Presented by Elisa Tonda, UNEP. Business Case of Eco-Innovation: "Acting Head, Responsible Industry and Value Chain Unit" at the UN Global Supplier Meeting, the SPHS Capacity Building Sessions, 25th of November, 2015 Copenhagen DENMARK.

1. Contribution to the discussion:
SPHS Capacity Building Sessions at
the UN Global Supplier Meeting
Elisa Tonda
Acting Head, Responsible Industry and Value Chain Unit
UNEP

2. 2
Sustainability mega-forces driving
business strategies
Climate change
Energy and fuel availability
Material resource stocks
Water supplies
Population growth
Food security
Concentration in urban areas
Deterioration of biodiversity and ecosystems
Workers and communities’ health
Increased intensity of natural & technological
disasters

3. Sustainability as source for innovation and
value creation

4. Eco-innovation approach
 Eco-innovation provides an ideal approach to promote the
application of industrial symbiosis
 Eco-innovation promotes systemic innovation based on holistic life-
cycle approach throughout company’s operations - products (goods
/ services), processes, market approach and organizational structure.
 It aims at influencing and involving stakeholders along the entire
value chain.
 Building and fostering collaboration for the identification of
innovative solutions

5. The Business Case
for Eco-innovation
How to communicate the
benefits and opportunities
of Eco-innovation to
stakeholders, including
companies.
It helps service providers
engage companies,
especially SMEs.
Available for download at:
www.unep.org/BCforEI

6. Business Case for Eco-innovation:
5 Drivers
Access new and
expanding markets
New market
segments (low
and high end)
Untapped
markets for
innovative
solutions
Company supply
chains and SPP
Increase
profitability along
the value chain
Ultimate
efficiency
Enhanced
resilience
Enhanced
knowledge and
technical capacity
Stay ahead of
standards and
regulations
First-mover
(competitive)
advantages
Industry
leadership (brand
reputation)
Inform regulation
Attract financial
resources
Banks, long term
investors, crowd
funders
Local and
national
authorities
Mergers and
acquisitions
Increase
productivity and
technical capacity
Acquisition of
knowledge
Strong skill base
Increased
employee
engagement

7. Company cases of Eco-innovation
Ecover (Belgium)
Growth of 10-25%
from 2002-2010
Eco2Distrib
(France)
Growth of 15%
Interface (USA)
35% global
market share
Triodos Bank (The
Netherlands)
Doubled in size
from 2008-2013
KUO Industrial
Group (Mexico)
Expanded
through new
export market
segments
Specialized Solar Systems
(South Africa)
Tripled size in three years
Natura (Brazil)
Access low-end
project through eco-
innovation

8. Case: Ecover
Eco-innovation at the core of their business strategy considering entire value
chain.
Open innovation model - Work across the value chain: Philips (maker of
washing machines) BASF (chemicals) and retailers for refill through dispensers =
strategic positioning
• Innovations in all dimensions:
– Product: Elimination of harmful chemicals and 100% biodegradable
– Packaging: 100% use of bio-based plastics, 100% recyclable
– Process: manufacturing & distribution channels
– Organizational structure
Business Benefits:
Added value –a sustainable product reduced risk of harmful chemicals that
meets client needs
• Average annual revenue growth of 10-20 % in a flat market
• Annual sales exceeding $200 Million
• Expansion to large retail stores (market access)
• Innovations through open source collaboration enables them access to
funding and resources
• Benefited from Sustainable Public Procurement (municipality of Ghent)

9. Eco-innovation at the core of their business strategy
 Change the ‘norms’ in consumption patterns of electricity from AC to solar
powered DC
 Provide sustainable energy solutions to meet market demand in areas of
high energy poverty.
How?
 Product: an innovative Direct Current (DC) micro grid service-system fed by solar
power.
 Designed taking a life-cycle approach, with a modular base.
 Modify home appliances to function on DC (2/3 less energy to AC)
 Process sold as a service-system (new to the market)
 Partnership with local government and technical institutions.
 Enabled research and additional funding
= roll out to the critical mass.
 Smart box serves as the functioning mechanism (remote access)
 Free training for installations, use and maintenance.
Business Growth:
• In 3 years the company has tripled in size
• Expanded to 4 other countries in the region.
Case: Specialized Solar Systems, South Africa

10. Case: Natura
Product SOU compared to conventional cosmetic products:
• 70% less plastic used
• 50 % less production costs (less manufacturing time)
• 60% lower CO2 emissions
• Lower transportation costs
• Innovation in the formula (ingredients)
• Product that can be sold for 50-70% less retail price
Business Strategy: Innovation for market differentiation and sustainability
How?
• Continuous research: new technologies, market trends
• Open innovation model and R&D platform involving partners and scientific
institutions
• Investment from national financial institutions
• Select suppliers on a “shadow price”
• Creation of partnerships to build a chain with higher added value.
• Life-cycle approach A calculator is used for all the indicators of an Environmental
table, and simplified packaging LCA, for all sold products.
Business Growth: Market share of 23 % in Brazil and annual growth of 26 % in 2005-
2010.

11. Case: Eco2Distrib
Business Strategy:
• Change patterns of consumption for consumer goods
• Respond to the market demand of end consumers, product manufacturers, retail.
• Expand to market leaders
How?
 Work with actors in the supply chain to reduce the env. and economic cost of
individual packaging.
 Manufacture machines with to dispense fluid products in retail stores
 Connect to product suppliers and retail stores
Business Growth:
Sales growth of 15 % annually. (Increased income by almost 200 % in 3 years)
Expansion to large supermarket chains and international markets.
Case: SafeChem
Business Strategy: Based on the chemical leasing model, the company manages the
product-specific risks of chlorinated solvents for its clients.
Respond to anticipated regulation on VOC solvents.
How?
-Offering a chemical leasing model, where clients pay per part cleaned, instead of the
volume of solvents.
-In 2007 the VOC directive was implemented throughout Europe. At that point, the
company had a product that was tested and proven, and that no one else could offer.
=competitive advantage

12. Eco-innovation and Industrial Symbiosis
with RECPnet

13. A - Vietnam: Joint Policy Mainstreaming & Pilot SME Application (Agri-food)
B - Sri Lanka: Pilot SME Application (Agri-food)
C – South Africa: Pilot SME Application (Metals)
D – Uganda: Pilot SME Application (Agri-food)
E – Kenya: Policy Mainstreaming
F – Egypt: Pilot SME Application (Chemicals)
G – Colombia: Joint policy mainstreaming & pilot SMEs Application (Chemicals and Metals)
F – Peru: Joint policy mainstreaming & pilot SMEs application (Chemicals and Metals)

14. Information on the Eco-innovation project:
www.unep.org/ecoinnovationproject