Sustainable Innovation


Social impacts of products

Underpinning company mission

Paint

An important reason to start measuring social impact is to underpin a company mission. More and more companies define company aspirations in terms of social impact. Take for instance Danone, that has a dual mission of business success and social impact. Philips aims to improve the lives of 3 billion people. And L’Oréal strives with its ‘Sharing Beaty for All’ program for all its products to have a social or environmental beneift. It is  important to substantiate these goals with tangible examples and report on progress based on solid metrics. How to do so?

Learning from NGOs and philantropy

Social progress is the ‘raison d’etre’ for Non-Gouvernemental Organisations (NGOs) and philantropic organisationsFor NGOs it would be unthinkable not to track the number of people lifted out of poverty, the income generated for small holder farmers or the number of girls educated. A number of tools and guidelines have become available to forecast and track progress , for instance those ‘Global Impact Investing Network’. The reporting guidelines of the Global Reporting Initiative provide inspiration as well for companies that wish to steer on social impact. However, these type of guidances do not always provide the level of granularity needed to steer the social impact of products.

Social impact through products

Companies can create the largest positive impact with their products and services. Through products companies have the ability to create the most significant impact in society: billions of end-users are reached, manufacturing processes can be changed in own organisation and supplier organisations. The choices companies make for their products have a direct effect on the impacts the products have on the planet and people. These impacts are created in all stages of the product life cycle from extraction of raw materials – all the way to the producten, use phase and the end of life of a product.

Life cycle approach

The impacts created by products can be related to all stages of the product life cycle, .’Life Cycle Analyses’ have become a common methodology to assess the environmental impact of a product. Take for instance the standard defined by the World Business Council for Sustainable Development (WBCSD) for life cycle assessments in the chemical sector. It is also possible to assess the social impacts along the life cycle. If you wish to integrate ‘people perspectives’ a good source is the Handbook for Product Social Impact Assessments developed by a group of industry peers.

Better for people and planet

DSM strives for products and innovations to be measurably better for the planet (Eco+) and people (People+)  based on a life cycle approach. By 2020 65% of DSMs products should be ‘Brighter Living Solutions’, measurably better for planet or people. Some examples:

  1. Alpaflor® Edelweiss is a personal care ingredient. It contributes to better skin health and comfort, and is sourced in a very socially sustainable way, contributing to good working circumstances and prosperity of farmers in the Swiss Valais region.
  2. Synthetic chains made of Dyneema® used for marine structure mooring are 8 times lighter and 70 times less noisy than steel chains. Users experience a safer and more comfortable use, shipping companies report improved operational efficiency.
  3. Medical gowns reinforced with breathable Arnitel VT® contribute to the protection of surgeons against virus and bacteria in high risk hospital environments, and allow surgeons to work in a comfortable way.
  4. Decovery® is a plant based and waterborne paint ingrediënt for paints. It is a solvent free and low odor product, and reduces health risks of the people involved in production and the users of the product.

Benefits of social impact measuring

Social impact measuring is useful to underpin company missions. Life cycle assessments can be instrumental to spot new innovation opportunities and business differentiators. They also help to train product developers and sourcing managers to choose the most sustainable alternatives, and marketeers to communicate the differentiators in a balanced way. More about business benefits here.

– based on the earlier published article by Karen Maas (Academic Director Impact Center Erasmus) and Jacobine Das Gupta (DSM Corporate Sustainability) in Dutch for NRC Live Impact Day

 

Advertisements


Cultural Differences and Sustainable Development

If you ask people what sustainability is all about, you will probably get multiple answers. Between 2009 and 2011 I interviewed sustainability managers across Europe. I found out that sustainable development has different connotations. Interpretations are often linked to historical developments.

In France, sustainability (développement durable’) has a strong social connotation. The principles of the French revolution, ‘Liberté, Egalité and Fraternité’, are still visible in today’s society. People believe that rights of individuals, employees and families should be defended at all times. You can recognize this social connotation of sustainability in the approach of Orange and of La Poste.

The Swedes are known to be very close to nature. For many Swedes, sustainability is more connected to environmental aspects. You can read more about this in the case study about best practices of Ericsson.

Not only national connotations may differ. Differences in business culture impact the way how sustainable strategies can be implemented in a successfull way.

In France, the society is organised in a strongly hierarchical way. Important decisions are taken at top level. This allows a swift implementation of new strategies. Decisions are taken early in the process and handed top-down through the hierarchy, as is done for example at Danone.

In Northern European countries, important decisions are often being made after intensive consultation rounds. These consultatations are being used to gather ideas but notably to make sure that all participants agree on the specific decision. A disadvantage is that this process may be time consuming.

What can we learn from the above?

First: Never assume that your understanding of sustainability is being shared by everyone across Europe – let alone people in the Americas, in Asia or Africa. When you are developing a multinational sustainability strategy, make sure you understand the regional connotations and include them as much as possible.

Second: Be aware of differences in business culture. Your sustainability implementation plan will need to be challenged by local experts. You will probably need to adapt it to the local business culture and decision making process in order to be successfull.

Globalisation improves a mutual understanding between people in different countries. Also national business cultures may change. French organizations slowly get less hierarchical. Generation Y employees get in direct contact with company boards as the case study of the Veolia Environnement illustrates. Globalisation however needs time to develop. At date, the differences in connotations, historical legacy and business culture are still very important.

Develop global, but adapt to local conditions: Test your global strategy with regional experts, and complete your strategy with regional implementation tactics, for instance in cooperation with national governments and local NGO partners, as DSM, Philips and Nokia show.

——————-
More about Best Practices of European Sustainability Leaders in: ‘Your customers want your products to be green’.



Dutch Business News Radio Interview

Why do customers want green?

This week I have presented my new book on the Dutch radio in the Business News Radio program ‘BNR Duurzaam’.

Presentator Mark Beekhuis, Jos Cozijnsen and I exchanged about sustainability news and strategies, employee engagement, cultural differences and the new book.

For those who understand Dutch find hereby the link to the radio emission: http://www.bnr.nl/programma/bnrduurzaam/555237-1201/bnr-duurzaam-14-januari-uw-klant-houdt-van-groen



Why buy ? Leasing is the future !

Customers want no hassle, no upfront costs, up-to-date and high quality products. Products As A Service’ (PAAS) become increasingly popular and respond to some of these needs.

What is a ‘Product As A Service ? PAAS is a creative derivation of the ICT word  ‘Software As A Service’.  Instead of becoming the owner of a new product or service,  you just rent and ‘pay as you go’. Take for instance Salesforce.com : an online CRM system paid on a monthly base.

PAAS can be found in all industries : Take the machines you can find at the office : copy, coca cola and coffee machines can be rented instead of buying the equipment representing substantial CAPEX. Dresses, costumes, shoes can be rented for special occasions. Michelins offers tyre-services to its lorry transportation customers, taking care of the tyres and the maintenance whilst customers pay for the transported kilometers. Property developers rent instead of sell their office and retail properties. Philips pilots a new ‘pay per lux’ service : customer like the architect agency of Thomas Rau profit from up-to-date high quality LED lighting without the hassle of installation and maintenance. 

Customer advantages of PAAS are numerous : No need to pay high upfront costs : just pay as you go. No need repair the product yourself : just ask the owner. No hassle to get the latest version : the supplier will take care of. And if you do not use the product any more  : the supplier will come and take it back.  

Environmental advantages of PAAS are obvious : By optimising the use of high-quality products, they can be kept operational for a longer period of time. In this model, suppliers and customers extend the lifetime of products, use less separate products and create a smaller environmental footprint.

In the ideal situation the supplier takes back the product and closes the product life cycle by using components as raw materials for new products – just as The Van Gansewinkel Group demonstrates.

– Thanks to Mirjam Kibbeling for our exchanges –



From waste collector to raw materials supplier : van Gansewinkel launches cradle2cradle office paper

The Gansewinkel Group (The Netherlands) has recently launched its new product : Van Gansewinkel office paper, powered by Océ : the first office paper in the world that is cradle2cradle certified. The product launch is remarkable, as the van Gansewinkel Group has, over the years, developed from a traditional waste collector to a supplier of sustainable raw materials and energy supplier.

Van Gansewinkel Office Paper, cradle2cradle certified, reducing 100% wood consumption, 85% water consumption, 72% electricity use and reducing 53% CO2 emissions compared to standard office paper

Why did the Van Gansewinkel Group develop its own office paper ?

Florens Slob, Marketing manager at the van Gansewinkel Group states : Our motto is ‘Afval Bestaat Niet’ (or in English : There’s no such thing as waste). We make all efforts to give waste a second life as a raw material or as a product. By analyzing our customers waste streams we identify how their waste can be re-used for the development of other products or as an energy source.

We have noticed that a large proportion of our customers waste consists of paper and cardboard. Of which a substantial part is high quality office paper. Recycling paper for newspapers and tissue paper is yet common practice. However, our challenge was to close the product cycle for our customers and offer both a service for shredding and recycling ‘old’ office paper as well as developing  ‘new’ office paper that could be used again.

How has the new office paper been developed  ?

The new office paper has been developed according to the guidelines of the scientific Cradle-to-Cradle institute EPEA. The development is a result of a close partnership with the document management and printing system supplier Océ and sustainable paper producer Steinbeis. Van Gansewinkel brings in used and shredded office paper provided by its customers. Paper producer Steinbeis produces the office paper. Océ contributes with its office paper and media knowledge and distribution channels – That is why the paper is co-branded as ‘powered by Océ’.

Van Gansewinkel partners with Océ and Steinbeis to develop and sell its office paper.

What are the advantages of the new Van Gansewinkel Office paper ?

Functionality & Price : First of all, the paper has a high standard quality for a reasonable price  – just as professional customers expect their office paper to be.

Ecological benefits : Secondly, it offers a number of ecological advantages : The production of the new paper takes up to 83% less water and 72% less energy than standard office paper. The CO2 emission reductions are estimated at 53%. Maybe the most important advantage is that no trees need to be cut down to produce this paper. Mind that 7,5 kg of wood that is needed for 1 pack of standard office paper.  

Is the office paper ready for sale yet ?

Yes it is. Professional customers based in Belgium, The Netherlands or Luxembourg you can contact Van Gansewinkel or Océ : http://www.vangansewinkel.com/officepaper

Is the Van Gansewinkel Group planning to develop more products ?  

Absolutely ! Our office paper is the first cradle2cradle certified product that Van Gansewinkel brings on the market. More products are expected to follow as a result of our partnerships with customers and industry partners.

To name a few examples :  Van Gansewinkel investigates with Philips how coffee-machines can be shredded and re-used as raw materials for new products. It exchanges with carpet manufacturer Desso how used carpets can be recycled, with manufacturer Mosa how broken tiles can be brought into the production processes and with Ahrend how used office furniture (parts) can be reused.

So, certainly : more news to come !

Philips, Desso, Ahrend and Mosa : all partners of the Van Gansewinkel Group.

For more information have a look at :  http://www.vangansewinkelgroep.com/en/company/news/gansewinkel_office_paper.aspx and http://www.vangansewinkelgroep.com/en/company/CtoC-Real-life-examples.aspx



Green products also attractive to people with a material orientation

Some people doubt about the good intentions of companies selling ‘sustainable’ products. However, under certain conditions they still find green products attractive and are happy to buy green products. How come ?

Robbert Elderenbosch and David Wijland, of the Marketing Management Master at the Nyenrode Business University in The Netherlands, studied the buying intentions of different consumer groups related to products with sustainable claims. 

Consumers that are intellectually oriented buy green products because they are really searching for product advantages related to society and environment. Other consumers are more materially oriented and can be sceptical about sustainable claims of suppliers.

Would it be possible to persuade mainstream customers, and notably the materially oriented, to buy green products ? The answer is : Yes.

Based on case studies with propositions for a new (Calvé) mayonaise, Elderenbosch and Wijland found that even sceptical consumers focussing on material advantages, are willing to buy products with sustainable advantages under the following condition :

First functional and personal advantages should be communicated (such as healthier, more simple, more effective), secondly the sustainable aspects (lower energie consumption, less toxic, less packaging).

Communication about ‘traditions’ and ‘authenticy’ related to products tends to be  connected with the sustainability claims and are positively perceived for some consumer groups. 

Confidence also grows when additional information is offered on specific websites to explore the sustainability claims that are made.

To conclude : It is possible to develop products with sustainability advantages ánd reach mainstream markets.  Best would be communicate first about the personal, cost and functional benefits and secondly (and shortly) about the sustainability advantages – possibly with a link to a website for further details.

Source : http://www.molblog.nl/bericht/duurzame-producten-ook-aantrekkelijk-voor-niet-duurzame-consumenten/



CSR Orientation of Suppliers is among the key drivers for Innovation

In December 2010, Mirjam Kibbeling PHD presented the findings of her thesis on ‘Creating Vlaue in Supply Chains’ at the Research School for Operations Management and Logistics in Eindhoven in The Netherlands.

New publication of Mirjam Kibbeling PHD.

For long, purchase has been equivalent with cost reduction. Nowadays suppliers are asked to contribute much more : from developing new customer value propositions to reducing carbon emissions. It is illustrative that not less than 50 to 80% of companies activities are currently outsourced to suppliers.

Mirjam Kibbeling dissertation deals what the key factors of the suppliers contribution to a firm’s value creation processes, or in other words : its innovativeness.

Kibbeling analysed the relationships between :

  • supplier : innovativeness, market orientation, and CSR orientation 
  • target company :  innovation competences, CSR reputation, customer satisfaction and financial performance.

88 matching supply chain sets (supplier-firm-customer) were analysed based The Netherlands and Belgium. Surveys were send out to analyse the mentioned factors.

Kibbelings key findings were :

1. Suppliers innovativeness is a key driver of the focal firm’s innovativeness and companies financial performance : Hence a crucial role exists for strategic purchase management and selection of innovative suppliers to accomplish the companies innovation ambitions.

2. Market orientation has been known in business literature for long as a factor for Innovation. Kibbelings confirmed this assumption.

3. The CSR orientation of a supplier boosts the innovation of products, business and processes. The ability to embed environmental social and ethical needs in business processes has been suggested as a driver for a companies innovativeness in literature before. Kibbeling proved that this is the case in an empirical way. 

Note that a single-orientation on CSR seems not a good idea. Companies should make sure that the three most important criteria for the innovativeness of a company (suppliers innovativeness, market orientation and CSR orientation) are taken into consideration together.

Too extensive ‘CSR codes of conduct’ and ‘extensive supplier surveys’ may hinder essential stream of ideas between supplier and the company, on products and customers . This constant stream of ideas are essential levers for creative (co)development and innovation. In contacts with suppliers, companies have to make sure that enough time and room is reserved for the necessary creative flow of ideas and knowledge on products and customers.

More information on Mirjam Kibbelings new book and other publications can be found on Mirjams publication site.

To stay tuned on news on CSR and Innovation practices in Europe, you are invited to subscribe to this blog on the left hand side.

Jacobine Das Gupta, The Green Take, Paris.