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Original Articles

Towards a framework for sustainability information in product development

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Pages 94-108 | Received 08 Dec 2011, Accepted 13 Mar 2012, Published online: 10 Apr 2012

Abstract

Important, accessible and accurate sustainability information (SI) beyond product and process data is a prerequisite for making knowledge-based decisions in product development and for reducing the unsustainable impacts of products. This article introduces a definition of SI relevant to product development and synthesises existing literature from the period 2000–2010 with the purpose of identifying, collecting and compiling relevant SI into a framework. The aim has been to demonstrate the value of using more and other types of information in sustainable product development than is done through the current scope of existing tools and methodologies. The competent use and exploitation of SI in product development have the potential to lead to the development of more sustainable products and to enhance firms' competitiveness through adding value to products beyond functionality, quality and cost.

1. Introduction

The tangible consequences in economic, environmental and social systems resulting from industrial activities and unsustainable consumption are more than ever forcing firms to improve their overall sustainability performance. Product development and product design have in this respect been the target of much interest from researchers, since up to 80% of the environmental and social cost factors of a product are determined in these early phases (Charter and Tischner Citation2001, Maxwell and van der Vorst Citation2003). It is at this stage that improvements to the sustainability attributes of a product can be made most effectively. Developing more sustainable products is a challenging journey to firms, as environmental and social impacts from a product may occur at all life cycle stages and involve a large number of stakeholders, most of them outside the firms' control.

Product development depends heavily on information to achieve its main tasks (Hicks et al. Citation2002). Hence, for knowledge-based decisions to be made in product development, seeking out relevant information about sustainability issues may be the best way for firms to improve their products. Such information does not just appear, it has to be ‘…collected, compiled and disseminated’ (Erlandsson and Tillman Citation2009). Traditionally, the main focus on information in product development has been on environmental information concerning product and process data needed for life cycle assessment (LCA), various ecodesign tools, environmental certificates, etc. Less research explores other types of information relevant to product development, or information concerning the broader context of sustainability issues.

There is some research on sustainability disclosure covering transformation of information from a firm to its stakeholders (Moffat and Auer Citation2006, Brown et al. Citation2009). Others have focused on IT systems for environmental information management within a firm (Carlson et al. Citation2001, Frysinger Citation2001), systems that mainly focus on how to capture, store and retrieve environmental information, disregarding the actual information identification and collection. Yet, other researchers have focused more on the potential for knowledge acquisition through stakeholders (Roy and Thérin Citation2008, Bos-Brouwers Citation2010), but without identifying relevant information.

In a product development context, a review of ecodesign tools and methods concluded that relevant information may be found among different actors of a firm, which requires a broader network of actors than traditionally considered in product development and design (Baumann et al. Citation2002). Other researchers have reviewed external stakeholders such as universities, consultants, NGOs, end-users and regulators as senders of green information and signals relevant to the green innovation process (Foster and Green Citation2000). The most recent addition is a framework for corporate environmental information collection, management and communication (Erlandsson and Tillman Citation2009). This framework sorts out what corporate environmental information is, and examines stakeholders as influencing factors, but not in the context of product development.

Based on the limited research available, we argue that there is a need to identify, collect and compile information beyond mere product and process data and environmental issues. For firms engaged in the development and manufacturing of new products, or in improving existing products, using such information to build knowledge on sustainability issues in product development may help these firms develop a broader vision on sustainable product development as well as provide useful additions to already existing practices in the field. Hence, the main purpose of this article is to explore what such sustainability information (SI) in relation to product development is, and what stakeholders are involved. The assumption behind the present work is that SI may be a key to increased knowledge in product development, which may further enhance firms' ability to develop and manufacture more sustainable products. Sustainability may be one way of adding value to products beyond functionality, cost and quality, and thus enhance firms' competitiveness.

In this article, the exploration of SI has been performed through the development of a SI framework, since a framework is an easy-to-understand way of compiling potentially relevant information. This framework renders further studies on SI possible. With more knowledge on SI in general, it may be possible to study which SI is most influential in relation to sustainable product development, how such information can be made more accessible to firms and which factors influence the importance and accessibility. The ultimate goal of such studies is to develop knowledge that may increase manufacturing firms' ability to develop sustainable and commercially viable products.

1.1 Terminology

SI in this article is defined as stakeholder information elements potentially capable of contributing to knowledge in product development, combining the environmental, social and economic dimensions of sustainability. SI explicitly includes information beyond internal product and process-related data, sustainability expectations from firm stakeholders towards the product itself or towards the firm (Aschehoug et al. Citation2011). The definition of SI is a synthesis of the triple bottom line (TBL) concept (Elkington Citation1998), stakeholder theory (Freeman Citation1984, Andersen and Fagerhaug Citation2002) and information and knowledge theory (Nonaka Citation1994, Hicks et al. Citation2002). This research is grounded on stakeholder theory as all firms have stakeholders. Moreover, the relationship between a firm and its stakeholders may be characterised by a mutual exchange process of money, goods, information and expectations (Andersen and Fagerhaug Citation2002). The present interest is on information and expectation flows on sustainability issues relevant to product development.

2. Method

The development of a framework was chosen, as this is a pragmatic approach to combining in a new way identified, collected and compiled SI from existing approaches, frameworks, strategies, methods and tools for improving sustainability performance of products and firms in a broad context. The present SI framework was developed based on the scientific literature from peer-reviewed articles from English language scientific journals from 2000 to 2010. The articles were identified through database search in Science Direct and Wiley Online Library. Derived from the above definition of SI, examples of keywords used in the literature search are presented in Table . Moreover, references in relevant articles were used as a second source for finding additional literature.

Table 1 Keywords employed in the literature search.

More than 280 articles were examined in the search for SI elements: 158 of these were found to address elements of SI. In addition, the use of stakeholder theory has supported the systematic collection of potentially relevant SI by providing a systematic approach to addressing ‘anything influencing or influenced by the firm’ (Freeman Citation1984, Donaldson and Preston Citation1995).

For information to be truly useful for firms, the SI also has to be important (to product development), accessible (easy to obtain) and accurate (represent a fact with some degree of precision and exactness) (Lee et al. Citation2002). Thus, SI was searched for in a wide context, using the following leading questions:

What kind of SI is potentially important to product development?

From which activities and from where (stakeholder groups) is the SI available?

With what degree of accuracy can the information generally be described?

3. Introduction to relevant stakeholders

3.1 Government

SI from the European Commission's (EC) directives, legislation and regulations is provided from governmental agencies. The EC has passed several directives and regulations, mandatory for all European Union member countries and its associates. For this reason, most European countries have adopted and transposed the EC directives into national legislation (Angerer et al. Citation2008).

The many product-oriented environmental policies [waste from electric and electronic equipment (WEEE), end-of-life vehicle (ELV), energy-using products (EuP) and restriction of hazardous substances (RoHS)] demonstrate a shift towards more holistic approaches to managing the impacts from production–consumption systems (Tukker Citation2006). The extended producer responsibility (EPR) principle plays a similar role. The purpose is to promote life cycle environmental improvements, to reduce pollution as well as resource and energy use, by extending the responsibility of the producer to other parts of the life cycle, especially the product's end-of-life (EOL) phase (Honkasalo Citation2001, Rosen et al. Citation2002, Sanne Citation2002, Li and Geiser Citation2005, Gehin et al. Citation2008).

In addition to regulations, some countries' public agencies and other large institutions have developed specific guidelines for big volume purchases and guidelines for environmentally responsible public procurement (Li and Geiser Citation2005). The aim is to give preferences to products or services that are environmentally friendly, and to create a market for environmentally benign products (Li and Geiser Citation2005).

Linked to sustainable product development, every relevant requirement of the EC must be looked upon as mandatory in terms of product specifications and requirements, as firms' continued access to European markets depends on the product's ability to meet EC requirements (Rock et al. Citation2006).

3.2 Non-governmental organisations (NGOs)

NGOs are legally constituted organisations that operate independently from any government (Kong et al. Citation2002). NGOs are traditionally involved in product development, green labelling, standardisation schemes and green purchasing (Jasch Citation2000, Kong et al. Citation2002, de Boer Citation2003, Erlandsson and Tillman Citation2009). NGOs may be involved in developing sustainable products together with firms, and have power to create market demands for sustainable products (Kong et al. Citation2002).

NGOs can also play the role of consumer organisations and provide information on test results on, e.g. household appliances (Kong et al. Citation2002), in which a firm's products' environmental performances in relation to those of competitors' products are displayed. NGOs may also collect information on environmental claims regarding different products or firms (Kong et al. Citation2002). Negative publicity campaigns from NGOs (Buysse and Verbeke Citation2003) may be another source of SI relevant to product development.

NGOs are often the holders of eco-labelling and standardisation schemes. The labels refer to the qualities of products or production processes and assure the buyers of the authenticity of the product or service provided by a firm. These labels may be divided into generic labels, sector-specific labels or regional labels (de Boer Citation2003). Information on requirements for sustainability labelling and standardisation may be regarded as mandatory input into product specifications and requirements for firms aiming for such.

3.3 Media

Media channels [TV, radio, newspapers, newsgroups, mailing lists and Internet (Facebook, Blogs and Twitter)] have the power to influence and shape customers' behaviour. Media may act as information mediators for other stakeholders, or present new information. The way a product or firm is portrayed in media may directly influence sales numbers. A documentary on harmful substances that may endanger customers' health might affect customers' perceptions of all products containing these substances and their producers. Media channels such as Internet, including social network services, make information on products and firms more accessible than ever, giving customers new power (Kong et al. Citation2002). Damaging information and displays may force firms to change their products or activities, thus also impacting product development.

3.4 Shareholders and investors

It is common belief that environmental protection issues are costly and conflict with economic shareholder values (Prakash Citation2002). Opposite views, the win–win paradigm argues that high focus on environmental issues is beneficial to such shareholder values (Halme and Niskanen Citation2001). A recent study claims that larger environmental improvements following environmental investments are associated with expectations of higher financial gains (Plaza-Ubeda et al. Citation2009). A growing number of empirical studies also report on a positive relationship between corporate social performance and financial performance (Callan and Thomas Citation2009, Alniacik et al. Citation2011) meaning that firms do not need to view sustainability and profitability as conflicting goals.

As shareholders and investors are increasingly concerned with corporate pollution and the risk of costly sanctions (Halme and Niskanen Citation2001), this concern may also be expanded to include products, as the EPR principle is becoming increasingly important (Li and Geiser Citation2005). We expect shareholders to be reluctant to invest in products resulting in harmful social conditions during use, or in irreversible environmental damage after its EOL. Knowing shareholders' attitudes and values in these matters is consequently important and such information should be considered when setting product development objectives.

3.5 Academia and industry associations

Research and cooperation between academia (universities and research institutions) and firms may provide opportunities for mutual learning, knowledge and practice exchange (Roy and Thérin Citation2008, Erlandsson and Tillman Citation2009). Research institutions and industry associations are frequently involved in the development of or revisions of sustainability standards (Erlandsson and Tillman Citation2009) or legislation and may consequently act as ‘knowledge brokers’ for firms. Especially, for smaller firms, cooperation with knowledge institutions may be important in innovation projects (Bos-Brouwers Citation2010).

3.6 Financial institutions

Financial institutions are increasingly engaging in environmental activities. Their environmental influence is typically physical, financial or immaterial (Lundgren and Catasus Citation2000). The physical flow refers to the banks' own environmental stewardship and includes issues such as recycling paper, demanding ISO 14001 certified suppliers, introducing low energy lighting/heating/cooling and responsible waste management. The financial flows are concerned with the core business of banks. Environmental and ethical checklists to protect the banks' own profitability is another way of influencing firms' actions (Lundgren and Catasus Citation2000). The bank can demand a higher risk premium for poor environmental performers, withdraw capital, refuse to extend new loans to such firms (Buysse and Verbeke Citation2003) or favour firms by offering low-interest loans based on environmental performance (Lundgren and Catasus Citation2000, Jayne and Skerratt Citation2003). Another way banks exert influence is through funds specially developed for firms aiming at environmental improvements. The EU has, for instance, a fund programme called Growth and the Environment, through which it sponsors initiatives by sharing the potential loss of a loan (Lundgren and Catasus Citation2000). Immaterial flows are concerned with the indirect impact information, knowledge, culture and policies have on the environment (Lundgren and Catasus Citation2000).

In a product development context, knowing banks' sustainability values might make firms bargain for more favourable interest rates based on product development portfolios. Firms may also be willing to change product development strategies to qualify for special risk funds.

3.7 Competitors

Engaging in stakeholder partnerships with competitors to gain information relevant to product development is for most firms not an option for confidentiality reasons. Benchmarking may, however, be an option. Benchmarking is ‘the process of continuously measuring and comparing one's business process against comparable process in leading organizations to obtain information that will help the organization identify and implement improvement’ (Andersen Citation1999). Competitive benchmarking allows for comparison with a firm's closets direct competitors. Performance benchmarking makes it possible to compare key figures on, for instance, a product's sustainability performance.

Environmental benchmarking is a method for improving products (Boks and Stevels Citation2003). It creates a link between environmental awareness and product design, as the benchmark gives information on current product environmental performance, and provides a platform for discussions on further improvements. SI derived from product performance benchmarking is typically product and process oriented: durability, problematic materials used, volume, weight, etc. (Boks and Stevels Citation2003).

3.8 Suppliers

Unsustainable impacts upstream or downstream a supply chain may occur in other parts of the product chain than at the firm's own production sites. In order to make sound decisions in product development, information about suppliers is needed outside the current scope of quality, economy and functionality issues. Well-known firms such as Nike have learned the hard way that public accusations of child labour and environmentally harmful practices lead to loss of reputation, sales and customers (Young and Kielkiewicz-Young Citation2001).

Sustainable supply chain management (SSCM) may be one way of generating the necessary information as input for product development. SSCM ‘is the management of material, information and capital flows as well as cooperation among companies along the supply chain while taking goals from all three dimensions of sustainable development, i.e. economic, environmental and social, into account which are derived from customer and stakeholder requirements’ (Seuring and Müller Citation2008). Reported advantages from engaging in SSCM are increased sales, more satisfied customers, smoother supply systems and reduced costs (Handfield et al. Citation2005, Sharfman et al. Citation2009). Supplier involvement is also recommended as suppliers have specialised product and process capabilities. Utilising such information in product development may reduce time to market, improve product quality and reduce costs (Johansson and Magnusson Citation2006).

Dow Chemicals for instance cooperated with its transportation suppliers to design an innovative and safer rail car. In the automotive industry, similar partnerships with paint and chemical suppliers are common in order to develop more environmentally benign products that car makers cannot otherwise develop (Darnall et al. Citation2008). Other researchers suggest that firms must integrate environmental management strategies into all supply chain stages, including product design, procurement, manufacturing, packaging and logistics in order to be successful (Handfield et al. Citation1997).

3.9 Customers (value chain and end-users)

A holistic approach to sustainable product development allows for preferences, views and behaviours of customers (Krantz Citation2010). Considering sustainable consumption in relation to product development provides the product designer with opportunities for developing creative concepts for immaterial culture and for proposing new ways of organising daily life (Marchand and Walker Citation2008).

Information on customers' environmental awareness, acceptance and behaviour change may be very relevant to product development (Gilg et al. Citation2005). By making the sustainable features of products more visible and apparent through product design, one can enable customers to choose sustainable products and services and to engage in sustainable lifestyles. Providing ecological and socially acceptable product alternatives may be a way for designers to influence and encourage customers already interested in directing their habits towards more sustainable consumption (Marchand and Walker Citation2008). Monitoring product usage, for instance, may provide valuable information on customers' decisions on preventive maintenance and EOL decisions that is crucial to developing products with an ecological and environmental EOL process as in design for remanufacturing (Sundin and Bras Citation2005).

Likewise, understanding sustainability attitudes among potential customers is important to determining appropriate marketing strategies that may influence commercial success and continuation of sustainable product development. A complicating factor is, however, customers' tendency to overestimate their own willingness to purchase eco-labelled and environmentally friendly products (Peattie Citation2001).

Within the area of marketing, researchers have focused their work on why green marketing fails and on the failing willingness among consumers to pay for green products (Meyer Citation2001, Peattie Citation2001, Prakash Citation2002, Chamorro et al. Citation2009, Thun and Muller Citation2010). The most important factor identified in the literature is the cost–benefit difference. The often forgotten issues related to the cost of the products include factors such as ‘search cost’ (green products are often less available), ‘information costs’ (you have to be informed to consider alternatives), ‘product cost’ (selling price), ‘cost of usage’ (unlearning old behaviour or learning new behaviour) and ‘cost of disposal’ (special requirements for disposing of the product) (Meyer Citation2001, Peattie Citation2001). Together, all these costs may be perceived to override the benefit side. Consequently, information on customer costs and benefits should be included in product development.

3.10 Management and employees

In product development, a key issue is how internal stakeholders respond to external stakeholders' concerns and expectations, as internal stakeholders' responses influence actions and decision making in product development. Stakeholder pressure is exerted and received on various levels in a firm. Consequently, the way internal stakeholders react is dependent on the recipients' organisational belonging (Delmas and Toffel Citation2004). Engineers may perceive environmental pressures differently from legal departments. Legal departments are likely to interpret pressures in terms of risks, liability and lawsuits. Engineers are likely to be more concerned with direct operating consequences. Likewise, the source of the environmental information and the managers' perception of the source may influence how managers adopt new environmental practices (Henriques and Sadorsky Citation1999, Delmas and Toffel Citation2004). Information from shareholders is likely to be viewed as very important by managers, while information from NGOs may be regarded as being less important to product development.

Managers' personal values, beliefs, commitment and knowledge on sustainability also influence how they understand and assess the importance of stakeholder concerns and requirements (González-Benito and González-Benito Citation2006, Plaza-Ubeda et al. Citation2009). Although a manager with great knowledge and commitment to environmental issues is perceptive and responds positively to environmental expectations, also in a product development context, a manager with less commitment to environmental issues is more likely to overlook or disregard such expectations.

Employees are also affected directly and indirectly by a firm's sustainable values and actions. Managerial attitudes and positions as motivators play an important role in environmental pro-activity (González-Benito and González-Benito Citation2006). Studies have also shown that conventional business aspects such as customisation, organisation and commitment are all important success factors for implementation (Boks Citation2006). Consequently, firm actions and commitments as to sustainability issues influence product development directly or indirectly.

In-house information on sustainability issues is also important to consider. Even if hazardous substances are eliminated in product development, workers may be exposed to other safety hazards, or may not have freedom of association. Products safe for customers are still not sustainable if workers' conditions are compromised during manufacturing, or if manufacturing results in adverse effects on the local community.

4. The sustainability information framework

Identified, collected, and compiled, Table presents the SI framework by stakeholder group, which is identified, collected and compiled. The SI framework presents key information elements potentially relevant to sustainable product development in the manufacturing industry, independent of firm size. The SI elements are organised based on their most prominent product life cycle phase, as information on sustainability impacts across all stages is equally important to sustainable product development. The life cycle stages used to organise the information are materials, manufacturing, transport, use and disposal (Hauschild et al. Citation2005, McAloone and Bey Citation2009). Many of the information elements identified were overlapping, or they described the same information element with other words. In such cases, the information elements were reformulated and merged together. In order to develop an SI framework up to date with current developments and industrial practice, SI elements were reformulated where appropriate to include all TBL elements, not only the environmental domain as frequently described in the literature.

Table 2 A framework for SI elements for product development.

5. Discussion

Developing more sustainable products is considered a journey rather than a destination. This is challenging to firms as environmental and social impacts from products may occur at all life cycle stages and involve a large number of stakeholders. Efforts to guide firms on this journey have been made by reviewing scientific literature and identifying SI that may contribute to knowledge in product development.

Product development may be defined as ‘the sequence of steps or activities which an enterprise employs to conceive, design and commercialize a product’ and is often described as having six steps: planning, concept development, system level design, detailed design, testing and refinement and finally production and ramp-up (Ulrich and Eppinger Citation2008). Given that up to 80% of the environmental and social cost factors of a product are determined in the early development phases (Charter and Tischner Citation2001, Maxwell and van der Vorst Citation2003), it is argued that SI will be most efficient in creating knowledge at these stages. Court (Citation1995) describes knowledge as the ability of the individuals to understand information, including how they handle, apply and use it in a given situation.

Although not envisioned as a tool itself, the information in the framework may be used for continuous sustainability improvements on existing products. SI may be used in the planning phase in developing detailed product requirements and specifications, in developing proposals and a broad range of product scheme solutions in the conceptual phase, and in choosing between different product schemes in system level design, as well as in supporting decision making in the later phases of product development. Information on current or future regulations regarding sustainability issues or requirements for sustainability labelling are the examples of SI relevant to requirements in the analysis phase.

Instead of using SI to create knowledge for developing requirements or other foundations for decision making in product development, another approach is to view SI as a possibility in building knowledge about future scenarios. Sustainability knowledge on future scenarios and trends may inspire firms to propose entirely new meanings to products. Verganti (Citation2009) has argued that radical innovations of product meanings are rarely pulled by users, but are instead proposed by firms through design-driven innovations through manufacturers' knowledge on future socio-cultural evolutions. Consequently, firms' interactions with various stakeholders to collect SI may generate such knowledge, which again may inspire new product meanings based on sustainability. In such cases, the potential impacts of firms' SI use to society at large are significant.

Appreciating that product development processes differ between industries, firms, and also between different products, the authors believe that the SI framework may be suitably customised in line with current demands in firms or industries. Such customisation may be based on information quality criteria that depend on the context, on the problem at hand, as well as on the information customer (i.e. information user) (Salaün and Flores Citation2001, Hicks et al. Citation2002, Lee et al. Citation2002). As product developers are main SI customers, any customisation should reflect product developers' own views of SI importance to products' sustainability performance.

6. Conclusion

Product development has been the target of growing attention as a means of improving the sustainability performance of products. Although, to some extent, firms have succeeded in improving their products by applying tools for ecodesign and the like, taking sustainable product development to the next level may require a broader perspective than that of current industrial practice. Making use of more and other types of information to build knowledge on sustainability in product development may be an additional way for firms to improve their products and increase firm competitiveness under the assumption that increasing sustainability may be a way of adding value to products beyond traditional aspects of functionality, cost and quality.

Grounded in stakeholder theory, an SI framework has been developed based on extant scientific literature. The framework presents SI that is identified, collected and compiled across life cycle stages for the most relevant stakeholder groups. Compared to existing approaches, the SI framework represents an expansion of existing research: first, the focus is shifted from a supply chain or value chain perspective, in which only a limited number of stakeholders are considered, towards a holistic stakeholder approach which includes all firm stakeholders. Second, the framework incorporates information in a TBL context. As reviewed in the introduction, existing work so far is mainly concerned with environmental information. Third, the attention extends beyond the traditional product and process data boundaries, which opens up for the simultaneous considerations of more information elements in product development than before. Fourth, SI specifically targeted product development has been identified and compiled. The combination of the elements as presented here has to the authors' knowledge not previously been described in the literature.

The SI framework renders further studies on SI possible. With more knowledge on SI in general, researchers may study which SI is most important in relation to product development and how this information can be made more accessible to firms. It is expected that importance and accessibility of such information are dependent on industry sector, or even are firm specific. The ultimate goal of such studies is to develop knowledge that may increase manufacturing firms' ability to develop sustainable and commercially viable products.

Acknowledgements

This research was funded by the Centre for Researched-Based Innovation – Norwegian Manufacturing Future through the Norwegian Research Council.

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