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Slide 1

ENT202 / Innovation: Strategies and Systems

Week 8: Eco-efficiency and Eco-design

College of Business and Law

Karmen Lužar

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Recognition of Traditional owners and Indigenous cultures

Charles Darwin University acknowledges the traditional custodians of the land on which we’re meeting and pays respect to Elders both past and present and extends that respect to all Aboriginal and Torres Strait Islander people.

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Example

• The water footprint of a 1 kg beef steak is approximately 15,000 liters.

• To produce a 1 kg beef steak, a cow eats more than one ton of cereal and seven tons of grass, which will have needed irrigation and rainwater, for around three years; similarly, the cow will have drunk more than 24 m3 of water, not counting the water needed for the maintenance and cleaning of the cattle shed and equipment.

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Eco-efficiency

• “Doing better with fewer resources.”

• Invites companies to reconsider their modes of production in order to drastically reduce the resources needed to achieve the same result, and the environmental impact to cater for the Earth’s capacity for self-renewal.

• World Business Council for Sustainable Development: “Effectiveness with which natural resources (mineral, energy and biological) are used by the industrial systems of production and consumption to meet human beings’ needs, at competitive prices, while reducing environmental consequences.”

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Slide 5

Eco-efficiency cont.

• Applies to both products and services.

• Applies to the process and the whole of a company’s activities.

• Application of eco-efficiency encourages a reconsideration of the design of a product, a service or a process in order to decrease its environmental impact.

• ISO and Ecolabel

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Example: Louis Vuitton

• COMMITMENT: 100% OF PRODUCTS TO COMPLY WITH AN ECO-DESIGN PROCESS BY 2025

• Products made to last

• Upcycling: Be Mindful Collection

• Responsible sourcing of materials - 70% of materials are already engaged in a certification process (2020)

• Regulate the use of chemicals in value chain

• Responsible packaging

• Partnership with Solar Impulse Foundation

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Eco-design

• Starts with the product conception and its intrinsic legitimacy to avoid perception of being “another greenwash” company.

• The eco-design approach is based on several specifications. An eco-designed product must:

• Be adapted to its use, form following function.

• Reduce the material intensity and minimize the use of nonrenewable resources.

• Reduce the energy intensity.

• Minimise the toxic components or replace them whenever possible.

• Be reliable and useful, and designed to last.

• Be easy to maintain, repair and support recyclability.

• Minimise its environmental impact on the whole life cycle.

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Adaptability to product’s use

• The design should be at the service of the function of the object in order to improve usability and use efficiency.

• Example: in 2011 Unilever introduced a new design for the Vaseline Petroleum Jelly jar that reduced the amount of plastic by three percent, saving about 113 tons of resin a year. By using polypropylene, the pack has become more recyclable, needing less energy to be produced, saving 13,000 MW a year. Consumers also appreciated the change: the packs are more visually appealing and easier to open.

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Slide 9

Reducing resources

• Example: Cognac brand Hennessy - Redesigned its bottle to make it more environment friendly. They reduced its glass content by 23 percent (making annual savings of 715 tons of glass), replaced the stopper, formerly made of tin, with one made of beech from a sustainably managed forest (Forest Stewardship Council (FSC) label) thus saving 30 tons of tin, labeled the glass using enamels without ink or glue or paper and used FSC certified packaging, bleached without chlorine.

• Example: Lush - Solid shampoo bars save 450,000 liters of water per year in their production.

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Slide 10

Reducing energy intensity

• Example: Philips LED lamps - consume less electricity, at equivalent luminosity, a much longer lifespan and lifetime.

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Minimising toxic components

• Example: Louis Vuitton - Inoculation Plan, first launched in 2014. All suppliers are imposed a Restricted Substances List (RSL). LV continually verifies compliance by testing both raw materials and final products. Around 250 audits per year.

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Reliability and durability

• Opposite to ‘planned obsolescence’.

• Moving from planned obsolescence logic requires a major change for economic models based on volumes of goods sold. By lengthening the lifetime of a product, the company is likely to be deprived of or to delay revenue streams from the replacement market, thus being penalized economically.

• Example: Michelin - multiplied by 2.5 the lifetime of its tires by adopting an alternative business model.

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Recyclability

• An eco-designed product must be able to be repaired easily, in particular by allowing the replacement of the single flawed piece.

• Example: Apple - iPod, initially criticised for its sealed battery. The company redesigned the product to allow its replacement and provided an extended warranty of two years.

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Minimising life cycle impact

• Eco-design imposes an analysis of the environmental impact of the product over its whole life cycle, from the extraction of raw materials to the end of its useful life, through all the stages of the supply chain, manufacturing, distribution and use of the product.

• The objective is to prevent a transfer of pollution between various phases of the life cycle.

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Minimising life cycle impact cont.

• Example: paint

Paint A Paint B

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Eco-design project

The implementation method of an eco-design project step- by-step:

1. Assemble a team in charge of the eco-design project within the company (demanding new human, financial and intangible resources in the SBMC)

2. Choose a product to be upgraded

3. (Re)design

4. Implementation

5. Follow-up scoring

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Slide 17

Sustainability team

• Ideally, a minimum of four profiles should be part of the team:

• R&D/product innovation,

• operations/manufacture,

• marketing/sales, and

• environmental management (if that profile exists).

• Orientation towards problem-solving.

• Support from the top management is essential.

• External expertise, if necessary.

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Product selection

• Based primarily on the expected objectives of the eco- design project. The pursued aims can concern:

• Internal factors: e.g. reduction of costs, dependence on raw materials, (re-)facilitation of local production, abandoning a toxic component, etc.

• External factors: e.g. marketing differentiation or perceived value, market demanding certain environmental criteria, answering new regulations, responding to competitive pressure, etc.

• Other considerations: e.g. product improvement potential, the relative simplicity or complexity of the redesign and capacity to reach a higher number of goals.

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Product selection cont.

• Objectives need to be linked with the main strategic orientation of the company.

• Focus on a product with high sales volume, because the total benefit will be amplified by the volume effect of the incremental improvements.

• However, customer acceptability of these improvements must still be validated by offering at least, the same functional and esthetic benefits.

• The impact of these improvements on price must also be considered.

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Slide 20

Redesign

• Life-Cycle Assessment (LCA) is an essential process to assess the environmental impact of the product throughout its life cycle (new resource allocation and new activity).

• LCA is codified by the ISO 14040 and associated standards.

• LCA also closely linked with marketing – user acceptability of the innovation.

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Redesign cont.

Figure: Enriched space of marketing differentiation / Source: Sempels, C & Hoffmann J 2013

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Life-Cycle Assessment (LCA)

• Carrying out an LCA is generally entrusted to an expert company, able to guarantee the quality of the implementation of the approach, or to new partnerships.

• General recommendations include: • Selection of lower impact raw materials;

• Reduction of the material intensity;

• Optimisation of production techniques;

• Optimisation of logistic flows and delivery systems;

• Optimisation of the use and reduction of the impact during the use/consumption phase;

• Improvement of the product lifetime;

• Optimisation of the management of the product’s end of life.

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LCA cont.

• A financial analysis: to evaluate the amount of investments necessary to redesign the product and the associated return on investment.

• A technical analysis: the feasibility of the recommendations and their relative simplicity or complexity of implementation. Also integrate the time of development of the project in order to estimate the time- to market of the redesigned product.

• A marketing analysis: the potential valorisation of the choices at the marketing and sales level.

• Final report.

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Implementation

• Improvements are evaluated and validated before moving to the development stage.

1. Internal considerations: impact on the supply chain, production modes, financial assessment, amount of training and coaching to accompany the change, traditional tests of intrinsic quality of the product, etc.

2. External considerations: acceptability test, concept test with target customers and analysis of market opportunities.

• Potentially new marketing plan, training and internal communication.

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Follow-up scoring

• Economic profitability of eco-design processes

• An improvement of customer satisfaction (added-value)

• Enriched vision for the design of new products

• A positive impact on employee motivation and commitment to the company

• Reduced employee turnover, attracting new talent

• Improved knowledge capital

• Improved public image of the company

• Improved stakeholder relations

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Slide 26

Case: biomimicry

• A design discipline that seeks sustainable solutions by emulating nature’s time-tested patterns and strategies

• The core idea is that nature has already solved many of the problems we are grappling with.

• Applications in numerous fields: agriculture, architecture, climate change, energy, energy efficiency, human safety, industrial design, medicine, natural cleaning and transportation.

• Examples: https://www.youtube.com/watch?v=coEwQRba_2o

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Slide 27

Bibliography

• Sempels, C & Hoffmann J 2013, ‘Chapter 3’ in Sustainable Innovation Strategy: Creating Value in a World of Finite Resources, Palgrave Macmillan.

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Slide 28

Next week…

• Circular Economy

• Tutorial reading for today (read before the tutorial): None.

• Tutorial reading for week 9 (read before the tutorial): None.

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