Product Innovation and Sustainability Ethical Corp June 2013


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

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Product Innovation and Sustainability Ethical Corp June 2013

  1. 1. If objectives aretoo easy, theywont inspireinnovationIt’s long been said that necessity is the mother ofinvention. That’s as may be. But today, in the hereand now, the absolute No 1 necessity is to put ourglobal systems onto a more sustainable footing. Abig part of that centres on the products we use everyday, from cars and carpets to toilet roll and tissues.The all-too-necessary nature of today’s sustain-ability challenge should be sparking innovation allaround us. Yet it isn’t. Okay, so it may be a tiny bit.Think of Persil’s breakthrough laundry detergentthat washes at 30C. Or carpet tile backing made bythe Dutch “cradle-to-cradle” evangelist Desso that is100% recyclable (it’s made from polyolefin). Yetsuch examples are too small-scale and too infre-quent to drive the systemic changes that our planetneeds.So how to up the pace and drive product inno-vators to integrate sustainability into the everydayof what they do?Envisioning the futureFirst things first: set a vision. Corporate profes-sionals are busy with their day jobs. Don’t expectthem to unduly fret about the world or assume theythemselves have a role in solving its challenges.Desso’s portfolio of stellar “closed loop”, lowimpact products didn’t come about by accident. In2008, the Dutch carpet maker started working withthe German-based Environmental ProtectionEncouragement Agency to design all its products inline with cradle-to-cradle principles by 2020.All the most innovative corporations set out simi-larly ambitious targets. Unilever’s SustainableLiving Plan, Marks & Spencer’s Plan A, Sainsbury’s20x20 Sustainability Plan – all paint a clear view ofwhat they want their sustainability performance tolook like in the future (see box: Waitrose).Kimberly-Clark falls into this category. The USmanufacturer of personal care goods set itself a goalof generating 25% of sales from environmentallyinnovative products by 2020 – equivalent to about£5bn in revenue. As part of that overall objective, ithas committed to reduce the total volume of fibresthat it sources from natural forests by half.The company is making good progress,achieving 22% of the 25% goal already. “Its a biggoal and we didnt know how we would get there,but it gave a clear vision for the future,” says TomBerry, Kimberly-Clark’s head of sustainability forEurope, Middle East and Africa.Any sustainability vision worth its salt shouldhave 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 ofone thing: product innovation won’t be springingfrom his team. Research and development functionsare where the real action lies, he insists.Again, it’s important to check expectations. R&Dprofessionals, like all other experts, follow their owninternal conventions. Paying over the odds for a rawmaterial, for example, isn’t a concept that theygenerally entertain – even if that material is manytimes more sustainable.“Until you can help people overcome that mentalbarrier, people will carry on doing what they arecomfortable doing,” notes David Clark, vice-presi-dent for sustainability at US packaging makerAmcor.Sustainable systemsInnovative products, innovative thinkingBy Oliver BalchProduct innovation has something of a mystical quality to it. It requires inspiration, but there aresteps companies can take to get the creative cogs turningBusiness strategy 29Ethical Corporation • June 2013ISTOCKPHOTO/THINKSTOCKECM June 2013_Layout 1 28/05/2013 17:02 Page 29
  2. 2. To get over this hump, Clark believes in the valueof “telling stories” about sustainable innovationsthat are happening at other companies. By tangiblyillustrating how others are inching towards a moresustainable future, R&D teams can begin to picturetheir own way forward.Presuming you’ve managed to inspire your in-house product teams, you then need to provide toolsto guide their thinking and decision-making. Sustain-ability remains breaking ground for most productinnovators in large corporations. In response to thatfact, 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 materialsaccording to their green credentials.Kimberly-Clark operates a similar set of LifeCycle Analysis (LCA) tools in its product designwork. Materials are approved as environmentallyinnovative if they can tick “yes” to one of threeconsiderations: Are the materials sustainablysourced? Do they reduce emissions? Can they beconsidered as “breakthrough”?As an example of the latter, Berry cites the use ofbamboo in its new Andrex Eco toilet tissue. The rawbamboo, which is certified by the Forest Steward-ship Council, grows to maturity in three years. Thatcompares with six decades in the case of the timber-based fibres that tissue manufacturers typically use.Berry issues a word of caution, though: avoidimplementing such tools in isolation. Any attemptto push sustainability without integrating it intoexisting R&D systems spells disaster, he insists: “Assoon as you try to have a separate process, it willonly ever be completed on the side and it will gonowhere.”Expanding the conversationLarge companies like to boast of their internalcreativity. It’s true that the world’s most successfulcompanies plough vast resources into in-houseR&D. But there’s a growing acknowledgementamong the corporate elite that they don’t have allthe answers.Vincent Stanley, vice-president of marketing atPatagonia, is frank. “We have incredible internallimitations,” he says. “When we innovate, there’salmost nothing that we develop ourselves. Almosteverything is developed in partnership.”Many of the primary partnerships for the USoutdoor clothing retailer are with fabric suppliers.Patagonia recently struck a deal Arizona-basedcleantech firm Yulex, which produces a renewablebiorubber based on the guayule plant. Patagonia’swetsuits now contain 60% of the environmentallyfriendly material, replacing fossil-fuel-basedneoprene. Patagonia recently launched the $20Million & Change venture fund to support start-upswith similarly innovative cleantech ideas (see box:Rennovia).Of course, suppliers won’t volunteer break-through sustainability ideas unless they knowbuyers are interested in the subject. That’s wherehigh-profile commitments come in – they act as agreen light for suppliers to pitch their best ideas.Amcor’s Clark describes it as a case of “working30Large companieslike to boast oftheir internalcreativityBusiness strategy Ethical Corporation • June 2013Less impact plannedWaitrose to waste lessIn May, UK food retailer Waitrose announced plans to cut itspackaging in half by 2016 (compared with 2005 levels). Earlysteps to achieve its target include a complete redesign of the 49products in its Menu from Waitrose range. It has also intro-duced fully lacquered trays, meaning customers can cook andserve 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 horizontalbagging process using polypropylene film acts as a substitute forplastic trays – cutting packaging by 38 tonnes per year, a 70%saving. These and other innovations should take around 100tonnes of packaging out of circulation every year.WAITROSEECM June 2013_Layout 1 28/05/2013 17:02 Page 30
  3. 3. backwards” with suppliers from the company’slong-term vision to make it a present-day reality.Supplier confidenceSuppliers need confidence too – confidence thatlarger companies aren’t going to walk away withtheir idea, and confidence that there is something init for them in the long run.Kimberly-Clark’s Berry offers the recent exampleof cooperating with Booshoot. The US biosciencefirm grows sustainable bamboo via a scientificprocess known as “tissue culture”. Booshoot natu-rally wanted assurances that a future deal would bemore than just a “flash in the pan”. Berry explains:“We had a long negotiation over what kind ofcertainty they could expect from us, and what wewanted from them in return.”It’s not only suppliers that companies look to forproduct innovation. Consumers can provide invalu-able insights as well. Patagonia is a pioneer inconnecting with its customer base. Its 2011 adver-tisement in the New York Times, with theeye-catching headline “Don’t Buy This Jacket”, haswon huge notoriety. And Patagonia’s consumerengagement goes much deeper than that. For thepast six years, the company has run its CleanestLine blog, which it uses to “actively ask consumersfor ideas”, according to Stanley.The larger the company, of course, the moreblurred the lines between suppliers and customers,and sometimes even competitors. In the search forinnovations, companies have to be prepared towork with all three if necessary.That’s certainly Stanley’s view. In 2010, Patag-onia invited the chief executives of the world’s 16largest clothing and footwear retailers to a meetingin New York. Fifteen came. The result was theSustainable Apparel Coalition, whose members(now more than 80 companies) currently representone-third of total global footwear and garmentproduction.The coalition has introduced an indicator-basedtool for clothing manufacturers. Based closely onNike’s Apparel Environmental Design Tool, theHigg Index 1.0 enables companies to evaluatematerial types, products, facilities and processesbased on a range of environmental and productdesign choices. In short, a beefed-up version ofwhat leading companies are developing in-house.“You need this kind of industry cooperation tomake industrial scale changes,” argues Stanley.“After all, if a third of the industry is leading, it willbe very hard for the other two-thirds not to follow.”Innovation ultimately comes through greatideas. But knowing what to have ideas about, howto shape those ideas when you have them, and thenhow to perfect and realise them are essential stepsalong the way. I31100% bio-basednylonCalifornia-based biotechfirm Rennovia recentlyreported that it had devel-oped the chemical catalytictechnology necessary tomake bio-based nylon.The breakthrough is twiceas carbon-efficient astraditional oil-basedequivalents, the companyinsists.Rennovia’s innovationrevolves around thecompany’s “demonstrationscale” production of thecore chemical hexamethyl-enediamine (HMD) fromrenewable feedstocks.Rennovia has alreadyinvented a renewable formof adipic acid. The twoproducts together open thepossibility of a 100% bio-based nylon derived frombio-renewable materials.Supplierswont volunteerbreakthroughsustainabilityideas unless theyknow buyers areinterestedBusiness strategyEthical Corporation • June 2013Fast-growing fibre sourceISTOCKPHOTO/THINKSTOCKECM June 2013_Layout 1 28/05/2013 17:02 Page 31