The Product Environmental Footprint (PEF) methodology in the Republic of Moldova: new costs or new opportunities?

The business environment and manufacturing enterprises play a crucial role in transforming the way in which society interacts with the environment. Adopting sustainable and responsible approaches can reduce the consumption of natural resources and ensure long-term economic growth.

In turn, education and raising public awareness on the importance of protecting the environment and adopting environmentally friendly behaviour are essential to bring positive change in the Republic of Moldova. In this regard, an effective tool to address the needs of businesses is the Product Environmental Footprint (PEF) methodology.

The PEF provides a stringent framework for assessing and communicating the environmental impact of products throughout their life cycle, promoting this the principles of Circular Economy nation-wide. Adopting the PEF methodology has several benefits, including an improved reputation and clear evidence of corporate social responsibility, which can further lead to increased sales and reduced production costs (due to an improved manufacturing process that takes into account Resource Efficient and Cleaner Production (RECP)).[1]

The PEF methodology is already applicable at EU level, where it measures and assesses the environmental impact of products throughout their entire life cycle (from the extraction of raw materials to production, transport, use, and disposal of waste). Being a relatively new concept in Moldova (introduced by UNIDO within the EU-funded, EU4Environment programme) the decision to adopt the PEF methodology should be analysed both in terms of benefits and potential challenges for manufacturing companies. Thus, some of the benefits of Product Environmental Footprint include:

SOCIAL RESPONSIBILITY AND POSITIVE IMAGE | Promoting and applying PEF demonstrates a strong commitment to contribute to sustainable and environmentally responsible development. It strengthens the image of service providers and manufacturing companies, increasing consumer confidence that the products they buy have been carefully inspected through a transparent and rigorous process.

ACCESS TO NEW MARKETS | As consumer concern for environmental protection grows, products and services with a reduced environmental footprint continue to gain popularity and can reach new market openings (such as the EU Single Market for Green Products), regardless of their country of origin.

REDUCED COSTS AND INCREASED ENERGY EFFICIENCY | Adopting green practices based on PEF reduces the consumption of natural resources and energy. For example, investing in energy-efficient technologies reduces energy bills, contributing to significant long-term savings. Thus, the promotion and implementation of the environmental footprint principles provides tangible financial benefits for manufacturing enterprises.

At the same time, the adoption of the Product Environmental Footprint methodology may also include potential challenges:

HIGH INITIAL COSTS | Initially, implementing measures to reduce the environmental footprint can involve significant costs for any company. Building capacity to comply with the regulatory framework, purchasing energy-efficient equipment or adapting infrastructure may all require new investments. These costs can be difficult to bear, especially with limited resources related to finances, staff, or time. Government subsidies, new partnerships and collaborations (especially with research organisations and associations), and phased investments in implementing measures to reduce the environmental footprint are just some of the potential solutions to mitigate these challenges.

COMPETITIVENESS | In some cases, products and services with a smaller environmental footprint may have higher prices than their conventional counterparts. In the short term, this persuade consumers to choose cheaper options, and put pressure on producers to adjust their pricing strategies. However, in a competitive market, products with a smaller environmental footprint have a clear advantage, being made with fewer natural resources, lower energy consumption, and higher quality. This long-term perspective can lead to increased consumer loyalty and strengthen companies’ reputation as leaders in environmental responsibility, creating a solid foundation for long-term success in the ever-growing business environment.

REGULATORY COMPLEXITY AND COMPLIANCE | Promoting environmental footprint may involve several requirements and regulations, relevant in the context of Moldova’s accession path to join the EU. Businesses must comply with environmental standards to avoid fines and negative reputational consequences. However, this also represents a valuable opportunity for manufacturing companies. The adoption of the PEF serves as a prerequisite for tapping into new markets and reaching to consumers concerned about the environmental impact of products. This would make it easier for Moldovan producers to access the EU’s Single Market for Green Products and become ready for the EU requirements, which would become mandatory once the Republic of Moldova joins the European Union.

Currently, in Moldova, the Product Environmental Footprint methodology is emerging as a topic of great interest, generating questions among producers on topics related to logistics, strategic opportunities, or financial challenges. In the global context of today’s environmental concerns, the adoption of PEF becomes not only a necessity but also a competitive advantage for the local business sector. In a world where environmental protection is becoming increasingly important, PEF is becoming a crucial element for companies, as an improved image and access to new markets are obvious benefits. At the same time, sustainable practices also generate significant savings. While they may involve upfront costs and potential competitive challenges in the short term, the benefits of products with a reduced environmental footprint remain undeniable.


Published on 06/09/2023

Інформаційний бюлетень

Залишайтеся в курсі подій завдяки нашим останнім новинам, звітам і аналізу підписавшись на наш щомісячний інформаційний бюлетень.