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Steering a Product Portfolio Toward Sustainability
Martin BlumbergThinkstep@thinkstep
Andreas KichererBASF SE@basf
Andrea BrownWBCSD@WBCSD
Sven LundieThinkstep@thinkstep
Talke SchaffranneckBASF@basf
Sustainable Portfolio SteeringImplementation Approach
Martin Blumberg VP Sustainable Building & Construction
thinkstep AG
19.10.2016 2
Sustainable Portfolio Steering delivers the following results
Guidance on how you need to shape your products in order to meet future demands and to achieve leading market positions
4
1 Clear understanding of the impact of sustainability on your business (growth and profitability) – today and in the future
2Consolidated market intelligence on how your products are likely to be affected by regulations and/or negative market perception
3 Contribution of your products to sustained value creation along the entire value chain
19.10.2016 3
The Sustainable Portfolio Steering methodology is implemented in a three step approach
DEVELOPSustainable Portfolio Steering
methodology
PILOTSustainable Portfolio Steering methodology
ROLL OUTSustainable Portfolio Steering methodology
In line with theWBCSD framework
Pilot to verify decision tree structure and processes, data
collection logic and tools and assessment
quality
Roll out Sustainable Portfolio Steering
process across the entire portfolio (product groups, sales regions,
applications)
19.10.2016 4
DEVELOP – Outcome and tasks
The outcome of this project phase is a definition of what is considered„sustainable“ within the company´s product portfolio and a methodology andprocess to assess its products against sustainability criteria.
DEVELOP PILOT ROLL OUT
Analyse sustainability needs (regulation, stakeholder requirements) of your products in their market applications across sales regions
Define decision tree structure for evaluating yourportfolio against sustainability criteria
19.10.2016 5
PILOT – Tasks and required stakeholder
TASKS STAKEHOLDER
•Data collection (Financial and sustainability related)
•Assess pilot products andcompetitors
SustainabilityStrategy
Owner of Product Portfolio Segmentation methodology development.Maintenance of cross BU and cross regional consistency
ProductStewardship & Safety
Ecological and toxicological stewardship. Implemen-tation of regulatory and internal product safety requests within the EH&S systems. Expertise on corporate SD concerns regardingphysiochemical, ecotoxicity and toxicity data.
Regulatory Guard of company's compliance with the law and fulfilment of other legal obligations.
Controlling Access to product list and financial information
Marketing Expertise on technical claims of solutions
ProductManagement
Development and management of portfolio, including production, purchase and capacity planning. Expertise on competitive environment and on regional market requirements
Sales/Key-Account Management
Expertise on market intelligence, customer requirements andproducts
Procurement Expertise on issues related to human rights, labour conditions, health & safenty and environmental protection in the procurement ofraw materials
Operations Expertise on technological and plant operations aspects
DEVELOP PILOT ROLL OUT
19.10.2016 6
PILOT – Data collection and assessment toolDEVELOP PILOT ROLL OUT
Web basedApplicatioon
= Global
Accessibility
19.10.2016 7
ROLL OUT – Key deliverablesDEVELOP PILOT ROLL OUT
Sustainable Portfolio Steering provides detailed information on current and forthcoming growth and profitability as well as sustainability performance by product group, application and region
2015 2020 2025Sales [mio €] [%] Sales [mio €] [%] Sales [mio €] [%]
Segment 1 2.850 € 24% 3.560 € 26% 4.830 € 27%Segment 2 8.140 € 69% 9.436 € 69% 12.435 € 70%Segment 3 752 € 6% 590 € 4% 501 € 3%Segment 4 65 € 1% 70 € 1% 89 € 0,5%
Total 11.807 € 100% 13.656 € 100% 17.855 € 100%
These outcomes allow• systematic promotion of sustained value creation• facilitation of long-term profitability and innovation• marketing of sustainability benefit topics and• issue management
Many thanks for your attention
Martin Blumberg VP Sustainable Building & Construction
thinkstep AG
The World Business Council for Sustainable Development
Product Portfolio Sustainability Framework
Andrea Brown, [email protected]
Vision 2050
From Vision to Action
Long-terminspiration
Pathway fortransformation
of society
Focus onqualitativeimpacts
Medium-termaction at scale
2020Must-havesgroundedin science
Scalable businesssolutions and
associated policyrequirements
Focus onquantitativeimpact and
processmonitoring
From 9 Priority Areas to 6 Clusters
Social Impact SustainableLifestyles
Climate& Energy Water
Ecosystems& LandscapeManagement
SustainableMaterials
Basic Needs& Rights
Skills &Employment
SustainableLifestyles
ClimateChange
Water
Ecosystems
Food, Feed,Fibre &Biofuel
NutrientElements
Exposure toHarmful
Substances
Sustainable Materials Cluster Projects & Activities
Materials Marketplace
Share the business case for sustainable product
transformation and develop a best practice framework for companies to assess and
communicate on the sustainability of their product
portfolio
Accelerate company-to-company material reuse
opportunities by developing a lab of scalable by-product
synergy activities, including the Materials Marketplace
Foundations for a moving towards a circular economy
Solutions Lab for Policy Frameworks for Sustainable Material Reuse
Harmonize and simplify the use of life cycle indicators across the buildings value
chain in order to mainstream the implementation of a set of core sustainability indicators
Bu
sin
ess
So
luti
on
s
Circular Economy and the SDGs Po
licy
Establish a roadmap for business to take an active role
in addressing marine debris through on-land solutions to the leak in plastics along the value chain. Deliverables will
include business case for action, policy
recommendations and a pilot project.
Roadmap for Oceans Waste
LCA forWhole Buildings
Product Portfolio Sustainability
Life Cycle Approaches Resource Optimization
Project Objective
Develop a common framework for the sustainability assessment of a company’s product portfolio to enable companies to compete on sustainability performance, not on methodology
The framework will enable:• More companies to understand the business value in
sustainability steering and how to approach it• More credible and effective communication with stakeholders
based on a common language • Sharing of challenges and best practices from leading
companies
Participants
Project co-chairs
Working Group participants
Supported by
What we aim to do
Framework for Portfolio Sustainability Assessment
Business Value of Portfolio Steering Guidance on Assessment Communications
Guidelines Best practices for steering
Impact of a common framework
• Provide a leading framework to enable more companies to steer their own portfolio from across sectors
• Provide guidance that allows companies to develop their approach, learn from the leaders, and get started
• Raise the bar across business to stimulate and deliver more sustainable solutions
Business Benefits of Portfolio Assessment Better decisions, more robust strategies, through more complete and robust insights
Faster growth of more sustainable solutions, through improved focus of efforts
Credible communication on sustainability benefits, at both the portfolio and product level
Stronger client stakeholder relationships, through intensive discussions on sustainability win-wins
Reduced risks, as risks are spotted earlier and managed transparently
Improved corporate image, supporting marketing and recruitment efforts, for example
Key elements of the framework
Categorizing the portfolio Reporting & using results
Segmenting the portfolio Detecting market signals
Key elements of the PSA guidance
Region
ApplicationProduct
Superior vs. competing solutions
Inferior vs. competing solutions
Supporting stakeholder objectives
Not compliant with stakeholder requirements
A++
A+
B
C-
C--
Weighting results
A++
A+
B
C-C- -
� Risk mgmt� Business Strategy� Communication� Marketing� M&A� Innovation� Etc.
Builds on existing guidance, for example:
Examples of existing, relevant WBCSD guidance documents
Accounting and reporting corporate GHG emissions in
the chemical sector VC
1Life Cycle Metrics for
chemical products
2Addressing the avoided
emissions challenge
3Social metrics for
chemical products in their applications
4
� ISO 14040:2006 (Environmental management – Life cycle assessment – Principles and framework)� ISO 14044:2006 (Environmental management – Life cycle assessment – Requirements and guidelines)� ISO/TS 14067 � GHG Protocol (Scope 1+2+3)� European Commission Product Environmental Footprint (PEF)� PAS 2050
Building on
Looking ahead
Proactive steering of the portfolio towards superior sustainability performance
Portfolio Sustainability Assessment Framework(applicable to all industries)
Industry-specific methodology
Industry-specific methodology
Industry-specific methodology
Industry-specific methodology
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Timeline and Next StepsTimeframe for Framework and Chemical Sector Methodology Timeline
1. Share and discuss Framework document with experts, adjacent value chains and other key stakeholders
Q3 2016
2. Develop a first draft industry-specific methodology for the chemical industry
Q4 2016 – Q1 2017
3. Consult experts and stakeholders on the chemical industry-specific methodology
Q1-Q3 2017
4. Upgrade the methodology based on expert and stakeholder feedback
Q3 2017
5. Release methodology guidance document Q3-Q4 2017
