135
Sustainable
value:
Economic
Environmental
Social
Drivers
• Costs (raw
materials,
insurance)
• Disruption to
operations
• Pollution, waste
• Higher productivity
Strategy:
Operational efficiency
Minimize consumption of water, energy
and generation of waste and emissions
from
operations. E.g.: Cleaner
production audits, energy efficiency,
programs for better working conditions
Business value:
-Cost reduction
-Risks reduction
-Healthy and motivated workforce
Drivers
• Regulation
• Civil Society
• Transparency
• Inter-connectedness
Strategy:
Product stewardship
Integrate
stakeholders’ views into
business processes.
E.g.: Responsible care, UN global
compact, ILO standards, directives
(WEEE, REACH, ROHS)
$
Business value:
-Legitimacy and Reputation
-No product liability costs
-Community and civil society support
Drivers
• Competitiveness
•
Human health
• Eco-systems
• Resource
scarcity/depletion
• Higher worker
income
• Employability
Strategy:
Reinventing processes,
products and business models
Improving performance throughout
value
chains, moving towards bio-based and
circular economy and considering
ecosystems in business. E.g. ecoeffective products, bio-polymers, upcycling, PSS* (chemical leasing), NCA
#,
Worker-management engagement
Business value:
-Innovation
-Product differentiation
-Rejuvenation of portfolio
-Competitiveness of suppliers
Future
Present
Internal
External
Drivers
• Population
• Poverty & Inequity
• Urbanization
• Planetary
boundaries
Strategy:
Provide societal needs by
aligning corporate vision
9 billion people living well within the
boundaries of planet by
open
collaboration and radical innovation.
E.g.: Enabling clean cook-stoves,
affordable nutrition, low cost housing,
affordable lighting and mobility, smart grid,
BOP^ or blue economy products
Business value:
-Business Growth
-new products
-new markets
-Safe business environment
Key business functions
Innovation
Procurement/supply chain
Marketing
Finance
Human resources
Key business functions
Operations
Legal affairs
Human resources
Key business functions
Legal affairs
Communications/Public relations
Key Business functions
Corporate strategy
Innovation
Marketing
-- ?
Fig. 11.2
Sustainable value framework (Adapted from Hart and Milstein ( 2003 ) (Manda 2014 )). (
*
PSS is Product Service Systems,
#
NCA is Natural Capital
Accounting,
^
BOP is Base Of the Pyramid,
$
REACH is Registration, Evaluation, Authorization of Chemicals and ROHS is Restriction Of Hazardous Substances,
WEEE is a directive on Waste Electrical and Electronic Equipment)
11 Sustainable Value Creation with Life Cycle Management
Sustainable
value:
Economic
Environmental
Social
Drivers
• Costs (raw
materials,
insurance)
• Disruption to
operations
• Pollution, waste
• Higher productivity
Strategy:
Operational efficiency
Minimize consumption of water, energy
and generation of waste and emissions
from
operations. E.g.: Cleaner
production audits, energy efficiency,
programs for better working conditions
Business value:
-Cost reduction
-Risks reduction
-Healthy and motivated workforce
Drivers
• Regulation
• Civil Society
• Transparency
• Inter-connectedness
Strategy:
Product stewardship
Integrate
stakeholders’ views into
business processes.
E.g.: Responsible care, UN global
compact, ILO standards, directives
(WEEE, REACH, ROHS)
$
Business value:
-Legitimacy and Reputation
-No product liability costs
-Community and civil society support
Drivers
• Competitiveness
•
Human health
• Eco-systems
• Resource
scarcity/depletion
• Higher worker
income
• Employability
Strategy:
Reinventing processes,
products and business models
Improving performance throughout
value
chains, moving towards bio-based and
circular economy and considering
ecosystems in business. E.g. ecoeffective products, bio-polymers, upcycling, PSS* (chemical leasing), NCA
#,
Worker-management engagement
Business value:
-Innovation
-Product differentiation
-Rejuvenation of portfolio
-Competitiveness of suppliers
Future
Present
Internal
External
Drivers
• Population
• Poverty & Inequity
• Urbanization
• Planetary
boundaries
Strategy:
Provide societal needs by
aligning corporate vision
9 billion people living well within the
boundaries of planet by
open
collaboration and radical innovation.
E.g.: Enabling clean cook-stoves,
affordable nutrition, low cost housing,
affordable lighting and mobility, smart grid,
BOP^ or blue economy products
Business value:
-Business Growth
-new products
-new markets
-Safe business environment
Key business functions
Innovation
Procurement/supply chain
Marketing
Finance
Human resources
Key business functions
Operations
Legal affairs
Human resources
Key business functions
Legal affairs
Communications/Public relations
Key Business functions
Corporate strategy
Innovation
Marketing
-- ?
Fig. 11.2
Sustainable value framework (Adapted from Hart and Milstein ( 2003 ) (Manda 2014 )). (
*
PSS is Product Service Systems,
#
NCA is Natural Capital
Accounting,
^
BOP is Base Of the Pyramid,
$
REACH is Registration, Evaluation, Authorization of Chemicals and ROHS is Restriction Of Hazardous Substances,
WEEE is a directive on Waste Electrical and Electronic Equipment)
11 Sustainable Value Creation with Life Cycle Management