A successful “Green strategy » to differentiate from competitors

More than 20 years ago, the “green wave” swept through the industry. We were then talking about “green washing”, referring to a set of more or less coordinated, opportunistic actions that were used to make the offers in place “greener”. But some companies have used this underlying thought to reinvent themselves. They have been able to integrate sustainability into their DNA to make it a differentiating factor, creating value for both the company and its customers. Alcimed reviews the key factors of a successful green strategy.

A “green” vision driven by top management with local accountability

In the examples of successful green strategies such as Skanska or Philips, it all starts with a strong intention of the top management to develop a positioning around sustainability. This vision, which is the backbone of the approach, sets medium- to long-term objectives and short-term milestones to be met in order to align the entire company.

But such a global vision is not enough. It is at the local level which has the most detailed market knowledge that the implementation of the strategy takes place to make initiatives more effective. Based on the feedback from various actors, alignment between the different levels must be found, even if it consumes time and energy. Among other initiatives, the establishment of internal ambassadors is an essential asset to convince and motivate teams to join the effort.

The implementation of tools to support innovative concepts

The players which are the most advanced in their “green strategy” dispose of a wide range of tools that are useful both internally and for their customers. These tools facilitate the monitoring of strategy implementation while providing additional information for customers.

Skanska’s “colour palette”, for example, evaluates all the group’s construction projects on key environmental criteria such as energy, carbon, materials and water. The colours range from “vanilla”, which characterises projects that comply with current environmental regulations, via “green” for those that perform beyond current requirements to “deep green” for projects with no environmental impact. Skanska’s “colour palette” thus supports the construction firms’ objective of having 100% of its projects green and 20% deep green by 2020.

Another approach is the development of an internal company label such as Philips’ “green product” label. This label, certified by an independent body, is based on 6 criteria (energy, packaging, materials, weight, recycling, lifespan). Each new product will have the “green product” label if it has at least 10% gain on one of the green criteria established by the group compared to the competing product or the one it replaces. Obtaining this label directs internal R&D efforts. It also makes it possible to monitor the sales of “green products” and thus to measure the impact of the “green strategy” on sales (60% of Philips’ sales in 2016).

Go beyond market standards, propose new business models

In the construction sector, carbon emissions are typically assessed during the operating phase of the building but not during its production. To go one step further, Skanska has developed a tool to calculate carbon emissions over the entire lifecycle of a building. This tool also proposes alternatives to reduce the project’s carbon emissions. Such an initiative makes it possible to educate and encourage customers who do not yet necessarily take this type of criteria into account in their calls for tenders.

Thinking beyond established boundaries can also be a success factor. Philips, as part of its eco-responsibility strategy, has succeeded in creating a new type of business model. Previously it was often too expensive for cities to install LED lighting. Philips therefore no longer only sells the necessary equipment but rents it out via energy performance contracts.

Towards the beginning of the circular economy?

Actors that have already started a reflection and successful actions on their “green strategy” are thinking about the next step. And that seems to be the circular economy. This approach raises new questions about product design, logistic chains and new collaborations to be established. Philips’ Diamond Select program is an example of such an initiative. The group recycles and resells medical equipment at a lower cost, both enhancing product value and providing smaller structures with access to equipment that was initially too expensive.

“We, at Alcimed, are convinced that the circular economy is the next step in the commitment to sustainable development. We support companies in defining their green strategy but also in their transition to the circular economy” concludes Vincent Pessey, Project Manager at Alcimed.