Filed under: Best Practices in The Netherlands, Corporate Social Responsibility, Directions for Sustainable Innovation, Social Impact, Sustainability News, Uncategorized | Tags: Best Practices, Innovation, Life Cycle Analyses, NGOs, Social Impact, Supply Chain, Sustainable Development, Sustainable Innovation
Underpinning company mission
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 organisations. For 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:
- 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.
- 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.
- 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.
- 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
Filed under: Corporate Social Responsibility, Directions for Sustainable Innovation, Sustainability News | Tags: Innovation, Social Impact, Supply Chain, Sustainable Development, The Netherlands
Companies taking the lead
In January politicians, leaders of multinationals, entrepreneurs and scientists gathered at the World Economic Forum in Davos to discuss today’s societal challenges. It is encouraging to see that the private sector is taking a leading role in defining plans to mitigate climate change, ensure health and safety and move towards a circular economy. Companies employ the most employees in the world and have the largest investment and innovation capabilities. Nowhere else such significant impacts on society can be made as by companies if they run their business in a responsible way. Think about sustainable sourcing policies, careful choice of materials, eco-design, production methods, creation of jobs and good working conditions.
Why should you start measuring social impact?
All impacts organisations have on society can be summarized as ‘social impact’. These can be from economic, environmental and social perspectives. How to measure this impact? How to identify the best opportunities for a maximum positive social impact? Where do companies create most impact? How to shift to new more sustainable consumption patterns? How to define priorities, and how to track progress? Measuring impact has surfaced in recent years as a new important perspective in doing business. There are five reasons why:
(1) Underpinning company mission: An increasing number of companies have defined company aspirations and targets that explicitly refer to the social impact they aim to achieve. Philips aims to improve the lives of 3 billion people with health care solutions. DSM wants 65% of its products to have a measurably better environmental or social impact (Eco+ or People+). Underpinning these missions are essential to monitor and manage performance.
(2) Requests for transparency: External stakeholders set higher expectations on transparency than before. Reporting financial and non-financial results are becoming common practise. Companies are not only asked to be transparent about their profits and revenues, but also to inform the general public about the status of ‘externalities’ such as the safety, health and employee engagement of their staff as well as the green house gas emissions of their sites.
(3) Consumer expectations: A large majority of consumers expects that companies take responsibility for healthy, safe and decent working conditions under which products are being produced. Two thirds of all consumers sense responsibility to purchase products that support environmental or societal goals (Globescan). Half of all consumers state they are even prepared to pay more for products that have a clear environmental or social benefit (Nielsen). Producers of goods or services that want to tap into this pull will need to come up with evidence that shows the positive impact on society is not biased, but real.
(4) Changing investor preferences: The investor community increasingly steers on the social impacts of investments. Before, most investors applied an exclusion policy, avoiding certain sectors. Nowadays investors increasingly steer their portfolio based on performance on several Environmental Social and Governance factors (ESG). For companies this is a reason more to track and manage these factors more closely.
(5) Employee engagement: Last but not least, the ‘sense of purpose’ of a company has become the most important reason for Millenials to work for that company (Deloitte). And this not only accounts for the Generation Y. Many people like to work for a company that has a social mission in its headlines. It inspires people to get up in the morning.
Impact measurement important for companies to flourish
Measurement of social impact is still in its early stages. There are ongoing discussions how to do this, and how to monetise externalities. Integration of impact measurement results in business cases is expected, and even on company balance sheets in the future. There is much to be explored, and much to gain. The progress in the coming decade will be instrumental to have better insights in the real social impact of companies, and be able to steer, for a healthy planet, a prosperous society and companies that flourish.
– by Karen Maas (Academic Director Impact Center Erasmus) and Jacobine Das Gupta (DSM Corporate Sustainability) published previously in Dutch: NRC Live Impact Day
Filed under: Directions for Sustainable Innovation, Sustainability News | Tags: Circular, Empathy, Engines, Sharing, Social Impact, Sustainable Development
It has been a crazy and tough, yet wonderful year, 2015. The world is changing at a high pace. Everybody is doing his or her utmost best to make the most out of it. The Netherlands experience a high influx of newcomers that arrive full of hope and motivation to build a new life, whereas we still are working hard on building these new mixed communities. The attacks in Paris, the city so close to my heart, make people realize that respect and empathy are the fundamental values that we should not stop advocating. In the city of light, end of the year, leaders of all nations concluded on an agreement to fight climate change, moving from fossil to a bio-based economy.
The plans are drafted for 2016 and beyond. Our success and future prosperity is depending on our perseverance to follow up. This counts for all of us: business and public leaders, entrepreneurs, managers, designers and consumers. Let’s stay sharp, be agile and make it work.
Some thoughts for 2016:
- More important than speed, it’s the direction we are heading for.
- More than kickstarters, we also need people that can be engines for change.
- More than transparency, it’s about impact.
- More than feeling pity, it’s about empathy.
- More than admiring individual heroes, it’s about fostering collective pride.
- More than pitching ideas, it’s about sharing and implementing.
- More than avoiding harm, it’s about creating sustainable systems in which people can flourish, now and in the future.
Have a great 2016. Play. Learn. Enjoy. Be kind.
Filed under: Uncategorized | Tags: Innovation, LCA, Social Impact, Social LCA, Sustainability
Don’t we all want to live in a prosperous world where people can thrive in good health, enjoying decent work or education ?
Companies have the ability to change the world as part of doing business. Corporate sustainability policies, supplier programs, CSR and employee engagement initiatives help to maintain a safe, healthy and fairly paid workforce within planetairy boundaries. They, however, do not always provide sufficient guidance for daily decisions.
How to make the right choices in daily work that can be precursors for the world we want? If you are a product developer, buyer or marketeer: How to make a good choice between product alternatives, supplier choices or the right messaging? What are the environmental and social aspects to take into consideration? What is ‘good enough’ and what are ‘aspirational’ levels? How present the outcomes in a consized but well balanced way decision makers and customers understand?
Life Cycle Analyses (LCA) have become commonplace for academia and companies as the best way to measure environmental impact of a new product. LCA allows to identify differences and make informed choices as it gives insights in the with a good understanding of the created greenhousegas emissions, energy or water consumption and biodiversity along the lifecycle. Life Cycle Management (LCM) is about steering innovations and product portfolio along their life cycle.
Product social metrics or ‘Social LCA’ respresent the new area that will help to structurally integrate also the elements related to the ‘quality of life’ of people when assessing impacts of a product along the lifecycle. Assessing social impacts brings new dilemma’s such as how to measure working conditions, how to aggregate, and how to combine the impacts on different stakeholder groups such as employees, communities and end-users. Despite all dilemma’s and challenges a new method is emerging. The new methos is strongly driven by industries and building on the Social LCA guidance of UNEP-SETAC, DSM’s People LCA methodology, the Handbook of the Roundtable for Product Social Metrics and WBCSD Chemical Sector Working Group.
On September 1st, in Bordeaux at t the LCM2015 conference, practitioners from academic world and industries will share their experiences with Social LCA discussing the challenges and opportunities. Kithrona Cerri of the WBCSD and I will co-chair the debate. Be warmly invited! More information: http://www.lcm2015.org
Filed under: Corporate Social Responsibility, Directions for Sustainable Innovation, Sustainability News | Tags: Benefits, Corporate Companies, Corporate Responsability, Feasability, Innovation, Marketing, Operations, Pilot, Social Impact, Supply Chain
Consumers are acutely aware of the provenance of the goods they purchase. They have greater access to product information than ever before, and are empowered to make more responsible purchase decisions. There is now evidence that a majority are also willing to pay more for them. A study by marketing research group Nielsen found that 55% of online consumers across 60 countries would pay a premium for ‘green’ or socially responsible goods. Clearly therefore, there is now an opportunity for businesses to develop products and services that have demonstrable ecological or social benefits.
As consumers, we are accustomed to seeing ‘eco-labels’ on products and services. In contrast to the range of methodologies used to assess a product’s environmental impact, there is still a scarcity of tools and metrics to estimate the social impact of these products. A cross-industry social impact assessment method for products has not existed, even though many companies have implemented important social initiatives across their supply chains and operations.
Attempts to develop metrics for social impacts have often resulted in instruments that can be applied to a company as a whole, but are not easily translatable for the products within an industrial context and the daily practices of product developers and marketers. The main reason for this is that measurements of how a product affects society and individuals are difficult to quantify. For example, to prove that a product contributes to the wellbeing of end-users, a company would need consumer research to assess their increase in perceived wellbeing when using the product. The task is further complicated by the sheer volume of real-time product information that can now be accessed in different formats, and the social complexities of a globalised world in which the balance of economic prosperity is rapidly shifting.
Recently, the Roundtable for Product Social Metrics a group of European industry leaders including Ahold, AkzoNobel, BASF, BMW Group, DSM, L’Oréal, Marks & Spencer and sustainability consultants PRé Sustainability published the Handbook for Product Social Impact Assessment. The Handbook is the result of two years of close collaboration and is the first practical methodology tested and accepted by a group of major businesses for assessing a product’s social impact throughout its lifecycle. It has been formulated based on international standards and consultations with researchers, industry hubs, development organisations and NGOs.
The Roundtable has tested the methodology in 6 different pilots, assessing a variety of their products ranging from protective coatings and personal care products, to office chair components and automotive parts. The findings from these initial pilots, in particular insights into often complex value chains, were used to further refine the methodology. Three key stakeholder groups are taken into consideration: workers, consumers and local communities.
Stakeholder Groups taken into account in Handbook Product Social Impact Assessment
The assessment gives practical guidance for capturing social performance data. The resulting dashboard shows the performance in all life cycle stages, from raw materials extraction up till disposal. The pilots showed that the methodology can provide a clear framework by which companies can analyse lifecycle data.
Roundtable partners DSM, l’Oréal and AkzoNobel piloted the product social impact assessment approach on two products: a serum and a hand cream. Both products contain ingredients from AkzoNobel and DSM. They looked at the impact of the product on end-users as well as farmers’ wages and job security.
Personal care product used to pilot methodology
The assessment helped to highlight specific product differentiators that otherwise might not have featured so prominently on a product developer’s radar such as workers condition’s and local community impact. Other potential benefits arising from using the methodology are identifying new product ideas, identifying and mitigating supply chain risks and improving employee engagement. This approach has the potential to be beneficial for all companies that wish to innovate based on social impact performance metrics that take into account the whole value chain.
Extract of article The Guardian October 28th – by Jacobine Das Gupta (DSM) and Charles Duclaux (L’Oréal). http://www.theguardian.com/sustainable-business/2014/oct/28/new-tool-measure-social-impact-products
Filed under: Corporate Social Responsibility, Directions for Sustainable Innovation, Sustainability News | Tags: branding, Innovation, Social Impact, Sustainable Innovation
What is the interest of Product Social Metrics for companies ? What are the benefits of branding and innovation? Do you want to learn more about the methodology described in the Handbook for Product Social Impact Assessment?
Join the conversation at the Sustainable Brands Conference in London on November 5th. Joao Fontes (PRé Sustainability), Hazel Culley (Marks & Spencer), Markus Laubscher (Philips) and Jacobine Das Gupta (DSM) will share their experiences with assessing the social footprint of products, and how this supports branding and innovation. http://www.sustainablebrands.com/events/sblondon14/program
You may also be interested to look and listen back to the registered webinar. During this 45′ webinar, Marzia Traverso (BMW Group), Joao Fontes (PRé Sustainability) and Jacobine Das Gupta (DSM) provide more information on the methodology described in the handbook, share pilot results and exchange on the business benefits of product social metrics. http://www.sustainablebrands.com/digital_learning/slideshow/new_metrics/socialfootprint_how_understanding_your_products_social_impact
Filed under: Corporate Social Responsibility, Directions for Sustainable Innovation | Tags: CSR, Innovation, Social Impact
“Stakeholders increasingly demand transparency about the social impacts of products,” says João Fontes of PRé Sustainability. As supply chains and product life cycles span the world, businesses need a practical, reliable way to systematically analyse risks and identify improvement opportunities.
“Research on consumer preferences, like The Nielsen Global Survey on Corporate Social Responsibility, shows that half of the world’s consumers are prepared to pay a premium if products have an ecological or social benefit,” says Jacobine Das Gupta, Corporate Sustainability Manager for DSM.
A group of likeminded multinationals – Ahold, Akzo Nobel, BASF, BMW Group, DSM, L’Oréal, Marks & Spencer, Philips, RB, Steelcase, The Goodyear Tire & Rubber Company and a chemical company, led by sustainability consulting firm PRé Sustainability – understand the need for a social impact assessment method that is capable of screening a product’s entire supply chain across continents and throughout its life cycle.
A cross-industry accepted product social impact assessment method did not exist so far. The Roundtable’s innovative social impact assessment method gives businesses the power to assess a product’s entire life cycle, scan their supply chains for risks and improvement opportunities and improve sustainable product development, reporting and communication.
The group developed a Handbook for Product Social Impact Assessment which is now available as free download for any business wanting to differentiate and create value through social impact assessment, being the next stepping stone towards a future broadly accepted standard. For more information see: http://product-social-impact-assessment.com/handbook/.