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March 2013

Blue Marble

The Business Sustainability Newsletter of PE INTERNATIONAL

Welcome

Bringing together the best and the brightest sus-

leaders in advance of our event. The questions relate

bility community, founded by PE leaders. Read

tainability thought leaders and practitioners from

to the topic of the Symposium “Sustaining busi-

more about the value it brought to companies

around the globe is always exciting for us. The

ness success and growth in a resource constrained

over 20 years and the plans for the future.

opportunity to share success stories, ideas and

world” and the related program highlights. It is

make connections helps further advance the evo-

our hope that these casual interviews in this

We hope you are able to take home a lot of food

lution of the market that we all serve; And, ulti-

printed edition of the “Blue Marble” newsletter

mately helps organizations create further tangi-

will help to evoke meaningful dialogue of the

ble business value from sustainability.

most pressing topics facing our customers today.

This year we decided to pose some questions to our

The Product Sustainability Roundtable is another

esteemed speakers, attendees and PE INTERNATIONAL

great institution, supporting a leading sustaina-

Symposium Edition

Expert views

1_Welcome Note

2_Expert views – we get the answers to four key questions 3_How to create value from sustainability – PSRT celebrates 20 years of finding out 4_Are you equipped? – Tap into the latest sustainability resources

working possibilities within the strong community we are happy to bring together at this occasion. Enjoy!

In respect to this year’s Symposium theme we asked the experts four questions.

Q 1. What are the impacts of limited resources on business now and in the future? Moritz Ritter, CEO, The Ritter Group.

“The

Neil D’Souza, SoFi Software Product Manager, PE INTERNATIONAL. “I

first issue is a cost factor since

duction in accordance with the

along the supply chain has an impact on competitiveness, as About 80% of the total energy consumption comes from fossil fuels. With the exception of natural gas (shale gas) whose price has decreased in countries such as the U.S. due to fracking, companies must deal with the increasing energy prices of fossil fuels. Businesses need to think in the future of a wide range of alternatives which include both fossil and renewable energy sources. Assuming that the real costs of fossil fuels will ever be accurate and transparent, renewable energy sources will be seen not only as the most environmentally responsible decision but also the most cost-efficient, and in the long run, the only available.”

see the im-

pact as increased costs of pro-

the cost of energy sources

well as the cost and availability of raw materials.

www.pe-international.com

for thought, inspiration and profit from the net-

basic principles of supply and demand. It implies changing supply chains and business relationships, elevating the importance of social issues of fairness and equitable distribution of resources, a focus on efficiency to reduce waste and greater importance on monitoring. There will be a case of ‘innovate or die.’ I also believe in the long term it can change how we benefit from globalization where companies source materials from one place to deliver products in another. This will be the cornerstone of economic success for major economies and will inevitably change quite dramatically in the next 10 to 15 years.”


Q 2. How do sustainability strategies help to mitigate against a limited supply of resources? Gabriella Zahzouh, Global Environmental Manager, British American Tobacco.

“As

Rodolphe d’Arjuzon, Global Head of Re-

Robert Gabriel, Director of Corporate Sus-

search

tainability, PE INTERNATIONAL.

and

Development, Verdantix.

“Any

we rely extensively on natural

“These strategies help you to

sustainability strategy will in-

resources, our strategies help

understand exposure so that

clude the management of ener-

us to forecast future scarcity

you can create sensible risk

gy and material resources in its

issues and ensure supply and demand is in bal-

management plans. They also help you to know

core. Understanding consumption, efficiencies and

ance. Our local reforestation programmes are

your suppliers so that you can work with them.

sourcing of resources are keys to evaluating and re-

good examples. We understand through local as-

There is a lot of this going on in the food sector.

ducing the risks related to limited resource avail-

sessments, what fuels are used for curing our to-

Companies such as Unilever, Nestle, and PepsiCo

ability and price increases. In addition, a proper

bacco and it is vital to us to ensure that our farm-

have created programmes to directly engage, teach

sustainability strategy will also address the oppor-

ers have a ready and sustainable supply available

and support their agricultural suppliers. It also im-

tunities to increase the competitive edge, whether

to them year over year without negatively im-

proves the robustness of weak links in the chain.

by driving the top line with green product portfoli-

pacting the biodiversity around us all.”

For example, working directly with farmers on bet-

os, or by growing the bottom line with the reduc-

ter irrigation methods can help conserve water

tion of resource-related production costs.”

while boosting yield.”

Q 3. One of the potential hot topics for the near future is the Environmental Footprint. Do you think that this is becoming a game changer in sus- tainability? How are companies preparing for this? Ramon Arratia, Sustainability Director

Michele Galatola, Policy Officer, EU Com-

Michael Betz, CEO, PE INTERNATIONAL.

“Absolutely.

“The Environmental Footprint

book Full Product Transparency,

There is growing pressure on

Initiative as driven by the EU

I think environmental product

companies to show they produce

Commission might indeed be-

EMEAI, Interface.

“As written in my

mission DG Environment.

declarations are the biggest

in an environmentally friendly

come a game changer. Irrespec-

changer in sustainability because they link the en-

way – both at the level of individual products and

tive of that, sooner or later corporate and prod-

tire value chain. You can influence demand, you

as organizations. Information on environmental

uct footprints, declarations or LCAs will definitively

can redesign products, you can transmit priorities

performance can be used in the management of

become mainstream. Our key clients prepare for

through your supply chain, and legislators can re-

supply chains as an efficient indicator of how re-

that by bringing manual and not integrated ap-

ward sustainable products or punish products with

source-efficient a company is. At the same time,

proaches to the next level. Our role is to help them

higher environmental impact. At Interface, we pro-

it serves to show how green a product or organi-

automate and rationalize sustainability and com-

duce EPDs for all of our products and are heavily

zation is, because consumers increasingly want

pliance data collection, transfer, decision making

redesigning each one so that the embodied im-

to better understand the environmental impacts

and communication. In this context, LCA data col-

pacts are reduced.”

of their consumption. The commission will soon

lection and transfer in supply chains will achieve

adopt and publish consistent methodologies for

the critical importance it deserves.”

Michael Spielmann, Principal Consultant, PE INTERNATIONAL “In my view, it may

tackle one critical issue: Green Washing. By developing sector and product group specific guide- lines that should guarantee the improvements claimed by producers are consistent, solid, and reproducible. This will avoid the risk of green washing which could jeopardize the entire sustainability issue. I think having a set of product category rules will be a critical component to the impact of this initiative in the future.”

the calculation of the life cycle environmental performance of products and organisations. Named PEF (Product Environmental Footprint) and OEF (Organization Environmental Footprint), we believe these will become more and more used in public and private initiatives, providing a more consistent and reliable way to communicate environmental information both in B2B and B2C contexts.”


Q 4. How do you see the role of Life Cycle Assessment in de-risking and improving supply chains? Nigel Topping, CIO, Carbon Disclosure

Chuck Grindstaff, CEO, Siemens PLM Software.

Harald Florin, Director of Product Sus-

Project.“The

vast majority of com-

“The high degree of standard-

tainability, PE INTERNATIONAL.

panies do not have a good un-

ization in material selection and

derstanding of their entire value

LCA reduces design risks and cre-

chain. Everything is connected,

ates a basis for innovation along

things change so quickly and we are at or beyond

the supply chain. It is imperative that the supply

limits with so many resources that without proper

chain stay in sync as environmentally-minded de-

LCA to understand risk, it can be devastating to

sign practices evolve from conformance to substan-

business. There is a definite need to both under-

tial regulations, to multi-domain optimization.”

stand the risks through LCA and put in place a

“LCA is the proven method to bring complete transparency into product life cycles on every level. It helps to offer an understanding of a changing world, changing technologies and their implications. One of the biggest supply chain risks is a failure to think through decisions and understand risks at every level. With LCA, businesses have a tried and tested approach that

sound strategy to address the risks throughout the

will provide the visibility needed to effectively

supply chain. With this preparedness, a company

manage and improve their supply chain. “

has foresight into potential problem areas and can respond by making changes to a product over time throughout the supply chain. This will prevent the devastating impact of getting blind sighted, and help to assure the health of the business.”

20 years of the Product Sustainability Round Table – looking back and looking ahead As the Product Sustainability Round Table (PSRT) celebrates its 20th year, we looked back on the significant changes in sustainability trends over that time and where the journey is expected to lead us in the next 20 years. Looking back, the big change has been the integration of sustainability into business decision making. Looking ahead, while the rules of the game are not expected to change, the field it is played on will be dramatically altered by the availability of information. Those companies who are prepared will succeed through proactive and integrated sustainability management. Jim Fava, Chairman PSRT.

PE’s PSRT 

1

was founded 20 years ago by Jim Fava and since that time has emerged as the premier community of practice in the product sustainability space. It brings together the sustainability leads of the world’s most respected companies, from across the value chain, in a non-competitive environment, to better understand what sustainability means today, what it is likely to mean tomorrow and, critically, how best to capture the opportunities it creates. To mark the occasion, we asked a number of past advisors as well as Jim Fava himself to talk about what has changed over that time and – more im-

portantly – where they expect sustainability to go over the next 20 years. The changes since 1993 all tended to focus on the shift of sustainability from being something nebulous, conceptual and distinct from ‘real’ business practice, to being pragmatic, tangible and integrated into management decision making. Looking forward, the fundamentals are not expected to change; people will continue to be motivated by self-interest – including status, profit, and pride – and companies will continue to maximize returns on their investments. However, the single biggest change will be the availability of information: getting people the information they want when they want it – and it will have a number of significant implications across the value chain. For consumers it is expected to provide them with customized information at the point of purchase covering the full sustainability performance of the product. An early model of this concept can be seen with GoodGuide and in the area of Environmental Product Declarations. As a result, consumers should have full visibility of the impacts of their purchase decisions which will drive more sustainable behavior through personal pride and ‘gentle’ encouragement from social networks. Companies are likely to experience the largest changes as a result of this.

In particular, expectations of transparency including material compositions, suppliers, material sources, and life cycle data will continue to grow. With information technology shrinking the ‘distance’ between countries, performance anywhere within one’s upstream will be tied to the broader brand. Internally operational performance will be driven by real or near-real time data, information and potential corrective actions, with PE’s SoFi platform taking the lead in this exciting field. For designers, improved life cycle information will fit seamlessly within their design process, a glimpse of which we can already see today in the SolidWorks Sustainability and GaBi Envision platforms. Further, implications of design decisions from regulatory issues to availability of recycling routes and technologies are likely to be fed directly to them utilizing smart solutions like the Siemens CPM. As a result, those who are effectively integrating sustainability into their strategies, data tracking and practices will be at a distinct market advantage. For suppliers and upstream material providers, the demands for more detailed and a broader scope of information will continue to grow. The ability to provide this information – such as sourcing locations – will be supported by technological advances in global tracking systems and innovative partnerships.


The ability to improve performance will further

What the world of sustainability will look like in

Chris Peterson, Manager PSRT. For

be accelerated by both greater demands from

2033 is hard to predict with certainty, but two

information on the PSRT please

downstream partners as well as the broader pro-

things seem likely:

contact Chris Peterson at

1) PE and PSRT members will be at the forefront

c.peterson@pe-international.com

motion of sustainability practices through a variety of networks including round tables such as the PSRT. This will accelerate the transfer of leading practice from a relatively exclusive circle of leaders to a broader set of companies including SME’s and global supply chain partners.

more

of translating sustainability ideas into successful business models; and

or visit http://www.pe-international.com/acade-

2) Sustainability, in whatever its 2033 form is, will

my/product-sustainability-round-table/

be critical and fundamental to business success.

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Are you equipped? Tap into the latest sustainability resources PE INTERNATIONAL is recognized by its clients as being a thought leader on how sustainability concepts can be applied to organizations and to

case studies, presentations, studies and webinars. Check out our online resource section www.pe-international.com/resources

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we offer not only our services as consultants but also our insights through numerous whitepapers,

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Blie Marble - PE Sustainability Symposium 2013