Sustainable Innovation


How to integrate Social Metrics in LCM?
August 29, 2015, 5:06 pm
Filed under: Uncategorized | Tags: , , , ,

LCM2015 Bordeaux conference websiteLCM2015

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

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Consumers prepared to pay a premium for products supporting social or environmental causes

More and more companies take an active approach to produce products in a sustainable way. But do consumers really care? The recently published The Nielsen Global Survey results point out they do.

A majority of consumers is prepared to pay more for products and services from companies committed to positive social and environmental impacts. This proportion is higher in Asia-Pacific (64%),  Latin America (63%) and Middle East/Africa (63%) than in North America (42%) and Europe (40%) – and in all regions the proportion is increasing.

Proportions per region preferring products that support sustainable cause

Consumers care and willing to pay more from sustainable companies.
Source: Nielsen Global Survey of Corporate Social Responsibility, Q1 2014

What are the social or environmental causes that get the most support? Nielsen asked respondents to specify the causes they are most passionate about. 67% are willing to pay more for products associated with an increased access to clean water, 63% that help to improve access to sanitation and 63% products that ensure environmental sustainability. Amongst the Top 10 are also ‘eradicating exterme poverty and hunger’, ‘combating non-communicable diseases’, ‘reducing child mortality’, ‘improving maternal health’.

Percentage of respondents willing to pay more for sust causes

Social and environmental causes consumers care about.
Source: Nielsen Global Survey of Corporate Social Responsibility, Q1 2014

Notably the Millenials (age 21-34) and Generation X (35-49) are prepared to pay more for sustainably produced products. Checking the packaging to be assured about the social or environmental impact is most important in Asia-Pacific, Latin America and Middle East/Africa (63%, 63% and 62%) whereas in Europa and North America, this is only 36% and 32%. (Perhaps the jungle of eco-labels has made people lees receptive?)

And it is not just about buying products. Half of the Millenials prefer to work for a sustainable company, and a quarter of the Generation X likewise.

Proportions responsive to sustainability actions

Millenials most prominent in preference for sustainability actions
Source: Nielsen Global Survey of Corporate Social Responsibility, Q1 2014

So: embedding sustainability in product development can create additional business value. That is encouraging news. Off course, just having a social or environmental cause associated with your product won’t do the trick. Old-school product-performance, a reasonable price, splendid marketing and communication skills are also essential. But if you are determined to produce great products that also support Planet and People, and you have the right conditions in place, nothing should stand in your way to create a successful business. As a bonus, you’ll be preferred employer of choice as well.



People perspectives in Sustainable Innovation

hands

The environment has been an impetus for innovation in the last couple of years. Many companies are applying environmental assessments to develop new products with environmental benefits and a sound business case, such as Veolia Environnement, PhilipsEricsson, Redevco and many others. Metrics play an important role to set objectives and measure progress. How can we fit ‘People’ into the equation? What if we were able to measure the social impacts of products? Wouldn’t that be great?

Social impact measurement has become subject of study of a growing group of organisations. Among them is the French Normalisation Institute AFNOR. The task force ‘Affichage Social’ aims to develop a mechanism to assess the social impact of products, with a focus on the work force ‘upstream’; at suppliers. Danone has set a dual mission of Business Success and Social Progress and is searching for the appropriate ways to measure. The United Nations UNEP-SETAC workgroup has developed guidelines for social impact along the life cycle of a product. A ready-to-use and agreed methodology has not been surfaced so far.

DSM, a global science company based in The Netherlands, active in health, nutrition and materials is actively searching for ways to create products that measurably improve people’s lives. The company started to develop its People+ Strategy.People+ will do for the ‘people’ element of the three ‘P’s what the companies ‘Eco+’ program has done for ‘planet.’ For this it needed metrics to measure the impact on lives of people.

Starting point was to define the people affected by the business. In other words: the people involved in making and using our company’s products. The number of stakeholder groups involved were brought down to three: employees, communities and end-users.

Knowing on which people DSM has an impact, the size of the impact needed to be identified. The developed ‘DSM People LCA’ metrics have been based on international standards and company values. The framework consists of four dimensions: Health Condition, Comfort & Well-Being, Working Conditions and Community Development. Currently the metrics are being road-tested in different industry applications. DSM strives in making the metrics a stepping stone towards a future harmonized methodology and takes an active role in engagement with industry peers, scientists, and consortia – such as with industry peers in the Product Social Metrics Roundtable.

To have a good yardstick for developing products that can improve people’s lives is an important benefit. Roadtesting and engaging with customers and suppliers brings even more advantages. More about the journey of People+ on November 19th at the Sustainable Brands conference in London.



Sustainability will be part of all business disciplines

Sustainability knowledge and tactics will be diffused accross organizations. It will be embedded in all functional areas. Which is a great thing.

All disciplines will be affected. Employees will need to be involved and trained in new areas that are logical extentions of their current activities, but with a sustainability focus:

    • Marketeers will be inspired by the new market dynamics related to environmental and social issues. All marketeers will learn about what works and what won’t in Green Marketing.
    • Innovators will be challenged to develop new products that create user benefits ánd create a positive social change, with reduced ecological impact
    • Sales reps will be trained to identify customer sustainability expectations and convince them of the advantages of new business models.
    • Purchasing will intensify at one hand the sustainable supplier criteria and audits, and at the other hand the cooperation with suppliers to search for sustainable sourcing solutions.
    • Controllers will be asked to track progress against social and environmental parameters in addition to the traditional financial indicators.
    • Human Resources have already discovered the power of Sustainability as a means to attract and retain employees. They will be encouraged to develop engagement plans and bonus plans that include sustainability performance indicators.

All functions will be affected. Yet a small group at headquarters will need to stay in place. This central sustainability team will be there to overview and align the companies sustainability activities, share best practices, set the companies KPIs, benchmark and track market developments and update the sustainability strategy accordingly.

More information on sustainability developments and best practices in my book ‘Your customers want your products to be green’. The book contains insights based on interviews with 19 senior sustainability & CSR managers of European frontrunners. Let me know what you think about it!



CSR Automn School 7-11 November in Rotterdam

If you want to learn more about Corporate Social Responsibility, ISO 26000, GRI reporting, supply chain and reputation management : Join the International CSR Automn School from 7 to 11 November in Rotterdam.

The CSR School has been developed by the Erasmus School of Accounting & Assurance (ESAA) of the Dutch Erasmus University. The Summer School targeted at CSR professionals on middle and senior management level.

CSR insights will be presented by experts from around Europe. Among the speakers will be Karen Maas PHD of the Erasmus University, Prof. dr. Jan Peter Balkenende, Jvan Gaffuri of SAM (Sustainability Asset Management AG), Piet Sprengers of the ASN Bank, Alex van der Zwart of Concernz Consulting, and Jacobine Das Gupta of The Green Take.

For more information contact Ms. Henny Lammerschop at Lammerschop(at)ese.eur.nl. or look at http://www.esaa.nl/fileadmin/ASSETS/esaa/brochures/Autumn_School_Brochure.pdf



Unilever perceived as sustainability leader
April 13, 2011, 10:31 am
Filed under: Sustainability News | Tags: , , ,

GlobalScan and SustainAbility presented the results of their study about perceived Sustainability Leadership. Results are based on an worldwide online survey among 559 sustainability specialists working in the private and public sector and at NGOs.’

What are the top 5 sustainable development leaders ?  Unilever (mentioned by 15%), General Electric (12%), Interface (12%), Wal-Mart (11%) and Marks&Spencer (8%).

What makes Unilever the frontrunner ? First of all, the newly launched and ambitious Sustainability Living Plan is much admired. Second it proves to have  encorporated sustainability values deep in the organisation. Third, it works in close relationship with external experts. As an illustration the four key objectives of Unilevers Sustainability Living Plan :

1)  Improve the health of 1 billion people in Asia, Africa and Latin-America by providing Lifebuoy soap, assisting with changing health habits, reducing diarrhea and thereby reducing infant mortality.

2) Source 100% of its raw materials sustainably by 2020, including 100% sustainable palm oil. (Unilever know buys 3% of the worlds palm oil).

3) Make drinking water safer in developing countries by extending sales of its Pureit home water purifier.

4) Improve the standards of living of 500 million smallholders by linking them to the Unilever supply chain in cooperation with NGOs Oxfam and the Rainforest Alliance

The following indicators as most contributing to perceived sustainability leadership :

1) commitment to sustainability values :  Does the company demonstrate the willingness to address social and environmental challenges, by its mission statement and  strategic directions.

2) sustainable products/services/supply chain :  The extent to which the company has changed and improved its portfolio of products and services and has changed its purchase and supply chain strategies to match environmental and social requirements.

3) integration in the core business model : If and how the company has incorporated sustainability in its operational business.

What counts now is the extent to which companies can match social and environmental issues with their core business, change their products and service portfolio, supply chains and operational business accordingly.

Sources : http://www.sustainability.com/news/latest-globe-scan-sustain-ability-survey-explores-sustainability-leadership / http://www.greenbiz.com/news/2011/04/11/unilever-tops-list-sustainability-leaders / http://www.sustainable-living.unilever.com/