The world faces major pressures from issues like climate change, resource scarcity, pollution, waste and global inequality – the challenges we call sustainability or sustainable development. It’s as huge and complex a topic as it is a challenge, covering political, technological, socio-economic, commercial, even ethical dimensions of our current business and lifestyles. It also asks serious questions about many of the 21st century’s perceived wisdoms. It can seem so big and scary as to be almost paralysing. What is an innovation manager to do about this and how would they get started on sustainability?
Concern about sustainability is not a new phenomenon. Its modern incarnation can be traced back some 40-50 years to the birth of the modern environment movement. Leading sustainable business commentator John Elkington describes four waves of sustainability – conservation, green consumerism, globalisation are the first three – with the current fourth wave focusing on creativity, innovation and entrepreneurship.
The global market for ‘green products and services’ was recently estimated as a $3.2 trillion business opportunity.
This drags sustainability firmly into the realms of innovation management. Smart innovators are acting on this as sustainability has emerged as a major new driver for business, with a growing case to support it. The global market for ‘green products and services’ was recently estimated as a $3.2 trillion business opportunity, while UK consumer spending on ‘sustainable’ products and services was last reported at more than £36bn – bigger even than alcohol and tobacco sales combined! Venture Capital flow into clean and green-tech start-ups remained constant from 2009-10 despite the global recession. Forum for the Future Founder Director and green guru Jonathon Porritt articulates well my own belief that the indisputable leadership on sustainable development currently comes from business, which is what we will focus on here.
What I refer to as sustainable innovation is described and understood as: eco-innovation, innovation for sustainability, corporate social innovation, sustainable business innovation, sustainable business models, social entre-/intrapreneurship, social innovation, plus several other terms, which though subtly different, broadly mean the same thing. That is innovation that contributes to sustainable development be that social, environmental or economic improvements. A lot of this work is done on social, community or grass-roots problems but we will here talk mostly about sustainable innovation as a business process fundamentally immersed in markets.
Given the numerous dimensions of sustainability, little surprise there is more than one way to do sustainability, featuring evolutionary or revolutionary approaches. Elsewhere we have described a 3-stage model for this, of incremental (continuous eco-improvement of current products), radical (new eco-products or technology) and systems innovation (featuring infrastructure, behaviour, business model or policy changes)
Clearly sustainability is on the agenda for business, and is increasingly linked to innovation. Innovation managers will need factor in these considerations to all innovation activities going forward and ‘sustainability literacy’ will be a core skill for the innovation manager of the future. To help you get started on this, here are the four broad sustainability concepts or themes every innovation manager should know. Wherever possible, these will build from the familiar and are illustrated with examples of how innovators are doing this.
Traditionally economic bottom lines have been enhanced through trade-offs that diminish social and environmental value. Sustainability requires innovation to maintain or enhance value across this broader triple bottom line.
We innovate for many goals like reduced costs, delighting customers, implementing new technology or functions. Most, some argue all of this, is about competitiveness, growth and financial value as innovation serves primarily the economic bottom line. Sustainability requires innovation to deliver value against two other ‘bottom lines’ – a social and/or an environmental one, often termed a Triple Bottom Line. Traditionally economic bottom lines have been enhanced through trade-offs that diminish social and environmental value: creating pollution, using non renewable resources, exploiting communities, impoverishing future generations. Sustainability requires innovation to maintain or enhance value across this broader triple bottom line.
Flooring company Interfaceflor’s pioneering Fairworks product illustrates this well. Innovative, modular yet individual carpet tiles are produced using handicraft techniques by artisans and communities in India using local materials and skills, in a way that’s fair for partners and for the planet. Essentially it’s an ‘industrial’ product that is beautiful, unique, uses sustainable materials and production and encapsulates the fair-trade ethos – in carpet. This triple bottom line innovation has clear economic, social and environmental benefits, which is the kind, are crucial to get started on sustainability of thinking every innovation manager will need to know.
Do you know your clients’ sustainability strategy?
Do you know your company’s or clients’ sustainability strategy? You might be surprised at its relevance, impact on your work or opportunity it presents. Work with Panasonic and it would be useful to know their commitment to be the ‘number one green innovation company in the electronics sector’ by 2018 with ‘innovation focussed on the environment in all business activities’. And that’s their business, not just sustainability strategy.
Similarly, Starbucks’ commitment to ‘develop a comprehensive recycled cup solution by 2012’ presents enormous innovation opportunities. In 2010 they launched the Betacup open innovation challenge, to crowd-source a disposable cup or recycling solution, resulting in some truly imaginative ideas (see the Karma Cup winner to be inspired by the coffee cup innovation). As sustainability becomes more a driver for product-based solutions, Innovation Managers will need to familiarise themselves with sustainability strategies and develop stronger relationships with sustainability functions in companies.
This one must be easy, as every Innovation Manager knows about lifecycles right? Well maybe… The principle of product lifecycles in the sustainability world provides an holistic view of a its key impacts across every stage of its life – from resource extraction, material processing, production, distribution, retail, use, and disposal. It can work for shampoo, power stations or a website. Knowing this is key as many of the big impacts of products can be hidden or invisible, at some early or later stage of this lifecycle. It can throw up surprises, but more importantly can tell you where to focus attention. Using lifecycle assessment,
Coke and Unilever have discovered that the biggest lifecycle impacts of some of their food and beverage brands are the energy used for in-store or in-home refrigeration. Both organisations are now working on efficient and green refrigeration solutions, beyond their products, while Unilever is reported to be working on ‘warm ice cream’ to store in your fridge not freezer. Lifecycle thinking and assessment, of this kind, are crucial to get started on sustainability.
Commercial battles can be won or lost in the market through excellent relationships with your customers, suppliers, employees. Sustainability battle can be won or lost through broader stakeholder relationships with non-governmental organisations (NGO’s), opinion formers, regulators. For instance, the Greenpeace Guide to Greener Electronics campaigns for sustainability in the electronics sector. As an extension to this, in February 2009 Greenpeace targeted Philips Electronics to improve the eco performance of their TV’s.
Within weeks Philips has overhauled its TV recycling and material use policies. Put aside the reputational implications of this and consider how it was likely managed, in this case, through Corporate Comm’s or External Affairs, who usually maintain relationships with such external stakeholders. Here’s my question.
Would this have gone differently, or been avoided, if it had been innovation managers, designers or R&D people talking to these stakeholder i.e. those primarily responsible for the way the TV’s were configured? Every innovation manager needs to know this broader set of sustainability stakeholders and should begin to track trends and opinions
Understanding sustainability issues is a must have part of innovation managers toolkit for the 21st century. There are some basic concepts, highlighted above, that should be easy to integrate into everyday practice. Beyond that, sustainability represents a major area of opportunity for innovation and a new generation of smart companies and innovators will begin to spot this see this realign themselves accordingly.
By Chris Sherwin
About the author:
Chris Sherwin is Head of Innovation at leading sustainability advisory group Forum for the Future. Forum’s innovation work is driven by the dual view that sustainability is the biggest innovation opportunity of the 21st Century and that humanity’s great sustainable development challenges will only likely be solved innovation through innovation. Chris has worked on environmentally and socially-driven innovation with companies like Akzo Nobel ICI Paints, PepsiCo, Unilever, Boots UK, O2, Tata Beverage Group, Interfaceflor, etc. Prior to The Forum, Chris held sustainable innovation positions inside Philips Electronics and Electrolux. He has lectured and presented widely on these subjects and holds a PhD titled ‘Innovative Ecodesign’ from Cranfield University.