Increasingly stringent regulatory requirements in relation to environmental protection, particularly the EU's Directive on Waste Electrical and Electronic Equipment (WEEE) and the Directive on Restriction of Hazardous Substances (RoHS) to be effective shortly, have sparked concerns among the trading community. This is because such so-called "green" regulations will affect the market access of relevant products to the concerned markets. Moreover, such developments are taking place not only in Europe, but also in other major markets like the US, Japan and even the Chinese mainland. All of these are compelling exporters to make their products green.

Overseas consumers are increasingly aware of the importance of environmental protection. The huge amount of waste stemming from daily goods that are thrown away and the associated toxic materials have threatened the environment, and in turn people's health. In view of this, consumers have gradually developed a preference for products with green attributes and environmentally-friendly end-of-life conditions, leading to the rise of so-called green consumerism in overseas markets.

Regulatory Developments and Voluntary Schemes in Favour of Green Products

The US, the EU and Japan have introduced a number of regulatory requirements for various consumer products in relation to environmental protection, which are largely aimed at minimising hazardous substances contained in/released by consumer products and their end-of-life wastes, while encouraging the efficient use of energy and other resources. As a result, certain products like batteries that contain heavy/hazardous metals are banned in some countries. But there are niches for products able to meet the regulatory changes. For example, electrical product manufacturers can enhance their competitive edge by improving their products' energy efficiency, which can be shown on certain energy labels under the regulatory requirements in many countries.

A number of players are also making use of voluntary schemes to highlight the green attributes of their products for marketing purposes. These include making green claims, or self-declared environmental claims, for their products, including claims about the use of environmentally-friendly materials in clothing and handbag items. Some have applied environmental labels to their products, such as Green Seal and Energy Star labels in the US, EU Eco-labels and German Blue Angel labels, and the Japanese labels Eco Mark and Eco Leaf. These voluntary claims and labels can help consumers identify green products, while enabling suppliers to tap the green market in a more effective way.

Opportunities Stemming from the Rise of "Green Consumerism"

Green consumers who actively seek out and buy green products are on the rise, accounting for more than 20% of the US and the UK populations, and some 50% in western Germany. While green product information is increasingly available and included among the criteria for consumer purchases, some have even considered a green lifestyle fashionable. Undoubtedly, the younger generation is relatively more concerned about environmental protection, and green consumers usually have higher incomes and are better educated. As such youngsters and higher-income groups have gradually become major buyers in the consumer market, the influence of green consumers will impact not only on demand patterns, but also on the development of product standards and regulations.

More importantly, an increasing number of consumers are willing to pay more for products with green attributes, and the price premium enjoyed by green products could be, for instance, as much as 20% in the US market. All these reveal that there is an increasing opportunity in overseas markets stemming from green consumerism. Hong Kong companies can consider differentiating their products from others by offering green products or products with green attributes to increase their value-added amid keen competition in the marketplace.

Hong Kong Green Manufacturing Alliance and Action Blueprint

Hong Kong companies are responsible corporate citizens in the global community. In response to environmental protection, the Hong Kong Green Manufacturing Alliance, founded by a number of major manufacturing and trade associations in Hong Kong, is now in place to facilitate Hong Kong industries to comply with overseas green regulatory requirements, while helping industries adopt the green manufacturing principle in order to enhance their competitiveness. To comply with regulatory requirements, Hong Kong companies are advised to set up their own action plans, with a view to incorporating the green manufacturing principle into their business operations.

Green Opportunities for Hong Kong Companies

Hong Kong companies are advised to keep abreast of changes in green regulations, while considering the utilisation of voluntary schemes to publicise the green features of their products. Hong Kong exporters also need to implement an environmental policy and create a good supply chain environmental management system in order to demonstrate sound fulfillment of their environmental responsibility to buyers. In addition, they should take note of global trends that can affect their product design and development, and focus on product categories, where consumer demand for green features is increasing.

• Green products with respect to efficient use of energy and resources

Including energy efficient household lighting equipment like compact fluorescent lamps and lighting equipment with sensor switches, small household electrical appliances and consumer electronics with efficient energy consumption, as well as clothes washers and dishwashers that are efficient in their use of water and energy.

• Green products with minimal hazardous substances and end-of-life waste

Such as lead-free and/or cadmium-free rechargeable batteries, as well as electronics products and household electrical appliances designed for easy disassembly to facilitate recycling and recovery of useable parts.

• Green products with minimum release of allergic/potentially harmful substances

Including clothing, footwear and travel goods that contain low level of substances like formaldehyde, azodyes, residual pesticides, heavy metals and volatile organic compounds, as well as nickel-free watches and jewellery.

• Green products making use of raw materials from sustainable/recycled sources

Such as clothing and bags made from organic cotton and agfibre (by-product of agricultural products), footwear with soles made from recycled rubber, wooden and paper items (including certain toys and furniture) made of certified timber or salvaged wood from sustainable sources, as well as plastic toys made from recycled plastics.

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