In-depth article from Ethical Corporation's June 2013 edition on product innovation and development with regard to sustainability and CSR, corporate responsibility

1. If objectives are
too easy, they
won't inspire
innovation
It’s long been said that necessity is the mother of
invention. That’s as may be. But today, in the here
and now, the absolute No 1 necessity is to put our
global systems onto a more sustainable footing. A
big part of that centres on the products we use every
day, from cars and carpets to toilet roll and tissues.
The all-too-necessary nature of today’s sustain-
ability challenge should be sparking innovation all
around us. Yet it isn’t. Okay, so it may be a tiny bit.
Think of Persil’s breakthrough laundry detergent
that washes at 30C. Or carpet tile backing made by
the Dutch “cradle-to-cradle” evangelist Desso that is
100% recyclable (it’s made from polyolefin). Yet
such examples are too small-scale and too infre-
quent to drive the systemic changes that our planet
needs.
So how to up the pace and drive product inno-
vators to integrate sustainability into the everyday
of what they do?
Envisioning the future
First things first: set a vision. Corporate profes-
sionals are busy with their day jobs. Don’t expect
them to unduly fret about the world or assume they
themselves have a role in solving its challenges.
Desso’s portfolio of stellar “closed loop”, low
impact products didn’t come about by accident. In
2008, the Dutch carpet maker started working with
the German-based Environmental Protection
Encouragement Agency to design all its products in
line with cradle-to-cradle principles by 2020.
All the most innovative corporations set out simi-
larly ambitious targets. Unilever’s Sustainable
Living Plan, Marks & Spencer’s Plan A, Sainsbury’s
20x20 Sustainability Plan – all paint a clear view of
what they want their sustainability performance to
look like in the future (see box: Waitrose).
Kimberly-Clark falls into this category. The US
manufacturer of personal care goods set itself a goal
of generating 25% of sales from environmentally
innovative products by 2020 – equivalent to about
£5bn in revenue. As part of that overall objective, it
has committed to reduce the total volume of fibres
that it sources from natural forests by half.
The company is making good progress,
achieving 22% of the 25% goal already. “It's a big
goal and we didn't know how we would get there,
but it gave a clear vision for the future,” says Tom
Berry, Kimberly-Clark’s head of sustainability for
Europe, Middle East and Africa.
Any sustainability vision worth its salt should
have some element of uncertainty to it. If the objec-
tives are too easy, they won’t inspire innovation.
Despite this inevitable haze ahead, Berry is sure of
one thing: product innovation won’t be springing
from his team. Research and development functions
are where the real action lies, he insists.
Again, it’s important to check expectations. R&D
professionals, like all other experts, follow their own
internal conventions. Paying over the odds for a raw
material, for example, isn’t a concept that they
generally entertain – even if that material is many
times more sustainable.
“Until you can help people overcome that mental
barrier, people will carry on doing what they are
comfortable doing,” notes David Clark, vice-presi-
dent for sustainability at US packaging maker
Amcor.
Sustainable systems
Innovative products, innovative thinking
By Oliver Balch
Product innovation has something of a mystical quality to it. It requires inspiration, but there are
steps companies can take to get the creative cogs turning
Business strategy 29Ethical Corporation • June 2013
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2. To get over this hump, Clark believes in the value
of “telling stories” about sustainable innovations
that are happening at other companies. By tangibly
illustrating how others are inching towards a more
sustainable future, R&D teams can begin to picture
their own way forward.
Presuming you’ve managed to inspire your in-
house product teams, you then need to provide tools
to guide their thinking and decision-making. Sustain-
ability remains breaking ground for most product
innovators in large corporations. In response to that
fact, Amcor has developed an Advanced Sustain-
ability Stewardship Evaluation Tool. The resource,
which is approved by the UK-based Carbon Trust,
enables developers to benchmark materials
according to their green credentials.
Kimberly-Clark operates a similar set of Life
Cycle Analysis (LCA) tools in its product design
work. Materials are approved as environmentally
innovative if they can tick “yes” to one of three
considerations: Are the materials sustainably
sourced? Do they reduce emissions? Can they be
considered as “breakthrough”?
As an example of the latter, Berry cites the use of
bamboo in its new Andrex Eco toilet tissue. The raw
bamboo, which is certified by the Forest Steward-
ship Council, grows to maturity in three years. That
compares with six decades in the case of the timber-
based fibres that tissue manufacturers typically use.
Berry issues a word of caution, though: avoid
implementing such tools in isolation. Any attempt
to push sustainability without integrating it into
existing R&D systems spells disaster, he insists: “As
soon as you try to have a separate process, it will
only ever be completed on the side and it will go
nowhere.”
Expanding the conversation
Large companies like to boast of their internal
creativity. It’s true that the world’s most successful
companies plough vast resources into in-house
R&D. But there’s a growing acknowledgement
among the corporate elite that they don’t have all
the answers.
Vincent Stanley, vice-president of marketing at
Patagonia, is frank. “We have incredible internal
limitations,” he says. “When we innovate, there’s
almost nothing that we develop ourselves. Almost
everything is developed in partnership.”
Many of the primary partnerships for the US
outdoor clothing retailer are with fabric suppliers.
Patagonia recently struck a deal Arizona-based
cleantech firm Yulex, which produces a renewable
biorubber based on the guayule plant. Patagonia’s
wetsuits now contain 60% of the environmentally
friendly material, replacing fossil-fuel-based
neoprene. Patagonia recently launched the $20
Million & Change venture fund to support start-ups
with similarly innovative cleantech ideas (see box:
Rennovia).
Of course, suppliers won’t volunteer break-
through sustainability ideas unless they know
buyers are interested in the subject. That’s where
high-profile commitments come in – they act as a
green light for suppliers to pitch their best ideas.
Amcor’s Clark describes it as a case of “working
30
Large companies
like to boast of
their internal
creativity
Business strategy Ethical Corporation • June 2013
Less impact planned
Waitrose to waste less
In May, UK food retailer Waitrose announced plans to cut its
packaging in half by 2016 (compared with 2005 levels). Early
steps to achieve its target include a complete redesign of the 49
products in its Menu from Waitrose range. It has also intro-
duced fully lacquered trays, meaning customers can cook and
serve their meals in the same container, and recycle it after use.
Another innovation centres on so-called “flow wrap” or
“pillow-pouch” packaging for meat products. This horizontal
bagging process using polypropylene film acts as a substitute for
plastic trays – cutting packaging by 38 tonnes per year, a 70%
saving. These and other innovations should take around 100
tonnes of packaging out of circulation every year.
WAITROSE
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3. backwards” with suppliers from the company’s
long-term vision to make it a present-day reality.
Supplier confidence
Suppliers need confidence too – confidence that
larger companies aren’t going to walk away with
their idea, and confidence that there is something in
it for them in the long run.
Kimberly-Clark’s Berry offers the recent example
of cooperating with Booshoot. The US bioscience
firm grows sustainable bamboo via a scientific
process known as “tissue culture”. Booshoot natu-
rally wanted assurances that a future deal would be
more than just a “flash in the pan”. Berry explains:
“We had a long negotiation over what kind of
certainty they could expect from us, and what we
wanted from them in return.”
It’s not only suppliers that companies look to for
product innovation. Consumers can provide invalu-
able insights as well. Patagonia is a pioneer in
connecting with its customer base. Its 2011 adver-
tisement in the New York Times, with the
eye-catching headline “Don’t Buy This Jacket”, has
won huge notoriety. And Patagonia’s consumer
engagement goes much deeper than that. For the
past six years, the company has run its Cleanest
Line blog, which it uses to “actively ask consumers
for ideas”, according to Stanley.
The larger the company, of course, the more
blurred the lines between suppliers and customers,
and sometimes even competitors. In the search for
innovations, companies have to be prepared to
work with all three if necessary.
That’s certainly Stanley’s view. In 2010, Patag-
onia invited the chief executives of the world’s 16
largest clothing and footwear retailers to a meeting
in New York. Fifteen came. The result was the
Sustainable Apparel Coalition, whose members
(now more than 80 companies) currently represent
one-third of total global footwear and garment
production.
The coalition has introduced an indicator-based
tool for clothing manufacturers. Based closely on
Nike’s Apparel Environmental Design Tool, the
Higg Index 1.0 enables companies to evaluate
material types, products, facilities and processes
based on a range of environmental and product
design choices. In short, a beefed-up version of
what leading companies are developing in-house.
“You need this kind of industry cooperation to
make industrial scale changes,” argues Stanley.
“After all, if a third of the industry is leading, it will
be very hard for the other two-thirds not to follow.”
Innovation ultimately comes through great
ideas. But knowing what to have ideas about, how
to shape those ideas when you have them, and then
how to perfect and realise them are essential steps
along the way. I
31
100% bio-based
nylon
California-based biotech
firm Rennovia recently
reported that it had devel-
oped the chemical catalytic
technology necessary to
make bio-based nylon.
The breakthrough is twice
as carbon-efficient as
traditional oil-based
equivalents, the company
insists.
Rennovia’s innovation
revolves around the
company’s “demonstration
scale” production of the
core chemical hexamethyl-
enediamine (HMD) from
renewable feedstocks.
Rennovia has already
invented a renewable form
of adipic acid. The two
products together open the
possibility of a 100% bio-
based nylon derived from
bio-renewable materials.
Suppliers
won't volunteer
breakthrough
sustainability
ideas unless they
know buyers are
interested
Business strategyEthical Corporation • June 2013
Fast-growing fibre source
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