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ANALYSIS

Five ways to be green and


profitable
Ab Stevels

Design for Sustainability Research Group, Faculty OCP, Delft


Albert Leendert Nicolaas (‘Ab’) Ste-
vels was born in Eindhoven (The
University of Technology, Delft, The Netherlands
Netherlands) on August 31st, 1944.
After Grammar School he studied
..
Chemical Engineering at the Techni- ..
.. In this paper five ways to make · Upstream 共supplier involve-
..
cal University of Eindhoven and ..
..
money while staying green are ment兲 and downstream
took a Ph. D. degree (cum laude) in ..
..
..
described. These include a form 共green marketing and sales兲
Physics and Chemistry at Gro- ..
.. of Eco-design (Design for envi- · To business level 共strategy,
..
ningen University. ..
.. ronment) in which company, cus- roadmap兲 and support level
..
From September 1969 Ab worked ..
..
tomer and societal benefits are 共tools and tools develop-
..
for Royal Philips Electronics in ..
..
taken into account, a new way of ment兲
many capacities in result on materi- .. dealing with suppliers, green · To higher levels of sustain-
..
..
als, production technology of glass, ..
.. marketing and sales focussing on ability 共alternative function-
..
as a business manager in electro- ..
..
add-on benefits, increasing prod- ality兲 and quality improve-
optics and as a project manager for ..
..
..
uct quality through green and ment 共less rejects兲.
joint ventures and licenses in Asia. .. paradigm shifts in creative think-
..
..
On January 1st., 1993 he became a ..
.. ing both for improved and alter- In a related development, en-
..
senior advisor in Environment at the ..
..
native products. These concepts vironmental improvement
Environmental Competence Center ..
..
..
can be applied separately but 共‘creating green options’兲 is
of Philips Consumer Electronics. .. when combined there are sub- now seeking to realize com-
..
..
In December 1995 Ab was appoint- ..
.. stantial ramifications of the re- bined stakeholders benefit and
..
ed as a part-time professor in Envi- ..
..
sults. is considering feasibility up-
..
ronmental Design at Delft University ..
..
front. This is shown in the
of Technology. In the fall of 1999 he .. figure below.
..
..
was a visiting professor in the Me- ..
.. Introduction
..
chanical Engineering Department of ..
..
From this figure it is clear that
..
Stanford University. ..
..
In the last 10 years, environ- in order to be realised in prac-
Ab Stevels has done trailblazing .. mental care in products has tice, green options should
..
..
work in how to make Eco-design in ..
.. changed substantially in bring environmental benefit as
..
day-to-day business really happen. ..
..
approach. first priority but, on top of
..
For this purpose tools and manage- ..
..
that, company, customer and
ment procedures have been devel- .. social benefits should be feasi-
..
..
oped that have proven their strength ..
..
..
through their practical success. ..
..
..
Ab is the author of some 80 journal ..
..
articles and conference contribu- ..
..
..
tions. These training courses on ap- ..
..
..
plied Eco-design have been held at ..
..
..
various universities (Delft, Stanford, ..
..
TU Berlin, Mexico City, Hong Kong ..
..
..
Poly), Philips departments and divi- ..
..
..
sions around the globe and at other ..
..
..
companies. Figure 1: The Eco-design matrix

The Journal of Sustainable Product Design 1: 81–89, 2001


© 2002 Kluwer Academic Publishers. Printed in the Netherlands. THE JOURNAL OF SUSTAINABLE PRODUCT DESIGN 81
ANALYSIS

Company Customer Society · Introducing paradigm shifts;


Material cost reduction lower cost of own- use of fewer re- looking at functionality in-
ership sources stead of embodiments.
Immaterial simpler to produce, easier, conven- better compliance
simpler to sell ience, more fun These items are interrelated
Emotional better image feel good, quality we make green through enabling relationships;
of life, less fear progress this means apart from having
a financial merit in itself they
Table 1: The benefits matrix will also enable improvement
in the other departments. This
ble from a technical and fi- try兲. This creates the platform is the reason that the five
nancial point of view. for the present paper which ways are positioned on a cir-
describes five ways to make cle: improvements in one field
Here environmental benefit is money while staying green. create the basis for progress in
defined as a lower environ- other fields etc. The following
mental load over the life cycle examples will be elucidated in
of the product or system con- Five ways to make money the paragraphs 3–7:
cerned 共Novem/RIVM, see while staying green and their · Eco-design will enable green
www./una.nl/turtlebay兲. The interrelation marketing and sales and in-
other benefits can be classified crease production quality
as being material 共money兲, The five ways to make money · Suppliers performance will
immaterial 共advantageous but while staying green and their enable better eco-design and
difficult to express in mon- interrelation are given in the green marketing and sales
etary terms兲 and emotional. figure below. · Enhanced sales through
These items are described in green will stimulate Eco-
more detail in the table above. This figure shows that the five design and further function-
ways include: ality thinking
In practice it turns out that · Eco-design 共design for envi- · Design for production qual-
there is a strong correlation ronment兲 ity leads to lower supply
between environmental ben- · Greening the supply chain costs
efits and other stakeholder · Green marketing and sales · Paradigm shifts will open
benefits as specified above 共at · Increased quality through new lines of business and
least in the electronic indus- the green perspective lower supply costs.

There is a clear link between


the five ways to make money
illustrated in Figure 2 and the
benefits matrix of Table 1.
This correlation is shown in
Table 2:

This table shows that being


‘green’ in the various ap-
proaches works out positively
in different ways. Resource
reduction, lower supply costs,
more sales, less rejects and
higher margins all produce
positive results in monetary
terms!
Figure 2: Five ways to make money while staying green

82 THE JOURNAL OF SUSTAINABLE PRODUCT DESIGN


ANALYSIS

Way Money Immaterial / Emotion The basic idea behind this


Eco-design Resource reduction Lower Life Cycle im- flow chart is to manage the
pact compliance processes in three ways:
Suppliers Supply cost Enable Eco-design · Strategic, managerial pro-
Green marketing & Sell more Caring, fun, nice to cesses 共roadmap兲
sales have · Executional processes
Quality Less reject Easy, simple 共idea’s, creation, exploita-
Paradigm shift Higher margin Lower Life Cycle Im- tion兲
Functionality pact · Supporting processes

Table 2: Correlation 5 ways to make money and benefits matrix Particular significance is
attributed to the processes at
Making money through Table 3 shows that a variety the very beginning of the
eco-design (Design for of activities can be envisaged whole procedure; that is, idea
Environment) that create combined environ- generation supported by
mental and financial improve- benchmarking and strategic
In order to make eco-design ments. In order to structure input. In this stage positioning
operational in industrial or- this wealth of opportunity, two with respect to the environ-
ganizations it is useful to split issues should be considered in mental performance of com-
the field up in five focal area’s particular: petitors gives strong direction
共Stevels, forthcoming兲: · Setting up an appropriate about what is to be achieved
· Energy consumption procedure for eco-design in later steps of eco-design.
· Material application · Setting priorities 共an eco- Apart from being the basis for
· Packaging and transport design procedure is given in ideas, benchmarking also
· Chemical content Figure 2兲. gives ‘learning for free’, by
· End-of-life / recyclability flagging up improvements and
solutions which competitors
have already put into practice.

Focal area Eco-design action Environmental benefit Cost benefit for pro- Cost benefit for user
ducer
Energy Use of more powerful Less energy used Lower bill of materials Lower electricity bill
Ic’s, miniaturization
Material Less material Less resources Lower bill of materials Lower price of product

Material substitution Less environmental load ? ?

Use of recycled mate- Closing the loop Lower bill of materials Lower price
rial
Packaging, Less packaging mate- Less resources, Lower cost Lower price of product
Transport rials Less waste

Less packaging vol- Lower transport energy Lower cost ?


ume
Chemical Mono material Better recyclability Volume discount Lower price of product
Content
Elimination of flame Better recyclability Lower bill of materials Lower price of product
retardants
End-of-life, Design for disassem- Higher recycling yield Lower assembly cost Lower end-of-life cost
Recyclability bly
Table 3: Environmental and cost benefits per eco-design focal area

THE JOURNAL OF SUSTAINABLE PRODUCT DESIGN 83


ANALYSIS

· The Environmental Quality


Concept 共EQC兲.
· The design for the supply
chain concept 共DSC兲.

The Environmental Quality


Concept has been pioneered
by Nagel 共Nagel, 2000兲. It
consists of benchmarking sup-
pliers in a similar product cat-
egory. Inputs 共energy, basic
Figure 3: Flow chart for eco-design from a business perspective material, auxiliary material,
water, packaging兲 and outputs
Table 4 provides information beyond competitors perform- 共products, emission to air, wa-
on 18 product benchmarks ance come on top of the po- ter, solid waste兲 are analysed
performed at Philips Con- tential which is already in quantitatively through a ques-
sumer Electronics 共PCE兲. place on basis of the bench- tionnaire.
When compared with 2 or 3 mark. In practice this combi- On the basis of the outcome
competitors, the statistical av- nation has proven to lead to quality indicators 共I兲 are cal-
erage performance of PCE is substantial cost reductions in culated for each input or out-
expected to be best in 33% or the product portfolio 共if also put stream. 共Normalized per
25% of the cases, respectively. Table 3兲. unit of product delivered to
the customer兲. I have the gen-
Benchmarking at Philips Con-
eral form:
sumer Electronics Making money through
18 products compared with 2 or 3 addressing suppliers Product stream out
competitors I ⫽ K* .
Philips is best
Stream of consideration
The role of suppliers in ensur- 共in/out兲
Energy con- 54% ing good environmental per-
sumption formance is being increasingly In which the reflects an envi-
Weight 56% recognised. Both inquiries ronmental quality constant.
Packaging 44% about evidence for complying K can reflect either:
Chemical con- 33% with legislation/regulation and · The degree of perfection of
tent about implementation of the different environmental
Recyclability 57% ISO 14001 have received an items in the category of con-
Table 4: Benchmarking score of 18 established position in Supply sideration.
Philips Consumer Electronics prod- Chain Management. · The relative environmental
ucts It is, however, less understood importance of the different
that such an approach is ‘top- environmental items in the
This table indicates that the down’ and only fairly defen- category of consideration.
performance of PCE products sive. Organisational and com- · The relative economic 共mon-
is clearly above average. pliance costs resulting from etary兲 importance of the dif-
However, the table also shows single mindedly pushing ferent environmental items
that per focal area 8–12 prod- through the items addressed in the category of considera-
ucts can still be brought up to above, could lead to price in- tion.
competition level – which is a creases rather than price de-
performance that has been creases. Two avenues of ac- The outcome of such calcula-
proven in practice and is tion are proposed to assist tions is a score I per category.
therefore beyond any doubt suppliers in reducing prices Practice has shown that no
about feasibility 共see figure 1兲. while increasing environmen- supplier consistently scores
Good ideas by which to go tal performance: best in all categories.

84 THE JOURNAL OF SUSTAINABLE PRODUCT DESIGN


ANALYSIS

On the basis of such scores a the electronic industry where the ‘as such’ 共that is taking
customer can assist individual up to 70–80% of the bill of green marketing out of its
suppliers in defining the areas materials 共and of energy con- isolation兲 rather than refrain-
of improvement. Since all en- sumption of future users兲 is ing on developing green prod-
vironmental items are directly related to suppliers. ucts.
associated with cost items, a
cost reduction potential can be This ‘enabling design’ by sup- An analysis of consumer atti-
defined as follows: pliers has produced impressive tudes 共Stevels, forthcoming兲
results: has shown that worldwide
Price reduction 共P r兲 ⫽ · lowering energy consump- only 20–30% of the popula-
P r standard ⫹ 共1-E兲 P r tion of TV’s and increasing tion consider environment to
playing 共use兲 time of port- be really important in buying
With E being the environmen- able products by making decisions irrespective of the
tal performance as calculated available dedicated 共‘smart’, country concerned; for another
using the formulae given by green兲 integrated circuits 40–50% it is ‘nice to have’,
Nagel 共2000兲. 共IC’s兲. whereas for 20–30% of the
· decreasing the amounts of people green is unimportant or
The Design for the Supply plastics needed for housings even negative. These figures
Chain Concept suggests that by applying gas-assisted make clear that in order to
the customer expects suppliers moulding and by using recy- cater to a majority 共70–80%兲
to make designs with the par- cled materials. of the public, the ‘nice to
ticular aim of lowering the · designing full cardboard have’ category has to be
environmental load and the packaging for consumer shetted into the category of
costs at the supplier. Basically electronics products with ‘interested buyers’. This is
this involves similar process weights below 10 kg. done by the environment AND
management for Eco-design, ... strategy, that is, by linking
however with the difference environmental benefits with
that this is applied upstream Making money by green other benefits as specified in
rather than downstream. The marketing and sales Table 1 共see customer col-
paradigm shift is that the sup- umn兲. Such a link between
plier and customer jointly in- Basically this strategy comes environmental effect and cus-
vestigate how a certain func- down to selling more products tomer benefit is shown in a
tionality can best be realised, 共preferably with higher mar- schematic form in the table
rather than that a given em- gins兲. Because they are below:
bodiment is forced down the ‘green’, at first sight, this
supplier’s throat. As special- strategy seems to be an abor- This table shows that large
ists in their field, suppliers can tive one since it is generally proportions of the buyers are
make substantial contributions recognized that ‘green as interested in all green focal
to enable producers to lower such’ does not sell. As will be areas – up to 80% for energy
their environmental load over pointed out below this state- reduction. It is to be realised
the life cycle of the product. ment can be right. However, however that in current mar-
This is particularly apparent in this should lead to eliminating kets in brand image – in this

Item Environmental effect Customer benefits % of buyers


attracted
Energy reduction Less emissions Material = lower cost 80
Material reduction Less resources Immaterial = simply, easy 75
Packaging/ Transport Less resources, less emissions Immaterial = convenient 75
Substances reduction Less emissions Emotional = less fear 60
Durability/ Recyclability Less resources Emotional = quality, feel good 75
Table 5: Link between environmental and other benefits for the five focal area’s in green

THE JOURNAL OF SUSTAINABLE PRODUCT DESIGN 85


ANALYSIS

Identity Unique for Philips One of many companies having Eco-label


Scope Global Local, National, Regional
Nature Technical, image Political
Procedure & to obtain Own control Dependent on thirds
Language Five focal area’s (easy to understand) Environmental (difficult to understand)
Accountability Life Cycle Calculation ??
Transparency to customer Big Small
Table 6: Comparison of effect of Philips Eco Vision communication program and Eco-labelling

case environmental brand im- Sponsorship: transparency to the customer,


age – is just as important or · Environmental research and both in terms of brand identity
may be even more important teaching chairs at Universi- and language used.
than technical green achieve- ties/institutions
ments. · Environmental related events
Areas in which green can con- 共like ‘Electronics Goes Making money by increasing
tribute to brand image include: Green’兲 conference in 2000 product quality, reducing
· Nature conservation groups. rejects
Leadership
· Top management shows vis- A focus on ‘company green’ The three basic factors deter-
ible involvement in green achievements and brand image mining product quality are
issues has turned out to be more in- depicted in Figure 4.
· Having a corporate environ- strumental in increasing sales
mental vision, policy and rather than displaying eco- Just as six sigma and Poke
roadmap. labels. Yoke, methods well known
· Pro-active in industry asso- In the table above the differ- from quality drives, supplier
ciations ences between a company-run quality, human errors and de-
· Participation in international green communication program sign complexity are the items
activities eg. World Business 共in this case the Philips Eco to be addressed. Taking the
Council on Sustainable De- Vision program兲 and general green perspective is one of the
velopment 共WBCSD兲 Eco-label programs is out- ways to move forward in this
lined. field.
Programmes
· Corporate programmes like Table 6 shows that the big
Philips environmental Eco gain from having a company-
Vision. specific programme is the
· ISO 14001 certification
· Supplier requirements

Documentation:
· Environmental 共annual兲 re-
ports
· Brochures eg. Philips
“Greening your Business”
· Scorecards/reviews
· Internet
· Press release/free publicity/
technical, scientific articles

Figure 4: Basic factors determining product quality, reject level

86 THE JOURNAL OF SUSTAINABLE PRODUCT DESIGN


ANALYSIS

functionality in a more envi-


ronmentally friendly way’?
This contrasts to the tradi-
tional approach in which the
first priority has always been
to produce the chosen embodi-
ments more and more effi-
ciently. The classical example
is the packaging of electronics
products. For more than 50
years the paradigm was that
the box should consist of
cardboard and the buffers of
expanded polystyrene 共EPS兲.
In that period, optimisation of
the concept has been continu-
ously worked on and in the
nineties it was believed that
Figure 5: The Hinkley correlation further progress had become
impossible. When the environ-
‘Design for supply chain’ is tence and skills in a produc- mental approach addressed
likely to increase supplier tion factory, there is a linear these items the following
quality and reduce cost. For relationship between design questions came up:
instance, reducing design complexity and number of · What is the maximum % of
complexity by resource reduc- rejects. The diagram also recycled cardboard that can
tion and modular design. By shows that design complexity be included in the boxes,
simplifying assembly proc- needs to be reduced when pro- given the climatological
esses, the amount of errors in duction is moved from a high conditions during transport
production can be minimized; level industrial environment to and storage?
design for disassembly 共a part one of lower levels; the pen- · What is more important:
of activities in the focal area alty for not doing so in a reduction of volume envi-
recyclability兲 will contribute higher amount of rejects. ronmental load of transpor-
to an increase in quality and a tation or a reduction of
reduction of rejects. All these packaging weight 共environ-
items are examples of envi- Making money by applying mental load of materials兲?
ronmental thinking leading to paradigm shifts · Can the buffer function of
improvements outside into EPS also be realised by ap-
own territory. ‘Looking to an The meaning of the word plying low impact materials
old problem from a new per- paradigm is ‘believing’ that like cardboard or moulded
spective’ can spark a lot of things should be as they are. fibre?
creativity. A paradigm shift is therefore a · Can the shock resistance of
change of mindset. As regards the product be increased so
The relationship between the products, ‘green’ thinking that less packaging is
reduction of design complex- stimulates such paradigm needed?
ity ‘design for supply chain’ shifts because the environmen-
and the number of rejects is tal approach asks new ques- This way of looking at classi-
showed by the Hinkley corre- tions such as ‘why are em- cal packaging issues brought
lation 共Hinkley, 1999兲. This bodiments of products as they impressive environmental
diagram shows that for a cer- are’ and ‘are there ways and gains and cost savings at
tain level of supplier compe- means to deliver the same Philips Consumer Electronics.

THE JOURNAL OF SUSTAINABLE PRODUCT DESIGN 87


ANALYSIS

· The recycled content of ality e.g. for audio sets so questionnaires, cost benefits
cardboard has consistly in- that only parts of the set have not yet been addressed.
creased to 60% worldwide. have to replaced with de- Use of the environmental per-
· For TV’s worldwide and for velopment of user require- spective to tackle quality and
other consumer electronics ments and technology reject issues is virtually ab-
products exported to a dif- developments. sent. Green marketing and
ferent part of the world, vol- · Services – Increasing the sales and forms of paradigm
ume reduction is more im- capability of electronic prod- shift are well recognised as
portant than weight ucts to download from the opportunities but are still
reduction, both from the internet 共music, film, infor- weak at the executional level.
ecological and the economic mation兲 Overall the customer perspec-
perspective. tive is still an unknown terri-
· In products with weight be- In all these cases environmen- tory in environmental think-
low approximately 10 kg, tal gains and economic benefit ing. There is a need to
EPS can be replaced by for producers and users go 共or drastically improve here be-
other materials. will go兲 ‘hand in hand’. cause customer care should be
· The shock resistance ap- the basis for market-driven
proach works out well, par- environmental improvement.
ticularly for certain catego- Current implementation of the The business perspective and
ries of audio products. five ways to make money societal perspective are weak
while being green too: this is an indication that
Paradigm shifts also play an ‘environment’ is an item that
important role in conceptual A review of best practices of is developing in isolation
changes 共next to the ‘improve- implementation of the princi- rather than being integrated
ment’ approach as demon- ples to make money while into mainstream business.
strated above兲. Examples are: being green yields the follow- There is still a big improve-
· The application of a differ- ing picture 共Table 7兲: ment potential in the organiza-
ent physical principle: tion of process: it seems that
– Human-powered radio The overall implementation of technicalities are still dominat-
versus battery operated the five principles is still ing the management of green.
radio weak; only eco-design is con-
– Monitor with Liquid sistently addressed well al-
Crystal Display 共LCD兲 though organization of the
screen instead of Cathode processes and customer per-
Ray Tube 共CRT兲. spective are still weak. Sup-
· Life cycle optimization plier involvement is still re-
– Create modular function- stricted to sending out

Perspective Awareness Organization Business Customer Societal per- Overall result


of processes perspective perspective spective
Item
Eco-design +++ + ++ 0 + ++
Suppliers + + 0 0 + 0/+
questionnaires
Suppliers 0 0 0 0 0 0
performance
Green marketing, ++ + + 0 0 0
sales
Quality/ reject 0 0 0 0 0 0
Paradigm shifts ++ + + 0 0 +
Table 7: Review of best practices of implementation of the ‘five ways’

88 THE JOURNAL OF SUSTAINABLE PRODUCT DESIGN


ANALYSIS

Conclusion things can be done proactively tionally operating. This is


in the environmental domain, however the field in which the
This paper has shown that rather than wait to be driven biggest environmental lessons
green approaches have tre- by external developments. For and societal gain can be made.
mendous potential, not only in suppliers the big challenge is
terms of reducing environmen- to move from a defensive to a Currently there is a strong
tal impact but also for compa- proactive chain management push in this sector, particularly
nies, consumers and society as approach in which perform- on the basis of technology-
a whole. Its significance there- ance plays a big role. Green driven product service combi-
fore extends far beyond its marketing and sales will have nations. The examples given
original domain. to overcome the prejudices in this paper show that in both
which currently exist in this ‘new’ and ‘old-economy’ prod-
In order to realise all these field. ucts, using paradigm shifts as
benefits in practice, integration a management approach can
of environment in the business Environmental thinking also be very fruitful.
共product creation兲, supply provides a useful perspective
chain management and green to generate quality products Overall it is concluded that
marketing is an essential in- and reduce rejects. However, there are at least five ways
gredient. There is a need to the first steps still have to be forward in green. All run in
widen the concept to supplier taken and results can be ex- the same direction, e.g. com-
performance and the user of pected not earlier than five bining environmental and eco-
quality/reject in the years to years from now. nomical gain. We are still at
come. the beginning of these av-
Paradigm shifts still have a enues. Five to ten years from
This means shifting from a limited foothold mainly be- now it is likely that this will
supply – to demand – driven cause these are revolutionizing result in a long but rewarding
focus in which business the way companies are tradi- trip.
should look at what sensible

References

The Eco indicator ’95 method, Nagel, M., Environmental Supply- Stevels, A.L.N., Green Marketing
Novem/RIVM editors, ISBN 90- Chain Management versus Green of Consumer Electronics Prod-
72130-77-4. EcoscanT, a windows Procurement and Environmental ucts, Proc. ‘Electronics Goes
program for the calculation of one Supply-Chain Management versus Green’ conference, September
figure eco scores. Available from Life Cycle Analysis, Proc. Int. 2000, Berlin.
Turtle Bay: info@turtlebay.nl, see Symposium in Electronics and
Stevels, A.L.N., Integration of Eco
also www.luna.nl/turtlebay. Environment, p. 219 and 118, May
design is to the business, in: M.S.
2000, San Francisco, ISBN
Hinkley, K. (1999), dissertation, Hundal and J.W. Wiley (eds), The
0-7803-5962-3.
Stanford University, info available Mechanical Life Cycle Handbook:
from K. Ishii: Good Environmental Design and
ishii@cdr.stanford.edu. Manufacturing. September 2001.

THE JOURNAL OF SUSTAINABLE PRODUCT DESIGN 89

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