Greenpeace ranked Nokia first, along with Dell, among a group of industry giants on environmental friendliness last month. The Finnish phone-maker is now leading the mobile phone section of a European Commission pilot project on how various industries can manage the impact their products have on the environment.

Joining the world's number one mobile phone company is number two Motorola, which did extremely poorly in the Greenpeace report - both for backtracking on its commitment to eliminate hazardous chemicals from phones and lack of a recycling program. Additional members include Panasonic Mobile, France Telecom/Orange, Vodafone, TeliaSonera AB, Intel, Epson, Spansion and Umicore, as well as several environmental organizations.

"Managing environmental performance is an important responsibility for the entire mobile sector. By working together with environmental groups we have been able to find new ways to make improvements at each stage of a mobile phone's lifecycle, from when it is made right through to how it can be recycled," according to Nokia Executive VP Veli Sundback. "We are now committed to turning these ideas into action and maintaining a long-term commitment to this issue."

Initiatives include reducing energy consumption by equipping phones with reminders to unplug chargers once the battery is recharged. Nokia expects to have energy savings alerts integrated its phones by the middle of next year. The company estimates if only 10 percent of the world’s mobile phone users unplugged their handsets when charged, it would save enough energy to power 60,000 homes.

They also aim to eliminate the use of specific materials of concern - such as certain flame retardants and phthalates - and improve the number of phones collected through take-back programs for recycling. For the next couple of years the group will examine current recycling programs around the world to identify which are the most successful and why, in addition to piloting incentive schemes. The best will be identified and shared across the industry, Nokia says, to improve handset collection rates.

The group also plans to provide consumers with more environmental information about products at the point of purchase. They figure an educated customer is the most environmentally aware customer - who will in turn more likely make the decisions that are best for the environment.

Member company Vodafone's director for corporate responsibility Charlotte Grezo said, "It is important that the mobile industry continues to provide ways for customers to return unwanted mobile phones. Customer involvement is key to our ongoing success and we are keen to try out innovative incentives in order to recover resources and minimize environmental impact."