CSR & Sustainable Product Development Strategies
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Sustainable product development considers factors like resource use, hazardous substances, packaging, distribution, and socioeconomic and consumer impacts. Investing in sustainable product development can help companies meet growing consumer demand, improve reputation, preserve resources, reduce costs, access new markets, drive innovation, differentiate products, improve quality, and retain employees. An effective sustainability strategy integrates customer, societal, and business needs without compromising any of them.
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CSR & Sustainable Product Development Strategies
- 1. CSR & Product Development Susan McPherson | Founder and CEO, McPherson Strategies | @susanmcp1
- 2. What is sustainable product development? @susanmcp1
- 3. @susanmcp1 Why should companies invest in sustainable product development? Consumer demand Reputation Preservation of resources Reduced costs Access to new markets Innovation Differentiation Product quality Employee retention
- 4. @susanmcp1 Just ask the C-Suite…
- 5. @susanmcp1 Keep in mind: “An effective sustainability strategy integrates the customer, society and the business; it does not compromise them.” -David Jerome & Rob Kleinbaum
- 12. @susanmcp1 Consumer use & disposal
Editor's Notes
- Let’s start by defining what we’re talking about. Sustainability in the context of sustainable product development generally includes the consideration of environmental, social, regulatory and economic factors for the development, production, use, and ultimate disposal of products. That’s a pretty general definition, which is on purpose. There are a ton of different ways that companies are defining sustainable – and a lot of these are valid. Because there is no clear understanding of what a sustainable product actually is, companies often create their own conflicting definitions. We’ll talk through some of these definitions and examples today, and along the way, think about the definitions or approaches that would make most sense for your company. There are a lot of ways for a product to be developed sustainably.
- As with anything CSR-related, there is usually a social impact benefit, but the motivation also has to be business-based. What are the motivators here? Why does the investment make sense? Here are just some of the reasons/benefits. -Consumer demand: studies have shown customers want to buy from brands that operate sustainably. -Reputation: Positive effect on brands from market and customer sustainability values -Preservation of resources: Companies won’t have the resources they rely on forever. Sustainable product design and development helps ensure they’ll last as long as possible. -Reduced costs from decreased use of resources and eliminating waste -Increased access to markets with regulatory and rules compliance. -Increased innovation driven by sustainability goals and performance measures. -Differentiated products and/or services based on environmental and social measures -Product quality: Sustainable design and development can lead to higher quality products that last longer. -Employees want to work with companies who are ‘doing the right thing’ and being proactive with corporate environmental and social programs. -
- Read each stat aloud
- Important to remember: sustainability is not a substitute for having a great product. The path to winning is to have a great product that integrates sustainability. Customers are not willing to tradeoff the main promise of a product; they expect a great product that is sustainable. As David Jerome and Rob Kleinbaum write, “An effective sustainability strategy integrates the customer, society and the business; it does not compromise them”
- There are so many ways sustainability considerations enter the product lifecycle – and it’s critical to be aware of these considerations from the beginning. This chart from AT Kearney gives us a snapshot of all the places in the product lifecycle where companies should consider sustainability – we’ll talk through some of these, keeping in mind that many extend from the supply process all the way to disposal. A lot of companies will talk about Life Cycle Assessment (LCA) standards to contextualize these topics. LCA is a tool for the systematic evaluation of the environmental aspects of a product or service system through all stages of its life cycle. LCA provides an adequate instrument for environmental decision support. Reliable LCA performance is crucial to achieve a life-cycle economy. The International Organisation for Standardisation (ISO), a world-wide federation of national standards bodies, has standardised this framework
- The materials used in products come from a resource base, and the way those resources are managed, conserved or protected is a major contributor to the overall sustainability profile of a product. It is important to carefully consider the type of resource as the main sustainability issues can vary. For wood fiber recycling is important but the management of the trees, land and soils to ensure soil preservation, reforestation and habitat conservation are critical. Wood, however, is different from metals. This requires not only good mining practices, but more importantly (because of their fundamental properties) a focus on the management and availability of the resource across the full life cycle to ensure continual recovery, reuse and recycling. Similarly, plastics, bio-materials, Nano-particles and other materials also have their own unique sustainability considerations. Start by asking what the nature of your resource base is, and are the right sustainability aspects being considered and addressed in material selection. Another important consideration here is natural resources and whether we drawing down on that capital too quickly or in ways that impinge upon future generations’ ability to have access to the resource. Coca Cola is addressing this through its water programs: Coca-Cola is able to give back the amount of water equivalent to what it uses in its finished beverages and their production through replenishment projects, increasing water use efficiency in its plants, and returning water to watersheds and municipalities through wastewater treatment. Part of meeting its replenishment goal is engaging in diverse, locally focused community water projects. Each project works toward set objectives such as providing or improving access to safe water and sanitation, protecting watersheds, supporting water conservation and raising awareness on critical local water issues.
- Ideally, this involves the elimination of the use of hazardous substances at the design stage but currently many product systems (e.g., batteries, circuit boards, and compact fluorescent light bulbs) do incorporate hazardous or potentially hazardous substances. For these products, it is important to understand how possible worker or consumer exposure to these substances is being managed and also how any potential releases of these substances to the environment are being managed. Disposal is also a key consideration. Whether hazardous substances are recovered safely is key. In "The Future We Want", the outcome document of Rio+20, Member States reaffirmed their commitment to achieve, by 2020, the sound management of chemicals throughout their life cycle and of hazardous waste in ways that lead to minimization of significant adverse effects to human health and the environment. EXAMPLE: NIKE The reduction/elimination of toxic chemicals in products and processes is part of NIKE, Inc.’s long term sustainability goals. They provide tools for suppliers to better understand their chemical impact and to search for less toxic ways to manufacture. These include Nike’s Restricted Substance List and Sustainable Chemistry Guidance. The Nike Considered Chemistry Team expects all suppliers to use the Principles of Green Chemistry to inspire innovation. Designing and producing materials around these principles can be used at any stage in the supply chain to improve sustainability as well as protect the consumer, employee, and the community/environment.
- Packaging incorporates a lot of the considerations we’re discussing here. It requires more analysis and documentation to look at the package design, choice of materials, processing, and life-cycle. This is not just the vague "green movement" that many businesses and companies have been trying to include over the past years. Companies implementing these eco-friendly actions are reducing their carbon footprint, using more recycled materials and reusing more package components.] They often encourage suppliers, contract packagers, and distributors to do likewise. Example – Ben & Jerry’s: All of Ben and Jerrys global paperboard packaging has Forest Stewardship Council (FSC) Certification. FSC certification means that the pulp in the paperboard comes from forests that are managed for the protection of wildlife habitat, maintenance of biodiversity, and other forest sustainability criteria. The company also continues to follow packaging industry developments into food-safe coatings made from renewable materials, with the goal of developing of packaging that's biodegradable and fully compostable. Another example: P&G has consistently evolved TIDE packaging to be more sustainable. Our laundry business has been working for years to make smaller packages. 2007, they introduced Tide Liquid 2x compacted in NA with 40% less plastic and 40% less water. 2012, unit dosing – or Pods – mean 50% less plastic packaging per consumer use than even Tide 2x concentrated
- Many companies consider outbound logistics, but there is a next step in the life cycle to improve upon: distribution and the retailer's impact on the environment in terms of energy and refrigeration. Sustainable distribution refers to any means of transportation / hauling of goods between vendor and purchaser with lowest possible impact on the ecological and social environment, and includes the whole distribution process from storage, order processing and picking, packaging, improved vehicle loadings, delivery to the customer or purchaser and taking back packaging. Pressure can be exerted on the major retailers all the way down to the mom-and-pop shops to ensure a minimal environmental impact. Example: DELL Air to Sea In an effort to move to greener shipping practices, Dell launched its the Air-to-Sea Initiative. In the past few years, Dell's business has changed from primarily being PC suppliers to "IT solutions providers". Dell now sees nearly half of its orders come from channel partners, instead of direct orders. As their company changes, they have realized that they can reduce costs and their environmental footprint in their shipping methods, by shifting from air transport to sea transport, utilizing cargo ships to send their products overseas. Dell has also pledged to utilize rail systems in lieu of trucks to deliver shipments across continents. One of the benefits Dell has realized through this initiative is that they can now deliver larger shipments at a time to their destinations across the globe. From an environmental standpoint, Dell has achieved lower emissions and fossil fuel usage per product shipped. The cargo ships may contribute to greater eco-impact, but the larger and more infrequent shipments offset the difference.
- These factors incorporate a wide range of issues along the value chain of the product. This might include worker treatment and labor issues in upstream resource industries, fair allocation of revenues and profits with supply chain partners or avoidance of the use of child labor or conflict minerals. The important aspect here is to determine if the key social and economic impacts and benefits are understood and whether appropriate standards are being met. Sometimes these standards are in a codes of conduct or established standards and sometimes they are contained in third-party certification schemes. Like life cycle impacts, socio-economic attributes should be evaluated across the full product system from resource extraction through to production use and disposal. CALL out: Unilever This is an important focus for Unilver, both in terms of its employees and its suppliers. Unilever is focused on transforming women’s lives by supporting projects across their value chain - for instance, by enhancing the livelihoods of women in our agricultural supply chain sector where they participate heavily. Rural women have less access to productive resources, services and opportunities, such as land, livestock, financial services and education, compared to men. Unilever helps address these issues, with the idea that women will benefit disproportionately, with improvements in production, productivity and living standards. This includes increasing skills for women and opening access to markets, while working to ensure that women’s fundamental rights are respected. Many of the 5.5 million smallholder farmers, small-scale retailers and young entrepreneurs Unilever aims to reach through its Inclusive Business programme are female.
- Depending on the product type, the vast majority of environmental impact is incurred as the consumer uses the product. Food products are chilled and cooked, grooming products use heated water, and cleaning products use machines and hot water. While it may seem out of the company's control, how consumers interact with a product depends largely on product design and marketing. Additionally, Influencing the consumer toward environmentally sound disposal practices can be done through choices in packaging types, weight, size, labeling and even external initiatives to increase recycling and reuse. In order to reach zero waste, products have to either be durable enough to last for a long time or be fully recycled and transformed completely into new products. Depending on both methods can help recycle products more than one time and decrease the dependence on Earth’s resources. Example: Patagonia Since 2013, Patagonia has been actively helping and encouraging consumers to repair their old Patagonia gear before buying anything new through its Worn Wear program. Patagonia claims its Reno, Nevada-based repair department is the largest garment repair facility in the U.S., doing about 30,000 repairs per year. Last year Patagonia launched a The Worn Wear Mobile Tour, which stopped at retail locations, coffee shops, farmers markets, and trailheads across the country before. Throughout the tour, staff performed free repairs on busted zippers, rips, tears, buttons, and more—on Patagonia products and other brands—showed people how to fix their own stuff, and sold used Patagonia gear. Share this quote from Patagonia CEO: “As individual consumers, the single best thing we can do for the planet is to keep our stuff in use longer. This simple act of extending the life of our garments through proper care and repair reduces the need to buy more over time—thereby avoiding the CO2 emissions, waste output and water usage required to build it. Why is repair such a radical act? Fixing something we might otherwise throw away is almost inconceivable to many in the heyday of fast fashion and rapidly advancing technology, but the impact is enormous.”