The innovation challenge
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Attaining Akzo Nobel’s growth ambitions, particularly in emerging markets, while reducing our ecological footprint by offering sustainable solutions to our customers, can only be done through innovation. Conceptually, the eco-innovation challenge is well described by the well known and widely accepted definition of the World Business Council for Sustainable Development: “The delivery of competitively priced goods and services that satisfy human needs and bring quality of life, while progressively reducing ecological impacts and resource intensity to a level at least in line with the Earth’s estimated carrying capacity.” As one can imagine, this single phrase represents an enormous innovation challenge for Akzo Nobel and the international business community at large. |
Our product portfolio: 18 percent revenue from products contributing to more eco-efficient solutions
Akzo Nobel unlocks a significant part of its revenue through innovative products, scoring very well in terms of eco-efficiency from a value chain perspective.
Eco-efficiency can be defined as creating more value with less environmental impact. The Akzo Nobel product portfolio has been evaluated in terms of eco-efficiency, and those products were identified that are contributing to more eco-efficient solutions than average. Whenever applicable, the reference has been the current mainstream of products; here defined as competing alternatives commercially available, fulfilling the same function and having a dominant market share.
The inventory of products contributing to eco-efficient solutions across our businesses shows that 18 percent of our revenue is from products that have been assessed to be better than mainstream competing products.
The eco-efficiency of a product can originate from any phase of the value chain: from extraction of natural resources to manufacturing, end-use and final waste management. Whenever available, quantitative Eco-efficiency Analyses were used as input to the inventory.
When no quantitative analyses were at hand, a qualitative assessment was conducted including the following eco-efficiency criteria:
- Toxicity
- Energy efficiency
- Use of natural resources and raw materials
- Emissions and waste
- Risks (e.g. for accidents).
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To qualify for inclusion in the eco-efficient solutions database, the products must be better than mainstream according to at least one of the applied eco-efficiency criteria, and not worse according to any of the eco-efficiency criteria.
The inventory process of eco-efficient products is challenging, because eco-efficiency is a moving target, while competitors and markets are changing fast too. Eco-efficiency and environmental specialists, product specialists and market experts have cooperated when performing the inventory. In the coming years, our approach to identifying the eco-efficient benefits of our products will be further refined in order to reduce imperfections and to improve the quality of our database.
For competitive reasons we are not able to disclose business sensitive information about products in this database. To ensure the validity of the evaluation, the inventory process was subject to an independent audit by our Sustainability Group.
New target to increase share of eco-efficient solutions to at least 30 percent by 2015
As part of its product development and process improvement, Akzo Nobel wants to increase significantly the percentage of turnover from products contributing to more eco-efficient solutions along their value chains. Based on prognoses of our business units, the Board of Management has set a target of 30 percent turnover from eco-efficient products in 2015, via 22 percent in 2009.
Integration of sustainability in all segments of the value chain
Though technological innovation plays a key role in competitively reducing our ecological footprint, the innovation challenge is much broader. Active involvement of a wide range of functional disciplines is required in order to build a truly sustainable company. For this reason, we shifted the focus of our sustainability approach in 2006 from “risk and reputation management” and “building the house” to value creation and pro-activeness in the entire value chain. This year, we have made significant progress in integrating eco-efficiency and other relevant sustainability issues in the following disciplines and management functions:
- Market research and business intelligence
- Strategy: investment decisions, mergers and acquisitions
- Purchasing: building sustainable supply chains
- Technology: sustainable manufacturing, R&D and innovation
- Sales and marketing.
These sustainability projects are managed by senior executives in dedicated teams of experts from each of the management disciplines.
Case study Surfactants |
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Surfactants are used in several business segments such as cleaning and personal care, agriculture, asphalt, mining and the petroleum industries. When it comes to developing eco-efficient chemicals, Akzo Nobel Surfactants is a global industry leader. This business was one of the first to turn potentially challenging restrictions into constructive opportunities to develop new, more ecologically-friendly alternatives that deliver better results for our customers. |
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Berol® 226 - Building better products by embracing change |
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Enforcing a greener future
Due to growing environmental and governmental pressure, many companies – including large retailers – have begun to implement initiatives to demand from their suppliers products that are more environmentally acceptable and based on sustainable technologies.
Akzo Nobel Surfactants sees these market developments as a challenge and also an opportunity to direct its clients towards more ecologically-friendly alternatives. Despite these circumstances, consumers resist change if it means giving up performance. “Green surfactants” have to provide an equivalent level of superior performance while remaining cost competitive in the marketplace.
Berol® 226 – Cleaner for everyone
Nearly every household uses some kind of kitchen cleaning spray, often solvent-based. Berol® 226 removes the dirt and oil while eliminating the negative side effects of many solvent-based cleaners.
While this development satisfies the consumer market, “green surfactants” affect cleaning on a much broader scale. The cleaning of aircraft, cars, trains and metals have an environmental impact also. This sustainable surfactant system enables safe handling while assuring effective cleaning.
Berol® ENV226 – anticipating changes ahead of competitors
Akzo Nobel’s quest to replace solvent-based products with greener solutions has had many positive consequences. By taking a pro-active approach to regulation affecting the cleaning industry, Akzo Nobel Surfactants has demonstrated that better products can result.
European detergent legislation is aimed at phasing out environmentally less acceptable chemicals. The already “green” Berol® 226 was further developed to comply with the strict criteria set by the European Detergents Regulation. Akzo Nobel Surfactants identified the need for its products to comply with increasingly tighter regulations and the ability to be able to adapt to these, as well as future, changes.
The introduction of Berol® ENV226 – the next generation of this “green” surfactant – has given Akzo Nobel Surfactants a distinct advantage over its competitors by remaining one step ahead. For example, in a typical hard surface cleaner formulation, 8 percent of 2-Butoxy Ethanol can be replaced by 1 percent of Berol® 226.
Rising to the challenge and creating better products
From a marketing perspective, these developments enable reduced environmental impact coupled with good performance, resulting in the creation of added value. Akzo Nobel is striving to address environmental concerns in all areas and has successfully delivered solutions that increase efficiency and provide better performance.
