Building brand equity is critical to increasing revenue and staying profitable in competitive environments. Many companies are focusing on product transparency and leveraging innovative tools like life cycle assessments (LCA). A fine balance between insight and innovation is beginning to shift corporate practices.
Terry Swack is the Founder and CEO of Sustainable Minds®, the first company to offer a streamlined eco-concept modeling and LCA software solution for product teams to use in early stage product development. Her new quest is to rethink how to scale engagement in environmental product transparency reporting by lowering the barriers to getting started, streamlining and harmonizing the standards process, and creating reports that are valuable for marketers, sales reps, distributors, and customers.
What are the challenges companies are encountering as they move from providing environmental disclosure documents to creating brand value?
The first challenge is also a goal: Make sure to maximize ROI. Companies are making a real investment in disclosure, so they owe it to themselves to turn the technical output from all of their analysis into understandable information that can be used by people like sales reps and customers.
Today’s product disclosures, commonly referred to as environmental product declarations (EPDs), are not really intended to be interpreted by non-LCA experts who are making specification or purchase decisions. Yet it’s perfectly possible to create reports that both meet recognized certification and verification requirements and serve a vital marketing role.
Making reporting more useful requires innovation: rethinking both the technical process and the content and form of the report. It takes consistent language and a presentation of information that provides context, not just numbers. And it has to be findable as part of a web search. Without that, the investment the company has made in disclosure ends up as a link to a PDF report, unlikely to be read by anyone.
What is the difference between disclosure requirements and environmental performance criteria?
Disclosure is based on stakeholder-driven standards. The rules are created using a consensus process made up of interested parties representing the product category. With a common set of rules, manufacturers worldwide who make those products can do their LCAs and report consistently.
Environmental performance criteria are key performance indicators, based on scientific methods such as LCA that manufacturers choose to include in their specifications in sourcing and product development. They can include some or all of the ecological damage, human health damage or resource depletion impact categories from LCA, or single attributes such as embodied energy and water use.
Increasingly, companies are requiring environmental performance information to inform purchasing decisions.
How can companies who want to do more with their investments in LCA and EPDs move from disclosure based reporting to disclosure plus building brand equity?
Learn to tell the story of the product’s environmental performance. Bring together the product development team, the folks responsible for product sustainability and the marketers to identify the decisions/processes/programs that have been put in place to address environmental performance.
This mindset of making environmental performance information understandable and meaningful, starting with product design, and now in product marketing, is fundamental to Sustainable Minds’ mission to provide applications, data and services to operationalize environmental performance in product development and manufacturing.
We help manufacturers realize that improving performance and reducing environmental impacts gives them tools they didn’t have before. It not only enables them to report in compliance with international standards, it gives them an advantage—a story to share with customers, prospects, and stakeholders, all of whom want to make more informed decisions.
How do you respond when a manufacturer pushes back and asks what value product transparency provides?
We explain that product transparency means going beyond the disclosure checkbox.
Transparency is good for business. By understanding their products’ lifecycle impacts and material ingredients, manufacturers can make informed decisions about what products to make and how to make them. Sharing this knowledge and demonstrating what they’re doing to improve environmental performance can be leveraged for competitive advantage.
Transparency provides the foundation for building a trusted brand. A trusted brand means growth in the marketplace.
How has lifecycle thinking changed the landscape of business this last decade and what effect has it had on product development?
We’re still in the early stages of seeing a significant effect. When first done, LCA is a way to benchmark existing environmental performance. Now we’re seeing that manufacturers are learning how to use the results to make improvements. As their customers become more sophisticated and continue to ask for new and more types of environmental reporting, we’ll see more choices in the market for credibly greener products. Keep in mind that where there are environmental impacts, there are costs. Manufacturers are always looking for ways to reduce those.
Integrating lifecycle thinking into early-stage product development, helping to find meaningful and finding performance improvement through rapid concept development are the keys to success. The trifecta is improved functional performance, improved environmental performance and lower costs.
What would you recommend to companies that want to get started using life cycle analysis in the product design and manufacturing processes?
Designing better products or meeting customer requirements for technical disclosures are the two common reasons to get started. So first, start by defining the reasons to conduct
LCAs near-term and longer term, who will be involved, and what will be done with the results.
Next, bring in a consultant or hire in the expertise to get started. It takes time to develop the required skill sets to conduct LCA. Start with external help, conduct an LCA or two and decide if it makes sense to bring the resources in house.
If the manufacturer wants to get started with environmental reporting, consider the types of reporting being done by peer companies and what customers are asking for. Is LCA enough, should it get done first? Is the market requesting material ingredient declarations, should this analysis and disclosure be done first, or can they be done concurrently and what’s the value and cost of that?
As sustainable manufacturing demands continue to grow worldwide, it’s a call to action – and an opportunity – to meet disclosure requirements and use that information to build brand value. Manufacturers should look at all of the kinds of value that come from engaging in product transparency: cost savings, brand differentiation and brand trust, keeping up with demand and finding new markets. Then see how they can deliver the right information in an understandable and meaningful way that builds credible, greener brands.
Bio:
Kelly Eisenhardt is Co-Founder and Managing Director at BlueCircle Advisors, an environmental compliance and sustainability consulting and training firm based in Massachusetts (www.bluecircleadvisors.com.) In her role at BlueCircle Advisors, she is responsible for providing business intelligence, strategy and implementation of environmental, social and governance (ESG) risk programs. Her experience aligns well with her client’s needs for technology, compliance, and sustainability expertise by helping companies create and manage their corporate environmental and social responsibility programs.
To contact Kelly Eisenhardt, send emails to kelly.eisenhardt@bluecircleadvisors.com or follow her on Twitter @KelEisenhardt. For more information about BlueCircle Advisors and the company’s products and services, please visit www.bluecircleadvisors.com, on Facebook at BlueCircle Advisors, on Twitter @OurBlueCircle, and on the LinkedIn group at the BlueCircle Advisors group.