The environmental consequences of firms' activities
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Industry has been one of the first sectors to be environmentally regulated. Since the sources of pollution are large and easy to identify, more or less stringent environmental standards for product and prodcution processes are in place at present. In sum, the industrial sector has actually made more progress in reducing its environmental impact than areas such as household consumption and private transport. A continuing industrial transformation over the last decades contributed to this development: heavy manufacturing declined and the production of lighter high value-added products and the provision of more environmental friendly services was increased. Improving eco-efficiency has become a standard procedure for many enterprises and a quality aspect in the international competition. Also, environmental regulation itself has lead to the creation of new markets for environmental goods and services and kicked off a stringent growth of the environmental business sector.
But there are still a lot of unsolved promblems up to date, e.g. the use of harmful substances in production processes - nearly 30.000 chemical substances are used without adequat control at the moment. Another major problem in nearly all European Member States is soil contamination from localised sources that is often related to industrial plants no longer in operation, past industrial accidents or improper industrial waste disposals. Altogether the generation and disposal of harmful waste and is another problem area.
The European Commission has adopted a wide range of regulatory measures to improve environmental performance of industry and to enhance technology development: The reform of the European Chemicals Policy for example, is a central reform project of European Industrial and Environmental Policy. The proposed REACH-System (Registration, Evaluation and Authorisation of Chemicals) foresees a new procedure and aims at improving the protection of human health and the environment from the hazards of chemicals and enhancing the competitiveness of the EU chemicals industry.
An important approach for measuring and reducing the the environmental consequences of firms' activities makes them subject to an environmental assessment at the project level (Directive 85/337/EEC), which e.g. assesses environmental impacts of major industrial installations. The assessment obligation has also been zoomed up to the level of policies, plans and programmes (Strategic Environmental Assessment, Directive 2001/42 EC). An assessment includes the analysis of the likely effects on the environment, recording those effects in a report, undertaking a public consultation on the report, taking into account the comments and the report when making the final decision and informing the public afterwards.
According to the Impact Assessment Guidelines of the European Commission, the following key questions are of particular importance when examining the impacts of policy initiatives on the environmental consequences of firms' activities:
- Evaluating impact on natural resource inputs
- Evaluating impact on environmentally friendly goods' prices
- Evaluating impact on promoting environmentally friendly goods
- JRC: IA TOOLS. Supporting inpact assessment in the European Commission. 
This text is for information only and is not designed to interpret or replace any reference documents.