparisons between years should

still be treated with caution.

1.1 OBJECTIVES

The primary objectives of the study were to:

• Provide Defra with annual estimates of environmental protection expenditure by UK industry; and

• Enable the UK Government to meet the requirements of the European Union (EU) Structural

Business Statistics Regulation 58/97, which provided a tool for regular data collection on the

variables and economic activities and is designed to give information on the service sector.

In addition to these broad objectives, annual data from the survey may be used to assess how

expenditure is changing and to compare the competitiveness of UK industries relative to other EU

countries. The data enables companies and trade associations to benchmark their own environmental

spending against that of the industry as a whole, both in the UK and the EU.


2

1.2 SCOPE AND BACKGROUND

The current survey covers all expenditure incurred in 2003 (financial year 2003/2004). In accordance

with the EU Regulations, industries that have been surveyed are those in NACE1 sections C, D and E.

These are businesses involved in extraction, manufacturing, energy and water supply. Expenditure

estimates are provided for the following:

• In-house and external operating costs (including research & development, regulatory charges

etc);

• End-of-pipe capital investments;

• Integrated or ‘clean’ technology capital investments; and

• Income and savings (the sale of environmental protection by-products).

This expenditure is also reported by the environmental media to which they relate to, as shown

below:

Waste water – collection and transport of waste water, the prevention or reduction in quantity of

waste water and of substances in waste water, the prevention of incidental water pollution, the

treatment of cooling water before draining to the surface or groundwater and monitoring of surface

water.

Air – prevention or reduction of gaseous, liquid or particulate emissions to the atmosphere and the

monitoring of air emissions.

(Solid) Waste – the prevention or reduction of waste, the collection, transport, treatment and

disposal and monitoring of waste.

Soil/groundwater – decontamination of polluted soils and cleansing of polluted ground water.

Includes the protection of soil and groundwater against pollution infiltration, monitoring of soil and

groundwater and the transport and disposal of contaminated soil.

Noise/vibration – measures to decrease noise and vibration levels at source, to isolate receivers

from noise/vibration and the monitoring of levels. Protection of the workplace is excluded.

Nature protection – protection of species, landscapes and habitats; rehabilitation of damaged

landscapes due to past or current actions. Reforestation is included.

1 NACE: ‘Nomenclature Generale des Activites Economiques dans les Communautes Europeennes’


3

This survey succeeds the Defra (formerly known as Department of Environment, Transport and the

Regions - DETR) surveys carried out in 2002, 2001, 2000, 1999, 1997 and research on environmental

protection expenditure in 1994 (pilot study). The reports from these surveys can be downloaded at:

http://www.defra.gov.uk/environment/statistics/envsurvey/index.htm

1.3 DEFINITION OF ENVIRONMENTAL PROTECTION EXPENDITURE

The definition of environmental protection expenditure used for this survey was established by the

Statistical Office of the European Community (SOEC) as follows:

‘Environmental protection expenditure is the sum of capital and current expenditure on environmental protection activities. Environmental protection is an action or activity (involving the use of equipment, labour, manufacturing techniques and practices, information networks or products) where the main purpose is to collect, treat, reduce, prevent, or eliminate pollutants and pollution or any other degradation of the environment resulting from the activity of the company. Environmental protection expenditure may relate to activities that generate marketable by-products, or results in savings, or are financed by subsidies or capital allowances. In such cases, environmental protection expenditure should be reported gross of any such cost offsets.’

Environmental protection expenditure includes: expenditure to reduce or prevent emission to air and

water; expenditure to protect or clean up soil and groundwater; expenditure to prevent noise and

vibration; and expenditure to reduce, treat and dispose of waste materials. Expenditure may be

operating expenditure (OPEX) or capital expenditure (CAPEX).

OPEX includes the operating costs of a company’s own environmental protection equipment and

services and also payments to others for environmental protection services (including waste disposal).

CAPEX consists of end-of-pipe expenditure and expenditure on integrated processes. End-of-

pipe CAPEX is defined as expenditure on equipment used to treat, handle, measure or dispose of

emissions and wastes from production. Examples include effluent treatment plant, exhaust air

scrubbing systems, and solid waste compactors.

Capital expenditure on integrated processes relates to new or modified production facilities

designed to integrate environmental protection into the production process. This might include

adaptation of an existing installation/process whereby the integrated expenditure is then the total

purchase cost of the adaptation. It also includes installing a new process in which the design takes

environmental protection into account and in this case the expenditure counted is only the extra cost

compared with installing a ‘dirtier’ alternative.


4

Energy costs are not included in the definition of environmental protection expenditure, except where

energy is specifically used to run environmental protection equipment or services. Also excluded is

any expenditure on health and safety equipment or services.

1.4 REPORT STRUCTURE

This report consists of the following sections:

Section 1 Introduction;

Section 2 Survey Methodology and Preparation;

Section 3 Conducting the Survey;

Section 4 Analysis of Responses;

Section 5 Survey Results and Analysis; and

Section 6 Recommendations for Future Surveys.

This main report is supplemented by detailed annexes, as described below, which are presented as a

separate document:

Annex 1 Cover Letters and Technical Guidance Notes;

Annex 2 Detailed Sampling Methodology;

Annex 3 Validation of Responses;

Annex 4 Copies of promotional material;

Annex 5 Response codes for sorting correspondence;

Annex 6 Drivers behind participation;

Annex 7 Output of Data Analysis;

Annex 8 Grossing-up Procedure;

Annex 9 Methods for derivation of standard error and confidence intervals;

Annex 10 Detailed Results Tables; and

Annex 11 Valid Data.

The report and the Annexes can be downloaded from Defra’s web site at



5

2 SURVEY METHODOLOGY AND PREPARATION

The main survey consisted of three phases, conducted between April 2004 and July 2005, which were

sub-divided into individual tasks/activities:

• Pre-survey is the first survey phase, which includes the following activities (April

2004 – May 2004):

o Review the previous year’s survey and introduction of modifications o Promote survey results o Produce a Project Initiation Document (PID) o Steering Group meeting participation

• Survey phase, which includes the following activities (June 2004 – February

2005):

o Select sample from the IDBR and carry out subsequent database work (request for the IDBR sample was sent out in March 2004)

o Review and submit mailout materials to Defra o Amend and approve mailout materials as required o Coordinate printing of the mailout materials o Provide helpdesk support o Dispatch survey pack to companies o Data entry of survey returns o Dispatch the reminder postcard o Survey resends as required o Reminder letter dispatch o Produce interim report

• Analysis and Final Reporting, this phase of the project includes the following

activities (March 2005 – July 2005):

o Creation / updating of validation process o Continuous validation (statistically and by calling companies to clarify issues) o Grossing of Results o Estimation of Non-response Bias o Supply of retrieval database to Defra o Assessment of previous Year’s Survey o Final Reporting and Feedback

Progress of the survey is guided by a Steering Group comprising of representatives from Defra,

Department for Trade and Industry (DTI), Environment Agency, Scottish Environmental Protection

Agency (SEPA) and the Office for National Statistics (ONS). URS are grateful for the guidance and

assistance provided by the Steering Group.

A few of the activities described above are discussed in detail below. These include introducing

modifications for 2003 survey, preparation of sampling methodology, changes in the database design,

and survey promotion.


6

2.1 MODIFICATIONS INTRODUCED IN THE 2003 SURVEY

Several modifications that were introduced during previous surveys were carried through to the 2003

survey, which in particular sought to improve awareness, help with definition issues and widen

ownership of the survey. These include for example the following activities:

• In order to continue to reduce respondent burden, micro sized companies, companies with 1 to 9

employees, were again excluded from the survey in 2003. In addition, small to medium sized

enterprises (SMEs), companies with between 10 and 50 employees, received a simplified cover

letter that asked them to complete only specific questions. Larger SMEs, large companies

(companies 250 plus employees) and top companies (specifically selected based on their

employee number and turnover as well as if they had responded to a number of previous

surveys) all received slightly different cover letters emphasising different issues. The definitions

of these company groups are explained in full in section 3.1 and the cover letters can be seen in

Annex 1.

• Helpdesk staff were trained to encourage companies to fill in specific / minimum questions in

cases where they felt that the survey was not relevant to them. This approach was carried over

from the previous surveys, as it proved useful in persuading companies to respond when they

contacted the Helpdesk.

• At the data entry stage, validation of internal inconsistencies and calculation errors were carried

out continuously during data entry, using a process specifically built into the Access database. In

addition to these inconsistency checks all of the other validation checks were built into the

database for the 2002 survey. The list of validation checks was updated to correspond to the

new 2003 survey form. This approach was continued because it made the further validation

process easier and quicker. It also enabled companies to be contacted with any queries fairly

soon after they had returned the questionnaire, while the information was still fresh in their

minds.

A number of new modifications were introduced for the survey in 2003, which aimed to reduce the

burden on respondents as well as to increase the response rate. These included the following

activities:

• The survey period was increased from ten to twelve weeks to allow enough time for completion

during a busy period of the year, and also to allow enough time for the questionnaire to reach the

right person within the company. In addition, to increasing the survey period, survey returns

were accepted several weeks after the final deadline.


7

• Chasing of Top Companies was increased by sending an additional e-mail to the companies’

general helpdesks, using the information that was available on their websites. The email

requested a contact name and email address of the person who was specifically responsible for

this type of information. Subsequently, the survey was sent to this contact, with a request to

complete the necessary information.

2.2 SAMPLING METHODOLOGY

The final stage of preparation involved selecting the sample of companies, which would be sent the

final questionnaire. In 2003, 8,142 companies were sampled across the extraction, manufacturing,

energy and water supply industries (see Figure 2.1 below a breakdown of the industry sectors

covered by the survey). A census was taken of the larger companies (companies with 250 plus

employees) with a stratified sampling approach, weighted towards the industry sectors with high

expenditure rates in the past, used to sample the smaller companies. The sampling procedure was

also designed to optimise the sample in terms of the sectors where the expenditure would be

greatest. The sampling methodology is described in full in Annex 2.

Figure 2.1 Industry sectors covered by the survey

SIC code Industry 10 – 14 Mining & Quarrying 15 – 37 Manufacturing 15-16 17-19 20 21-22 23 24-25 26 27 28-36

Food, beverages and tobacco products Textiles Wood and wood products Pulp, paper and printing Coke, petroleum and nuclear fuel Chemicals, plastics and rubber Non-metallic mineral products Basic metals Other manufacturing

40-41 Electricity, gas & water. 2.3 DATABASE DESIGN

The 2002 survey database was re-developed for the 2003 survey. The database was designed and

built using Microsoft Access 2000 to store information from the surveys. The database was intended

for use by:

• URS personnel gathering information from postal questionnaires and other correspondence;


8

• URS personnel to carry out continuous validation checks of the data entry process and to record

all of the phone calls made to the responding companies when confirming the data; and

• URS personnel conducting statistical analysis of each year’s data.

The database was re-developed for the 2003 survey to incorporate some additional validation tests.

Some of the data from the previous survey was retained within the database to allow for comparisons

to be made. Validation checks incorporated into the database are shown in Annex 3.

There are a number of advantages of building the validation checks into the data entry system:

1. Checks could be run more frequently;

2. The results of any follow up calls or validation changes were recorded;

3. The validation tests took account of the data types and conversions;

4. There was no delay between the data entry and the return of the validation checks; and

5. Companies could be contacted promptly after returning their completed questionnaires with any

queries.

After the validation tests were run, the results were stored for manual validation. The records within

the list would not change until the validation tests were run again.

2.4 SURVEY PROMOTION

Survey promotion was carried out as previously. A separate article was published independently by

ENDS, which is presented in Annex 4.


9

3 CONDUCTING THE SURVEY

3.1 METHODOLOGY

The stages involved in the survey implementation are summarised in Figure 3.1.

Figure 3.1 Survey Implementation Summary

Stage Number approached Comment

Questionnaire 8,142 Survey period was increased from ten to twelve weeks. The volume of questionnaires returned was the highest in the first weeks after the survey was sent. The same applied for the reminders.

Post survey postcard to elicit responses

8,142 This first reminder mail-out produced a surge in the volume of calls to the helpdesk requesting assistance and survey resends.

Reminder letter to elicit responses

6,709 This second reminder mailout produced a greater surge in calls to the helpdesk. This reminder mailout represents 82 percent of the companies surveyed, which is a slightly lower proportion than in the 2002, where 90% of the companies received a reminder letter.

Top company responses

261 The top companies were approached via a series of dedicated telephone and electronic reminders. Top company response is discussed further in section 3.3.

Companies removed from sample

0

No companies were removed from the total sample after validation checks.

Helpdesk support

1630

Companies contacted the Helpdesk via telephone calls, fax back forms, emails and letters. This represents 20% of the total number of companies surveyed.

The questionnaire was distributed as a package comprising of a cover letter, a questionnaire (an

example of which is shown below), a fax back form, relevant Technical Guidance Notes (TGN) and a

freepost return envelope. The cover letters were targeted at specific company sizes, (SME simple,

SME standard, Large and Top companies) as summarised after the example questionnaire. As a

result of trying to reduce the burden for respondents, micro sized (1 to 9 employees) companies were

not sampled. Examples of all of the cover letters together with the technical guidance note are

provided in Annex 1.

• SME SIMPLE: ≥10 to <50 employees. This letter emphasised the benefits of participation even

if the companies’ environmental protection expenditure was very low. Companies were asked to

answer a minimum number of specific questions to reduce the respondent’s burden. These

included the following questions: Box 1.1A – Total in-house operating costs; 1.2B - Operating

costs paid to external organisations for waste disposal; Box 1.2C - Operating cost paid to external

Government Survey of EnvironmentalProtection Expenditure by Industry: 2003

If any of the details entered in the box oppositeare incorrect please enter the correct details here:

Please complete this form for the Company addressed above but before doing so, please read the instructions below.

InstructionsPlease read these before completing the survey.

● The purpose of this survey is to find out how muchindustry spends annually on protecting the environment.The expenditure covered includes capital costs such asinvestments in clean technology which reduce emissionsof pollutants or the use of raw materials, as well asoperating costs, for example the costs of solid wastedisposal and payments to water companies for sewagetreatment. The survey also seeks information on thebenefits from actions taken during the year which reducethe impact on the environment, e.g. savings from usingraw materials more efficiently or income from sellingby-products.

● The information you provide should preferably beobtained from your accounting system, however if thisis not possible then estimates are acceptable.

● All expenditure should relate to 2003 or the financialyear 2003/2004.

● Expenditure should be reported exclusive of VAT.

● Do not include any expenditure relating to health andsafety.

● Enter zero if you made no expenditure or n/a if thequestion is not applicable. Do not leave blank.

● Enter n/k if the expenditure is not known and you cannotmake an estimate.

● Nil returns (i.e. if you have no environmental protectionexpenditure) are required. However all companiesshould attempt to answer questions 1.1(a), 1.2 B, 1.2C, 1.3, 2.1(a), 2.2(a) and sections 5 and 6.

● When completed please return in the FREEPOSTenvelope provided by 29 October 2004To: Defra Environment Survey, Freepost,

LON17241, London SW19 4YY

● Please refer to the accompanying technical guidancenotes for further guidance in filling out this form andexamples of environmental protection spending.

Should you require advice completing the form please contactthe Survey HELPDESK on 020 8944 3333 (Monday to Friday,9am to 5pm) or e-mail: defra [email protected] you would like to receive a copy ofthe survey results please tick this box ..............................

EPE 1 (Rev. 8/04)

The EU Structural Business Statistics Regulation (No.58/97) requires the UK to report information onenvironmental protection expenditure by industry. Inorder to comply with this requirement, Defra needsthe help of industry.In addition to meeting the UK’s legal obligations, it ishoped that the survey and its results will be of interestto your organisation. In particular, your participationin the survey can:● provide your organisation with information that

can be used in corporate environmental reports,for ‘triple bottom line’ accounting, or for internallytracking compliance costs;

● enable Defra to produce and publishbenchmarking data using comparable informationacross industry sectors against which you will beable to compare your company’s performance;

● help identify UK demand for environmental goodsand services and the basis for improving industrysupport programmes to this growing industry.

Further information about the survey is available fromour website at http://www.defra.gov.uk/environment/statistics/envsurvey/Thank you for your co-operation and assistance withour survey.

John CustanceHead of Environmental Protection Statistics andInformation Management Division

All responses will be treated in confidence. Theinformation collected is not intended to be used byany person or body to damage or harm the reputationof your company. Individual respondents will not beidentified in any reports or other outputs produced asa result of the survey. Any request for specificinformation will be dealt with in accordance with theEnvironmental Information Regulations, which allow forthe confidentiality of information supplied on avoluntary basis to be respected.

■ Environmental Protection ExpenditureEnvironmental protection expenditure is definedas spending incurred by companies where theprimary aim is to reduce environmentalpollution caused during normal operations –that is, expenditure to:● reduce or prevent emissions to air or water;● dispose of waste materials;● protect land, soil and groundwater;● prevent noise and vibration; or● protect the natural environment.

Environmental protection expenditure includes:● operating (running) costs of the company’s own

‘in-house’ environment management and control activities;● ‘external’ operating costs including payments to others for

environmental protection services such as waste disposal;● the purchase price of capital goods (to be recorded for the

year in which they were introduced); and● any revenues and cost savings resulting from environmental

expenditure e.g. savings from using alternative materials orincome from selling by-products.

1. Operating Environmental Protection ExpenditureThis section covers in-house expenditure associated with the operation of pollution control or abatement equipment(1.1 below) and payments to external organisations for environmental services (1.2 below). Waste managementand waste disposal costs should also be included. The sum of in-house expenditure and external payments shouldequal your total operating environmental costs (1.3 below).

1.1 In-house operating costs(a) What were your company’s total in-house environmental operating costs in 2003

for all environmental protection facilities and environmental management(including labour, leasing payments for equipment, chemicals etc.)? ........................

(b) What are the % estimates of in-house operating expenditure on eachenvironmental protection category below? (Please ensure all percentages add up to 100).

Waste (Solid) Soil/ Noise/ Naturewater Air Waste Groundwater Vibrations Protection Other

% of in-houseoperating costs + + + + + + = 100%

1.2 Operating costs paid to EXTERNAL organisationsWhat sums have been paid to external organisations in 2003 for the following:

● Removal of solid wastes (any waste, including general waste suchas paper and cardboard, not classified as liquid waste).(N.B. Do not deduct revenue from sale of wastes)

of which special waste

● Waste water: to Water Service Company for sewagetreatment and general sewage charges .........................................If ZERO please specify why e.g.septic tank or included in leasing cost

to contractors for removal of liquid wastes ...................................● Contaminated soil and/or groundwater. Removal, treatment, site

inspection or containment of contaminated soil and/or groundwater .....................

● Regulatory charges, including payments to Environment Agenciesor local authorities for discharge consents, consignment notesfor special waste, IPC authorisation etc. ..........................................................................

● Other (please specify ) .....

● Total EXTERNAL operating costs (i.e. sum of Box B to Box G) .................................

1.3 TOTAL Operating Environmental Costs in 2003What were your company’s TOTAL environmental operating costs in 2003?This should be equal to the sum of Box A and Box H ..........................................................

1.4Environmental Research and DevelopmentHow much was spent during 2003 on Research and Development to reduce theenvironmental impacts of your company’s activities? (This includes in-house R&Dand amounts paid to others, such as trade associations and consultants for R&D). ......

£

£

£

£

% % % % % % %

£

A

B

C

£

£

£

£

£

£

D

E

F

G

H

2. Capital Environmental Protection Expenditures

2.1 ‘End-of-Pipe’ Capital Expenditure‘End-of-pipe’ equipment is used to treat, handle, measure or dispose of emissions and wastes from production,but not equipment which is used in, or as part of, production processes or installations (covered in 2.2 below).Examples of ‘end-of-pipe’ equipment include effluent treatment plant and exhaust air scrubbing systems.

For further examples refer to the technical guidance notes.

(a) What was your company’s total capital expenditure (exclusive of VAT)on ‘end-of-pipe’ pollution control equipment, which became operationalin 2003, including equipment and installation costs? ...................................................

(b) What are the % estimates of 2003 ‘end-of-pipe’ capital expenditure on eachenvironmental protection category below? (Please ensure all percentages add up to 100).

Waste (Solid) Soil/ Noise/ Naturewater Air Waste Groundwater Vibrations Protection Other% of ‘end of

pipe’ capitalexpenditure + + + + + + = 100%

(c) Please provide a brief description of the main ‘end-of-pipe‘ capital expenditure.

2.2 ‘Integrated’ Capital Expenditure‘Integrated’ capital expenditure relates to new or modified production facilities, which have been designed sothat environmental protection is an integral part of the process.

(a) Most new integrated processes are more efficient and contribute to reducingpollution and/or the use of raw materials in some way. What was the totalexpenditure on such integrated processes that became operational in 2003? .......

(b) The primary aim of some of the expenditure recorded in 2.2(a) may not beto reduce environmental pollution. What is the element that specifically relatesto the additional cost of environmentally friendly processes? .....................................For example, if a new production process was installed in which the design takes account of environmental protection requirements,the environmental protection expenditure comprises the extra cost compared with a cheaper and less environmentally friendlyalternative. It can also include the adaptation of an existing installation/process. The environmental protection expenditure is then thetotal purchase cost of the adaptation.

(c) Of the expenditure recorded in 2.2(b), what are the percentages on each of the environmental protectioncategories shown below? (Please ensure all percentages add up to 100).

Waste (Solid) Soil/ Noise/ Nature% ofwater Air Waste Groundwater Vibrations Protection Other‘integrated’

capitalexpenditure + + + + + + = 100%

(d) Please provide a brief description of the main ‘integrated’ capital expenditure.

3. Cost Savings and IncomeThis section covers cost savings or income arising from expenditures or processchanges taken in 2003 that have resulted in environmental improvements.

3.1 Annualised cost savings resulting from:

(i) improved use of or substitution of raw materials ...........................................................

(ii) reductions in water use or production of effluent .........................................................

(iii) reductions in energy use......................................................................................................

(iv) savings in waste disposal costs ...........................................................................................

(v) other .........................................................................................................................................

% % % % % % %

% % % % % % %

£

£

£

£

£

£

£

£

5. Classification details● Number of persons employed

in the company (at 31.12.2003) .......................................................................................

● Company turnover in 2003................................................................................................

● Total Capital Expenditure in 2003 ....................................................................................

● Please specify whether all the above information wasfilled in for a site, division, whole company or other ...................................................

6. Contact detailsName Telephone No. (including national dialling code)

Position in Company e-mail address

Thank you for your assistancePlease return the questionnaire in the FREEPOST

envelope provided by 29 October 2004, toDefra Environment Survey, Freepost, LON17241, London SW19 4YY

£

£

3.2 What is the annualised level of income, if any, that has been obtained fromthe sale of by-products arising from expenditures or process changes takenin 2003 that have resulted in environmental improvements? ............................................Please note that income from the sale of by-products should only be reportedwhere these products are additional to the company’s core business.

3.3 What is the main product which generates this income?

4. Environmental Reporting Systems4.1 Do you separately identify environmental protection expenditure in any of the following?

(a) Management accounting system .................................................................................................... YES NO

(b) The financial accounts ...................................................................................................................... YES NO

(c) Data generated by an environmental management system ..................................................... YES NO

(d) Other sources ..................................................................................................................................... YES NO

4.2 Is some or all of this information also externally reported in:

(a) the annual reports and accounts?................................................................................................... YES NO

(b) an environmental report? ................................................................................................................. YES NO

(c) a corporate social responsibility or sustainability report? ......................................................... YES NO

(d) other? .................................................................................................................................................... YES NO

4.3 How long did it take you to complete this questionnaire? ....................................... hours minsPlease include the time required to retrieve/compile the relevant information.

4.4 Are there any comments you would like to make on this survey?

£


10

organisations for wastewater disposal; Box 1.3 - Total environmental operating costs in 2002; Box

2.1a - Total 'end of pipe' capital expenditure; Box 2.2a - Total 'integrated' expenditure; and

Sections 4, 5 and 6 – Completing information on environmental reporting systems, the

classification and company contact details;

• SME STANDARD:≥50 to <250 employees. The letter concentrated on emphasising the benefits

of participation to this size of company as the performance benchmarking and environmental

compliance;

• LARGE: ≥ 250 employees, excluding the top 261 companies. The letter emphasised the benefits

of participation by including Turnbull Guidance. The information collated in the survey may be

used to satisfy the corporate governance requirements; and

• TOP COMPANIES: ≥ 250 employees, selected companies from a ranked pool of the top 261

companies ranked by turnover and employee numbers. In addition to companies selected by

turnover and employee number, the 28 companies that did not respond in 2002 but did respond

in 1999, 2000, and 2001, and the 40 companies that did not respond in 2002 survey but did in

2000 and 2001, were also selected as Top Companies.

A change in methodology for the 2001 survey meant those companies with fewer than 10 employees

were excluded from the sample frame. This approach was continued for the 2002 and 2003 surveys

and the adjustment allowed more sampling to occur for companies with 10 to 249 employees. It was

felt that this change could be continued in 2003 because there seemed to be no real difference

between the expenditure per employee for the different size bands.

This change also aimed to improve the confidence intervals in the estimation of expenditure, and had

the added benefit of reducing the burden placed on the smallest companies. However the removal of

a complete section of the population meant that additional qualifications needed to be made

regarding the results of the survey. A comparison of the number of companies from which the

sample was drawn shows the clear effect of excluding the companies with under 10 employees as

seen in Figure 3.2.


11

Figure 3.2 Comparison of the number of companies from which the sample was drawn

from 1999 to 2003

1999 2000 2001 2002 2003

Complete Population 138,635 135,755 133,883 133,568 132,901

Excluded from sample 90,890 93,503 93,783

Population from which

sample was drawn

138,635 135,755 42,993 40,065 39,118

3.2 TOP COMPANY FOCUS

The focus on the top companies was changed from a ‘Top 100 interviews’ in 1999 to a ‘Dedicated Top

Company Follow-up’ for the 2000 survey. Due to its success, the Dedicated Top Company Follow-up

was continued for the 2001, 2002 and 2003 surveys. The following advantages have become

apparent each year using this approach:

• Feedback received from companies is an integral part of the questionnaire design for the

following year;

• Companies were pleased to be listed as Top Companies and therefore said that they will do their

best to participate in the survey.

• The telephone conversation provided the survey team with an opportunity to validate the data

and create confidence that the data supplied by respondents was valid. It also provided an

insight into the way companies interpreted the questions and presented their information;

• Key expenditure issues that are particularly relevant to the company are identified and may be

used for future reference during validation;

• Allowed us to build on the contacts made to minimise the difficulties experienced in identifying

and contacting the right person within the organisation. Also it helped to establish a good

working relationship with the company to help the survey process both this year and in future

years;

• Continue to raise the profile of the survey to minimise on the failure of companies to respond to

the questionnaire, either due to lack of interest or ability to complete as well as to encourage


12

companies to allocate time/resources to complete the survey and set up their accounting systems

to account for the required environmental protection expenditure information; and

• Continue to raise the profile to encourage response from the larger multi-nationals with a policy

of not partaking in voluntary surveys.

In addition to the standard Top Company Follow-up carried over from the previous years surveys, an

extra dimension was added into the process for the 2003 survey. For those Top Companies where

the contact person was not reachable by phone, an additional e-mail was sent to the companies’

general helpdesk, utilising the information they provided on their websites, enquiring whom the

appropriate person would be to contact with regards to the survey. The questionnaire and

corresponding material was then sent to the contact. The number of queries sent to a general

helpdesk was 51 and as a result contact was made with 7 companies. It is not possible to say which

survey returns are a direct result of the additional e-mail sent to the companies’ general helpdesk due

to the variety of methods used to contact the Top Companies and the difficulty in identifying exactly

why a company responded.

3.2.1 Impact of the Top Company Focus

Top Company responses for the follow-up are shown below in Figure 3.3. An analysis of reminder

calls for Top Companies is also provided. Specific codes used for recording the correspondence

received by the Helpdesk are presented in Annex 5.

Figure 3.3 Top company correspondence response codes. Response QuantityCompany declined to participate 56Undecided whether to participate 2Response sent for whole company – individual units not responding 4Late return 0Said that will return the survey – but did not 61Returned Questionnaires 65Company uncontactable / no response 73Total 261


13

3.2.2 Lessons learnt from the Dedicated Top Company Follow-up

During the reminder call phase for the Top Companies, more detail was noted during the telephone

conversations than at any previous stage. As a result, more specific analysis could be conducted

from this Top Company Follow-up. Key findings include:

• For the Top Companies that declined to participate in this year’s survey (2003) the most common

reasons were the same as in previous surveys. These included that next year would be more

convenient and that they did not have the resources or time available at present to complete the

survey. A commonly occurring reason was that the information that would support a response

was not readily available. Related to this, another reason was that due to the size and nature of

the companies, gathering the required information would necessitate too much time to be

devoted to it as the company’s accounting procedures do not separately identify environmental

protection expenditure; and

• Requests for resends were particularly prevalent where questionnaires had been sent to

unnamed persons and hence had gone missing or passed on from department to department, or

from person to person. As a result there was difficulty in finding the person made responsible for

its completion to remind them about the deadline.

It may be concluded that the numerous reminder calls made to these companies (with a majority of

the Top Companies being called at least three times or until a definite response was received) helped

to achieve a good response. In addition it is suggested that the timing of the 2003 survey suited

companies particularly well as it did not overlap with the end of year and Christmas periods as in

2002. 65 survey returns from 261 Top Companies gives a response rate of 25 per cent, which is an

increase on the 2002 response rate of 20 per cent. The highest responding sectors were Wood and

Wood Products (100%), Fabricated Metal Products (50%) and Furniture Manufacture (50%). Sectors

with the lowest response rates were Textiles (0%), Leather Products (0%) and Publishing & Printing

(0%).


14

3.3 SME SIMPLIFIED APPROACH

The expanded SME approach used for the 2001 and 2002 survey was continued in 2003. Hence, for

the 2001, 2002 and 2003 surveys, all companies with between 10 and 49 employees received a

simplified request. In contrast, the 2000 survey, half of the SME Simple and all of the micro-sized

companies received this simplified cover letter, and the other half received a standard cover letter.

The simplified cover letter instructed companies to answer specific questions. The specific questions

included the following:

• Box A in section 1.1 – Total in-house operating costs;

• Box B in section 1.2 - Operating costs paid to external organisations covering waste disposal;

• Box C in section 1.2 - Operating costs paid to external organisations covering wastewater

disposal;

• Box 1.3 - Total environmental operating costs in 2002;

• Box 2.1a - Total 'end of pipe' capital expenditure;

• Box 2.2a - Total 'integrated' expenditure; and

• Sections 5 and 6 - Complete the classification and contact details sections (see questionnaire for

further detail).

Companies in other categories (SME Standard, Large and Top) received the standard cover letters,

which instructed companies to answer all of the questions. The standard letter emphasised the

benefits of participation to this size of company, particularly focusing on the benefits and relevance of

the survey for performance benchmarking and environmental compliance purposes.

The highest responding sectors with the SME Simple approach included sector Collection, Purification

& Water Distribution (43%), Medical, Precision & Optical (38%), Radio, Television & Communications

(26%) and Chemical & Chemical Products – Other and Basic (26% and 25% respectively). This is

very similar to the 2002 survey with the exception of Radio, Television & Communications and Basic

Chemicals being amongst the highest 2003 respondents. In 2001 and 2002 the highest responding

sectors were Fabricated Metal Products, Chemical & Chemical Products and Machinery & Equipment.

The overall response rate of 20% within the SME Simple companies is in line with the overall

response rate for the survey. The SME Simple approach ensures that smaller companies also take

part in the survey and therefore, that the survey provides a broad representation of UK industry.

The percentage of response rates is not merely a reflection of the effect of the letter type but is also

the influence of the company’s size. As such, they should not be compared with the results of

simplified letters within the 2002 survey.


15

It should be noted that the majority (around 90 per cent) of the companies that received the

simplified request actually completed additional sections within the questionnaire. This extra data has

been included within the data set and subsequent analysis.

3.4 HELPDESK SUPPORT

The Helpdesk provided a key area of focus for the survey with companies using the facility to discuss

all aspects of the survey and opening a constructive dialogue between the sample population and the

URS survey team. This provided insight into the information from which the data have been derived,

allowed the data to be validated, and feedback to be obtained from companies as to their individual

experiences with the survey.

A Helpdesk telephone line, fax and email facilities were available to participating companies

throughout the entire survey period. Companies could use any or all of these methods to contact a

member of the URS survey team.

Throughout the main survey period about 1,560 calls and faxes and approximately 70 emails were

received. These facilities, in conjunction with the website, have proved to be a valuable part of the

survey process. The feedback provided has enabled the survey team to track the reasons for

participation and constraints identified by potential survey participants. Annex 6 identifies the main

drivers behind participation and also the reasons why companies declined to participate. This

feedback will be utilised when designing future surveys.

Companies that have used the Helpdesk services commented that it provided useful information,

clarification and assistance in completing the survey form. In addition, the Helpdesk phone calls were

utilised to persuade companies to respond to the questionnaire even if they thought that the survey

was not relevant to them. The URS survey team asked companies to complete the minimum

questions required including external operating cost paid for waste disposal, and for wastewater

charges, as well as the environmental reporting, company classification and contact details.

The website has been maintained and continually updated throughout the year. The website address

is: http://www.defra.gov.uk/environment/statistics/envsurvey/index.htm.

The website has been used in conjunction with the Helpdesk to provide companies with additional

copies of the questionnaire, technical guidance notes and other information relating to the survey.

Approximately 40 companies were directed to the website in order to obtain another copy of the 2003

survey or to fill it in online. When survey resends were requested the website was used as a primary

means of providing another copy of the questionnaire, a copy sent by e-mail and fax was used as a



16

secondary means and a postal copy was only offered as a final resort. Despite this, companies

mostly preferred to receive an additional copy of the survey by post.

In addition a web-based questionnaire was used for the 2003 in order for companies to be able to fill

in the survey online. This method of responding was encouraged through the calls received at

helpdesk. However, only handful of questionnaires filled in online were received by e-mail by the end

of the survey period. This approach was introduced to reduce the burden on respondents as well as

on the helpdesk staff and will be encouraged in the following survey. Introduction of the web-based

questionnaire was well received and provided added flexibility to the survey. It is therefore

recommended that this approach be mentioned in the survey correspondence sent to the companies.


17

4 ANALYSIS OF RESPONSES

4.1 RESPONSES

4.1.1 Response Rates

From a sample of 8,142 companies, the total number of validated responses was 1,591 giving a valid

response rate of 19.5 per cent. This was similar to the response rate achieved in the 2002 survey

(19.7 per cent). There was a significant reduction in the number of companies with 250 plus

employees within the sample frame. As the request to the IDBR was for a census of these companies

this indicates a reduced population. There was no change in the response rate for companies with 10

to 249 employees. The response rates are summarised by employee numbers in Figure 4.1 below.

The output of the data is presented in Annex 7.

Figure 4.1 Comparison of Response Rate – 2000, 2001 and 2002 Surveys

Response by Employee Numbers Year 2001 Survey Year 2002 Survey Year 2003 Survey

< 250 ≥ 250 Total < 250 ≥ 250 Total < 250 ≥ 250 Total

Questionnaires sent out 5111 2254 7365 5373 2706 8079 5847 2295 8142

Questionnaires returned* 1024 427 1451 1080 513 1593 1222 369 1591

% Response rate (valid) 20.0 18.9 19.7 20.1 19.0 19.7 20.9 16.1 19.5

*Only responses used for analysis are counted here.

Note: 2-stage survey process was used in 2002 for companies with plus 250 employees.

The sample frame was split into cells. A cell represents a combination of industrial sector and

employee size band, for example SIC 14 size band with 10-249 employees. This sample division

ensured that a representative sample of UK industry was gathered. No businesses with fewer than 10

employees were sampled. The average (mean) environmental expenditure per employee for

businesses with fewer than 10 employees and 10 to 249 employees was virtually identical for

pervious surveys. (See Annex 2 for further details).

The response rates within individual cells in the sample frame (i.e. by SIC and employee ranges) were

fairly similar between 2002 and 2003. A summary of response rate by individual cell is shown in

Figure 4.2. It should be noted that, as with the previous surveys, the SIC codes 10-14 (Mining and


18

Quarrying) and 15 and 16 (Food Products and Beverages including Tobacco Products) are combined

for reporting purposes. Details of the valid data are presented in Annex 11.


19

Figure 4.2 Sample response rate by SIC

4.1.2 Weighted Response Rates

The overall response rate given above considers each company as an equal contributor to the final

results. The sample frame has, however, been designed to target higher spending sectors and the

largest employers. This means that other response rate measures may be more appropriate. A

number of alternative effective response rates are given in the Figure 4.3 below.

Figure 4.3 Alternative measures of response rate

Measure response rate by:

Sample Frame Grouping Response Rate

Census 17.8%

Non-Census 20.5%

Number of Companies

All 19.5%

Census 21.7%

Non-Census 22.8%

Number of Employees

All 21.8%

Census 26.8%

Non-Census 22.7%

Turnover

All 26.5%

Census 27.8%

Non-Census 22.0%

Spending

All 27.3%

This analysis shows that the sampling strategy is effective in targeting the highest spending sectors,

with 27 per cent of the estimated spending of the sample accounted for by respondents.

4.1.3 Repeated Responses

With five years of survey data it is possible to consider the responses of individual companies across

the five-year period. Figure 4.4 shows the distribution of repeat responses based upon the 2003

respondents. It should be noted that the opportunities to respond to the surveys are not the same

for all companies. Some may have been included in every survey, whilst for others 2003 was their

first chance to respond.

20 5645R/46059-003-784/SV Final Report June 2005

Figure 4.4 Distribution of repeat sampling

Company Size Number of times a response was received <250 >250 Total

1 586 104 690 2 529 87 616 3 71 96 167 4 22 42 64 5 15 40 55

Total 1223 369 1592 No of companies with 2 or

more responses 637 265 902

Figure 4.5 shows which of the previous surveys 2003 respondents had also returned questionnaires

for.

Figure 4.5 Yearly breakdown of repeat responses

Year Number of 2003 respondents that also responded

1999 166

2000 160

2001 247

2002 789

It is apparent that half of the respondents in 2003 had also returned the survey in 2002, whereas

only 15% of the respondents in 2003 had also returned the survey in 2001.

For the 789 companies that responded in both 2002 and 2003 it is possible to directly compare the

amount spent within the different environmental categories. This comparison is shown in Figure 4.6

below.

Figure 4.6 Main expenditure categories for repeat respondent in 2002 and 2003

Expenditure Item 2002 (£M) 2003 (£M) Percent Change In-house opex 112.7 110.8 -1.7%External opex 116.8 114.2 -2.2%Total opex 229.5 225.1 -1.9%Research & Development 5.3 6.8 28.7%End-of-pipe capex 40.9 40.9 -0.2%Total integrated capex 108.7 127.3 17.2%Environmentally friendly part of the integrated capex 38.6 23.1 -40.1%

The largest percentage decrease (40%) in spending was in the part of the integrated expenditure

that is specifically related to environmentally friendly processes. The second largest change in


spending was the increase (28%) in spending on research and development and the third largest is

the increase in the total spending on integrated expenditure (17%). The spending has shifted

towards the total integrated expenditure from the part of the integrated expenditure that specifically

related to environmental protection. It should be noted that the values seen in Figure 4.6 are for the

repeat respondent’s total spending without any grossing up.

4.1.4 Response Bias

There are many forms of response bias associated with this survey and these have been well

documented in previous reports. To recount, the potential sources of response bias previously

identified included:

• Companies with zero or low expenditure being more likely to respond because they have less of

the questionnaire to complete;

• Larger companies with organised environmental departments being more likely to respond

because of availability of the data;

• Possible bias from companies that have completed the survey in previous years being more likely

be able to complete one for 2003; and

• Companies that take environmental protection expenditure more seriously may well be more

likely to respond to the survey, but would be expected to have higher expenditure.

The effect of these possible biases is likely to be reduced, however, by the stratified sampling and

grossing arrangements (details of the grossing-up procedure are presented in Annex 8), that is,

using a relatively large number of cells (determined by size of company and SIC) to categorise

companies with similar characteristics – any bias is then “contained” within the cell.

The repetition of the survey over a number of years has allowed for measures to be taken to obtain a

better understanding of the potential and likely significance of these response biases. For example:

• The question on the reporting systems used indicated that most companies complete the

questionnaire without a reporting system suggesting that even without easily available data

companies do manage to respond; and

• A number of companies actually self-exclude themselves from the survey if they have zero

expenditure suggesting that zero expenditure may not increase the likelihood of a company

responding.


4.1.5 2002 vs. 2003 Methodology

In comparing the two sets of data, there are a number of factors that need to be considered. The

ranges indicated by the confidence intervals for the total expenditure are relatively large, and there

have been improvements made to the questionnaire design and estimation procedure. Hence

comparing the absolute values should be undertaken with caution. The process of generating

estimates of expenditure from the sample sets means that it is possible for one company’s

expenditure, to affect the final figure to a considerable degree. Furthermore the nature of

environmental protection expenditure is such that an individual company may make a large “one-off”

investment (e.g. capital equipment upgrade). Therefore, even though these large figures may make

a considerable difference in the final expenditure they should still be included. This principally relates

to capital expenditure rather than operating expenditure, which is generally more consistent from one

year to the next.

4.2 STANDARD ERRORS AND CONFIDENCE INTERVALS

The methodology adopted for the standard error calculation follows that used in the previous studies.

The results of the 2003 survey, in general, have similar standard errors to the equivalent results in

2002. This could be attributed to the limited number of changes made to both the sample frame and

the questionnaire between the 2002 and 2003 surveys.

The methods for deriving standard errors and 95 percent confidence intervals are presented in

Annex 9, together with the calculated standard errors and confidence limits themselves. Annex 9

explains the method of calculating standard errors (SE), for aggregates, i.e., operating expenditure,

capital expenditure, total gross, and total net expenditures.

The method followed involves aggregating the responses for each business. It is then possible to

calculate overall standard errors by using these aggregate sums. This method takes into account the

correlation between the responses to different questions by individual companies. Some companies

have zero expenditure for all questions whereas others have high expenditures for most questions.

This reflects the different types of businesses operating within particular SIC sectors. Figure 4.7

shows the standard errors for total environmental protection expenditure for different SIC sectors.


Figure 4. 7 Standard error for total environmental expenditure for different SIC sectors

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

SIC

Sta

nd

ard

Err

or /

Tot

al E

xpen

dit

ure

2000

2001

2002

2003


5 SURVEY RESULTS AND ANALYSIS

5.1 TOTAL EXPENDITURE

An estimated total of £3.4 billion was spent by UK industry on environmental protection in 2003.

Operating expenditure accounted for approximately 85 per cent of the total, with capital expenditure

making up the remainder. In-house operating costs account for nearly half of all operating costs, a

rather higher proportion than in previous years, most of the remainder being accounted for by

payments to others. Capital expenditure is dominated by spending on end-of-pipe processes, which

shows signs of decline since 2000. Spending on integrated processes is estimated at a relatively low

level of £180 million in 2003.

A summary of total expenditure is presented in Figure 5.1 in conjunction with equivalent data from

the 2000, 2001 and surveys for comparison. Ranges indicating the 95 percent confidence intervals

associated with each value are provided in parenthesis where available. As might be expected

because of the higher level of estimated expenditure, generally the interval 95 percent confidence

intervals are higher for the 2003 survey than the 2002 survey. Detailed tables of the expenditure can

be found in Annex 10. Gross spending on environmental protection in 2003 by UK industry

amounted to an estimated £3.4 billion, plus or minus £0.6 billion at 95 per cent confidence. The

estimates for previous years were £4.2 billion in 2000, £3.9 billion in 2001, and £2.6 billion in 2002.

Although a reduction in spending might have been expected as a result of the general downturn in

the manufacturing sector over the period, it now appears as if the 2002 figure is a bit of an anomaly.

Direct comparisons between survey years are not possible because the estimates are subject to wide

confidence intervals and because of improvements made over time to the questionnaire design and

estimation procedures. In light of this, comparisons will be shown as percentage shares of the total

spending reported in each year, rather than absolute figures. Comparisons between years should,

however still be treated with caution.


Figure 5.1 Total Expenditure Summary

2000 2001 2002 2003

Total expenditure (£M)




% of gross

Capital expenditure

End of pipe

627 (470-784)

15 489(257-721)

13 276(169-383)

10 355(228-482)

10

Integrated processes1

795 (580-1,010)

19 639(399-880)

16 222 1

(121-324) 8 1771

(113-240) 5

Total CAPEX1

1,442 (1,122-1,721)

34 1,128(762-1,493)

29 498 1

(350-647) 19 5321

(387-676) 15

Operational Own account 1,150

(927-1,373) 27 1,222

(903-1,542) 31 888

(687-1,088) 34 1,369

(1,075-1,663) 40

Payment to others 1,492 (1,201-1,784)

35 1,455(1,202-1,708)

37 1,176(989-1,363)

45 1,459(1,145-1,773)

42

R&D 163 (67-258)

4 81(51-112)

2 77(51-103)

3 82(41-124)

3

Total OPEX

2,805 (2,343-3,266)

66 2,759(2,282-3,236)

71 2,140(1,784-2,496)

81 2,911(2,373-3,448)

85

Gross expenditure Total gross spending

4,226 (3,587-4,865)

100 3,887(3,162-4,612)

100 2,639(2,191-3,086)

100 3,442(2,835-4,049)

100

Subsidies 2 3 (1-5)

0 4(1-8)

0 N/a 2 N/a 2

By-products 207(122-291)

5 198(127-269)

5 232(134-329)

9 178(82-273)

5

Total net expenditure

4,016 (3,365-4,667)

95 3,599 (2,837-4,361)

93 2,407 (1,915-2,899)

91 3,264 (2,644-3,884)

95

Cost savings 3 180 (130-230)

4 113 (78-148)

3 296 3

(186-406) 11 265

(185-344) 8

Note: Comparisons between years should be treated with extreme caution 1. Questions on integrated processes changed in 2002 leading to reduction in estimates – total spend on integrated processes was estimated to be £2.3 billion in 2002 and £1.4 billion in

2003. 2. Question on subsidies excluded from questionnaire for 2002. 3. Questions on cost savings from environmental protection activities changed in 2002 leading to increase in estimates.


26

5.2 EXPENDITURE BY ENVIRONMENTAL MEDIA

This section summarises the amount of expenditure allocated to various environmental protection

categories. Responses are classified under capital expenditure (Figure 5.2) and operating

expenditure (Figure 5.3) and shown in bar chart form (Figures 5.4 and 5.5).

Figure 5.2 2003 Capital Environmental Expenditure by Media

Environmental media Capital Expenditure (£M) Integrated

Expenditure Integrated End-of-

Pipe

Total % of

total

2002 %

of total

2003 % of

total

Integrated

2002 %

of total

Integrated

Water 30 112 141 27% 21% 17% 13%

Air 49 164 213 40% 38% 28% 36%

Solid 22 33 55 10% 17% 12% 10%

Soil/ground water 11 11 22 4% 3% 6% 3%

Noise 7 3 11 2% 2% 4% 3%

Nature protection 27 10 38 7% 6% 15% 7%

Other 30 21 52 10% 13% 17% 28%

Total (£m) 177 355 532 498

Expenditure on air protection measures accounted for 40 percent of capital expenditure, as a

percentage of the total. Capital expenditure on air, water and solids combined accounted for 77

percent. The percentage spend by media is more variable for integrated expenditure items than for

end-of-pipe. The percentage of integrated nature protection expenditure has doubled between 2002

and 2003 (7% to 15%).

5645R/46059-003-784/SV Final Report

June 2005

27

Figure 5.3 2003 Operational Environmental Expenditure by Media

Environmental media Operating Expenditure (£M)

Internal External Total % of total 2002 % of total

Water 337 434 771 27% 31%

Air 235 2 237 8% 10%

Solid 491 805 1296 46% 40%

Soil/ground water 46 64 110 4% 2%

Noise 27 0 27 1% 3%

Nature protection 21 8 29 1% 1%

Other** 211 146 358 13% 10%

Total (£m) 1369 1459 2828 2064

** Includes regulator charges

Expenditure on solid waste accounted for 46 percent of the total operating cost (excluding R&D). This

was the largest expenditure category for both internal and external expenditure. In comparison to

2002, operational environmental expenditure on water and air protection measures, as a proportion

of the total operating expenditure, decreased. It should be noted that by its very nature an increased

percentage in one category would result in a decrease within another category.

Figures 5.4 and 5.5 show the proportion of expenditure across environmental media for operating

and capital expenditures respectively between 2000 and 2003.


June 2005

28

Figure 5.4 Proportion of Operational Environmental Expenditure by Environmental Media:

UK 2000, 2001, 2002 and 2003

OPEX

0

5

10

15

20

25

30

35

40

45

50

Wat er A ir Solid Solid/Groundwater Noise Nat ure Other

Media

Pro

po

rtio

n o

f T

ota

l Sp

en

d (%

)

2000

2001

20022003


Operating expenditure accounted for approximately 85 per cent of the overall proportion of the

expenditure, which is a higher proportion than in 2002 and 2001, with capital expenditure making up

the remainder.

The highest proportion of expenditure was on solid waste, accounting for about 46 per cent of the

total, with a further 27 per cent spent on wastewater and the remaining 27 per cent spent on air,

soil/groundwater, noise, nature protection and other areas. This pattern is consistent throughout the

period 2000 to 2003.

Some of the key items included in the end-of-pipe operating expenditure include various types of

filters and dust collection and control systems, effluent treatment plants and their parts as well as

noise and odour abatement systems.


June 2005

29

Figure 5.5 Proportion of Capital Environmental Expenditure by Environmental Media: UK

2000, 2001, 2002 and 2003

CAPEX

0

5

10

15

20

25

30

35

40

45

50

Wat er A ir Solid Solid/Groundwater Noise Nat ure Other

Media

Pro

po

rtio

n o

f T

ota

l Sp

en

d (%

)

2000

20012002

2003


Capital expenditure accounted for about 15% of the overall total environmental protection

expenditure in 2003. The highest proportion of expenditure was on air, accounting for approximately

40 per cent of the total, with a further 27 per cent spent on wastewater, 10 per cent on solid waste

and the remaining 23 per cent spent on soil/groundwater, noise, nature protection and other areas.

The highest areas of capital expenditure were broadly the same in 2000, 2001, and 2002. As

previously noted, the large differences between years in the amounts of capital expenditure recorded

in the survey is in part attributable to changes in the ways the survey questions have been asked in

different years.

The highest proportion of operating expenditure was on solid waste, whereas the highest proportion

of capital expenditure was on air. This could result from the Integrated Pollution Prevention Control

(IPPC) permit increasing the capital expenditure on air protection measures.


June 2005

30

5.3 EXPENDITURE BY INDUSTRY SECTOR

In all four years the primary spending sectors were Food, Beverages and Tobacco Products (ranging

between 12 to 19 per cent of total spend), Electricity, Gas, Steam and Hot Water (ranging between

11 to 17 per cent) and Chemicals and Chemical Products (ranging between 15 and 19 per cent of

total spend). The bar chart in Figure 5.6 shows the proportion of total expenditure by sector for

2000 to 2003.

Figure 5.6 Proportion of Total Environmental Expenditure by Standard Industrial

Classification (SIC) sectors: UK 2000, 2001, 2002 and 2003.

02468

101214161820

Sector

Pro

port

ion

of T

ota

l Sp

end

(%)

2000

2001

2002

2003

Since 2002 expenditure has decreased in the two largest spending sectors, Beverages and Tobacco

Products and Electricity, Gas, Steam and Hot Water. However in the Chemicals and Chemical

Products sector the expenditure has increased. Spending in the Machinery & Equipment sector has

more than doubled since 2002. Also a large increase has been noted in the Textiles, Clothing and

Leather Products sector since 2002. Sectors where the spending has remained fairly stable include

Mining and Quarrying, Rubber and Plastics, Electrical, Medical and Optical, Transport Equipment and

Furniture Manufacture.


June 2005

31

5.4 COST SAVINGS AND INCOME

This section summarises the amount of income and savings that are generated by environmental

measures. Figure 5.7 below shows the cost savings in 2003 and 2002 and Figure 5.9 shows the

income from by-products in 2003 and 2002. Again comparisons between years should be treated

with caution.

Figure 5.7 Cost savings in 2002 and 2003

0

10000

20000

30000

40000

50000

60000

70000

80000

Cost

Sa

vin

gs (

00

0's

)

Min

ing

and

Qua

rryi

ng

Food

, Bev

erag

es a

nd T

obac

co P

rodu

cts

Text

iles,

Clo

thin

g &

Lea

ther

Pro

duct

s

Woo

d &

Woo

d Pr

oduc

ts

Pulp

& P

aper

Publ

ishi

ng &

Pri

ntin

g

Cok

e, P

etro

leum

& N

ucle

ar F

uel

Che

mic

als

and

Che

mic

al P

rodu

cts

Rub

ber

& P

last

ics

Oth

er N

on-M

etal

lic M

iner

als

Bas

ic M

etal

s

Fabr

icat

ed M

etal

pro

duct

s

Mac

hine

ry &

Equ

ipm

ent

Off

ice

Mac

hine

ry &

App

arat

us

Elec

tric

al M

achi

nery

& A

ppar

atus

Rad

io, T

elev

isio

n &

Com

mun

icat

ions

Med

ical

, Pre

cisi

on &

Opt

ical

Mot

or V

ehic

les

Oth

er T

rans

port

Equ

ipm

ent

Furn

itur

e M

anuf

actu

re

Elec

tric

ity,

Gas

, Ste

am &

Hot

Wat

er

Col

lect

ion,

Pur

ific

atio

n &

Wat

er D

istr

ibut

ion

SIC

20022003

Overall the cost savings in 2003 were £265 million which is a slight decreased since 2002. Food

Products, Beverages and Tobacco Products achieved the highest total cost savings resulting from

environmental protection measures in 2003. Other sectors with high cost savings include Wood &

Wood Products, Pulp & Paper and Chemical & Chemical Products (Pharmaceuticals). This is very

similar to that in 2002 with the exception of Pulp & Paper sector achieving cost savings of only a

fraction of those in 2003.

The estimated cost savings for these sectors in 2003 were £29.64 million for Food Products,

Beverages and Tobacco Products, £44.98 million for Wood & Wood Products, £13.58 million for Pulp

& Paper and £6.17 million for Chemical & Chemical Products (Pharmaceuticals).

Cost savings are broken down by media for 2002 and 2003 in the Figure 5.8 below.


June 2005

32

Figure 5.8 Breakdown of cost savings

Cost savings (£M)

Raw

materials

Water

use

Energy

use

Waste Other Total

2003 Total 423.34 20.92 71.45 38.50 13.03 567.23

% Total 74.6 3.7 12.6 6.8 2.3 -

2002 Total 167.48 17.39 45.02 42.13 24.05 296.06

% Total 56.6 5.9 15.2 14.2 8.1 -

Highest cost savings were achieved from improved use or substitution of raw materials in 2003 as

well as in 2002. Cost savings as a result of reductions in energy use and savings in waste disposal

costs accounted for 12.6% and 6.8% in 2003 and 15.2% and 14.2% in 2002 respectively.

Income received as a result from by-products for 2003 as well as 2002 is shown in Figure 5.9 below.

Figure 5.9 Income from by-products (£ thousands) in 2002 and 2003

0

10000

20000

30000

40000

50000

60000

70000

80000

By-

Prod

ucts

(0

00's

)

Min

ing

and

Qua

rryi

ng

Food

, Bev

erag

es a

nd T

obac

co P

rodu

cts

Text

iles,

Clo

thin

g &

Lea

ther

Pro

duct

s

Woo

d &

Woo

d Pr

oduc

ts

Pulp

& P

aper

Publ

ishi

ng &

Pri

ntin

g

Cok

e, P

etro

leum

& N

ucle

ar F

uel

Che

mic

als

and

Che

mic

al P

rodu

cts

Rub

ber

& P

last

ics

Oth

er N

on-M

etal

lic M

iner

als

Bas

ic M

etal

s

Fabr

icat

ed M

etal

pro

duct

s

Mac

hine

ry &

Equ

ipm

ent

Off

ice

Mac

hine

ry &

App

arat

us

Elec

tric

al M

achi

nery

& A

ppar

atus

Rad

io, T

elev

isio

n &

Com

mun

icat

ions

Med

ical

, Pre

cisi

on &

Opt

ical

Mot

or V

ehic

les

Oth

er T

rans

port

Equ

ipm

ent

Furn

itur

e M

anuf

actu

re

Elec

tric

ity,

Gas

, Ste

am &

Hot

Wat

er

Col

lect

ion,

Pur

ific

atio

n &

Wat

er D

istr

ibut

ion

SIC

2002

2003

Income and savings resulting from the sale of by-products in 2003 was £178 million, which is a slight

decrease since 2002. Fabricated Metal Products (SIC 28) achieved the highest income resulting from

the sale of by-products in 2003 with a value of £48.5 million. This differs from 2002 when Food


June 2005

33

Products, Beverages and Tobacco Products achieved the highest income resulting from the sale of by-

products, (£77 million) closely followed by Fabricated Metal Products (£62 million).


June 2005

34

5.5 ENVIRONMENTAL PROTECTION EXPENDITURE BY INDIVIDUAL (SIC)

SECTOR

This section looks at each sector individually, identifies any notable features under the following

headings including a brief analysis discussing trends and drivers of environmental protection

expenditure in 2003:

• Key Expenditure – Summary of key data by operating expenditure (OPEX) and capital

expenditure (CAPEX) categories along with the expenditure in 2000 and 2002.

• Environmental Expenditure by Media – Expenditure has been subdivided according to media

type (i.e. water, solid waste, noise, air soil/groundwater, nature protection and ‘other’). This is

shown in bar chart form for external, in-house, integrated and end-of-pipe expenditure.

• Income and savings – Summary of key data by cost savings and by-product sales in

expenditure from 2000 to 2003.

When looking at the sector analyses it should be remembered that direct comparisons between

survey years are not possible because the estimates are subject to wide confidence intervals and

because of improvements made to the questionnaire design and estimation procedures. In light of

these discontinuities, comparisons will be shown as percentage shares of the total spending reported

in each year, rather than absolute figures. Comparisons between years should, however, still be

treated with caution. It should be noted that efforts are made each year to reduce confidence

intervals as well as to keep the questionnaire and methodology consistent.


June 2005

35

5.5.1 SIC 10 to 14: Mining and Quarrying

The Mining and Quarrying sector has a relatively small number of companies in the UK and there are several

large companies that have responded to the survey in one year and not in the others, which increases the

potential for skewed results. This sector also includes several large oil and gas companies, where investment

expenditure may be particularly ‘lumpy’.

Estimates of environmental protection expenditure, environmental expenditure by media and income and

savings are provided below for the Mining and Quarrying sector. For this sector, 83 companies participated in

the survey giving a response rate for the sector of 21%, which is equivalent to 5% of the total survey

response.

Key Expenditure

The Mining and Quarrying sector spent approximately £190 million in 2003 on environmental protection

measures, 5 per cent of the total UK industry spend for 2003. Environmental expenditure for this sector is

shown in Figure 5.10 for the years 2000 to 2003. The data are presented separately for companies with less

than 250 employees and 250 plus employees, as well as for capital and operational expenditure.

Figure 5.10 Expenditure


36

t f

Foo note: Totals may not add due to the rounding effects. Comparisons between years should be treated with caution because o the low

response rate.

Operating expenditure accounted for 87 per cent of total environmental spending by the Mining and Quarrying

sector in 2003. Spending in 2003 was significantly higher for in-house compared to external costs. In terms of

capital spending, 2003 was marked with a high relative level of end of pipe spending, accounting for 83 per

cent of the total CAPEX spend in this sector. Overall, however, capital spending was relatively low in

comparison with previous years.

Environmental Expenditure by Media

Environmental expenditure by media for the Mining and Quarrying sector is shown in Figure 5.11 below. The

expenditure priorities for 2003 are different from both that of 2002 and 2001. This sector spent about £30

million on dealing with solid waste, the majority of which is accounted for by external expenditure. Expenditure

on water and air were just under £20 million. In 2002, air protection measures were the largest spend area,

with nearly £60 million in expenditures. In 2001, soil and groundwater were the highest spend areas, with

June 2005

In-house External Tot R & D Total End of Pipe Integrated Total

<250 18 24 1 43 3 1 4 250+ 103 18 0 121 17 4 21Total 120 42 2 164 20 4 24

2002 Total 42 37 2 81 5 53 58 2001 Total 43 55 2 101 32 99 1302000 Total 78 165 37 280 93 121 214

OPEX (£M) CAPEX (£M)

2003

nearly £70 million in expenditure. The figures for 2003 indicate that there were other priorities for the year,

with over £115 million, mainly in-house expenditure, being spent on other areas.

Figure 5.11 Environmental Expenditure by Media


37

t f

Income and Savings

In 2003, income and savings for the Mining and Quarrying sector were approximately £7 million in 2003.

Income and savings for this sector are shown in the Figure 5.12 for the years 2000 to 2003. The data are

presented separately for companies with less than 250 employees and 250 plus employees.

Figure 5.12 Income and savings


response rate.

Cost savings in the sector for 2003 were £4 million of which most are accounted for by companies with less

than 250 employees. As a proportion of the total capital expenditure, the cost savings are high for companies

with less than 250 employees. In line with previous years, most of the cost savings came from measures to

reduce waste and energy use. Approximately 80 per cent of income received from sale of by-products was by

companies with over 250 employees.

June 2005

0

20

40

60

80

100

120

Water Air Solid Soil/Groundwater

Noise Natureprotection

Other

Environmental Media

£M

End of PipeIntegratedExternalIn-House

By- products

Total

Raw material

Water use Energy use Waste Other Total

<250 0.70 0.04 0.79 2.24 0.00 3.77 0.44 4.22250+ 0.10 0.12 0.06 0.20 0.10 0.58 1.88 2.46Total 0.80 0.16 0.85 2.44 0.10 4.35 2.32 6.67

2002 Total 0.13 0.10 0.32 0.23 0.04 0.81 0.49 1.302001 Total - - - - - 0.79 10.37 11.162000 Total - - - - - 10.24 1.54 11.78

(£M) Cost savings

2003

The Mining and Quarrying sector has been under economic pressure in 2003, with a sharp fall in production in

mining and quarrying, mainly in respect of oil and gas extraction. It has been suggested that this fall was

primarily responsible for the overall contraction in manufacturing production figures in 2003 and this trend may

affect environmental expenditure levels that are not linked to legislative requirements in 2004.


38

June 2005

Nonetheless, the sector is responding to changes in waste management legislation and cost savings are being

realised. The sector is moving towards compliance with European laws and developments such as the Waste

Management Regulations of 2005 includes measures to extend existing waste management controls to non-

mineral mining and quarrying waste. Increased spending in the sector may also be seen in light of the UK

Climate Change Programme.

5.5.2 SIC 15 & 16: Food Products and Beverages, and Tobacco Products

The Food Products and Beverages, and Tobacco Products sector is one of the largest sectors in terms of

environmental protection expenditure in the 2003 survey and it is relatively water intensive.


savings are provided below for the Food Products and Beverages, and Tobacco Products sector. For this

sector, 250 companies participated in the survey giving a response rate for the sector of 19%, which is

equivalent to 16% of the total survey response.

Key Expenditure

The Food Products and Beverages, and Tobacco Products sector spent approximately £410 million in 2003 on

environmental protection measures, 12 per cent of the total UK industry spend for 2003. Environmental

expenditure for this sector is shown in Figure 5.13 for the years 2000 to 2003. The data are presented

separately for companies with less than 250 employees and 250 plus employees, as well as for capital and

operational expenditure.



39

tFoo note: Totals may not add due to the rounding effects. Comparisons between years should be treated with caution because of the low

response rate.

Operating expenditure accounted for nearly 80% of total environmental spending by the Food Products and

Beverages, and Tobacco Products sector in 2003. The spending in all years shown above was higher on

external than in-house expenditure.

The fact that integrated capital expenditure is greater than end of pipe may represent a more actual trend this

year unlike in 2002 when end-of-pipe expenditure was higher than integrated expenditure. It is of interest that

for the smaller companies, which may be less likely to be captured by the forthcoming Integrated Pollution

Prevention and Control (IPPC) requirements, end of pipe expenditure is greater than integrated expenditure.

This might suggest that the companies within the sector that are being caught by IPPC are preparing for likely

upgrades. We would expect to see this trend continuing as the IPPC licensing application period for the food

and beverages sector is June to August 2004 and January to March 2005.

June 2005


<250 23 84 1 108 17 10 27 250+ 76 137 4 218 18 38 56 Total 99 221 5 326 35 48 83

2002 Total 149 273 7 429 40 26 66 2001 Total 110 320 3 432 60 102 161 2000 Total 77 242 9 329 137 31 168


2003


Environmental expenditure by media for the Food Products and Beverages and Tobacco Products sector is

shown in Figure 5.14 below. This sector spent nearly £200 million on water protection measures and over

£100 million on dealing with solid waste in 2003, of which most is accounted for by external operating

expenditure. The pattern of expenditure by media in this sector is very consistent for 2000 to 2003 with water

and solid waste being the largest spending areas both years.

Figure 5.14 Environmental Spending by Media


40

t

Income and Savings

In 2003, income and savings for the Food Products and Beverages, and Tobacco Products sector were

approximately £48 million in total. Income and savings for this sector are shown in Figure 5.15 for the years

2000 to 2003. The data are presented separately for companies with less than 250 employees and 250 plus

employees.


Foo note: Totals may not add due to the rounding effects. Comparisons between years should be treated with caution because of the low

response rate.

Greatest cost savings are identified in energy use, which may be associated with the ever-increasing energy

costs and therefore focus in this area. Cost savings for the companies with plus 250 employees is

approximately half of the total capital expenditure for those companies. However, overall savings are

significantly less than for last year, possibly influenced by the change in raw material savings. A single

company that saved £500,000 heavily influenced the raw material savings in 2002.

June 2005

0

50

100

150

200

250



Other

Environmental Media

£M


By- products

Total

Raw material


<250 0.90 1.01 1.82 1.05 0.00 4.79 3.17 7.95250+ 5.77 3.29 11.18 1.89 2.74 24.86 15.05 39.90Total 6.67 4.30 13.00 2.93 2.74 29.64 18.21 47.85


2003

(£M) Cost savings

5.5.3 SIC 17, 18, and 19: Textiles, Clothing and Leather Products

Textiles, Clothing and Leather Products sector is a relatively small sector.


savings are provided below for the Textiles, Clothing and Leather Products sector. For this sector, 80

companies participated in the survey giving a response rate for the sector of 17%, which is equivalent to 5% of

the total survey response.

Key Expenditure

The Textiles, Clothing and Leather Products sector spent approximately £120 million in 2003 on environmental

protection measures, 3 per cent of the total UK industry spend for 2003. Environmental expenditure for this

sector is shown in Figure 5.16 for the years 2000 to 2003. The data are presented separately for capital and

operational expenditure. In a number of years, due to the low response rates, it has not been possible to

separately identify companies with less than 250 and plus 250 employees.



41


response rate.

Operating expenditure accounted for over 80% of total environmental spending by the Textiles, Clothing and

Leather Products sector in 2003. The external expenditure in 2003 was higher than in-house expenditure,

similar to previous years. Capital spending in 2003 was dominated by end-of-pipe expenditure.


Environmental expenditure by media for the Textiles, Clothing and Leather Products sector is shown in Figure

5.17 below. This sector spent just over £50 million on water protection measures, of which most is accounted

for by external operating expenditure. Over £25 million was spent on dealing with solid waste. The pattern of

expenditure was similar in 2002, with highest spending areas being water and solid waste.

June 2005


2003 Total 39 56 1 97 15 7 222002 Total 11 33 1 45 3 4 72001 Total 25 92 3 119 12 2 142000 Total 45 56 1 102 2 4 6




42

Income and savings

In 2003 , income and savings for the Textiles, Clothing and Leather Products sector were approximately £6.9

million. Income and savings for this sector are shown in Figure 5.18 for the years 2000 to 2003. In a

number of years, due to the low response rates, it has not been possible to separately identify companies with

less than 250 and plus 250 employees.


Cost savings By- products

Total (£M)

Raw material


2003Total 0.15 0.73 3.62 2.27 0.00 6.76 0.14 6.90 2002Total 0.84 0.97 0.66 0.17 0.00 2.64 0.03 2.68 2001Total - - - - - 1.83 0.57 2.40 2000Total - - - - - 2.08 0.62 2.69


response rate.

Cost savings in 2003 for the Textiles, Clothing and Leather Products sector were £6.8 million. The bulk of the

savings resulted from savings on waste disposal and the improved energy use.

June 2005

0

10

20

30

40

50

60



Other

Environmental Media

£M


5.5.4 SIC 20: Wood and Wood Products

This is a relatively small sector with limited forestry operations in the UK harvesting trees to produce wood/

timber for construction or conversion into pulp and paper products. The industry tends to make efficient use of

its natural resource (both from an environmental as well as economic perspective) with a range of products

depending on raw material quality.


savings are provided below for the Wood and Wood Products sector. For this sector, 34 companies

participated in the survey giving a response rate for the sector of 21%, which is equivalent to 2% of the total

survey response.

Key Expenditure

The Wood and Wood Products sector spent approximately £50 million in 2003 on environmental protection






43


response rate.

Operating expenditure accounted for over 80% of total environmental spending by the Wood and Wood

Products sector in 2003. The external spending in 2003 was higher than in-house costs, similar to 2002.

Capital spending in 2003 was evenly split between end-of-pipe and integrated expenditure, similar to previous

years.


Environmental expenditure by media for the Wood and Wood Products sector is shown in Figure 5.20 below.

This sector spent over £30 million on dealing with solid waste, of which most is accounted for by external and

in-house operating expenditure. Approximately £14 million was spent on air and water protection measures in

total. The pattern of expenditure was fairly similar in 2002, where the highest spending area was also solid

waste.

June 2005


<250 4 17 0 21 1 3 3250+ 10 12 1 23 4 2 6Total 15 28 1 44 5 5 10

2002 Total 20 29 1 49 2 2 42001 Total 25 25 1 50 4 4 82000 Total 18 19 2 39 3 15 18

2003




44

t f

Income and Savings

In 2003, income and savings for the Wood and Wood Products sector were approximately £50 million. Income

and savings for this sector are shown in Figure 5.21 for the years 2000 to 2003. The data are presented

separately for companies with less than 250 employees and 250 plus employees.



response rate.

Cost savings in 2003 were relatively high for the Wood and Wood Products sector, which reported a total of

over £45 million. The bulk of the savings resulted from measures to improve the use or substitution of raw

materials. Income from by-products sales were also high in 2003, approximately £4 million. Thinnings are the

main by-product in this sector, which is sold to the pulp and paper industry.

June 2005

0

5

10

15

20

25

30

35



Other

Environmental Media

£MEnd of PipeIntegratedExternalIn-House

By- products

Total

Raw material


<250 0.00 0.01 0.50 0.34 0.82 1.66 3.06 4.72250+ 33.45 0.07 3.82 2.20 3.78 43.31 0.93 44.24Total 33.45 0.08 4.32 2.54 4.59 44.98 3.99 48.96


2003

(£M) Cost savings

5.5.5 SIC 21: Pulp and Paper

The UK has limited its pulping capability and imports for a significant proportion of its paper products as well as

pulp for making into paper products. The range of paper products manufactured is extensive, ranging from

specialty and security papers through to bulk printing and writing grades, tissue and newsprint. Key issues for

the sector include energy efficiency, water use, sludge disposal, the quality and mix of waste papers used for

recycling, effluent quality and the trend towards more secondary effluent treatment.


savings are provided below for the Pulp and Paper sector. For this sector, 78 companies participated in the

survey giving a response rate for the sector of 21%, which is equivalent to 5% of the total survey response.

Key Expenditure

The Pulp and Paper sector spent approximately £170 million in 2003 on environmental protection measures, 5

per cent of the total UK industry spend for 2003. Environmental expenditure for this sector is shown in Figure

5.22 for the years 2000 to 2003. The data are presented separately for companies with less than 250

employees and 250 plus employees, as well as for capital and operational expenditure.



45

t fFoo note: Totals may not add due to the rounding effects. Comparisons between years should be treated with caution because o the low

response rate.

Operating expenditure accounted for 87% of total environmental spending by the Pulp and Paper sector in

2003, with a majority spent on external expenditure. Capital spending in 2003, as in previous years, was

dominated by spending on end-of-pipe processes.

The 2002 report refers to the potential influence on environmental spending of the IPPC application period at

the beginning of 2001. The significant increase in operational spending since this period may well reflect costs

associated with measures undertaken as part of permitting, for example monitoring, development of actions

plans, etc. However, it is also apparent that this trend has not translated similarly to capital expenditure.


Environmental expenditure by media for the Pulp and Paper sector is shown in Figure 5.23 below. This sector

spent approximately £100 million on dealing with solid waste, of which most is accounted for by external and

June 2005


<250 14 32 1 47 7 2 8250+ 47 53 2 102 5 9 14Total 61 85 3 149 12 10 22


2003


in-house operating expenditure. About £45 million was spent on water protection measures. The pattern of

expenditure was similar in 2002, where the highest spending areas were solid waste and water.



46

t f

Income and Savings

In 2003, income and savings for the Pulp and Paper sector were approximately £25 million. Income and

savings for this sector are shown in Figures 5.24 for the years 2000 to 2003. The data are presented




response rate.

Cost savings in 2003 were relatively high for the pulp and paper sector, which reported a total of over £13

million. The bulk of the savings resulted from the improved use or substitution of raw materials. As a

proportion of the total capital expenditure, the cost savings are high for companies with less than 250

employees. Income from by-products sales was also relatively high, about £11 million. By-products are linked

to initiatives such as recycling, and the lack of growth in this area relative to the previous year possibly

indicates problems associated with, for example, capacity, supply of materials for recycling, etc.

June 2005

0102030405060708090

100110



Other

Environmental Media

£M


By- products

Total

Raw material


<250 2.15 1.73 1.05 0.79 0.05 5.77 2.85 8.62250+ 3.00 2.10 2.37 0.35 0.00 7.81 8.32 16.13Total 5.15 3.83 3.42 1.14 0.05 13.58 11.17 24.74


(£M) Cost savings

2003

5.5.6 SIC 22: Publishing and Printing

The Publishing and Printing sector is relatively small in the UK. Printing operations range from large publishing

houses to relatively small family owned businesses that have been in operation for several generations. Over

the years there has been a trend away from solvent based inks to water based inks as well as a greater use of

electronic technology to set the type face and create the lay out for printed materials. Issues in this sector

include the disposal of used plates which are used to set the type face, treatment and disposal of used inks as

well as atmospheric releases linked to solvent based inks.


savings are provided below for the Publishing and Printing sector. For this sector, 100 companies participated

in the survey giving a response rate for the sector of 18 %, which is equivalent to 6 % of the total survey

response.

Key Expenditure

The Publishing and Printing sector spent over £60 million in 2003 on environmental protection measures, 2 per

cent of the total UK industry spend for 2003. Environmental expenditure for this sector is shown in Figure





47

t f


response rate.

Operating expenditure accounted for over 90% of total environmental spending by the Publishing and Printing

sector in 2003. The operational spending in 2003 was dominated by external expenditure, similar to previous

years. Capital spending in 2003 was fairly evenly split between end of pipe and integrated processes.


Environmental expenditure by media for the Publishing and Printing sector is shown in Figure 5.26 below.

This sector spent nearly £30 million on dealing with solid waste, of which most is accounted for by external and

in-house operating expenditure. Over £20 million was spent on water protection measures. The pattern of

expenditure was fairly similar to previous years with highest spending areas being solid waste and water.

June 2005


<250 18 17 0 35 0 1 1250+ 8 15 0 24 2 1 3Total 26 33 0 59 2 2 5

2002 Total 12 28 1 40 5 0 52001 Total 20 32 1 53 2 2 4 2000 Total 76 27 0.5 103 19 33 52

2003




48

t f

Income and Savings

In 2003, income and savings for the Publishing and Printing sector were approximately £11 million. Income

and savings are shown for the years 2000 to 2003. The data are presented separately for companies with less

than 250 employees and 250 plus employees. (Figure 5.27).



response rate.

Cost savings in 2003 for the Publishing and Printing sector were over £1 million. The bulk of the savings

resulted from reduced energy use. About two thirds of the income from sale of by-products was by companies

with less than 250 employees.

The trend of segregating trimmings increases the value of by-products because the consistency of the paper

type can be sold back at a higher price. This includes, for example, unsold greeting cards. Increasing trends

towards more recycling manufacture means that the trimmings market will increase in volume, although the

value can fluctuate due to the volatility of the recycled paper market.

June 2005

0

5

10

15

20

25

30



Other

Environmental Media


By- products

Total

Raw material


<250 0.06 0.01 0.02 0.03 0.00 0.12 6.54 6.65250+ 0.00 0.03 0.73 0.22 0.22 1.20 3.70 4.89Total 0.06 0.04 0.74 0.25 0.23 1.32 10.23 11.55


(£M) Cost savings

2003

5.5.7 SIC 23: Coke, Petroleum and Nuclear Fuel

Coke, Petroleum and Nuclear Fuel sector is relatively small in the UK.


savings are provided below for the Coke, Petroleum and Nuclear fuel sector. For this sector, 15 companies


survey response.

Key Expenditure

The Coke, Petroleum & Nuclear Fuel sector spent approximately £90 million in 2003 on environmental


sector is shown in Figure 5.28 for the years 2000 to 2003. The data are presented separately for companies

with less than 250 employees and 250 plus employees, as well as for capital and operational expenditure.



49


response rate.

Operating expenditure accounted for about 60% of total environmental spending by the coke, petroleum and

nuclear fuel sector in 2003. The spending on external measures was higher in 2003. Capital spending in 2003

was dominated by spending on end-of-pipe measures.


Environmental expenditure by media for the Coke, Petroleum and Nuclear Fuel sector is shown in Figure 5.29

below. This sector spent about £30 million on water protection measures, of which most is accounted for by

end-of-pipe capital expenditure. Approximately £20 million was spent on both dealing with solid waste and soil

and groundwater protection. The pattern of expenditure differs from the pattern in 2002 when the air was the

highest spending area.

June 2005


<250 10 6 0 17 0 0 1250+ 9 24 0 34 36 0 36Total 20 31 0 51 37 0 37


2003




50

t f

Income and Savings

In 2003, income and savings for the Coke, Petroleum and Nuclear Fuel sector were approximately £1 million.

Income and savings for this sector are shown in Figure 5.30 for the years 2000 to 2003. The data are




response rate.

Cost savings in 2003 for the Coke, Petroleum and Nuclear Fuel sector were approximately £1 million. The bulk

of the savings resulted from waste disposal. Cost savings for the companies with less than 250 employees are

approximately the same as the total capital expenditure for those companies. No income from the sale by-

products was reported for this sector.

June 2005

0

5

10

15

20

25

30

35



Other

Environmental Media

£M


By- products

Total

Raw material


<2500.02 0.05 0.29 0.44 0.23 1.02 0.00 1.02

250+ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Total 0.02 0.05 0.29 0.44 0.23 1.02 0.00 1.02

2002 Total 0.02 0.02 0.17 0.06 0.02 0.30 0.36 0.662001 Total - - - - - 1.98 0.88 2.85

2000 Total - - - - - 7.63 5.43 13.06

2003

(£M) Cost savings

5.5.8 SIC 24: Chemicals (Basic, Pharmaceuticals and Other)

This sector comprises of three sub-sectors (Basic, Pharmaceuticals and Other), which together make one of

the largest spending sectors. Basic chemicals are characterized by high volume and low margin bulk

chemicals. Pharmaceuticals sector provides high margin products manufactured in stringent clean conditions,

supported by substantial research and development. Other includes fine and specialty chemicals, which

operate in batch cycles with regular cleaning between product changes. Generally the sector in the UK is

struggling to remain competitive especially with competitors based in China for example and to a lesser extent

Eastern Europe.


savings are provided below for the Chemicals and Chemical Products sector. For this sector, 227 companies


survey response.

Key Expenditure

The Chemicals and Chemical Products sector spent approximately £620 million in 2003 on environmental






51


response rate.

Operating expenditure accounted for 85% of the total environmental spending by the chemicals sector in 2003.

Capital spending in 2003, as in previous years, was dominated by spending on end-of-pipe processes.

The reduction in integrated expenditure may be linked to organisations not upgrading / investing in their

manufacturing process until they understood what was required as part of BAT (Best Available Technology)

within their PPC permit, the first tranche of PPC permit applications were made June – August 2003. End of

pipe expenditure is likely to be linked to ensuring ongoing compliance with required emission levels.

Other potential influences for environmental spending by the sector in 2003 are the Solvent Directive, the IPPC

permitting requirements and COMAH updates / requirements. In addition the 2004 expenditure is likely to be

June 2005


<250 78 78 5 161 11 8 20250+ 157 175 31 364 57 17 73Total 235 254 36 525 68 25 93


2003


affected by the impact of the ban on hazardous liquids to landfill and the end of landfill co-disposal of

hazardous and non hazardous wastes (July 2004) as well as new Hazardous Waste Regulations due July 2005,

which will increase the amount of hazardous waste generated.


Environmental expenditure by media for the Chemicals sector is shown in Figure 5.32 below. This sector

spent over £250 million on water protection measures, of which most is accounted for by external and in-house

operating expenditure. Approximately £150 million was spent on dealing with solid waste.


Effluent treatment plant equipment and discharge costs may have increased as a result of the Urban Waste

Water Treatment Directive and also the need for more monitoring, testing and reporting to satisfy regulator

requirements. Solid may have increased as a result of an increase in waste disposal prices, as waste

management becomes more of a logistics business, with waste being transported around the country and the

impact of the ban on hazardous liquids to landfill and the end of landfill co-disposal of hazardous and non

hazardous wastes (July 2004). Air may have increased due to the need for more monitoring, testing and

reporting to satisfy regulator requirements.


52

Income and Savings

In 2003, income and savings for the Chemicals sector were approximately £80 million. Income and savings for

this sector are shown in Figure 5.33 for the years 2000 to 2003. The data are presented separately for

companies with less than 250 employees and 250 plus employees.

June 2005

0

50

100

150

200

250

300



Other

Environmental Media

£M




53


response rate.

Cost savings in 2003 for the Chemicals sector were approximately £56 million. The bulk of the savings resulted

from improved use of or substitution of raw materials. Income from the sale of by-products was dominated by

companies with less than 250 employees. As a proportion of the total capital expenditure the cost savings are

high for both companies with less than and plus 250 employees.

Overall income and savings has decreased from 2002. Energy savings have increased, which may be linked to

any climate change levy agreements in place. Waste savings have increased which may possibly be due to

waste reuse / recycling and better segregation, less cross contamination, better understanding and

characterisation of the composition of wastes generated, for example less special waste. Water savings may be

attributed to increased process efficiency, recycling / reuse of cooling water and process wastewater.

Income and savings are likely to increase in particular with regards to waste, water, energy and raw materials

in the future due to sites having new PPC permits conditions in place.

June 2005

By- products

Total

Raw material


<250 5.54 2.14 5.02 2.21 0.68 15.60 26.21 41.80250+ 23.21 0.93 9.28 6.53 0.00 39.94 0.21 40.15Total 28.75 3.07 14.29 8.75 0.68 55.54 26.41 81.95


(£M) Cost savings

2003

5.5.9 SIC 251 and 252: Rubber and Plastics

The Rubber and Plastics sector includes material mixing and processing into intermediate material, for example

speciality rubber or into finished components such as automotive parts including tyres and plastic trim.


savings are provided below for the Rubber and Plastics sector. For this sector, 99 companies participated in

the survey giving a response rate for the sector of 17%, which is equivalent to 6 % of the total survey

response.

Key Expenditure

The Rubber and Plastics sector spent approximately £130 million in 2003 on environmental protection






54

t f


response rate.

Operating expenditure accounted for nearly 80% of total environmental spending by the Rubber and Plastics

sector in 2003. The operational spending in 2003 was dominated by external expenditure, similar to 2002.

Capital spending in 2003 was dominated by spending on end-of-pipe processes.


Environmental expenditure by media for the Rubber and Plastics sector is shown in Figure 5.35 below. This

sector spent nearly £70 million on dealing with solid waste, of which most is accounted for by external and in-

house operating expenditure. Other high spending areas were air and water, which are mostly accounted for

by end-of-pipe capital expenditure and external operating expenditure respectively. The pattern of expenditure

is similar to that in 2002 where the highest spending areas were solid waste, water and air.

June 2005


<250 34 40 1 75 2 3 5250+ 6 19 1 26 22 1 23Total 40 60 2 101 25 3 28


2003




55

t f

Income and Savings

In 2003, income and savings for the Rubber and Plastics sector were about £15 million. Income and savings

for this sector are shown in Figures 5.36 for the years 2000 to 2003. The data are presented separately for




response rate.

Cost savings in 2003 were relatively high for the Rubber and Plastics sector, which reported a total of over £11

million. Cost savings for the companies with less than 250 employees are approximately the same as the total

capital expenditure for those companies. The bulk of the savings resulted from reduction in energy use as well

as measures to improve the use or substitution of raw materials.

June 2005

0

10

20

30

40

50

60

70

80



Other

Environmental Media

£M


By- products

Total

Raw material


<250 1.61 0.32 1.12 2.32 0.00 5.36 1.27 6.63250+ 2.26 0.01 3.41 0.17 0.11 5.96 1.99 7.95Total 3.87 0.34 4.53 2.48 0.11 11.32 3.26 14.58


(£M) Cost savings

2003

5.5.10 SIC 26: Other Non-Metallic Minerals

This sector is characterized by large furnaces requiring significant air pollution control, which in turn can

generate liquid and solid waste.


savings are provided below for the Other Non-Metallic Minerals sector. For this sector, 64 companies

participated in the survey giving a response rate for the sector of 21 %, which is equivalent to 4% of the total

survey response.

Key Expenditure

The Other Non-Metallic Minerals sector spent approximately £125 million in 2003 on environmental protection






56


response rate.

Operating expenditure accounted for approximately 70% of total environmental spending by the Other Non-

Metallic Minerals sector, which is similar to the proportions reported in 2001 and 2002. In-house and external

spending was evenly split for 2003, similar to the results from 2002. A shift towards end-of-pipe solutions

dominated capital expenditure in both 2002 and 2003.


Environmental expenditure by media for the Other Non-Metallic Minerals sector is shown in Figure 5.38

below. This sector spent over £35 million on dealing with solid waste, with just over £30 million being spent on

air protection measures. Similarly, solid waste was for the highest expenditure by media for the industry in

2002. In 2001, the highest spending was towards air.

June 2005


<250 21 21 4 46 7 3 9250+ 21 22 1 45 18 6 24Total 43 43 5 91 24 9 33


2003




57

t f

Income and Savings

In 2003, income and savings for the other non-metallic minerals sector were approximately £35 million.





response rate.

Cost savings of £23 million were relatively high for the other non-metallic metals sector with the bulk of savings

resulting from the substitution of raw materials. As a proportion of the total capital expenditure, the cost

savings are high for both companies with less than and plus 250 employees. Income from by-product was also

relatively high (£11 million), which was dominated by companies with less than 250 employees.

June 2005

0

5

10

15

20

25

30

35

40



Other

Environmental Media


By- products

Total

Raw material


<250 3.56 0.07 0.55 0.35 0.00 4.53 11.35 15.88250+ 10.59 0.18 6.61 1.39 0.00 18.77 0.04 18.81Total 14.15 0.25 7.16 1.75 0.00 23.31 11.38 34.69


2003

(£M) Cost savings

5.5.11 SIC 27: Basic Metals

Several industries make up the Basic Metals sector, including basic manufacture and first processing (e.g. steel

tube, strip or wire) of iron and steel, aluminium, copper lead zinc and tin, as well as foundries. The industry

supplies materials to other sectors such as motor vehicles, machinery and metal products and faces low cost

competition from overseas.


savings are provided below for the Basic Metals sector. For this sector, 67 companies participated in the

survey giving a response rate for the sector of 19%, which is equivalent to 4% of the total survey response.

Key Expenditure

The Basic Metals sector spent approximately £140 million in 2003 on environmental protection measures, 4 per

cent of the total UK industry spend for 2003. Environmental expenditure for this sector is shown in Figure





58

t f


response rate.

Operating expenditure accounted for about 90% of the total environmental spending by the Basic Metals

sector, which is similar to the proportions reported in 2001 and 2002. In-house spending is higher than

external, which follows the spending pattern of 2002. Capital spending was dominated by integrated solutions,

which differs to 2002 where end-of-pipe solutions dominated spending.

The EU Emissions Trading scheme and the Large Combustion Plant directive will have further impacts on larger

companies in the iron and steel and aluminium sectors in 2004. Changes in hazardous waste classification, and

implementation of the Landfill Directive could have a substantial impact on solid waste costs in 2004/5.


Environmental expenditure by media for the Basic Metals sector is shown in Figure 5.41 below. This sector

spent over £40 million on other and approximately £30 million on dealing with solid waste (mainly external

costs), air (mainly in-house) and water (split evenly between in-house and external). The pattern of

expenditure was fairly similar to 2002 except that expenditure on ‘other’ was not as high.

June 2005


<250 46 21 2 70 1 1 2250+ 32 23 2 58 4 6 10Total 79 45 4 127 5 7 12


2003


Basic Metals sector has relatively high waste disposal costs (one of the highest spend per gross value added,

when compared to other sectors) and rising waste costs would be expected to impact particularly heavily on

this sector.



59

t f

Income and Savings

In 2003, income and savings for the Basic Metals sector were approximately £17 million. Income and savings

for this sector are shown in Figure 5.42 for the years 2000 to 2003. The data are presented separately for




response rate.

Cost savings in 2003 were approximately £6 million. The bulk of the savings resulted from improved energy

use. Income from by-products were approximately £12 million and were dominated by smaller companies.

June 2005

05

1015202530354045



Other

Environmental Media

£M


By- products

Total

Raw material


<250 0.40 0.01 2.16 0.48 0.08 3.12 11.29 14.42250+ 0.04 0.07 1.86 0.74 0.00 2.70 0.35 3.05Total 0.43 0.08 4.01 1.22 0.08 5.82 11.65 17.47


(£M) Cost savings

2003

5.5.12 SIC 28: Fabricated Metal Products

Operations within this sector include cutting and forming (generating noise), degreasing, rinsing (creating

waste water), coating and trimming (creating solid waste, together with packaging). This sector also includes

structural steel, which is used in construction, and the future performance of construction will influence future

spending in structural steel. The food and beverages industry is an important client for this sector (e.g.

beverage cans).


savings are provided below for the Fabricated Metal Products sector. For this sector, 88 companies


survey response.

Key Expenditure


60

t f

The Fabricated Metal Products sector spent approximately £180 million in 2003 on environmental protection


shown in Figure 5.43 for the year 2000 to 2003. The data are presented separately for companies with less




response rate.

Operating expenditure accounted for approximately 95% of total environmental spending by the fabricated

metal products sector. The spending in 2003 was dominated by in-house expenditure. This represents a shift

in priority from 2002 when in-house and external costs were approximately equal. Capital expenditure in both

2003 and 2002 was dominated by end-of-pipe solutions.


Environmental expenditure by media for the Fabricated Metal Products sector is shown in Figure 5.44 below.

This sector spent nearly £90 million on dealing with solid waste, of which most is accounted for by in-house

operating costs. Just over £45 million was spent on water expenditure. Other significant contributors were air

and noise, both of which incur mostly in-house cost.

June 2005


<250 113 32 2 147 4 2 6250+ 9 17 0 27 2 0 2Total 122 49 3 174 6 3 8


2003



In the future this sector is likely to see further increases in waste and wastewater costs, as the Landfill

Directive takes effect. For example, the directive ended the waste co-disposal in July 2004, and the introduced

hazardous waste acceptance criteria in July 2005. Wastewater costs will depend on water company price

increases, and there may be pressure from the Water Framework Directive to reduce emissions of oil and

chemicals to water. Air emissions have already been targeted under previous legislation.

Income and Savings

In 2003, income and savings for the Fabricated Metal Products sector was approximately £70 million. Income

and savings for this sector are shown in Figure 5.45 for the years 2000 to 2003. The data are presented




61


response rate.

Cost savings were relatively high for the Fabricated Metal Products sector, which reported a total of

approximately £24 million and almost 90% of this was from larger companies. Cost savings for the companies

with plus 250 employees is approximately half of the total capital expenditure for those companies. A large

proportion of the cost savings resulted from measures to reduce raw material usage. Income from by products

June 2005

0102030405060708090

100



Other

Environmental Media

£M


By- products

Total

Raw material


<250 0.55 1.39 0.26 0.86 0.00 3.05 4.97 8.02250+ 17.82 0.97 1.44 0.53 0.66 21.42 43.51 64.94Total 18.36 2.36 1.70 1.39 0.66 24.47 48.48 72.95


(£M) Cost savings

2003


62

June 2005

was £48 million of which nearly 90% was by companies with over 250 employees. By-products are expected

to include recycled metals.

5.5.13 SIC 29, 30 and 31: Machinery and Equipment, Office Machinery and Apparatus and

Electrical Machinery and Apparatus

Activities in this sector include basic metal and plastic forming operations, coating and assembly.


savings are provided below for the Machinery and Equipment, Office Machinery and Apparatus and Electrical

Machinery and Apparatus sector. For this sector, 160 companies participated in the survey giving a response

rate for the sector of 20%, which is equivalent to 10 % of the total survey response.

Key Expenditure

The Machinery and Equipment, Office Machinery and Apparatus and Electrical Machinery and Apparatus sector

spent approximately £330 million in 2003 on environmental protection measures, 9 per cent of the total UK

industry spend for 2003. Environmental expenditure for this sector is shown in Figure 5.46 for the years

2000 to 2003. The data are presented separately for companies with less than 250 employees and 250 plus

employees, as well as for capital and operational expenditure.



63

t f


response rate.

Operating expenditure accounted for approximately 90% of total environmental spending by the machinery

and equipment sector, which is similar to the proportion reported in 2002. Capital spending in 2003 was

dominated by end-of-pipe solutions, which is similar to previous years.


Environmental expenditure by media for the Machinery and Equipment, Office Machinery and Apparatus and

Electrical Machinery and Apparatus sector is shown in Figure 5.47 below. This sector spent about £170

million on dealing with solid waste, of which most is accounted for by external expenditure. Over £50 million

was spent on water and soil / groundwater protection. The increase in spending on soil and groundwater is

possibly as a result of the requirement for application site reports under IPPC for rubber and coating processes,

or increased acquisition activity. The pattern of expenditure was similar to 2002 with the exception of

expenditure on air declining, which may reflect that compliance has been achieved with legislation on solvent

releases.

June 2005


<250 41 28 2 71 2 1 3250+ 77 145 2 223 26 2 28Total 117 173 4 294 28 3 31

2002 Total 82 91 10 183 11 6 172001 Total 75 105.9 9 189.9 25.6 16.1 41.72000 Total 109 214 37.4 360 55 39.5 93

2003




64

t f

Income and Savings

In 2003, income and savings for the Machinery and Equipment, Office Machinery and Apparatus and Electrical

Machinery and Apparatus sector were approximately £27 million. Income and savings for this sector are shown

in Figure 5.48 for the years 2000 to 2003. The data are presented separately for companies with less than

250 employees and 250 plus employees.



response rate.

Cost savings were relatively high for the Machinery and Equipment sector, which reported a total of

approximately £14 million. Cost savings for the companies with less than 250 employees is approximately half

of the total capital expenditure for those companies. The bulk of the savings resulted from substitution of raw

materials and measures to reduce energy usage. The costs appear to have switched from energy in 2002

(potentially to meet climate change agreement targets) to raw materials in 2003.

June 2005

0

20

40

60

80

100

120

140

160

180



Other

Environmental Media


By- products

Total

Raw material


<250 3.42 0.21 1.88 1.05 0.27 6.83 4.28 11.10250+ 4.36 0.21 1.47 0.45 0.69 7.19 8.78 15.97Total 7.78 0.42 3.35 1.50 0.96 14.01 13.06 27.07


(£M) Cost savings

2003


65

June 2005

Both large and small companies benefited from sales of by-products, which may include the recycling of scrap

metal and plastic. Income from the sale of by-products was £13 million for the Machinery and Equipment

sector.

5.5.14 SIC 32 & 33: Radio, TV and Comms, and Medical, Precision and Optical

This sector manufactures electronic components and equipment including television, sound and video

recording, instrumentation, optical equipment such as photographic and spectacle lenses, clocks and watches.


savings are provided below for the Radio, TV and Comms, and Medical, Precision and Optical sector. For this

sector, 86 companies participated in the survey giving a response rate for the sector of 24%, which is

equivalent to 5% of the total survey response.

Key Expenditure

The Radio, TV and Comms, and Medical, Precision and Optical sector spent approximately £60 million in 2003

on environmental protection measures, 2 percent of the total UK industry spend for 2003. Environmental






66


response rate.

Operating expenditure accounted for approximately 90% of total environmental spending by the Radio, TV and

Comms, and Medical, Precision and Optical sector. External spending was slightly higher than in-house which is

consistent 2002. Capital spending in 2003 is dominated by end-of-pipe expenditure whilst it was split evenly

between end-of-pipe and integrated in 2002.


Environmental expenditure by media for the Radio, TV and Comms, and Medical, Precision and Optical sector is

shown in Figure 5.50 below. Figures show that the major expenditure was on dealing with solid waste

(approximately £18 million), mainly as external costs for activities such as waste disposal. The pattern of

expenditure is similar to the expenditure in 2002.

June 2005


<250 3 10 1 14 0 0 0250+ 18 17 1 36 7 0 7Total 21 27 3 50 7 0 7


2003




67

t f

Income and Savings

In 2003, income and savings for the Radio, TV and Comms, and Medical, Precision and Optical sector were

approximately £9 million. Income and savings for this sector are shown in Figure 5.51 for the years 2000 to

2003. The data are presented separately for companies with less than 250 employees and 250 plus

employees.



response rate.

Cost savings were relatively high for the sector, which reported a total of about £7 million. As a proportion of

the total capital expenditure, the cost savings are high for both companies with less than and plus 250

employees. The savings were dominated by measures to reduce energy and water usage particularly in the

larger companies. Income achieved from the sale of by-products was approximately £2 million and dominated

by companies with over 250 employees.

June 2005

0

5

10

15

20



Other

Environmental Media


By- products

Total

Raw material


<250 0.00 0.12 0.75 0.11 0.00 0.98 0.03 1.01250+ 0.84 2.75 1.30 0.59 0.51 5.99 1.93 7.92Total 0.84 2.87 2.05 0.69 0.51 6.96 1.96 8.93


(£M) Cost savings

2003

5.5.15 SIC 34 & 35: Motor Vehicles and Other Transport Equipment

This sector includes assemblers and manufacturers of components and panels used in assembly. In recent

years there has been a trend towards light weighting which has been counter-balanced by increases in weight

linked to increased safety features such as strengthened side impact bars and air bags, as well as greater

integration of ‘luxury features’ such as air conditioning. A number of manufacturers have started to use

different material types that lead to light weighting, for example replacing steel panels and parts (e.g. fuel

tank) with aluminium or plastic.


savings are provided below for the Motor Vehicles and Other Transport sector. For this sector, 90 companies


survey response.

Key Expenditure

The Motor Vehicles and Other Transport Equipment sector spent approximately £200 million in 2003 on

environmental protection measures, 6 percent of the total UK industry spend for 2003. Environmental






68


response rate.

Operating expenditure accounted for approximately 85% of total environmental spending by the Motor Vehicles

and Other Transport Equipment sector in 2003, which is similar to 2002. The spending in 2003 was higher for

in-house expenditure, whereas external expenditure was dominant in 2002. Capital spending in 2003 was

dominated by spending on integrated processes.

The relatively low level of capital expenditure shown may reflect the economic constraints on this sector within

the UK. It is interesting to note that for the smaller companies external operational expenditure is greatest

whereas for the larger companies in-house expenditure is greater. For the smaller companies, the external

expenditure might be due to greater use of external assistance brought on by down sizing of workforce, which

in turn is caused by pricing pressures imposed by the manufacturers further down the supply chain.

June 2005


<250 14 23 1 37 0 0 1250+ 86 44 2 133 6 23 29Total 100 67 3 170 6 23 29


2003



Environmental expenditure by media for the Motor Vehicles and Other Transport Equipment sector is shown in

Figure 5.53 below. This sector spent approximately £70 million on dealing with solid waste, of which most is

accounted for by in-house and external operating expenditure. About £40 million was spent on water, of which

most is accounted for by external and in-house operating expenditure. We expect the high costs for solid

waste to continue into 2004 due to the changes in landfill legislation with the majority of these costs being

associated with external processes. The pattern of expenditure is similar to that in 2002.



69

t f

Income and Savings

In 2003, income and savings for the Motor Vehicles and Other Transport Equipment sector were approximately

£27 million. Income and savings for this sector are shown in Figure 5.54 for the year 2000 to 2003. The

data are presented separately for companies with less than 250 employees and 250 plus employees.



response rate.

June 2005

0

10

20

30

40

50

60

70

80



Other

Environmental Media

£M


By- products

Total

Raw material


<250 0.00 0.83 1.36 1.99 0.06 4.25 0.58 4.82250+ 0.44 1.34 2.69 1.79 2.02 8.27 13.85 22.11Total 0.44 2.17 4.05 3.78 2.08 12.51 14.42 26.94


(£M) Cost savings

2003

Cost savings in 2003 were relatively high for the motor vehicles and other transport equipment sector, which

reported a total of almost £13 million. As a proportion of the total capital expenditure, the cost savings are

high for companies with less than 250 employees. The bulk of the savings resulted from savings achieved by

improved waste disposal and a reduction in energy use. Savings have decreased since 2002 with the main

change being a considerable decrease in savings from raw materials (only 2.5% of last year’s savings). This

may be due in part to the significant cost pressure that has been on this sector for some time driven

throughout the supply chain or a particular response from last year, which skewed the results.

The income from by-product sales in 2003 were also relatively high, about £14 million. These include metal,

leather and wood trimmings and scrap from testing. Income was dominated by companies with over 250

employees.


70

June 2005

5.5.16 SIC 36: Furniture Manufacture

The Furniture Manufacture sector is a small sector related to the wood and wood products industry – mainly

assembly operations. This sector faces strong competition from imports.


savings are provided below for the Furniture Manufacture sector. For this sector, 39 companies participated in

the survey giving a response rate for the sector of 16%, which is equivalent to 2% of the total survey

response.

Key Expenditure

The Furniture Manufacture sector spent approximately £100 million in 2003 on environmental protection






71


response rate.

Operating expenditure accounted for nearly 80% of total environmental spending by the Furniture Manufacture

sector in 2003. The spending in both 2002 and 2003 was dominated by external costs. Capital spending in

2003, unlike in 2002, was dominated by spending on end-of-pipe processes.


Environmental expenditure by media for the Furniture Manufacture sector is shown in Figure 5.56 below.

This sector spent over £45 million on dealing with solid waste, of which most is accounted for by external

operating expenditure. About £25 million was spent on air protection measures. The pattern of expenditure

was slightly different in 2002 where the highest spending area was air.

June 2005


<250 13 50 6 69 14 1 14250+ 4 7 0 11 3 6 9Total 17 57 6 80 16 7 24


2003




72

t f

Income and Savings

In 2003, income and savings for the Furniture Manufacture sector were approximately £6 million. Income and

savings for this sector are shown in Figure 5.57 for the years 2000 to 2003. The data are presented




response rate.

Cost savings in 2003 were relatively low for the furniture manufacture sector, which reported a total of about

£5 million. The bulk of the savings resulted from measures to reduce energy use.

June 2005

05

101520253035404550



Other

Environmental Media

£M


By- products

Total

Raw material


<250 0.00 0.09 3.53 0.61 0.00 4.23 0.23 4.46250+ 0.00 0.01 0.48 0.35 0.00 0.83 0.67 1.50Total 0.00 0.10 4.00 0.96 0.00 5.06 0.90 5.96


2003

(£M) Cost savings

5.5.17 SIC 40: Electricity, Gas, Steam and Hot Water

Electricity, Gas, Steam and Hot Water is a relatively large sector in the UK and make one of the largest

spending sectors for this survey.


savings are provided below for the Electricity, Gas, Steam and Hot Water sector. For this sector, 21 companies


survey response.

Key Expenditure

The Electricity, gas, steam and hot water sector spent approximately £460 million in 2003 on environmental






73


response rate.

Operating expenditure accounted for over 85% of total environmental spending by the Electricity, Gas, Steam

and Hot Water sector in 2003, which is higher to the proportion reported in 2001 and 2002. The spending in

2003 was higher for in-house than external expenditure, which is similar to previous years. Capital spending in

2003, as in 2002, was dominated by spending on end-of-pipe processes.


Environmental expenditure by media for the Electricity, Gas, Steam and Hot Water sector is shown in Figure

5.59 below. This sector spent approximately £300 million on dealing with solid waste, of which most is

accounted for by in-house and external operating expenditure. About £60 million was spent on air protection

measures and other. Pattern of expenditure is similar to that in 2002.

June 2005


<250 12 6 4 22 0 1 1250+ 202 177 1 379 43 18 61Total 214 182 4 400 43 19 63


2003




74

t f

Income and Savings

In 2003, income and savings for the Electricity, Gas, Steam and Hot Water sector were about £4 million.




Foo note: Totals may not add due to the rounding effects. Comparisons between years should be treated with caution because o the low response rate. Cost savings in 2003 were relatively low for the Electricity, Gas, Steam and Hot Water sector, which reported a

total of about £4 million. The bulk of the savings resulted from savings in waste disposal costs.

Income from by-product sales in 2003 were approximately £0.3 million, which is a sharp decrease from the

previous years.

June 2005

0

50

100

150

200

250

300

350



Other

Environmental Media

£M


By- products

Total

Raw material


<250 0.02 0.07 0.06 0.01 0.00 0.16 0.24 0.40250+ 0.00 0.00 0.00 3.99 0.00 3.99 0.07 4.06Total 0.02 0.07 0.06 4.00 0.00 4.15 0.31 4.45


(£M) Cost savings

2003

5.5.18 SIC 41: Collection, Purification and Water Distribution

Collection, Purification and Water Collection sector comprised of only a very small sample set in 2003 and thus

represented a small portion of the overall expenditure compared with other sectors that participated in the

survey.


savings are provided below for the Collection, purification and water distribution sector. For this sector, 10

companies participated in the survey giving a response rate for the sector of 48 %, which is equivalent to 1%

of the total survey response.

Key Expenditure

The Collection, purification and water distribution sector spent approximately £10 million in 2003 on

environmental protection measures, 0.3 percent of the total UK industry spend for 2003. Environmental

expenditure for this sector is shown in Figure 5.61 for the year 2000 to 2003. The data are presented





75

t f


response rate.

Operating expenditure approached 100% of total environmental spending for the collection, purification and

water distribution sector in 2003. External expenditure accounts for 80% of the total operating expenditure.


Environmental expenditure by media for the Collection, Purification and Water Distribution sector is shown in

Figure 5.62 below. This sector spent nearly £5 million on other which is mostly accounted for by external

expenditure and £2 million was spent on dealing with solid waste again accounted for by external expenditure.

This differs from the pattern in 2002 where the highest spending areas were soil / groundwater and nature

protection.

June 2005


<250 0 0 0 1 0 0 0250+ 2 7 0 9 0 0 0Total 2 8 0 10 0 0 0


2003




76

t f

Income and Savings

In 2003, income and savings for the Collection, Purification and Water Distribution sector were approximately

£13,000. Income and savings for this sector are shown in Figure 5.63 for the years 2000 to 2003. The data

are presented separately for companies with less than 250 employees and 250 plus employees.



response rate.

Cost savings in 2003 were very low for the Collection, Purification and Water Distribution sector, which

reported an approximate total of £13,000. The savings resulted from measures to reduce water use and

reduce cost of waste disposal and other. No income from by-products sales was identified by the sector in

2003, as seen in previous years.

June 2005

0

1

2

3

4

5



Other

Environmental Media


By- products

Total

Raw material


<250 0.00 0.01 0.00 0.00 0.00 0.01 0.00 0.01250+ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Total 0.00 0.01 0.00 0.00 0.00 0.01 0.00 0.01


2003

(£M) Cost savings

5.6 COMPARISON OF CURRENT EXPENDITURE WITH SUPPLY SIDE ESTIMATES

To help validate the expenditure estimates from the Defra survey, comparisons have been made with

“supply-side” data; that is information on the value of environmental ‘services’ provided to UK

industry by the environmental industry and regulators (e.g. wastewater treatment and environmental

regulatory charges).

Environmen al regulatory charges t

Figure 5.64 shows that the regulatory charges of £100 million reported in the 2003 Defra survey for

the UK are broadly consistent with the charges reported by the Environment Agency for England and

Wales, £89.2 million. The table also shows that the consistency between the Defra survey figures

and those reported by the Environment Agency was also present in 2001 and 2002.

Figure 5.64 Comparison with supply-side expenditure on regulatory charges

Year Estimated expenditure

per Defra survey (£m)

Regulatory charges paid

by industry (£m)

Comments

2001 135 87.2

2002 104 86.4

2003 100 89.2

Environment Agency

income (England and

Wales)

The charges are broken down in Figure 5.65.

Figure 5.65 Regulatory charges for industry in England and Wales

Income (£m)

Type of fee 2001 2002 2003

Charging for discharges 53.9 55.6 58.7

IPC 17.4 15.2 12.8

Radioactive Substances 6.3 6.1 8.2

Producer Responsibility 2.7 2.7 2.7

Waste Management Licensing 6.9 6.8 6.8

Total 87.2 86.4 89.2

Source: Environment Agency (2004)

It should be noted that waste management licensing applies to both industry sites and the waste

management industry proper, which does not feature in this survey. The Environment Agency

estimates that 70 per cent of the waste management licence fee is attributable to the waste

management industry, not covered on this survey. Therefore, in Figure 5.65, for 2001 £6.9 million


June 2005

77

is 30 per cent of the Waste Management Licensing total of £22.9 million, and for 2002 and 2003 £6.8

million is 30 per cent of the £22.7 million total.

Wastewater t eatment r

The 2003 Defra survey indicates that UK industry paid £428 million to water companies for

wastewater treatment services. This compares with an estimate of £1259 million based on OFWAT

(Office for Water Services) data for trade effluent and metered sewerage shown in Figure 5.66. The

true comparable figure could either be higher or lower than £1259 million for the reasons given

below, but it does give an indication of the order of magnitude and suggests that the Defra survey

estimate is clearly well below i.e. that the Defra figure probably understates industry payments to

water companies. This understatement can also be seen in 2001 and 2002.

Figure 5.66 Comparison with supply-side expenditure on wastewater treatment

operating costs paid to the water industry

Year Estimated expenditure

per Defra survey (£m)

Wastewater treatment

operating cost paid to

water industry (£m)

Comments

2001 564 1204

2002 428 1202

2003 428 1259

Supply-side estimates

include trade effluent and

metered sewerage charges

for England and Wales

The supply-side estimates provided in Figure 5.66 are based on OFWAT data (Source – Financial

performance and expenditure of the water companies in England and Wales 2003-04 report) on

income received by English and Welsh water companies from trade effluent and sewerage activities.

The OFWAT data does not identify revenues received from different sources (e.g. industrial,

household) so it is not possible directly to identify payments to industry. The data does, however,

distinguish three types of sewerage revenues: trade effluent, metered sewerage charges and

unmetered sewerage. The first two categories of revenue are largely paid by firms in the industries

covered by the survey, but will include some charges from commercial consumers and households as

well. ‘Unmetered sewerage’ will almost entirely be paid by households and firms outside the

coverage of the survey. The figure of £1259 million shown in Figure 5.66 includes income earned

from the first two categories, trade effluent and metered sewerage, the bulk coming from metered

sewerage.

The costs are broken down in Figure 5.67.


June 2005

78

Figure 5.67 Wastewater treatment operating costs paid to the water industry in England

and Wales

Year Trade effluent (£m) Metered sewerage

(£m)

Wastewater

treatment costs

(£m)

2001 119 1085 1204

2002 107 1095 1202

2003 85 1174 1259

Source: Office for Water Services


June 2005

79

5.7 ENVIRONMENTAL REPORTING SYSTEMS

This section presents the results of the questions on Environmental Reporting Systems (Section 4 in

the questionnaire) that were introduced in the 2002 survey and continued for 2003. These questions

were introduced to provide greater information on the sources used to answer the main sections of

the questionnaire.

5.7.1 Separate Identification of Environmental Expenditure in information systems

The first question asks if environmental protection expenditure was separately identified within the

management accounting system, the financial accounts, environmental management system or any

other sources. Figure 5.68 presents a summary of the results of this question. There are three

possible answers that can be given - yes, no or unknown.

Figure 5.68 Separate Identification of Environmental Protection Expenditure in

information systems

Response by Company Numbers No Yes

< 250 ≥ 250 Total < 250 ≥ 250 Total

Management Accounting System

998 247 1245 78% 224 120 344 22%

The financial accounts 1063 281 1344 85% 159 86 245 15%

Data generated by an environmental management system

1140 270 1410 89% 82 97 179 11%

Other sources 1158 313 1471 93% 64 53 117 7%

Note, two companies did not answer the questions regarding the first three systems and 3 companies

did not answer the final question on other sources.

The key findings of the question are:

• 22% of companies surveyed separately identify environmental protection expenditure in their

management accounting system;

• 15% of companies surveyed separately identify environmental protection expenditure in the

financial accounts;

• 11% of companies surveyed separately identify environmental protection expenditure in data

generated by an environmental management system; and


June 2005

80

• 7% of companies surveyed separately identify environmental protection expenditure in other

sources.

The use of environmental reporting systems is more widespread amongst companies with over 250

employees. This is clearly shown in the Figure 5.69 below.

Figure 5.69 Identification of environmental protection expenditure estimates within

company information systems

Number of Reporting Systems Number of Reporting Systems used by Company Size

< 250 As % ≥ 250 As % Total As %

Estimates not separately identified’

1024 84% 222 60% 1246 78%

Estimates are separately identified’

199 16% 146 40% 345 22%

Within the survey nearly 80 per cent of companies have no separate identification of environmental

protection expenditure. This rises for those companies with less than 250 employees. For companies

with 250 or more employees 60 per cent do not separately identify environmental protection

expenditure.

External reporting

Some or all of the information sought within the questionnaire may already be formally reported

elsewhere. The second question was designed to try and find out if and where the information was

externally reported.

The Figure 5.70 below indicates the number of companies identifying environmental protection

expenditure in different reports.


June 2005

81

Figure 5.70 Number Companies Reporting in Various Media

Media External Reporting by Company Size

< 250 ≥ 250 Total

The annual reports and accounts 132 11% 74 20% 206 13%

The environmental Report 70 6% 79 21% 149 9%

A corporate social responsibility or sustainability report

34 3% 62 17% 96 6%

Other 38 3% 28 8% 66 4%

Not Reported at all 1024 84% 222 60% 1246 78%

Almost 80 per cent of companies indicated that the information that they had provided for the

questionnaire was not identified (either in partial or complete form) in other external reports. 22% of

companies surveyed publicly report on their environmental expenditure. The most frequent methods

of reporting information are in their annual accounts (13%) or an environmental / sustainability

report (6%). For companies with 250 or more employees, 40 per cent of those surveyed provide the

information in an external report.

Of those companies that externally report the information the most common media is within the

annual reports and accounts.

5.7.2 Findings

The majority of companies do not separately identify environmental protection expenditure in their

information systems. As this data is not separately recorded it is unsurprising that it is not externally

reported. This raises the question of how the majority of the people who filled in the questionnaire

obtained their information. In the past, when asked for the source of the data a common answer has

been that they are best guess or estimates. This raises issues regarding the accuracy and

consistency of the given figures.


June 2005

82

6 RECOMMENDATIONS FOR FUTURE SURVEYS

The following section provides recommendations for subsequent surveys based on the experience of

the URS team in conducting the 2003 study, feedback received from trade associations, and

comments from companies via the Helpdesk and interviews.

The main sources of feedback from the correspondence in 2003 were through phone calls to the Help

desk, phone calls made through dedicated Top Company Follow-up and phone calls made during data

validation. Useful feedback was also obtained from the letters that were returned to explain a

company’s non-participation. All the feedback was recorded and the text below discusses the main

findings, which should be taken into consideration for future surveys.

6.1 GENERAL

• Overall, fewer problems have been encountered by companies than during the previous surveys–

it is reasoned that the improvements made to the survey after the 1999, 2000, 2001, and 2002

survey review are responsible.

• The timing of the 2003 survey aimed to avoid the end of financial year as well as Christmas

periods and therefore, to reduce the burden on respondents. It was noted that the queries and

complaints about the survey timing were remarkably reduced from the previous year and it is

therefore recommended that similar timing would be applied in the future survey years. Some

confusion was caused in a few cases by the timing of the survey, for participants who were

surveyed for a second time and felt they had only recently completed the same survey. This

affected only a very small minority of participants.

• Reminder postcards, in general, were found to be a very efficient way of getting companies to

contact the Helpdesk and to participate, although some companies gave negative feedback

stating that it was unnecessary to send a reminder before the survey deadline. This and the

reminder letter, which was sent out three weeks later, increased the calls to the Helpdesk and the

response rate considerably.

• It is recommended that the different cover letters sent to companies according to their size be

reviewed to reflect the sampling methodology (i.e. large companies are not selected by random

sampling).

• A web-based questionnaire was used for the 2003 in order for companies to be able to fill in the

survey online. This method of responding was encouraged through the calls received at


June 2005

83

Helpdesk. Only handful of questionnaires filled in online were, however, received via e-mail by

the end of the survey period. It is recommended that this method be further encouraged during

the 2004 survey, in order to reduce the burden on respondents as well as the Helpdesk.

• Once again differences have arisen between the questionnaire returns and the IDBR company

turnover and number of employees. Addition of the question in the classification details of

whether the survey was, however, filled in for a site, division or the whole company made it

easier to validate figures.

• It is recommended that more use would be made of the end-of-pipe and integrated expenditure

items that are completed on the questionnaire. These are currently used for validation purposes,

but they could also assist in giving ideas of the drivers behind expenditure.

Broadly, the feedback about problems arising from the survey can be split into two areas as in

previous years:

• Firstly, the larger companies encounter more logistical problems such as the co-ordination of all

the data from different sites. In addition, the ‘large’ companies also experience more accounting

difficulties, as they tend to not separate the expenditures. It is noted that several companies are

willing to modify their accounting procedures in order to participate in the survey in following

years.

• In comparison the smaller companies tend to contact the Helpdesk with concerns that the survey

is not relevant to them, or seeking guidance and assistance with technical questions they were

experiencing difficulty with answering. The former of these concerns remained the most frequent

driver for calls from smaller companies this year, but in most cases it was possible to work

through the questions giving illustrative examples of the kinds of information required, thus

persuading the participant to complete some or all of the questionnaire. For example, the

Helpdesk requested all the companies to provide answers for at least for questions 1.2 Box B and

C and sections 4, 5, and 6. It is highly recommended that an additional postcard or leaflet,

addressing the concerns of small companies in non-technical language, be sent out in the 2004

survey pack. This should aim to lessen the confusion caused by the complex appearance of the

questionnaire for those unfamiliar with its terminology and directly encourage the participation of

smaller companies by clearly explaining the relevance of the survey to them, briefly explaining the

rationale behind it and outlining the long term benefits of participating for small businesses. This

may help to reduce the number of queries received by the Helpdesk in future surveys.


June 2005

84

6.2 QUESTIONNAIRE DESIGN

The only modification for the 2003 questionnaire was the introduction of the question asking ‘what is

the main product which generates the integrated expenditure. Several further modifications are

recommended for the 2004 questionnaire. These are outlined in the Figure 6.1 below.

Figure 6.1 Recommendations for Questionnaire Design

Question Number Question Problems and Recommendations

1.2 c Operating Costs paid to External organisations: Waste Water

Question on wastewater has caused continued confusion and low responses. It is recommended that the survey more clearly explain the split between water rates and sewage charges which businesses should see on their annual bills, and specify the requirement for a separately stated sewage charge in answer to this question. It is also recommended that a comment is added to the question itself stating the following N.B It is normal that all companies pay such a charge unless e.g. use septic tank, or cost included in leasing cost).

5. Classification Details In some cases information is given for a combination of sites, whole companies or divisions, which can confuse the results. It is recommended that to avoid this the questionnaire states at the beginning of the section that the information provided should relate to one site, division or company only, not to a mixture.

5. Classification Details: Total Capital Expenditure

A number of participants failed to understand that ’Capital Expenditure’ in section 5 does not refer to total costs, i.e. does not include running costs, nor does it refer to only environmentally related Cap EX as in section 2. It is recommended that an abbreviated definition of capital expenditure is included next to the question itself.

General – 1-6 All sections Validations continue to arise where answer boxes have been left blank or only a few filled in on the questionnaires. In an attempt to reduce these instances, it is recommended that the bullet point instructions from the front page of the survey with regards to entering zero or n/a or leaving blank and entering n/k should be moved, and placed in bold text after the definition of environmental protection expenditure on page 2 and before Section 1 on Operating Environmental Protection Expenditure.


June 2005

85

6.3 VALIDATION PROCESS

• The high number of validations resulting from this year’s survey response, suggest that the

validation checks have worked very effectively in picking up discrepancies and gaps in the data

provided by participants. This demonstrates the effectiveness of improvements and modifications

made to the validation process since last year’s survey and over previous years.

• The increased use of email for responses and reminders as well as in a few cases the online

questionnaire, facilitated the validation process this year, improving the efficiency of the Helpdesk

in chasing up late surveys and responses to validation queries. The emails also helped to reduce

the paper use from requested survey resends in the later stages of the survey period. The online

questionnaire is expected to yield an increased improvement in these areas in 2004.


June 2005

86

LIST OF ABBREVIATIONS

Abbreviation

CAPEX Capital Expenditure COMAH Control of Major Accidents and Hazards Defra Department for Environment, Food and Rural Affairs DETR Department of Environment Transport and the Regions EU European Union EUROSTAT European Statistical Office FAQ Frequently Asked Questions IDBR Inter Departmental Business Register IPPC Integrated Pollution Prevention and Control NACE Nomenclature Generale des Activites Economiques dans les Communautes

Europeennes ONS Office for National Statistics OPEX Operating Expenditure PPC Pollution Prevention and Control Regulations QA Quality Assurance SEPA Scottish Environmental Protection Agency SIC Standard Industrial Classification SMEs Small or Medium Sized Enterprises TGN Technical Guidance Notes URS URS Corporation Ltd


June 2005

87

LIST OF STANDARD INDUSTRIAL CLASSIFICATION (SIC) CODES

SIC Code

SIC Sector

10 to 14 Mining and Quarrying 15 Food Products & Beverages 16 Tobacco Products 17 Textiles 18 Clothing 19 Leather Products 20 Wood & Wood Products 21 Pulp & Paper 22 Publishing & Printing 23 Coke, Petroleum & Nuclear Fuel 241 Chemical & Chemical Products - Basic 244 Chemical & Chemical Products - Pharmaceuticals 24 other Chemical & Chemical Products - Other 251 Rubber 252 Plastics 26 Other Non-Metallic Minerals 27 Basic Metals 28 Fabricated Metal Products 29 Machinery & Equipment 30 Office Machinery & Apparatus 31 Electrical Machinery & Apparatus 32 Radio, Television & Communications 33 Medical, Precision & Optical 34 Motor Vehicles 35 Other Transport Equipment 36 Furniture Manufacture 40 Electricity, Gas, Steam & Hot Water 41 Collection, Purification & Water Distribution


June 2005

88

Documents

UK Environmental Protection Expenditure by Industry …webarchive.nationalarchives.gov.uk/20130123162956/http:/... · ENVIRONMENTAL PROTECTION EXPENDITURE BY INDUSTRY: 2003 UK