The Journal of Sustainable Product Design · 2019. 2. 9. · Professor Ezio Manzini of Politecnico...

The Journal ofSustainable Product Design

ISSUE 6 : JULY 1998

ISSN 1367–6679

Re-THINK

Re-DESIGN

LEGO 1

LEGO 2

Li = 0Lq = 0Lf = 0Lt = 0

Re-PAIRRe-FINE

Re-THINK

Re-DESIGN

Re-PAIR

Re-FINERe-design will require looking at environmental issues in different ways through assembling new ideas and information

Recycled furniture designed by Meta Morf

Gallery, page 41

SS-BG30 Speakers made from ‘Tectan’,re-launched by Sony Wega Audio Group

Gallery, page 41

Baygen self-poweredlantern, designed by theBayGen Power Group

Gallery, page 41

5 EditorialMartin Charter, Joint Editor, The Journal of Sustainable Product Design

Analysis

7 Measuring product sustainabilityJoseph Fiksel, Jeff McDaniel and David Spitzley, Senior Director, Senior Consultant and Researcher, Battelle Memorial Institute, US

19 How important is environmental performance? A case study measuring the environmental preferences of ‘business to business’ consumersGraham Earl and Roland Clift, Research Engineer and Professor of Environmental Technology, Centre for Environmental Strategy, University of Surrey, UK

30 Design for Disassembly: a new element in product developmentDr Conrad Luttropp, Senior Research Associate, KTH Machine Design, Sweden

Gallery

41 Recycled furniture, Baygen self-powered lantern and SS-BG30 speakers

Analysis

42 Opportunities and constraints for product-oriented diagnosis toolsMarije Lafleur, René van Berkel and Jaap Kortman, IVAM Environmental Research, University of Amsterdam, the Netherlands

Interview

54 Professor Ezio ManziniMartin Charter, Joint Coordinator, The Centre for Sustainable Design, UK

Innovation

57 Sustainable ValueMartin Charter, Joint Coordinator, The Centre for Sustainable Design, UK

O2 news

60 Special feature: The Next Step event 98Martin Charter, Joint Coordinator, The Centre for Sustainable Design, UK

61 Reviews

63 Diary of events

© 1998 The Centre for Sustainable Design. All written material, unless otherwise stated, is the copyright of The Centre

for Sustainable Design, Surrey, UK. Views expressed in articles and letters

are those of the contributors, and not necessarily those of the publisher.

ISSN 1367–6679

The Journal ofSustainable Product Design

ISSUE 6 : JULY 1998

Editors

Martin Charter and Anne Chick, Joint Coordinators, The Centre for Sustainable, Design, UK

Articles, Interview, O2 News andJournal marketing: Martin Charter

Gallery, Reviews, Diary and Journal production: Anne Chick

The Journal of Sustainable Product Designencourages response from its readers to any of the issues raised in the journal. Entries for the Diary of events and materialto be considered for review should all besent to the Editors at the address below.

All articles published in the Analysissection are assessed by an externalpanel of business professionals,consultants and academics.

Subscription rates

The Journal of Sustainable Product Design is a quarterly journal appearing in themonths of April, July, October and Januaryeach year. Subscription rates for one year(four issues) are £90.00 (UK) and £100(non-UK) for the paper-based version, and£50.00 for the online version. Specialsubscription rates for developing countriesand students are available on application. Cheques should be made payable to TheSurrey Institute in £ sterling and sent to:

The Journal of Sustainable Product DesignThe Centre for Sustainable DesignFaculty of DesignThe Surrey Institute of Art & DesignFalkner RoadFarnhamSurrey GU9 7DSUKtel +44 (0)1252 892772fax +44 (0)1252 892747email: [email protected]: http://www.cfsd.org.uk

Editorial BoardAfricaGary OwenCEO, ResponseAbility Alliance (Zimbabwe)

AustralasiaProfessor Chris RyanDirector, Centre for Design, RoyalMelbourne Institute for Technology(Australia)

EuropeJacqueline Aloisi de LarderelDirector, Industry and Environment, UNEP(France)

Hans Peter BeckerManaging Director, Wilkhahn (UK) Ltd. (UK)

Professor Eric BillettWarden, Brunel University College (UK)

Professor Dr Michael Braungart Fachhochschule Nordostnierasachen(Germany)

Professor Han BrezetDirector, Section of Environmental ProductDevelopment, Faculty of Industrial DesignEngineering, Delft University of Technology(Netherlands)

Ian DumelowDean, Faculty of Design, Surrey Institute of Art & Design (UK)

Professor Dr Guenter FleischerDirector, Instit fuer TechnischenUmweltschutz, Technische UniversitatBerlin (Germany)

Peter JamesDirector, Sustainable Business Centre (UK)

Iris van de graaf de KeijserDirector, Kiva Product Ecology(Netherlands)

Professor Karl LidgrenDirector, The International Institute forIndustrial Environmental Economics, Lund University (Sweden)

Dorothy MacKenzieDirector, Dragon (UK)

Professor Ezio ManziniDirector, Facolta di Architettura, Unita di ricerca Progetto, Prodotto,Ambiente, Politecnico di Milano (Italy)

Dr Stefano MarzanoHead of Corporate Design, Philips International (Netherlands)

Dr Diana MontgomeryHead of Environment, AutomobileAssociation (UK)

Professor Jeremy MyersonContemporary Design, De Montfort University (UK)

Jonathan SmalesCEO, The Earth Centre (UK)

Sam TowleHead of Environmental Audit, The Body Shop International Plc (UK)

Dr Hans van WeenenDirector, UNEP Working Group on Sustainable Product Design,International Centre, University of Amsterdam (Netherlands)

Professor Jan-Olaf WillumsDirector, Foundation for Business andSustainable Development (Norway)

Dr Jonathan WilliamsDirector, Group for EnvironmentalManufacturing (UK)

USDr Brad AllenbyDirector, Environmental, Health & Safety, AT&T (US)

Professor Patricia DillonThe Gordon Institute, Tufts University (US)

Ralph Earle IIIDirector, The Alliance for EnvironmentalInnovation (US)

Professor John EhrenfeldDirector, Technology, Business andEnvironment Program, MassachusettsInstitute of Technology (US)

Dr Joseph FikselSenior Director, Strategic Environmental,Health & Safety Management, BattelleMemorial Institute (US)

James HartzfeldVice President, Interface ResearchCorporation (US)

Professor William McDonoughDean, Faculty of Architecture, University of Virginia (US)

Jacquelyn OttmanPresident, J Ottman Consulting Inc (US)

GENERAL INFORMATION

4 THE JOURNAL OF SUSTAINABLE PRODUCT DESIGN · JULY 1998

Factor 4 and beyond

The recent ‘Factor 4+’ confer-ence in Klagenfurt, Austria high-lighted that ‘Factor 4’ thinkingprovides a goal and focus fornew product and service devel-opment amidst huge uncertainty.However, the transition towardssuch solutions will not be easy.The path towards a product orservice that incorporates a 400%reduction in energy and materialconsumption throughout itslifecycle will require re-thinkingand new thinking through strate-gies such as miniaturisationand/or a shift from products toservices (de-materialisation).These approaches are often highlighted as routemaps forenvironmental sustainability,however, the practicalities areoften poorly thought throughand the impact on designers and those managing ‘end of life’issues is often ignored.

‘Factor 4+’ solutions will beenabled through a mix of behav-ioural change resulting frombetter stakeholder education,and innovative new technologiesand materials. Stakeholders willneed to ‘buy-in’ to the change.Examples, can be derived fromsustainable city projects wherepeople have managed the transi-tion from a dirty to a clean city

eg. Chattanooga, US. A majorsuccess factor was recognisingand involving all major stake-holders in envisioning a moresustainable city, giving people astake in their future! Researchinto green product developmentindicates that companies oftendo not involve external stake-holders in the process forcompetitive reasons and/orbecause of ‘not invented heresyndrome’. To move ‘Factor 4’forward will require smarter, less inclusive thinking, and newprocesses and systems.

Lifestyle shifts

This change will require lifestyleshifts, with significant increasesin customer awareness andunderstanding. As consumptionincreases due to populationgrowth, it will not be enough to focus solely on the materialsand energy efficiency in productdevelopment. There will need to be a move towards sufficiencyie. less consumption. This willrequire education, demandmanagement and potentiallyreduced choice, which mayinterfere with notions of free-dom and freewill. How theglobal society constructs a moreequitable consumption and

production system is the keyissue.

‘Since goods are finite, wants should be reduced to enhance happiness.’

Professor Dr Ryoichi Yamamoto,Institute of Industrial Science,University of Tokyo, Japan

‘Factor 4+’ conference inKlagenfurt, Austria.

Happiness (increased ‘quality of life’) =Goods

Wants or wishes

Role of designers

Designers should play a majorrole in ‘Factor 4+‘ process,however cultural and profes-sional awareness varies consider-ably across the world. TheNetherlands have consistentlystimulated eco-design through-out the nineties with centralgovernment funding. For exam-ple, in June 1998, Kaltalys waslaunched, a joint venturebetween TU Delft and TNO Delftfocusing on sustainable productinnovation. In Japan the focuson energy efficiency was notabandoned at the end of the ‘oilcrises’ in the seventies, butrather it has continued andextended to materials efficiency.This has resulted in a range ofeco-design solutions from

EDITORIAL

5JULY 1998 · THE JOURNAL OF SUSTAINABLE PRODUCT DESIGN

Welcome to the sixth issue of The Journal of Sustainable Product Design

Martin Chartern

Joint Editor, The Journal of Sustainable Product Design

Japanese companies includingSony, Canon and Fuji-Xerox.However, many countries andcompanies are still focusing on‘middle of pipe’ issues eg. wasteminimisation, cleaner productionand ‘end of pipe’ solutions e.g.air emission monitoring.

New tools

To enable eco-design will requirea recognition that ‘productdesign’ is not generic and newtools need to be developed. Forexample, in designing a laptopcomputer, there are a range ofdesigners involved, includingelectronic and mechanical engi-neers who are particularly inter-ested in science and numericaldata, as well industrial designerswho are interested in aestheticsand pictorial representations.There is also a major need toconceptualise the completeproduct development processfrom idea generation to launchto ‘end of life’ and to develop aportfolio of ‘green’ tools for therange of stakeholders involved inthe process. Many of the existingdesign tools have focused onenvironmental evaluation eg.LCA and have been costly andtime-consuming. There is a clearand growing need for simplertools eg. ‘cut down’ andsimplified LCA’s that enablequicker decision-making.

Innovation

A key opportunity is to use environmental and/or broader

sustainability thinking as aprovocative device at the ‘frontof pipe’. For example, Philipsapply this process through itsEcoDesign programme and haverecently launched a range ofgreen(er) products. Extracts fromits ’Green to gold’ leaflet high-light the companies approach:

Consumers throughout the world arelooking for innovative products while at the same time, reaching out for asustainable world… To integrate functionality and sustainability –balancing innovation with ecologicalimpact… We strive for intelligent products with sustainable design.Products with brains – that auto-matically switch on when you are homeand turn off when you are away.Products that will look great – thatyou’ll want to keep forever… We focuson five areas to enhance environmentalperformance: weight; hazardoussubstances; packaging; energy; andrecycling. These drivers led us to innovative options – options we imple-ment because they provide added valuefor our customers… We believe thatsustainable products are the productsthat will measure up in the future.

…and finally

The sixth issue of the Journal ofSustainable Product Design high-lights the importance of the needfor change: new tools, perspec-tives and frameworks. Fiksel,McDaniel and Spitzley of BatelleMemorial Institute (US) focus onthe issue of measuring sustain-able product performance, incorporating the need to

explore social, as well aseconomic, environmental andconsiderations. Earl and Cliftfrom the University of Surrey(UK) outline the results of aresearch project amongstpurchasing managers which high-lights obstacles to buying ‘green’products, particularly printersincorporating recycled plasticand reusable ink jet cartridges.Luttropp from ETH MachineDesign (Sweden) illustrates theneed to ‘factor in ‘ recycling anddisassembly considerations earlyin the product developmentcycle. Lafleur, van Berkel andKortman of IVAM EnvironmentalResearch (Netherlands) outlinean eco-design tool aimed at link-ing environmental evaluation toenvironmental improvement,using an example of a lightingsystem. In the Innovationsection, the Editor considers how SPDD relates to the processof the delivery of the product orservice, as well as the final resultand the need to increase theimbedded Sustainable Value offinal results. The interview withProfessor Ezio Manzini ofPolitecnico di Milan (Italy) high-lights opportunities resultingfrom moving towards a moresystemic view of SPDD, and theneed to evolve a situation wherethe customer takes a share of theproduct’s eco-impact, alongsidethe producer. Lastly, the O2 pagehighlights papers from 02’s tenthanniversary conference. •

EDITORIAL



ANALYSIS

Is our product or service sustain-able? Many industrial firms areposing this question as they beginto embrace the long-term goal ofsustainable development. Whileoperational definitions of sustain-ability provide general guidance,the actual evaluation of sustain-ability for a specific product orservice has proven challenging. The authors review current practices of leading companies,and then propose a SustainabilityPerformance Measurement framework that embodies threeprinciples – separation of resourceand value measures, explicit representation of the ‘triple bottomline’, and consideration of the fulllife cycle.

Introduction

Sustainability is a compellingconcept – who can resist theargument that all products ofcommerce should contribute topreserving the quality of thesocietal and ecological environ-ment for future generations?However, putting this conceptinto practice has baffled some ofthe best minds in leading globalcorporations. How does onedistinguish a ‘sustainable’ prod-uct from one that is not? Thisquestion poses new challenges

for the design community,extending far beyond the traditional scope of productdevelopment. Some of thedifficulties that arise are the:

· lack of consensus on a pragmatic definition of sustainability

· breadth of scope of sustain-ability issues, many of whichare beyond the firm’s control

· potentially large amounts of information required to evaluate product sustainability

· difficulty in quantifying the societal and ethical aspects of sustainability.

Perhaps one of the most formi-dable difficulties is the challengeof business integration. Tosuccessfully develop sustainableproducts, a company must learnhow to effectively integratesustainability concepts into itsproduct development process.Sustainable product designcannot be practiced in isolation;rather it must be one facet in amulti-faceted approach thatconsiders cost, ease of use, functional performance, manufacturability, and other keyproduct requirements.

However, trying to achieve thistype of integration raises bothorganisational and technical

Dr Joseph Fiksel is Senior Director ofBattelle’s Life Cycle Management

(LCM) group, with a 20-year manage-ment consulting career. Dr Fiksel is an

active member of the IEEE TechnicalAdvisory Board on Environmental Healthand Safety, and numerous other profes-sional organisations. He holds a BSc in

Electrical Engineering from MIT and aPhD from Stanford University inOperations Research. He is the

principal author and editor of Design for Environment: Creating Eco-Efficient

Products and Processes.

Jeff McDaniel is a Senior Consultant inthe LCM group of Battelle Memorial

Institute (BMI). Upon graduation fromTexas A&M University with a BS in

chemical engineering, he joined GeneralElectric. Jeff then completed the

Corporate Environmental ManagementProgramme at the University of Michigan

where he obtained a MBA and MS inEnvironmental Studies. Since joining

BMI, he has helped firms develop green accounting and performance

measurement programmes.

David Spitzley joined the LCM group atBMI as a researcher in January 1998.

Previously, he worked as a researchassistant and project leader in the areas

of life cycle design and LCA. at theUniversity of Michigan’s National

Pollution Prevention Center (NPPC)where he also obtained a BS degree in

chemical engineering.

Measuring productsustainability

Joseph Fiksel, Jeff McDaniel and David Spitzleyn

Senior Director, Senior Consultant and Researcher, Battelle Memorial Institute, US


ANALYSIS

issues. Organisational issuesinclude the establishment ofappropriate company policiesand incentives, modification of existing business processes,capture and dissemination ofsustainable design knowledge viatraining and information tech-nology, and achievement ofconsistent practices acrossdiverse business units. Technicalissues include the implementa-tion of various design strategies– eg. modifying the materialcomposition of products so thatthey generate less pollution andwaste, or changing the assemblyrequirements so that fewermaterial and energy resourcesare consumed per product unit –as well as systematic adoption of sustainable design guidelines,metrics, and tools.

These organisational and techni-cal issues are equally important,and must be addressed from thestrategic, tactical and operationalperspectives, as suggested inTable 1. In reviewing this scope,one fact becomes clear: a funda-mental element of any successfulprogramme is the establishmentof measurable goals and perfor-mance indicators. Without aconcrete basis for measuringsuccess, policy statements areineffectual, accountabilities areambiguous, and design evaluation

remains subjective and imprecise.Therefore, this paper focusesupon the emerging field ofsustainability performancemeasurement.

While a number of performanceindicators have recently beendeveloped to measure eco-efficiency, little work has beendone on less tangible aspects ofsustainability; namely, measuringthe socio-economic impacts ofproducts. Most organisations thathave published sustainabilityindicators have focused uponmacro-environmental featuresfor a community or a society as a whole. In contrast, productdevelopers need more focusedindicators that address thebeneficial or adverse impactsassociated with particular designinnovations.

To address that need, this articlefirst characterises the currentstate of the art with respect tosustainability performancemeasurement, and then presentsa conceptual framework that willsupport systematic developmentof performance indicators forvirtually any type of product.Although sustainability as a business practice is still at anembryonic stage, a viableapproach toward measuringsustainability can be forged by

building on the general princi-ples of performance measure-ment and on the lessons learnedby companies during the pastdecade in establishing environ-mental performance evaluationsystems.

Review of sustainabilitymeasurement practices

‘Meeting the needs of the present with-out compromising the ability of futuregenerations to meet their own needs.’ –Brundtland Commission, 1987.

The original definition of sustain-able development, provided bythe Brundtland commission,proved to be too ambiguous toallow organisations interested inpursuing sustainability to estab-lish meaningful goals andmetrics. Therefore, severalgroups have revised thisdefinition to include three keyaspects of business performance– economic, environmental andsocietal.

Efforts to evaluate each aspect of this ‘triple bottom line’ ofsustainability have progressedsomewhat independently, andhave reached different levels of sophistication. As shown inFigure 1, corporate reportingpractices for these three aspectshave evolved over vastly

Strategic Tactical Operational

Organisational Company policy Reward systems Performance and commitment and accountability indicators and targets

Technical Next-generation Key design concepts Design evaluation andR&D strategy and features improvement tools

Table 1: Scope of sustainable product design issues


ANALYSIS

different time frames. Corporatefinancial reporting has beenproviding information oneconomic performance since thebeginning of the 20th century,while corporate environmentalreporting has been practiced forless than a decade. Corporatesocial reporting was firstattempted in the 1970s, and hasrecently been revived. Corporatesustainability reporting, whichcombines elements of all threeaspects, has been attempted onlyin the last few years, and is stillin an exploratory phase. Thesections that follow discuss thecurrent ‘state of the art’ in each of the three aspects ofsustainability performancemeasurement.

Economic performance evaluation

Economic performance evaluation has been practiced for almost a century, although, it is perhaps better known asfinancial reporting. Standards forexternally reporting financialresults are highly developed, anda variety of rigorous guidelinesand standards exist for thesefinancial indicators. In contrastto this high level of standardisa-tion for external financialaccounting, firms can choosefrom a wide variety of manager-ial accounting practices tosupport internal decisions. Overthe last 20 years, the introduc-tion of new accounting methodssuch as activity-based accountingand economic value added (EVA)accounting has helped to revealthe underlying drivers ofeconomic performance andshareholder value (Blumberg,1997).

To address the full scope ofsustainability, economic perfor-mance evaluation must evolvebeyond traditional techniquesbased solely on profitability andcash flow. Specific issues include(Epstein, 1996):

· quantification of hidden costs associated with the utilisationof material, energy, capital, and human resources

· estimation of uncertain future costs associated with externalimpacts of industrial produc-tion and consumption

· understanding the costs and benefits incurred by variousstakeholders (customers,employees, communities,interest groups, etc.) across the life cycle of a product orprocess.

A host of new research into lifecycle accounting, environmentalaccounting, and full costaccounting has introduced newtechniques that serve to high-light costs and benefits that arenot explicitly addressed withconventional approaches. One ofthe leading practitioners of these

new approaches is ChryslerCorporation. In designing severalnew automotive components,Chrysler considered the direct,potentially hidden and contin-gent costs associated with eachdesign option. Direct and poten-tially hidden costs were evalu-ated with activity-based costingmethods, and contingent costswere estimated with proprietaryrisk factors developed byChrysler.

As an example, when Chryslerdeveloped an oil filter for a newline of vehicles, they estimatedthe direct material costs, someof the potentially hidden manu-facturing expenses, and possibleliabilities associated with wastedisposal (Armstrong and White,1997). This evaluation revealedthat the design option with thelowest direct costs (materials andproduction labour) did not havethe lowest overall life cycle costbecause the hidden and liabilitycosts were greater than thedirect costs. Chrysler’s experi-ence illustrates how these newlife cycle accounting methodscan help design teams to assess

Financial

1900 1920 1940 1960 1980 1998

Environmental

Social

Sustainability

Figure 1: Comparative time frames of triple bottom line reporting


ANALYSIS

product sustainability ineconomic terms.

Environmental performanceevaluation

As shown in Figure 1, corporateenvironmental performancereporting has been practiced forat least the past decade. Recentresearch has demonstrated aplausible connection betweenimproved environmental perfor-mance and increased shareholdervalue (Feldman, Soyka andAmeer, 1997), and a growingnumber of corporations havebegun to voluntarily report theirproduct and company environ-mental performance (Blumberg,1997). These reporting efforts, inturn, have led to an increaseddemand for standard environ-mental reporting criteria, similarto those for financial reporting.For example, in 1992 the PublicEnvironmental ReportingInitiative (PERI), a consortium of global firms, developed aninfluential set of guidelines forenvironmental reporting. The

types of performance indicatorstypically presented in conven-tional environmental reportsinclude wastes and emissions,employee lost-time injuries,notices of violation, spills andreleases, etc.

With the introduction of the ISO14000 series of standards, aninternational consensus wasdeveloped on the elements of anEnvironmental PerformanceEvaluation process, documentedin ISO 14031 (Fiksel, 1997). Aneven more recent standardisationinitiative is the Global ReportingInitiative (GRI). Launched by theCoalition for EnvironmentallyResponsible Economies (CERES)in the fall of 1997, the objectiveof the GRI is to standardise themethodology and format ofcorporate environmental andsustainability reports, and GRIhopes to propose standard indi-cators by the year 2000 (BATE,1998). Although the standardisa-tion debate continues, one indi-cator of environmental perfor-mance has been used by over

twenty companies to measureenvironmental/economic rela-tionships – eco-efficiency.

Eco-efficiency is generallydefined as a measure of environ-mental performance relative toeconomic input or output, andhas been implemented in a vari-ety of ways, as illustrated inTable 2. There are currentlyseveral initiatives seeking tostandardise eco-efficiencymeasurement; for example,Canada’s National Round Tableon the Environment andEconomy (NRTEE) has enlisted a number of firms in a pilot testof material and energy intensityindicators (NRTEE, 1997). Sucheco-efficiency indicators,whether intended for enterprise-level goal setting or for productdesign, will be essential components of any quantitativeevaluation of sustainability.

Societal performance evaluation

In the 1970s, many organisationsbegan developing standards for

Company Current eco-efficiency practice

Novo Nordisk Novo Nordisk has implemented an eco-efÞciency indicator that is calculated as the ratio of indexed turnover in constant prices to indexed resource consumption (NRTEE, 1997).

Northern Telecom Nortel has developed a composite Environmental Performance Indicator (EPI) that is (Nortel) annually tracked and reported relative to baseline 1993 performance (NRTEE, 1997).

Sony Europe Sony is utilising an EPI for batteries that is calculated as economic value added over the product life time divided by the sum of the non-recyclable material consumption and the production energy use (Lehni, 1998).

Dow Chemical Dow utilises a unique EPI in their product environmental assessments Ð the Eco-Compass. This structure includes evaluations of mass intensity, risk potential, energy intensity, reuse, resource conservation, and extent of service. Each of these compass directions is evaluated using product life cycle analysis data and the results are intended for use in design decision making (Lehni, 1998) (James, 1997).

Table 2: The use of eco-efÞciency indicators


ANALYSIS

corporate social accounting(Epstein, 1996). While interest in social evaluation faded in the1980’s, efforts to measure andreport social performance haveresurfaced in the last few years.This change is due partially tothe need for societal indicatorsin the evaluation of sustainabil-ity, and partially to the increasedmedia interest in the socialimpacts of corporate operations.Companies such as Nike andShell have discovered that stake-holder concerns about manage-ment policies and practices canrapidly generate adverse public-ity, damage brand image, andalienate customers.

One company that has pursuedsocial reporting aggressively isThe Body Shop. The UK-basedhair and skin care product manu-facturer and retailer released itsfirst Social Report in 1995. In thisand in the 1997 Values Report (acombined social-ecologicalperformance report), The BodyShop presents performanceresults on over 200 stated targetsgrouped into nine stakeholdercategories. Although impressivein scope, The Body Shop’sperformance results are generallyderived from surveys and resultsare presented as percentages ofstakeholder responses. This typeof information is no doubtuseful in policy setting and internal performance tracking;however, it does not directlyaddress the issue of sustainabil-ity. British Petroleum (BP) hasattempted to evaluate its socialperformance in a slightly differ-ent manner. BP’s 1997 SocialReport provides case studies insocial impact assessment. Despite

being generally non-quantitative,BP’s report acknowledges that animportant aspect of their socialperformance is creating value inthe communities where theyoperate. As companies advancetoward more sophisticatedsustainability performancemeasurement, the value createdby products and operations willbecome increasingly important.

With the emergence of effortslike those of BP and the BodyShop, there is an increased needfor social performance evalua-tion methodologies and tools.Responding to this need, theCouncil on Economic Priorities(CEP) has proposed SA 8000, asocial accountability standarddesigned to follow in the path ofother ‘quality’ standards. CEPhopes that like ISO 9000 andISO 14000, SA 8000 will becomethe de facto standard for evaluat-ing the quality of a company’ssocial performance. Although SA8000 makes significant advancesin standardising the evaluation ofcorporate commitment tohuman rights issues, such asworker safety and equality, theissues covered by the standardinclude only a limited subset of the issues implied by sustain-ability (Ranganathan, 1998).

Recognising that existingapproaches do not address thefull scope of sustainabilityconcerns, a coalition hasrecently formed to developappropriate societal performancemeasures. The group, led byShell, plans to develop indicatorsthat enable a firm to evaluate itssocietal impact. Although theeffort will be specific to Shell,the results are likely to have

implications for sustainabilityevaluation in other organisationsas well.

Sustainability performancemeasurement (SPM)

As standards and acceptedmethodologies have evolved ineconomic, environmental andsocietal performance evaluation,a few companies have begun topublish integrated sustainabilityreports. In 1997, Interface, a UScarpet manufacturer, publishedwhat is believed to be the firstsustainability report. This earlyreporting effort demonstratesthat Interface is committed tosustainable development and hastaken initial steps to identifypotential sustainability indica-tors. However, this initial reportdoes not clearly indicate aframework which will be utilisedin future performance measure-ment and progress evaluation.

Monsanto, the newly emergedlife-sciences company, has alsopublished a sustainability report.The Monsanto report provides an initial framework for productsustainability evaluation.However, Monsanto admits thatthis framework has yet to beimplemented.

The lack of quantified perfor-mance indicators in the Interfaceand Monsanto sustainabilityreports is not surprising, SPM isstill in its infancy and thesecompanies are attempting toexpand the boundaries of available methodologies. Theseearly attempts at integratedsustainability measurement high-light the need for a frameworkthat facilitates meaningful indi-cator development.


ANALYSIS

The Sustainable Business Centrein the UK has developed a prod-uct design tool to address theneed for sustainability measure-ment – the ‘Sustainability Circle’(James, 1997). The circle is agraphical representation of prod-uct performance based on theresults of 16 indicators. Theseindicators are grouped into categories which encompass the‘triple bottom line’ perspective.The Sustainable Business Centreuses five categories to evaluateproduct sustainability, they are:physical environmental impacts,product attributes, socialimpacts, transport, and customervalue. Indicator scores areprovided to the decision-makerby shading the appropriatesection of the circle a specificcolour.

For example, if the design teamdetermines that the product hasexcessive energy use, the corre-sponding section of the circlewould be red. If the product hasa major sustainability advantage,such as elimination of hazardouswaste, another section of thecircle would be shaded darkgreen. This process continuesuntil each section of the circlehas been assigned a colour, thusproviding decision-makers withan easy to grasp visual display of the ‘trade offs’. This type ofgraphical representation isuniversally understandable, andleaves it up to the product development team to determinewhat specific performance indicators would be most meaningful within each categoryof sustainability.

Influencing the productdevelopment process

As described above, a number ofpioneering companies are adopt-ing sustainability goals andbeginning to introduce sustain-ability considerations into theproduct development process.Influencing this process is essen-tial if a company is to achieve‘step changes’ in performance, as opposed to incrementalimprovements. A first steptoward sustainable productdevelopment is practicing eco-design, or ‘Design forEnvironment’ (DfE), which maybe defined as systematic consid-eration of design performancewith respect to environmental,health and safety (EH&S) objec-tives over the full product lifecycle (Fiksel, 1996). Thisdefinition encompasses not onlyenvironmental protection issuesbut also traditional health andsafety concerns that may beimportant considerations inproduct design. Indeed, manypractitioners of eco-design findit a useful ‘umbrella’ conceptthat integrates a variety ofrelated disciplines, includingenvironmental risk management,product safety, occupationalhealth and safety, pollutionprevention, resource conserva-tion, accident prevention andwaste management.

The boundaries associated witheco-design are broader thanthose in the usual definition of a ‘product system.’ Rather thanmerely considering how theproduct interacts with its physi-cal environment, it considers theentire supply chain – upstream

processes that produce thecomponents, raw materials andenergy to fabricate the product,as well as downstream processesinvolved in its distribution, useand disposal. DfE also addresseshow by-products might bebeneficially used and how wasteproducts may affect humans orthe environment. A keyapproach in eco-design is thepursuit of eco-efficiency,enabling simultaneous improve-ments in resource productivity(which contributes to profitabil-ity), and environmental conser-vation (which contributes tosustainability). In other words,by eliminating waste and usingresources more wisely, eco-efficient companies can reducecosts and become more compet-itive. However, the scope ofsustainable product design mustmove beyond efficiency to alsoconsider the societal aspect ofthe ‘triple bottom line’, includ-ing issues such as ‘quality of life’and social equity.

The need for integration

For sustainable design to beadopted in a meaningful way, itmust be fully integrated into theproduct development process.This requires an understandingof the primary product designdrivers, including reduction inproduct development cycle time,continuous improvement inproduct quality, and responsive-ness to the ‘voice of thecustomer.’ As an example,certain sustainability characteris-tics – eg. durability, modularity,waste elimination – are naturallysynergistic with cost of owner-ship, which is an increasingly


ANALYSIS

important customer criterion.However, to capture these typesof synergies, a design organisa-tion must incorporate sustain-ability awareness systematicallyinto the daily work of develop-ment teams. This is a logicalextension of the modern practice of Integrated ProductDevelopment (IPD), wherebycross-functional teams begin atthe conceptual design stage toconsider life cycle issues includ-ing quality, manufacturability,reliability, maintainability, environment and safety. Manycompanies use a ‘stage gate’process, requiring that a productsatisfy a variety of performancecriteria before passing on to thenext stage of development.Clearly, sustainability considera-tions need to be woven into this‘stage gate’ process and the associated criteria.

The eco-design tools that arebeing used today tend to berelatively simple, ranging fromrudimentary ‘advisory’ systemsthat provide on-line design guid-ance to performance trackingtools that represent multi-dimensional indicators. Anumber of companies havedeveloped internal systems,although they are seldom fullyintegrated into the designautomation environment. Forexample, a ‘Green Index’ soft-ware tool was developed byAT&T to assess a product’s over-all environmental performance.Hughes Aircraft has implementeda similar system called the‘Green Notes EnvironmentalRating and MeasurementSystem’, which is used to auto-matically provide ratings as

designers develop their productand process specifications. A fewcompanies are using streamlinedlife cycle assessment (LCA) toolsto provide somewhat morerigorous product evaluations.

In today’s exploratory phase,simple tools are preferable tohelp the rapid establishment ofsustainable product design withminimal disruption to existingbusiness processes. Eventually,new types of information tech-nology, such as ‘intelligent assis-tant’ design tools, will facilitatethe transformation from tradi-tional ways of doing business toa more integrated approach.Once sustainability principlesbecome embedded into decisionsupport software tools, they willbecome more accessible to thevast majority of companies thatare extremely busy meeting theneeds of their stakeholders anddo not have the time orresources for developing newprocesses and systems. Thesecompanies will be primarilyinterested in practical applica-tions of sustainable productdesign, to the extent that itcontributes to their success in the marketplace.

Creating a measurementframework

An essential element in the prac-tice of sustainable productdesign is the capability to evalu-ate and predict product perfor-mance in objective, measurableterms. In this context, one of thekey challenges is to incorporatea life cycle view of sustainabilityperformance into measurementtools that can be easily imple-

mented. The remainder of thisarticle suggests how decision-makers can design and imple-ment a SustainabilityPerformance Measurement (SPM)framework for their products,processes, or services. Thisframework is built upon thefollowing three principles:

Resource and value

A sustainable product shouldminimise resource consumptionwhile maximising value creationin the ‘triple bottom line’ sense.Here, resources are definedbroadly to be natural or anthro-pogenic stocks that are requiredfor the creation, use and disposi-tion of a product. Examples ofresources include materials,energy, labour, and land. Value isdefined as a condition, attribut-able to a product, that benefitsone or more of the enterprise’sstakeholders. Examples of valuecreation include increasedprofitability, reduced pollution,improved nutrition, and libera-tion of time.

The first principle of sustain-ability measurement is that evaluations must address the dual perspectives of resourceconsumption and value creation.

Three aspects

Effective sustainability measure-ment should consider thecomplete ‘triple bottom line’ as it relates to the product inquestion. This means that bothresource consumption and valuecreation should be considered interms of economic, environmen-tal, and societal aspects. Forexample, an automobileconsumes economic resources in terms of operation and main-


ANALYSIS

tenance costs, environmentalresources in terms of fossil fuel,and societal resources in termsof personal time spent driving.

Most product indicator frame-works focus exclusively oneconomic or environmentalperformance, and very fewaddress societal concerns (James,1997). Based on the resurgence ofattention to companies’ societal performance, we anticipate an increased focus on the societal impacts of products and services.

The second principle of sustainability measurement isthat evaluations must includeeconomic, environmental, andsocietal aspects.

Life cycle

Finally, resource consumptionand value creation, in terms ofall three aspects, take placethroughout the life cycle, includ-ing the supply, manufacturing,use and disposal of a product. An evaluation that focuses exclusively on one life cyclestage (eg. manufacturing) mayfail to capture significant productbenefits or impacts that occur ineither upstream or downstream

stages (Fiksel, 1996). Referringagain to the automobile exam-ple, it is only recently thatdesigners have begun to considerthe ‘end of life’ stage, and thepotential impacts of disassembly,recycling, recovery, refurbish-ment and re-use.

The third principle of sustain-ability measurement is that evaluations must systematicallyconsider each stage in the product life cycle.

Holistic framework

These three principles can beintegrated visually to create theframework depicted in Figure 2.The sustainability of a productcan be evaluated by consideringthe economic, environmentaland societal aspects of resourceconsumption and value creationthroughout its life cycle. (InFigure 2 the halves of the circlesrepresent resource consumptionand value creation.)

This framework can be used tographically depict the results ofperformance analyses. For exam-ple, once performance indicatorshave been evaluated (as discussedin the following section), specifichalf circles could be filled in

Environmental

Economic

Societal

Supply Manufacturing Use Distribution

Figure 2: Sustainability Performance Measurement (SPM) framework

An evaluationthat focuses

exclusively onone life cycle

stage may fail to capture

signiÞcantproduct

beneÞts orimpacts that

occur in eitherupstream ordownstream

stages


ANALYSIS

with a pre-determined colour or incrementally darkened toconvey relative product performance. This would create a visually appealing, readilyunderstandable representation of results.

Performance indicators and metrics

Once a SPM framework has been established, design teams canproceed to select appropriateperformance indicators andaccompanying metrics that bestrepresent the contributions oftheir product to sustainability. A recommended approach toselecting indicators and metricsis discussed briefly below.

Basic concepts

A performance indicator is aspecific, measurable productattribute that characterises itscontribution to some aspect ofsustainability (Fiksel, 1997).Performance indicators can begrouped into two categories:lagging and leading. Commonlyused lagging indicators, alsoknown as ‘result’ indicators,

include air emissions released,environmental costs incurred,and customer benefits provided.These indicators can only bevalidated in a retrospective fashion once the product hasbeen released. In contrast, leading indicators, also known as ‘process’ indicators, measureinternal practices or efforts thatare expected to improve perfor-mance; eg. employee training orquality control. Thus, thepurpose of process indicators isnot to measure results but ratherto encourage a focus on productor service performance drivers.

Each selected performance indi-cator must be associated with atleast one metric that defines aspecific means of tracking andreporting that indicator. Metricsshould ideally be verifiable,objective, and meaningful todecision-makers and stakehold-ers. A variety of metrics can bechosen for most indicators; eg.potential metrics for solid wastegeneration include annualvolume (tons/yr.), annualimprovement (% weight reduc-tion), cost ($/yr.), or quantityavoided (tons recycled/yr.). Two

broad categories of metrics exist:the first is quantitative metricsthat rely upon empirical data andcharacterise performance numer-ically, eg. dollars of revenue ($).The second category is qualita-tive metrics that rely uponsemantic distinctions based onobservation and judgment. Forexample, to track a product’ssocietal performance, a companycould survey its stakeholders todetermine how its performancewas perceived. An illustration ofthe above indicator and metriccategories is provided in Table 3.

Selecting indicators andmetrics

The SPM framework, shown inFigure 2, can provide a startingpoint for designers when select-ing the most appropriate set ofperformance indicators andmetrics. One approach would beto qualitatively characterise eachaspect of the product’s perfor-mance (as done in the sustain-ability circle discussed earlier) as1) an area of concern, 2) an areawithout significant weakness orstrength, or 3) one of possiblesustainability advantage. Underthis approach, the design team

Table 3: Examples of indicators and metrics

Sustainability training(number of employees trained)

Sustainability training(employees evaluation

of training courses)

Product eco-efficiency(lbs. product/total lbs. input)

Product eco-efficiency(stakeholder satisfaction

or number of awards)

Leadingindicator

Laggingindicator

Quantitativemetric

Qualitativemetric

note: lbs = pounds (weight)


ANALYSIS

Societal Employee injuries Public health risk(number/year) (qualitative)

Environmental Material Toxic Genetic transferenceintensity emmissions risk (qualitative)(lbs/year) (lbs/year) Pesticide use

(gal/bushel)Fuel consumption(gal/bushel)

Economic Economic Farmer productivity Food costsvalue added (bushels/year) ($/bushel)

Supply Manufacturing Use Distribution

Figure 3: Sustainability indicators for a biotech agricultural product

Economic Environmental Societal

Direct Material consumption Quality of lifeá Raw material cost á Product & packaging mass á Breadth of product availabilityá Labour cost á Useful product lifetime á Knowledge or skill á Capital cost á Hazardous materials used enhancement

Potentially hidden Energy consumption Peace of mindá Recycling revenue á Life cycle energy á Perceived riská Product disposition cost á Power use during operation á Complaints

Contingent Local impacts Illness & disease reductioná Employee injury cost á Product recyclability á Illnesses avoidedá Customer warranty cost á Impact upon local streams á Mortality reduction

Relationship Regional impacts Accident & injury reductioná Loss of goodwill due á Smog creation á Lost time injuries

to customer concerns á Acid rain precursors á Reportable releasesá Business interruption due á Biodiversity reduction á Number of incidents

to stakeholder interventions

Externalities Global impacts Health & wellnessá Ecosystem productivity loss á CO2 emissions á Nutritional value providedá Resource depletion á Ozone depletion á Food costs

Table 4: Illustrative categories of sustainable product indicators

note: gal = gallonlbs = pounds (weight)


would assess subjectively howtheir product will create valueand consume resources throughout its life cycle. Such a qualitative assessment can beconducted through a workshopsession involving an expert team,and the results can be displayedvisually using the frameworkpresented earlier. The obvious advantage of thisapproach is its relative simplicitycompared to the data-intensivesteps required to quantify theentire life cycle performance.

A more rigorous and demandingapproach would focus on thecritical aspects of productperformance and devise eitherleading or lagging indicators thatcould be quantitatively evaluated.In this case, the primary benefitof the framework is helpingensure that all relevant aspectsare addressed. Table 4 illustratesa number of different categoriesof sustainability peformanceindicators that could potentiallybe quantified. Generally, practi-tioners are advised to select asfew indicators as necessary toaddress the most importantaspects of product performance.Efforts to track numerous indica-tors (more than 12) have oftenproven burdensome and haveeventually been scaled back.

In many cases, practical limita-tions of data, resources ormethodology may hinder theability of a development team to evaluate indicators over thefull life cycle. In other cases,companies may wish to excludecertain life cycle stages fromconsideration because they arenot relevant to business deci-

sion-making. Therefore, theintended scope and rationale for indicators should always beclarified. For example, ratherthan speaking of ‘energy usereduction’ we should specify‘reduction in energy use duringmanufacturing and distribution’or ‘reduction in power consump-tion during product end use’.

Finally, a mixed approach usesquantitative indicators when themeasurement data can beobtained cost effectively, andthen relies upon qualitative indi-cators for the other criticalaspects of sustainability. Theapplication of this approach isshown in the following example.

A biotechnology example

Life science companies arecurrently developing a host ofbiotechnology-based productsthat they claim will enable ashift to sustainable agriculture.One class of these new agricul-tural products is pest-resistantcrops; biotechnology enables theinsertion of genetic material intothe crops that can help deter avariety of harmful pests.Proponents claim that this tech-nology will increase agriculturalproductivity and lower consumercosts, while opponents areconcerned about possible healthand environmental impacts. Thethree measurement principlesproposed earlier can help internal and external decision-makers compare the sustain-ability of these biotechnology-based product systems toalternatives.

· How do these ‘product systems’ create value andconsume resources?

· How will customers or stakeholders be affectedeconomically, environmentally,and socially?

· What are the most significant impacts across the full lifecycle of these ‘productsystems?’

In comparison to a conventionalcrop, biotechnology-based products create value by reduc-ing pesticide use during cropproduction, with correspondingreductions in toxic emissionsduring pesticide manufacture.Similarly, both the raw materialsrequired to produce the pesti-cides and fuel required to applythem are reduced. These indica-tors and several others that werederived using the afore-mentioned sustainabilitymeasurement principles areprovided in Figure 3.

Conclusion

This paper has set forth a generalframework for sustainabilityperformance measurement andillustrated how it can be applied.The framework provides acomprehensive organisingscheme for reviewing the manydifferent ways that a ‘productsystem’ can have adverse orbeneficial impacts upon the‘triple bottom line’. The frame-work embodies three principles– separation of resource andvalue measures, explicit repre-sentation of the ‘triple bottomline’, and consideration of thefull life cycle.

Already, many companies havebegun to incorporate sustain-ability measurement into their


product development and perfor-mance evaluation processes, and we believe that the use of an organising framework willhelp to ensure consistency andthoroughness in the practice of sustainability measurement.Looking ahead, we anticipatethat a number of trends willemerge:

· those companies that have committed in principle tosustainable development willbegin developing practical waysof assessing the sustainabilityof specific products andservices.

· in pursuing sustainability performance measurement,these companies will developor adopt frameworks such asthe one presented here toensure that they address thefull spectrum of relevantimpacts or benefits.

· the implementation of product sustainability indicators willrequire some ‘short cuts’ suchas relying upon qualitativeinstead of quantitative metrics.Many companies will choose totrack and report leading indica-tors that are likely tocontribute to sustainability.

The practices for measuringproduct sustainability willcontinue to evolve rapidly duringthe next several years. By under-standing the principles ofsustainability performancemeasurement, practitioners candesign a process that is bestsuited to the needs of theirorganisation. •

Armstrong, Laura A., and Wendy S.White, ÔCase Study: ChryslerCorporation Life Cycle ManagementComparison of Three Engine OilFilters,Õ International BusinessCommunications EnvironmentalCost Accounting, ConferenceProceedings, Washington, DC,(November 17-19, 1997).

Blumberg, Jerald; Korsvold, Age;Blum, George; ÔEnvironmentalPerformance and ShareholderValue,Õ World Business Council forSustainable Development, (1997).

Business and the Environment(BATE), ÔFocus Report: CorporateEnvironmental Reporting MovesAhead,Õ Cutter Information Corp.,(May 1998), pg. 2.

Epstein, M. J., MeasuringCorporate EnvironmentalPerformance: Best Practices forCosting and Managing an EffectiveEnvironmental Strategy, Institute ofManagement Accountants, Irwin,Chicago, IL, (1996).

Feldman, S.J., Soyka, P.A., andAmeer, P., ÔDoes Improving a FirmÕsEnvironmental ManagementSystem and EnvironmentalPerformance Result in a HigherStock PriceÕ, Journal of Investing,(January 1997).

Fiksel, J., Design for Environment,Creating Eco-EfÞcient Products andProcesses, McGraw-Hill, NY (1996).

Fiksel, J., ÔPractical Issues inEnvironmental PerformanceEvaluationÓ, in Tibor, T. and I.Feldman, Implementing ISO 14001,Irwin, (1997).

James, Peter, ÔThe SustainabilityCycle: A New Tool for ProductDevelopment and Design,Õ Journalfor Sustainable Product Design,Issue 2, (July 1997).

Lehni, Markus, ÔWBCSD Project onEco-efÞciency Metrics andReporting: State-of-Play Report,ÕWorld Business Council forSustainable Development,(February 1998).

National Round Table on theEnvironment and the Economy(NRTEE), ÔMeasuring Eco-efÞciencyin Business,Õ (1997).

Ranganathan, Janet, ÔSustainabilityRulers: Measuring CorporateEnvironmental & SocialPerformance,Õ World ResourcesInstitute Ð Sustainable EnterpriseInitiative, (May 1998).

References

Increasing awareness of environ-mental performance, especiallyamongst customers, has not gone unnoticed by designers ofelectrical and electronic products.Unsurprisingly this has resulted inenvironmental performance becom-ing increasingly emphasised inmarketing such products. Despite a wealth of research on ‘greenconsumerism’, it is not clear howenvironmental concerns stand inrelation to other product attributes.

One potentially important group is‘business to business’ consumers. In order to determine the importanceof environmental performance tothis group, a conjoint analysismethodology has been applied toinvestigate the buying preferencesof company purchasing managersfor two different products, an inkjet printer and inkjet cartridge.

This study shows the importance ofprice for most purchasing managers.Environmental performance is alsoshown to be an important productfeature. However, perhaps surpris-ingly, the research shows that inkjet

printers which use recycled plasticare not routinely preferred to equiv-alent printers made from virginmaterial, while inkjet cartridgeswhich are reusable are notpreferred to disposable cartridges.The principal drivers for this behav-iour are investigated, as well as the implications for manufacturers.

Introduction

The growth in stakeholderinterest in industry’s environ-mental performance, especiallyamongst consumers, has not goneunnoticed by designers of electri-cal and electronic products.Unsurprisingly this has resultedin environmental performancebecoming increasingly empha-sised in marketing such products.A graphic illustration of thistrend is the burgeoning numberof electrical and electronicconsumer products which arenow being ‘badged’ with so-called ‘green labels’.

ANALYSIS


Graham Earl is a Research Engineerwith the University of Surrey’sEngineering Doctorate (EngD)

programme and is sponsored by theCentre for Environmental Strategy (CES)

and Paras Ltd. His doctoral researchproject has involved extensive liaison

and test case applications with leadingmulti-national companies and has

resulted in the development of theStakeholder Value Analysis Toolkit.

This is a hybrid model which linkstogether a collection of decision

support tools and aims to support decision-makers in identifying,

measuring and linking the stakeholdervalues driving environmental invest-

ment decisions. The results of hisresearch have been widely presented

in leading journals and conferences.

Roland Clift is Professor of Environmental Technology and

Founding Director of the CES at theUniversity of Surrey. CES was set up

in 1992 as multi-disciplinary researchcentre concerned with long-term

environmental problems. In addition to its research activities, CES runs MSc, PhD and EngD programmes,

the last of these being an innovative D Eng programme in EnvironmentalTechnology. He is a member of the

Royal Commission on EnvironmentalPollution and the UK Ecolabelling

Board. Professor Clift is a Fellow of the Royal Academy of Engineering and

the Institution of Chemical Engineers.

How important isenvironmental performance?A case study measuring theenvironmental preferences of ‘business to business’consumers

Graham Earl and Roland Cliftn

Research Engineer and Professor of Environmental Technology,Centre for Environmental Strategy, University of Surrey, UK

In some instances manufacturershave designed their products tomeet ‘green label’ criteria indirect response to purchasingrequirements, for example tomeet a public sector organisa-tion’s buying guidelines.However, in many instances thepursuit of environmental claimshas been carried out withoutindependent verification, as away to differentiate a productfrom its close competitors.

There is evidence that consumersnot only desire to purchaseproducts which minimise theirimpact on the natural environ-ment, but are also willing to paymore for them (Coddington,1993). Taken from a companyperspective, Earl et al (1998) hasshown through specific industrycase studies that investmentswhich improve a company’senvironmental performance, and hence public image, canproduce significant financialbenefits for the company.

Despite these findings, what isnot clear, and what the study(below) hoped to investigate, is how environmental concernsstand in relation to other product attributes.

Project aims

A research project was developedthat aimed to investigate therelative ‘trade offs’ companypurchasing managers make whenpurchasing electronic and electri-cal products. More specifically it aimed to answer the question‘Are ‘business to business’consumers willing to foregoperformance or pay higher pricesto improve a product’s environ-

mental performance, and if so by how much?’

To meet this aim the study choseto investigate two closely relatedproducts. The first, inkjet print-ers, are relatively long-lastingand involve an element of investment. The second product,inkjet cartridges, are much morefrequently purchased and involvesignificantly lower per trans-action cost. At the same timeboth products belong to a fastmoving office equipment andconsumables market which isincreasingly being subjected toenvironmental performancepressures from stakeholders.Indeed both products shareattributes which have significantpotential to impact the environ-ment, either through using upvaluable resources (eg. energy,materials) or by creating largeamounts of waste and potentialcontamination.

Essentially, customers can beclassified into three broad categories:

· domestic

∑· intermediate, ie. retailers

∑· ‘business to business’ (includes both the public and privatesectors).

This study chose to investigatethe ‘business to business’ category, more specifically thebehaviour of purchasingmanagers from the private sector.From the demand side, purchas-ing decisions from corporatebuyers send strong signals tomanufacturers. On the otherhand, purchasing behaviour alsoindicates the company’s ownattitude towards the ‘greenness’of suppliers’ products, which is

an important influence on atti-tudes within the purchasingcompany itself. Because of theuniqueness and purchasinginfluence of the purchasingmanagers approached, this studyhas not attempted to achieve thesample rate of other studieswhich have examined generalconsumer behaviour.

Conjoint analysis – a tool for measuring trade-offs

Conjoint analysis is a marketresearch tool which can be usedto measure consumers’ ‘tradeoffs’ among products with manyattributes. Conjoint analysisrelies on the ability of respon-dents to make judgements aboutstimuli. For example, it is easierfor a consumer to answer thequestion ‘are you prepared topay £1000 to upgrade from asimilar Ford to a similar BMW?’rather than ‘what is the relativeimportance to you of a car’sbrand and price?’ This is exactlythe type of question asked of the respondents by the conjointmethodology.

In conjoint analysis, the stimulirepresent some predeterminedcombinations of attributes, andrespondents are asked to makejudgements about their prefer-ence for the various combina-tions of attributes. Conjointanalysis attempts to handle theproblem of determiningpreferred features by systemati-cally estimating how much eachattribute is valued on the basis of the respondents’ choicesbetween alternative productconcepts. Because questions are ‘framed’ closely and madeconcrete, conjoint analysis is

ANALYSIS


distinct from the broad eco-nomic approach of contingent valuation. Also sincethe conjoint method convertsconsumer preferences for different performance attributesto a single variable, utility, it ispossible to quantify the relativeimportance of these to therespondent.

Methodology and results

In line with the study’s aim aconjoint experiment wasdesigned to measure the relative‘trade offs’ purchasing managersmake when choosing inkjetprinters and inkjet cartridges.Data from the study was analysedusing conjoint analysis softwaredeveloped by Bretton Clark. Themethodology used covered thefollowing basic stages:

Specification of separateconjoint experiments for each product

Appendix 1a and 1b summarisethe performance attributes andlevels used to describe the inkjetcartridge and inkjet printerexperiments. Cartridge reusabil-ity and printer casing recycledcontent are the environmentalperformance attributes includedin each design. The performancelevels specified for these attrib-utes were defined so that theydid not imply any direct financialor operational gain or loss to the respondent (eg. purchasingmanager). The idea was that utility values measured for theseperformance attributes wouldindicate only the respondent’s preference for environmentalperformance.

Stimuli design

Conjoint analysis works byasking respondents to rank inorder of preference a set ofproduct scenarios which havebeen specified using a commonset of performance attributes andperformance levels (in this casethose described in Appendix 1aand 1b). Whilst each productscenario is specified by the sameset of performance attributes, theperformance levels defined foreach attribute will differ on atleast one of the attributes. Themost common way to display the product scenarios to therespondent (eg. purchasingmanager) is through a set ofcards. Each card carries a descrip-tion of the product using thepre-defined performance attrib-utes and performance levels.

Data gathering

The inkjet printer and inkjetcartridge conjoint experimentswere carried out with 22 purchasing managers selectedfrom 13 companies. On averagetwo individuals were interviewedfrom each company; in each casethese were chosen for theirresponsibility for purchasing ITequipment. The companiesapproached covered a wide spec-trum in terms of size (rangingfrom small and medium sizedcompanies to multinationals) andarea of operation (consultancy toproduction and manufacturing).

Produce output results

Appendix 2a and 2b summarisethe average utility and attributeimportance calculated for thetwo experiments. A useful repre-sentation of this data is achievedby comparing utility levels withperformance levels for each

attribute. Figures 1 and 2 showthe utilities for the environ-mental attributes for each of the two product groups.

Results

Price is invariably and notsurprisingly an importantattribute. However the detailedresults show that, all other thingsconstant, the lower priced inkjetprinters and cartridges are onaverage not routinely preferredover higher price versions. Forexample, for inkjet printers only22% of respondents consistentlyplaced higher utilities on lowerpriced printers compared tohigher priced ones, and for inkjetcartridges this figure was 14%.This behaviour suggests thatrespondents are inferring somekind of benefit associated withhigher prices which are notdefined on the conjoint card.Alternatively they may doubt thecredibility of the lower pricedproducts described on theconjoint cards.

The recycled content of theinkjet printer is on average animportant negative feature. Theutility function and data analysisshows that 85% of respondentsprefer lower over higher recycledcontent. This behaviour impliesthat respondents simply do notwish to buy inkjet printers madefrom recycled plastics or thatthey associate some kind ofproduct performance loss, toprinters with a casing with higherrecycled content (not defined on the conjoint cards)

The spent cartridge optionattribute was deliberately definedso that the possible performancelevels would not offer any

JULY 1998 · THE JOURNAL OF SUSTAINABLE PRODUCT DESIGN

ANALYSIS

21

ANALYSIS

THE JOURNAL OF SUSTAINABLE PRODUCT DESIGN · JULY 199822

financial incentive to the respondents. The value of eachperformance level would there-fore relate solely to the impor-tance placed on the cartridge’senvironmental performance. Thedetailed results show that nearlytwo thirds of respondents, allother things equal, prefer dispos-able cartridges over refillable orrecyclable ones. The conclusionis that the purchasing managersprefer disposable inkjetcartridges: although they offerpoorer environmental perfor-mance, they are easier to use,requiring no refilling or storingfor recycling.

Conclusions and implications

The analysis has deliberatelyfocused on the spent cartridgeoption and recycled contentattributes, since these wereintroduced to ‘capture’ environ-mental performance as a selling attribute for the twoproducts studied. In both cases,the environmental attributeswere defined so that they did notdirectly imply financial benefitsto the purchasing managers, andtherefore did not elicit any pref-erence for environmental perfor-mance.

In this study, purchasingmanagers were required to thinkabout and articulate their ‘tradeoffs’. Whereas a preference forenvironmental performance isoften assumed, it is only possibleto measure real preferences via‘trade off’ decisions whichinclude environmental perfor-mance as one decision criterionamong several. The results from

both conjoint experiments showthat price and operational criteria are important for mostpurchasing managers. The recycled content of the casingand cartridge re-usability wereshown to be important productfeatures. To the extent that re-cycled content and re-usability,and therefore improved environ-mental performance, representlower rather than higher perfor-mance is preferred.

Greenness is not enough

For inkjet printers, reference toFigure 1 shows that purchasingmanagers place lower utilities on (ie. are less satisfied with)printers with higher recycledmaterials content. This meansthat for two printers with equalcost, each offering the sameoperational performance, theprinter made from ‘virgin’ mater-ial offers more utility (ie. ispreferred) over the same printermade from recycled materials.There are two likely reasons forthis behaviour;

· the purchasing managers misunderstood theexperiment’s definition of recycled.

· the purchasing managers perceive recycled products as inferior to new products.

The first reason is thoughtunlikely since a great deal of care was taken to fully define and explain each performanceattribute. It was made very clearthat the term recycled referredonly to the material used toproduce the printer’s casing.Respondents were told theywere comparing ‘printers withdifferent amounts of recycled

casing content’ and not ‘recycledverses new printers’. It was alsomade clear that this attribute was totally independent of theprinter’s other attributes, ie. theprinter’s recycled content is notin any way linked with and cantherefore not affect any of theother attributes used to describea printer.

The second reason, driven by the purchasing manager’s ownperception of what recycledmeans, appears to be morelikely. So, rather than acknowl-edging that recycled means ‘asgood as new’, purchasingmanagers are more likely toperceive them as ‘second hand’.Given that the purchase of aprinter is longer term and can beseen as an ‘investment decision’,it is plausible to think thatpurchasing managers would bereluctant to invest in productsperceived as ‘second hand’.

This type of behaviour is notunusual. For years, Xerox havebeen marketing re-manufacturedphotocopying machines and havestruggled to dispel the miscon-ception that these machines arerefurbished, use old componentsand are in some way inferior to‘brand new’ products. In factXerox have found that the great-est resistance to their re-manu-factured machines stems frompublic sector buyers. In somecases this is borne out bygovernmental selection protocol,which may stipulate that only‘brand new’ products may beconsidered for tender. Even ifthis is not the case, Xerox havefound that buyers using publicmoney, who are thereforeaccountable to tax payers, are


ANALYSIS

23

-1.2-1

-0.8-0.6-0.4-0.20.00.20.40.60.8

0% 50% 100%

Util

ity

Recycled content

1

Figure 1a: Recycled content utility function for inkjet printers

reluctant to risk public disap-proval by spending money ongoods which are not ‘brandnew’.

Perhaps this partly explains whyICL prefer to market their prod-ucts as ‘second life’ rather that‘Re-whatever’, anticipating thatthe products are less likely to bedevalued by the purchaser.However, the analysis suggeststhat the problem is deep-rooted,not merely semantic. Assuggested earlier, it is muchmore likely to be driven bypurchaser perceptions. Theanswer therefore is not simply to change the name of goods orhide the fact that a product is re-manufactured or incorporatesrecyclate; rather, it must addressthe cause, which seems to be a lack of understanding.

The preference drivers forprinter cartridges seem to beslightly different. Because thepurchase of an inkjet cartridge is

unlikely to be seen as an invest-ment, it is more likely that oper-ational and logistical criteriadrive the purchase decision. Theconjoint analysis results (seeFigure 1b) show that purchasingmanagers actively prefer dispos-able cartridges to refillable andrecyclable ones. Given nofinancial benefit then the easiestand most convenient option isshown to be preferred. If thepreference for disposablecartridges is seen as a proxy forconvenience, then the analysisshows this is a much moreimportant factor for the purchas-ing managers than any potentialenvironmental gain.

Other supporting evidence

This behaviour is not altogethersurprising. Although Kärnä andHeiskanen (1998) report thatsome manufacturers ofelectronic and electrical productsclaim to have noticed greaterenvironmental awareness

amongst ‘business to business’consumers compared to domes-tic consumers. This type ofbehaviour has generally beenlimited to more aware countriessuch as Germany and Swedenwhere there are more socialpressures to emphasise environ-mental performance. The implication is that ‘business tobusiness’ consumers in countriessuch as the UK, where thesepressures are weaker or absent,suffer the same misconceptionsand lack of awareness as inter-mediary and domesticconsumers.

Business in the Environment(BiE) in the UK carried outresearch on the level of environ-mental engagement of the FTSE100 top UK companies and founda disappointing level of supplychain management amongst theUK’s top companies (BiE 97). Inreply to the question, ‘Does yourcompany have an environment-focused supplier programme in

ANALYSIS


place?’ the survey found thatonly 38% of the companies interviewed responded with apositive answer.

The solution for manufacturerswishing to specify and sell theirproducts using ‘green creden-tials’ is clearly not simple.Manufacturers see a diffuse andunspecified demand for environ-mental solutions, as well as verylittle hard evidence to showreward for their environmentalimprovement endeavours.

Obviously there are exceptionsto his rule, as identified by JohnCarew from Business in theEnvironment (Carew, 1997), for example:

· BT report that they use environmental considerationsin their purchasing decision-making process

· IBM carry out eco-risk analyses of strategic suppliers

· Nortel work with suppliers on specific environmental issues –

currently they are trying totackle packaging issues byworking together withMotorola

· B&Q uses environmental management in the supplychain to increase market share

· Sainsbury’s is developing joint ventures in crop management.

Nevertheless the assumption that‘business to business’ consumersare going to be the ‘forerunnersof the environmentallyconscious generation ofcustomers of the future’ (Kärnäand Heiskanen, 1998) appears tobe ill-founded. A major challengesuggested by this study is thatthere is confusion and lack ofunderstanding even amongstpurchasing managers of whatsome environmental claims actually mean, especially theirimplications for the product’sperformance and for the business in general. This problemis not helped by what also

appears to be a lack of generallyaccepted environmental criteriafor electrical and electronicproducts.

Barriers to greener purchasing

BiE have identified two funda-mental barriers faced by ‘business to business’ purchaserswishing to improve theircompany’s supply chain manage-ment. The first is gaining policycommitment and the associatedmechanisms and procedures toback it up. The second barrier isthe application of the poorlyunderstood approach of ‘wholelife costing’. There is little or noevidence that ‘whole life cost-ing’, which implies including theenvironmental imperatives oflongevity, lower running costsand disposal costs, has beenapplied properly and as a matterof course in private and publicsector procurement.

Underlying these barriers is ascarcity of available and reliable

-1-0.8-0.6-0.4-0.2

00.20.40.60.8

1

disposable

Util

ity

Spent cartridge option

refillable recyclable

Figure 1b: Spent cartridge option utility function for inkjet cartridges


ANALYSIS

25

information about the environ-mental characteristics of prod-ucts and services. In fact, JeanCinq-Mars, Head of the PollutionPrevention and Control DivisionEnvironment Directorate, OECD,speaking at the ‘GreeningGovernment’ conference (Cinq-Mars, 1997) suggests that lack ofinformation is sometimesconsidered to be the majorobstacle to greener purchasinginitiatives as it limits the devel-opment of multi-criteriaspecification of environmentalcharacteristics of products.

Eco-labels and regulation

Although third party labellingschemes may seem to offer apart solution, the role andsignificance of labelling are stillunclear, especially since thereseems to be little agreement onan internationally acceptablelabel. Recent analysis by theOECD (Cinq-Mars, 1997) on afew selected eco-labellingschemes concludes that suchschemes have had little effect on consumer behaviour, exceptin those countries whereconsumers express strong environmental awareness.

Underlying all of this is an evolving regulatory environment.In the electronics sector the lawis moving towards enforcingproducer responsibility, withemphasis on ‘end of life’management (EOLM) rather thaneco-design. An example support-ing this trend is the draftDirective on the management of waste from electrical andelectronic equipment issued bythe European Commission(1998). However, this EuropeanUnion (EU) initiative does haveconsiderable implications for the

development and design of elec-trical and electronic products.The draft Directive outlinesspecific responsibilities forproducers of electronic and electrical equipment, whichtaken together aim to:

∑· eliminate toxic materials

∑∑· increase recyclability

∑· increase dismantability

∑· increase the amount of recycled material

∑· improve the reverse logistics associated with these products.

For example, broad ranges havebeen proposed for a reuseand/or recycling minimum for allIT equipment. The responsibilityfor achieving this target is placedfirmly with the producer. Toachieve it, producers will needto provide users of electrical andelectronic equipment, in particu-lar consumers, with the neces-sary information about thereturn, collection and recoverysystems available to them, andalso to emphasise their role incontributing to the recovery andre-use and recycling of ‘end oflife’ electrical and electronicequipment.

A basic strategy for effective green marketing

Taken together the picture forproducers seems somewhatbleak. On the one hand theregulatory framework is lookingto impose the responsibility forEOLM on the producer, toencourage the uptake of reusableand recyclable products andmaterials. On the other hand,this and other similar studiesshow that consumers, evensupposedly better informed‘business to business’ consumers

show an unwillingness to switchto greener designs and products.

On the positive side the elec-tronics sector is leading the wayin the implementation of theinternational environmentalmanagement standard, ISO 14001.Because this standard aims topush companies to greaterunderstanding of the direct andindirect environmental effects ofproducts throughout their lifecycle, it should help with themarketing of greener products. It would however be foolish torely solely on ISO 14001 andemerging international eco-labels to solve the perceptionproblems associated with recycled or reused products.

Form relations withstakeholders to reducemisconceptions

It is more sensible for manufac-turers to become more proactiveand start to develop in-housestrategies for the specification,design and marketing of theirproducts. As a starting point,conclusions drawn from thisstudy suggest that any strategy must aim to reassurepurchasing managers of thevalidity and implications of‘green claims’. Advice should berelayed back to potential manu-facturers of products or compo-nents, that ‘recycled’ does notmean ‘second hand’, and thateco-innovations are needed.

Since customers (domestic or‘business to business’) oftendistrust environmental claims,because they are perceived to beused to gain competitive advan-tage and can not easily be testedby customers themselves, it iscritical that manufacturers areable to demonstrate their credi-

ANALYSIS


bility and develop an honest andtrusting relationship with theirstakeholders. To help achievethis, the company must aim toidentify what kind of informa-tion is used and needed by itsdifferent stakeholders, and thenbe pro-active in ensuring thatthis information and the way itrelates to their products reachesthe stakeholders in a systematicway.

Demonstrate the whole life value of the product

Secondly, and probably just asimportant, the strategy mustensure that if green claims arebeing made, these are linkedwherever possible to overallenvironmental policy and associ-ated financial and operationalgains for the ‘business to busi-ness’ consumer. This meansworking together with thepurchaser to show the benefits of using ‘whole life costing’ todifferentiate between products.Using this approach, the manu-facturer will be much betterplaced to demonstrate any ‘downthe line’ cost reductions associ-ated with improved environmen-tal performance and, perhapsmost importantly, the risk reduc-tion benefits which can result through increasedconfidence amongst its stake-holders. This analysis confirmsthe views expressed, for exam-ple, by Stevels (1997).

Taking the example of inkjetcartridges, using ‘whole life costing’ principles will help toreinforce that reusable cartridgescan in fact be cheaper for thepurchasing company if potentialdisposal costs are factored in, orif the company is struggling with

its environmental image. Thisresearch has shown that, unlesslinks such as these are made, it is unlikely that purchasingmanagers will be willing tosacrifice convenience for thesake of environmental perfor-mance.

Education, training andcommunication

All of this must be underpinnedthrough a basic platform ofeducation, training and clearcommunications. No matter howgood the eco-improvements thatdesigners make to products, theirpotential to reduce environmen-tal impacts is usually contingenton the behaviour of others, notleast of which is customerdemand which makes it possibleto compete and sell into themarket place. The best ‘green’products can only reduce ourenvironmental footprint if theyare actually purchased and usedin preference to products withpoorer environmental perfor-mance.

Future research

This study represents a startingpoint in trying to quantify theimportance of environmentalperformance as a decision-making criterion in purchasing.In this case, the research hasconcentrated on the importanceof environmental performanceto ‘business to business’customers.

There are of course many otherstakeholders who are interestedin not only the environmentalperformance of the products butalso of the manufacturingcompanies themselves. For

example, as Stevels (1997)observed, company designerswill benefit immensely and bebetter placed to develop sustain-able product designs if they canintegrate stakeholder prioritiesinto the design process. So,rather than incremental productimprovements, the aim must beto move towards radically re-thinking the way stakeholders’needs are provided for. ‘Tradeoffs’ have to be made betweenenvironmental and other criteria.To increase the credibility ofthese choices stakeholders mustbe involved in the decision-making process.

Future research must thereforelook at ways to quantify thepriorities, values and needs of awider set of stakeholders, and todesign decision-makingprocesses which will allow thesefactors to be integrated into thetraditionally closed, internalprocesses by which companiesreach their decisions. •

Acknowledgements

This paper summarises part ofthe work carried out by GrahamEarl for the degree of Doctor ofEngineering at the University ofSurrey. Financial support fromEPSRC and Paras Ltd. is gratefullyacknowledged.

The authors also wish to thankMs Zoe Jackson and Mr TomDavies of Hewlett Packard, whohelped with the design of theconjoint experiments. Specialthanks are also extended to allthose research engineers on theEngineering Doctorate whoassisted with gathering data forthe conjoint experiments.


ANALYSIS

27

Business in the Environment (BiE),(1997), ÔThe Index of CorporateEnvironmental Engagement: ÔGreenProÞleÕ of the FTSE-100Õ, Business inthe Environment, London.

Carew, J. (1997), ÔThe Supply ChainAs A Catalyst For EnvironmentalChangeÕ, Green Procurement inGovernment Conference, QueenElizabeth II Conference Centre, 11July.

Carmone, F.J. (1995), ÔReview:Conjoint Analysis SoftwareÕ, Journalof Marketing Research, February,pp.113-120.

Cinq-Mars, J. (1997), ÔGreen PublicPurchasing in OECD CountriesÕ, GreenProcurement in GovernmentConference, Queen Elizabeth IIConference Centre, 11 July.

Coddington, W. (1993), EnvironmentalMarketing: Positive Strategies forReaching Green Consumers, McGrawHill, New York.

Earl, G., R. Clift and T. Moilanen(1998). ÔRemoving the Uncertainty inEnvironmental Investments:Integrating Stakeholder Values intoCorporate DecisionsÕ, in James, P.and M. Bennett (eds.), The GreenBottom Line: EnvironmentalManagement Accounting Ð CurrentPractice and Future Trends,Greenleaf, London.

European Commission (1997)ÔWorking Paper on the Managementof Waste from Electrical andElectronic EquipmentÕ, DG XI, E3/FED(97), Director General XIEnvironment, Nuclear Safety and CivilProtection, 9 October, Brussels.

Green, P.E. and V. Srinivasen (1990)ÔConjoint Analysis in Marketing: NewDevelopments with Implications forResearch and PracticeÕ Journal ofMarketing, October, pp.3-19.

K−rn−, A and E. Heiskanen (1998),ÔThe Challenge of ÔProduct ChainÕThinking for Product Developmentand Design Ð the Example ofElectrical and Electronic ProductsÕ,Journal of Sustainable ProductDesign, Iss. 4, January, pp.26-36.

Stevels, A.L.N. (1997), ÔMovingCompanies towards Sustainabilitythrough Eco-design: Conditions forSuccessÕ, Journal of SustainableProduct Design, Issue 3, pp.47-55.

References

Appendices

Performance attribute

Name Description Levels

Price The price of an inkjet cartridge for use in an £30 average inkjet printer £22.50

£15

Life The printing lifetim

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