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Strategic Sustainability Risk Management in Product Development Companies
Blekinge Institute of Technology, Faculty of Engineering, Department of Strategic Sustainable Development.ORCID iD: 0000-0003-2563-8273
2021 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Society’s transition towards a sustainable state entails rapid and disruptive change in all sectors. This change is the source of profound uncertainty. From a company perspective, it can either pose existential threats if current practices or products enforce unsustainable development, or it can present opportunities if the company can provide solutions to the sustainability challenges humanity is facing. Such sustainability-related threats and opportunities, i.e., risks, can be related to, for example, reputation, legislative change, litigation, the ability to attract and retain talented employees, or the ability to meet customer needs on increasingly sustainability-driven markets. While more and more companies recognize the importance of building capabilities for sustainable product development to remain competitive, the relation between social and environmental aspects and economic performance is still oftentimes viewed as a trade-off where some profit must be sacrificed to be sustainable.Based on an interactive qualitative research approach, this thesis shows how a risk management lens can be used to support decision-makers at product development companies in understanding the dynamic interplay between socio-ecological sustainability aspects and business implications. The conceptual understanding of sustainability risks was advanced by identifying their characteristics and by proposing a new definition, utilizing literature review and the Framework for Strategic Sustainable Development. In the next step of the research, today’s situation and preconditions at some product development companies in Sweden were studied. Using multiple data collection methods, current risk management practices were investigated and hypotheses for sustainability integration were derived. Based on interviews with industrial and academic experts, the hypotheses were further developed into key aspects for sustainability risk management that can be used as recommendations for practitioners. Utilizing the newly developed definition and key aspects, a conceptual approach for strategic risk management within the sustainability transition was conceived. This approach was then adapted and operationalized as a workshop method for multifunctional teams in the context of product portfolio planning. Finally, the Sustainability Impact and Effects Analysis was developed and tested through an action research approach to provide decision-makers in early phases of the product innovation process with practical support for identifying, assessing, and managing sustainability risks. Uncertainty is neither good nor bad – it is just an inherent part of reality. This thesis showed how a risk management approach can be used to guide decision-making in uncertainty within the sustainability transition in a product development company context. Thereby, companies can take the strategic leadership that is required to benefit from the opportunities that can be found in this time of deep uncertainty.

Place, publisher, year, edition, pages
Karlskrona: Blekinge Tekniska Högskola, 2021.
Series
Blekinge Institute of Technology Doctoral Dissertation Series, ISSN 1653-2090 ; 9
Keywords [en]
sustainable product development, sustainable design, risk management, corporate sustainability, product innovation, sustainability transition
National Category
Environmental Sciences Mechanical Engineering
Research subject
Strategic Sustainable Development
Identifiers
URN: urn:nbn:se:bth-22193ISBN: 978-91-7295-431-1 (print)OAI: oai:DiVA.org:bth-22193DiVA, id: diva2:1602175
Public defence
2021-12-09, J1630, Blekinge Tekniska Högskola, Karlskrona, 09:15 (English)
Opponent
Supervisors
Funder
Vinnova, 2020-04163Knowledge Foundation, 20180159Available from: 2021-10-19 Created: 2021-10-11 Last updated: 2021-11-04Bibliographically approved
List of papers
1. Challenges and preconditions to build capabilities for sustainable product design
Open this publication in new window or tab >>Challenges and preconditions to build capabilities for sustainable product design
2017 (English)In: DS87-1 PROCEEDINGS OF THE 21ST INTERNATIONAL CONFERENCE ON ENGINEERING DESIGN (ICED 17), VOL 1: RESOURCE SENSITIVE DESIGN, DESIGN RESEARCH APPLICATIONS AND CASE STUDIES / [ed] Maier A.M., Skec S., Salustri F.A., Fadel G., Kim H., Kokkolaras M., Oehmen J., Van der Loos M., Design Society , 2017, Vol. 1, no DS87-1, p. 1-10, article id DS87-1Conference paper, Published paper (Refereed)
Abstract [en]

Sustainable product innovation has previously been found to be positively correlated to competitiveness. However, in order to build capabilities for sustainability integration one must first understand companies' current state. The overall aim is therefore to identify common preconditions and challenges for sustainability integration in product innovation. A questionnaire study, targeting employees with roles in product development, was conducted at four medium-sized to large product development and manufacturing companies in Sweden. Results show that capabilities for sustainability integration are perceived as decisive for future company success, but are not considered to be correspondingly high prioritized today. Decision making is focused on material selection and energy efficiency, so no full socio-ecological sustainability perspective is covered. Formal decision support tools are only used by half of respondents and are a main area for improvement. Identified challenges include short-term economic thinking, lack of sustainability criteria and vague management commitment. Based on these findings, seven recommendations for companies are presented and validated.

Place, publisher, year, edition, pages
Design Society, 2017
Keywords
Capability, Case study, Ecodesign, Sustainability, Sustainable product development, Decision making, Decision support systems, Energy efficiency, Innovation, Integration, Product development, Sustainable development, Decision support tools, Manufacturing companies, Questionnaire studies, Sustainability criteria, Sustainable product designs, Sustainable products, Product design
National Category
Other Environmental Engineering
Identifiers
urn:nbn:se:bth-15517 (URN)000455059100001 ()2-s2.0-85029747884 (Scopus ID)
Conference
21st International Conference on Engineering Design, ICED, Vancouver, 21-25 August, 2017.
Note

Open access.

Available from: 2017-11-24 Created: 2017-11-24 Last updated: 2022-01-31Bibliographically approved
2. Challenges for integrating sustainability in risk management-current state of research
Open this publication in new window or tab >>Challenges for integrating sustainability in risk management-current state of research
2017 (English)In: Proceedings of the International Conference on Engineering Design, ICEDVolume 2, Issue DS87-2, 2017, Pages 327-336 / [ed] Kokkolaras M.,Maier A.M.,Fadel G.,Salustri F.,Oehmen J.,Van der Loos M.,Skec S.,Kim H., The Design Society, 2017, no DS87-2, p. 327-336, article id DS87-2Conference paper, Published paper (Refereed)
Abstract [en]

Numerous examples have shown how environmental and social issues can affect companies to an existential level. In fact, today's most urgent business risks, e.g. brand value, legislative change, litigation, and supply chain disruptions, are directly linked to sustainability issues. These risks need to be systematically identified and strategically managed on both strategic company-and operational product development level in order for a company to be long-term competitive. Based on literature review and interviews at case companies, this paper investigates the current state for integrating a strategic sustainability perspective in risk management processes and related support tools. Results show that sustainability risks are not consciously identified and managed at the companies. Research is at an early stage and few frameworks and tools exist. Based on the findings, the study identifies and provides a comprehensive analysis of challenges for sustainability integration, which work as a foundation for future research. Finally, key steps to advance understanding and methods in sustainability risk management are suggested.

Place, publisher, year, edition, pages
The Design Society, 2017
Keywords
Ecodesign, Risk management, Strategic sustainable development, Sustainability, Sustainable product development
National Category
Other Engineering and Technologies not elsewhere specified Applied Mechanics Environmental Sciences
Identifiers
urn:nbn:se:bth-15308 (URN)000455237100034 ()2-s2.0-85029742256 (Scopus ID)
Conference
21st International Conference on Engineering Design, ICED, Vancouver, Canada,21 August 2017 through 25 August 2017
Funder
Knowledge Foundation
Available from: 2017-10-06 Created: 2017-10-06 Last updated: 2021-11-04Bibliographically approved
3. Company Risk Management in Light of the Sustainability Transition
Open this publication in new window or tab >>Company Risk Management in Light of the Sustainability Transition
2018 (English)In: Sustainability, E-ISSN 2071-1050, Vol. 10, article id 4137Article in journal (Refereed) Published
Abstract [en]

Many of the most important business and economic risks are directly linked to environmental and social issues. This includes both threats and opportunities, not only in relation to reputation, which is often mentioned in this context, but, even more importantly, in relation to innovation capability and legislative change on inevitably more and more sustainability-driven markets. It is, however, unclear through which mechanisms such sustainability risks currently affect companies and how they can be systematically identified and managed. Based on the Framework for Strategic Sustainable Development, this study investigates the dynamics and implications of society’s sustainability transition from a company risk management perspective. In addition, exploratory and descriptive studies were conducted at two large product innovation companies to identify current risk management practices and preconditions for sustainability integration. The results reveal that a society moving closer towards a collapse of environmental and social systems leads to increasing sustainability-related threats for unsustainable businesses and increasing opportunities for sustainable businesses. Also, risk management is found to be a promising way for maneuvering in a smart zone between being too passive and being too pro-active in relation to sustainable innovation.The study participants at the case companies were knowledgeable about risk management in general but were largely unfamiliar with risks associated with sustainability and no processes or support tools exist to work systematically with such risks. Key steps to accomplishing an integration of a strategic sustainability perspective into risk management are proposed as: (i) identifying the effects of sustainability issues on internal and external stakeholder value; (ii) actively including sustainability in objective setting and cascading objectives across the levels of the organizational hierarchy; and (iii) developing concrete support for identifying, assessing, and managing economic sustainability risks. Thereby, companies can enhance their competitiveness while providing leadership in the sustainability transition.

Place, publisher, year, edition, pages
MDPI, 2018
Keywords
risk management, sustainability, product innovation, strategic sustainable development, sustainable product development, sustainability transitions, sustainable development
National Category
Environmental Sciences
Identifiers
urn:nbn:se:bth-17246 (URN)10.3390/su10114137 (DOI)000451531700311 ()
Projects
Sustainability Implementation Package
Funder
Vinnova, 2018-00361Knowledge Foundation, 20120278
Note

open access

Available from: 2018-11-10 Created: 2018-11-10 Last updated: 2022-02-10Bibliographically approved
4. Strategic Sustainability Risk Management in Product Development Companies: Key Aspects and Conceptual Approach
Open this publication in new window or tab >>Strategic Sustainability Risk Management in Product Development Companies: Key Aspects and Conceptual Approach
2020 (English)In: Sustainability, E-ISSN 2071-1050, no 24, p. 1-20, article id 10531Article in journal (Refereed) Published
Abstract [en]

Society’s transition towards sustainability comes with radical change, which entails significant threats and opportunities for product development and manufacturing companies, for example related to new legislation, shifting customer preferences, and increasing raw material prices. Smart risk management therefore plays a key role for successfully maneuvering society’s sustainability transition. However, from a company perspective, it remains challenging to connect the macro-level societal change with tangible risks for the business on the micro level. Based on interviews with academic and industrial experts, this study identified 21 key aspects for sustainability risk management. Drawing on these results and research from the areas of transition design, strategic sustainable development, and sustainability risk management, a conceptual approach for strategic risk management within the sustainability transition is presented. It builds on layered, double-flow scenario modelling in which backcasting from a vision, framed by basic principles for sustainability, is combined with forecasting from the present. The implications of such scenarios, i.e., risks, can then be identified and managed. By doing so on different scales, connections between macro- and micro-level change can be established. Thereby, product development companies shall be supported in making sustainability an intrinsic part of decision-making across the strategic, tactical, and operational levels to increase competitiveness while contributing to the transition towards a sustainable society. 

Place, publisher, year, edition, pages
MDPI, 2020
Keywords
sustainable product development, backcasting, strategic sustainable development, transition design, Environmental Social and Governance (ESG), risk management
National Category
Environmental Sciences
Research subject
Strategic Sustainable Development
Identifiers
urn:nbn:se:bth-20855 (URN)10.3390/su122410531 (DOI)000603287000001 ()2-s2.0-85098212880 (Scopus ID)
Funder
Knowledge Foundation, 20180159
Note

open access

Available from: 2020-12-16 Created: 2020-12-16 Last updated: 2023-01-30Bibliographically approved
5. Sustainability risk and portfolio management - a strategic scenario method for sustainable product development
Open this publication in new window or tab >>Sustainability risk and portfolio management - a strategic scenario method for sustainable product development
2022 (English)In: Business Strategy and the Environment, ISSN 0964-4733, E-ISSN 1099-0836, Vol. 31, no 3, p. 1042-1057Article in journal (Refereed) Published
Abstract [en]

Companies need to strategically develop their portfolio and find the balance between being proactive and passive in relation to sustainability. In this study, a strategic perspective based on backcasting from overarching socio-ecological sustainability principles was used as a lens to understand how companies might adapt their product portfolios to avoid threats and exploit opportunities on increasingly sustainability-driven markets. The study shows that sustainability performance, market success, and time are key areas to be considered in the product portfolio process to ensure short-term profitability and long-term competitiveness. A novel method was developed and tested in one academic group and two companies to explore how such a strategic sustainability perspective can support the product portfolio process in practice. The results indicate that the strategic layered double-flow scenario method, including different time horizons, was supportive in identifying opportunities and avoid risks in the sustainable development process at the company.

Place, publisher, year, edition, pages
John Wiley & Sons, 2022
Keywords
backcasting, forecasting, market success, product portfolio, scenario modeling, strategic sustainable development
National Category
Mechanical Engineering Environmental Sciences
Research subject
Strategic Sustainable Development
Identifiers
urn:nbn:se:bth-22196 (URN)10.1002/bse.2934 (DOI)000714350800001 ()2-s2.0-85118496463 (Scopus ID)
Funder
Vinnova, 2020-04163
Note

open access

Available from: 2021-10-11 Created: 2021-10-11 Last updated: 2023-01-30Bibliographically approved
6. Sustainability impact and effects analysis - A risk management tool for sustainable product development
Open this publication in new window or tab >>Sustainability impact and effects analysis - A risk management tool for sustainable product development
2022 (English)In: Sustainable Production and Consumption, ISSN 2352-5509, Vol. 30, p. 737-751Article in journal (Refereed) Published
Abstract [en]

Integrating a strategic sustainability perspective in product development requires that decision-makers can connect socio-ecological sustainability aspects to tangible business implications in the short- and long term. Only then will there be the driving forces necessary for adopting sustainable product development practices. A risk management approach can be used to enable strategic proactivity by exposing the potential consequences of sustainability-related decisions, for example in relation to reputation, legislative change, the ability to attract top talent, or meeting customer needs. Through an action research approach and by building on previous findings and existing tools and methods, this study presents the Sustainability Impact and Effects Analysis. This novel method and risk management tool combines the familiar format of the well-established Failure Mode and Effects Analysis with a strategic sustainability perspective. Designed to be applicable in early stages of the product innovation process, this tool aims to increase decision-makers’ awareness of sustainability risks and provide them with a practical way for how to identify, assess, and treat such risks. The tool was developed in close collaboration with industry and tested in two different companies. The results indicate the effectiveness of the tool for identifying and analyzing sustainability risks, as well as deriving and monitoring strategies for how to manage them strategically, also leading to an increased awareness of the interconnections between socio-ecological sustainability aspects and business implications. Thereby, it can provide support for companies in how to work with product development in a way that contributes to society's transition towards sustainability, while benefiting the own organization. © 2022 The Authors

Place, publisher, year, edition, pages
Elsevier, 2022
Keywords
Sustainable innovation, Eco-design, Failure mode and effects analysis (FMEA), Action research, Decision-support, Strategic sustainable development
National Category
Environmental Sciences Social Sciences Interdisciplinary
Research subject
Strategic Sustainable Development
Identifiers
urn:nbn:se:bth-22195 (URN)10.1016/j.spc.2022.01.004 (DOI)000789137500005 ()2-s2.0-85122994811 (Scopus ID)
Funder
Knowledge Foundation, 20180159Vinnova, 2020-04163
Note

Open access.

Available from: 2021-10-11 Created: 2021-10-11 Last updated: 2022-05-30Bibliographically approved

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