How to Embed Sustainability Into R&D Processes for More Responsible Innovation

Speakers

• Jens Duus, Professor and Director, Carlsberg Laboratory
• Louise Nicholls, Head of Responsible Sourcing, Marks and Spencer
• Beth Concoby, Director of Sustainability , Danisco US
• Farid Baddache, Director, Europe, BSR (Moderator)

Highlights

• Innovation is a key component of product sustainability because it can reduce the use of materials and natural resources, improve energy efficiency, and extend product lifecycles.

• Stakeholders are expressing concerns about whether companies are integrating enough consideration into R&D/marketing processes to enable regenerative design, limit impacts on biodiversity, and address health issues for consumers and workers.

• Conducting a lifecycle analysis (LCA) early in the research and development phase can help maximize the positive sustainability attributes of a product by influencing what raw materials that are used.

Memorable Quotes

“The key to integrating innovation throughout the business and taking it to the marketplace is to incentivize commercial directors by making product sustainability part of their performance indicators. We have since demonstrated huge business benefits through these innovations, so the conversation has become easier.” —Louise Nicholls, Marks and Spencer

“It is getting increasingly difficult to reduce the carbon or water footprint of operations, and that’s where science plays a critical role. If you want to make meaningful progress in the future, we will need to have a scientific breakthrough and go beyond incremental improvements.” —Jens Duus, Carlsberg Laboratory

“By collaborating we can accomplish what can’t be done alone, and that’s why it’s important to work with our customers—as well our customers’ customers—to look at the end use of our products.” —Beth Concoby, Genencor

Overview

Baddache kicked off the session by explaining its objective: to explore the challenges and responses from companies in embedding sustainability into R&D processes in ways that provide value to customers and other stakeholders. He posed three main questions for the audience to keep in mind throughout the session:

1. How can a company create appropriate incentives to embed innovation throughout the organization?
2. What trade-offs between positive and negative impacts do companies need to consider, and how will they communicate those?
3. How does a company engage with clients and suppliers to cocreate solutions?

Nicholls described how Marks and Spencer approaches innovation, which includes investments in long-term research projects, commercialization of existing research, exploration of new ways to use existing materials or technology across all product categories, and development of new products. She gave several examples of products that were developed through investments in science and research, including the Carbon Neutral Bra, which achieved 40 percent higher sales than the company projected, and the Simply Fuller Longer food product line, which has become one of the top diet products in the UK. Simply Fuller Longer is a line of nutritionally balanced meals that was developed based on existing research that shows high-protein diets enable people to feel full for a longer period of time.

As a scientist rather than a sustainability executive, Duus provided a unique perspective on the role of scientific research in creating a competitive advantage for Carlsberg. At its research lab Carlsberg integrates basic and applied research on the process of brewing beer. Examples of innovation include research to purify a strand of yeast used in the brewing process, and new types of barley that allow beer to be stored longer and better in warm environments. Despite these achievements, Duus acknowledged that the bigger environmental impact is not in the brewing process, but rather in the agricultural process, namely in the amount of water used for growing crops, as well as in packaging. These areas require additional investments in research and development.

Concoby provided the supplier perspective and described how Genencor conducts LCAs early in the product development process in order to select the most sustainable raw materials for product design. In addition to doing an LCA, however, Concoby advocated for increasing employee engagement in order to generate innovative ideas and for collaborating with key stakeholders, such as governments and academics, in order to find solutions to global problems.

After the panelists provided their perspectives, session participants convened in smaller group discussions to brainstorm about the three questions posed by Baddache at the start of the session. One group focused on internal alignment and how to create the right framework and incentives for embedding innovation within an organization. Suggestions included: creating incentives by making sustainability part of everyone’s performance indicators; setting up a separate innovation fund to incubate new ideas; and creating a cross-functional sustainability steering committee so that people throughout the organization gain a better understanding of how sustainability impacts them.

A second group focused on how to create a market for sustainability. The group reported that while the approach varies by sector, data is critical for aiding decision-making and inspiring innovation. Having access to quality data on cost and impacts helps companies focus on the most critical aspects of a product’s sustainability impact throughout the value chain, which they can communicate to consumers.

The final group focused on the trade-offs companies must consider when there are both positive and negative effects of any innovation. The group agreed that as long as the positives outweigh the negatives, the innovation is worth the investment, but data is critical to understand product impacts, as well as potential or unforeseen risks and opportunities. With the right data, the organization should focus on environmental and social hot spots to maximize positive impacts. Collaboration through cross-sector initiatives like the Sustainability Consortium can help make the data consistent, easier to collect, and more robust.

In summary, this session provided several practical recommendations for how companies can innovate in the way they integrate sustainability into their R&D processes. Given the complexity of the issue, companies should collaborate in order to collect relevant LCA data, set management performance indicators to obtain internal buy-in for sustainable product design, and be willing to take risks in order to recognize the commercial benefits of innovation.