Paula Kivimaa Research Programme for Environmental Policy Finnish Environment Institute (SYKE)

1. Integrating environment for innovationExperiences from product development for paper and packaging13th International Greening of Industry Network ConferenceINTEGRATION AND COMMUNICATION: A CLEAR ROUTE TO SUSTAINABILITY, 2-5 July 2006, Cardiff Paula Kivimaa Research Programme for Environmental Policy Finnish Environment Institute (SYKE)

2. Contents of the presentation • Why environmental integration? • Research approach and data • Findings from product development in paper and packaging • How environmental integration relates to organisations and innovation

3. Why environmental integration? • Innovation processes, generating environmentally harmful and benign innovations, are affected by many different factors (e.g. Edquist, 2005; Malerba, 2005) • Public policies have only a limited impact on innovation, especially on the product side • Thus, company activities are important • Environmental integration could be a potential tool for generating environmental innovations

4. Environmental integration in companies • Environmental integration in companies can be defined as: • Incorporating the principles of corporate environmental responsibility, not only in environmental divisions, but in all the divisions and activities of the company • E.g. product development • Related to whether principles are translated into action (coupling between principles and practice) or whether they are merely symbolic (decoupling between principles and practice)

5. Thematic interviews of company R&D and environmental representatives Content analysis of company environmental reports from 2005 Tetra Pak Stora Enso SCA A review of international trade journals Recorded group discussions Research approach and data • Purpose: • Identify different ways to integrate environmental issues in product development of P&P companies • Explore the potential implications of this to coupling/decoupling and to innovation

6. A framework for analysis • Five potential indicators of integrating environmental considerations into product development: • Environmental criteria in product design and development • The use of life-cycle assessments (LCAs) • Participation of environmental experts in product development activities • Environmental training of the personnel involved with product development • The purposeful development of environmental product innovations

7. Results (1) • Life Cycle Assessments (LCAs) • Commonly used for a long time • SCA: in the hygiene products division, not so much in packaging and printing divisions • SE: no formal routines, but a coordination team • Tetra Pak used since 1975 as an integral part of product development • Environmental training • In SE and UPM reports mentioned as part of corporate training programmes • Not explicitly mentioned in interviews

8. Results (2) • Environmental criteria • Tetra Pak and SCA: a stepwise system of product development, where environmental considerations as specific checkpoints • SE: a context specific approach, no predetermined checkpoints • Environmental expertise • Tetra Pak and SE: central experts • Tetra Pak, and occasionally SE: an environmental expert participating in a development project • SCA: an environmental committee but link to product development vague

9. Results (3) • Purposeful development of environmental innovations • Environmental considerations are implicit in the development of new products in the studied paper and packaging companies • More or less standard practice • In recent years, environmental issues have not been a driving force for new product innovations in the studied companies

10. Systematic procedures for environment in R&D projects Procedural approach Standardised approach Only project-specific R&D personnel used in R&D projects Central environmental expertise used in R&D projects Case-specific approach Expertise-based approach Case-specific consideration of environment in R&D projects Different approaches for integrating environment into product development

11. Organisational principles and practice • Discrepancy between company goals and institutional requirements may lead to situations where principles (stated in public) do no match the practice • E.g. difference between corporate environmental policies/strategies and actual practice of product development • Intentional decoupling between principles and practice can be termed as • Concealment tactics (Oliver, 1991) • Hypocrisy (Brunsson, 1993) • Decoupling may also result from a lack of capacity to conform (knowledge, time, resources)

12. Systematic procedures for environment in R&D projects May suffer from lack of people implementing principles Procedural approach Standardised approach Hypocrisy least likely to appear Only project-specific R&D personnel used in R&D projects Central environmental expertise used in R&D projects Case-specific approach Expertise-based approach Dependent on activities of selected people (human error) Decoupling, or coupling through bottom up flow of ideas Case-specific consideration of environment in R&D projects Links between organisational principles and product development

13. Implications for environmental innovation

14. Conclusions • Environmental considerations are becoming standard practice in product development of the studied companies • But environmental issues rarely act as drivers for product innovations • Systematic procedures and central environmental expertise main means for integrating environment into product development • The appropriate strategy for integrating environmental considerations depends on the nature of the company, institutional requirements in place, and the aim of innovation activities • Because innovation processes are complex and context-specific