eco-innovation for sustainability - mcgill university...sustainability & innovation management...

This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No. 641974.

ECO-INNOVATION FOR SUSTAINABILITY

Hosted by the McGill Centre for the Convergence of Health and Economics.

The Convergent Innovation Webinar Series. Food Program: Inventing “One-World” Food Solutions for Sustainable Development and Affordable Healthcare

March 20th, 2019

Dr. Fernando J. Diaz Lopez, Ph.D.


AGENDA

10.30 Introduction: presentation & objectives10.35 What do we now about Eco-innovation (ECOI) for

sustainability?10.45 What is Eco-Innovation?10.55 Systemic View of Innovation and Business models11:10 Examples in Cleantech, Agro-Food & Health11:30 Discussion and Q&A12:00 End of the day

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1. INTRODUCTION

This webinar is about the topic of eco-innovation in/for corporate sustainability. It presents an overview of:• Relevance & context• Definitions, classifications • Complementary approaches,

theoretical and empirical, at the system and business levels

• Examples in the agro-food sector

Note: The acronym ECOI is used in a number of slides instead of the term ‘eco-innovation’

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FOR THE REST OF THE WEBINAR…Let’s keep a few perspectives in mind:


2. WHAT DO WE KNOW ABOUT ECO-INNOVATION FOR SUSTAINABILITY?


BEFORE WE START…The natural and urban environment are common goods. But, do we need eco-innovations (ECOI) to keep them & us clean and healthy?

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Behavioural change (e.g. chainging consumption patters) are often more important and effective in addressing sustainability challenges than simply putting more innovations in the market…


DID THE ENVIRONMENT AS A DRIVER OF CHANGE START IN THE 1960s?

Without doubt Rachel Carson’s Silent Spring was very influential in denouncing the significant impact of pesticides in the natural environment. It is considered a major influence for the birth of modern environmentalism and a precursor of sustainability.

But ask yourself:Is the quest for sustainability in organisations and economic activities something new? Is innovation for (environmental)sustainability something that started in our

lifetime?


DID ECOI ONLY EMERGE IN OUR DECADE?

Source: modified from Hargroves et al (2005)


ECOI HISTORICAL EVOLUTION HAS BEEN CONDITIONED BY A SERIES OF EVENTS OF ECONOMIC, SOCIAL, ENVIRONMENTAL, INSTITUTIONAL, TECHNOLOGICAL , NATURE…

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CONSIDER FIRST THE EVENTS OF PRE 1900S….

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Technological Social Institutional Business Knowledge


NO, IT’S NOT SOMETHING NEW…

The first case of clean technology development (I am aware of) was linked to the creation of social resistance, the establishment of a an environmental law and a technical standard, dates back to the 19th Century.

It was the product of the convergence of technical, economic, environmental & health, social, institutional, and behavioural change…

Why? Primarily, there was a two-fold rationale: •Business case•Public good situation

But of course, knowledge, institutions (policy), social pressure, etc. also converged…

Source: Diaz Lopez & Montalvo 2012. Greening of the Chemical Industry


DOES IT SOUND FAMILIAR? CIRCULAR…?

Most goods (products, manufacturing technologies, services) have undesired side effects…waste being one of them.The first documented case of “waste” recovery was the Chase-Claus recovery of sulfur from the calcium sulfide resides from the LeBlanc process (1882-1887).Why is sulfur relevant? About 90-95% of world production uses a variation of the Claus method…And sulfur is used to produce fertilisers…also called pesticides, since the 1920s.Do you remember Rachel Carlson’s main point for complain? Organophosphorous pesticides (OPs) Sulfur can be found in nature; but its massification enabled the growth of an industry for the agro-food sector, which in turn has caused pollution & health effects on humans. This is, undesired effects. It is mostly about the laws of thermodynamics. Pollution & hazardous compounds are transferred from one medium (e.g. air) to another (e.g. water, human body).

12


ECOI IN AGRO-FOOD?Yes, the agro-food field since the 1970s has been concerned with the adoption of environmental practices which often rely on innovation. Currently lots of activity in food packaing, waste, AI for circular economy, etc.

13

Source: Van Es & Pampel. 1976 Source: blendhub.com


ECOI FOR HEALTH?The obvious example continues to be clean technologies for air and water pollution; decrease the likeability of risk exposure, bio-active healthy food products (from residual biomass), etc.

14

Source: Studio Roosengarde Smog Free Tower


WHAT IS ECO-INNOVATION?


IN A NUTSHELL, ECO-INNOVATION IS:

Source: Diaz Lopez 2019. Green innovation policies for LAC. IADB.


3. WHAT IS ECO-INNOVATION?

Highly relevantA field in the making…Manifold definitionsClassifications are comparable to ‘regular’ innovationKey in the circular economy


THE ROLE OF INNOVATION TO ACHIEVE THE SDGS

Source: illustration from UN SDGs communication pack


ECO-INNOVATION: POLICY SUPPORTING A GREEN ECONOMY AND THE SDGS

Source: inno4sd 2018.


THERE IS A BUSINESS CASE

Source: UNEP 2015.


SCHOLARLY WORK …

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Source: Turkely & Kemp. 2018.


IN EUROPE: 2,2% OF GDP

Source: INNON 2015


IN CANADA

• Novel policy framework & plans at difference governance levels

• PCFCGCC• Quebeck Cleantech Plan• Montreal Support

• Canada holds 2.3% of global cleantech market• Quebec is key to the Canadian industry with 1

billion CAN in revenue, 350 companies and 9,000 jobs. Quebec’s target of 3 billion CAN revenue.

• Challenges for the adoption of cleantech in economic sectors (SPI, 2017).

• Carbon pricing alone unlikely to foster high pace of diffusion and scale-up…

• Key role of strong ecosystems, intermediary organisations (e.g. cluster managers) and sustainability & innovation management at organisation-level (My two cents, today).

23



Highly relevantA field in the making…Manifold definitionsCommonalities and differences with ‘regular’ innovationKey in the circular economy


MODERN EVOLUTION OF THE FIELD

25

Technological Social Institutional Business Knowledge Science-policy


A (KNOWLEDGE) FIELD IN THE MAKING



AND MANY MORE…

27



NOT A SINGLE, UNIFIED THEORY…

28


TAXONOMIES DIFFER DEPENDING ON THE (EPISTEMIC) COMMUNITY

• Categories largely influenced by early 1990s definitions of green technology

• Combined with Oslo Manual’s definition of innovation (next slide)


ACADEMIC INTEREST

6500 articles (peer-reviewed) in Scopus between 1980-2015

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POLICY AREAS SUPPORTING ECOI

Environment(including biodiversity)

STI Industry & competitiveness

Energy Consumer Education

Communication &spaceFiscal



INNOVATIONIt is both a process (innovate/change the way) and an outcome (the solution)

Different from invention; often related to: creativity, modernism, improvement, originality, improvement, be differentIn economics, a Schumpeterian understanding of innovation: doing things differently in the realm of economic life from idea to market; five options dictated by the OECD view of innovation (Oslo Manual. OECD 2005): innovation is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practice.It produces value, it is necessary (non-spurious/artificially induces necessities) and aligned to both nature and human needs. More and more innovation ought to be translated into SUSTAINABLE value

33


SUSTAINABILITYThe notion of sustainable development by the Brundtland Commission seem to prevail: economic, social and environmental dimensions of sustainability

Origins in biology (rates of extraction of renewable resources without damaging ecosystems)

No agreed definition on sustainability across academic disciplines…

In economics there is often a relation between natural capital and economy

In management, sustainability in organisations is often associated to firm’s competitiveness; ; associated to what is being sustained

Sustainable Development goals as guiding framework until 2030

34


RELATED TERMS



WHAT IS ECOI?Innovations that contribute to sustainable development

• It is good for both business and the environment

• It supports policy objectives of green economy, SDGs, climate action

• Somehow, it does not fully capture social and inclusiveness aspects (e.g. poverty alleviation)

• But, not yet know how ‘green’ they truly are…

https://youtu.be/NTgmV5zMSX4

https://youtu.be/NTgmV5zMSX4


VALUE IN ECOI CAN CHALLENGE THE TRADITIONAL VIEW OF INNOVATION…

https://www.youtube.com/watch?v=Mtjatz9r-Vc

https://www.youtube.com/watch?v=Mtjatz9r-Vc


WHERE CHANGING THE WORLD HAS AN ECONOMIC AND HUMAN CENTRED VIEW….


THERE IS NO ECOI FIRM IN THE TOP GLOBAL……nor cleantech firm for that matter. But of course, many of them invest in cleantech and claim to be innovative and/or have a sustainability programme; which can drive the value chain. Other good news is that a number of B-corps are on the rise…currently 2777 in the B-corp directory.

39

Source: TheRankings, data from Interbrand.com B-Corps in 2014. Source:

Clarlyso.com with data from b-corps.com

https://www.youtube.com/watch?v=BQovQUga0VE


COMPARABLE TO REGULAR INNOVATION (OECD OSLO MANUAL)

Source: illustration from Diaz Lopez 2019. Green innovation policies for LAC. IADB.


NOVELTY DEGREE

• New to the firm• New to the industry• New to the market• New to the world



UNDERSTANDING OF LIFE CYCLE

• Product development• Environmental impact of goods and services• Innovation• Manufacting processes• Investments• Firm growth• Policy, etc.

43


WHY?

We have borrowed notions and concepts from biology,

particularly in economics and management (e.g. Penrose

1952; Biological analogies in the theory of the firm, The

American Economic Review, 42: 5); it is very common to

use analogies about technology, firms and innovation and

compare their evolution with those of living organisms

(species) that undergo through stages of inception, birth,

growth (maturity and decay), death and decomposition

(nutrient restoration) - in cyclical manner.


FIRM-CENTERED VIEW OF ECOINNOVATORS


ECOINNNOVATORS ARE PART OF A COMPLEX ECOSYSTEM



HOW GREEN IS GREEN?

• Identifying the real environmental impacts of GI is relevant because this is a relative concept (better than alternatives);

• In policy practice we assume, a priory, that green technologies are good for society and the environment without an actual estimation of the environmental benefits, costs and rebounds at the economy-wide level.

• Rebound effects can be created by EcoI

Greenest Greener Green Greenish


ECOIS HAVE THE POTENTIAL OF WIDESPREAD ADOPTION/USE IN…Bio-fuels Bio-chemicals Bio-polymers Bio-catalyst Bio-fibbers Bio-solvents Bio-sensor

Bio-leaching Bio-remediation Fuel cells H2 Storage Advanced batteries Hybrid vehicles

Vehicle components Vehicle engineering Powertrain retrofitting Lightweight structur. materials

Smart grid Smart meters Smart lighting Smart transportation Smart logistics High cap. PV

Charging systems Waste recycling rfid Automation systems Sensors Inspection robots

Green marketing Green supply chain management Eco-stores E-shopping Cogeneration

BiotechnologyAutomotive & transportElectrical and optical equipment

Space & aeronautics

ConstructionWholesale & retailKnowledge services (consultancy / R&D)

Textile & clothingFood & beverages

Material engines Alternative propulsion systems Eco-construction materials Building segments

Passive solar design Eco-integrated building Env. Assessment of buildings Waste management

Building automation Building retrofitting Energy management Deconstruction Eco-labels

Green ICT Product-service systems Environmental & energy consultancy

Eco-training

Eco-brokering

Eco-intelligent network mgt Zero emission systems Smart/bio/eco-packaging

Sust. Water management Eco-textile systems Plasma/laser textile tech Textiles reuse/recycling

Source: Diaz Lopez et al 2013. Strategic eco-innovators for a low carbon economy.



Highly relevantA field in the making…Manifold definitionsClassifications are comparable to ‘regular’ innovationKey in the circular economy


CIRCULAR ECONOMY

European Commission: in a circular economy the value of products and materials is maintained for as long as possible; waste and resource use are minimised, and resources are kept within the economy when a product has reached the end of its life, to be used again and again to create further value.

Source: European Commission. 2018.


4. SYSTEMIC VIEW OF INNOVATION & BUSINESS MODELS


EPISTEMOLOGICAL STANDPOINT: PRAGMATISM

Pragmatism has the following characteristics:

Methods: qualitative and quantitativeLogic: deductive and inductiveEpistemology: objective and subjectiveAxiology: values play an important part in explaining the resultsOntology: accept external reality Causal linkages: may exist, but cannot be clearly established.

Source: categories from Burrell, G. and G. Morgan (1979). Welford, R. (1997).


WHAT IS A SYSTEM?


I. SYSTEM BASED APPROACHES TO INNOVATION

• Innovation systems• National Innovation systems• Sectoral innovation system • Regional innovation systems• Local innovation systems• Technological innovation

systems

• System innovation and Sustainable Transitions

• Socio-technical systems• Sustainability Transitions

• System failure frameworks

KEY elements:• System Boundaries: internal –

external to the system• Actors and networks: primary and

secondary actors• Institutions: the rules of the game by

which the actors play• Knowledge: key resource in an

innovation system • Dynamics: static snap-shots versus

dynamic driver of change• Policy approach: rationale for

intervention

Methodology: pluralist, ecclecticperspective

Souce: Coenen and Diaz Lopez, 2010.


I. TECHNOLOGICAL INNOVATION SYSTEMS

• Carlsson and Stankiewicz (1991): Network(s) of agents interacting in a specific economic/industrial area under a particular institutionalinfrastructure or set of infrastructuresand involved in the generation, diffusion, and utilisation of technology

• Initial work closely related to SSI, recent turn towards functionalanalysis

• Functional analysis caters for focus on activities and structures

• Emphasis on changes over time (motors of change)

• Less attention for social networksand institutions

• Primarily concerned withtechnological change per se in energy fields

Source: Hekkert et al 2008


II. SUSTAINABILITY TRANSITIONS

The complex of organisations, artefacts, knowledge, capital, labour, cultural meaning that encompass the production, diffusion and use of technology in relation to specific societal functions

Particular attention for regime versus niche constellationsExplicit in broadening up the range of actors conceptualized as social groups and underpinned by Actor Network Theory (Callon) and structurization theory (Giddens)

Includes not only cognitive institutions but also regulative and normative

Focus on process of knowledge creation, exchange and use (broadly defined beyond technological knowledge)Focus on understanding and explaining transitionsParticularly interested in radical changeQualitative historical analysis and interactive, action research

56Souce: Coenen and Diaz Lopez, 2010.


MULTI-LEVEL PERSPECTIVE

5757

Source: Geels (2002)


NOT IN THIS PAPER, BUT SHOWS THE CO-EVOLVING & CONVERGENT NATURE OF ECOINNOVATION: KNOWLEDGE, MARKET, INSTITUTIONS, TECHNOLOGY

58Source: Diaz Lopez and Montalvo 2015


EFFICIENCY OF ACTIVITIES IN THE INNOVATIONSYSTEM

Source: Diaz Lopez et al 2016. EU-LAC collaboration in research and innovation. ELAN network.


AND ITS USE TO IDENTIFY BARRIERS TO DIFFUSION…



ECO-INNOVATION DRIVERS & BARRIERS

Very high

Very low1

2

3

4

5

6

7

2005 2010 2015 2020 2025

Eco-innovation willingness

Environmental Risk

Economic Risk

Market Pressure

Community Pressure

Regulatory Pressure

Technological Capabilities

Organisational Learning

Strategic Alliances

Networks of Collaboration

Very high

Very low1

2

3

4

5

6

7

2005 2010 2015 2020 2025

Eco-innovation willingness

Environmental Risk

Economic Risk

Market Pressure

Community Pressure

Regulatory Pressure

Technological Capabilities

Organisational Learning

Strategic Alliances

Networks of Collaboration

Source: Montalvo et al 2007.


4. SYSTEMIC VIEW OF INNOVATION & BUSINESS MODELS


PAPER ANALYSES DIFFERENT BUSINESS MODELS, EXPRESSED BY ORGANISATION-LEVEL MEASURES

63

Main category of REMs

Strategies, concepts, eco-innovations Example of a REM

Life cycle-focused

Industrial ecology Industrial symbiosis Remanufacturing

Radical re-design Circular economy Cradle to Cradle (C2C) Green chemistry

Supply side focused

Process integrated measures

Pollution control Waste management Cleaner production Eco-efficiency

Management measures Green Supply Chain Management Energy efficiency (in production) Environmental management systems

Demand side focused

New ventures Green entrepreneurship (GE) Goods Green(er) products Services Green services

Source: Diaz Lopez et al 2018.


A BUSINESS MODEL CHANGE / REM FRAMEWORK WAS THEN DEPICTED…



BASED ON 147 COMPANY CASES, THE DEGREE AND SCOPE OF CHANGE WAS ASSESSED…



NOT IN THE PAPER, BUT (INNOVATION/SUSTAINABILITY) STRATEGY IS KEY FOR ADOPTION

Source: Pettigrew et al 1988


ADOPTION BY FIRMS REQUIRES ACCUMULATION OF CAPABILITIES

Source: OECD 2010


OECD 2009 Eco-innovation in Industry

ECOI AS AN ENABLER OF CHANGE

68 | Ecoinnovation for Sustainability


5. EXAMPLES

SYSTEMIC:- Cleantech & Circular in the NL

BUSINESS MODEL:- Organic Banana Grower In

the Caribbean- Craft Brewery in Asia


CLEANTECH & CIRCULAR IN THE NETHERLANDS

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CIRCULAR FLOWS IN AMSTERDAM REGION

71Source: Circle Economy, et al. 2017. Circular Amsterdam.


IMPLEMENTATION ROADMAP

Source: Circle Economy, et al. 2017. Circular Amsterdam.


FOR EXAMPLE, PROTEIN FROM WASTE

Pellets…torrefaction


A BANANA GROWER IN THE CARIBBEAN…

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THE BUSINESS CASE

• Largest producer of organic, fair trade banana in the Caribbean• Certifies other farms; export-oriented product• Refuse does not got to local market because of business ethics (it

could potentially • A high percentage of the electricity for on-site operations was

produced using diesel generators (because the farm is off-the-grid)

• First eco-innovation pilot to substitute the pumping system for a state of the art solar-powered water pump

• Many additional opportunities for eco-innovation…

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ECOINNOVATION PILOTS

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Pilot1Pilot2

Pilot3

Source: Diaz Lopez, 2015.Field Asessment EcoInnovation in Organic Banana Producer. TNO Report.


TOOL: STRATEGY ROADMAP

Source: Phaal et al 2013. Roadmapping for strategy and innovation. Cambridge University Press


A CRAFT BREWERY IN ASIA…

78


PRODUCT-MARKET MATRIX

Source: Dodds, 2009. The evolution of organic food and drinks. Business Insights.


ECOI HAS BEEN UNINTENTIONAL…BUT IT IS GUIDED BY A STRATEGY (OR A PHILOSOPHY AT LAST)


A CIRCULAR BUSINESS MODEL IN THE MAKING…WITHOUT EVEN KNOWING!

Our holistic approach uses local agricultural products in our beer production and taproom while repurposing our brewing waste into agricultural value. Basically we use our farm to make great beer and use the waste from our beer production to fuel our farm.

We farm chillies, pineapples and seasonal vegetables to make incredible tasting beer and the spent grain is used to feed over 80 boars and 100 chickens in neighboring farms.

Source: https://www.facebook.com/7bridgesbrewingco/

https://www.facebook.com/7bridgesbrewingco/


MANIFOLD POSSIBILITIES FOR ECO-INNOVATION…

Organic raw materialsSustainable crop production (e.g. water use)Ethical farmingi-blendingEtc

Renewable energyEnergy efficient operationsPower conversion (electricity instead of heat)

Automation/ sensorsGreen logistics, transport & packagingEnergy efficient building

EcolabelEco-productGreen marketingCO2 offsetting transport

Source (diagramme): PRESME report. Centro Produccion Mas Limpia de Cuba


WANT TO KNOW MORE?


USEFUL RESOURCES

• Inno4sd knowledge repository http://new.inno4sd.net/

• Maastricht Manual for the Measurement of Ecoinnovation

• OECD EcoI and Green Growth www.oecd.org/sti/ind/greengrowthandeco-innovation.htm

• European Commissions EcoIprogramme http://ec.europa.eu/environment/eco-innovation/

• UNEP EcoI project unep.ecoinnovation.org

http://new.inno4sd.net/

http://www.oecd.org/sti/ind/greengrowthandeco-innovation.htm

http://ec.europa.eu/environment/eco-innovation/

http://unep.ecoinnovation.org/


ECO-INNOVATION FOR SUSTAINABILITYInnovation for Sustainable Development Network – inno4sd© http://new.inno4sd.net/

Eco-innovation for sustainability, by: Dr. Fernando J. Diaz Lopez, Ph.D.Email: [email protected]: @FJDiazLopez

Illustrations:Pages 8, 16, 18, 26, 41, 42, 45, 46, 53, 70: Inge Conde Moreno (www.ingecreative.com)Pages 6, 12, 14, 15, 24, 32, 33, 34, 40, 43, 44, 49, 69, 78, 83: Shutterstock.com

This work is licensed under the Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/ or send a letter to Creative Commons.

http://new.inno4sd.net/

mailto:[email protected]

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