Sustainability has become a strategic priority for businesses, with corporate goals increasingly focusing on environmental stewardship, social responsibility, and governance. Yet, one area often overlooked is product sustainability—a critical driver that connects a company's sustainability commitments to actionable outcomes.
In our recent blog, Green Chemistry in Business: Transforming Sustainability with LCA and Eco-Design, we explored how innovative approaches like life cycle assessments (LCA) and eco-design principles are reshaping sustainable product development. Building on this, let’s explore why product sustainability is essential to achieving corporate sustainability goals, the challenges in its adoption, and the advanced strategies companies use to bridge the gap.
Why Is Product Sustainability Underutilized?
While corporate sustainability frameworks emphasize operational and governance improvements, product sustainability often takes a back seat. This is due to several challenges:
- Data Integration: Measuring product-level impacts, particularly Scope 3 emissions, requires a deep integration of supply chain and lifecycle data—something many organizations struggle to achieve.
- Perceived ROI Challenges: Unlike operational sustainability, the financial benefits of sustainable product design often manifest over the long term, making it harder to justify immediate investment.
- Fragmented Collaboration: Product sustainability requires cross-functional collaboration between R&D, marketing, and supply chain teams—breaking down these silos can be a significant hurdle.
Yet, sidelining product sustainability misses an opportunity to directly connect a company’s sustainability goals with measurable product-level impacts. This disconnect risks undermining efforts to address critical environmental and social challenges.
Did you know that over 80% of a product’s environmental impact is determined at the design stage? This underscores the need to integrate sustainability early in the product development process.
The Central Role of Product Sustainability in Corporate Goals
Focusing on product sustainability strengthens a company’s ability to meet broader environmental, social, and operational objectives:
- Environmental Impact
- Lifecycle Transparency: Sustainable products that undergo rigorous lifecycle assessments (LCA) assessing impacts from raw material sourcing to end-of-life disposal or recycling to minimize ecological harm and align with global carbon neutrality goals.
- Circular Economy Integration: IKEA is leading circular economy efforts with initiatives like the Circular Hub, a resale concept for secondhand furniture. This program encourages customers to return used items, refurbish, and resell them, extending the product life cycle and reducing waste. IKEA aims to become fully circular by 2030, designing all products for reuse, repair, and recycling. Such strategies demonstrate the tangible impact of circular practices, aligning environmental benefits with cost savings and enhancing customer value.
- Social Benefits
- Ethical sourcing of materials, such as Fairtrade-certified goods or conflict-free minerals, ensures supply chains benefit workers and communities.
- Products designed for accessibility or inclusivity cater to broader societal needs, aligning brand values with consumer expectations.
According to a McKinsey report, 70% of consumers are more likely to support brands prioritizing product sustainability.
- Governance Alignment
- Clear labeling and certifications like Cradle to Cradle or EPDs (Environmental Product Declarations) build trust and transparency.
Incorporating product sustainability metrics into corporate sustainability goals reporting demonstrates accountability to investors and regulators.
Case in Point: Sustainability in Action
These benefits are not theoretical. Companies leading in sustainable product innovation, such as Patagonia or Unilever, are outperforming peers by gaining loyalty from ethically conscious consumers and securing premium market positions. A prime example is Unilever’s Love Beauty and Planet product line, which has seen significant growth thanks to its eco-friendly appeal. With initiatives like reducing plastic use and sourcing renewable ingredients, Unilever's focus on sustainability has helped the brand resonate with consumers who prioritize product environmental responsibility. This shift has positioned them as leaders in the market, outpacing competitors and demonstrating that sustainability can be a powerful driver of consumer loyalty, profitability, and business success.
Overcoming Challenges to Prioritize Product Sustainability
Businesses can adopt bold strategies and advanced tools to close the gap between corporate sustainability goals and product innovation. Here’s how forward-thinking companies can rise to the challenge:
- Implement Advanced Lifecycle Assessments (LCA)
Lifecycle assessments (LCA) minimize environmental impacts and contribute directly to corporate sustainability KPIs, such as reducing Scope 3 emissions—a critical aspect of achieving net-zero commitments.
- Integrate Circular Economy Principles
Adopt design strategies that prioritize product longevity, recyclability, and material recovery. Examples include:
- Developing modular products that allow for easy upgrades or repairs.
- Partnering with reverse logistics providers to streamline recycling or reuse programs.
- Leverage Blockchain for Supply Chain Transparency
Blockchain technology offers a secure and traceable way to monitor product sourcing and lifecycle impacts. This ensures compliance with emerging regulations and provides consumers with proof of sustainability claims.
- Embed Product Sustainability in R&D Priorities
By embedding sustainability in R&D priorities, companies can proactively address compliance requirements such as the EU Green Deal while meeting market demands for eco-friendly products. This dual focus ensures regulatory adherence and positions brands as leaders in sustainability.
Beyond Greenwashing: The Business Case for Product Sustainability
Sustainable products aren’t just a checkbox for compliance with sustainability goals—they’re critical to business growth. Here’s why:
- Consumer Trust and Loyalty: Over 60% of global consumers prefer sustainable products with comparable prices and performance. Sustainable design builds brand credibility in an era of greenwashing scrutiny.
- Regulatory Preparedness: With governments implementing stricter environmental laws, such as the EU’s Corporate Sustainability Reporting Directive (CSRD), sustainable products reduce compliance risks.
- Innovation and Differentiation: Product sustainability encourages creative problem-solving, opening doors to new markets and driving differentiation in saturated industries.
The global green technology and sustainability market was valued at USD 19.07 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 22.9% from 2024 to 2030.
The Long-Term Value of Product Sustainability
Product sustainability isn’t just about meeting the demands of today—it’s about securing a competitive advantage for tomorrow. By investing in sustainable product design, companies can:
- Reduce Risks: With tighter regulations around carbon emissions and sustainability practices, companies prioritizing product sustainability will be better prepared to meet evolving compliance requirements. This will help them meet climate action goals, such as reducing greenhouse gas (GHG) emissions, waste, and water usage.
- Drive Innovation: Sustainability is a breeding ground for creativity. Companies that embrace product sustainability will continue to innovate, tapping into new business opportunities and products that appeal to the growing eco-conscious consumer base.
- Achieve Market Leadership: Early adoption of sustainable product practices positions companies as industry leaders, attracting investment, building consumer trust, and ultimately ensuring long-term profitability.
Beyond Greenwashing: The Business Case for Product Sustainability
The sustainability landscape is shifting rapidly. Investors, consumers, and policymakers alike are demanding greater accountability, pushing businesses to adapt. Companies that integrate product sustainability into their strategies have an opportunity to meet these expectations and shape industry standards.
The challenge isn’t just prioritizing sustainable products—it’s scaling these efforts effectively. With the right tools, cross-functional collaboration, and a transparent approach, businesses can move beyond operational sustainability and make meaningful strides at the product level.
Bridging the Gap with Strategic Sustainability Integration
Integrating sustainability into product designs requires more than intention—it demands data-driven strategies and specialized expertise. By focusing on solutions like lifecycle assessments and sustainability-focused R&D, companies can identify opportunities to innovate while ensuring compliance with evolving regulations.
From evaluating product impacts to embedding circular economy principles, advanced technologies such as AI and blockchain enable businesses to enhance transparency, reduce environmental footprints, and achieve measurable goals. These tools help bridge the gap between ambition and action, paving the way for long-term sustainability success.
