1. What stakeholders need to be on board when pursuing sustainability efforts? And how can design help them converge?
Sustainability efforts are system-level by definition, so they work best when all parts of the organization are engaged. As companies increasingly realize this, they are embedding sustainability-related responsibilities into finance, strategy, procurement, operations, and transformation functions. They are often late to embed sustainability in R&D, though, which is a missed opportunity: when products and services are designed from the start with sustainability in mind, managing for sustainability becomes much easier and impact can be enhanced.
2. Can better design help resolve the tug-of-war between profit, stakeholder value and sustainability goals?
Sustainability efforts by their very nature tend to build value for stakeholders and shareholders in the long run, and their focus on efficiency (through waste reduction, reuse, circularity, etc.) inherently promotes profits. In the short term, though, sustainability programs can add cost, particularly when such programs and practices were not designed in from the start or haven’t been sufficiently developed.
When companies adopt a “design for sustainability” mindset, they intentionally develop products and services that enable efficiency and long-term value. They also understand which areas in their supply chain need updating, and may seek to invest in or partner with alternative suppliers that are creating the products of tomorrow. They expand design efforts to encompass not just the product, but the ecosystem in which it’s created and used.
Take an EV battery, for example. An electric vehicle original equipment manufacturer (OEM) might design its batteries to be easy to replace when their range starts to fall off, and easy to disassemble and recycle when they’re no longer suitable for backup power usage on the grid. These design decisions may require the OEM to build new capabilities and engage new partners, but they also allow the company to tap into a “closed loop” of EV batteries and component materials. This can bring significant benefits to unit economics, supply chain stability, and sustainability. Sustainability efforts deliver their biggest, most immediate win when built in from the start; even when introduced in an active supply chain, they still bring enormous benefits, but they may take longer to materialize.
3. How can companies shift consumers' mindset towards more sustainable buying behaviors?
It’s all about education and communication. People are hungry for more information about the products and services they buy. Gen Z consumers in particular are keen to spend on products that align with their values and buy from companies who display a compelling “purpose” beyond simply turning a product. Companies that explain their value proposition in a compelling manner—or better yet, do the math for customers to prove that value proposition—can count on an edge.
Consumers also benefit from standardized communications, whether in the form of programs such as Energy Star that give a clear seal of approval, or as “nutrition facts” on clothing labels, outlining the gallons of water and tons of carbon involved in their production. Education and communication can be individual corporate efforts, but they benefit enormously from economies of scope when carried out in collaboration across companies, or even at an industry-wide level.
4. Sustainability has been a disruptor in many industries, but as these practices become more common, how do sustainable brands differentiate themselves?
Most companies are working on sustainability today to some degree, but few have adopted circularity into the bulk of their business. Practicing circularity requires coordination across design, operations, and strategy, but it presents a deep opportunity for both stakeholder engagement and supply chain stability.
This makes circularity a major differentiator for two reasons. First, it takes sustainability efforts to the next level. Second, it equips the customer to better understand the product life cycle, and enables them to benefit from more reliable, controllable supply chains.
5. Can you give examples of design increasing the long-term ROI of circular business models and other sustainable solutions?
EV batteries that can no longer deliver a vehicle’s stated range can be swapped out and redeployed in an application that depends less on the battery’s health, e.g. small industrial mobility, stationary energy storage, or EV charging infrastructure. This allows the automotive OEM selling this battery to access two revenue streams: one from its “first life” (the vehicle sale) and another from its “second life”. If the battery is ultimately recycled, this can present a third value stream.
Adidas Parley ocean plastic sneakers
The Adidas x Parley partnership is a great example of circular supply chains to help end plastic waste. Adidas is one of the most established sportswear companies and wields influence in the retail and sports sectors. While the company did not start off as a sustainability native, they have made public commitments about sustainability and have followed up with products to help achieve their goals.
Adidas’ partnerships illustrate how supply chain sustainability can leverage waste as an input. In 2015, adidas decided to introduce a running shoe made of recycled plastic, but rather than buy processed recycled plastic on the open market, they chose to source it in a circular model.