Integrating environment for innovationExperiences from product development for paper and packaging

13th International Greening of Industry Network ConferenceINTEGRATION AND COMMUNICATION: A CLEAR ROUTE TO

SUSTAINABILITY, 2-5 July 2006, Cardiff

Paula Kivimaa

Research Programme for Environmental Policy Finnish Environment Institute (SYKE)

Contents of the presentation

Why environmental integration?

Research approach and data

Findings from product development in paper and packaging

How environmental integration relates to organisations and innovation

Why environmental integration?

Innovation processes, generating environmentally harmful and benign innovations, are affected by many different factors (e.g. Edquist, 2005; Malerba, 2005)

Public policies have only a limited impact on innovation, especially on the product side

• Thus, company activities are important

Environmental integration could be a potential tool for generating environmental innovations

Environmental integration in companies

Environmental integration in companies can be defined as:

• Incorporating the principles of corporate environmental responsibility, not only in environmental divisions, but in all the divisions and activities of the company

• E.g. product development

Related to whether principles are translated into action (coupling between principles and practice) or whether they are merely symbolic (decoupling between principles and practice)

Research approach and data Purpose:

• Identify different ways to integrate environmental issues in product development of P&P companies

• Explore the potential implications of this to coupling/decoupling and to innovation

Tetra Pak

Stora Enso

SCA

Recorded group discussions

A review of international trade journals

Thematic interviews of company R&D and environmental representatives

Content analysis of company

environmental reports from 2005

A framework for analysis

Five potential indicators of integrating environmental considerations into product development:

• Environmental criteria in product design and development

• The use of life-cycle assessments (LCAs)

• Participation of environmental experts in product development activities

• Environmental training of the personnel involved with product development

• The purposeful development of environmental product innovations

Results (1)

Life Cycle Assessments (LCAs)

• Commonly used for a long time

• SCA: in the hygiene products division, not so much in packaging and printing divisions

• SE: no formal routines, but a coordination team

• Tetra Pak used since 1975 as an integral part of product development

Environmental training

• In SE and UPM reports mentioned as part of corporate training programmes

• Not explicitly mentioned in interviews

Results (2)

Environmental criteria

• Tetra Pak and SCA: a stepwise system of product development, where environmental considerations as specific checkpoints

• SE: a context specific approach, no predetermined checkpoints

Environmental expertise

• Tetra Pak and SE: central experts

• Tetra Pak, and occasionally SE: an environmental expert participating in a development project

• SCA: an environmental committee but link to product development vague

Results (3)

Purposeful development of environmental innovations

• Environmental considerations are implicit in the development of new products in the studied paper and packaging companies

• More or less standard practice

• In recent years, environmental issues have not been a driving force for new product innovations in the studied companies

Different approaches for integrating environment into product development

Systematic procedures for environment in R&D projects

Case-specific consideration of environment in R&D projects

Central environmental

expertise used in R&D projects

Only project-specific R&D personnel used in R&D projects

Standardised approach

Procedural approach

Case-specific approach

Expertise-based

approach

Organisational principles and practice Discrepancy between company goals and institutional

requirements may lead to situations where principles (stated in public) do no match the practice

• E.g. difference between corporate environmental policies/strategies and actual practice of product development

Intentional decoupling between principles and practice can be termed as

• Concealment tactics (Oliver, 1991)

• Hypocrisy (Brunsson, 1993)

Decoupling may also result from a lack of capacity to conform (knowledge, time, resources)

Links between organisational principles and product development

Systematic procedures for environment in R&D projects

Case-specific consideration of environment in R&D projects

Central environmental

expertise used in R&D projects

Only project-specific R&D personnel used in R&D projects

Standardised approach

Procedural approach

Case-specific approach

Expertise-based

approach

Hypocrisy least likely

to appear

May suffer from lack of

people implementing

principles

Dependent on activities

of selected people

(human error)

Decoupling, or coupling

through bottom up

flow of ideas

Implications for environmental innovation

Case-specific Approach Standardised Approach

Flexibility from codified boundaries Explicit corporate boundaries for innovation

Improvements in one or selected few environmental features (e.g. energy use) more likely

Improvements regarding many environmental features (esp. if LCA used) more likely

Varying environmental quality between new products

A baseline for environmental quality of new products

Undetermined starting point for considering environmental issues

Environmental issues considered from start

Radical innovations enabled Incremental innovations more likely

Conclusions

Environmental considerations are becoming standard practice in product development of the studied companies

• But environmental issues rarely act as drivers for product innovations

Systematic procedures and central environmental expertise main means for integrating environment into product development

The appropriate strategy for integrating environmental considerations depends on the nature of the company, institutional requirements in place, and the aim of innovation activities

• Because innovation processes are complex and context-specific