Eco-innovation: The Journey to Circularity

It is undeniable: change has become a constant in our lives and a process of extreme relevance to guarantee personal and professional success. This reality has implications for all dimensions of our societies, namely for people and organizations.


In order to keep up with the change that surrounds us, the ability to adapt and innovate has become extremely important for the survival and evolution of organizations. Nowadays the ability to innovate has become a factor of differentiation and often gives entities the ability to remain competitive and relevant. However, innovating by itself is not enough to ensure the success of organizations: it is necessary to innovate according to the new needs of societies and to respond to the challenges that we’re actually living in.


The search for innovations that contribute to sustainable development in its three dimensions (environmentally sustainable, socially equitable and financially effective) is increasingly a priority for organizations and often translates into a competitive advantage for them. According to a study carried out by the consultant Deloitte, one of the main trends for the next 5 years is the increase in demand for brand solutions actively committed to the development of healthy alternatives for both consumers and the planet and with a positive social and environmental impact. This reality results in high pressure for organizations to develop strategies and innovations that are aligned with this reality (1). In line with these predictions, a study developed by Nielsen indicates that “73% of consumers indicated that they will definitely change their consumption habits to reduce their environmental impacts” (2).


There is a consensus among experts, governments and consumers (3) that one of the most important steps to respond to these challenges, is the transition to the Circular Economy model. However, the transition to this model implies some challenges, among them the adaptation of the business models and the value chain to the specificities and objectives of this model.


This is where Eco-innovation comes in: a systematic process that, as the name suggests, combines innovation with ecology. The application of this process implies a deep analysis of the strategy, business model, processes and activities, to identify any negative environmental impacts that are generated along the chain, in order to transform these weaknesses or threats, into strengths or opportunities for innovation, which answer the identified problems. These innovations, whose central objective is to make the company sustainable and circulate in all its dimensions, can lead to improvements in terms of strategy, business model, products, services, processes and the relationship with stakeholders (4).


To identify potential eco-innovation opportunities along the production chain, the product or service life cycle assessment is applied. This approach considers the entire life cycle of a product or service, and not just the phase of use, analyzing the activities involved, raw materials and resources needed, negative externalities (like emissions, waste, impacts on the health of consumers/employees/community, etc.) and economic impacts (5).


This process can also be applied to develop new entrepreneurial projects, through the analysis of the industry or sector where it is intended to operate, to identify the main challenges or negative impacts from the environmental point of view and the respective eco-innovations that can be translated into solutions viable from a social, environmental, economic and financial perspective (5).


The development of an eco-innovation project involves several phases, of which we highlight (6):


Eco-innovation examples - Source: Sebrae and UN, 2017
  1. Definition of the scope of the project and the systems to be analyzed, based on the resources and information available;

  2. Analysis of the life cycle of the product or service, considering all phases of the extraction of raw materials until disposal (“from cradle to grave” to “cradle to the cradle”);

  3. Identifying opportunities for improvement through processes such as design thinking, benchmarking, partnerships and/or research;

  4. Analysis of the viability of the opportunities and definition of the indicators of success assessment;

  5. Review of the strategy and business model in order to adapt it to the developed eco-innovations, enhancing its results;

  6. Conducting periodic evaluations of the results achieved and communicating throughout the project with the interested parties (employees, investors, suppliers, partners, customers, community, etc.);


The eco-innovation implementation in companies has several advantages, as it allows for increased efficiency and effectiveness of processes, a reduction in costs and new sources of income. In addition, companies reinforce the commitment to sustainability, which increases customer confidence and identification with the brand and greater motivation and engagement of stakeholders. For a holistic view, it is an asset to include the various parties involved in the process, such as employees, suppliers, partners and customers (4).


Do you intend to develop an Eco-innovation project, but don't know where to start? Get in touch with us and find out how our consulting and mentoring solutions can help you.




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Author: Mariana Pinto e Costa (Co-founder BeeCircular)

Contact us: beecircular.geral@gmail.com


Sources:

(1) Deloitte, Consumer Product Trends: Navigating 2020, 2015

(2) Nielsen, The Evolution of the Sustainability Mindset, 2018

(3) Ellen MacArthur Foundation and McKinsey Center for Business and Environment, Growth within: A circular economy vision for a competitive Europe, 2015.

(4) United Nations Environment Program, The Business Case for Eco-innovation, 2014

(5) SEBRAE and UN Environment, Eco-innovation in small businesses, 2017

(6) OECD, The Future of Eco-Innovation: The Role of Business Models in Green Transformation, 2012;


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