Clear Understanding of Sustainability Challenges Drives Innovation
Companies and individuals who have a comprehensive appreciation of today’s sustainability challenges are driving environmental innovation.
Procter & Gamble is one company committed to understanding consumers and the world in which we live in order to make smart decisions in sustainability. “Most consumers are unwilling to make trade-offs in performance or price. Therefore, as we design products that conserve resources, we must maintain product performance and value,” says Len Sauers, VP of global sustainability for P&G.
Because the world’s sustainability challenges have become quite clear, finding ways to innovate is easier today, says Frank O’Brien-Bernini, Owens Corning chief sustainability officer. “It’s a real gift for an innovator to have a clear view of problems worth solving.”
This understanding informs Owens Corning’s products in the building materials and composites market. The company developed its award-winning EcoTouch Insulation with the needs of both the environment and the homeowner in mind. The product reduces energy consumption and lowers monthly heating and cooling costs, a key desire of its customers, O’Brien-Bernini says.
Such innovation can be seen in all areas of industry. Ford is introducing the 2015 F-150, a truck built from military-grade aluminum alloy (with a high-strength steel backbone). The technologies used in the creation of the truck were developed because of efficiency regulations put into place by the Obama administration in 2011 and because consumers want better gas mileage.
“This is a major innovation and platform change, all being driven from fleet efficiency goals for miles per gallon,” says Matthew Littlefield, president and principal analyst with LNS Research. Littlefield predicts that other truck makers will likely follow suit in coming years.
Process of Innovation
Sustainability is a great driver for innovation, says David Dornfeld, Director, Laboratory for Manufacturing and Sustainability at the University of California, Berkeley. “If you look at the big transitions that have happened in the last 100 years, you will notice they have always been prompted by the need to get more value out of a process or reduce cost or inefficiency,” he said during an interview with Sustainability Outlook magazine. “Henry Ford epitomized this when he pushed the transition from a craft production to an automated production. [He] took the inefficiency out of random organization and made the whole process more organized… Productivity went up, cost went down.”
Companies are motivated to innovate by a number of factors. A 2013 survey from MIT Sloan Management Review and the Boston Consulting Group shows the top reasons for making sustainability a part of business plans were related to competitiveness, risk reduction, getting and retaining good employees, and increased business.
“Usually this is driven from the top, with execution pushed to the operations of the company – the engineers – who try to figure out how to do this… Once they see the opportunities, from enterprise down to process and tooling, they begin to address the problem,” Dornfeld says. Metrics are critical to understand the current operating state, how the proposal will move to a better state, and the economic and environmental rewards.
When P&G began targeting the group of consumers they call “sustainable mainstream,” the company looked for ways to meet their needs and reduce environmental impact.
They started with a lifecycle assessment, which allowed the company to quantify the impact of a product from creation, distribution, and delivery to the use phase on the consumer end.
P&G learned that, in the developed world, its main environmental footprint in the consumer-use phase comes from the energy needed to heat water for laundry. This led to the development of Tide Coldwater, designed to allow users to wash in cold water without a performance tradeoff.
But that single innovation around a particular product line wasn’t enough. While energy to heat hot water is the main factor in the developed world, that isn’t the case in developing countries, where water is scarce.
In countries like the Philippines, households may draw as many as four basins of water for laundry: one to wash and three to rinse. P&G developed Downy Single Rinse, which contains technologies that help sequester suds, Sauers says; the new product needs only a single basin of water for rinsing.
Similarly, an automobile’s use phase is the biggest contributor to its lifecycle impact, so innovation in auto manufacturing must focus on reducing the impact of that phase, says Dornfeld. With that in mind, his department looked at leveraging manufacturing to examine the payback on improving the surface finish of gears in an automobile’s gear train. “The payback was huge in the reduction of losses in the gear train and concurrent improvement in fuel economy of the auto,” Dornfeld says.
Anheuser-Busch InBev also focuses on a “relentless move toward sustainability innovation,” says AB InBev’s Hugh Share, senior global director of Beer and a Better World. Because water is essential to the business, the company looked at the issue of the increasing stress on watersheds around the world. “This was an opportunity for our facilities to work with local stakeholders on creative solutions to complex issues.”
Now the company reuses effluent from its brewing process for community needs such as irrigation, as inputs to other industrial processes, and as fire and dust suppression, implementing these innovations at five facilities in China, Brazil, Argentina and Bolivia.
Cost Inhibits Innovation
When great innovations fail to be implemented, it’s likely because of cost, points out Gary Lawrence, chief sustainability officer and VP of AECOM Technology Corp.
There is a “preponderance of great innovations we have failed to implement… despite compelling evidence that they provide elegant solutions to complex problems,” he wrote in an EL article.
The cost argument is shortsighted and misleading, he believes. The consideration of cost generally centers on the upfront cost of designing and building – and when that cost seems prohibitive, projects falter. Instead, companies should go on to consider the opportunity cost.
Justin Grau, senior engineer with ConAgra Foods, agrees. “The biggest trend I see in sustainable initiatives is the need for rebates to make projects economical,” he says. “Unfortunately, the costs of implementing new technologies is still too high for many companies to justify without some form of rebate… For locations that have the opportunity to take advantage of rebates, I see more effort and projects being implemented, resulting in a more sustainable facility and – in many cases – increased reliability.”
In order for new developments in sustainability to be implemented, innovators need to look at producing things that companies can afford, and not just something that looks good on paper, Grau says.
Real innovation is disruptive, but companies like these – that are reimagining products, processes, and models – are finding true transformation.
This article is sponsored by Procter & Gamble.
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