Information and Communication Unit B-1049 Brussels Fax (32-2) 29-58220 E-mail: research@cec. eu. int
societies and economies with essential energy resources The need to renew Europe†s electricity networks, meet
growing electricity demand, enable a trans-European electricity market and integrate more sustainable generation resources (including renewable sources
to new products, processes and services, improving industrial efficiency and use of cleaner energy resources while providing a competitive edge for Europe in
economy in the world In this highly regulated sector, efficient knowledge sharing and the pooling of
demand centres. The energy challenges that Europe is now facing are changing the electricity generation
the demand side, will enable customers to become much more interactive with the networks More customer-centric networks are the way ahead,
the benefits of Europe and its electricity customers The energy policy context The European Commission†s 2006 Green Paper â€oea European Strategy for Sustainable, Competitive and
assuring and improving security and quality of supply, consistent with the demands of the digital age with resilience to hazards and uncertainties
field†competition and regulation The vision embraces the latest technologies to ensure success, whilst retaining the flexibility to adapt
application for the benefit of both customers and utilities. Developments in communications, metering and business systems will open up new opportunities at every level on the system to enable market
signals to drive technical and commercial efficiency Making it happen Enabling Europe†s electricity grids to meet the challenges
and opportunities of the 21st century and fulfil the expectations of society requires intensified and sustained research efforts.
It is essential that this takes place in a coherent way addressing technical, commercial and regulatory factors, to minimise risk and
allow business decisions to be made by companies in an environment of stability Key elements of the vision include
both power and grid services, ensuring that they will accommodate a wide range of operating situations
and enhance their services to customers •Ensuring the successful interfacing of new and old designs of grid equipment to ensure inter
Job opportunities will be broadened as the networks require workers with new skills and integration across new technology areas
liberalised market will encourage trading opportunities to be identified and developed. Smartgrids networks will, in addition to electricity flows, establish a two-way flow of information between supplier
For a successful transition to a future sustainable energy system all the relevant stakeholders must become
constructive dialogue between all stakeholders involved in the electricity sector and help to ensure the European
public and private investments required for the implementation of the research and development R&d) strategies The time is now
The electricity sector faces new challenges and opportunities which must be responded to in a vision of the future
increased interest in electricity market opportunities value added services, flexible demand for energy, lower prices, microgeneration
opportunities •Electricity networks renewal and innovation: pursuing efficient asset management increasing the degree of automation for better quality of service;
using system wide remote control; applying efficient investments to solve infrastructure ageing •Security of supply:
limited primary resources of traditional energy sources, flexible storage; need for higher reliability and quality;
and opportunities of liberalisation by developing and enabling both new products and new services; high
demand flexibility and controlled price volatility flexible and predictable tariffs; liquid markets for trading of energy and grid services
2. The origins of Smartgrids The Smartgrids European Technology Platform for Electricity Networks of the Future began its work in
challenges and opportunities, bringing benefits to all users, stakeholders and companies that perform efficiently and effectively
•enables Europe†s electricity grids to meet the challenges and opportunities of the 21st century
•fulfils the expectations of society •strengthens the European busi -ness context for the electricity
opportunities 7 VISION AND STRATEGY I ELECTRICITY NETWORKS OF THE FUTURE •Interoperability of European electricity networks
efficiency improvements, increased flexibility towards the system services integration with RES and DG •Environmental issues:
•Demand response and demand side management DSM): ) developing strategies for local demand modulation and load control by electronic metering
and automatic meter management systems •Politics and regulatory aspects: continuing development and harmonisation of policies and
changed demand of an ageing society with increased comfort and quality of life According to the International Energy Agency (IEA
demands placed on energy supply Smartgrids will use revolutionary new technologies, products and services to
create a strongly user-centric approach for all customers 8 E u R O P E A n T E C H N O L O G Y P L a T F
O R M S m A r T G r I D S A broad spectrum of stakeholders
As markets across Europe become more liberalised and dynamic, an increasing number of people are implicated in the future of electricity supply.
government members to everyday users, every stakeholder will help to shape the Smartgrids system. What are the different needs
and will include value added services, energy services on demand and total connectivity. They will be asking for connection of
in-house generation, the ability to sell surplus generation back to the grid, real time tariffs and the freedom to choose their suppliers
undertake necessary investments to guarantee high levels of power quality and system security, while assuring adequate remuneration for their shareholders
Investment remuneration and stable regulatory frameworks will be necessary for a â€oelevel playing field†competition in a liberalised market
Energy service companies: Companies will have to satisfy the growing needs of users. Some users will seek
simple â€oeturnkey†products. Cost efficiencies and savings will need to be made visible, in monetary terms This must be accompanied by an increase in services delivered and a reduction of
grid companies, technology providers will have important investment decisions to make. A shared vision will be critical to ensuring sound strategic developments that
Innovation will be needed in relation to networks, demand, and for generation, both distributed and centralised, as grid system operational characteristics change
Customers will benefit from the opportunity to choose the energy supplier that best suits their requirements
Customers, providers, researchers and lawmakers are implicated all in the future of electricity provision 9 VISION AND STRATEGY I ELECTRICITY NETWORKS OF THE FUTURE
Generators: Electricity grids are integrated complex systems and there is a sensitive interaction between generators, the grid systems,
and the demands. It will be important for the future to ensure the continuing close involvement of generation companies
The European market for energy and related services should be supported by a stable and clear regulatory framework, with well-established and
incentives which secure a grid with increasingly open access, a clear investment remuneration system and keep transmission and distribution costs as low as possible
competition is expected to keep a downward pressure on energy prices, but a more environmentally friendly energy mix may bring cost challenges.
They will have the opportunity to offer demand side response products and services to the grid.
ancillary services and their users. They must also share a vision of electrical system performance. A pan European approach is essential since,
products and services, European Companies will be able to get ahead in international business 10 E u R O P E A n T E C H N O L O G Y P L a T F
In response to new challenges and opportunities, electricity networks have begun to evolve. The aim is that they accommodate more decentralised generation services
with many actors involved in the generation, transmission, distribution and operation of the system. At the same time, centralised generation and high voltage bulk-transmission
A shared vision of the opportunities for all stakeholders remains an essential ingredient in successfully achieving efficient liberalised markets.
compatible with a competitive commercial environment: it reduces investment risk Smartgrids: The Vision Europe†s electricity networks in 2020 and beyond will be
•Flexible: Fulfilling customers†needs whilst responding to the changes and challenges ahead •Accessible:
supply, consistent with the demands of the digital age •Economic: Providing best value through innovation
competition and regulation Commercialisation, whether in Europe or internationally, can only take place when innovation has been proved in the demanding
technical venture. The overall goal of the project is to develop a strategy for research
companies in an environment of stability Smartgrids Why take action now New technologies-for generation, networks, energy storage, load
efficiency, control and communications, liberalised markets and environmental challenges-require a shared vision and strategic
networks of the future meet the needs of tomorrow†s customers and a broader spectrum of stakeholders
The driving factors requiring action now are •Increasing participation of customers in the energy field
•European and national policies encouraging lower carbon generation, new and renewable energy sources and more efficient
opportunities for integrating new generation technologies into Europe†s grids •The need for investment in end-of-life grid renewal in an innovative
way to better position the networks for the next 50 years of operation •The need to handle grid congestions with market based methods
•The desire to deliver benefits to customers at the earliest opportunity •The need to reduce uncertainty and risk to businesses making
investment decisions •The progress in technology, which allows improvements in operation and new services at reasonable costs
Successful development and deployment of a vision for electricity grids has application beyond Europe. There is significant benefit for jobs in
or about the details of investment funding and risk management •It†s not about emission trading markets or
efficient regulatory framework, will promote economic growth and play a key role in the EU€ s competitiveness strategy.
Increasing competition will encourage efficiency and spur on technological progress and innovation. As a result, the
a wider choice of services and downward pressure on electricity prices •Security and Quality of Supply:
Significant investment will be required to develop and renew these infrastructures: the most efficient way to achieve this is by incorporating
•The Environment: Besides issues of primary energy supply, the major disadvantage of fossil fuels is that they emit CO2, SO2, NOX and other pollutants
Global investments required in the energy sector for 2003 -2030 are estimated an $16 trillion, according to the
investment will be needed to upgrade the electricity transmission and distribution infrastructure The electricity network of the future
on the environment 3. Driving factors in the move towards Smartgrids The current climate demands change in the way electricity is supplied.
As the internal market develops, European citizens will start to benefit from greater choice and lower costs.
ENVIRONMENT 14 E u R O P E A n T E C H N O L O G Y P L a T F
•In regulatory frameworks and investment remuneration in innovation The best strategy for managing these uncertainties is to build flexibility and
ensure a favourable regulatory environment; help to develop supportive financial markets; and create attractive education
to win-win solutions for economic growth, social development and environmental protection Smartgrids Enhancing grid flexibility & robustness
services (such as reserve power, for instance Nordic hydropower), ensuring that they will accommodate a wide range of operating situations without
and enhance their services to customers Research is needed to help identify the most cost-effective technologies
end-to-end communications Traditional grid design has evolved through economies of scale in large centralised generation and the geographical distribution of generation resources (locations near
as demand rises and traditional resources are depleted. Major players have been brought together to define a clear vision
values, the environment and commerce Limited cross-border interconnections Centralised control Technology approaching an age of one century
foundation from which future challenges and opportunities can be met However, the change should be accomplished through an incremental rather than
active power balancing and ancillary services such as voltage stability. Distribution networks, on the other hand, have seen little change
added services Coordinated, local energy management and full integration of DG and RES with large-scale central power
customers Harmonised legal frameworks facilitating cross-border trading of power and grid services Grids of Tomorrow
17 VISION AND STRATEGY I ELECTRICITY NETWORKS OF THE FUTURE Future models for the electricity grids have to meet the changes in technology
in the values in society, in the environment and in commerce. Thus security, safety environment, power quality
and cost of supply are all being examined in new ways and energy efficiency in the system is taken ever more seriously for a variety of
environment across Europe Future electricity markets The liberalisation of electricity markets is an important factor to take into account
implemented well, it can bring the benefits of competition, choice and incentives for an efficient development
Scarcity of primary energy sources on one hand and climate change on the other is likely to greatly affect decisions on new investments in
generation. It is not so much the case of playing central versus distributed solutions but much more to take advantage of a wide energy technology portfolio and the
demand response demand side management; and energy storage Additional standby capacity might be required, which could be called upon
whenever the intermittent RES ceases to generate power. It may be economically efficient to seek a European solution for balancing power rather than national ones
communications capability and greatly improved user information, is now a reality and deployment is already taking place in some European countries
significant opportunities and challenges for all stakeholders: for example, multilateral participation in the real-time balance between
supply and demand Conceptually, a demand reduction is equivalent to a generation increase in the balancing process:
avoidance of usage or local generation enables each user node in the future network to behave as both sink and source.
Extending the definition of generation to commercial and industrial demand customers and individual households allows demand management to be treated as a form of
indirect generation. This landmark change in the concept of grid operational management may now become a reality,
developments including end user communications access 5. Setting up Smart Power grids Electricity grids of the future are Smart in several ways.
Demand management becomes an indirect source of generation and savings are rewarded. Secondly, the new system offers greater efficiency as links are
exchange is developed and customers take on an active role 20 E u R O P E A n T E C H N O L O G Y P L a T F
services Forecast information Offshore wind Microgrid Wave energy Demand side management Fuel cells Compressed hydrogen storage
will contribute by improving the opportunities for RES and DG. It will facilitate the interconnection of
liberalised market will encourage trading opportunities to be identified and developed. In addition to energy trades between Member States,
let everyone to have access to the provision of electricity supply services such as the demand management capabilities.
Enabled by smart metering, electronic control technologies, modern communications means and the increased awareness of
customers, local electricity supply management will play a key part in establishing new services that will create value for the parties involved
In this context, metering services will represent the gateway for access to the grid of the future and will have a critical consequence on power demand
evolution. For this reason, electronic meters, automated meter management systems and telecommunications †together with other communications systems
that use electricity supply networks as their delivery infrastructure †will serve as enabling technologies.
Information and Communication Technology (ICT) and business process integration will be valuable tools in the real time management of the
value chain across suppliers, active networks, meters, customers and corporate systems Wide area monitoring and protection (WAM & WAP) systems will be applied to
manage the congestions in the transmission systems in a way that improves the security and reliability of grid operation
Distribution companies will deal with customers who are more aware of the possibilities offered by the market and their on-line response.
demand side management and converging utilities; communication and billing services Regulatory bodies will develop harmonised rules to favour competition on a non
-discriminatory basis in the EU context. This will guarantee open access at all levels ensuring the removal of unnecessary barriers and
ensure access to common benefits and incentives Harmonised regulation will underpin a common EU energy strategy.
real-time balancing power and ancillary services open to both power producers and load management operators.
Europe will be facilitated by standardised, open communication means, transparent rules and a liquid cross-border trading.
Broadband communications will be used to access virtually all power produ -cers and loads on every power level and with very low cost.
stakeholders must become involved: governments, regulators, consumers generators, traders, power exchanges, transmission companies, distribution companies, power equipment manufactures and ICT providers
commercial activities with respect to long time investments Grids will become intelligent systems with flexible, controlled power flows supported by advanced information
most cost-effective basis with minimum damage to the environment, in line with European related policies
Throughout the development of the new grids, communication at every level is essential. Effective dialogue between stakeholders will ensure that relevant
information influences the system design. The latest technologies will be incorporated into the network and the approach will remain flexible to
and regular interaction with stakeholders is required to respond to future challenges and opportunities Future work should adopt a techno-economic system approach for a trans-European
network. This calls for the development of •distribution grids accessible to distributed generation and renewable energy
sources, either self-dispatched or dispatched by local distribution system operators •distribution grids enabling local energy demand management to interact with end
•transmission grids with minimum negative side-effects on the environment and the society •secure transmission grids that can comply with different forms of generation
customers and businesses •It will guard against a lack of harmonisation of European technical standards, regulatory
create opportunities for novel types of equipment and services, all of which would need to respect the protocols
and standards adopted. New business and trading opportunities can be envisaged-based on new power sources, new power consumption habits and new
regulation, all of which favour cleaner and more efficient generation and consumption as well as the development of a flexible, multi-user connected network which establishes
power and communication transfer possibilities among all players Keeping it real It is important to emphasise the role of ICT †in particular telecommunications â€
communications equipment for a distributed real-time control of electricity networks The real time performance of the internet as communication means is known to be
very difficult to assess and it is given critical the power balance needed at any instant
consumer demands, allowing both to decide how best to operate in real time. The level of control required to achieve this is much greater than in current distribution systems
contracts with distributed generators for ancillary services. Rules will have to be defined to outline physical and geographical boundaries of contracting
local and global services and trading issues, adaptability without information overload, control issues •Final stage:
regime using real-time communication and remote control to meet the majority of the network services requirement.
The transmission and distribution networks are both active, with harmonised and real-time interacting control functions and
ancillary services supporting the network •Virtual utilities (or virtual electricity market) adopt the structure of the
accomplished if all stakeholders form a shared vision for future grids and develop an implementation framework that is consistent with the liberalised
business model Smartgrids: †Enabling†technologies •Active distribution networks revealing characteristics of today†s transmission grids
communications to enable grid automation, on-line services, active operation demand response and DSM •Power electronic
technologies for quality of supply •Stationary energy storage devices CHP Households Industrial & commercial Wind farms
but also economics & market regulatory & legal and environmental aspects. A skills shortfall is a key risk to the
is the regulatory and legal environment in which grid companies operate It is recognised that innovative approaches may from time to time be hindered by
that benefits will be seen by European customers and that international market opportunities will be released 30 E u R O P E A n T E C H N O L O G Y P L a T F
O R M S m A r T G r I D S Simplified Representation of the Proposed Flexible Framework
with benefits delivered to customers and companies Key elements of the Flexible Framework •Future network challenges
As in other ETPS, a group of high-level stakeholders came together with one primary objective:
Europe†s future competitiveness and economic growth More specifically, an Advisory Council has been established to develop and
public investments required for the implementation of the RTD strategies In this respect, integrated research and demonstration projects in electricity networks
opportunities ahead are responded to efficiently for the benefit of all stakeholders in Europe It will do this in a number of ways
cooperation and sufficient investment to fund extensive research. It is divided into different bodies, each
and public investments to allow crucial research to be carried out Smartgrids: How will transition be achieved
and grid services •A strategic approach to developing a range of new and innovative grid
the situations demand 32 E u R O P E A n T E C H N O L O G Y P L a T F
•Smartgrids will not be a purely technical venture. It is recognised that commercial and regulatory issues must
stakeholders in defining a vision of the future development of grids The platform leads the way in
Demand and Metering Generation and Storage PLATFORM OPERATIONS New and ongoing projects and initiatives (EC+MS national, regional and local
enable participation of associations of stakeholders Electricity Networks of the Future Technology Platform 35 VISION AND STRATEGY I ELECTRICITY NETWORKS OF THE FUTURE
DSM Demand Side Management ETP European Technology Platform EU European union FACTS Flexible AC Transmission Systems
ICT Information and Communication Technology IEA International Energy Agency NOX Nitrogen oxides R&d Research and development RES Renewable Energy Source
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
2 Revisit your business model...12 3 Eco-innovate production processes...18 3. 1 Waste and emissions...
4 Eco-innovate products and services...36 4. 1 Research and development...38 4. 2 Design...42
small and medium-sized enterprises (SMES. The booklet overviews emerging business opportunities eco-innovation has to offer to companies that re
-consider business models, develop new products technologies or services, or improve production processes The aim is to summarise key business issues
questions and lessons learnt for SMES based on the existing resources, notably specific assess -ment tools, checklists and databases, as well as to
present selected eco-innovation good practices This guide is for you This guide is addressed above all to companies
services to SMES This guide is one of many publications and informa -tion sources developed by the Eco-Innovation Ob
new market opportunities. We believe that eco -innovations in SMES will contribute to a making a
green economy work in Europe and worldwide Visit www. eco-innovation. eu for further information
issues, challenges and opportunities of eco-inno -vation for SMES The guide includes sections on
business model and value proposition†¢process eco-innovation†¢product eco-innovation†¢getting eco-innovations on the marketâ€
-ing existing goods and services, whereas disrup -tive eco-innovation is about thinking outside of
competitive while respecting the natural environment Eco-innovation takes the full life-cycle perspective into account, rather than just focusing on environ
delivering new services, but it also encompasses reducing environmental impacts in the way prod -ucts are designed,
but creating new services and introducing organisational changes are just as important. At its core, eco-innovation is about cre
-ating 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 costsâ€
¢New products and services: new markets†¢New business models†¢Enhancing quality of life†¢Creating new and sustainable jobsâ€
¢â€oematerial 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
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 busi
-ness more resilient in the face of market trends notably fluctuating commodity prices New markets and customers
Companies developing and selling new eco -innovative products, services and technolo -gies 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 â€oeperformance†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 â€oesavings oppor
-tunity†is associated especially with process inno -vation and grounded in initiatives like â€oecleaner 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 require -ments, 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 â€
¢by limiting extraction of virgin resources and by limiting â€oeunused†extraction Consider renewable and secondary resources (circular economy) â€
¢Reduce cost by improving efficiency of extraction †¢Comply with and anticipate new regulations†¢Improve your reputation CSR (Corporate Social Responsibility) â€
Build resilience to changes in commodity prices and resource supply †¢Increase your turnover and profits from sales of resource-efficient â€
¢products and services Comply with and anticipate new regulations (including eco-design) †¢Distribution Reduce impacts, for example through:
†¢Better packaging design, reuse, recycling†¢Fuel and energy use reduction in transpor-†¢tation and storage
¢Shift to selling services from products (i e. functional sales, including prod-†¢uct leasing and sharing
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, per -haps 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
and redesign their business model to reduce costs and improve customer experience. Many companies are driven also by environmental
Revisit your business model Key Questions What value do we deliver to customers? †¢Which customers†needs are we helping to â€
¢satisfy What are key the activities and resources that †¢help us to develop and deliver value to cus
How much does our business model depend †¢on our companies†and our customers†access to and use of material and energy
¢isfy the needs of our customers (e g. product -service systems A fundamental question for any eco-innovative
Revisit your business model Good practice examples Turntoo efficient chemical management system Turntoo (NL) is an intermediary making pay for
product and derive their profits from its use rather than its sale. Therefore, they have an incentive to
Swedish AGA Gas offers its customers the ability to continuously introduce safer chemicals at lower
â€oehired†(customers use a chip to unlock the car kept for as long as needed and left anywhere
2 See more about chemicals management business models in Green Paper by FORA on www. foranet. dk/media/27577/greenpaper fora
Business model Generation•offers a wide range of resources for entre -preneurs and companies on business model innovation
www. businessmodelgeneration. com/canvas OECD workshop •â€oethe Future of Eco-Innovation: The role of business
FORA€¢present a number of cases of green business models in its Green paper: â€oegreen 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
Revisit your business model Measuring environmental performance Ecological rucksacks are the resource requirements of producing products
or services. For products, it is the complete material input needed to manufac -ture a product from the cradle to the point of sale, minus its own weight.
services, it is the sum of the shares of the rucksacks of the technical means
-tor for comparing functionally comparable goods 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 eco -systems.
services shop. bsigroup. com/en/forms/PASS/PAS-2050-Guide/Confirmation The water footprint of an individual, community or business is defined as
the total volume of freshwater used to produce the goods and services consumed by the individual or community or produced by the business
and delivery of products and services 3. 1 Waste and emissions Key challenges for your business
investments Creates a socially responsible image for the †¢company Figure 4: Hidden waste costs
Medium-Sized Enterprises: Industrial training handbook Figure 5: â€oequick wins†in reducing waste and emissions in SMES
Enterprises is an industrial training handbook. It explains basic concepts like resource efficiency and life cycle thinking
-tion for Sustainable Economies in Hungary disseminates case study books to help SMES invest in environmental measures that generate
RREUSE€¢is a European umbrella for social enterprises with activities in reuse, repair and recycling
opportunities where waste products from one industry can be recovered reprocessed or reused by other businesses, reducing the amount of waste
environment The price volatility for commodities, notably met -als, food and non-food agricultural items, was
higher in the 2000s than in any decade of the 20th century 6. The World Economic Forum (WEF
-ity of commodity prices as the fifth most important risk in terms of potentially negative impacts7. At
products and services What measures can we take to reduce the †¢use of materials, energy, water and other
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
Towards the circular economy Economic and business rationale for an accelerated tradition 7 WEF 2012:
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 Eco-innovate! A guide to eco-innovation for SMES and business coaches
On average, these investments paid off after 13 months. Micro companies achieved high relative savings (comparable to 11%of annual
the eco-innovation gap, an economic opportunity for business, p. 17 www. eco-innovation. eu/index. php?
or services that also improve the functionality of the end product Select lightweight materials•to improve
investments in energy efficiency by more than half. This leads them to waste at least £1. 6bn every year on energy they could easily save
an economic opportunity for business, p. 17, www. eco-innovation. eu Eco-innovate! A guide to eco-innovation for SMES and business coaches
in the field of energy and environment by the World Economic Forum in 2012 www. electrops. it
The customers of Made can choose online what the company manufactures by voting on the designs they
cost savings for customers of up to 70%.%The ma -terial choice for the furniture production is based
goods or services. The Wuppertal Institute has developed a stepwise guide to how to perform MIPS
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
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 and evi
good governance practices†throughout the life-cycle of goods and services. 12 11 Council of Supply Chain Management Professionals (CSCMP
impacts of their products and services and can take the form of a reuse, buy-back, or recycling
What are the risks and opportunities of imple-†¢menting a sustainable supply chain manage
stakeholders Map and measure resource inflows and out-†¢flows from the company Conduct benchmarks and consider what is â€
¢being done externally in the field Map Resources Design a supply chain map: identify the scope â€
Evaluate risks and opportunities through a †¢risk management approach or an opportunity -based approach Establish a common language
Set sustainability targets and procurement †¢criteria for the supply chain Develop indicators to monitor performance. â€
Internal and external communication is also †¢very important at all stages Develop collaborative practices and strong relationships with
Shields Environment recycling and remarketing Shields Environmental is a UK based company that provides support services
to the telecommunication sector, mainly accompany -ing companies with envi -ronmental management solutions and recycling
cooperation based business model for freight transport. The model is called â€oesmart bundling†Quick Wins Save costs from streamlining processes at all â€
Procure eco-efficient products and services. †¢According to the Carbon Disclosure Project 39%of its members and 28%of their sup
¢customers adhesion to the company and its products and services 13 See Accenture, 2012: www. accenture. com/us-en/outlook/Pages/outlook
-journal-2012-why-sustainable-supply-chain-is-good-business. aspx Eco-innovate production processes Eco-innovate!
products and services 38 eco-innovation observatory Eco-innovate products and services Key questions Does our company have the skills, time and â€
¢money to pursue relevant R&d Who has the research and technical skills to †¢undertake eco-innovative R&d internally or
How could R&d help identify opportunities? †¢Do we have systems in place to monitor eco-â€
Developing eco-innovative products, services †¢and technologies may mean fundamental changes to existing designs, which may be
identify new business opportunities Eco-innovate! A guide to eco-innovation for SMES and business coaches
highlight opportunities and priorities related to eco-innovation alongside other product and service attributes Analyse market needs
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, im-â€
Eco-innovate products and services Map life-cycle environmental impacts of †¢products, identify any â€oematerial and energy
stakeholders in R&d Subscribe to sources of information on emerg-†¢ing technologies which could be applied to
Eco-innovate products and services Trulstech biodegradable flame retardant The science behind natural fire protection known
Enterprise Europe Network shares new technologies for partnering 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
Eco-innovate products and services Eco-innovate! A guide to eco-innovation for SMES and business coaches
Eco-innovate products and services Key questions What product design options are there to â€
a strong motivator for customers or users to change behaviour e g. reduction in energy in
¢design for your products and services. For ex -ample, Philips†as an electronics company†explores opportunities to improve product-re
-lated environmental performance in six focal areas: reduced weight, increased energy effi -ciency, reduced packaging, increased re
¢and evaluate comparable, working prototypes with customer representatives to confirm the likely environmental performance related to
¢cepts and involve stakeholders/experts. Re -ward buy in when eco-innovative ideas are implemented Choose whether to pursue patents to protect â€
Eco-innovate products and services Eco-innovate! A guide to eco-innovation for SMES and business coaches
Eco-innovate products and services How does the product system actually fulfil customer needs Dematerialisation Â
investment and reduction of materials sent to land -fill. Orangebox has been actively embedding eco -design for a number of years,
Eco-innovate products and services Quick wins Creative approaches and focused improv-†¢ment strategies help identify potential design
involving customers informs their relative im -portance Tools for assessment help designers to directly â€
and customers in the supply chain, and this questioning can drive innovation. The result of that can be products
Eco-innovate products and services Granta Design, a Cambridge university spin-off, produced an •Eco -design Guide for starters that offers an easy-to-understand overview of
Eco-innovate products and services Figure 7: Eco-design Strategies Wheel Eco-innovate! A guide to eco-innovation for SMES and business coaches
Eco-innovate products and services Key challenges for your business Customers†whether they are end consum-â€
new eco-innovative products, services or technologies Identifying more radical product concepts or †¢new business models driven by environmen
-tal considerations will require approaches outside of normal day-to-day R&d processes with dialogue with a range of stakeholders
including customers, partners or suppliers Lifecycle considerations are increasingly im-†¢portant to customers e g. companies need to
understand how products are sourced, manu -factured, packaged and disposed of Today†s customers buy greener products, services or technologies because they work better
save money or enhance health. Eco-brands integrate relevant environmental benefits into products alongside cost and quality and communicate evidence-based messages avoiding
greenwashing 4. 3 Marketing Understanding customer and user behaviour †¢is important. User behaviour may be a strong
¢about products and services Evaluation†how do we help people evalu-†¢ate greener value propositions
Purchase†how do customers purchase †¢products and services Delivery†how do we deliver a greener â€
¢value proposition to customers After sales†how do we provide greener †¢post-purchase support
Greener customers are influenced by recom-†¢mendations of trusted peers and third parties There is a backlash against perceived green
-washing, therefore companies must be clear about the environmental impacts of products Proactive companies build trust related to â€
engaging customers in meaningful conversa -tions through a variety of media, especially via websites and online social networks
rather than by simply talking â€oeat†customers through traditional media Eco-innovate! A guide to eco-innovation for SMES and business coaches
our business model Which combination of customer needs are †¢the companies†products satisfying e g. new
¢communications with customers and other stakeholders can identify new opportunities for eco-innovation Promotion based on clear evidence-based â€
¢claims related to environmental performance will enhance internal and external reputation Test stakeholders†responses and attitudes â€
existing and potential customers, as well as other stakeholders, in conversations through a variety of media. Use positive and nega
-tive feedback to improve business/product development and promotional strategies Benchmark your product (s) against com-â€
¢petitors on environmental aspects, along -side function, cost, pricing, etc Identify your product (s) absolute and rela-â€
which means that customers energy bills are reduced by â Z per month What will the market pay?
-fect pricing, costing and communications What â€oeadded value†environmental benefits †¢can be attached to the core concept and?
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
Eco-innovate products and services Quick wins Determining the extent of customers and †¢other stakeholders environmental awareness
and understanding may help to reveal busi -ness opportunities or threats Identifying product (s) environmental features â€
¢and business benefits may help determine areas for product differentiation Researching competitors product environ-â€
¢mental performance may identify relative strengths of your product that you can exploit in promotion
Communications incorporating understand-†¢able, valid and clear environmental perform -ance claims underpinned by fact based infor
customers Establishing a reputation for environmental †¢knowledge and expertise may attract new prospects and generate new customers
Good practice Visionary Soap Company Ltd successfully estab -lished a brand of fair trade soap
-grate positives into communications with customers Ensure environmental performance claims †¢are valid and understandable before you in
-corporate them into promotional messages Use social neworks (Facebook, Twitter, †¢Linkedin etc. selectively and carefully to
and services that have reduced a †¢environmental impact. It is a voluntary label used following certification
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†â€oegreen Claims Guidance†provides clear principles and examples. â€
¢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
¢technology deliver to your customers Who are the potential customers for your †¢product have done you any market research?
†¢Who are your competitors? Have you bench-†¢marked your product, service or technology
venture capital; â€oeangel investorsâ€; share ownership; and â€oecrowd funding†What are associated the risks with each â€
¢market and amongst your customers What can you do yourself? What will you †¢need to outsource?
What is crowdfunding Crowdfunding is a peer-to-peer funding model that offers transparency and a sense of community for
both funder and entrepreneur. A pitch for funds is made to a crowd of â€oeinvestors†who commit either
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 con
-sumption of the product or service, which the busi -ness creates. Impact investing is expected to
com (UK), specialise in impact investment for ven -tures that aim to create environmental, social and
Tips for establishing a crowdfunding campaign Consider the proposition and scope for tiers †¢of rewards alongside the environmental im
¢est e g. networks of suppliers and customers and extend it to the likeminded crowd who
a crowdfunding platform for European eco -innovators 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 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. Some articles focus on eco-innovation
Members receive opportunities to net -work, 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
R&d, economy and society www. eco-innovera. eu Ecopol is a transnational public partnership that
all platform services, offer of full platform services to their members and ambassador of the platform
Enterprises: Industrial training handbook p. 22: NISP Â Source: www. nispnetwork. com/media-centre/case-studies
Shields Environment  Source: www. shields-e. com p. 40: TECNARO  Source: www. tecnaro. de;
for the Environment from the Competitiveness and Innovation framework Programme (CIP. The Observatory has developed an
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