Bright ideas


According to a new report, the leading technology companies are using Sustainability-Driven Innovation to win customers and create new markets. John Haven reports.


During the course of last year, a survey was conducted involving 40 technology organisations across Europe, the United States and Japan. The idea was to focus on the business opportunities presented by integration of sustainability into the innovation process. The report, produced by Arthur D Little, refers to this as 'Sustainability-Driven Innovation' (SDI), or the creation of new market space, products and services or processes driven by social, environmental or sustainability issues.

For the majority of the 40 firms, SDI was particularly high on the agenda and many are already using environmental drivers to push 'above the foothills' to what the report views as the 'innovation high ground'. Around 95% of companies believe SDI has the potential to deliver business value - and almost 25% believe it definitely will. Critical to the success of the leaders is integrating sustainability into business strategy, as well as product and process design.

The leaders
The survey revealed a number of promising SDI products and services which are coming onto the market. For example, France Telecom has been developing devices for distance working in response to growing pressure on transport infrastructure, air quality - and an increase in the proportion of employees desiring distance working.

Meanwhile, leading-edge companies are moving from incremental reductions in the footprint of their own operations to making bold and radical reductions in the full life-cycle footprint. This is becoming more widespread and sophisticated as technology becomes more advanced. For example, Sony is striving to reduce the environmental impact of its products. Its Group Environmental Vision sets out the company's long-term aspirations, and Green Management 2005 defines mid-term targets for each business division.
To ensure targets are effectively translated into product design, Sony's Group HQ provides guidelines for business divisions and reviews progress. Also, each region has an environmental office responsible for disseminating directives to the divisions and encouraging interregional activities. Enhanced environmental education and awards encourage individuals to conduct effective environmental activities.

Reducing the environmental impact of products requires thorough life-cycle assessment. Sony's system for doing this draws on data relating to product information, parts configurations and product transport conditions, among other things. Product design divisions are required to estimate CO2 emissions, energy consumption and resource consumption at each stage of the life-cycle, in addition to the total figure. A product environmental data collection system gathers this data and allows Sony to monitor the environmental impact of all of its products.

Finally, in order to give customers information about the environmental
performance of its products, Sony uses the 'eco info' mark on catalogues and websites to indicate a specific environmental feature of the product.

Barriers
While Sustainability-Driven Innovation is starting to offer real business value, the benefits are still intangible for many and there are still significant barriers to be overcome.

Many companies either do not yet recognise the potential of SDI or believe the concept is still too immature to focus on it at the current time. Key barriers identified include:
  • A lack of understanding of the significance of sustainability trends and drivers;
  • A high degree of internal and external scepticism, often with perceived high levels of uncertainty and risk involved;
  • An absence of suitable business models;
  • A tendency to use available capital to grow 'more of the same' in new markets, rather than to develop new business models that could offer greater long-term benefits in terms of responding better to sustainability drivers; and,
  • An unwillingness to finance new projects.

  • Despite these barriers, the leading organisations are now focussing on winning tomorrow's customers, rather than just managing risks, as was common five years ago.

    As a result, a small minority of companies are already exploring exciting breakthrough opportunities in SDI.

    According to Justin Keeble, head of UK Sustainability Services and co-author of the report, "several anomalies have been thrown up by this research, which is not surprising in a comparatively new discipline.

    "Many organisations have not yet fully addressed the issues, and whilst they are, broadly speaking, open to the concepts of sustainability, they have not done the 'proof of concept' work required to integrate it into their business and innovation process. Others have embraced the concept.

    "We are seeing a number of companies introduce new service offerings and more streamlined business processes. It won't be long before it 'tips' to become a mainstream part of innovation management. Our advice is to get climbing now if you want to see the mountain of opportunity."
    For more information email keeble.justin@adlittle.com

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