For a fast-moving consumer goods company such as Henkel in Germany, the reduction of negative, and the enhancement of positive, environmental, social and economic impacts of new products is a challenge.
Henkel’s Sustainable Consumption Index helps the company measure its own progress with the help of their Factor 3 sustainability strategy. According to the strategy, Henkel can set targets and implement them in two ways: they can triple the value of all Henkel products, services and processes created today in the next 20 years while their environmental footprint remains at the same level, or they can reduce their environmental footprint down to one third of what it is today, while delivering the same value.
Henkel’s Sustainable Consumption Index helps with quantifying the impact (e.g., material consumption, productivity increase etc.) of a product or process throughout its life cycle. The Index answers the question “will the new product or process lead to more sustainable consumption?” by analysing the sustainability profile of the proposed product/process innovation across the value chain. This includes looking at environmental, social and economic aspects of the product/process.
Why did it work?
Henkel’s Sustainable Consumption Index emerged from the business question of whether a new product/process innovation will lead to sustainable consumption. A new product/process innovation is benchmarked against its predecessor and its progress on the Factor 3 target is measured. An innovation, which has an improved Factor 3 performance is selected for launch in consultation with the company’s internal and external stakeholders. The tool helps Henkel to report on new product/process’ progress related to environmental, social and economic dimensions and thus setting up a sustainable strategy.
The Sustainable Consumption Index of Henkel is a tool to assess the profile of a proposed product/process innovation before its implementation. The approach can be replicated in other industries and sectors where sustainability criteria need to become a benchmark for product innovation.
Since Henkel has successfully launched new products (for example Loctite, a polyurethane-based resin used for fibre impregnation in light weight vehicles) meeting the Factor 3 targets, the maturity of its Index is estimated to be beyond 9 on the GML scale.