managemnet company strategy managemanet How Ecodesign Can Help the Environment and Your Bottom Line

How Ecodesign Can Help the Environment and Your Bottom Line

How Ecodesign Can Help the Environment and Your Bottom Line post thumbnail image

While many commitments to build a circular economy have been signed around the world, industries are still consuming more resources than they can regenerate. Today, it would take 1.75 Earths to feed the world’s needs.

In addition, less than 7% of the materials are preserved for further use, while the rest is sent to the waste disposal (a sequence called “linear use of resources”). Thus, there are many supply risks and price increases ahead, which puts economic growth at risk.

The linear use of resources endangers our environment. The extraction of natural resources contributes to climate change and more than 90% of the loss of biodiversity, according to a recent study by the Ellen MacArthur Foundation.

So people have good reasons to work quickly and implement the principles of the circular economy in global businesses. In doing so, we can separate resource consumption from growth in absolute terms. We can do more with less.

The Circular Economy and Ecodesign

What is the key to a successful transition from a linear to a circular economy? This is product design. Up to 80% of a product’s life cycle environmental impact is determined by its design. And that’s where ecodesign comes in.

How does ecodesign work?

While traditional product development focuses primarily on factors such as usability, safety, cost, and quality, ecodesign emphasizes ecological factors. This means finding ways to reuse materials, while maximizing the safe use and value of the product.

Unlike traditional product design methods, ecodesign considers the entire product life cycle, including resource acquisition, procurement, prototyping, series production, multiple use of the product, the final part of the life, and all logistics and transportation processes. Ecodesign’s product development goes beyond the company’s gates, from “cradle to grave.”

The implementation of ecodesign represents a significant change for any organization. Making the strategy work requires the commitment of top executives, and this means that teams must embrace new ways of thinking and working.

Sustainable Eco Design: Three Stages

In 2020, Siemens introduced a dedicated, holistic ecodesign approach to development processes called Robust Eco Design (RED). With RED, Siemens aims to systematically identify ways to achieve the same or greater customer value, while consuming less energy and less resources, reducing the spread of unnatural substances environment, and manage the necessary technical and biological resources in a circular loop.

On their way to environmentally friendly products, Siemens’ design departments follow a three-step approach.

First, teams specify customer requirements related to the environment, such as energy efficiency or product longevity, and regulatory targets, such as the EU’s Circular Economy Action Plan.

They then collect comprehensive data on all inbound and outbound material and energy flows from the entire life cycle, including emissions to air, water, and land as well as resources extracted from nature. Afterwards, they quantify the design’s various environmental impacts and human health impacts and make the findings transparent to their stakeholders.

Finally, they provide recommendations for environmentally optimized design specifications that do not require trade-offs in areas such as safety or quality. Recommendations may include increased use of recyclates or modifications that allow for easy reuse, repair, refurbishing, remanufacturing, or recycling.

How Digitalization Improves Ecodesign

Some may argue that adding new environmental parameters to product design does not make decision making easier. And in some respects, that’s true. Organizations may face more conflicting requirements, such as stronger materials that enable longer product life but also require more energy-intensive processes.

However, digitalization and simulation can solve such challenges. “Digital twins” of real-life products can mimic the efficiency or durability of a product without wasting real-life resources. They can also support factories in cutting energy consumption and resources, CO2 emissions, and waste production by simulating production processes. Future organizations will need to bring technology and expertise that will help them integrate these powerful tools into their operations.

Digitalization also allows organizations to share emissions data without revealing strategic secrets. In the open, cross-industry networks like Estanium, manufacturers, suppliers, and customers can exchange reliable product carbon footprint data.

A Strategy That Makes Sense

Ecodesign is not just a matter of protecting the climate and biodiversity. It is also a smart business strategy.

By adopting ecodesign principles, companies can simultaneously reduce costs, minimize waste, and gain a competitive advantage. The potential benefits are significant, including billions of dollars in cost savings for materials and new revenue streams through new business models such as anything-as-a-service (XaaS ). Collaboration among industries in an open ecosystem can further maximize environmental and economic advantages.

The jump to circular economy practices is a big change. So make your sustainability efforts worthwhile and focus on product design, because that’s how you’ll maximize your impact—on your bottom line and our environment.

Learn more about ecodesign and how to create your “circular advantage” in Siemens’ white paper Ecodesign: Multiplying impact, shaping the world.

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