Full-Systems Sustainability: The 3D Framework
Excerpt from Part 3 of my New Guidebook: Swivel to Sustainability: A Guidebook to Full Systems Business Transformation
Now available to purchase here as a digital ebook and as a printed book
A few weeks back, I launched a new guidebook on activating transformative change in business called Swivel to Sustainability. It’s for anyone who works in or for a company and steps through how to move from doing business as usual to embedding sustainability that is set up for regeneration. I have already shared an excerpt from Part 1 on the foundations of sustainability and from Part 2 on the need for organizational change in order to integrate sustainability into the DNA of an organization. This article is an excerpt from Part 3, The 3D Sustainability in Business Framework. Designed to help anyone take action, this framework ensures that an organization is continually improving and evolving how products are designed, how operations run and how customers and stakeholders experience the business so that sustainability is integrated into the cultural DNA, with integrity.
The Sustainability in Business 3D Framework
Every action taken has an impact, and many of the social and environmental issues that we are seeking to design out of the system through sustainability are locked in through everyday decisions made in business. Thus, in this section, we’ll first dive into the best-practice methods used to assess your business’s impacts, and then we’ll define techniques used for designing policies to change them toward full systems sustainability.
To make the process of impact assessment more accessible, we created the Sustainability in Business 3D Framework. Based on the operational, product and experiential impacts that all businesses have, there are 18 important areas of impact, as shown in the diagram below.
Operations: The energy, water, waste, infrastructure, travel and procurement that the company consumes and produces in order to do business.
Products: Everything that is produced by a company as part of their offering into the economy. These have significant supply chain, material, natural resource and waste impacts and should be considered in relation to full-life product stewardship across the manufacturing, materials, packaging, retail, consumer use and end of life.
Experiences: The culture fostered and services created by an organization for customers and employees. This involves looking at the direction, space, cognitive experience, communication, engagement and journey created as part of your business offerings.
Combined this three-stage framework is designed to help you take action to ensure your organization is continually improving and evolving how you run your operations, design your products and engage with your customers and stakeholders so that sustainability becomes an integral part of your organization’s DNA.
Whilst there are many areas your business will need to assess and transform, not all of the 18 areas will be of major impact. Additionally, there will be industry-specific areas to consider. For example, a tech company has a different set of impacts to a hotel or a packaged food company.
It’s likely, however, that no matter what size your company is, you will need to assess your operational impacts of energy, waste, water, infrastructure, procurement and travel, as these are often the foundations of a company’s day-to-day environmental impacts.
Likewise, since you’re producing and buying products and/or services that rely on complex supply chains, you’ll need to look at the materials used, the design approaches, the end-of-life impacts and the opportunities to redesign the delivery of your products and services to the market in sustainable and circular ways.
Finally, you’ll want to consider your stakeholders’ experience. From your employees to your customers and the ways that they engage with your organization, the more you consider all of the touchpoints associated with the experience offering and how you direct customers to interact more sustainably with your company and its products/services, the higher successes you will have when transforming to a sustainable business. Afterall, their actions add up to your impacts.
Here’s an example — say you’re in the hotel business. You sell the service of rooms and accommodation, which both have clear operational impacts by way of the cleaning products used, consumables offered, restaurant catering, etc. You can assess these impacts and work to make improvements by purchasing renewable energy, growing food on site, composting food waste and using green cleaning products. But you also provide direction to customers to ensure that their behaviors during their stay are more sustainable — such as refillable water bottles and beautiful water stations instead of disposable bottles (like at my hotel in Brussels), discounted green transportation options and clearly-communicated goals on your collective performance. When you see it as a collaboration between your company and your customers, you start to change the relationship by design.
To get started, establish the major priority areas that immediately affect your business and indicate a level of importance to start exploring each of the areas. Use the activity worksheet on the next page to prioritize where you will start your impact assessment journey.
Environmental Auditing
Auditing is part of any good sustainability approach. It’s a process of considering the direct and indirect impacts of your company’s actions by understanding and working with the entire value chain and taking full responsibility for the social and environmental impacts of the business activities.
Auditing offers systemic scrutiny of your activities to develop a more detailed perspective on what you are actually doing, thereby uncovering the impacts of your actions and thus, the opportunities for transforming them.
This is why the 3D framework covers the operational, product and experiential impacts, instead of just one area. Impacts occur across all aspects of an organization’s activities in the economy, and auditing is one of the main ways you will gain a clear understanding and a data set to benchmark against.
One thing to avoid is using an audit process to control versus explore. Auditing should be about uncovering aspects of your systems that were not obvious at first so that the data and insights can be used as the foundations for creating better outcomes. This is not a race to the bottom or a tick-the-box activity (although checklists can be very helpful in ensuring that the right data is collected regularly).
Environmental Audit Objectives
Determine & document current status
Understand & improve environmental performance
Improve management processes
Increase awareness of impacts
Develop and employ environmental management systems
Reduce risks & liabilities
Develop benchmarks
Promote sustainability within your organization
Account for environmental consequences, both foreseen and unforeseen
Influence future management practices
Create data that helps fuel organizational change
Reduce negative impacts from operations
Measure against your goals
In some industries, certain environmental management regulations are required to be adhered to, but moving beyond compliance should be the goal of all sustainability-focused businesses.
We will get into this in more detail, but the type of audits you may do are waste, energy, procurement, travel, supply chains, water, etc.
Environmental Impact Assessments
Every single action has impacts back on the environment in some way; impact assessments help to determine what will happen once an action has been taken.
All operations, along with materials and manufacturing, require inputs. These are resources like raw materials, energy and water which must be first extracted and then fed into the system. As a result, outputs are generated.
Outputs tend to be the cause of an action, such as CO2 from energy use or waste from manufacturing. In environmental impact assessments, you are measuring the effects of inputs and outputs that occur as part of your operations and actions.
By doing this, you gain valuable insights into the resource inputs and pollution outputs of your company. Then you can manage and mitigate them by changing suppliers, processes, designs and policies.
Once you have assessed your impacts, you can then start to develop approaches to transform them through environmental management policies, sustainability strategies or whatever approaches make the most sense for your company.
To clarify, audits and assessments are both tools for identifying and documenting impacts that occur as a result of business decisions and actions. They share some terminology but are utilized in different ways.
An assessment anticipates impacts. It’s most commonly conducted before an action is taken in order to explore potential impacts that may occur, whereas an audit is often carried out on something that already exists, such as business operations or supply chains.
Assessments provide information and insights to decision-makers on potential impacts so that they can be designed out of the product/business/service; the data that helps inform this is often from an audit. So, they work hand-in-hand to provide insights that can lead to better actions.
Let’s look at a couple of examples of how you can use audits and assessments to inform how you manage your impacts.
You will have climate change impacts across several areas of your business, including the energy that powers operations, like an office or worksite, the types of servers hosting your website and the processes used to get your product to market.
By auditing your energy bills, procurement practices, and the products in use, you can assess what your total energy impact is and calculate how this translates as a climate impact (there are many calculators online that help do this). You can then use this data to set your climate reduction targets and change practices within your company.
Another big impact area is waste production. You likely generate solid waste from your office, including general paper, packaging, coffee, food waste, etc., which can be separated quite easily for recycling and organic waste collection.
These can then be monitored to document amounts of waste production and contamination.
Waste produced from product development across the supply chain is often the bigger issue. Examples include water run-off from fabric dyes, offcuts from material manufacturing, chemicals used in agriculture, etc.
You will only be able to reduce these impacts by auditing and mapping your entire supply chain along with all the materials and processes that occur throughout it (jump ahead to page 124 to get started on this).
Sustainable practices around waste can leverage principles of the circular economy, which eliminates waste from the system.
This requires you to find new ways of designing your processes to stop waste or to cycle it back through a well-designed system, which often involves bringing products back into your manufacturing system through reverse supply chain logistics and customer return incentives.
Social Impact Assessment
So far we have been focusing on the environmental impact side of things, but there are many social impacts resulting from your operations and activities that need to be assessed and improved.
Social impact assessments measure how your business affects people in a community as well as in society as a whole. After a social impact assessment is done, you can implement approaches that reduce negative social impacts and boost programs that improve positive social impacts.
Social impact assessment requires interaction with the workers along your entire supply chain to ensure that no one is being exploited or harmed and that their labor practices are ethical and fair.
You will need to explore the impacts of your actions on the way of life of the people you are impacting, including the culture, community, health and wellbeing of the people along your entire value chain.
This is about preemptively measuring both the intended and unintended consequences of your actions on society, community and individuals.
Over the past few decades, many people have been working on methodologies that incorporate social impact assessment into robust processes like life cycle assessments. But it is a lot harder to measure impacts on humans than it is on the environment, given that measuring social impacts can be quite subjective.
Considerations in Social Impact
Work with affected communities to understand how actions will result in impacts that affect them and explore possible community-derived ways of addressing these.
Get proof from your suppliers that all their workers are paid an appropriate rate — not just in line with the going rate in the local community, but a rate that allows them to have a living wage, live comfortably, upskill, provide education for their children, access food and clean water and provide the potential for upward mobility in their community.
Seek out trusted third-party verification on claims and engage validation services that will perform regular inspections and follow-ups.
Physically visit the factories, mines or production facilities yourself to confirm the suppliers’ claims and ensure that your standards are being upheld.
If you don’t already have a set of standards for working conditions, create one. Then share it with your suppliers, have them commit to it and support them in meeting any costs or time requirements to level up.
Invest in helping your manufacturing facilities improve where needed, and if possible, form collaborations with other companies who use the same factories to create cohesive and aligned conditions of work.
Check for subcontractors or suppliers, cottage industry outsourcing or other undisclosed methods of meeting timelines.
Set realistic delivery timelines to avoid unrealistic expectations that force suppliers to outsource to unvetted facilities.
Seek out manufacturing facilities that provide support for their employees, such as childcare on location, pay rates that don’t require onerous overtime in order to meet the cost of living, basic healthcare coverage, regular break and meal times, transportation to the work site, etc.
Check the raw materials and Material Safety Data Sheets (MSDS) to ensure that the proper safety measures are being put in place and adhered to. There are service providers that can arrange these checks for you.
Track and monitor where post-manufacturing waste materials are being sent and how they are processed and transported in order to avoid infiltrating local water tables or creating other impacts on the community.
Product Level Impacts
Product level impacts cover all aspects of the produced products and services created by the company as part of their offering into the economy. It doesn’t matter if the product is an app or the phone that the app runs on; everything can be assessed for its impact in creation, delivery, use and end of life.
All goods that are created rely on materials extracted from nature and exist within a complex global supply chain that has impacts at multiple stages. By assessing products across their entire life cycle from the extraction of raw materials through to the end of life, you get a far more detailed and accurate perspective of where impacts are occurring so that they can then be redesigned.
Changes to product design and service delivery decisions should be implemented to ensure that supply chains and auxiliary aspects of company production activities have been considered in line with reducing and avoiding negative consequences.
Once full life cycle and supply chain impacts are understood, then sustainable design strategies can be employed. Let’s get started by understanding how to explore the current linear economy by looking at the life cycle stages that a product goes through.
Life Cycle Thinking Key Concepts
As we discussed in Part 1 (see page 63), Life Cycle Thinking is based on the methodology of product environmental impact assessment called Life Cycle Assessment, which is the scientific process of understanding the impacts that occur as a result of the products that move through our economy. There are several key concepts that apply to both the more technical assessment process and the streamlined thinking tool explored here.
Context: The conditions in which the product will exist such as the climate, use case, durability, repair options, cultural norms, energy sources, etc. will all determine the life cycle impacts, so always consider the contextual scenarios and conditions to get the full picture.
Functional unit: Defining the product’s performance criteria, such as how much liquid a cup can hold or if something has to conduct electricity, or even the amount of calories delivered by a type of food, allows for things that are of the same functionality to be compared. Everything that is sold in the economy has a definable functional unit — that is the unit of functional delivery.
Inputs: Everything that is created requires things to come from nature. These are essentially the inputs, which are the resources that are required in order for a change to happen, such as a chicken being grown for meat or water being used to grow plants as food stock to grow the chicken.
There are a bazillion different types of inputs, but think of it this way: to get something out, we must put something in — raw materials, energy, water, chemicals, etc.
Inputs can all be traced back to nature at some point, so we need to understand what impact their extraction has had on the resilience of natural systems.
Outputs: These are the intended and unintended results of processing inputs. Water coming into a factory can help to break up wood fiber to make paper, but it also creates contaminated wastewater due to the chemicals used in the processing. This should be treated before re-entering the natural environment, which will also have outputs. A chicken farm has the outputs of manure that, if untreated, can have adverse human health and environmental impacts, such as contributing to dead zones in the oceans from nutrient increases.
Outputs are all the pollutants, byproducts, and actual intended products which occur when we process something.
Flow-Through: This is the way things flow through a system from input to output, along with the activities that occur throughout.
We call this “stocks and flows”in systems thinking, and it results in feedback loops. In LCT, it helps to think about how things flow through the system in order to get to the desired outcome at each stage of the product’s life.
Goal and Scope: The goal is the delivery of the functional unit, and the scope is the framing that the LCA study is done through.
The scope outlines what is included in the assessment and what is excluded. For example, if you had a study that only compared the impacts of a large family restaurant chain inside the restaurant walls (e.g., cooking and waste) but ignored the meat production, packaging and all other inputs needed to function as a food provider, then the study would not be a proper LCA, as it needs to cover the full scope of delivering the products to the customer.
Metabolism Rate: The ability for things to be reabsorbed or integrated into a system, be it biological or industrial, describes the metabolism rate. Food waste, for example, can be easily metabolized in a compost bin or biodigester, whereas it does not get effectively metabolized in a landfill.
Impacts: Everything that is created requires something else to be altered, destroyed, converted, etc. Actions result in reactions and consequences, and in life cycle thinking and sustainability in general, we are concerned with the impacts of actions.
If you are deciding whether to swap your packaging from one material to another, you need to think about the resulting impacts across the life of the product.
How do you maximize the functional gain, while minimizing inputs and the negative outputs on people, the planet and the bottom line?
Experiential Impacts
Experiential impacts are the outcome of the services, company culture and customer-facing offerings that your organization creates and fosters with customers, suppliers and employees.
This is all about the interface you have with the world. The general areas of impact are around what the workforce is encouraged or discouraged to do, be it in how they get to work, the waste management on site, resource efficiency and general culture and company ethics. Then there is the customer journey and how people engage with your company, products and services.
Given that much of the circular economy is about designing closed-loop systems that have a high level of customer interaction, the experiential side of your offerings is crucial to your success. Additionally, the experiences of all players along your value chain will impact how effectively you create an ethical and sustainable company.
The experiences that you offer your customers and team members will impact their understanding of your organization and its ethos; in turn, it will affect their behaviors. By considering and designing experiences that affect positive change, challenging unsustainable cultural norms and offering entirely new ways of delivering value into the economy, you can embed sustainability into your workforce and wider value chain.
The six areas that we explore in customer and staff sustainability experiences are:
Journey: The way your customer interacts with all your offerings, such as how they move through your space, interact with your website or return your product when no longer needed as part of a product as service model. All journeys have multiple touchpoints that could be contributing to unsustainability or adjusted to promote sustainable actions.
Engagement: This is how you engage your customer, employees and stakeholders along your value chain. From communication to education, how you engage with the world determines how you are valued.
Communication: There are many ways you can communicate with your customers, including brand identity and packaging designs, wayfinding signs that help direct them to better behaviors and even the emails that you send them. All the aspects of engagement could accidentally be encouraging unsustainable actions, or conversely, be redesigned to offer more encouragement and direction. The way you frame the offerings, the language you use and your approach will determine how willing people are to engage with your offerings.
Cognition: This is how you understand and enhance the cognitive experience your customers have through the design, experience flow and behavioral insights associated with their cognitive experience of what you offer. Overcoming biases, ensuring that the experience is joyful, frictionless, incentivizing and rewarding — the cognitive experience design will greatly affect their behavior, perception and how likely a customer is to invest in your offering as well as how ethical and equitable the experience can become.
Space: This is about considering the physical spaces you design and how they influence your customers and workers throughout you facilities. Consider your offices and their layout, the way people move through a shop or cafe that you own — these will all impact their emotions, experiences, behaviors and willingness to participate in changes you make as part of your sustainability initiative.
Direction: This is about how you guide social norms, behaviors, and culture by pro-actively encouraging customers and your team to do something sustainable, like bringing in their own coffee cup, refilling a water bottle, ordering differently, etc. You can help direct people to more sustainable offerings by designing the experience to maximize these preferences and reducing friction that adopting new norms could result in.
At every stage of your customer journey, you can design both the physical and cognitive experiences to nudge and direct people toward better preferences and choices that lead to more sustainable outcomes.
What to read more? Get your hands on the full 120+ pages of the guidebook and interactive worksheets by downloading the e-book or ordering the printed version here.
Also, you can apply to join one of my upcoming live workshops on activating technical sustainability skills and leveraging your business leadership here.