Both the U s. and European economies have taken the lead in establishing some early concepts and policies for realizing the smart grid.
and a relatively low economy of scale when compared to the transmission systems. Several legislative mandates have provided various opportunities for the modernization of the electric grid in the U s. Fig. 1 shows a timeline of some events related to the electricity grid in the U s. that have served as harbingers to important changes via mandates
and legislations. B. Trajectory in Europe The unification of the European grid was achieved in parallel to the economical unification of European countries.
and sees that investments decrease. However, the sense of ownership and contribution of each individual country to the whole grid is different from how the U s. directs initiatives through its Department of energy.
and securing investments for projects in the energy sector. 2) An overall energy-efficiency action plan (2007 2012) establishes a firm objective of 20%improvement 3) The European energy infrastructure package identifies smart
4) incorporation of demand-side resources and demand response; 5) deployment of smart technologies and integration of smart appliances and consumer devices;
8) standard development for communication and interoperability of equipment; 1156 IEEE TRANSACTIONS ON INDUSTRY APPLICATIONS, VOL. 48, NO.
and services 9. An illustration of an implementation of the smart grid is shown in Fig. 2. The U s. National Institute of Standards
bulk generation, transmission, distribution, customers, service providers, operations, and markets 10. In the EU, the smart grid strategy is motivated by concepts of innovation with regard to social and environmental reforms for an interactive economy.
The European energy policy relies on 11 the following: 1) security of supply; 2) sustainability;
Dispositions are taken also to favor international energy (electricity and gas) trade, collaboration and investment, separation of generation and supply from transmission networks, decentralized generation and energy efficiency,
and correspond to an investment of about 190 million. The Seventh Framework Program, the current program, will run until 2013
including on-demand power quality of supply, enhanced reliability, deferrals in transmission investment, and avenues for meeting renewable mandates in the face of growing disinvestments in transmission assets all of which cater to the smart grid philosophy.
B. Energy Storage Electricity is a highly perishable commodity that must be consumed within a very short span of production
4) provides ancillary services, supplying reactive power for voltage regulation; and 5) supports transmission-anddistribution (T&d) investment deferral.
Energy storage with power-electronics-interfaced units can create virtual rotational inertia, the so-called virtual synchronous generators,
informing end users of all required pricing parameters. 9) Communications: The intelligent functioning of the smart grid depends on the capability to support a communication layer in tandem with an energy delivery layer in the grid. 10) Fault tolerance/self-healing:
A key issue is a built-in ability to minimize the propagation of failures and resilience against such local failures.
This capability should be incorporated with monitoring, communication, and reconfiguration features of power electronics systems. Additionally, power electronics interfaces must be configured to avoid nuisance trips.
The two-way communication ability of smart meters allows the transmission of delivered and generated energy data along with actionable commands to customers.
With technologies such as WIFI Zigbee, and home area network (HAN) communication systems, smart meters can now act as interfaces for energy management entities, customers,
and utilities to control a number of appliances within a residential home based on price signals 25.
Threshold voltage events can trigger communication with utilities for providing alerts to disturbances prior to customer equipment failure or discomfort.
E. DSM Demand-side management (DSM) refers to the ability to change energy consumption patterns and characteristics via structured programs.
while some conservation programs aimed at deferring investments in new assets (including generating facilities, power purchases,
since mid-1990s following deregulation of the industry, has enabled economic efficiency, fostered investments in technological innovations, and, for the most part,
customers and utilities will need to interact via DSM structures aimed at increased energy efficiency, lowered cost of engaging inefficient and costly generators at peak periods,
and time and provide incentives to customers to become more active in controlling their electricity consumption 29,
then real-time pricing is known as hour-ahead pricing. 3) Critical peak pricing is used to force customers to avoid consuming electric energy during specific peak periods.
The International Electrotechnical Commission (IEC) 61850 Standard (Communication Networks and Systems in Substations) provides authoritative information relevant to the design of substation automation 33.
Reconfiguring the system in islanded mode may require hitherto unknown rate and amount of data exchange, two-way communication links,
safeguarding the electricity supply to its customers 34. A self-healing system should be based on a wide-area monitoring network that incorporates a variety of sensors
Fig. 5 shows how several communication technologies can be applied for such data, according to their characteristics.
Two-way-communication-enabled smart appliances, smart meters for control of sources, loads, and storage must be implemented in a platform that allows both digital information and electric energy to flow through a two-way smart infrastructure.
The requirements for these communication infrastructures are reliability and resilience, bandwidth, interoperability, and costs. Several communication protocols and media are currently under various stages of R&d for implementation in smart grids.
Examples include broadband over power line and power line communications which use existing power lines to transmit information;
and marketing services. It also mandated the creation of independent system operators, eventually making possible the creation of an open-access same-time information system a Web-based secure database of transmission-systemrelated information.
climate change legislation and energy policy have been linked intimately with a strong impact on investment decisions from private companies.
This raises the question of the real interests of the many stakeholders in the smart grid.
Moreover, the smart grid requires utilities to make significant changes to their present business models (e g.
in order to ensure that each player finds an acceptable ratio between the costs and returns on investments.
a requirement for demand response actions and DSM programs to achieve success. The acceptance of consumers regarding smart metering
Communication and user interfaces will be pervasive, and the integration with the new web of things will allow individual home
and breeding a new class of informed customers who engage in the grid operations are expected to be achieved.
quality of customers, IEEE Trans. Smart Grid, vol. 3, no. 2, pp. 738 743, Jun. 2012, doi:
tp=arnumber=6191343&isnumber=6204228 28 D. Kirschen and G. Strbac, Fundamentals of Power systems Economics. Chichester, U k.:
Wiley, 2004.29 A.-H. Mohsenian-Rad and A. Leon-Garcia, Optimal residential load control with price prediction in real-time electricity pricing environments, IEEE Trans.
vol. 41, no. 1, pp. 81 92, Jan. 2011.33 Communication Networks and Systems in Substations, International Electrotechnical Committee Standard IEC 61850,2003. 34 S m
Data Sheet (TEDS) Formats, IEEE Standard 1451.4-2004, Dec. 2004.38 Q. Zou and L. Qin, Integrated communications in smart distribution grid, in Proc.
operation, and economics of finite-inertia systems and integration of renewable-energy systems to electric grids.
presents a series of targeted recommendations aimed at increasing the demand and uptake of the digital solutions by European small firms in the areas of cloud computing,
opportunity, diversity, innovation, integrity and accountability. We believe that accountants bring value to economies in all stages of development.
We aim to develop capacity in the profession and encourage the adoption of consistent global standards.
and seek opportunities for long-term success. By focusing on the critical role professional accountants play in economies at all stages of development around the world,
and enhance the role the accountancy profession plays in supporting a healthy global economy. www. accaglobal. com/accountants business The Association of Chartered Certified Accountants,
presents a series of targeted recommendations aimed at increasing the demand and uptake of the digital solutions by European small firms.
and prospects for, the global economy. The increasing emphasis placed on the role of the digital capability for the European recovery (European commission 2010b) raises the question of how the digital agenda can effectively engage the small and medium-sized enterprise (SME) sector
which accounts for over 99.8%of the European business population (Stawiñska 2011. The potential for information and communication technologies (ICT) to deliver efficiency gains is accepted widely.
While large firms are often at the forefront in recognising and investing in IT advancements,
while the survey reveals significantly lower levels of demand in other parts, such as Eastern europe. Similarly, the need for action from various stakeholders seems to vary,
with Eastern europe expecting more action from banks and governments in relation to the e-invoicing agenda for example.
such as accountants, must be considered carefully by the European commission and other stakeholders. Owing to the limited management and resource capacity of small firms, the SME sector is highly reliant on external advice.
capital-upfront investment model to an operational expense, cloud computing promises to enable especially SMES and entrepreneurs the development and adoption of innovative solutions.
-based email services (hotmail, gmail, yahoo, etc. A more complete definition, however, offered by the European commission,
or infrastructure that enables the execution of services and applications in a managed and elastic fashion (European commission 2010c).
and scale back their operations without a major upfront investment. Despite its potential, the level of uptake remains low
to enable European SMES to make the most of cloud computing. Making an informed choicecloud computing requires careful consideration by an SME owner of the kind of services the firm is able to buy, the interoperability of these with current software, the pricing of bolt-on services,
comparable and relevant information when choosing services and providers. This is especially pertinent in light of the fact that some 60%of UK small firms recently surveyed admit that they do not know what cloud computing is (Blundel and Gray 2011.
are engaged in this debate will be crucial in ensuring that SMES are represented better in their use of cloud services.
and confidence Increasing awareness of and confidence in cloud services among the SME sector is an important educational challenge.
even though 49%of SMES already exchange data in an automated fashion with other ICT systems outside their own enterprise (Giannakouris and Smihily 2010.
improving the general knowledge of the cloud services available while at the same time building confidence in the services on offer.
The survey reveals that over one-third of ACCA's members already feel that they have a good understanding of cloud services
Lack of cost effective solutionslack of universal platformslack of access to fast internetlack of government actiontoo complexperceived security risklack of government initiativesno need, customers don't require thislack of access
customers don't require thislack of government initiativesperceived security risktoo complexlack of government actionlack of access to fast internetlack of universal platformslack of cost effective solutionshas some expertisehas no expertise0%25
platformslack of access to fast internetlack of government actiontoo complexperceived security risklack of government initiativesno need/customers don't require thislack of access to appropriate specialists/advisers/consultantslack of support
customers don't require thislack of government initiativesperceived security risktoo complexlack of government actionlack of access to fast internetlack of universal platformslack of cost effective solutions0%25%50%SMES
and lack of demand were cited by accountants as the key reasons why SMES do not use e-invoicing.
and the most common obstacle (though no more common here than elsewhere) appears to be a lack of demand no interest from customers.
but more emphasis was placed on the lack of demand, and the focus shifted from complexity to cost-effectiveness.
Banks are therefore a crucial stakeholder that ought to engage in the development and growth of a SME e-invoicing agenda.
not only can they fulfil the need for effective coordination of the multiple stakeholders that need to be involved through setting up national e-invoicing forums (such as banks, industry representatives and SMES),
of universal platformslack of access to fast internetlack of government actiontoo complexperceived security risklack of government initiativeslack of need/customers generally don't requirethislack of access to appropriate specialists/advisers/consultantslack
customers don't require thislack of government initiativesperceived security risktoo complexlack of government actionlack of access to fast internetlack of universal platformslack of cost effective solutions0%25%50%Eastern
and a general resurgence in enterprise activity have provided a supportive environment for the incubation of a new system of financing businesses:‘
by improving the economics of deposit taking, due diligence and lending in favour of both investors and businesses, improving customer satisfaction and most importantly keeping default or failure rates low.
the opportunities available to small businesses from this new form of‘social lending'are potentially significant;
and growth opportunities offered by future economic recovery could provide important incentives to social investors and small business owners alike.
For this unique opportunity to materialise, a number of issues need to be addressed. Figure 5:
Too expensivelack of awarenesslack of support from bankslack of access to appropriate specialistsno need, customers don't require thislack of government initiativesperceived security risktoo complexlack of government actionlack of access to fast internetlack
of government actiontoo complexperceived security risklack of government initiativesno need/customers don't require thislack appropriate specialists/advisers/consultantslack of support from bankslack of awarenesstoo expensivesmes are not using P2pfinancesmes are using P2p
wide range of financial products (encompassing equity investment, invoice discounting, secondary debt markets and insurance) will be of key importance to increasing its appeal.
and social enterprises will ensure that social lending platforms, specifically aimed at small firms, become a credible alternative to bank funding.
others, such as Crowdcube in the UK, Seedmatch in Germany or Wiseed in France, provide equity investment,
Accessing a company's financial accounts is a crucial part of this process (even though individual lenders/investors can choose not to consider these)
Access to advicesocial lending and P2p finance are still niche business models and as a result the influence of adoption rates on the types of problem identified by accountants is strong.
opening up new markets and opportunities that would otherwise not have been within their reach. The internet provides one of the rare platforms on
Generally speaking, lack of awareness, security risks, a lack of demand and a shortage of cost-effective solutions tend to prevent SMES from engaging in e-commerce, according to ACCA members (Figure 6). As with other aspects of the digital agenda however,
and addressed by the industry and other stakeholders. Internet is the fastest growing retail channeleuropa. eu (2009),
/customers don't require thislack of access to appropriate specialists/advisers/consultantslack of support from bankslack of awarenesstoo expensivesmes don't use e-commercesmes use e-commercefigure 6:
Too expensivelack of awarenesslack of support from bankslack of access to appropriate specialistsno need, customers don't require thislack of government initiativesperceived security risktoo complexlack of government actionlack to fast internetlack of universal
and penalising a significant proportion of enterprises through wider adoption of any of the digital solutions discussed in this report.
On the other hand, lack of demand, risk, cost effectiveness, lack of advice and availability of reliable internet access are‘second generation'problems more common in sectors that are more familiar (though still not very much so) with the technology.
Q3, 2011, online report,<http://www2. accaglobal. com/general/activities/library/economy, accessed 26 september 2011.
Annual Report on EU Small and Medium-sized Enterprises 2009, online report,<http://ec. europa. eu/enterprise/policies/sme/facts-figures-analysis
European commission (2010a), Communication from the Commission to the European parliament, the Council, the European Economic and Social Committee and the Committee of the Regions:
A Digital Agenda for Europe, online report,<http://ec. europa. eu/information society/digital-agenda/documents/digital-agenda-communication-en. pdf>,accessed 26 september 2011.
European commission (2010b), Communication from the Commission: Europe 2020: A Strategy for Smart, Sustainable and Inclusive Growth, online report,<http://europa. eu/press room/pdf/complet en barroso 007 -europe 2020 -en version. pdf>,accessed 26 september 2011.
Opportunities for European Cloud computing Beyond 2010, Expert Group Report, online report<http://cordis. europa. eu/fp7/ict/ssai/docs/cloud-report-final. pdf,
European commission (2010d), Communication from the Commission to the European parliament, the Council, the European Economic and Social Committee and the Committee of the Regions:
<http://ec. europa. eu/enterprise/sectors/ict/files/com712 en. pdf>,accessed 26 september 2011. European commission (2010e), Internationalisation of European SMES, online report,<http://ec. europa. eu/enterprise/policies/sme/market-access/files/internationalisation of european smes final en. pdf,
>accessed 26 september 2011. European commission (2011),‘E-Invoicing',online text, <http://ec. europa. eu/internal market/payments/einvoicing/index en. htm>,accessed 26 september 2011.
Giannakouris, K. and Smihily, M. 2010), ICT Usage in Enterprises 2010, online report,<http://epp. eurostat. ec. europa. eu/cache/ITY OFFPUB/KS
The Eco-Innovation Observatory is financed by DG Environment of the European commission: Legal notice Any views or opinions expressed in this report are solely those of the authors
Funded by the European commission, DG Environment, Brussels Layout Eco-innovate! A guide to eco-innovation for SMES and business coaches 3 eco-innovation observatory 1 Introducing eco-innovation...
6 2 Revisit your business model...12 3 Eco-innovate production processes...18 3. 1 Waste and emissions...
32 4 Eco-innovate products and services...36 4. 1 Research and development...38 4. 2 Design...
This guide is a practical and comprehensive introduction to eco-innovation addressed primarily to small and medium-sized enterprises (SMES.
The booklet overviews emerging business opportunities eco-innovation has to offer to companies that reconsider business models,
develop new products, technologies or services, or improve production processes. The aim is to summarise key business issues,
and coaching services to SMES. This guide is one of many publications and information sources developed by the Eco-Innovation Observatory (EIO).
Over the years we have gathered convincing evidence on the benefits from ecoinnovation, especially regarding cost savings and new market opportunities.
We believe that ecoinnovations in SMES will contribute to a making a green economy work in Europe and worldwide.
The focus then shifts to the key issues, challenges and opportunities of eco-innovation for SMES.
business model and value proposition process eco-innovation product eco-innovation getting eco-innovations on the market online resources for eco-innovation.
Incremental eco-innovation focuses on improving existing goods and services, whereas disruptive eco-innovation is about thinking outside of the box
It means being economically competitive while respecting the natural environment. Eco-innovation takes the full life-cycle perspective into account, rather than just focusing on environmental aspects of individual life-cycle stages.
and delivering new services, but it also encompasses reducing environmental impacts in the way products are designed,
but creating new services and introducing organisational changes are just as important. At its core, eco-innovation is about creating business models that are both competitive
and respect the environment by reducing resource intensity of products and services. Sustainable management of natural resources Tackling climate change Improving biodiversity and ecosystems Saving material and energy costs New products and services:
new markets New business models Enhancing quality of life Creating new and sustainable jobs Material security Resource justice economy environment society politics Figure 2:
Why eco-innovation 1 EIO 2010: Eco-innovation Observatory Annual Report 2010. Pathways to a resource-efficient Europe, www. eco-innovation. eu/index. php?
option=com content&view=article&id=200&itemid=258 Eco-innovate! A guide to eco-innovation for SMES and business coaches. 9 eco-innovation observatory Introducing eco-innovation Resilient business models Companies can revisit their business models
and value propositions by reconsidering novel ways of delivering their services. Alternative approaches to delivering services (e g. functional sales) can both reduce resource intensity,
bring about new market opportunities and make business more resilient in the face of market trends, notably fluctuating commodity prices.
New markets and customers Companies developing and selling new ecoinnovative products, services and technologies are motivated by the opportunity to access new markets and customer segments.
A clear incentive here is maintaining and generating higher profits. Business case for eco-innovation Cost avoidance Regulatory requirements
anticipation of new standards Cost saving Material and energy cost savings due to efficiency gains Resilient business models Creating business models focussed on delivering services
and performance to customers New markets and customers Higher revenues and profit Cost saving Eco-innovations resulting in improved resource productivity save money by reducing costs of material
and energy. This type of savings opportunity is associated especially with process innovation and grounded in initiatives like cleaner and leaner production.
The business case for material efficiency has increased with rising commodity prices. Complying with regulations Many companies eco-innovate their processes
and products to comply with regulatory requirements, but also to meet growing environmental and social standards applied by their strategic partners and clients (e g. retailers.
Product and service eco-innovation Process eco-innovation Figure 3: Business case for eco-innovation Eco-innovate!
A guide to eco-innovation for SMES and business coaches. 10 eco-innovation observatory Introducing eco-innovation Eco-innovate!
A guide to eco-innovation for SMES and business coaches. 11 eco-innovation observatory Life-cycle stage Environmental consideration Business case Resource extraction Reduce environmental pressures
and impacts by limiting extraction of virgin resources and by limiting unused extraction Consider renewable and secondary resources (circular economy) Reduce cost by improving efficiency of extraction Comply with
and energy productivity and by material substitution Build resilience to changes in commodity prices and resource supply Increase your turnover
and profits from sales of resource-efficient products and services Comply with and anticipate new regulations (
land and water Cause less pollution and waste Shift to selling services from products (i e. functional sales, including product leasing
A guide to eco-innovation for SMES and business coaches. 2 Revisit your business model 14 eco-innovation observatory Revisit your business model Key challenges for your business model Rethink your value proposition and your offer:
customers do need not necessarily to own products; services can meet their needs, perhaps even better.
Consider concepts like leasing or sharing for your business. Scan the horizon: what are emerging trends that may influence your value proposition and business model in a short-and long-term?
Prepare to take risks: changing a business model is a continuous process. Integrate an ongoing strategic reflection of your business model.
This will make your business more resilient. Companies most often decide to rethink and redesign their business model to reduce costs
and improve customer experience. Many companies are driven also by environmental and social concerns. Revisit your business model Key Questions
What value do we deliver to customers? Which customers'needs are we helping to satisfy?
What are key the activities and resources that help us to develop and deliver value to customers (e g. skills, resources, strategic partnerships, Intellectual Property (IP))?
How much does our business model depend on our companies 'and our customers'access to and use of material and energy?
Could we consider an alternative way to satisfy the needs of our customers (e g. productservice systems?
A fundamental question for any eco-innovative company is how to deliver value to a customer in a way that is both profitable and less resource intensive.
Reflecting on how to satisfy fundamental needs of a customer, be it a business or household, is the first step in tacking this challenge.
The need for mobility, for example, does not necessarily equal the need to own a car;
the function or performance of a car can be delivered by many other means and forms of transportation or by limiting the need for mobility altogether!
A guide to eco-innovation for SMES and business coaches. 15 eco-innovation observatory Revisit your business model Good practice examples Turntoo:
and derive their profits from its use rather than its sale. Therefore, they have an incentive to make the product as durable and efficient as possible,
functional sales in practice Swedish AGA Gas offers its customers the ability to continuously introduce safer chemicals at lower consumption levels and with less hazardous waste disposal.
AGA Gas reduces their customers'overall chemical procurement costs by reducing use of chemical products,
The main concept is that cars can be hired spontaneously (customers use a chip to unlock the car),
and cleaning. www. car2go. com 2 See more about chemicals management business models in Green Paper by FORA on www. foranet. dk/media/27577/greenpaper fora 211010. pdf Eco-innovate!
A guide to eco-innovation for SMES and business coaches. 16 eco-innovation observatory Learning Resources Business model Generation offers a wide range of resources for entrepreneurs and companies on business model innovation
The role of business models in green transformation Background Paper www. oecd. org/dataoecd/7/34/49537036. pdf Workshop resources www. oecd. org/innovation
/innovationinsciencetechnologyandindustry/thefutureofeco-innovationtheroleofbusinessmodelsingreentrans formationsummaryandpresentations. htm Nordic Innovation produced a series of publications on green business models www. nordicinnovation. org/Publications/green-business-modelinnovation-empirical
-and-literature-studies FORA present a number of cases of green business models in its Green paper:
Green business models in the Nordic Region. A key to promote sustainable growth. www. foranet. dk/media/27577/greenpaper fora 211010. pdf Revisit your business model Eco-innovate!
A guide to eco-innovation for SMES and business coaches. 17 eco-innovation observatory 3 See Schmidt-Bleek F.,2011:
Revisit your business model Measuring environmental performance Ecological rucksacks are the resource requirements of producing products or services.
For services, it is the sum of the shares of the rucksacks of the technical means (Service delivery machines) employed (for example, vehicles, buildings, etc.
or services in terms of their material or energy requirements. www. factor10-institute. org/terms. html The ecological footprint is a measure of human demand on the Earth's ecosystems.
and delivery of waste treatment and transport lca. jrc. ec. europa. eu/lcainfohub/datasetarea. vm Guide to PAS 2050 How to assess the carbon footprint of goods and services shop
and services consumed by the individual or community or produced by the business. www. waterfootprint. org Eco-innovate!
and delivery of products and services. 3. 1 Waste and emissions Key challenges for your business Dealing with waste.
Saves costs of raw materials, transport, storage, management etc. over relatively short time periods and with generally low-risk investments.
PRE-SME Promoting Resource Efficiency in Small-& Medium-Sized Enterprises: Industrial training handbook Figure 5:
Promoting Resource Efficiency in Small & Medium Sized Enterprises is an industrial training handbook. It explains basic concepts like resource efficiency
USA) website contains a wide range of resources that could be useful for ecoinnovators. www4. shwec. uwm. edu/shwec The Money back through the window initiative of the KÖVET Association for Sustainable Economies
A guide to eco-innovation for SMES and business coaches. 25 eco-innovation observatory RREUSE is a European umbrella for social enterprises with activities in reuse,
repair and recycling. www. rreuse. org National Industrial Symbiosis Programme (NISP) in UK helps to identify opportunities where waste products from one industry can be recovered,
This trend cannot continue without detrimental consequences for environment. The price volatility for commodities, notably metals, food and non-food agricultural items, was higher in the 2000s than in any decade of the 20th century6.
The World Economic Forum (WEF) Global Risks Report 2012 ranked extreme volatility of commodity prices as the fifth most important risk in terms of potentially negative impacts7.
At the same time Europe is the world region most dependent on imports, especially for fossil fuels and metals8. 3. 2 Material and energy productivity Many companies are exposed to risks of raw material supply shortages,
and quantity of materials are consumed throughout the lifecycle of our products and services? What measures can we take to reduce the use of materials, energy, water and other resources?
Material productivity expresses the amount of economic value generated by a unit of material input or consumption.
Energy productivity expresses the amount of economic value generated by one unit of energy input or consumption. 5 SERI 2011, Global Material Flow Database. 2011 Version. www. materialflows
Towards the circular economy. Economic and business rationale for an accelerated tradition. 7 WEF 2012:
World Economic Forum Global Risks Report 2012, www. weforum. org/reports/global-risks-2012-seventh-edition 8 European Environment Agency 2010:
The European Environment. State and Outlook 2010. Material resources and Waste. European Environment Agency, Copenhagen. Eco-innovations focused on improving material
and energy productivity can save costs and lower risk by making companies less dependent on imports.
On average, these investments paid off after 13 months. Micro companies achieved high relative savings (comparable to 11%of annual turnover)
Eco-Innovation Observatory Annual Report 2011, Closing the eco-innovation gap, an economic opportunity for business, p. 17, www. eco-innovation. eu/index. php?
German enterprises that reduced their use of metal achieved average savings of € 72,000 per year10.
Substitute resource-intensive materials and products with new materials, products or services that also improve the functionality of the end product.
Research by the Carbon Trust showed that large UK businesses undervalue the financial returns from investments in energy efficiency by more than half.
an economic opportunity for business, p. 17, www. eco-innovation. eu. Eco-innovate! A guide to eco-innovation for SMES and business coaches. 29 eco-innovation observatory Electroself:
The producer Electro Power systems SPA, was nominated as one of the Technology Pioneers in the field of energy and environment by the World Economic Forum in 2012. www. electrops. it WEF 2012
sustainable furniture The customers of Made can choose online what the company manufactures by voting on the designs they prefer most.
This allows for cost savings for customers of up to 70%.%The material choice for the furniture production is based on a comparative analysis of closest equivalent products in functionality,
of functionally comparable goods or services. The Wuppertal Institute has developed a stepwise guide to how to perform MIPS. www. wupperinst. org/en/publications/entnd/index. html?
and can be found online. www. oecd. org/innovation/green/toolkit The Guide Towards The Circular Economy of the Ellen Macarthur Foundation offers interesting guidance on how businesses can benefit from adopting new practices
based on the circular economy philosophy. www. thecirculareconomy. org. Several in depth case studies also provide insights on how companies have changed their material inputs,
management include coping with the rising volatility of commodity prices, dealing with uncertain supply of materials,
as well as meeting customer demand for an improved transparency of supply chain. The most in demand information includes data on the origin of resources used in products
Sustainable supply chain management requires the management of environmental, social and economic impacts and the encouragement of good governance practices throughout the life-cycle of goods and services. 12 11 Council of Supply
and services and can take the form of a reuse, buy-back, or recycling programme.
and minimum impact on humans and the environment (ICMM). Materials stewardship encompasses both process and product stewardship.
and opportunities of implementing a sustainable supply chain management approach? Eco-innovate! A guide to eco-innovation for SMES and business coaches.
or by involving key suppliers and other related stakeholders. Map and measure resource inflows and outflows from the company.
Conduct benchmarks and consider what is being done externally in the field. Map Resources Design a supply chain map:
Evaluate risks and opportunities through a risk management approach or an opportunitybased approach. Establish a common language Set sustainability targets and procurement criteria for the supply chain.
Internal and external communication is also very important at all stages. Develop collaborative practices and strong relationships with clients and suppliers Foster collaborative practices,
TRI-VIZOR's Cross Supply Chain Methodology software makes it possible to maximise in real-time the total community gains in cost and CO2. www. trivizor. com Shields Environment:
recycling and remarketing Shields Environmental is based a UK company that provides support services to the telecommunication sector, mainly accompanying companies with environmental management solutions and recycling.
towards smart freight models TRI-VIZOR, a spin-off from the University of Antwerp in Belgium, developed an original horizontal cooperation based business model for freight transport.
Procure eco-efficient products and services. According to the Carbon Disclosure Project, 39%of its members and 28%of their suppliers witnessed cost savings after introducing a sustainable procurement approach13.
Develop sustainable stories to increase customers, adhesion to the company and its products and services. 13 See Accenture, 2012:
www. accenture. com/us-en/outlook/Pages/outlookjournal-2012-why-sustainable-supply-chain-is-good-business. aspx Eco-innovate production processes Eco-innovate!
and services 38 eco-innovation observatory Eco-innovate products and services Key questions Does our company have the skills,
time and money to pursue relevant R&d? Who has the research and technical skills to undertake eco-innovative R&d internally or externally?
How could R&d help identify opportunities? Do we have systems in place to monitor ecoinnovation trends related to our core business?
services and technologies may mean fundamental changes to existing designs, which may be costly in the short term but beneficial in the long term.
and focus. 4. 1 Research and development Building eco-innovative capacity into the Research & development (R&d) process will help identify new business opportunities.
Raise awareness and understanding of environmental impacts throughout the firm to highlight opportunities and priorities related to eco-innovation alongside other product and service attributes.
Quick wins Engage key partners and stakeholders: this may produce interesting opportunities for new eco-innovative solutions,
or ways to reduce environmental impacts of existing products and processes. Share causes of environmental impacts,
and services Map life-cycle environmental impacts of products, identify any material and energy use hotspots
materials and processes to key internal and external stakeholders in R&d. Subscribe to sources of information on emerging technologies
toys etc. www. tecnaro. de Eco-innovate products and services Trulstech: biodegradable flame retardant The science behind natural fire protection known as the Molecular Heat Eater led to Swedish inventor Mats Nilsson founding Trulstech.
10 big questions about your eco-innovation www. bsk-cic. co. uk/uploads/assets/media/documents/e77d55492e6e69 4e04a2ffe62f8a3c972f27a79d. pdf Enterprise Europe Network shares
and licensing. portal. enterprise-europe-network. ec. europa. eu EUREKA is a European network that supports businesses carrying out R&d. www. eurekanetwork. org/supporting Learning Resources
and services Eco-innovate! A guide to eco-innovation for SMES and business coaches. 42 eco-innovation observatory Eco-innovate products
and services Key questions What product design options are there to improve the environmental performance of products?
Communicating data or information on a product's environmental impacts is not always a strong motivator for customers
A guide to eco-innovation for SMES and business coaches. 43 eco-innovation observatory Business case for eco-innovation Identify the appropriate focal areas of ecodesign for your products and services.
For example, Philips as an electronics company explores opportunities to improve product-related environmental performance in six focal areas:
working prototypes with customer representatives to confirm the likely environmental performance related to typical user-behaviour.
diverse concepts and involve stakeholders/experts. Reward buy in when eco-innovative ideas are implemented. Choose whether to pursue patents to protect the novel function,
and services Eco-innovate! A guide to eco-innovation for SMES and business coaches. 44 eco-innovation observatory What problems can arise in the distribution of the product to the customer?
and services How does the product system actually fulfil customer needs? Dematerialisation Shared use of the product Integration of functions Functional optimisation of product (components)
Orangebox has set up a recycling centre at their site in Wales achieving a significant return on investment
and services Quick wins Creative approaches and focused improvment strategies help identify potential design improvement.
and comparison e g. with competitors involving customers informs their relative importance. Tools for assessment help designers to directly inform their decision making.
Focusing on the environmental aspects of a product makes you start asking questions of suppliers and customers in the supply chain,
A guide to eco-innovation for SMES and business coaches. 46 eco-innovation observatory Eco-innovate products and services Granta Design,
and services Eco-innovate! A guide to eco-innovation for SMES and business coaches. 48 eco-innovation observatory Eco-innovate products
and services Key challenges for your business Customers whether they are end consumers or buyers in business or government are increasingly integrating environmental and social considerations into purchasing decisions.
Market research may highlight important areas of environmental or social interest, improvement or concern related to existing or new eco-innovative products, services or technologies.
or new business models driven by environmental considerations will require approaches outside of normal day-to-day R&d processes with dialogue with a range of stakeholders including customers,
Lifecycle considerations are increasingly important to customers e g. companies need to understand how products are manufactured sourced
Today's customers buy greener products, services or technologies because they work better, save money or enhance health.
Awareness how do we raise awareness about products and services? Evaluation how do we help people evaluate greener value propositions?
Purchase how do customers purchase products and services? Delivery how do we deliver a greener value proposition to customers?
After sales how do we provide greener post-purchase support? Greener customers are influenced by recommendations of trusted peers and third parties.
There is a backlash against perceived greenwashing, therefore companies must be clear about the environmental impacts of products.
and others issues through engaging customers in meaningful conversations through a variety of media, especially via websites and online social networks, rather than by simply talking at customers through traditional media.
A guide to eco-innovation for SMES and business coaches. 49 eco-innovation observatory Key Questions have completed we market research amongst customer groups to determine environmental awareness, understanding, potential opportunities and concerns?
How can environmental considerations become integrated into customer relationships and integral to our business model? Which combination of customer needs are the companies'products satisfying e g. newness,
and ongoing communications with customers and other stakeholders can identify new opportunities for eco-innovation.
Test stakeholders'responses and attitudes surrounding environmental aspects. Engage existing and potential customers, as well as other stakeholders, in conversations through a variety of media.
Use positive and negative feedback to improve business/product development and promotional strategies. Benchmark your product (s) against competitors on environmental aspects, alongside function, cost, pricing
etc. Identify your product (s) absolute and relative environmental features and benefits compared to your competitors. ronmental performance (e g. reduced energy consumption
and lower costs) strengthen the product's offer? How do we incorporate environmental performance related data in communications?
What is the product's Unique Selling Proposition (USP) relative to competitive offers? Has environmental benchmarking been completed on indirectly and directly competitive products?
which means that customers energy bills are reduced by €z per month. What will the market pay?
or business benefits from distinct environmental performance affect pricing, costing and communications? What added value environmental benefits can be attached to the core concept and?
How can stakeholders be rewarded for adopting and promoting pro-environmental behaviour? Eco-innovate products and services Eco-innovate!
A guide to eco-innovation for SMES and business coaches. 50 eco-innovation observatory Eco-innovate products
and services Quick wins Determining the extent of customers and other stakeholders environmental awareness and understanding may help to reveal business opportunities or threats.
Identifying product (s) environmental features and business benefits may help determine areas for product differentiation.
Communications incorporating understandable, valid and clear environmental performance claims underpinned by fact based information will build trust and reputation amongst customers.
Establishing a reputation for environmental knowledge and expertise may attract new prospects and generate new customers.
Good practice Visionary Soap Company Ltd successfully established a brand of fair trade soap www. visionarysoap. co. uk/about-us-1-w. asp Elvis
and integrate positives into communications with customers. Ensure environmental performance claims are valid and understandable before you incorporate them into promotional messages.
and services that have reduced a environmental impact. It is a voluntary label used following certification through independent compliance checks
following a simple online application process with special discounts for SMES. ec. europa. eu/environment/ecolabel Eco-labels are profiled at limas. simpple. com/resources/results
-communication-eco-labels ISO guidelines on environmental labelling www. iso. org/iso/environmental-labelling. pdf Defra Green Claims Guidance provides clear principles
and examples. www. defra. gov. uk/environment/economy/products-consumers/green-claims-labels/Learning Resources Eco-innovate products
and services Eco-innovate! A guide to eco-innovation for SMES and business coaches. 5 Get your eco-innovation idea off the ground 54 eco-innovation observatory Get your eco-innovation idea off the ground:
service or technology deliver to your customers? Who are the potential customers for your product?
have done you any market research? Who are your competitors? have benchmarked you your product, service or technology compared to competitive products and services?
What are relative benefits of your product compared to competitive offers? Assess your strategic capacity What knowledge
venture capital; angel investors; share ownership; and crowd funding? What are associated the risks with each source of funding?
How are you going to create noise in the market and amongst your customers? What can you do yourself?
A guide to eco-innovation for SMES and business coaches. 56 eco-innovation observatory What is crowdfunding?
Crowdfunding is a peer-to-peer funding model that offers transparency and a sense of community for both funder and entrepreneur.
Impact investment for eco-innovation? Impact investment is investment assessing not only the financial return on investment,
but also the environmental and social impacts in the course of the operations of the business and the consumption of the product or service,
Currently, several crowfunding platforms, such as www. Impactcrowd. com (NL) and www. crowdmission. com (UK), specialise in impact investment for ventures that aim to create environmental, social and economic impact.
Tips for establishing a crowdfunding campaign Consider the proposition and scope for tiers of rewards alongside the environmental impact of the proposition and establish a clear link between the reward
and customers and extend it to the likeminded crowd who have affinity with your product,
As a result of their experience Enviu has established Impactcrowd, a crowdfunding platform for European ecoinnovators. Crowdfunding for eco-innovators 14 www. environmentalleader. com/2013/01/09/impact-investing-to-hit-9-billion-in-2013/Get your eco-innovation idea off the ground:
lead questions Eco-innovate! A guide to eco-innovation for SMES and business coaches. 57 eco-innovation observatory Good practice examples In the US Mosaic (www. joinmosaic. com) targets small businesses
and ANI (As Nature Intended)( www. anibrand. com) vegan Barefoot shoes were funded both by Kickstarter (www. kickstarter. com). Learning Resources A Directory of crowdfunding platforms www
. crowdsourcing. org/directory Choose the category as Crowdfunding and then country. Results can be filtered by sub-category for donations, equity or lending.
Members receive opportunities to network, access services and financial partners and become visible internationally. www. europe-innova. eu/ecolink Examples of European projects on eco-innovation Eco-innovate!
A guide to eco-innovation for SMES and business coaches. 61 eco-innovation observatory ECO-INNOVERA focuses on the support of ecoinnovation in research and development.
economy and society. www. eco-innovera. eu Ecopol is a transnational public partnership that aims to accelerate the implementation of ecoinnovation policies across Europe.
It is also also building a European network of key collaborators with privileges such as the testing of all platform services,
offer of full platform services to their members and ambassador of the platform in their country. www. ecoweb-project. eu A number of INTERREG programmes and projects offer interesting good practices in eco-innovative solutions
PRE-SME Promoting Resource Efficiency in Small-& Medium-Sized Enterprises: Industrial training handbook p. 22:
Shields Environment Source: www. shields-e. com p. 40: TECNARO Source: www. tecnaro. de; Godrej & Boyce Manufacturing Source:
www. crawfordhk. com/study. html About the Eco-Innovation Observatory The Eco-Innovation Observatory (EIO) is a three-year initiative financed by the European commission's Directorate-General for the Environment from the Competitiveness
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