Innovation Strategies in Environmental Science [1 ed.] 0128173823, 9780128173824

Table of contents :
Innovation Strategies in Environmental Science
Copyright
Contributors
Preface
1 -
From waste to value: assessing the pressures toward a sustainability transition of the Ukrainian waste management system
1. Introduction
2. Theoretical framework
2.1 The hierarchy of waste
2.2 Waste sector and sociotechnical transitions
3. The Ukrainian waste management system
3.1 Background
3.2 Statistical data
4. Methodology
5. Results
6. Conclusions
References
2 -
Success factors for environmentally sustainable product innovation
1. Introduction
2. Benefits of environmentally sustainable product innovation
3. Drivers and motivations for environmentally sustainable product innovation
4. Innovations and technological uncertainty
4.1 Radical and incremental innovations
4.2 Technological uncertainty
5. External collaboration partners
5.1 Why do firms collaborate with external partners to develop environmentally sustainable innovations?
5.2 With whom do firms collaborate for environmentally sustainable innovations?
5.3 How do collaboration partners contribute to environmentally sustainable innovations?
5.4 Building relationships with partners
5.5 Characteristics of partners: single or multiple, small or large, and national or international?
5.6 Considerations regarding external collaboration
6. Internal collaboration across functions
7. Literature on success factors for environmentally sustainable product innovation
8. Summarizing the success factors
9. Future research agenda
9.1 Contradictions in the literature
9.2 Fruitful venues of investigation into environmentally sustainable product innovation
References
3 -
Public driven and public perceptible innovation of environmental sector
1. Introduction
1.1 The first technology: text analysis
1.2 The Second Technology: Mind Genomics
2. Materials and Methods
3. Running the mind genomics studies
3.1 Surface analysis: distribution of ratings and response times
3.2 Deeper analysis 1: solar energy
3.3 Dividing respondents into mind-sets about solar, based on the pattern of their coefficients
3.4 Deeper analysis 2: nuclear power
3.5 Underlying neurophysiological processes
4. Deconstructing the response times to components
5. Studies undertaken using the mind genomics approach
5.1 Study of the case of corruption in education
5.2 Study on the threshold: what concerns healthy people about the prospect of cancer?
5.3 Candy is dandy: the mind of sexuality as suggested by a mind genomics experiment
5.4 Study of mental informatics and agricultural issues: global change versus sustainable agriculture
5.5 Study renewable energy: tapping and typing the citizen's mind
6. Segment 1: gradualists
7. Segment 2: realists
7.1 Study customer requirements for natural food stores: the mind of the shopper
7.2 Comparison of text mining and mind genomics
8. Conclusions
Acknowledgments
References
4
- Implementing environmental sustainability engagement into business: sustainability management, innovation, and sustainable ...
1. Process innovation and environmental sustainability engagement
2. Theoretical frameworks and economic/institutional rationales
2.1 Stakeholder theory
2.2 Legitimacy theory
2.3 Institutional theory
2.4 Signaling theory
3. Strategic approaches to environmental sustainability
4. Implementing sustainability initiatives
4.1 A business case for environmental sustainability and environmental sustainability management
4.2 The role of innovation in sustainable business models
5. Conclusion
Acknowledgments
References
Further reading
5 -
Open and eco-innovations in traditional industries
1. Introduction
2. Literature review and hypothesis development
2.1 Network factors in open innovation
2.2 Breadth of sources
2.3 External search depth
2.4 External geographic diversity
3. Data and methods
3.1 Traditional sector
3.2 Definition of sample and variables
3.3 Results in the agri-food industry
3.4 Results in the tourism industry
4. Conclusions, recommendations, and limitations
References
6 -
Achieving environmental sustainability with ecodesign practices and tools for new product development
1. Introduction
2. Ecodesign and new product development
3. Ecodesign in the context of product portfolio management
3.1 Strategic
3.2 Organizational
3.3 Methods and tools
4. Practices, methods, and tools
4.1 Ecodesign checklist
4.2 Materials, energy, and toxicity matrix
4.3 Green Design Advisor
4.4 Environmental-quality function deployment
5. Drivers and barriers for ecodesign adoption
6. Concluding remarks
References
7 -
Green and low-carbon technology innovations
1. Introduction
2. Methodology and search criteria
3. Overview of the literature from the web of science database
3.1 Literature classified by period sequence
3.2 Literature classified by country and territory
3.3 Literature classified by research method
3.4 Literature classified by research level
3.5 Literature classified by research subject area
3.6 Literature classified by key words cluster
4. Literature classified by major themes
4.1 Regulation or policy innovations
4.2 Technology innovation adoptions and diffusion
4.3 Technology transfer
4.4 Technology innovation management and capability
4.5 Basic research and advance development
4.6 Entrepreneurship innovations
5. Result and discussion
5.1 Insight from our exploration
5.2 Recommendations for future direction
6. Conclusion
Acknowledgments
References
8 -
Sustainable and innovative practices of small and medium-sized enterprises in the water and waste management sector
1. Introduction and background
2. Water management
3. Waste management
4. Future perspectives
5. Conclusions
References
Further reading
9 -
Innovative and sustainable membrane technology for wastewater treatment and desalination application
1. Introduction
2. Membrane processes
2.1 Pressure-driven membrane processes
2.2 Osmotically driven membrane processes
3. Membrane development
3.1 Membrane fabrication
3.2 Membrane modifications
3.3 New classes of membranes
4. Membrane technology for wastewater treatment
4.1 Heavy metal removal
4.2 Color removal
4.3 Oily wastewater treatment
5. Membrane technology for desalination
6. Membrane technology for energy generation
7. Innovation and sustainability of membrane technology
8. Conclusion
Acknowledgments
References
Index
A
B
C
D
E
F
G
H
I
L
M
N
O
P
Q
R
S
T
U
V
W

Citation preview

Innovation Strategies in Environmental Science Edited by Charis M. Galanakis Research & Innovation Department, Galanakis Laboratories, Chania, Greece Food Waste Recovery Group, ISEKI Food Association, Vienna, Austria

Elsevier Radarweg 29, PO Box 211, 1000 AE Amsterdam, Netherlands The Boulevard, Langford Lane, Kidlington, Oxford OX5 1GB, United Kingdom 50 Hampshire Street, 5th Floor, Cambridge, MA 02139, United States Copyright © 2020 Elsevier Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage and retrieval system, without permission in writing from the publisher. Details on how to seek permission, further information about the Publisher’s permissions policies and our arrangements with organizations such as the Copyright Clearance Center and the Copyright Licensing Agency, can be found at our website: www.elsevier.com/permissions. This book and the individual contributions contained in it are protected under copyright by the Publisher (other than as may be noted herein). Notices Knowledge and best practice in this field are constantly changing. As new research and experience broaden our understanding, changes in research methods, professional practices, or medical treatment may become necessary. Practitioners and researchers must always rely on their own experience and knowledge in evaluating and using any information, methods, compounds, or experiments described herein. In using such information or methods they should be mindful of their own safety and the safety of others, including parties for whom they have a professional responsibility. To the fullest extent of the law, neither the Publisher nor the authors, contributors, or editors, assume any liability for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions, or ideas contained in the material herein. Library of Congress Cataloging-in-Publication Data A catalog record for this book is available from the Library of Congress British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library ISBN: 978-0-12-817382-4 For information on all Elsevier publications visit our website at https://www.elsevier.com/books-and-journals

Publisher: Joe Hayton Acquisition Editor: Marisa LaFleur Editorial Project Manager: Lindsay Lawrence Production Project Manager: Vijayaraj Purushothaman Cover Designer: Matthew Limbert Typeset by TNQ Technologies

Contributors Laura M. Avellaneda-Rivera University of Castilla-La Mancha, Albacete, Spain Marco Bellucci Department of Economics and Management, University of Florence, Florence, Italy Laura Bini Department of Economics and Management, University of Florence, Florence, Italy Leonardo Borsacchi ARCO (Action Research for CO-development), PIN Scrl - University of Florence, Prato, Italy Paulo Augusto Cauchick-Miguel Post-graduate Program in Production Engineering, University of Sa˜o Paulo (USP), Sa˜o Paulo, Brazil; Department of Production and Systems Engineering, Federal University of Santa Catarina (UFSC), Floriano´polis, Brazil Attila Gere Szent Istva´n University, Budapest, Hungary Francesco Giunta Department of Economics and Management, University of Florence, Florence, Italy Pei Sean Goh Advanced Membrane Technology Research Centre, School of Chemical and Energy Engineering, Faculty of Engineering, Universiti Teknologi Malaysia, Johor Bahru, Johor, Malaysia ´ ngela Gonza´lez-Moreno University of Castilla-La Mancha, Albacete, Spain A Nidal Hilal Centre for water Advanced Technologies and Environmental Research (CWATER), College of Engineering, Swansea University, Swansea, United Kingdom Ahmad Fauzi Ismail Advanced Membrane Technology Research Centre, School of Chemical and Energy Engineering, Faculty of Engineering, Universiti Teknologi Malaysia, Johor Bahru, Johor, Malaysia Daniel Jugend Production Engineering Department, Sa˜o Paulo State University (UNESP), Bauru, SP Angelo Varandas Junior Post-graduate Program in Production Engineering, University of Sa˜o Paulo (USP), Sa˜o Paulo, Brazil Xiaodong Lai School of Economics and Management, South China Normal University, Guangzhou, China Jun Wei Lim Department of Fundamental and Applied Sciences, Universiti Teknologi PETRONAS, Seri Iskandar, Perak, Malaysia Joa˜o Victor Rojas Luiz Production Engineering Department, Sa˜o Paulo State University (UNESP), Bauru, SP

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Contributors Oksana Makarchuk National University of Life and Environmental Sciences of Ukraine - NULES, Kiev, Ukraine Lisa Melander Department of Technology Management and Economics, Chalmers University of Technology, Gothenburg, Sweden Piergiuseppe Morone Unitelma-Sapienza University of Rome, Rome, Italy Howard Moskowitz Mind Genomics Advisors, White Plains, NY, United States Petraq Papajorgij Universiteti Europian i Tiranes, Tirane, Albania Patrizia Pinelli Department of Statistics, Computer Science, Applications “Giuseppe Parenti” (DiSIA), University of Florence, Florence, Italy Marco Antonio Paula Pinheiro Production Engineering Department, Sa˜o Paulo State University (UNESP), Bauru, SP Dalma Radva´nyi Centre for Agricultural Research, Hungarian Academy of Sciences, Plant Protection Institute, Martonva´sa´r, Hungary Francisco J. Sa´ez-Martı´nez University of Castilla-La Mancha, Albacete, Spain Qian Shi School of Economics and Management, Tongji University, Shanghai, China Edgardo Sica Department of Economics, University of Foggia, Foggia, Italy Tuck Whye Wong Advanced Membrane Technology Research Centre, School of Chemical and Energy Engineering, Faculty of Engineering, Universiti Teknologi Malaysia, Johor Bahru, Johor, Malaysia Ryan Zemel Limbic Reviews, Inc., Downers Grove, IL, United States

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Preface Environmental science and technology (wastewater management, renewable energy technologies, waste disposal, etc.) help in improving the natural environments that give healthy life to human beings by providing pure water, air, and land and also keeping the area pollution-free. In addition, consumers and companies nowadays are looking for alternatives to mitigate pressing environmental demands resulting from continuous population and economic growth. Nevertheless, it is not a secret that the environmental sector is lately facing technical and economic changes in spite of society, processing, and legislation. This fact has significantly affected the entire sector, forcing public authorities and involved companies to pay greater attention to developing processes, services, and products that meet people’s demands for a cleaner environment, cleaner production, and a more sustainable world. At the same time, companies must deal with an increasingly competitive scenario in which innovation is a survival requirement in most markets. As a consequence, there is an extensive dialogue about the need to introduce economically viable innovations in order to optimize performance and make for even more environmental sustainability. Innovations in the environmental sector target the generation of more effective processes, technologies, services, solutions, and products that are readily available to markets, public authorities, and society. However, even though researchers and companies develop continuously innovative products, services and treatment technologies, their applications encounter several obstacles. The last is concerned more with the introduction of innovations due to legislation, public opinion, and other issues and less with the technological adequacy of the innovative techniques. For instance, ecodesign is known to contribute to environmental sustainability via the development of eco-friendly products; however, many studies have pointed out difficulties in adopting ecodesign for practitioners and scholars. On the other hand, most books report the characteristics of innovative technologies, products, etc., but lack information about how these innovations could be implemented in the environmental sectorde.g., overcoming limitations, interactions between academia and industry, transfer of know-how, and meeting public expectations and environmental concerns. There is also a lack of interpretation between the information received by researchers and technology end users.

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Preface The Food Waste Recovery Group (www.foodwasterecovery.group of the ISEKI Food Association) is organizing different training and development actions in the field of food and environmental science and technologyde.g., a basic theory (“The Universal Recovery Strategy”), a reference module, an e-course, training workshops, webinars, an experts’ database, and news channels (social media pages, videos, and blogs) for the timely dissemination of knowledge and an open innovation network aimed at bridging the gap between academia and the food industry. In addition, the group has published books dealing with food waste recovery technologies, different food processing by-products’ valorizations (from olives, grapes, cereals, coffee, meat, etc.), sustainable food systems, and innovations in the food industry, among others. Following these efforts, the current book aims to address the ongoing innovations in the environmental sector by providing tools, ideas, and strategies to overcome bottlenecks to their practical implementation. The ultimate goal is to bridge the gap between researchers, strategy developers, and technical associates (scientists and engineers). The book consists of 9 chapters. Nowadays, the challenges related to the transformation of the waste management system into a “green” system cannot be addressed only by considering incremental (technological) improvements in recovering waste because addressing these challenges requires an overall paradigm shift. Starting from these premises, Chapter 1 discusses the pressures pushing current waste management systems to become greener, emphasizing the Ukrainian case study. The analysis is framed within the theory of sociotechnical transitions and a multilevel perspective, investigating the role played by landscape actors in exerting “narrative pressure” upon the ongoing waste sector. The growing awareness of environmental sustainability has fully reached business reality; meanwhile, systematic academic research is paramount to guiding companies to succeed in product innovation toward this approach. Chapter 2 consolidates extant research and aggregate findings of different studies on environmentally sustainable product innovation through an interpretative framework of published literature on the topic and maps critical success factors that drive product innovation developed with this new logic of production and consumption. In Chapter 3, similarities, differences, and potential connections between two complementary approaches are presented, aimed at understanding opinions regarding the controversial topic of power sources. The first method is the emerging and increasingly popular technology of “text mining,” which uses text as inputs from people and analyzes the structure of such texts. Freely emitted text allows understanding of the underlying mind-sets of the people generating the text. The second method, “mind genomics,” comprises designed experiments, using people’s systematically varied texts to understand the “algebra of the mind.” The referred empirical study involved the mind genomics assessment of solar and nuclear energy, respectively. Chapter 4 discusses the intersections among environmental sustainability engagement of companies, process innovation and sustainable business models. Many theoretical

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Preface frameworks (including stakeholder, legitimacy, institutional, and signaling theories) offer economic and institutional rationales that elucidate why environmental sustainability has become a priority for companies. Since the discussion on environmental sustainability of companies has shifted on the mechanisms that allow an implementation in their business models, this chapter discusses the role of innovation toward sustainable business models, also from a business case perspective, and reviews a set of frameworks capable of orienting the implementations of sustainability within the operations of a company. In Chapter 5, the study of new knowledge opportunities through open innovation to achieve environmental improvements in traditional industries is discussed. By studying the properties of such cooperation networks, the results in two industries are presented using data from PITEC (2011) for a manufacturing agrifood industry and a tourism service industry. Both industries have considerable economic weight in countries like Spain, but each has a different strategic behavior toward eco-innovation, including industries that produce similar products or services. In addition, the chapter highlights the importance of studying the depth and breadth of relationships with external sources for environmental purposes, reaching different conclusions depending on the analyzed industry. Ecodesign is today recognized as a practice to reduce environmental impacts in the early phases of new product development as well as during the product life cycle. Therefore, Chapter 6 discusses ecodesign practices and tools from three new product development perspectives. The first emphasizes the importance of integrating ecodesign in the process of new product development and product portfolio decision-making. The second perspective deals with methods and tools that foster practical applications of ecodesign like environmental quality function deployment, materials, energy, and toxicity matrix. Thereafter, the predominant issues that motivate ecodesign are discussed in addition to some barriers to adopting it. Finally, the chapter describes some examples of ecodesign research and applications in Brazilian companies. Chapter 7 aims to help researchers and practitioners understand what issues or subjects have been addressed in green and low-carbon technology innovation and initiate a journey for the next generation of sustainable-oriented research. The research of Western Europe and North America is highly advanced compared with that of developing countries, especially in terms of new resource and renewable energy technology innovation. Likewise, empirical research is prevalent over other methodsde.g., sample surveys and field studies with primary data compared with conceptual, qualitative, and formal model research. So far, the research fields have mainly focused on technology adoption, diffusion, transfer, policy making or implementation, and advanced technology development. New vibrancy of advanced theoretical and methodological research is particularly needed, especially for low-carbon technology innovation trajectory, performance evaluation, government policy instruments, and multilevel cooperation among enterprises, governments, and nongovernmental organizations.

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Preface Sustainability is also a major concern in the water sector. Indeed, compliance with current legislation alone does not seem to be enough for facing major challenges such as climate change or population growth and concentration; thereby, companies should decide to take a step forward. Chapter 8 focuses on the environmental responsibility of small- and medium-sized enterprises in the water and waste management sector, analyzing the drivers that lead these firms to adoption of more sustainable and innovative practices. Market pull has a low incidence in encouraging environmental responsibility, while values and the strategic decisions of entrepreneurs seem decisive. Policy makers should prioritize subsidies over fiscal incentives because they show greater potential to promote the adoption of environmental responsibility among these firms. Chapter 9 discusses the application of membrane technologies for wastewater treatment and desalination, highlighting advantages, disadvantages, bottlenecks, and innovation barriers upon the actual and sustainable implementation of these technologies in the field. The chapter focuses on the development of membrane processes for several niche areas including heavy metal and color removal, oily wastewater treatment, desalination, and energy generation. At the moment, many fabrication methods have been established and successfully implemented for membrane modification in order to improve membrane separation performance, and long-term stability. The selection of an appropriate method strongly relies on the compatibility of membrane materials with additives, durability of membrane materials toward modifications that might involve harsh conditions, cost-effectiveness, purpose of separation, and types of operations as well as practicability for large-scale operations so that they are commercially attractive. Conclusively, the book addresses environmental technologists, professionals, specialists, and students working or studying in the environmental sector. It concerns researchers working in the whole environmental science and technology field as well as scientists in transition from active research to administration, in both the academy and industry. It could be used by university libraries as a textbook and as ancillary reading in graduate- and postgraduate-level courses in environmental science, technology, and innovation fields as well as environmental management programs and business schools. The book can also be a useful guide for research and development companies who intend to investigate and utilize technologies to reduce and control environmental pollution. I would like to acknowledge all the authors for the acceptance of my invitation and their fruitful collaboration in this book project. Their dedication to editorial guidelines and timelines is highly appreciated. In addition, I consider myself fortunate to have had the opportunity to work together with international experts from Albania, Brazil, China, Hungary, Italy, Malaysia, Sweden, Spain, the UK, Ukraine, and the USA. I would also like to thank acquisition editor Janco Candice, book manager Katerina Zaliva, and Elsevier’s production team for their help during editing and production.

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Preface Last but not least, I have a message for every individual reader of this book. This book contains scientific feedback described by more than 100,000 words. It is therefore impossible for it to not contain any errors or gaps. If you find anything amiss or have any suggestion or comment, please do not hesitate to contact me for further discussion. Charis M. Galanakis http://charisgalanakis.info Food Waste Recovery Group http://foodwasterecovery.group ISEKI Food Association Vienna, Austria [email protected] Research & Innovation Department Galanakis Laboratories https://chemlab.gr/ Chania, Greece [email protected]

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CHAPTER 1

From waste to value: assessing the pressures toward a sustainability transition of the Ukrainian waste management system Piergiuseppe Morone1, Edgardo Sica2, Oksana Makarchuk3 1

Unitelma-Sapienza University of Rome, Rome, Italy; 2Department of Economics, University of Foggia, Foggia, Italy; 3National University of Life and Environmental Sciences of Ukraine - NULES, Kiev, Ukraine

Chapter Outline 1. Introduction 1 2. Theoretical framework 4 2.1 The hierarchy of waste 4 2.2 Waste sector and sociotechnical transitions 7

3. The Ukrainian waste management system

10

3.1 Background 10 3.2 Statistical data 15

4. Methodology 22 5. Results 23 6. Conclusions 27 References 29

1. Introduction Waste represents one of the most important environmental problems worldwide. Calculation of the quantity of waste globally produced remains problematic, but its amount continues to rise mainly owing to the increasing world population, urbanization, and the change in consumption patterns (Xue et al., 2008). According to World Bank estimations, the amount of solid waste generated in the world’s cities in 2016 reached 2.01 billion tons and is expected to increase by 70% to 3.40 billion tons in 2050 (Kaza et al., 2018). Indeed, the quantity and content of waste generated in a country are related to some Innovation Strategies in Environmental Science. https://doi.org/10.1016/B978-0-12-817382-4.00001-0 Copyright © 2020 Elsevier Inc. All rights reserved.

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2 Chapter 1 extent to the size of the population and may differ significantly across regions or cities; developing economies exhibit a larger proportion of waste compared with developed ones (World Bank, 2012; Hoornweg and Bhada-Tata, 2012). Data suggest that daily per capita waste generation in high-income and low/middle-income countries is expected to increase, respectively, by 19% and 40% by 2050 (Kaza et al., 2018). According to Directive 2008/98/European Community (EC), waste is “any substance or object which the holder discards or intends or is required to discard.” A large part of it is represented by municipal solid waste, whereas wastewater is generally classified within the water or industry sectors and waste from mining and quarrying and from construction and demolition as major mineral wastes. Municipal solid waste is composed of electronic waste (e-waste) (e.g., discarded computers, mobile phones, home electrical equipment such TVs, fridges, etc.), construction and demolition waste, health care waste, agricultural residues, and waste produced by households, offices, shops, schools, and industries. The last one includes food waste, garden and park waste, paper, wood, textiles, rubber, plastics, metal, and glass (UNEP, 2013). The incorrect disposal of waste can cause direct and indirect problems for the environment and human health through many pathways and mechanisms (UNEP and UNU, 2009). For instance, methane produced in landfills by microorganisms from biodegradable waste (e.g., food, paper, and garden waste) is one of the most powerful gases contributing to air pollution through ozone layer depletion. Moreover, if liquid leachate escapes from landfills into the surrounding soil, a relevant threat to local surface and groundwater systems is posed owing to the high levels of chemical compounds, pesticides, and solvents released. Similarly, heavy metals, polycyclic aromatic hydrocarbons, polychlorinated biphenyls, and brominated flame retardants contained in e-waste have potentially dangerous outcomes if improperly disposed of. Along with environmental consequences, poor waste management can have a negative impact on human health, mainly in terms of birth defects and reproductive disorders. Indeed, people living in the proximity of a landfill are exposed to a number of health risks resulting from exposure to pollutants through the inhalation of substances emitted by the site, contact with polluted soil, and the consumption of contaminated water (World Health Organization, 2016). The appropriate management of waste (in which generation, storage, collection, transport, processing, and waste disposal are accomplished in a way that best addresses the range of public health, economic, engineering, and other environmental considerations) - is therefore recognized as essential for achieving the goal of sustainable development (UNHSP, 2010; UNEP, 2011a). From a historical point of view, the waste management system (WMS) essentially dealt with removing potentially harmful materials from urbanized areas (Papargyropoulou et al., 2014; Wilson et al., 2012). However, this approach, which is based on collecting waste and transporting it disposal sites, seems to be outdated (Jouhara et al., 2017). Indeed, the increasing emergence of environmental and human

From waste to value health problems associated with waste has raised the need for a greener WMS whose primary goals should be to reduce the adverse impacts of waste and support economic development and a superior quality of life (Bringezu and Bleischwitz, 2009). According to this perspective, the WMS needs to be transformed into a more holistic approach whose related challenges should be addressed through an overall paradigm shift, i.e., a radical change involving the infrastructural, institutional, and social dimensions (Markard et al., 2012). In other words, following a circular economy approach, the greening of the WMS should be accompanied by a sociotechnical transition toward a new and more sustainable regime (Geels, 2018). Indeed, along with incremental technological improvements in recovering and disposing of waste, waste management problems encompass a number of elements such as markets, user practices, cultural meanings, infrastructures, policies, industry structures, and supply and distribution chains, which can be unitarily considered through the multidimensional and coevolutive perspective of sociotechnical transitions (Zarate et al., 2008). A core issue in this approach is the relation between stability and change. Green innovations and practices in the field of waste management struggle against the current locked-in system that creates stable and path-dependent trajectories (Walker, 2000). The transition approach involves a long-term horizon that considers the time needed for changes in technologies, from their early emergence in smallapplication niches to widespread diffusion as well as the time necessary to destabilize and unlock the dominant system and overcome resistance from incumbent actors (Rotmans et al., 2001). Starting from these premises, the current chapter investigates the case of the Ukrainian WMS by identifying actors that exert pressure on the system to become greener, as well as the channels through which such actors apply pressure. In other words, we analyze the pressures the current (unsustainable) regime is receiving regarding a system approach for reducing, recycling, and reusing waste, encouraging the recycling of raw materials from products, moving toward near-zero waste, and preparing and promoting innovation procurement for resource efficiency. The Ukrainian case study is particularly relevant because of the magnitude of the problem (i.e., the amount of waste generated at the country level, compared with other developed economies) and the general lack of adequate infrastructures for efficient waste management. The high level of waste produced and the low rate of its use as secondary raw materials led to the significant accumulation of waste from the industrial and municipal sectors, which ended up in landfills. The Ukrainian Cabinet of Ministers approved the 2030 National Waste Management Strategy on November 8, 2017. Its priority is the conversion of waste into energy through extensive technological modernization. The strategy envisages introducing circular economy principles by encouraging waste prevention and recycling.

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4 Chapter 1

2. Theoretical framework 2.1 The hierarchy of waste As discussed in Section 1, the relevance of environmental and health implications arising from improper waste disposal makes the green transformation of the WMS an escalating concern. A tool commonly employed to describe the order of preferred actions for reducing and managing waste according to the assumed environmental impacts is represented by the waste hierarchy, which assesses processes that protect the environment and human health from least to most favorable (Hultman and Corvellec, 2012). The waste hierarchy can be traced back to the 1970s, when the environmental movement started to critique the practice of disposal-based WMS. The movement supported the idea that waste is a whole of different materials that should be treated differently rather than a homogeneous mass to be buried (Schall, 1992). In particular, some materials should not be produced at all, others ought to be reused, recycled, or composted, others burned, and others buried (Gertsakis and Lewis, 2003). The diffusion of the waste hierarchy significantly influenced waste management in many countries, even when the green transformation of WMS had already begun (Parto et al., 2007; Dijkgraaf and Vollebergh, 2004). It was introduced for the first time in the European Union (EU) policy in 1975 through the Waste Framework Directive (1975/442/EEC). Later, the Community Strategy for Waste Management (EC, 1989) argued that prevention represents the first guideline in waste management and that waste that cannot be prevented should be recycled or reused, and that only when these last two options are not feasible should it be disposed. In 2008, Directive 2008/98/EC introduced a new five-step hierarchy to the EU’s waste legislation which member states must introduce into national waste management laws. Although the Directive 2008/98/EC advises member states to consider both social and economic impacts along with environmental ones, the waste hierarchy focuses primarily on environmental over economic factors (Papargyropoulou et al., 2014). Overall, the hierarchy is founded on the principles of minimizing the depletion of natural resources, preventing waste, and using lifecycle thinking, by establishing preferred program priorities based on sustainability (UNEP, 2011b). The priority order between alternatives is related to the ability of each option to achieve diversion from the landfill (Van Ewijk and Stegemann, 2016). Accordingly, the most preferred option is represented by prevention, followed by reuse, recycling, and recovery (including energy recovery) and, as a last option, safe disposal. In this framework, the first priority (prevention) aims to avoid and reduce the generation of waste by encouraging consumers, producers, and government to minimize the amount of materials extracted and used. Prevention can be achieved by following a number of new behaviors such as selecting goods with the least packaging or that require the fewest resources to be produced, avoiding disposable goods or single-use materials, buying recycled, reusable, or biodegradable products, and using

From waste to value leftover food rather than throwing it away. The second priority (preparing for reuse) aims at providing products with a second life before they become waste through substitution (so that no new material is necessary to fulfill the need) and/or postponing (by extending their life through good maintenance practices, repair, and refurbishment). Reuse does not require further processing, so the third priority within the waste hierarchy (recycling) consists of processing waste materials to produce the same or a new good, thus keeping materials in the productive economy and minimizing the need for new materials and waste absorption. Recycling can involve a number of different materials such as aluminum, copper, steel, rubber tires, polyethylene and polyethylene terephthalate bottles, glass, paperboard cartons, and light paper. However, when waste cannot be prevented and materials cannot be reused or recycled, the fourth priority (recovery) aims to promote technologies for extracting energy from materials instead of mass burning organic waste with no energy recovery. Only from this point on, discarded materials are considered waste. More specifically, energy recovery represents the conversion of nonrecyclable waste materials into usable and renewable energy (heat, electricity, and fuel) through a variety of processes. This contributes to reduce air emissions by reducing methane generated from landfills and offsetting the need for energy produced from traditional fossil sources. One of the most widespread thermal treatments employed to recover energy is represented by incineration, which reduces the volume of disposed waste by up to 90% and produces gas that can be exploited to create steam (Marshall and Farahbakhsh, 2013). Pyrolysis and gasification are two more advanced thermal waste treatments: the first represents the thermochemical decomposition of organic material at a high temperature into gas, oil, and char in the absence or presence of a small amount of oxygen, whereas the second takes place in an atmosphere poor in oxygen, which produces char and synthesis gas (Klinghoffer and Castaldi, 2013). However, both of them still have a number of technical limitations and inefficiencies mainly because some of the energy produced must be necessarily be employed to power the process, which reduces the overall benefits (DEFRA, 2013; Lin et al., 2013; Mohan et al., 2006). In contrast, a particularly viable option for recycling the organic fraction of municipal solid waste is represented by anaerobic digestion, which produces biogas, a mix of methane, carbon dioxide, and other gases in small quantities that can be converted to generate electricity and heat, and as a substitute for natural gas and transportation fuel (Xu et al., 2016). Moreover, the digested slurry can be further processed to obtain compost and liquid fertilizer (Khalid et al., 2011). Along with turning waste into a resource, the contribution of biogas to the greenhouse effect is limited, which is a main reason why anaerobic digestion can have a key role in meeting the energy needs of the future. Finally, when materials are inappropriate for reuse, recycling, or recovery for energy, the fifth and least preferred option in the waste hierarchy is represented by disposal, which requires specific treatments to minimize environmental and health impacts.

5

6 Chapter 1 A relevant criticism regarding the waste hierarchy is that it organizes priorities according to a consensus ranking that does not take fully into account the possible environmental and human health consequences arising from adopting each option (Rasmussen et al., 2005). For instance, recycling can produce environmental effects during the treatment associated with transportation, energy use, and other residuals that occur in relation to the recycling process. For this reason, we should have different hierarchies according to the type of waste, and even the country analyzed. Moreover, reuse seems not be applicable in municipal solid waste management, in which the opportunities to achieve significant reductions in waste volumes through reuse are limited. Similarly, the possibility of achieving real environmental savings from recycling can be limited or excessively expensive in the case of many multimaterial products, which makes this option not always feasible. Furthermore, the literature (Wilkinson, 2002; Mazzanti and Zoboli, 2008; Finnveden et al., 2013) suggests that implementation of the waste hierarchy has failed so far to achieve the most preferable alternatives to landfills: in particular, prevention seems to be far from being fully attained. This can arise from a conceptual problem regarding the hierarchy of waste and more generally the WMS, which includes prevention although waste managers seem substantially powerless (Van Ewijk and Stegemann, 2016). Indeed, a WMS is conceived of as a set of tasks ranging from waste generation (i.e., the whole of activities involved in identifying materials that are no longer usable) to onsite handling and processing (i.e., activities carried out at the point of waste generation to facilitate collection), waste collection (i.e., activities such as placing waste collection bins and collecting waste from those bins), waste transfer and transport (i.e., activities involved in moving waste from local waste collection sites to regional ones), waste processing and recovery (i.e., activities aimed at recovering reusable and recyclable materials from the waste stream), and disposal (i.e., activities for the disposal of waste materials in landfills and waste-to-energy facilities). Within this framework, although prevention is traditionally associated with the first task executed from the WMS (i.e., waste generation), it should be more correctly related to consumers and companies’ behavior, because once materials are discarded and collected, there is no further opportunity for prevention. When goods are disposed of, the possibility their being reused becomes much more complicated than the reuse of goods that have not been discarded, because they cannot easily be removed from controls on waste management. From this viewpoint, a radical change in the way people approach environmental and health problems arising from incorrect waste disposal is necessary because even weight- or volume-based collection fees that act as a deterrent to disposal do not discriminate between goods that must be disposed of and those that can be reused or recycled. Despite such shortcomings, the hierarchy of waste represents a relevant and environmentally desirable approach to achieving the greening of the WMS based on the

From waste to value importance of waste diversion from the landfill to safeguard the environment and human health. However, its practical application requires a deep change in the waste management technologies employed as well as the behaviors of all actors involved in the process. In other words, it must be sustained by a sociotechnical transition able to encompass the radical changes necessary at the infrastructural, institutional, political, and social levels to achieve the goal of a green waste sector. For this reason, in the current work, we investigate the greening of the WMS in the framework of sustainable transitions, i.e., sociotechnical transitions toward a more sustainable regime.

2.2 Waste sector and sociotechnical transitions Environmental and health human problems arising from the incorrect disposal of waste involve a large scale and complex level; consequently, they must be addressed through more substantial shifts than by means of incremental green technologies (Elzen et al., 2004). Within this perspective, the approach of sociotechnical transitions considers the multiple actors and disruptive, long-term, and nonlinear processes surrounding the shift toward a green WMS, other than to capture uncertainty stemming from the nonlinear character of political, sociocultural, and innovation processes related to waste management. These transitions are labeled sociotechnical because they “not only entail new technologies, but also changes in markets, user practices, policy and cultural meanings” (Geels, 2010: 495). One of the main orienting frameworks employed in the literature to investigate sociotechnical transitions is represented by the multilevel perspective (MLP), which describes transitions in terms of alignment within and among three analytical levels: niche innovations, sociotechnical regimes, and the sociotechnical landscape (for a graphical representation of the basic model, see Geels, 2011, p. 28). According to this viewpoint, the MLP represents an innovative analytical framework that is more comprehensive than a microfocus on single economic agents and at the same time more concrete than a macrofocus on the green economy (Geels, 2018). The sociotechnical regime represents the mesolevel unit of analysis. It can be defined as a stable configuration of institutions, techniques and artifacts, rules, and practices that determine the normal development and use of technologies. In other words, the regime represents the existing way of doing things, such as designing and manufacturing products, framing expectations, and assigning values (Pesch, 2014). The different social groups (engineers, scientists, policy makers, and users) involved in the regime embed a semicoherent set of rules and cognitive routines supportive of the existing system, opposing resistance to any possible transition toward a new sociotechnical system (Fallde and Eklund, 2015). Normally, a regime accepts normally incremental innovations in the short term and radical innovations only in the long term.

7

8 Chapter 1 The niche innovations level represents the microlevel and consists of protective application spaces or incubator rooms (niches) for technologies that deviate from existing regimes. Niches aim to enhance the further development and rate of application of new technologies, enabling learning regarding expectations, networks, and technical features. Although niche innovations may perform poorly in more conventional terms (for example, in terms of price), they are given the opportunity to be evaluated and to mature through gradual experimentation and learning by niche actors (producers, users, researchers, and so on) (Steinhilber et al., 2013). Finally, the sociotechnical landscape represents the macrolevel. It can be considered an external structure or context for interactions of actors in which a number of different and heterogeneous forces exert pressure upon the mesolevel and microlevel (i.e., the regime and the niche). The landscape includes factors that do not change or that change only slowly (e.g., the climate, cultural values, demographic trends, broad political changes) as well as rapid exogenous shocks (e.g., wars, economic crises, shocks in oil prices) (So¨derholm and Wihlborg, 2015). The relation among these three levels can be explained as follows. The sociotechnical regime accounts for the dynamic stability of existing technological developments, because it guides innovative activity by means of incremental innovations along trajectories. The sociotechnical landscape consists of changing external factors that provide deep structural gradients of force, making some trajectories easier than others. Finally, the niche innovations level accounts for the development of radical innovations (Geels and Schot, 2007). The three levels are more than ontological descriptions of the reality: they represent “analytical and heuristic concepts to understand the complex dynamics of sociotechnical change” (Geels, 2002, p. 1259). A transition represents the emergence of a new sociotechnical system that, in the long term, will replace the existing system. It is the consequence of coevolutionary dynamics that are not limited to a shift in the technologies being used, but that involve changes in production techniques, distribution networks, regulations, symbolic meaning, etc. In particular, it occurs when pressures from the landscape level couple with sufficiently developed niches (Upham et al., 2014). According to the model, niche innovations struggle against the existing regime, needing to propagate sufficiently to transform existing arrangements. The selection and integration of niche-level innovations by regimes is more than adoption, because regime-level actors have to integrate new technologies in their practices, organizations, and routines. When the sociotechnical landscape exerts destabilizing pressures on the existing regime, niche innovations have the opportunity to emerge and compete with the existing regime and eventually go into the mainstream markets (Turnheim and Geels, 2012). These conditions do not cause, or unidirectionally drive, the others,

From waste to value but they link up with and reinforce each other, following a process of circular causality. Moreover, interactions among niche, regime, and landscape occur following several phases: for example, emergence, takeoff, acceleration, and stabilization (Binder et al., 2017). Within this framework, sustainability transitions can be conceived of as transitions toward a more sustainable regime in which the sociotechnical system encompasses the creation, adoption, and diffusion of sustainable technologies supported by changes at the social, institutional, and policy levels (Loorbach et al., 2017). Compared with other sociotechnical transitions, they are purposive and not “emergent” because they address persistent environmental issues (Geels, 2011). Moreover, they must deal with free rider problems owing to the public good nature of the goal addressed (i.e., environmental sustainability) (Smith et al., 2005). When a sustainability transition concerns the WMS, it involves a deep change in consumers’ attitude toward waste prevention and reuse of materials, accompanied by improvements in recycling techniques as well as in technologies normally employed to recover energy from waste (Kemp and van Lente, 2011). After a transition occurs, the amount of natural resources consumed is significantly reduced, materials taken from nature are reused as many times as possible, and waste generated is generally kept to a minimum. Therefore, the transition toward a green WMS should be inspired by the principles of the waste hierarchy, as discussed in the previous section. As argued in Section 1, in this chapter we concentrate exclusively on the pressures that the current WMS receives at the landscape level, aimed at making it greener consistently with the circular economy principles mentioned earlier. To this end, we follow Morone et al. (2016) and Falcone et al. (2018) by distinguishing unintentional from intentional pressures. The first represents exogenous and unpredictable shocks (e.g., earthquakes, wars) occurring at the landscape level that provide a destabilizing pressure on the current sociotechnical regime. In contrast, the second is activities that are deliberately exerted by actors to induce a misalignment of landscape factors from the regime. In this work, we focus specifically on intentional pressures, assuming that they can be exerted from two broad categories of actors: (i) global and (ii) national actors. More specifically, global actors are institutions or organizations that can influence a sustainability shift in a country by operating at the supranational or international level, whereas national actors are institutions or organizations act mainly at the country level, such as national policy makers, grassroots associations, and stakeholders. Moreover, we assume that both global and national actors exert pressure by adopting either an (i) informal or (ii) institutional route. The first works by means of informal tools of influence, and the second through designed political actions. In this light, we are therefore able to identify which landscape actors exert pressure on the greening of the WMS (i.e., “the source of pressure”) and the way in which such pressure is exerted (i.e., “the type of pressure”).

9

10 Chapter 1 Consequently, we identify four possible pressures originating from the landscape level that arise from the combination of the source and type of pressure: 1. 2. 3. 4.

global/informal pressure (GLOB/INF) global/institutional pressure (GLOB/INST) national/informal pressure (NAT/INF) national/institutional pressure (NAT/INST)

To destabilize an existing sociotechnical regime, pressure originating from the landscape must be balanced. In other words, an unbalanced pressure, i.e., coming only from one or two source(s)/type(s) could be completely ineffective (Centola and Macy, 2007). Therefore, along with identifying the source and type of pressure, we will assess the extent to which it is balanced overall across the four categories.

3. The Ukrainian waste management system 3.1 Background The Ukrainian WMS represents a relevant case study because the country lags well behind in terms of waste prevention, reuse, and recovery. Indeed, despite a territory of 603,628 km2 and a population of 44.03 million people, Ukraine has only 2 incineration plants, 15 waste separation plants, and no waste processing plants, so large amounts of waste are still buried in landfills. As a consequence, the waste sector is characterized by the general accumulation of waste in both the industrial and domestic sectors, the improper treatment and disposal of hazardous waste, the storage of household waste without considering possible hazardous consequences, and the inadequate use of waste as a secondary raw material (DLF, 2018). As reported in Table 1.1, these problems stem Table 1.1: Main problems affecting the Ukrainian waste management system. Legal

Economic

• Imperfect system of responsibility for consumer, producers, and authorities as well as of tender procedures in waste-related services • Ineffective state control over waste formation and lack of structured fines system • Absence of publiceprivate partnerships in waste sector owing to complex legal framework

• Underdeveloped domestic market for recycled materials • Limited involvement of foreign investors owing to risk of carrying out innovative processes in the country • Absence of motivational controlling mechanism to incentive eco-innovations in companies, which limits landfilling

Social • Poor standards of citizens’ ecological culture and environmental consciousness • General reluctance in households to sort garbage

Technical • Unsolved logistics in separation and treatment processes • Saturated, unsafe, and outdated waste infrastructures

Own elaboration based on Brauweiler, H.C., Shkola, V., Markova, O., 2017. Economic and legal mechanisms of waste management in Ukraine. Marketing and Management of Innovations 2, 359e368. https://doi.org/10.21272/mmi.2017.2-33.

From waste to value 11 from a composite of failures in the WMS that involve legal, economic, social, and technical dimensions. From a legal point of view, the absence of coordinated waste collection mechanisms causes the fragmentation of responsibilities in state agencies across the country that hinders the effective management of waste disposal and processing. Furthermore, Ukraine faces difficulties in enforcing environmental legislation in the waste sector, mainly owing to insufficient administrative capacity other than a lack of financial resources. The legal framework at the national level is complex, which limits the establishment of publiceprivate partnerships that could have a driving role in achieving an effective and sustainable WMS. From an economic point of view, collection tariffs are too low to cover retreatment costs, which limits private investors (including foreign ones) from entering the market for recycled materials, and thus which is underdeveloped.1 Moreover, the absence of effective mechanisms to identify norms of payment for generated waste along with the lack of governmental support for companies to employing modern and clean waste processing technologies discourage enterprises from eco-innovation. From the social side, the system of environmental education to promote environmental consciousness in producers and consumers is insufficiently developed, with the consequence that the standard of citizens’ ecological culture is limited. Recycling is poorly performed in the country and is circumscribed to paper, glass, and metals. Indeed, awareness of the population is limited and separate collection is generally not implemented even for the most hazardous items. Despite the large reliance of the local population on dumping waste in poorly controlled sites for solid waste disposal, some private companies have started investing in the recycling sector. They operate mainly by purchasing waste from citizens at specific recycling points or materials from scavengers, but the volume of waste collected remains too low, so that most such sorting factories are largely underused. On the other hand, waste infrastructures are outdated. Some landfills were built more than 40 years ago. Moreover, few companies in the country are specialized in processing waste electrical and electronic equipment. The significant volumes of waste accumulated; the lack of effective measures aimed at preventing its formation, use and disposal; and the absence of appropriate infrastructures for handling it deepen the ecological crisis of the country and have become a barrier to developing the national economy. Such a situation necessitates the establishment and proper functioning of a nationwide system of waste prevention, collection, recycling, and ecological and safe disposal even under the conditions of relatively limited economic 1

The cost for recycling waste in Ukraine is incorporated into tariffs for household waste and is regulated by the resolution of the Cabinet of Ministers “On approval of the formation of tariffs for household waste.” According to this resolution, the tariff represents a fee for the collection, storage, transport, processing, recycling, disposal, and dumping of 1 m3 of waste and its average rate in 2016 amounted only to 65.3 UAH per 1 m3.

12 Chapter 1 opportunities of both the state and the main waste generators. A transition toward a green and integrated WMS, inspired by the principles of the waste hierarchy and of the circular economy in general, thus represents a matter of urgency for the country and is crucial for its energy and resource independence, to save natural materials and energy resources. Ukraine has a large potential to increase waste recovery rates significantly, reducing greenhouse gas emissions and environmental and health risks, but this requires the substantial reform of its waste management sector (Demus and Zhechkov, 2014). Ukrainian government regulations already contain a number of basic requirements for waste management corresponding to certain norms of EU legislation. In particular, after issuing the Framework Law on Environmental Protection in 1991, the country adopted a number of relevant legislative initiatives aimed at harmonizing national standards with EU directives and complying with EU requirements. However, the main document defining the Ukrainian WMS is represented by the Law of March 5, 1998, No. 187/98-BP (amended in 2002, 2005, and 2010), known as the About Waste law. It considers the requirements of Directive 75/442/EU on waste and of Directive on Hazardous Waste 91/689/EU. In Article 1, the law defines the meaning of the term “waste management” as “actions aimed at preventing the generation of waste, their collection, transportation, sorting, storage, processing, recycling, utilization, removal, disposal and burial including control of these operations and overseeing removal locations.” Accordingly, the waste management process includes collection, transportation, sorting, storage, processing (recycling), utilization, removal, disposal, and burial (Fig. 1.1). The law recognizes waste and resource management as strategic areas of cooperation regarding environmental protection, sustainable development, and the green economy under the EU-Ukraine Association Agreement (2014). However, it differs substantially from EU legislation in defining the hazardous properties of waste and their basis-assignment to the safe or hazardous list of waste (Zhukovskyi et al., 2016). Although the About Waste law represented a significant step toward establishing an integrated regulation of national WMS, it failed to address some relevant aspects. In particular, it did not promote the principle of producer responsibility for waste, the market principle of waste treatment of recyclables, and did not define an economic incentive for increased volumes of green goods and services produced. Later, the Ministry of Ecology and Natural Resources (following Order No. 1-1/1047, May 30, 2011 of the President of Ukraine, “On Improving the Effectiveness of Public Policy in the Field of Waste Management”) drafted the Resolution of the Cabinet of Ministers, “On Approval of the Concept of National Environmental Program on Waste Management,” which was accepted with Order No. 22-r, Jan. 3, 2013 of the Cabinet of Ministers. The program established a number of relevant points concerning waste collection and treatment: (i) The deposit of municipal waste of cities with a population of more than 250,000 inhabitants into specialized and environmentally safe landfills;

From waste to value 13

Wastes collection

Activities related to elimination, accumulation and the placement of waste in specially designated areas or objects, including waste sorting for purpose further utilization or disposal or objects, including waste sorting for purpose further utilization or disposal

Wastes transportation

Transportation of wastes from the places of their generation or storage to places or objects where they utilization or disposal

Waste sorting

Mechanical waste distribution for their physical and chemical properties, technical components, energy value,commodity indices for the purpose of waste preparation

Wastes storage

Temporary placement of waste in a special places or objects (before their utilization or disposal)

Wastes processing (recycling)

Carrying out of any related technological operations with a change in physical, chemical or biological properties of wastes, in order to prepare them for environmentally safe storage, transportation, utilization or disposal

Wastes utilization

Use of waste as secondary material or energy resources

Wastes removal

Carrying out operations of wastes, which are not subject to their utilization

Wastes disposal

Reduce or eliminate waste hazard by mechanical, physical and chemical biological treatment

Wastes burial

Final disposal of waste when removed in specially designated places or on objects in such a way that long-term harmful effects of wastes on the environment and human health not exceeding the established standards

Figure 1.1 List of waste management processes according to the About Waste law of Ukraine.

(ii) a 1.5 times increase in volume of waste provision, use, and use as recyclable materials until 2020; and (iii) implementation of the latest technologies for municipal solid waste use (Demus and Zhechkov, 2014). Moreover, in 2012, the government approved a national plan for implementing the Stockholm Convention on Persistent Organic Pollutants (Decree No. 589-p, Jul. 25, 2012).

14 Chapter 1 More recently, it adopted the National Strategy for Waste Management Until 2030, which defines the main directions of the state regulation in coming decades regarding waste management. The strategy is inspired by principles of EU regulations in this field, and any normative and legal act that will be developed and adopted for its implementation will be based solely on provisions of relevant acts of the EU legislation, in particular Framework Directive No. 2008/98/EU, “About waste and abolition of some directives,” Directive No. 1999/31/EU, “About disposal of waste,” Directive No. 2006/21/EC, “On waste management of extractive industries, which amends Directive No. 2004/35/EU,” Directive No. 94/62/EU, “On packaging and packaging waste,” Directive No. 2012/19/EU, “About waste of electrical and electronic equipment,” and Directive No. 2006/66/EU, “About batteries and accumulators and spent batteries and accumulators.” When drawing up international and national waste management plans and strategies, EU legislation recommends generally following the hierarchy of waste principles. Consistently, the strategy aimed to apply a systemic approach to waste management at the national and regional levels and to reduce waste generation by increasing the amount of recycling and reuse. In particular, its implementation will be carried out over three time frames (2017e18, 2019e23, and 2024e30) and is expected to facilitate the implementation of a WMS on an innovative basis; the development of a relevant legislation base; and improvement of the environment as well as of the sanitary and epidemiological well-being of the population.2 The strategy is also expected to attract investments in the field of waste management in terms of creating modern infrastructures, applying the latest technologies, diverting waste from landfills, etc. In particular, it foresees the manufacture of 800 new facilities by 2030 for recycling used materials, composting biowaste, reducing the total amount of household waste disposal from 95% to 30%, minimizing the total amount of buried waste from 50% to 35%, and creating a network of 50 regional landfills. To ensure the monitoring and control of waste management, an information system will operate that will include information about the

2

More specifically, the strategy is envisaged to: 1. 2. 3. 4. 5. 6.

modernize the material and technical base of business entities in employing natural resources and processing and using waste; create a universal information web portal concerning the multiple use of natural resources and the recycling and use of waste; develop a logistical scheme for managing natural resources (their extraction, getting useful products from them, and forming waste that is processed and used); implement a national register of sources of waste generation, waste management capacities by using the best available technologies; ensure the functioning of an information system for electronic reporting by entities conducting activities in the field of waste management; and establish a state register of waste and secondary resources that are created and accumulated in the country.

From waste to value 15 nomenclature and amount of waste that is generated, processed, disposed of, and removed, as well as the creation of the National Register of Waste Generation Sources. Adoption of the About Waste law and above all, of the National Strategy for Waste Management in Ukraine Until 2030 has initiated a qualitatively new stage in the formation and development of the national WMS, based on the experience of advanced foreign countries. However, the process of developing a regulatory framework in Ukraine is controversial. National legislation is largely fragmentary and incomplete and has a number of weaknesses such as uncertainty about the priority of objectives and the lack of integration of environmental issues in the sectoral strategy. Indeed, many waste management issues in Ukraine remain unsolved and some aspects require further changes or reforms.

3.2 Statistical data Statistical data on waste production and valorization practices in Ukraine are not always reliable. Indeed, statistics on the volume and dangerousness of waste produced are generally gathered from municipalities and companies with no regular and centralized data collection and analysis, which hampers monitoring and planning processes at both the national and regional levels. However, available data allow us to draw an interesting picture about the current state of the national WMS. Table 1.2 reports main indicators showing waste generation and treatment in Ukraine according to data from the National Statistics Service. Table 1.2 demonstrates that waste reduced constantly over 2010e16 reached a 30% reduction by 2016 compared with 2010. Waste per person increased until 2012 and then was steadily reduced, registering a significant decrease in 2016 (6934 kg). Similarly, used waste first increased and decreased, reaching 84,630 thousand tons in 2016. In contrast, exported waste decreased in 2016 compared with 2014 and 2015 but increased compared with 2010e13. However, looking at accumulated waste, it amounted to 1239 million tons at the end of 2016, which represents only 6% less than 2010. At the same time, waste per square kilometer and per capita waste remained almost unchanged over 2010e16. Table 1.3 reports waste generation in Ukraine by economic activity and households. Table 1.3 shows that the mining and quarrying sector exhibited the largest share in total waste generation (74% in 2016). In the manufacturing industry, a relevant role in waste generation was played by metallurgy production, whose share in total amounted to 15% in 2016. Waste generation by food production in total waste in the manufacturing industry was 10% in 2016, 2% higher than in 2015. Waste in agriculture, forestry, and fisheries remained almost unchanged during 2010e16, amounting to 8,715 thousand tons in 2016 (3% in total waste generation). Similarly, the amount of household waste remained unchanged over 2010e16 (with the exception of 2013).

Indices Formed, 1000 tons (t) - Including from economic activity Per capita waste, kg Collected, received household and similar waste, 1000 t Imported, 1000 t Burned, total, 1000 t - Without getting energy - With aim of receiving energy Used, 1000 t Prepared to use, 1000 t Use in specially assigned places or objects, 1000 t - Included in specially equipped landfills Used by other removal methods, 1000 t Deactivate, 1000 t Placed on spontaneous landfills, 1000 t Exported, 1000 t Immobilize owing to leakage, evaporation, fires, thefts, 1000 t Accumulated waste during exploitation in places of waste use at end of year, million t - Per square km of country territory, t - Per person, kg Source: State Statistics Service of Ukraine.

2010

2011

2012

2013

2014

2015

2016

425914.2 419191.8 9,285 9765.5

447641.2 442464.4 9,794 10356.5

450726.8 442757.3 9,886 13878.0

448117.6 439091.4 9,851 14501.0

355000.4 348686.1 8,256 10748.0

312267.6 306214.3 7,288 11491.8

295870.1 289523.6 6,934 11562.6

4.1 1058.6 218.3 840.3 145710.7 6037.3 313410.6

40.6 1054.5 253.9 800.6 153687.4 7962.2 253395.9

113.3 1215.9 133.0 1082.9 143453.5 6105.2 265789.0

169.6 918.7 35.6 883.1 147177.9 5093.6 267222.6

33.4 944.7 71.0 873.7 109280.1 2903.9 203698.0

3.4 1134.7 48.4 1086.3 92463.7 1940.5 152295.0

7.9 1106.1 70.8 1035.3 84630.3 2920.5 157379.3

207445.1

154422.8

153151.3

150831.9

35463.5

31142.8

33871.0

24318.0 e 87.4 281.3 1367.6

23742.7 e 299.6 85.8 433.9

23856.3 e 82.1 556.6 519.9

20923.3 e 86.8 318.7 373.9

34279.0 311.3 141.5 653.3 27.7

55248.1 2616.0 14.4 675.4 6.5

39390.4 186.7 12.4 415.6 19.8

13267.5

14422.4

14910.1

15167.4

12205.4

12505.9

12393.9

21984.2 289,236

23897.9 315,546

24706.1 327,024

25132.3 333,425

21171.5 283,838

21692.8 291,888

21495.6 289,274

16 Chapter 1

Table 1.2: Main indicators of the waste generation and treatment in Ukraine.

From waste to value 17 Table 1.3: Waste generation by economic activity and households in Ukraine, 1000 tons. Indices Total From economic activity Agriculture, forestry and fisheries Mining and quarrying - Mining of stony and brown coal - Extraction of metal ores - Extraction of other minerals and development of quarries Manufacturing industry including: - Food production - Production of beverages - Production of coke and refined products - Manufacture of chemicals and chemical products - Manufacture of basic pharmaceuticals and pharmaceuticals products - Production of other nonmetallic mineral products - Metallurgy production Supply of electricity, gas, steam, and air conditioning Water supply; sewage, waste management - Collection, treatment, and disposal of waste; material recovery Building activity Other types of economic activity From households

2010

2013

2014

2015

2016

425914.2 419191.8 8568.2

448117.6 439091.4 10311.8

355000.4 348686.1 8451.4

312267.6 306214.3 8736.8

295870.1 289523.6 8715.5

321889.8 37071.3

341363.2 42744.9

267506.1 13032.5

232642.4 12084.7

217907.8 10495.8

267544.9 16819.0

289675.2 8834.3

251735.3 2685.8

218603.0 1921.6

202923.0 4378.1

75950.4

74279.0

64755.8

56506.3

53857.9

7245.4 1522.2 1676.1

3672.7 755.4 3524.7

5016.1 815.9 1699.9

4222.2 939.2 2367.2

5089.8 646.4 2434.9

2679.0

2048.0

1062.5

703.3

840.0

615.4

11.9

7.5

10.8

12.0

1449.6

1411.7

1121.2

709.9

1041.7

58782.9 8641.0

60380.3 9346.4

53345.7 5972.7

46231.4 6597.5

42029.3 7511.5

1698.7

1011.2

612.5

594.2

457.4

842.8

342.2

94.1

180.0

136.2

189.0 2254.7

639.3 2140.5

131.2 1256.4

89.9 1047.2

88.9 984.6

6722.4

9026.2

6314.3

6053.3

6346.5

Source: Data of the State Statistics Service of Ukraine.

To gather a more detailed picture about the Ukrainian WMS, it is relevant to assess handling waste by economic activity, as reported in Table 1.4. As Table 1.4 shows, valorized waste in 2016 amounted to 84,630 thousand tons, which is 29% of total waste produced. Burned waste quantity was 1,106 thousand tons (1% of total). Waste had a relevant role in specially assigned places, which represents 54% of total waste. Waste generated in agriculture, forestry, and fisheries was used, burned, or

18 Chapter 1 Table 1.4: Handling waste by economic activity in Ukraine in 2016, 1000 t. Including for purpose Indices Total Agriculture, forestry, and fisheries Mining and quarrying - Mining of stony and brown coal - Extraction of metal ores - Extraction of other minerals and development of quarries Manufacturing industry including - Food production - Production of beverages - Production of coke and refined products - Manufacture of chemicals and chemical products - Manufacture of basic pharmaceuticals and pharmaceuticals products - Production of other nonmetallic mineral products - Metallurgy production Supply of electricity, gas, steam, and air conditioning Water supply; sewage, waste management - Collection, treatment, and disposal of waste; material recovery Building activity Other types of economic activity

Getting energy

84630.3 6203.5

1106.1 49.1

1035.3 35.8

70.8 13.3

157379.3 75.5

55016.0 1198.2

0.2 0.0

0.2 0.0

0.0 0.0

136396.2 8073.2

51457.4 2353.0

0.1 0.0

0.1 0.0

0.0 0.0

127504.2 740.1

22088.7

786.6

735.2

51.4

10168.1

588.3 38.7 2131.7

402.3 7.6 3.2

370.3 7.6 3.2

32.0 0.0 e

12.3 3.8 723.2

81.7

10.7

3.3

7.4

237.9

0.0

e

e

e

0.1

1894.1

5.3

4.0

1.3

38.8

16939.9 388.3

0.6 256.6

0.2 256.3

0.4 0.3

8676.4 3884.0

729.8

4.3

1.7

2.6

5359.1

298.4

4.2

1.6

2.6

4092.9

1.1 202.9

0.4 8.9

0.3 5.8

0.1 3.1

32.7 1463.7

Utilized

Thermal processing

Used in specially assigned places

Burned: all

Source: Data of the State Statistics Service of Ukraine.

used in specially assigned places at 73% in 2016. Considering the waste generated in the manufacturing industry, in particular food production, in 2016, only 20% of it was valorized. Table 1.5 reports the distribution of waste by regions.

From waste to value 19 Table 1.5: Waste generation by regions in Ukraine, 1000 t. Regions

2010

2013

2014

2015

2016

Ukraine Autonomous Republic of Crimea Vinnyts’ka Volyns’ka Dnipropetrovs’ka Donets’ka Zhytomyrs’ka Zakarpats’ka Zaporizhs’ka Ivano-Frankivs’ka Kyivs’ka Kropyvnyts’ka Luhans’ka lvivs’ka Mykolaivs’ka Odes’ka Poltavs’ka Rivnens’ka Sums’ka Ternopils’ka Kharkivs’ka Khersons’ka Khmelnits’ka Cherkas’ka Chernivets’ka Chernigivs’ka Kyiv Sevastopol

425914.2 3161.3

448117.6 2584.8

355000.4 .

312267.6 .

295870.1 .

1860.9 2718.0 282799.4 56544.4 757.6 188.7 5758.1 1278.5 3529.0 29177.1 16107.5 2599.9 3268.8 748.8 4581.7 747.9 1031.2 1121.8 2856.8 472.2 1435.3 1568.9 251.1 410.2 736.1 203.0

2907.4 572.0 300581.8 53295.2 673.3 123.3 4594.9 1692.5 2427.8 38934.9 17838.6 2652.3 2476.3 720.5 5898.9 1587.1 768.2 690.2 2179.5 439.4 1111.6 1029.8 415.9 674.7 976.0 270.7

2423.8 583.4 259353.9 17982.4 671.9 96.0 5155.6 1815.0 1272.1 39748.6 3536.9 3323.0 2328.6 809.5 5013.7 1356.0 938.2 858.9 2172.5 467.8 1266.2 1041.2 388.9 848.3 1548.0 .

1950.3 638.9 227076.8 16877.5 518.3 133.7 5463.3 2124.8 1660.5 33344.7 2548.4 2953.3 2306.1 602.6 4431.7 843.3 840.0 808.9 1711.4 417.3 960.9 1179.2 398.1 867.3 1610.3 .

1927.5 684.0 205850.1 20205.7 550.4 155.6 5040.8 1935.4 1561.3 34408.1 2456.4 2773.8 2366.4 647.5 5421.2 713.2 672.6 862.2 1952.6 388.7 1299.6 1219.2 388.5 720.6 1668.7 .

Source: Data of the State Statistics Service of Ukraine. (Data from the Autonomous Republic of Crimea and Sevastopol from 2014 were absent because it was an occupied territory of Russia.)

Table 1.5 shows that the regions with the largest amount of waste generated (88% in 2016) were Dnipropetrovs’ka, Donets’ka, and Kropyvnyts’ka. This is mainly because of the intensity in metallurgy production that characterized the three regions. In contrast, Zakarpats’ka, Khersons’ka, and Chernivets’ka were the regions that generated the smallest amounts of waste (only 1% in 2016). Waste generation in the capital of Ukraine (Kyiv) increased yearly during the period under investigation, amounting to 1,668 thousand tons in 2016, which was 127% higher than 2010. Fig. 1.2 shows the use of waste by regions in the country. As can be observed, more than 50% of waste produced in Zaporizhs’ka, Poltavs’ka, and Cherkas’ka regions went for use. In contrast, in Zakarpats’ka, Kyivs’ka, Kropyvnyts’ka,

20 Chapter 1 0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

Ukraine Vinnyts’ka Volyns’ka Dnipropetrovs’ka Donets’ka Zhytomyrs’ka Zakarpatts’ka Zaporizhs’ka Ivano-Frankivs’ka Kyivs’ka Kropyvnyts’ka Luhans’ka lvivs’ka Mykolaivs’ka Odes’ka Poltavs’ka Rivnens’ka Sums’ka Ternopils’ka Kharkivs’ka Khersons’ka Khmelnits’ka Cherkas’ka Chernivets’ka Chernigivs’ka Kyiv

Figure 1.2 Share of used waste in the total volume of waste production (%). Source: Build based on data of the State Statistics Service of Ukraine.

Mykolaivs’ka, Odes’ka, Rivnens’ka, Ternopils’ka, Khersons’ka, and Kyiv, waste used was less than 10%. This is because of a different WMS across the Ukraine regions, which determines different outcomes in terms of used waste. Finally, Table 1.6 presents the amount of handled household and similar waste by regions in 2016. Data reported in Table 1.6 suggest that Ukraine produces an average of 250 kg of waste per person. However, handling of household and similar waste varies significantly across regions. In particular, the largest load of waste per person belongs to Kyivs’ka and Kharkivs’ka regions and to Kyiv, whereas Luhans’ka and Khersons’ka regions register the smallest amount. In some regions, waste is used or burned, but in most it is used in specially assigned places and objects. Overall, the data suggest that the country is going through the early stages of a transition toward a modern and more sustainable WMS in which minimum waste generation is ensured, the harmful effects of waste on the environment and human health are prevented,

From waste to value 21 Table 1.6: Handled household and similar waste by regions in 2016, t. Collected Regions

Total

kg/1 person

Used

Burned

Used in specially assigned places and objects

Ukraine Vinnyts’ka Volyns’ka Dnipropetrovs’ka Donets’ka Zhytomyrs’ka Zakarpats’ka Zaporizhs’ka Ivano-Frankivs’ka Kyivs’ka Kropyvnyts’ka Luhans’ka lvivs’ka Mykolaivs’ka Odes’ka Poltavs’ka Rivnens’ka Sums’ka Ternopils’ka Kharkivs’ka Khersons’ka Khmelnits’ka Cherkas’ka Chernivets’ka Chernigivs’ka Kyiv

11562560.0 187384.1 122428.6 1123742.7 560326.6 231724.6 242342.1 448392.1 250476.2 1069161.6 292612.0 134158.2 467382.5 408428.1 899322.6 313769.3 219994.0 309506.0 112007.4 1185107.9 69015.3 270774.6 249627.7 279830.3 351962.5 1763083.0

271 117 118 347 132 186 193 257 181 617 302 61 184 354 377 219 189 279 105 437 65 210 202 308 339 605

6504.4 e e 6131.9 303.9 2.4 e e e e e 1.3 0.0 e 0.4 e 0.0 e e 5.2 e 0.0 43.4 e e 15.9

259329.7 e e e 7.0 310.5 e 133.3 e e 85.6 1.3 5.0 e 664.8 e 13.3 0.4 e 795.5 e e e e e 257313.1

6089472.3 104751.0 118761.2 284710.1 503591.7 130056.8 142463.8 384343.4 163689.1 954653.4 162559.0 122611.8 228560.4 187591.8 635605.8 298237.2 132120.4 167958.6 28369.5 349624.7 61895.8 266413.4 174745.4 209324.9 206880.0 69953.1

Source: Data of the State Statistics Service of Ukraine.

and waste disposal is managed through environmentally innovative methods, tools, and means. In particular, the implementation of feed in tariffs (as planned by the government) is significantly contributing to trigger such a process by attracting national and international investments in electricity produced from waste because of the possibility of reducing the payback period 1.5e2 times. However, the country seems to be far from completing the transition toward a sustainable WMS and a number of activities need to be addressed, such as the establishment of control systems for waste disposal, regular and centralized data collection for waste volume and composition, the implementation of educational initiatives for shaping citizens’ culture of separate waste collection, and the development of new and modern plants to process secondary raw materials. Therefore, it is worth investigating the pressures that actors actually exert on the current system with the aim of fully completing the transition process.

22 Chapter 1

4. Methodology To investigate the source and type of landscape pressure exerted on the Ukrainian waste sector, we adopt a discourse analysis approach (Rosenbloom et al., 2016; Smith et al., 2014; Hajer, 2006), aiming to investigate the use of language surrounding the sociotechnical system dynamics and the related debates. In other words, we try to capture and assess the main narratives emerging from ideas, opinions, and facts expressed by landscape actors about the need for a green transition in the Ukrainian WMS, with the aim of inferring their impact in terms of the narrative pressure exerted on the dominant regime. As discussed, a sociotechnical transition occurs only when the technologies experimented at the niche level match a sufficient amount of pressure originating from the landscape level. Hence, the text analysis of landscape actors’ discourses may provide relevant information about the narrative pressure they exert to drive a change in the WMS of the country. In particular, to identify the source and type of landscape pressure, we started by looking at all of the potential actors involved in the green transition of the Ukrainian WMS. To this end, we analyzed a large number of scientific articles, reports, websites, written interviews, regulation texts, etc., concerning the application of environmental criteria to the waste sector in Ukraine. In this way, we defined a list of actors that have a relevant role in the debate on the environmental sustainability of the country’s WMS. Subsequently, with the aim of assessing the amount of pressure exerted by the identified actors, we carried out an in-depth analysis of their selected written texts with a temporal scope ranging from 2010 to 2018. This allowed us to recognize the most significant narratives that they are employing to communicate the need of a green transition in the Ukrainian waste sector and, within such narratives, to identify the key story lines emerging from their debate: i.e., “the medium through which actors try to convince others of their positions, suggest certain practices, and criticize alternatives” (Hajer, 2006: 71). Story lines evaluate the effort of landscape actors in building consensus regarding the relevance of managing waste sectors following an environmentally friendly approach. They were captured according to the three interlinked principles: (i) the green WMS (or alternative ways to define this issue) was clearly mentioned; (ii) the selected narratives reported an idea or a value judgment regarding the transition toward the green management of the waste sector; and (iii) such narratives were fairly extended to carry out a qualitative investigation. Finally, to quantify the extent to which the pressure exerted is balanced across the different categories of identified landscape actors, we derived a number of key words originating from the story lines that we then used to weight their pressures. More specifically, we queried the landscape texts by means of QDA Miner text analysis

From waste to value 23 software to test for the existence of the identified key words. The software allowed us to carry out: (i) a quantitative/screening analysis by checking for the presence of the key words in the narratives and deleting all documents that did not include any key word; and (ii) a qualitative/in-depth investigation by checking, in the remaining documents, for specific text patterns in the narratives. More specifically, we reported any key word (or its synonym) found in a document according to the context in which it was located: thus, only those referring specifically to the Ukrainian WMS. In this way, we could recognize actors that were actually exerting some narrative pressures on the dominant waste system and the extent to which such pressure is balanced among them.

5. Results The in-depth analysis of literature, reports, websites, etc. related to the Ukrainian waste sector led us to identify 19 landscape actors, including executive bodies, nonprofit and private organizations, independent agencies, science and financial institutions, and a consulting organization. We classified them according to the type of pressure exerted, thus recognizing four actors exerting a GLOB/INF pressure, four a GLOB/INST pressure, seven an NAT/INF pressure, and four an NAT/INST pressure. The full list of actors, their role, and the corresponding type of pressure exerted are reported in Table 1.7. After analyzing the main texts authored by the 19 actors that specifically dealt with the Ukrainian waste sector, we were able to isolate three story lines. Story line 1: The transition toward a sustainable WMS requires investments and innovations in the bioenergy sector, a clear national strategy, and transparent rules for market players. Indeed, the amount of waste produced in Ukraine and taken to landfills and unofficial landfills in a year is huge (Tables 1.2e1.6). Moreover, only one incinerator works in the country, the capacity of which is not even sufficient to serve Kyiv municipality (the capital city of Ukraine). To stop a probable ecological catastrophe, it is necessary to turn garbage into a resource overcoming factors that hinder the process of the greening of the waste sector in the country: mainly the lack of a well-defined national strategy and necessary legislative acts. Therefore, such story lines stress the relevance of fostering the bioeconomy sector in the country to valorize waste consistently with the principles of the green economy. Moreover, they underline the necessity of implementing clear rules and policy actions and enforcing their application.

24 Chapter 1 Table 1.7: Source and type of pressure exerted by landscape actors upon the Ukrainian WMS. Source of pressure Actor name World Wildlife Fund Business Sweden in Ukraine

United States Agency for International Development European Investment Bank World Bank European Union EU Commission Organization for Security and Cooperation in Europe

Bioenergy Association of Ukraine

Association Clean Country

National Academy of Sciences of Ukraine Sec Ecology

Role Nonprofit organization supporting projects for environment protection Organization of consulting and projects promoting business opportunities in heating, water and wastewater treatment, solid waste management, air handling, and energy efficiency to Swedish companies and facilitating their development on the Ukrainian market Independent agency promoting projects in different sectors including the waste industry Financial institution promoting projects in different sectors including the waste industry Promotion funding and knowledge for developing countries Executive body supporting projects promotion and enforcement Executive body supporting European law promotion and enforcement Executive body supplying a comprehensive approach to security that encompasses politico-military, economic, environmental, and human aspects Nonprofit organization promoting a common platform for cooperation on bioenergy market of Ukraine to ensure the most favorable business environment and accelerated development of bioenergy market and sustainable development of bioenergy sector Nonprofit organization protecting firms’ interests in waste sector, coordinating market activities, and promoting development of waste management system both at regional and municipal levels and at country level as a whole Institution promoting scientific research on waste Private engineering and technical company providing integrated environmental support to enterprises, services for development and execution of scientific and technical documentation of permissive nature in field of environmental protection, and coordination with authorized state bodies of environmental control.

Type of pressure GLOB/INF GLOB/INF

GLOB/INF GLOB/INF GLOB/INST GLOB/INST GLOB/INST GLOB/INST

NAT/INF

NAT/INF

NAT/INF NAT/INF

From waste to value 25 Table 1.7: Source and type of pressure exerted by landscape actors upon the Ukrainian WMS.dcont’d Source of pressure Actor name Center of Environmental Consulting and Auditing Ukraine

InvestUkraine Institute of Green Economics

Ministry of Ecology and Natural Resources of Ukraine

Ministry of Agrarian Policy and Food of Ukraine Ministry of Energy and Mines of Ukraine State Environmental Investment Agency of Ukraine

Role Private center providing services in area of environmental protection, health, safety, and social issues in line with national regulation and other countries of Newly Independent States (NIS) region, international standards and requirements (EU directives, International Finance Corporation and European Bank for Reconstruction and Development environmental and social policy, European Investment Bank standards) and corporate policies State agency for investment and national projects of Ukraine Nonprofit organization providing services for development of scientific and technical documentation and professional assistance at all stages of environmental impact assessment, including consultations with representatives of Ministry of Ecology and natural resources of Ukraine and environmental departments of regional state administrations Executive body operating in fields of environmental protection, ecological safety, treatment of waste, hazardous chemicals, pesticides, and agricultural chemicals; performs state ecological expertise Executive body providing policy guidance about agricultural matters Executive body providing policy guidance about supply of energy Executive body providing policy guidance in establishing and providing for execution of state national investment policy in environmental protection sector area as well as state policy in field of regulation of anthropogenic adverse negative impact on climate change; to execute provisions set in United Nations framework convention on climate change and implement mechanisms of Kyoto Protocol including implementation of greenhouse gases (GHG) mitigation projects, attracting investments to environmental protection; and establish and ensure operation of national system for assessment of GHG emissions and absorption

Type of pressure NAT/INF

NAT/INF NAT/INF

NAT/INST

NAT/INST NAT/INST NAT/INST

GLOB/INF, global/informal pressure; GLOB/INST, global/institutional pressure; NAT/INF, national/informal pressure; NAT/INST, national/institutional pressure.

26 Chapter 1 Story line 2: A green WMS represents a winewin solution that can generate profits which dealing with problems of climate change, greenhouse gas (GHG) emissions, and, in general, environmental protection. The manual “Methodical Recommendations of the Reasonable Community Waste Management” (2017), prepared during implementation of the project Intelligent Waste Management in Countries of the Eastern Partnership, shows that household waste in Ukraine is mainly buried in 4157 dumps and landfills with a total area of about 7.4 thousand hectares. Despite the decline in population, there is a tendency to increase the volume of solid domestic waste generated and exported to landfills by 4 million cubic meters annually, an occurrence most probably owing to the growing level of consumption. For solid household waste, the share of waste that requires significant storage space is increasing. Moreover, the number of overloaded landfills is 243 units (5.8% of the total), and 1187 units (28.5%) does not meet environmental safety standards. This will have serious consequences for the environment and human health that urgently need to be tackled. Such a large amount of waste, if opportunely exploited in the framework of the circular economy principles, could represent a significant resource for the country, setting profitable activities in the waste sector. This second thus story lines stresses the relevance of waste that, when conceived as a resource, can lead to a winewin solution in which, on the one hand, profitable businesses are implemented, and on the other, human health and environmental resources are opportunely safeguarded. Story line 3: The greening of the WMS represents a complex process within the bioeconomy that involves local authorities, producers, consumers, and companies that perform sorting and processing. Several factors may influence and drive the change toward a more sustainable way to manage waste. Indeed, moving toward a green WMS requires not only major technological transformations within the sector but also a change in the way such transformations are executed. This story line focuses on the complexity of the waste management process, which involves a number of actors operating at different levels. First and foremost are the producers, and then the consumers, the companies that operate in the sector, and the local authorities that are responsible for waste disposal in the cities. These story lines allowed us to identify a number of keywords that we then employed to assess the extent to which pressure exerted by the landscape actors is balanced. In particular, we derived the following nine keywords (the corresponding Ukrainian translations are in parentheses): (i) environmental sustainability (ctamjk rpicjtpl oaclpmjzo:pdp sfrfepcj7a); (ii) green waste management (uTracm{oo> c{ewpeanj), (iii) green innovations (ifmfo{ {oopcax{ї);

From waste to value 27 Table 1.8: Descriptive statistics and actors’ pressure organized by groups.

Type of pressure

Total number of words

Average number of words per document

Total number of key words found

Number of key words every 10,000 words

Pressure exerted

GLOB/INF GLOB/INST NAT/INF NAT/INST Total

40,873 98,635 48,041 55,870 243,419

4,087 8,966 3,202 4,655 5,071

112 84 58 45 299

27.4 8.51 12.07 8.05 12.3

37.46% 28.09% 19.40% 15.05% 100%

(iv) (v) (vi) (vii) (viii) (ix)

climate change (in{oa lm{natu); investments ({ocfstjx{ї); environmental protection (iawjst oaclpmjzo:pdp sfrfepcj7a); GHG emission (cjljej Tarojlpcjw dai{c); bioenergy (b{pfofrdftjla); and bioeconomy (b{pflpopn{la).

We searched for such key words in the actors’ narratives, carrying out a quantitative and qualitative investigation. The first was aimed at measuring the number of times the key words appeared in the landscape actors’ identified documents, whereas the second aimed at refining our findings by carefully checking the semantic context in which the key words were employed, keeping only those that explicitly referred to the Ukrainian WMS. We accessed 48 documents for a total of 243,419 words, with an average number of words per document equal to 5071. Within such documents, we found 299 key words related to the Ukrainian WMS, corresponding approximately to 12.3 key words every 10,000 words. To make an overall assessment, we derived the percentage of narrative pressure exerted for any category. Table 1.8 reports the results achieved along with the most significant descriptive statistics organized by groups. Overall, our findings showed that most of the narrative pressure is exerted at the global level, mainly by means of the informal channel. In contrast, the weak pressure exerted at the national level upon the greening of the Ukrainian WMS thus determines a significantly unbalanced scenario. These findings seem to suggest that national actors lack a targeted and proactive behavior toward problems related to waste management, which has a marginal role in transforming the country’s waste sector above all in terms of institutional pressure.

6. Conclusions The amount of waste generated worldwide is rapidly increasing, leading to a general decrease in environmental and human health. However, if addressed through the correct

28 Chapter 1 policies and practices, it can be a valuable resource for meeting the goal of an environmentally sustainable future. The priorities established by the waste hierarchy represent a desirable approach toward a green WMS, but to be implemented, they require the use of appropriate technologies accompanied by deep changes in consumption and waste production patterns, organizational capacity, and cooperation among a wide range of stakeholders. In other words, the greening of the WMS should be conceived of as a holistic and complex process that encompasses a sociotechnical transition involving a radical shift at infrastructural, institutional, and social levels. Its achievement may result in a number of benefits occurring at environmental, economic, and social levels (Barrett and Scott, 2012). From an environmental point of view, a green WMS can significantly contribute to limiting or even eliminating adverse impacts on the environment that arise from incorrect waste management, with relevant consequences in terms of preventing air, groundwater, and soil pollution, preserving biodiversity, minimizing resource extraction, and reducing GHG emissions. Moreover, it can produce relevant economic outcomes by improving economic efficiency in terms of rational use, treatment, and disposal of resources (WRAP, 2010). The creation of markets for recycling can create new jobs and business opportunities, efficient practices in the production and consumption of goods, an increase in revenues for regional and local governments originating from waste sorting and recycling operations, and a general rise in the gross domestic product in absolute and per capita terms. Finally, from a social perspective, a green WMS reduces adverse impacts on health originating from dangerous disposal practices and contributes to cleaner urban and rural areas and more intergenerational equity with a fairer and more inclusive society. Despite this, many developed countries seem to lag behind in terms of waste prevention, reuse, and recycling. This is the case for Ukraine, for instance, where 95% of waste is buried in landfills with no processing, the accumulation of waste is unsustainable, the treatment of hazardous waste is inappropriate, and the use of waste as a secondary raw material is insufficient. The waste market is just developing, and despite some challenges (e.g., complex and imperfect legislation limiting enforcement of environmental legislation in the waste sector and the establishment of publiceprivate partnerships, economically unjustified tariffs for waste collection and processing with a resulting underdeveloped market for recycled materials, and lack of awareness in the population about separate collection even for the most hazardous items), the country has the large potential to increase waste recovery rates. However, the regulatory framework, and in particular approval of the National Strategy for Waste Management Until 2030, is driving the country, with difficulties, to the preliminary stages of a transition toward a more sustainable management of waste. Starting from these premises, this chapter investigated the pressures that are greening the current Ukrainian WMS by reducing GHG emissions, increasing waste recovery rates, eliminating environmental and health risks, and reforming the municipal solid waste

From waste to value 29 sector. Our analysis is framed within the theory of sociotechnical transitions and MLP and specifically investigated the role of landscape actors in exerting a narrative pressure on the ongoing waste sector. To this end, we employed a discourse analysis approach whose results showed that most of the pressure originates at the global level mainly by means of informal channels, leaving only a marginal role to national actors. Such an unbalanced pressure might be insufficient to carry out the full regime shift, because it is largely decoupled from the national pressure. Our results suggest that it is urgent for national actors to place the waste management debate among national priorities by ensuring the availability of skills, knowledge, and capacity to implement waste management programs effectively, especially at the local level, thus helping to turn waste into a valuable resource. In other words, despite the effort to implement the National Waste Management Strategy Until 2030, the country seems to be still far from completing a transition toward a more sustainable WMS, and even the narrative pressure does not looks sufficient to foster the regime shift, which is strongly unbalanced across the different categories of actors.

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From waste to value 31 Morone, P., Lopolito, A., Anguilano, D., Sica, E., Tartiu, V.E., 2016. Unpacking landscape pressures on socio-technical regimes: insights on the urban waste management system. Environmental Innovation and Societal Transitions 20, 62e74. ISSN: 2210-4224. Papargyropoulou, E., Lozano, R., Steinberger, J.K., Wright, N., Bin Ujang, Z., 2014. The food waste hierarchy as a framework for the management of food surplus and food waste. Journal of Cleaner Production 76, 106e115. Parto, S., Loorbach, D., Lansink, A., 2007. Transitions and institutional change: the case of the Dutch waste subsystem. In: Industrial Innovation and Environmental Regulation: Developing Workable Solutions. United Nations Univ. Pr., ISBN 978-92-808-1127-8, pp. 233e257 Pesch, U., 2014. Tracing discursive space: agency and change in sustainability transitions. Technological Forecasting and Social Change 90 (B), 379e388. Rasmussen, C., Vigso, D., Ackerman, F., Porter, R., Pearce, D., Dijkgraaf, E., Vollebergh, H., 2005. Rethinking the Waste Hierarchy. Environmental Assessment Institute. Rosenbloom, D., Berton, H., Meadowcroft, S., 2016. Framing the sun: a discursive approach to understanding multi-dimensional interactions within socio-technical transitions through the case of solar electricity in Ontario, Canada. Research Policy 45 (6), 1275e1290. Rotmans, J., Kemp, R., van Asselt, M., 2001. More evolution than revolution: transition management in public policy. Foresight 3, 15e31. Schall, J., 1992. Does the solid waste management hierarchy make sense? A technical, economic and environmental justification for the priority of source reduction and recycling. In: Working Paper #1, Program on Solid Waste Policy. Yale University. Smith, A., Stirling, A., Berkhout, F., 2005. The governance of sustainable socio-technical transitions. Research Policy 34, 1491e1510. Smith, A., Kern, F., Raven, R., Verhees, B., 2014. Spaces for sustainable innovation: solar photovoltaic electricity in the UK. Technological Forecasting and Social Change 81, 115e130. So¨derholm, K., Wihlborg, E., 2015. Policy for sociotechnical transition: implications from Swedish historical case studies. Journal of Environmental Policy and Planning 17 (4), 452e474. Steinhilber, S., Wells, P., Thankappan, S., 2013. Socio-technical inertia: understanding the barriers to electric vehicles. Energy Policy 60, 531e539. Turnheim, B., Geels, F.W., 2012. Regime destabilisation as the flipside of energy transitions: lessons from the history of the British coal industry (1913e1997). Energy Policy 50, 35e49. UNEP, 2011a. Decoupling Natural Resource Use and Environmental Impacts from Economic Growth. United Nations Environment Programme, Paris. UNEP, 2011b. Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication. United Nations Environment Programme. UNEP, 2013. Municipal Solid Waste: Is it Garbage or Gold? United Nations Environment Programme. UNEP, UNU, 2009. Recycling- from E-Waste to Resources. Sustainable Innovation and Technology Transfer Industrial Sector Studies. United Nations Environment Programme & United Nations University. UNHSP, 2010. Solid Waste Management in the World’s Cities. London. ˚ strand, K., 2014. Climate policy innovation: a sociotechnical transitions Upham, P., Kivimaa, P., Mickwitz, P., A perspective. Environmental Politics 23 (5), 774e794. Van Ewijk, S., Stegemann, J.A., 2016. Limitations of the waste hierarchy for achieving absolute reductions in material throughput. Journal of Cleaner Production 132, 122e128. Walker, W., 2000. Entrapment in large technology systems: institutional commitments and power relations. Research Policy 29 (7e8), 833e846. Wilkinson, D., 2002. Waste law. In: Waste in Ecological Economics. Edward Elgar Publishing, pp. 101e113. Wilson, D.C., Rodic, L., Scheinberg, A., Velis, C., Alabaster, G., 2012. Comparative analysis of solid waste management in 20 cities. Waste Management and Research 30 (3), 237e254. World Bank, 2012. What a Waste: A Global Review of Solid Waste Management. Urban Development Series Knowledge Papers.

32 Chapter 1 World Health Organization, 2016. Waste and human health: evidence and needs. In: WHO Meeting Report 5e6 November 2015 Bonn, Germany. WRAP, 2010. Securing the Future e The Role of Resource Efficiency. Banbury. Xu, Q., Tian, Y., Kim, H., Ko, J.H., 2016. Comparison of biogas recovery from MSW using different aerobic-anaerobic operation modes. Waste Management 56, 190e195. https://doi.org/10.1016/ j.wasman.2016.07.005. Xue, B., Chen, X., Lu, H., Lu, C., Yang, M., 2008. Analysis of transition process from waste management towards resource management system. In: 2008 4th International Conference on Wireless Communications, Networking and Mobile Computing. Zarate, M., Slotnick, J., Ramos, M., 2008. Capacity building in rural Guatemala by implementing a solid waste management program. Waste Management 28 (12), 2542e2551. Zhukovskyi, T., Pshenichnova, O., Pisnya, L., Tkachova, O., 2016. The introduction of a unified national approach to classification procedure of wastes to hazardous. Metallurgical and Mining Industry 7, 24e29.

CHAPTER 2

Success factors for environmentally sustainable product innovation Lisa Melander Department of Technology Management and Economics, Chalmers University of Technology, Gothenburg, Sweden

Chapter Outline 1. 2. 3. 4.

Introduction 33 Benefits of environmentally sustainable product innovation 35 Drivers and motivations for environmentally sustainable product innovation Innovations and technological uncertainty 41 4.1 Radical and incremental innovations 4.2 Technological uncertainty 43

5. External collaboration partners

36

41

44

5.1 Why do firms collaborate with external partners to develop environmentally sustainable innovations? 44 5.2 With whom do firms collaborate for environmentally sustainable innovations? 46 5.3 How do collaboration partners contribute to environmentally sustainable innovations? 47 5.4 Building relationships with partners 48 5.5 Characteristics of partners: single or multiple, small or large, and national or international? 5.6 Considerations regarding external collaboration 51

6. 7. 8. 9.

Internal collaboration across functions 54 Literature on success factors for environmentally sustainable product innovation Summarizing the success factors 57 Future research agenda 59 9.1 Contradictions in the literature 60 9.2 Fruitful venues of investigation into environmentally sustainable product innovation

References

49

55

61

62

1. Introduction Governments, societies, and industries agree that sustainability is a global challenge that must be addressed in a joint effort. The United Nations has presented 17 sustainable development goals, one of which relates to industry, innovation, and infrastructure (Goal 9). Innovation Strategies in Environmental Science. https://doi.org/10.1016/B978-0-12-817382-4.00002-2 Copyright © 2020 Elsevier Inc. All rights reserved.

33

34 Chapter 2 Regarding industry and innovation, it highlights that industries must become sustainable through increasingly efficient use of resources and the adoption of clean and environmentally friendly technologies and industrial processes (United Nations, 2015). Innovation is critical to solving future challenges, such as our limited resources. Through environmentally sustainable product innovation, smarter and more environmentally friendly products will be able to support the transition toward a more sustainable society. There have been many studies on innovation and what is important when firms engage in regular product innovation (Chesbrough, 2003; Schumpeter, 1942). Hence, we know a great deal about product innovation but not much about environmentally sustainable product innovation, although this field has been growing rapidly (Dangelico, 2016). Several phrases are used to describe the subject of environmentally sustainable product innovation. The concepts of environmentally sustainable product innovation, green product innovation, and eco-innovation seem to be used interchangeably (Schiederig et al., 2012). The research in this chapter will be referred to as environmentally sustainable product innovation, although some of the literature uses the terms green product innovation or eco-innovation to describe this phenomenon. In this chapter, environmentally sustainable product innovation refers to innovation that focuses on new clean technologies, designs, materials, and changes to the way products are bought, used, and disposed of (Melander, 2018; Pujari, 2006). Firms are increasingly engaging and investing in environmentally sustainable product innovation. According to Chen et al. (2006), stricter environmental regulations and the rise of consumer environmentalism have challenged firms to invest in environmentally sustainable product innovation. However, to succeed in environmentally sustainable product innovation, firms need additional capabilities. A study suggested that firms ensure that they have sufficient learning capabilities to be able to incorporate external knowledge to improve their environmental innovation performance (Pacheco et al., 2018). In fact, for firms to succeed in environmentally sustainable product innovation, they have to be aware of additional investments that may be needed. Such investments include environmental training, audits, patents, and other organizational resources to manage environmental innovations (Pacheco et al., 2018). Environmentally sustainable product innovation is complex and challenging for firms to manage (Petruzzelli et al., 2011). Therefore, academic research is important to guide them to succeed in environmentally sustainable product innovation. Hence, this chapter (1) aggregates findings of different studies on environmentally sustainable product innovation in published literature on the topic, and (2) maps critical success factors that drive environmentally sustainable product innovation. The chapter is structured as follows. First, it looks at the benefits of environmentally sustainable product innovation. Next, it describes the drivers and motivations for

Success factors for environmentally sustainable product innovation 35 environmentally sustainable product innovation. It then focuses on innovation and technological uncertainty, external collaboration partners, and internal collaboration across functions in environmentally sustainable product innovation. This is followed by a presentation of literature on success factors for environmentally sustainable product innovation. Finally, the success factors are summarized, and a future research agenda is presented.

2. Benefits of environmentally sustainable product innovation The literature on environmentally sustainable product innovation points to benefits for the environment, such as energy savings and lower emissions, as well as for firms, such as reducing costs, increasing market share, and improving firm reputation (Horbach et al., 2012; Melander, 2018; Pujari et al., 2003; Tang et al., 2018). Hence, there are benefits to environmentally sustainable product innovation that affect society on a larger scale, as well as individual firms and their supply chain. However, measuring the environmental impact and performance of a product is a complex process (Dangelico and Pujari, 2010). Therefore, it can be difficult to identify benefits from environmentally sustainable product innovation. Environmental gains from environmentally sustainable product innovation include energy savings, emission reductions, material savings, increased recycling, avoiding leakages of toxic fluids, and the use of more environmentally friendly materials (Horbach et al., 2012; Melander, 2018). A German study also showed that environmentally sustainable product innovation reduces emissions to air, water, and soil, as well as noise (Horbach et al., 2012). Another study showed that environmentally sustainable product innovation is related to efficiency of eco-performance, such as reducing inputs, limiting pollution, and creating less waste, and thus reduces environmental impacts (Pujari et al., 2003). In their study of information and electronics industries in Taiwan, Chen et al. (2006) showed that innovations in technologies result in energy savings, pollution prevention, and waste recycling. The literature shows that environmental gains bring benefits to firms investing in environmentally sustainable product innovation, but there is also evidence that some environmental gains result in increased costs for the firms. Hence, not all aspects of environmentally sustainable product innovation lead to benefits for firms. One example relates to energy savings. Horbach et al. (2012) showedthat although energy-saving products result in economic gains, energy-saving activities also lead to increased costs for the firm in the short run. Another example of environmental gains and their benefits and costs relates to recyclability. A study by Melander and Lingega˚rd(2018) showed that recycling and reuse of components in the remanufacturing of products, for example, results in cost savings. However, another study showed that improvements in recyclability of products lead to higher costs for the firm (Horbach et al., 2012).

36 Chapter 2 Economic gains from environmentally sustainable product innovation come frommaterial savings and better performance for the company, for instance (Ar, 2012; Horbach et al., 2012). In addition, investments in environmentally sustainable product innovation have the potential to lead to new business opportunities for firms, giving them access to new markets and customers. It has been shown that implementing environmentally sustainable product innovation is important for firms to attain competitive advantages (Lin et al., 2013). Chen et al. (2006) demonstrated in their study that the more firms invest in environmentally sustainable product innovation, the stronger the corporate competitive advantage is. Similarly, a study of Turkish manufacturing and exporting firms reported that environmentally sustainable product innovation leads to firms being more competitive (Ar, 2012). Other benefits are related to the market, customers, and firm reputation. In their study, Tang et al. (2018) showed that environmentally sustainable product innovation has a positive influence on a company’s performance, which the authors measure as a combination of sales volumes, market share, return on investments, company image, and customer satisfaction. For instance, in a study of the Vietnamese motorcycle industry, results showed that firms that perform well in environmentally sustainable product innovation are able to perform better on the market (Lin et al., 2013). By working on environmentally sustainable product innovation, firms have the chance to be the first on the market to introduce an environmentally sustainable product, and thus to be able enjoy the first mover advantage (Chen et al., 2006). Customer benefits have an important role in environmentally sustainable product innovation. Firms that see large potentials for customer benefits in environmentally sustainable product innovation are more likely to invest in these types of innovations (Kammerer, 2009). Finally, by developing environmentally sustainable product innovations, firms can improve their corporate image (Chen et al., 2006). Fig. 2.1 shows different benefits of environmentally sustainable product innovation. These benefits have been divided into three areas: environmental benefits, firm benefits, and market benefits.

3. Drivers and motivations for environmentally sustainable product innovation Some of the most important drivers and motivations presented in the literature are based on economic incentives, regulatory pressures, expected benefits from the innovation, market benefits, requirements from customers, technology push, managerial concerns, stakeholder pressure, firms striving to be competitive, and firms trying to profile

Success factors for environmentally sustainable product innovation 37

Figure 2.1 Environmental benefits, firm benefits, and market benefits of environmentally sustainable product innovation.

themselves as being more environmentally friendly (Dangelico and Pujari, 2010; Hojnik and Ruzzier, 2016; Lee and Kim, 2011; Lenox and Ehrenfeld, 1997; Steward and Conway, 1998; Wagner and Llerena, 2011). In their review of what drives environmentally sustainable product innovation, Hojnik and Ruzzier (2016) found that regulations and market pull factors are the most important aspects for firms. Of the two factors, regulations stand out as the most reported factors in the articles in that review. However, a paper by Dangelico (2017) showed that the most relevant motivations for firms to develop environmentally sustainable products are related to market opportunities and customers, such as the prospect of achieving higher customer satisfaction, gaining new customers, and improving the firm’s reputation. This study, in contrast to others, reported that governments and other actors in the firm’s network were able to do little to motivate firms to develop environmentally sustainable products. Drivers for environmentally sustainable product innovation can be of a push and/or pull nature. It is not always easy to distinguish between push and pull drivers, because some drivers that are mostly of a push nature also include elements of a pull nature. For example, firms can be pushed into environmentally sustainable product innovation by regulatory pressures or pulled into environmentally sustainable product innovation by striving to be more competitive. However, the strive to be more competitive can also have push characteristics, with stakeholders pushing the firm to be more competitive. Hence, most drivers tend to have elements of both push and pull natures. Table 2.1 presents a brief overview of drivers for environmentally sustainable product innovation. These drivers are divided into a number of categories, such as economic incentives, governmental

38 Chapter 2 Table 2.1: Overview of drivers for environmentally sustainable product innovation. Driver

Some examples

Economic incentives

Cost savings in materials Cost savings due to new designs Cost savings in production processes Rising energy costs Increased margins on new products Larger market share Access to new customers Regulations related to emissions Regulations related to materials and chemicals (e.g., toxic materials) Regulations related to waste Regulations related to energy usage Regulations related to cleaner technologies Regulatory pressures from the industry sector or other stakeholders Pressure to adopt industry sector standards Customers requiring cleaner technologies Customers requiring less emissions Customers requiring lower energy usage Customers requiring more environmentally friendly materials Competitors have introduced new environmentally sustainable products to the market Competitors are focusing on environmentally sustainable product innovation Difficulty competing on price and other elements means that environmentally sustainable product innovation could be a way to become more competitive Increased market share Creating new markets Access to markets that are new to the firm New potential technologies being developed Technology developments in other industries R&D developments in the industry New standards based on new technologies Expectations of the public and society Expectations of employees Expectations of shareholders Firm brand and image Attracting young professionals Stakeholder focus on environmentally sustainable product innovation Market push and pull for firms to profile themselves as environmentally friendly Getting favorable publicity from environmentally friendly efforts Publicity from sources such as sustainability reports Joining environmentally friendly industry groups Improved corporate image ISO 14001 certification

Governmental regulations

Regulatory pressures Customer requirements

Firms striving to be competitive

Market benefits

Technology push factors

Stakeholder pressure, public pressure Managerial concerns

Firms striving to profile themselves as more environmentally friendly

Certifications

Success factors for environmentally sustainable product innovation 39 regulations, regulatory pressures, requirements from customers, firms striving to be competitive, market benefits, technology push factors, stakeholder pressure, public pressure, managerial concern, firms striving to profile the firm as being more environmentally friendly, and certifications. External influences act as drivers and motivators, with customers requiring investments in more sustainable solutions or external regulators pushing firms to change. Regulations in specific industries and regions also push customers to require more environmentally sustainable products, needing firms to innovate with a focus on making their products fit the requirements of the customers and the customers’ regulators. It is suggested that firms need to be attentive to changes in environmental regulations as well as customer behavior (Pacheco et al., 2018). Government regulations push firms to invest in more environmentally sustainable product innovation by incorporating new technologies or materials that are more sustainable. Such regulations can cover different geographical areas, such as global, regional, or national. Chen et al. (2006) highlighted the importance of stricter international regulations in driving firms to invest in environmentally sustainable product innovation. Regulations can also be industry specific. Kammerer (2009) showed that firms that face more regulations implement environmentally sustainable product innovation to a greater extent. However, according to the author, these innovations are not necessarily novel to the market. A study in Korea by Choi and Yi (2018) indicated that firms have internal inertia that needs to be overcome if they are to achieve sustainability beyond existing practices when developing environmental innovations. The authors also pointed to the importance of external drivers to motivate firms to engage in environmentally sustainable innovations. Tang et al. (2018) ascertained that governmental laws and regulations may force firms to conduct environmentally sustainable product innovation. The authors suggested that in such situations, companies may end up conducting low-level innovations to achieve short-term results. Examples of governmental regulations related to environmental concerns are those focusing on emissions, materials, chemicals, waste, energy use, and cleaner technologies. It is argued that firms should not only strive to fulfill governmental regulations but aim higher and exceed these regulations when innovating new products (Walton et al., 1998). By exceeding expectations, firms can be more competitive and bring their new products to new markets and industries. Although regulations are recognized as a driver for environmentally sustainable product innovation, there are contradictory views in the literature. For instance, Guoyou et al. (2013) showed in their study that regulatory stakeholders seem to have no influence on environmentally sustainable product innovation. One driver for firms to engage in environmentally sustainable product innovation is to improve their corporate image and environmental reputation (Dangelico and Pujari, 2010).

40 Chapter 2 Another driver identified by Dangelico and Pujari (2010) was ecological responsibility that originates from companies’ internal orientation and commitment from top management. However, the authors warned about the risk of firms facing additional scrutiny from stakeholders when engaging in environmentally sustainable product innovation. By developing more environmentally sustainable products, firms also become more competitive. It may be that by fulfilling new environmental requirements in one industry, firms become more competitive in another where similar regulations may be underway. Dangelico and Pujari (2010) found that expectations of green market growth and potential to increase profits are drivers for firms. By innovating with the focus on environmental sustainability, it has been shown that firms simultaneously improve productivity and reduce environmental costs and risks (Florida, 1996). It is important for these environmentally sustainable product innovations to become successful both environmentally and commercially (Lee and Kim, 2011). Having an environmentally sustainable product is not enough; it needs to be accepted by the market and make a good business case. In an ideal situation, such a new product would be both more profitable(e.g., cost-effective) (Steward and Conway, 1998) and create new opportunities for the firm in, for example, new markets, by incorporating new technologies or being a new product category (Dangelico et al., 2013). Despite having argued for the importance of environmentally sustainable product innovations to be economically feasible and a good business case for companies, this combination seems to be difficult. One aspect raised in the literature is that it can be challenging to show an economic benefit because it may take a long time before firms can see and measure economic performance (Zhu et al., 2012);that is, the point when firms can reap the benefits of their innovation activities may be far into the future, which makes it difficult for them to commit to and invest in these environmentally sustainable product innovations, because the potential profits may be too far off. Other studies also highlight the difficulties of showing the economic benefits of environmental investments. For instance, Dangelico et al. (2013) showed that integrating environmental issues into product innovation programs such as those of green product design does not have a significant impact on financial outcomes. Market demand for environmentally sustainable product innovation is an important motivator and driver for firms to invest in these types of innovations (Lin et al., 2013). Examples of requirements from customers include cleaner technologies, less emissions, lower energy use, and more environmentally friendly materials. When customer requirements act as a driver for environmentally sustainable product innovation, it is possible for firms to involve these customers (e.g., endusers) in the innovation process. In fact, by involving endusers, opportunities arise for the design of new innovative products that are both more efficient and environmentally sustainable (Florida, 1996). The literature points out that by collaborating with customers, firms can better address environmental challenges (Hofmann et al., 2012). Hence, in these situations, customers act as both drivers

Success factors for environmentally sustainable product innovation 41 and collaboration partners, helping firms by setting new requirements for their products. Foster and Green (2000) argued that customer requirements are the most important driver for environmentally sustainable product innovation. They suggested that customers’ requirements act as a form of second-hand legislation because customers tend to pass on green regulation requirements to their suppliers. However, firms that involve external partners in their innovation efforts become exposed to new risks, which couldresult from environmental adaptations, for instance (Canning and Hanmer-Lloyd, 2007). A study of environmentally sustainable product innovations of toys by Tsai et al. (2012) argued that firms are willing to adopt customers’ perceived value of more environmentally sustainable products only once they have managed to overcome the difficulty of collaboration in the supply chain as well as potential new challenges in production. Hence, although firms may be aware of customers’ preferences, they need to overcome several obstacles before they decide to act on this information. It may also be that external regulations push companies to seek external expertise, because sufficient knowledge and competence may not reside within the company. Wagner and Llerena (2011) asserted out that regulation may even force businesses to find external collaboration partners to succeed in the innovation effort. However, involving external partners in innovation efforts is challenging and requires firms to develop good relations with external partners. It has been shown that firms that have poor relations with suppliers, customers, and stakeholders achieve little by improving their environmental performance and saving costs (Wong et al., 2015). Besides identifying the most reported drivers, Hojnik and Ruzzier (2016) presented some less frequently used ones in their review. These drivers include the economic incentive instrument, supply-side factors, product design with life cycle analysis, expected increase in product quality, networking activities, employees, resources (physical, financial, and human), company efficiency/productivity, eco-labeling activities, intention to strengthen the brand, industrial sector initiatives, technology-specific instruments, market research on the potential of environmental innovation, shareholders’ pressure, nongovernmental organizations (NGOs), International Organization for Standardization 9001 certification, and specific environmental organizational measures such as take-back systems for products and measures pertaining to waste disposal or redemption of their own products.

4. Innovations and technological uncertainty 4.1 Radical and incremental innovations Environmentally sustainable product innovation has a higher degree of complexity than regular innovation because it also incorporates environmental issues. Noci and Verganti (1999) pointed out that environmentally sustainable innovation is a complex managerial

42 Chapter 2 concern, particularly for small businesses. In the context of innovation, there are examples in which disruptive and radical technologies are used, such as in the development of new electric cars and autonomous drive for vehicles. These include technologies that result in substantial changes not only for the manufacturer and its suppliers and customers but also for society as a whole. Radical environmentally sustainable product innovation involves implementing new technologies or replacing critical components with completely new ones that significantly reduce the environmental impact of the product (Dangelico and Pujari, 2010). To gain substantial environmental improvement, there is a need to develop radically new products. It is argued that radical environmentally sustainable product innovation has the potential to bring substantial product differentiation and competitiveness to the marketplace (Dangelico and Pujari, 2010). These radical changes include material selection, energy use, and pollution prevention. Hellstro¨m (2007) went further and claimed that radical environmentally sustainable product innovation is necessary, and that products and systems need to be reconstructed to improve environmentally sustainable efficiency. To achieve such benefits, Leitner et al. (2010) suggested that regulations can be used to stimulate radical environmentally sustainable product innovation. However, as Dangelico and Pujari (2010) pointed out, for radical environmentally sustainable product innovation to contribute greatly to environmental sustainability, it would require changes in both infrastructure and consumer behavior. Hence, many stakeholders need to adapt before environmental benefits can be reaped from radical environmentally sustainable product innovations. Such technologies do not develop in isolation but rather in broad collaboration among suppliers, manufacturers, customers, and regulators. A literature review investigated how firms collaborate with suppliers on radical, disruptive, and discontinuous changes (Calvi et al., 2018). The authors found that unlocked potentials result from collaborating in these settings. A study of the Taiwanese electronic industry showed that firms that want to improve the performance of their radical environmentally sustainable product innovation should increase their environmentally shared vision as well as their environmental absorptive capacity (Chen et al., 2014). Radical innovations call for a much closer partnership than incremental innovations, with firms collaborating with a wide range of stakeholders on radical innovations (Szekely and Strebel, 2013). In contrast to radical innovations, incremental environmentally sustainable product innovation is characterized by minor improvements in previous generations of products or a reliance on existing technologies with minor changes (Dangelico and Pujari, 2010). Such incremental environmentally sustainable product innovation focuses on increasing eco-efficiency, changing to more environmentally friendly materials or designing recyclable products (Hellstro¨m, 2007). Driessen and Hillebrand (2002) stressed that

Success factors for environmentally sustainable product innovation 43 incremental environmentally sustainable product innovations often have low visibility. The authors state that it is often difficult to see a difference between these incremental innovations and the previous not-so-environmentally friendly product. Hence, it may be difficult for customers to identify new products that show small improvements in their environmental impact. The study by Hellstro¨m (2007) pointed to incremental innovations being more common than radical innovations. Incremental environmentally sustainable product innovation also differs from radical environmentally sustainable product innovation in the way in which firms collaborate with stakeholders. Szekely and Strebel (2013) argued that partnerships for incremental environmentally sustainable product innovation are formed for a specific environmental issue(e.g., energy efficiency). Hence, the scope for collaboration is more defined and limited than for radical environmentally sustainable product innovation.

4.2 Technological uncertainty Environmentally sustainable product innovations involve uncertainties that businesses need to consider. Uncertainty refers to situations in which outcomes are not known (Knight, 1921) and for which it is impossible to predict future outcomes (Shenharand Dvir, 1996). A framework containing four dimensions of uncertainties related to innovations, the Team Coaching Operating System (TCOS) framework, was developed by Hall and Martin (2005) and Hall et al. (2011). It concerns issues related to uncertainties that need to be considered for an innovation to be successful and consists of technological, commercial, organizational, and social uncertainties. The TCOS framework has also been extended to environmentally sustainable product innovations (Hall et al., 2017). Innovation involves uncertainties as firms venture into the unknown to develop new products (Wheelwright, 1992). A number of concerns are related to technological uncertainty (Gupta and Wilemon, 1990): • • • •

compatibility of the new technology with existing components, the firm’s ability to make incremental developments, the firm’s efforts to ensure quality and reliability of the new technology, and the time needed to develop or acquire the new technology.

The way in which technological uncertainty affects innovation depends on which industries, firms, and products are facing technological uncertainty. The speed at which technologies change, which is a source of technological uncertainty, differs across technologies and industries (Malerbaand Orsenigo, 1996). The simultaneous development of several competing technologies that are applicable to a product may cause a situation of technological uncertainty because businesses do not know which technology to implement into their product. During periods of this kind of uncertainty, companies may

44 Chapter 2 compete by developing products incorporating different technologies before a preferred technology emerges (Henderson and Clark, 1990). They may also choose to avoid uncertainty by waiting for the technology to stabilize before reaching a decision about whether to implement the technology (McDermott and Handfield, 2000). Investing in a new and uncertain technology is risky because the features, reliability, costs, and performance of the technology are not well-understood (Yan, 2011). In a situation of technological uncertainty, it may not be known which technology will be most suitable for the firm’s needs (Tegarden et al., 1999).Because of specialization, firms may need to find external partners that are experts in the new potential technologies. In situations of high technological uncertainty, companies choose between developing the products themselves and collaborating with expert suppliers (Oh and Rhee, 2010). Owing to the uncertainties, firms may find it difficult to select the most appropriate technology for the environmentally sustainable product innovation. Difficulties in selecting the appropriate technology may also influence the selection of a collaboration partner (Melander and Tell, 2014). However, only the selection of partners but also the collaboration process is affected, because the relationship the partners develop depends on the nature and maturity of the technology that is being developed (Johnsen et al., 2006). However, collaboration is important, as highlighted in a study that shows that collaborations between suppliers and customers on environmentally sustainable product innovation become more important with technological uncertainty (Zhao et al., 2018). For businesses to stay ahead in developing new technologies, they need to scout for environmentally sustainable technologies. Hence, they need to scan the market actively for new technologies (Theoharakisand Wong, 2002). This kind of technology scouting relies on both formal and informal sources (Rohrbeck, 2010). Hence, firms search for technologies in new and unfamiliar fields, such as in new sectors, and this process is a critical managerial challenge for environmentally sustainable innovations (Seebode et al., 2012). For firms, it is important to find partners that have new technological solutions that can contribute to environmentally sustainable product innovations.

5. External collaboration partners 5.1 Why do firms collaborate with external partners to develop environmentally sustainable innovations? It is argued that technologies pertaining to environmentally sustainable innovations are characterized by a higher degree of complexity and novelty than other innovations (Petruzzelli et al., 2011). Hence, it is difficult for firms to have sufficient knowledge of all of these potential technologies for environmentally sustainable innovations. Firms thus expand beyond the firm level for environmentally sustainable innovations; that is, they involve

Success factors for environmentally sustainable product innovation 45 external partners in their innovation projects (Prajogo et al., 2014). This is unsurprising, because early research predicted that business’ sustainable development strategies would evolve to extend beyond the individual firm to include multiple collaborations among both public and private organizations (Hart, 1995). Hence, firms collaborate with external organizations to access knowledge to be able to use new and complex technologies in their new products. Szekely and Strebel (2013) pointed out that environmentally sustainable product innovation differs from regular innovation in that partnerships with external organizations almost always have a central role in such innovations. In fact, studies suggest that collaboration seems to be more important for environmentally sustainable product innovations than other types of innovations (De Marchi, 2012; Horbach, 2008; Petruzzelli et al., 2011). Dangelico et al. (2013) identified acquisition of expertise, networks of collaborations, and external knowledge links as important in environmentally sustainable product innovations. All of these aspects are related to external collaborations in which companies access knowledge and build networks. Innovation efforts appear to be associated with networking activities (Mazzanti and Zoboli, 2009). Firms that collaborate with external partners in environmentally sustainable product innovations draw innovation knowledge from a broader network of partners (De Marchi and Grandinetti, 2013). Moreover, it is shown that firms that use market information from external sources in their innovation processes are more environmentally oriented (Segarra-Ona et al., 2014). A final point is that firms that collaborate with external organizations are shown to be more likely to overcome competence lock-in during radical environmentally sustainable product innovations (Chadha, 2011). However, to reap all of the benefits from these collaborations, firms need to make a big investment in relations with their partners and networks. Building such networks that include relevant actors requires businesses to have a suitable vision, funding, skills, and commitment (Gijsbersand van Tulder, 2011). Literature recognizes external collaborations as having great influence and importance in environmentally sustainable product innovations (Chadha, 2011; Dangelico et al., 2016; Melander, 2017). Although much research confirms the importance of external collaborations, not all firms apply these collaborations to environmentally sustainable product innovations. A literature review on collaborations in environmentally sustainable product innovations found suppliers and customers to be the most frequent collaboration partners (Melander, 2017). However, there is still much unused potential in collaborating with other actors, such as endusers, governments, universities, research institutes, competitors, and NGOs, to mention a few. There is also unused potential from collaborating with suppliers and customers. In their study of Japanese manufacturers, Zhu et al. (2010) found that although these firms implemented international environmental management practices well, they still

46 Chapter 2 have much to learn in the area of customer collaborations with a focus on environmentally sustainable product innovations.

5.2 With whom do firms collaborate for environmentally sustainable innovations? A review of collaborations in environmentally sustainable product innovations shows that firms collaborate with a number of different partners, such as suppliers, customers, universities, research institutes, NGOs, competitors, and network partners (Melander, 2017). Many studies show that suppliers are particularly useful as partners when firms engage in environmentally sustainable product innovations (Hofmann et al., 2012; Melander, 2018; Pujari, 2006; Sarkis et al., 2011; Vachon, 2007). Collaborations with suppliers are fruitful in the area of accessing new technologies, knowledge, and materials. Studies show that suppliers contribute to environmentally sustainable product innovations by providing new technology (Foster and Green, 2000) and innovative materials (Geffen and Rothenberg, 2000; Johansson, 2002). Suppliers also contribute knowledge such as filling a knowledge gap at the firm and engaging in knowledge sharing and creation (Melander, 2018). Suppliers also contribute to environmentally sustainable product innovation with specific environmental knowledge (Dangelico et al., 2016). Companies also use suppliers as sources of information on environmental impacts of existing materials (Foster and Green, 2000) and environmental alternatives in potential materials and components (Johansson, 2002). It is suggested that firms need to consider the whole supply chain of suppliers to gain access to materials and information for environmentally sustainable product innovations (Pujari, 2006; Pujari et al., 2003). Customers are also important collaboration partners in environmentally sustainable product innovations (Dai et al., 2015; Hart, 1995; Melander, 2018). They are important as drivers for environmentally sustainable product innovations and as providers of information about future trends and requirements. It is argued that close collaboration with customers focusing on environmentally sustainable product innovations enables firms to learn about future changes in such products (Dai et al., 2015). Through collaborations, customers provide ideas for future designs and knowledge about their requirements and the environments in which the product will operate, all of which are important in environmentally sustainable product innovations (Melander, 2018). Hence, customers provide firms with knowledge that is useful in environmentally sustainable product innovation projects. A study of Chinese firms showed that firms improve their environmentally sustainable innovation performance by combining supplier and customer collaborations (Du et al., 2018). Another source of knowledge for environmentally sustainable product innovations is partners such as universities and research institutes. A number of studies highlight universities and research institutes as important sources of new knowledge for firms

Success factors for environmentally sustainable product innovation 47 (Cainelli et al., 2012; Conway and Steward, 1998; Foster and Green, 2000; Triguero et al., 2013; Triguero et al., 2014). According to Cainelli et al. (2012), universities were useful collaboration partners, particularly in that basic research conducted at universities provided important knowledge for companies. It is shown that universities and research institutes can act as links to access knowledge communities (Conway and Steward, 1998). Universities and research institutes provide essential knowledge for firms and form part of a network of collaboration partners working toward environmentally sustainable product innovations (Triguero et al., 2014). There are some contradictions in the literature when it comes to research institutes. On the one hand, they are pointed out as important; on the other, they have limited involvement. De Marchi and Grandinetti (2013) and De Marchi (2012) showed that collaboration partners such as universities and research institutions are more important for environmentally sustainable product innovations than for other innovations. However, Mazzanti and Zoboli (2005), who studied sources of innovations, found low involvement from research institutes. Hence, it seems that the role of research institutes requires more investigation when it comes to environmentally sustainable product innovations.

5.3 How do collaboration partners contribute to environmentally sustainable innovations? A literature review shows that external collaborations in environmentally sustainable product innovations present both opportunities and threats (Rizzi et al., 2013). Hence, there are benefits and drawbacks to collaborating with external partners in environmentally sustainable product innovations. As with all external collaborations in innovation, firms need to consider a number of aspects in terms of governance, such as contracting and relations (Blomqvist et al., 2005; Melander and Lakemond, 2015). As mentioned, there are many benefits of collaborating with external partners in environmentally sustainable product innovations. It is argued that to reach their environmental goal, firms should collaborate closely with suppliers (Chiou et al., 2011). Several studies investigated how suppliers contribute to environmentally sustainable product innovations. One such study shows that a higher degree of supplier collaboration positively influences the eco-performance of environmentally sustainable product innovations (Pujari et al., 2003). Another study shows that collaborating with suppliers is associated with greater investment in pollution-prevention technologies (Vachon, 2007). It is suggested that firms need to strengthen environmental collaboration with suppliers in environmentally sustainable product innovations (Yen and Yen, 2012). External sources provide knowledge to firms that is applied in environmentally sustainable product innovation. In their study of knowledge sourcing, Ghisetti et al. (2015) showed that intensive interaction is beneficial to firms, whereas broadly acquired external

48 Chapter 2 knowledge is difficult to manage and may even discourage firms from investing in environmentally sustainable product innovation. Collaborations in environmentally sustainable product innovations can be of a more general nature. For instance, a study by Chadha (2011) shows how collaborations can be aimed at partners agreeing on common standards in order to reduce technological uncertainty, which was important particularly for test specifications. Partnerships can also be beneficial in other situations, such as when the innovating firm is not the most powerful actor in the network. In such situations, partnerships with complementary products could be an important factor for success (Naor et al., 2015).

5.4 Building relationships with partners Although a number of studies point to the importance of involving collaborative partners early in the innovation process (Dai et al., 2015; Lee and Kim, 2011; Verghese and Lewis, 2007), it is not always easy to find a suitable partner to involve at an early stage. A study showed that firms use a wide variety of methods to find and include suppliers and customers in environmentally sustainable product innovations (Melander, 2018). Before engaging in a collaboration, firms need to verify whether potential partners will be able to participate in and contribute to environmentally sustainable product innovations (Noci, 1997). Selecting the right partner is important, of course. Studies stress the importance of selecting the most suitable partner (Chesbrough, 2012; Curwen et al., 2013). It has been suggested that selecting the wrong partner can risk ruining the reputation of both the new product and the firm (Pujari, 2006). Firms rely on a variety of approaches to finding partners, such as assessments, previous relations, and recommendations (Melander, 2018). Close relations and trust are important to getting the most out of collaborations with external partners in environmentally sustainable product innovations (Canning and Hanmer-Lloyd, 2007; Florida, 1996; Liao and Long, 2018). Chesbrough (2012) argued that firms must manage relations to make sure that environmentally sustainable product innovations become profitable. Building relations and trust with new collaboration partners takes time and requires investments from firms. There are many relational and organizational obstacles to overcome in close innovation collaborations, such as how to share knowledge and benefits from the developed product and how to trust that the partner will not take advantage of the collaborating firm. Thus, business estend to collaborate with like-minded partners to overcome challenges in environmentally sustainable product innovations (Curwen et al., 2013). Considering the uncertainties involved in collaborative innovation, it is unsurprising that firms prefer to work with well-known partners (Bossink, 2007; Melander, 2018) with whom there is a strong sense of mutual trust, respect, and friendship on the engineering level (Conway and Steward, 1998). There are benefits to forming close collaborations, because greater relational

Success factors for environmentally sustainable product innovation 49 capital motivates collaboration partners to share knowledge, because they are unafraid of being taken advantage of (Chen and Hung, 2014). Studies show that in relations with a high level of trust, suppliers are more willing to share their innovative ideas with the collaborating firm (Geffen and Rothenberg, 2000). In innovation settings involving partners, firms need to manage the relation, i.e., coordination and collaboration simultaneously (Johansson et al., 2011; Lee and Kim, 2011). An important aspect in such relations is communication between partners. Studies show that there needs to be effective communication between collaboration partners (Dangelico, 2016; Lee and Kim, 2011). However, Badi and Pryke (2015) argued that it is not always easy to accomplish such effective communication, partly because there may be barriers to communication from contractual structures. An important factor in relations is aligning objectives (Melander, 2018) for the particular innovation project at hand and other possible collaborative innovations for different product segments. Alignment is not necessarily restricted to the project level; for companies engaged in collaborative innovation, it is also at the strategic levels (Melander et al., 2014). It is important for firms to agree on innovative objectives regarding both environmental performance and technological developments. In fact, in collaborative environmentally sustainable product innovations, diverse and conflicting sustainability objectives between collaborators have been shown to be challenging (Badi and Pryke, 2015). By sharing goals for green management, partners can avoid misunderstandings and have more opportunities to exchange knowledge (Chen and Hung, 2014), but to succeed, they have to be highly proactive in the collaboration, relationship development, and innovation project to reduce tensions between the strategic and tactical levels (Herazoand Lizarralde, 2015).

5.5 Characteristics of partners: single or multiple, small or large, and national or international? Because environmentally sustainable product innovations involve a combination of new and complex technologies in new designs, a number of partners need to collaborate and combine their knowledge to develop new environmentally sustainable product innovations. Studies show that it is important in environmentally sustainable product innovations for firms to be able to manage several relations at the same time (Rizzi et al., 2013; Wong et al., 2015). Some of these relations will be of an informal nature, with firms not systematically scanning the market for collaboration partners but using personal contacts to find suitable partners. According to Clarke and Roome (1995), firms often collaborate with their informal network, which consists of external organizations. These networks tend to be weak, and the different partners’ contributions to environmentally sustainable product innovations are not always recognized. Several studies highlight the importance

50 Chapter 2 of using multiple collaboration partners in environmentally sustainable product innovations (Goodman et al., 2017; Pavlovich and Akoorie, 2010). Goodman et al. (2017) stress that partners have different scopes of contribution and can take a more or less proactive role in the collaboration. To access all available new knowledge, environmentally sustainable product innovations can be of a multisector nature. In such collaborations, a number of firms from different sectors form a network in which knowledge is created and shared (Pavlovich and Akoorie, 2010). In their study of environmentally sustainable product innovations in a regional context, Pavlovich and Akoorie (2010) found that innovations stem from firms in the network as well as publiceprivate partnerships. The authors pointed out that such complex collaborations, involving many parties from different sectors, focus on long-term sustainable outcomes. Seebode et al. (2012) showed that finding and forming new networks is an important managerial challenge for environmentally sustainable innovations. Of course, environmentally sustainable product innovations also result from close collaboration between partners, such as with an expert supplier or a leading customer (Melander, 2018). Such collaborations tend to be of a long-term nature in which the partners collaborate closely, develop trust, solve problems together, and exchange much knowledge over long periods. Businesses collaborate with small and large partners in environmentally sustainable product innovations. Whereas large firms can have extensive technological knowledge and big networks, small firms such as technological start-ups can have unique technologies and solutions. Hence, both small and large partners participate in these innovative collaborations. There are risks associated with collaborating with large as well as small partners. For instance, Chesbrough (2012) argued that it can be challenging for small firms to collaborate with large firms in environmentally sustainable product innovations. However, the author suggests that firms should invest in the relationship to overcome this obstacle. Chesbrough’s is not the only study that highlights the importance of relationships; many studies point out the importance of building strong relationships. For instance, studies show that greater relational capital motivates collaboration partners to share knowledge, because they are less afraid of being taken advantage of in such relationships (Chen and Hung, 2014). Collaborating with small partners can also be risky because they may have less capital or an uncertain ownership structure and be at risk of being bought by a competitor. Having a small supplier may bring difficulties related to capacity, because a small firm may be hesitant to invest in an uncertain environmentally sustainable product innovation project. If a pilot product is produced successfully and accepted on the market, a small firm may find it difficult to make investments for the rapid expansion of production (Melander and Tell, 2014). However, small businesses such as family firms may be more committed to environmentally sustainable product innovations. In their study of family companie sand

Success factors for environmentally sustainable product innovation 51 environmentally sustainable product innovation, Doluca et al. (2018) showed that these firms care about their image of being good and responsible, but they are risk averse toward investing in environmentally sustainable product innovation. Despite being risk averse, they show some willingness to adopt environmentally friendly technologies when these have been proven. However, as pointed out by Calvi et al. (2018), large firms’ supplier selection processes are often so formalized that they can limit and hamper the selection of small firms such as start-ups. Companies also face the choice of whether to collaborate with local or international partners. Here, research has shown some differences between collaboration aimed at regular product innovations and environmentally sustainable product innovations. Firms involved in environmentally sustainable product innovations collaborate much more with foreign partners than do firms that innovate regular products (De Marchi and Grandinetti, 2013). Hence, it seems that businesses focusing on innovations that improve environmental sustainability have a wider international network of collaboration partners. Those that belong to an international context tend be more engaged in environmentally sustainable product innovations than those that do not. Studies show that firms that belong to an international group are more open to collaborative innovation in environmentally sustainable product innovations (Chiarvesio et al., 2015) and have the chance to learn from units situated in other geographical locations, where environmental regulations may be stricter and push firms to invest more in environmentally sustainable product innovations. These learning opportunities are described by Zhu and Liu (2010), who showed that businesses learn from their parent company, which then helps them to develop their own initiatives when it comes to environmentally sustainable product innovations. However, contradicting studies point to local partners being more important to firms engaged in environmentally sustainable product innovations (Cainelli et al., 2012; Chiarvesio et al., 2015). More specifically, in their study of suppliers and universities as collaboration partners in environmentally sustainable product innovations, Cainelli et al. (2012) found that local actors were the most important driver for innovations. Chiarvesio et al. (2015) showed that firms are more likely to invest in environmentally sustainable product innovations when collaborating with local suppliers than with international suppliers. Hence, there seems to be some contradictions in the literature regarding the importance of international and local partners to environmentally sustainable product innovations.

5.6 Considerations regarding external collaboration Table 2.2 lists considerations regarding external collaboration in environmentally sustainable product innovations and presents some examples. These considerations include reasons for collaborating, different types of partners, contributions from partners, findings partners, relationships, number of partners, small and large partners, and finally, local and

52 Chapter 2 Table 2.2: External collaboration considerations in environmentally sustainable product innovations. External collaboration considerations Reasons for collaborating

Different types of partners

Contributions from partners

Finding partners

Relationships

Number of partners

Small and large partners

Local and international partners

Examples As environmentally sustainable product innovations tend to be more complex and contain more novelties than other innovations, firms need to expand their knowledge bases. By collaborating with partners, firms gain access to a broader set of knowledge bases including specialized knowledge. Firms collaborate with different partners, both private and public. The partners include suppliers, customers, end users, universities, research institutes, NGOs, competitors, and other network partners. Partners contribute knowledge needed in environmentally sustainable product innovations. This knowledge may be related to technologies, designs, materials, markets, regulations, etc. Broader collaborations can aim to develop industry or sector standardsdfor instance, product testing. Finding suitable partners to involve in environmentally sustainable product innovations can be quite demanding. Firms need to verify that partners have the necessary skills, motivations, and knowledge. In order to find partners, firms use assessments, previous relationships, recommendations, and informal networks. Finding the right partner is crucial, as choosing the wrong partner may affect a firm’s reputation. Research points out the importance of having close collaborations for environmentally sustainable product innovations, in which partners build trust and establish long-term relationships in order to share knowledge and create new solutions. These innovations involve much uncertainty and complex technologies, which leads firms to seek like-minded partners to build relationships quickly. In these collaborations, it is important that firms align their objectives and share environmental goals. Firms collaborate in various constellations for environmentally sustainable product innovations. Collaborations may be with a single partner, such as an expert supplier, or with multiple partners encompassing large networks. Such networks can include suppliers, subsuppliers, customers, end users, universities, research institutes, and governmental partners. Collaborations can also reach across industry sectors, enabling firms to access knowledge from a wide set of partners. In environmentally sustainable product innovations, firms collaborate with both small and large firms. Both types of partners have benefits and drawbacks. Small firms may possess unique technology that firms want to access, but they can be reluctant to share the knowledge due to fear of being taken advantage of. Large firms possess large networks and can access large knowledge bases. However, they may have the capacity to become a competitor, and thus the firm may not want to share the necessary knowledge for a fruitful collaboration. Studies show that firms collaborate with both local and international partners in environmentally sustainable product innovations. Local partners provide easy access to knowledge, and it may be easier to build trust and develop a fruitful relationship with them. International partners, on the other hand, may possess broader sets of knowledge.

Success factors for environmentally sustainable product innovation 53 international partners. First, there are a number of reasons for firms to collaborate in environmentally sustainable product innovations. For example, because environmentally sustainable product innovations tend to be more complex and contain more novelties than do other innovations, firms need to expand their knowledge base. By collaborating with partners, firms gain access to a broader set of knowledge bases, including specialized knowledge. Second, firms collaborate with different types of partners, both private and public. These partners include suppliers, customers, endusers, universities, research institutes, NGOs, competitors, and other network partners. Third, different partners contribute in various ways to environmentally sustainable product innovations. Partners contribute knowledge needed in environmentally sustainable product innovations. This knowledge may be related to technologies, designs, materials, markets, regulations, and so on. Broader collaborations can aim to develop industry or sector standards, such as the testing of products. Fourth, finding suitable partners to involve in environmentally sustainable product innovations can be demanding. Firms need to verify that partners have the necessary skills, motivations, and knowledge. To find partners, firms use assessments, previous relations, recommendations, and informal networks. Finding the right partner is crucial, because choosing the wrong partner may affect the firm’s reputation. Fifth, firms need to manage the different relations in environmentally sustainable product innovations. Research points out the importance of having close collaborations in environmentally sustainable product innovations in which partners build trust and establish long-term relations to share knowledge and create new solutions. These innovations involve much uncertainty and complex technologies, which leads companies to seek like-minded partners to build relations quickly. In these collaborations, it is important for firms to align their objectives and share environmental goals. Sixth, firms engage in collaborations with a number of partners and collaborate in various constellations in environmentally sustainable product innovations. Collaborations may be with single partners, such as an expert supplier, or encompass large networks. Such networks can include suppliers, sub-suppliers, customers, endusers, universities, research institutes, and governmental partners. Collaborations can also reach across industry sectors, enabling firms to access knowledge from a wide set of partners. Seventh, in environmentally sustainable product innovations, firms collaborate with both small and large firms. There are benefits and drawbacks to both types of partners. Small firms may possess unique technology that firms want to access, but they can be reluctant to share the knowledge owing to fear of being taken advantage of. Large firms possess large networks and can access large knowledge bases. However, they may have the capacity to become a competitor, and thus the firm may not want to share the knowledge necessary for a fruitful collaboration. Finally, firms collaborate with both local and international partners in environmentally sustainable product innovations. Local partners provide easy access to knowledge, and it may be easier to build trust and develop a fruitful

54 Chapter 2 relationship with them. International partners, on the other hand, may possess a broader set of knowledge.

6. Internal collaboration across functions For firms to succeed in environmentally sustainable product innovations, they need to have an external focus and collaborate with expert partners, but also good internal relations, in particular cross-functional collaborations (Chadha, 2011; Melander, 2018; Petruzzelli et al., 2011; Zhu and Sarkis, 2006). Wu (2013) points out that internal integration enhances environmentally sustainable product innovations. Within firms, functions such as research and development (R&D), purchasing, sales, production, and eco-design collaborate to develop environmentally sustainable product innovations. However, studies of cross-functional collaboration in environmentally sustainable product innovations show that the way firms organize internal collaborations across functions varies between firms (Melander, 2018). Companies integrate knowledge sources from different functions into environmentally sustainable product innovations, such as technological knowledge from R&D, market knowledge from sales and marketing, environmental regulation information from eco-design, and supplier knowledge from purchasing. It is important to have a well-functioning cross-functional collaboration because it enables access to knowledge about user needs and makes it possible to map and evaluate existing knowledge residing within the firm (Sindakis et al., 2015). Cross-functional collaboration allows firms to integrate diverse knowledge resources and interlink them internally in the business(Lenox and Ehrenfeld, 1997). However, to succeed in integrating this knowledge, firms need to have well-established internal processes (Dai et al., 2015; Rosell et al., 2017). Similar to external relations, building relations within firms requires investments and communication across functions. Technological and environmental competencies also need to be acquired. Petruzzelli et al. (2011) suggested that developing successful environmentally sustainable product innovations requires investments in the organization and potential technologies other than conventional innovations. With respect to the internal organization, Curwen et al. (2013) suggested clear goals and a strong company mandate to succeed. Carayannis et al. (2015) emphasized the importance of having long-term aspects and planning capabilities within the firm. Similar to organizational capabilities, Triguero et al. (2014) argued that technological capabilities within the firm are needed not only to develop environmentally sustainable technologies but also to absorb those available on the market. One option available to companies is to invest in, or buy, new technologies. However, studies have shown that investments in new environmentally sustainable technologies are not always viewed positively within functional groups at firms. For example, Chesbrough (2012) showed that firms that invest in new competitive technologies can be viewed internally within the firm as the firm not

Success factors for environmentally sustainable product innovation 55 believing in the technologies that have been developed in-house. Similarly, Melander et al. (2014) showed that conflicts can arise internally between functions when companies decide to incorporate technologies from suppliers into new products instead of technologies that have been developed in-house. To make the most of knowledge residing in their different functions, firms need knowledge management practices (Rosell et al., 2017; Sindakis et al., 2015; Wong, 2013). For firms to enable knowledge sharing and cross-functional integration, however, their employees need to be creative and flexible and to share knowledge (Curwen et al., 2013). Hence, employees in a particular function need to be experts in that field and also to have good collaboration skills and be able to absorb new knowledge. To focus on environmentally sustainable product innovation, Dangelico et al. (2013) suggested that firms recruit employees with specialist knowledge and train them in specialized aspects of environmental sustainability. Another important internal practice is to collect environmental data that can be used internally in environmentally sustainable product developments (Zhu and Liu, 2010). Walton et al. (1998)suggests that firms need to address several cross-functional considerations and internal processes related to the supply chain, such as product design, supplier processes, supplier evaluation systems, and inbound logistics.

7. Literature on success factors for environmentally sustainable product innovation Governments, industry, and academia agree about the importance of succeeding in innovating new environmentally sustainable products, and there seem to be many potential factors related to the success of environmentally sustainable product innovation. It appears that many critical factors for the success of environmentally sustainable product innovations are similar to those for regular new product innovation (Pujari et al., 2003). A thorough literature review on the subject was conducted by de Medeiros et al. (2014), who studied 67 publications on factors for the success of environmentally sustainable product innovation. The authors synthesized their findings into four critical factors for success, each containing several variables: (1) knowledge, (2) interfunctional collaborations, (3) learning, and (4) R&D investments. The first factor identified by de Medeiros et al. (2014) is related to knowledge, specifically about markets, laws, and legislations. Market knowledge variables include those about customers, such as customer expectation fulfilment; cultural ones that influence buyer behavior; factors that drive sustainable buying; and consumption patterns of a reference population. The success of environmentally sustainable product innovation depends on whether customers are willing to adopt the new product (Driessen and Hillebrand, 2002).

56 Chapter 2 Customers tend to adopt new innovations if they perceive them to have advantages over other products. Advantages can be related to price, quality, functionality, and so on, as well as status and reputation. In fact, the degree to which a product is considered environmentally sustainable is a form of relative advantage (Driessen and Hillebrand, 2002). Market knowledge includes competitor monitoring (de Medeiros et al., 2014). Similarly, Pujari et al. (2003) point to the importance of knowledge and suggest that firms need to collect environmentally related information as well as benchmarks against competitors. Knowledge about laws and legislations includes variables such as compliance with laws and regulations, financial information, and information support from the government (de Medeiros et al., 2014). In their study from Germany, Horbach et al. (2012) showed that regulations only affect reductions of emissions related to air, water, and soil, as well as noise, not energy consumption and recycling, although the authors point out that companies expect regulations to be more important in the future. The second factor identified by de Medeiros et al. (2014) concerns interfunctional collaborations. This factor includes cultural attitudes toward collaboration, internal collaborations across functions such as R&D, marketing and production, as well as collaborations with external organizations, such as suppliers, universities, and environmental specialists. Similarly, Horbach et al. (2012) stressed the importance of collaborations within the businesson quality and supply chain management. Pujari et al. (2003) and Pujari (2006) show similar findings that cross-functional coordination is important within the firm. Horbach et al. (2012) and Pujari et al. (2003) also highlighted the importance of collaborations with other firms in the supply chain, in particular involving suppliers in innovation efforts. Similarly, Szekely and Strebel (2013) pointed to partnerships between organizations as a factor in the success of environmentally sustainable product innovation. The third factor identified by de Medeiros et al. (2014) deals with learning related to innovations. Variables of this factor relate to cultural attitudes and the development of competencies and capabilities. First, firms need to eliminate cultural barriers, and top management support has been shown to be important (Pujari et al., 2003; Szekely and Strebel, 2013) in helping them to overcome these, because environmentally sustainable product innovation brings an additional layer of complexity to the innovation process. Managers should also aim to legitimize investments in environmentally sustainable product innovations. Chen et al. (2014) argued that top managers must be able to disseminate environmental information across and within organizations. Second, firms should develop a set of environmentally sustainable competencies such as working proactivity, being creative, and experimenting. In addition, firms need to develop critical reflective analysis capability. Kammerer (2009) also pointed to the importance of

Success factors for environmentally sustainable product innovation 57 environmentally sustainable capabilities that enable firms to implement environmentally sustainable product innovation. The fourth factor identified by de Medeiros et al. (2014) focuses on R&D investments, including in cleaner technology research and R&D infrastructure, the adoption of methods for sustainable product development, and qualified human resources. Thus, firms need to invest in new technologies. As discussed earlier, companies can access new technologies by collaborating with external partners. However, these collaborations require investments, particularly in building relations and managing new knowledge. Dangelico and Pujari (2010) argued that for environmentally sustainable products to have long-term success on the market, they need to show credible environmental performance while not compromising on the functions of the product. Hence, firms also need to invest in proving the environmental and performance characteristics of the new product.

8. Summarizing the success factors The review in this chapter has identified several factors for the success of environmentally sustainable product innovation from the literature. These can be structured into a number of important areas (Fig. 2.2): drivers and motivators, identify benefits, acquire knowledge, embrace innovations, scout for green technologies, external collaborations, internal competencies, and cross-functional collaboration. The reviewed literature identified a number of drivers and motivators for firms to engage in environmentally sustainable product innovation. Drivers and motivators include: 1. governmental regulations and legislation as well as industrial regulations; 2. economic incentives such as increased profits and lower costs; 3. market issues such as accessing new markets, gaining new customers, and improving the company’s image; 4. competition driving firms to be as good as or better than their competitors; 5. technology developments enabling new features or products; and 6. internal drivers such as management decisions or employee engagement in environmental issues. Another area relates to identifying benefits from environmentally sustainable product innovation: 1. environmental benefits from developing new products(e.g., lower energy use and changing to environmentally friendly materials and lower emissions), and 2. firm benefits(e.g., economic benefits in the form of reduced costs) and market benefits such as increased market share and improved firm reputation.

58 Chapter 2

Figure 2.2 Overview of success factors for environmentally sustainable product innovation.

In environmentally sustainable product innovation, environmental benefits are often obvious, although it is not always clear how these bring firm benefits. Some environmentally sustainable product innovation may bring benefits in the form of an improved firm image but also increase costs. To succeed in environmentally sustainable product innovation, companies need competencies and capabilities related to innovation, environmental issues, R&D, technology and design, and market knowledge. Firms also need to: 1. keep developing important competencies and capabilities; 2. develop a positive attitude toward environmentally sustainable product innovation and secure top management support for environmental investments; 3. invest in and support environmentally sustainable product innovation, as well as create a culture of acceptance for environmentally sustainable product innovation; and 4. ensure that sufficient R&D investment is made.

Success factors for environmentally sustainable product innovation 59 In the innovation of environmentally sustainable products, it is important for firms to acquire knowledge in a number of different areas: 1. market(e.g., about competitors, market shares, products on the market, and potential barriers to entering the market); 2. regulations, such as in different regions and industries; 3. customers in the form of requirements and what motivates customers to buy environmentally friendly products; and 4. technological knowledge, such as new and available technologies, potential technologies, and future prospects of potential technologies. In the rapid development of new green technologies, firms need to embrace disruptive and radical innovation and also work on incremental innovations. When incorporating new technology, firms need to manage technological uncertainty and be flexible about changing to another technology if a better solution becomes available. A related issue is scouting for green technologies, in which firms need to search for and find new technologies. Firms often engage in collaborations with partners that have unique technological knowledge about required technologies, knowledge that the firm may be lacking in-house. Because no firm can possess knowledge of all potential technologies, it is important for firms to collaborate with partners and thus to organize external collaboration. When collaborating with external partners, firms have to consider a number of issues: 1. the need to find suitable partners; several should be assessed according to different criteria; 2. the need to coordinate with external partners to divide work and share knowledge; 3. the need to decide what kind of relationship to have with which partner: a distant, arm’s-length relationship or a closer partnership with a long-term strategy; 4. the need to ensure that they can access critical knowledge from partners to develop new products; and 5. the need to have a strategy for involving partners and investing in the relationship. In the innovation of environmentally sustainable products, there is a need to develop internal cross-functional collaborations. Different competencies need to be combined to incorporate environmental knowledge and knowledge about regulations with R&D competencies. When involving external partners in innovating environmentally sustainable products, more functions become involved in the innovation project, such as purchasing in the case of supplier involvement, and sales and marketing in the case of customer involvement.

9. Future research agenda A few ideas follow about potential future research. Two different venues could be fruitful to explore further. The first regards more investigation into areas in which there is

60 Chapter 2 contraction in the literature; the second relates to areas that have not been extensively studied up to this point.

9.1 Contradictions in the literature In the literature on environmentally sustainable product innovation, there are some contradictions that need to be explored further: 1. motivators and drivers, 2. combining external and internal knowledge sources, and 3. which partners are beneficial for collaboration. Some studies point to regulations as an important motivator and driver for environmentally sustainable product innovation. A review of what drives environmentally sustainable product innovation found that regulations are the most reported factor (Hojnik and Ruzzier, 2016). According to Dangelico (2017), governments and other actors in a firm’s network can do little to motivate the firm to develop environmentally sustainable products. Instead, market opportunities and customers, such as the prospect of achieving higher customer satisfaction to attract new customers and improve their reputation, act as motivators and drivers for businesses to innovate environmentally sustainable products (Dangelico, 2017). With regard to regulations, Chen et al. (2006) pointed to regulations as a driver for firms to invest in environmentally sustainable product innovation. Similarly, Kammerer (2009) argued that firms that face more regulations implement environmentally sustainable product innovation to a greater extent. However, the study by Guoyou et al. (2013) showed that regulations seem to have a limited influence on environmentally sustainable product innovation. Hence, there are contradictions regarding regulations as a driver for environmentally sustainable product innovation. Research on collaboration and combining knowledge sources show some contrasting results in the literature. Studies point to collaboration as being more important to environmentally sustainable product innovations than other types of innovations (De Marchi, 2012; Horbach, 2008; Petruzzelli et al., 2011). Similarly, Dangelico et al. (2013) identified the acquisition of expertise, networks of collaborations, and external knowledge links as important in environmentally sustainable product innovations. To reap benefits from these collaborations, companies need to invest heavily into relations with their partners and networks. Firms need much internal knowledge to manage collaborative innovations. However, a study points out that internal innovation investments may hamper the exploitation of deep external interactions aimed at environmentally sustainable product innovation (Ghisetti et al., 2015). The study thus suggested that internal and external

Success factors for environmentally sustainable product innovation 61 knowledge sources may in fact not be as complementary in environmentally sustainable product innovation as they are in other innovation efforts. There are some contrasting findings in the literature on collaborative environmentally sustainable product innovation when it comes to research institutes as partners. On the one hand, research institutes are pointed out as important; on the other, they are indicated as having limited involvement. De Marchi and Grandinetti (2013) and De Marchi (2012) showed that collaboration partners such as universities and research institutions were more important to environmentally sustainable product innovations than other innovations. However, Mazzanti and Zoboli (2005) found a low level of involvement from research institutes as a source of innovation. Hence, it seems that the role of research institutes requires more investigation when it comes to environmentally sustainable product innovations. Finally, there are some contradictions in the literature as to whether to collaborate with a local or international partner. It is shown that firms involved in environmentally sustainable product innovations collaborate much more with foreign partners than do firms that innovate regular products (De Marchi and Grandinetti, 2013). In addition, studies show that companiesthat belong to an international group are more open to collaborative innovation in environmentally sustainable product innovations (Chiarvesio et al., 2015). Zhu and Liu (2010) showed that businesseslearn from their parent company, which helps them to develop their own initiatives when it comes to environmentally sustainable product innovations. However, studies point to local partners as being more important to firms that are engaged in environmentally sustainable product innovations (Cainelli et al., 2012; Chiarvesio et al., 2015). Cainelli et al. (2012) found that local actors were the most important driver for innovations, whereas Chiarvesio et al. (2015) showed that firms are more likely to invest in environmentally sustainable product innovations when collaborating with local suppliers than with international suppliers. Hence, there seem to be some contradictions in the literature regarding the importance of international and local partners to environmentally sustainable product innovations.

9.2 Fruitful venues of investigation into environmentally sustainable product innovation There are a number of venues worth exploring in environmentally sustainable product innovations. First, the contradictions in the literature presented earlier could be studied further: 1. what acts as motivators and drivers, 2. how firms can combine external and internal knowledge sources, and 3. which collaboration partners are beneficial and whether firms should collaborate with local or international partners.

62 Chapter 2 In fact, Mazzanti and Zoboli (2009) pointed out that there is little research within the field of industrial relations on environmentally sustainable product innovations. Hence, collaborative environmentally sustainable product innovations could be investigated further. In this area, some less studied collaboration partners, such as competitors, NGOs, start-ups, and entire networks, need further attention. As pointed out by Szekely and Strebel (2013), environmentally sustainable product innovation differs from regular innovation in the way in which partnerships with external organizations almost always havea central role in such innovations. Hence, these need to be explored further. This is important because the studies suggest that collaboration is more important to environmentally sustainable product innovations than to other types of innovations (De Marchi, 2012; Horbach, 2008; Petruzzelli et al., 2011). In addition, little attention has been given to environmentally sustainable product development in privateepublic interactions, which is an area that could be fruitful to explore.

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CHAPTER 3

Public driven and public perceptible innovation of environmental sector Attila Gere1, Ryan Zemel2, Petraq Papajorgij3, Dalma Radva´nyi4, Howard Moskowitz5 1

Szent Istva´n University, Budapest, Hungary; 2Limbic Reviews, Inc., Downers Grove, IL, United States; 3Universiteti Europian i Tiranes, Tirane, Albania; 4Centre for Agricultural Research, Hungarian Academy of Sciences, Plant Protection Institute, Martonva´sa´r, Hungary; 5Mind Genomics Advisors, White Plains, NY, United States

Chapter Outline 1. Introduction

70

1.1 The first technology: text analysis 70 1.2 The Second Technology: Mind Genomics

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2. Materials and Methods 74 3. Running the mind genomics studies 74 3.1 3.2 3.3 3.4 3.5

Surface analysis: distribution of ratings and response times 77 Deeper analysis 1: solar energy 78 Dividing respondents into mind-sets about solar, based on the pattern of their coefficients Deeper analysis 2: nuclear power 83 Underlying neurophysiological processes 84

4. Deconstructing the response times to components 86 5. Studies undertaken using the mind genomics approach 88 5.1 5.2 5.3 5.4

Study of the case of corruption in education 89 Study on the threshold: what concerns healthy people about the prospect of cancer? 91 Candy is dandy: the mind of sexuality as suggested by a mind genomics experiment 92 Study of mental informatics and agricultural issues: global change versus sustainable agriculture 95 5.5 Study renewable energy: tapping and typing the citizen’s mind 97

6. Segment 1: gradualists 98 7. Segment 2: realists 99 7.1 Study customer requirements for natural food stores: the mind of the shopper 7.2 Comparison of text mining and mind genomics 102

8. Conclusions 104 Acknowledgments 104 References 104 Innovation Strategies in Environmental Science. https://doi.org/10.1016/B978-0-12-817382-4.00003-4 Copyright © 2020 Elsevier Inc. All rights reserved.

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100

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70 Chapter 3

1. Introduction Discovering the opinions of different groups of people regarding a controversial topic and then understanding the reasons behind these options constitutes a topic that can best be described by the popular colloquial term “evergreen.” Investigation of the opinions, an understanding of what the opinions are, discovery of who holds the opinions, and why offers enormous potential to create, modify, or develop different products and/or services. Although opinion research is important in almost every field of study in which decision-making with uncertainty is a factor, opinion research enjoys a particularly important role in the world of environmental sciences. Understanding people’s motives, attitudes, or even their minds enables those in responsible positions to communicate better and educate on topics that affect us all, perhaps not immediately, but inevitably. The important topics of today are subsumed under the large rubric that we can call environmental protection or sustainability.

1.1 The first technology: text analysis One of the most popular methods for understanding opinions is known as text mining. Text mining applies a series of methods, each aiming to extract meaning and information from texts obtained from any source. Today’s highly developed information technology and the exponentially increasing use of social media platforms provide what can be described as a fire hydrant of raw material. Text, the raw material for text mining efforts, is easily obtained from different social media sites (such as Facebook and Twitter) (Talib et al., 2016.) The sheer richness of the data enables a variety of different analyses. Text can be classified by geography (e.g., posts from a given country), season, and so forth, leading to even richer analyses considering spatial and temporal factors. In the world of ecology-relevant research, the raw material ranges from social media (Nuortimo et al., 2018) to scientific papers (Ding et al., 2018; Yang et al., 2018), press releases (Park and Yong, 2017), and even patents (Rodriguez-Esteban and Bundschus, 2016), to name just a few sources. Social media as a data source are rarely used by ecology researchers, but when used, the results correlate well with the far more acceptable survey data (Monkman et al., 2019). For the most part, text data are unstructured, i.e., collected from blogs, social media, etc.. As the amount of unstructured data collected by companies continue to increase, text mining is gaining a lot of relevance. It has a significant role in business intelligence, helping organizations of all types to understand their customers and competitors and to make better-informed decisions (Talib et al., 2016). For example, knowledge from text

Public driven and public perceptible innovation of environmental sector 71 analysis dramatically helps the telecommunication industry in business and commerce applications as well as in the customer chain management system (Fatima et al., 2010). In text mining, analysis of the obtained data involves a wide range of activities ranging from preprocessing to information retrieval, natural language processing, information extraction, and finally data mining (Manning et al., 2008). During the process, relevant information is filtered from the raw input text and ordered into frequency tables in which each category describes a feature. Usually, the text mining approach combines text mining techniques and natural language processing techniques. The most important elements of this approach are powerful mining techniques, visualization technologies, and an interactive analysis environment to analyze massive sets of data so as to discover information of marketing relevance (Auinger and Fischer, 2008; Fan et al., 2006). Results from text mining can be startlingly informative, often contradicting what might have been accepted based on one’s experience and common sense. For example, consider a study analyzing public awareness about global warming and climate change using a relative search volume and sentiment analysis of tweets (Lineman et al., 2015). The authors showed that the relative search volume for “global warming” rose consistently until 2007e08, enjoying four to five times more searches than were done for “climate change.” Over time, public awareness began to level off and showed almost the same relative search volumes with about 17,000 searches for “global warming” and approximately 13,000 searches for “climate change.” Text analysis allowed the authors to evaluate positive, neutral, and negative sentiments in tweets. The data revealed significantly more negative sentiments for the topic of global warming versus the topic of climate change. Furthermore, the authors evaluated the associations, revealing that the terms “ice, snow, Arctic, and sea” were associated with “global warming,” whereas the terms “world, science, environment, and scientist” were associated with “climate change.” Based on these, the authors concluded that “People seem to think that climate change as a phenomenon is revealed by scientific investigation” (Lineman et al., 2015). The concept of text mining might seem straightforward but taking a closer look at the data we collect, we soon realize that text mining is much more complicated. A number of issues emerge affecting the nature of the results and the validity of the interpretation. First, researchers must define the proper data sources. Second, for each particular issue, the researcher must select a suitable method for data analysis from the many published methods. Third, the researcher must define the limits of the conclusions: namely, where the conclusions stop being appropriate. Finally, another problem is raised by legal questions regarding text mining, which cover several areas including contract law, copyright law, and database law. These must be considered before running a project (Truyens and Van Eecke, 2014).

72 Chapter 3 A number of studies suggest that the efforts to create text mining technology have fallen short. The reality is that text mining has not performed as well as hoped and expected. Companies that have applied automated analyses of textual feedback or text mining have failed to reach their expectations (Fenn and LeHong, 2012; Zhong et al., 2012). Simply said, text mining is a difficult and perhaps unusually tortuous process. Research in the area of natural language processing has encountered a number of difficulties owing to the complex nature of human language (Auinger and Fischer, 2008). Thus, text mining in general seems to have performed below expectations in terms of the depth of analysis of customer experience feedback and accuracy (Ordenes et al., 2014). There are specific areas of disappointment. For example, major obstacles have been encountered in the field of accurately predicting the sentiment (positive, negative, or neutral) of customers. Despite what one might read in the literature of consumer researchers and others employing text mining for sentiment analysis, the inability to address these issues successfully has disillusioned some (Fenn and LeHong, 2012). Some of the disillusionment is to be expected because sentiment analysis must be sensitive to the nuances of many languages. Feelings expressed by words in one language may not render naturally when the words are translated. Few tools are available that support multiple languages (Talib et al., 2016). It may be that better feedback might actually be obtained with structure systems such as surveys (Ordenes et al., 2014).

1.2 The Second Technology: Mind Genomics The traditional method isolates a single variable from the set of possible one and measures its performance under different conditions. In the world of behavioral science, this approach is called stimuluseresponse. The researcher varies the single stimulus and measures a defined response following the traditional design of experiments (Antony, 2014). In biology, a comparable approach might be called doseeresponse, following the same train of thought. The key to knowledge is believed to be a deep understanding of the single variable. There are occasions when the study is a mixture, but the intellectual apparatus in behavioral science appears to be built on a deep understanding of one variable at a time. In this chapter, a new approach is proposed to understanding the surrounding world from the point of view of understanding the mind of the person, who can be considered a possible node. The approach operationally defines the world as a series of experiences that might be captured, and for each experience to create a way of understanding the different viewpoints or mind-sets of the person undergoing that experience. The effect is to add a deeper level to the problem, moving beyond the patterns of that which is observed, down to the mind-sets of the people actually doing what is observed. In effect, the approach provides a deeper matrix of information, more two-dimensional. The first dimension is the structure of what is being done (a traditional understanding of the world) and the second is

Public driven and public perceptible innovation of environmental sector 73 the mind-set of the person(s) doing what is being done. The mind-sets are specific and appropriate for that which is being done. In essence, therefore, a what and the minds(s) behind the what. The chapter concludes with the prospect of creating that understanding of the mind by both straightforward, affordable experiments and a tool (viewpoint identifier) that allows one to understand the mind of any person in terms of the relevant action being displayed. In the world of everyday life, the notion of a single stimulus, a single idea, does not teach us very much, even when we know a lot about that idea. For example, if the idea or notion is “nuclear power is important for a cleaner environment,” it is possible and indeed customary for researchers to measure the agreement of people with that single idea. Yet, even with this important topic of nuclear power, one does not know how the idea and opinions about that idea interact with other ideas, with other situations, to drive a person’s behavior. We can get deeper knowledge about people’s minds using text mining, focus group discussions (Gailing and Naumann, 2018), or even psychological methods (e.g., neophobia, fear of the new) (Greggor et al., 2015.) Sadly, however, these approaches are unable to deal with complex stimuli except through tortuous efforts. Moreover, they lack the scalable, quantitative technology that allow them to be used routinely for both knowledge-building and pragmatic application. There needs to be an improved system to deal with complex ideas on a larger scale. Mind genomics moves the scientific effort away from the study of responses to single ideas, a situation unusual in daily life, toward the study of responses to more typically encountered combinations of ideas; the combinations of these ideas systematically varies according to an underlying experimental design (Moskowitz et al., 2006). Mind genomics begins with a set of ideas categorized into silos. The ideas, also called elements or messages, are then combined by the underlying experimental design, creating a set of vignettes or test concepts, the combinations mentioned earlier. The respondent is exposed to the set of vignettes one at a time. The vignette is in fact a small story, although it is simply composed of a simple set of disconnected but topically related messages. The respondent’s ratings for the set of vignettes are then deconstructed by the method of ordinary least squares (OLS) to estimate the part-worth contribution of each idea to the response (Moskowitz, 2012). Why, then, is mind genomics to be preferred in these studies to the traditional method of isolating one idea and studying it in its splendid isolation? The answer is straightforward. First, mind genomics presents more realistic test stimuli, combinations of ideas or messages. People are likely to encounter such combinations in daily life. Second, it is impossible to game the mind genomics experiment. The test stimuli are presented in a way that forces the respondent to evaluate a mixture of ideas, so the respondent is incapable of giving a so-called politically correct response (Porretta et al., 2018).

74 Chapter 3 In studies presented here, the aim is to understand and then introduce major differences between the widely applied text mining techniques and mind genomics, so that the two methods can be placed in the collection of approaches to uncover peoples’ minds about a given topic. Use of the same topic but different approaches highlights similarities and differences between the approaches while giving deep substantive insight into people’s minds about nuclear and solar energy.

2. Materials and Methods Topics for the mind genomics studies were selected from the text mining results of the study published by Nuortimo and Ha¨rko¨nen in 2018. That study involved opinion mining of the media image of energy production. The authors presented their text mining results of 264,076 editorial and social media data points, which enabled them to conduct thorough and reliable research on the topic. Details of the methods and approaches used by the authors are not discussed in the present chapter. For further assistance, we refer to the original research article (Nuortimo and Ha¨rko¨nen, 2018). Mind genomics studies begin with an effort to formalize the nature of the messages. Table 3.1 shows inputs as a set of four questions, each with four answers, for a total of 16 answers. Use of the questioning or Socratic input is deliberate. Through a systematic question of oneself or a set of experts, or even books, and of course, Web information in today’s world, one may amass the necessary information to understand how people perceive their everyday life. The structure of questions and answers emerges from the discipline of argumentation and rhetoric, a legacy of the Greek worldview (Milutinovic and Salom, 2016). The elements or messages in Table 3.1A (solar power) and Table 3.1B (Nuclear Power) emerged from this structured approach to understanding the world as experienced by people. The approach of questions and answers is not meant to be exhaustive, but rather to give a structure to the information in a way that tells a story. The elements, or answers, will later be combined into vignettes or concepts, providing many different stories. Therefore, it is vital that the sequence of questions be logical, proceeding in a way that tells a coherent story.

3. Running the mind genomics studies The choreography of mind genomics follows a fixed pattern: 1. Raw material: develop the questions and answers or silos and elements for each study. These appear in Table 3.1A for solar energy and Table 3.1B for nuclear energy.

Public driven and public perceptible innovation of environmental sector 75 Table 3.1A: Questions and answers (silos and elements) for the solar energy study. Question A: power and environment A1 A2 A3 A4

Solar energy helps protect the environment Solar energy has only a little impact on the environment Solar energy will never replace traditional energy sources Solar energy and renewable energy sources will replace traditional energy sources Question B: benefits

B1 B2 B3 B4

Going solar helps reducing greenhouse gas emissions Going solar saves money Solar panels are reliable and produce electricity every day Installing solar panels provides energy independence Question C: users

C1 C2 C3 C4

Solar power is suitable for everyone Solar power is suitable for private people Solar power is suitable for small companies Solar power is suitable for big companies Question D: how to reduce costs

D1 D2 D3 D4

Governments should support domestic solar panels Newly built houses should have preinstalled solar panels Grants for companies are needed Huge solar farms should be heavily supported

Table 3.1B: Questions and answers (silos and elements) for the nuclear energy study. Question A: power and Environment A1 A2 A3 A4

Nuclear energy is safe for the environment Nuclear energy has potential dangers Renewable energy sources will never replace nuclear energy Nuclear energy is able to feed the increased energy demand of the society Question B: benefits

B1 B2 B3 B4

Nuclear energy is cheap Nuclear energy use reduces greenhouse gas emissions Modern nuclear power plants generate zero waste Nuclear power is reliable and efficient Question C: users

C1 C2 C3 C4

Nuclear power is suitable for everyone Nuclear power is suitable for private people Nuclear power is suitable for small companies Nuclear power is suitable for big companies Question D: how to reduce costs

D1 D2 D3 D4

Governments should support nuclear power plants Nuclear power plants are the past and should not be supported Establishing more nuclear plants helps reduce energy prices significantly New, modern, and safe nuclear power plants should be heavily supported

76 Chapter 3 2. Experimental design: choose the appropriate experimental design. The design is composed of four independent variables (Questions AeD), each with four alternative levels (the four answers), or a total of 16 answers. The underlying or core experimental design creates a set of 24 combinations or vignettes, composed of two to four answers per vignette, with each vignette allowed to have at most one answer from a question (i.e., one element from a silo.) The underlying experimental ensures that each answer appears equally often, and that the 16 answers are statistically independent of each other, allowing the data to be analyzed either at the individual respondent level or at the group level. 3. Permute the experimental design: create 50 permutations of the underlying experimental design for solar, and a second, totally new set of 50 permutations of the underlying experimental design for nuclear. The structure of the design remains the same. The only things that change are the specific combinations that emerge. This strategy of systematic permutations to create valid, isomorphic experimental designs enables mind genomics to work in any area without ingoing knowledge of the important ideas to test. Rather, the mind genomics method quickly runs through many combinations, with each element competing against many other elements to drive the rating. As a consequence, the elements performing best do so because they perform well in hundreds of different vignettes. 4. Present the test stimuli and acquire the rating: present each respondent with the randomized set of 24 vignettes specifically created by the experimental design (Fig. 3.1). Keep in mind that each respondent evaluates a unique set of 24 vignettes. Each respondent rates each vignette on the following rating scale, reading the entire vignette as a single set of ideas to be rated together: How much do you agree with the following statements? 1 ¼ totally disagree . 9 ¼ absolutely agree 5. Measure the response time: at the same time the rating is acquired, measure the response time, defined as the time between when the vignette appeared and when the rating was assigned. The response time will be analyzed as well, to show how quickly or slowly the information is processed. 6. Recode the ratings: recode the ratings to create a binary scale. Ratings of 1e6 are recoded to 0 (plus a small random number < 105), whereas ratings of 7e9 are recoded to 100 (plus a small random number < 105). The recoding is done because the end result is easier to understand. The binary scale means either no or yes. 7. Analyze ratings: perform OLS regression on the data for the total panel and for relevant respondents in the two mind-sets emerging from each study: the 16 independent variables, our 16 answers, are coded either 0 (missing from the vignette) or 1 (present in the vignette.). Thus, the beginning data for the analysis for the total panel is composed of 24 (vignettes)  50 (respondents), or 1240 cases. Each case is composed of 16 independent variables, with either a 0 to denote the answer is missing from that

Public driven and public perceptible innovation of environmental sector 77

Figure 3.1 Presentation screen (mobile view) of the nuclear energy (left) and solar energy (right) studies. Altogether, 24 different vignettes are presented for each participant.

vignette or 1 to denote that the answer is present in that vignette. The dependent variable is now the binary response augmented by the small random number whose value (< 105) ensures that the OLS regression runs (Hastie et al., 2011). 8. Analyze response time: replace all response times > 30 s by 30 s, and then run the appropriate OLS analysis, relating the presence or absence of the 16 elements to the time it takes the respondent to assign a rating. For this analysis, we do not use an additive constant, assuming that the response time is 0 with no elements in a vignette.

3.1 Surface analysis: distribution of ratings and response times Fig. 3.2 shows differences in the underlying dynamics of responses to these two new energy sources. The top two panels of Fig. 3.2 show the distribution of 9-point ratings;

78 Chapter 3

Figure 3.2 Distribution plots of ratings on the 9-point agreement scale (top) and on response times (bottom). Results come from the raw data, 1240 observations, respectively, for both solar energy (left) and nuclear energy (right).

the bottom two panels show the distribution of response times. It is clear from Fig. 3.2 that for solar energy (left panels), the distribution of “agree” ratings is skewed left, with a greater number of higher ratings. Furthermore, the response times for solar energy tend to be a bit longer, as if the respondents are reading the vignettes rather than instantaneously responding. A different pattern emerges for the right-most plot, dealing with nuclear energy. A greater distribution of ratings with many more “disagrees” is visible. Somewhat faster reaction times are present, suggesting a more immediate, emotional reaction.

3.2 Deeper analysis 1: solar energy Solar energy does not carry with it the negative implications of nuclear energy; the latter is associated with bombs and contamination. Thus, it should come as no surprise that in the results for the total panel, all 50 respondents suggested a high level of interest in solar energy. Table 3.2 shows the parameters of the grand model relating the presence or absence of the 16 answers to the binary rating.

Public driven and public perceptible innovation of environmental sector 79 Table 3.2: Solar energy: coefficients and statistics for the 16 elements whose contributions to “agreement” were estimated using ordinary least-squares regression.

B2 D2 B3 B1 B4 D1 A1 D3 D4 C2 C3 A4 C1 C4 A2 A3

Additive Constant Going solar saves money Newly built houses should have preinstalled solar panels Solar panels are reliable and produce electricity every day Going solar helps reduce greenhouse gas emissions Installing solar panels provides energy independence Governments should support domestic solar panels Solar energy helps protect the environment Grants for companies are needed Huge solar farms should be heavily supported Solar power is suitable for private people Solar power is suitable for small companies Solar energy and renewable energy sources will replace traditional energy sources Solar power is suitable for everyone Solar power is suitable for big companies Solar energy has only a little impact on the environment Solar energy will never replace traditional energy sources

Coeff.

t-value

P-value

60.27 12.30 9.53 8.72 6.49 5.74 3.96 3.37 3.09 2.12 1.62 0.67 0.37

8.80 2.95 2.30 2.07 1.53 1.37 0.95 0.80 0.75 0.51 0.39 0.16 0.09

0.00 0.00 0.02 0.04 0.13 0.17 0.34 0.42 0.46 0.61 0.70 0.87 0.93

1.23 2.48 13.47 20.90

0.29 0.59 3.23 5.01

0.77 0.55 0.00 0.00

Coeff, ordinary least-squares regression coefficients of the variables. Data comes from the total panel.

The additive constant of 60.27 tells us that approximately 60% of the answers will range between 7 and 9 on the 9-point scale. It is impossible to prove that empirically, of course, because all vignettes are composed of two to four elements, and thus none had zero elements. The additive constant is an estimated value that we can use as a baseline. Each of the 16 elements or answers generates its own estimated coefficient, as shown in Table 3.2. The table also shows the computed t-score and the probability that the coefficient came from a sampling distribution whose true mean is 0. By convention, in these studies, important elements with a value of 7e8 or higher are statistically significant in terms of conventional inferential statistics and in other studies were demonstrated to covary with relevant behavior such as product adoption. When considering the data from all respondents, it is clear that only three elements really drive agreement. These elements are either factual or prescriptive in a nonemotional way. They do not call into play beliefs about safe energy: Going solar saves money Newly built houses should have preinstalled solar panels Solar panels are reliable and produce electricity every day

80 Chapter 3

3.3 Dividing respondents into mind-sets about solar, based on the pattern of their coefficients People differ in their attitudes toward social-based issues. These differences may not necessarily link to who a person is. That is, there is no reason to assume that males and females differ in the pattern of their points of view about a social topic. The more important differences in a topic are the varieties of different fundamental ideas. These fundamental ideas are metaphorically akin to primary colors (red, yellow, and blue); or in the metaphoric language of mind genomics, these fundamental ideas are mind genomes, or alleles of a mind genome. In the worldview of mind genomics, each topic area, such as solar energy, carries with it different groups of ideas, different mind-sets. A person usually can be assigned one of a limited number of mind-sets for that topic. The discovery of such mind-sets comes from small empirical studies of this type, needing as few as 25e50 respondents. The underlying experimental design creating the 24 vignettes for each of our 50 respondents allows us to estimate a model of the form shown in Table 3.2, but doing so for each of our 50 respondents. Thus, each respondent generates an additive constant (showing basic agreement in the absence of the elements) and 16 coefficients. We cluster the 50 respondents, using the well-accepted procedure of k-means clustering, with the measure of distance between each pair of respondents defined as (1 ePearson r), where the Pearson r is the linear correlation coefficient between two respondents, computed from the values of the 16 coefficients. The clustering is based on values of the coefficient and does not use the additive constant. When two respondents have a Pearson R of 1.00, with their coefficients aligning perfectly, the distance is 1:1 or 0. When two respondents generate a Pearson r of 1.00, with their coefficients going in precisely opposite directions, the distance is 2 (1 to 1 ¼ 2). The mind genomics program used in this study (BimiLeap) automatically computes the assignment of respondents into both two mind-sets and three mind-sets, respectively. The results of the grand models are also created for the two versus three Mind Sets to decide among the two options. Our criteria are: 1. parsimony: fewer mind-sets are better; 2. interpretability of the mind-sets: they each must “tell a meaningful story.” Table 3.3 suggests two mind-sets for solar energy. The response times are long, more than 1 s for each element. The response time is shortest for a typical slogan (helps protect the environment). The foregoing data apply only to the 50 respondents who participate. This research could be considered similar to discovering basic colors, such as red, yellow, and blue.

Public driven and public perceptible innovation of environmental sector 81 Table 3.3: Performance of elements by two emergent mind-sets for solar energy. Mind set 1

Mind set 2

Mind set 1

Agreement Additive constant

58

Mind set 2

Response time

58

Mind-Set 1: focus on what (saves money, makes us energy independent) B2 D1 D2 B4 B3 B1 D4 D3 A1

Going solar saves money Governments should support domestic solar panels Newly built houses should have preinstalled solar panels Installing solar panels provides energy independence Solar panels are reliable and produce electricity every day Going solar helps reduce greenhouse gas emissions Huge solar farms should be heavily supported Grants for companies are needed Solar energy helps protect the environment

18 16 15

8 7 5

1.8 2.1 2.0

1.3 1.1 0.9

15 14

2 3

2.7 2.1

2.1 1.9

14 14 13 6

0 9 6 1

2.3 2.2 2.4 0.5

1.8 1.6 1.2 0.7

10 9 7 4

2.2 1.9 1.2 2.1

1.1 1.9 1.2 1.0

2

2

2.1

2.5

24

2

1.9

1.4

23

18

1.2

1.6

Mind-Set 2: focus on who (who should be using solar energy) C3 C2 C1 C4

Solar power is suitable for small companies Solar power is suitable for private people Solar power is suitable for everyone Solar power is suitable for big companies

6 3 5 5

Not agreed to by either mind-set A4 A2 A3

Solar energy and renewable energy sources will replace traditional energy sources Solar energy has only a little impact on the environment Solar energy will never replace traditional energy sources

Almost any set of stimuli with colors can be used to discover the underlying science. Once the science is discovered (e.g., our two mind-sets for solar energy), a device like a colorimeter is needed to test new stimuli, new people, to determine the mind-set of the new person. That instrument disentangles the basic mind-set (a set of related ideas) from the person who holds the mind-set. This is an important philosophical distinction and bears repeating. The mind-sets are the primaries. The people are “protoplasm that holds the particular mind-set” at a specific time and in a specific place. In other ways, the mindsets may be the universals. The people are temporally and spatially limited carriers of these universals. Personal viewpoint identification (PVI) is a simple questionnaire administered to the person to discover the mind-set to which the personal belongs at a specific time, in a specific place. The pattern of responses enables us to assign a new person to one of our

82 Chapter 3

Figure 3.3 Personal viewpoint identifier of solar energy study. The most discriminating elements are presented and a simple binary question is asked. Participants rate each element separately. By clicking the Submit button, their mind-set classification is presented.

two emergent mind-sets for opinions about solar energy. The first step to construct the PVI looks at the most discriminating elements between the two mind-sets. Highly discriminating elements are needed because the PVI uses binary scales (disagreeeagree). Thus, each element in the PVI must drive the differentiation and assignment in a strong fashion. The solar energy PVI is composed of five different questions based on elements that best differentiate the two mind-sets. Good research practice dictates that the PVI present the questions in different orders to respondents. The respondent answers all the questions and provides an email address. The PVI calculates the most likely mind-set membership and presents the results; the content of the presentation is selected by the PVI user. Fig. 3.3 shows the PVI. In our case, the mind-set membership and a short description are presented to the participants (Fig. 3.4). Other options are available. Consider the company that sells solar panels and has a homepage. A respondent who reaches the page can be asked to fill out a PVI, first to find out her or his mind-set (fun), with the PVI enabling the corporation selling the solar panels to understand and serve the visitor better. For example, content for members of Mind-Set 1 should be about reduced greenhouse gases, saving money, government support, etc., whereas content for members of Mind-Set 2 should be about the

Public driven and public perceptible innovation of environmental sector 83

Figure 3.4 Mind-set classification result of personal viewpoint identification. Mind-Set 1 (top) and Mind-Set 2 (bottom) have different segment names and short descriptions based on the main study.

possible users of solar panels. Using this logic, local projects, government programs, and scientific research can also be supported by a well-designed PVI, giving a continuous flow of information relevant and interesting to specific, different-minded groups in the audience. Knowledge-based tailoring of information only helps to present the right messages to the right person, but voluntary information from the PVI of allied topics, new data, can also be used to map visitors’ minds. Finally, the PVI is socially responsive. With the PVI there is no issue of invasion of privacy, tracking behavior on the Web, and so forth. The information is a simple momentary transaction with no private information given away. The mind-set membership need not be stored; rather, it is used only momentarily to direct the right message to this particular visitor whose mind-set has been momentarily identified.

3.4 Deeper analysis 2: nuclear power Currently, attention is on nuclear power, which has attracted significant detractors and engendered great controversy because of the history of meltdowns and contamination. Table 3.4 shows that no element drives agreement at all. There is a basic agreement of 53.47, or about 53e54%, but no element at all can move the total panel. If there is any movement, it must come from the mind-sets, soon to be uncovered. Two radically different mind-sets emerge from the clustering of responses from the 50 respondents. Once again, the two emergent mind-sets are those that focus on who and those that focus on what (Table 3.5). The shortest response time is, of course, the one that is most like a slogan and does not require thinking. This element is “Nuclear power is cheap.” That message is one of the most commonly used slogans to promote the adoption of nuclear power. It takes much more time to process the information in the denser slogan “Nuclear energy is able to feed the increased energy demand of the society.”

84 Chapter 3 Table 3.4: Nuclear energy: coefficients and statistics for the 16 elements whose contributions to “agreement” were estimated using ordinary least-squares regression. Coeff. B4 C4 C1 B2 D4 C3 B3 A1 C2 A4 D3 A2 A3 B1 D1 D2

Additive sonstant Nuclear power is reliable and efficient Nuclear power is suitable for big companies Nuclear power is suitable for everyone Nuclear energy use reduces greenhouse gas emissions New, modern, and safe nuclear power plants should be heavily supported Nuclear power is suitable for small companies Modern nuclear power plants generate zero waste Nuclear energy is safe for the environment Nuclear power is suitable for private people Nuclear energy is able to feed the increased energy demand of the society Establishing more nuclear plants helps reduce energy prices significantly Nuclear energy has potential dangers Renewable energy sources will never replace nuclear energy Nuclear energy is cheap Governments should support nuclear power plants Nuclear power plants are the past and should not be supported

t-value

P-value

53.47 0.53 0.45 0.33 0.03 0.42

6.83 0.11 0.09 0.07 0.01 0.09

0.00 0.91 0.93 0.95 1.00 0.93

1.13 1.20 1.74 3.05 4.07

0.24 0.25 0.36 0.64 0.85

0.81 0.80 0.72 0.52 0.40

4.56

0.96

0.34

5.35 5.60 6.58 6.63 10.00

1.12 1.18 1.36 1.39 2.11

0.26 0.24 0.18 0.17 0.04

Coeff., Ordinary least-squares regression coefficients of the variables. Data comes from the total panel.

3.5 Underlying neurophysiological processes Up to now, this chapter has focused on cognitive responses to test stimuli using an experimental design of ideas. The responses are reasoned, made through judgment. At a deeper level, however we may want to know whether there are the same dramatic differences in the speed that we process the messages. We already know from the data that we judge the messages differently. We see those differences most dramatically when we look at the coefficients for the 9-point ratings after the ratings have been transformed from the original 9 points to a binary scale. We now move to underlying processes, exploring whether the different messages are processed at different speeds. At this stage of our understanding of neurophysiology, we do not suggest a hypothesis to be validated or falsified. Rather, we simply present our observations and draw conclusions about those which we observe. Mind genomics technology measures response times for the different vignettes. The times range from 0 and 1 s to hundreds of seconds. The latter, dozens or hundreds of seconds, reflects the intrusion of other activities on the experiment. We have automatically changed

Public driven and public perceptible innovation of environmental sector 85 Table 3.5: Performance of the elements by two emergent mind-sets for nuclear energy. MindSet 1

MindSet 2

Agreement Additive constant

54

MindSet 1

MindSet 2

Response time

52

Mind-Set 1: focus on who C4 C1 D4 C3

11 6 5

10 6 5

1.3 1.7 2.8

1.1 1.4 1.7

3

5

1.8

1.6

8 9 15

7 6 5

2.7 1.6 3.8

1.6 1.3 1.6

11

4

4.2

1.9

1

3

1.5

1.8

0

1

2.4

2.2

11 13 2 3

0 0 7 7

1.7 0.6 1.2 2.2

1.1 1.4 1.3 2.0

5 6

8 13

2.3 2.4

1.4 1.8

Nuclear power is suitable for big companies Nuclear power is suitable for everyone New, modern, and safe nuclear power plants should be heavily supported Nuclear power is suitable for small companies Mind-Set 2: focus on what

B3 A1 A3 A4 B4

Modern nuclear power plants generate zero waste Nuclear energy is safe for the environment Renewable energy sources will never replace nuclear energy Nuclear energy is able to feed the increased energy demand of the society Nuclear power is reliable and efficient

Elements not agreed to by either mind-set B2 A2 B1 C2 D3 D1 D2

Nuclear energy use reduces greenhouse gas emissions Nuclear energy has potential dangers Nuclear energy is cheap Nuclear power is suitable for private people Establishing more nuclear plants helps reduce energy prices significantly Governments should support nuclear power plants Nuclear power plants are the past and should not be supported

all response times of 9 s or more to 9 s, because our observations of response times from many studies suggest that judgments are typically made at 5e7 s or faster. Figs. 3.5 and 3.6 show the relation between ratings on the 9-point scale and the response time as actually measured. The data are, of course, largely a random distribution. However, there is a suggestion of a pattern, albeit a noisy one. For solar energy, as the rating increases, we sense, with a lot of noise, of course, that the response time increases. For nuclear energy, in contrast, as the rating increases, we sense, again with a lot of noise, that there is less of a relation. This suggests that there is possibly more thinking involved in evaluating messages about solar energy, and perhaps a knee-jerk reaction to messages about nuclear energy.

86 Chapter 3 12

Solar (RT)

10 8 6 4 2 0

0

1

2

3

4

5

6

7

8

9 10

Solar (9-Point)

Figure 3.5 Relation between ratings on the 9-point scale and the response time (RT) obtained during solar power study.

12

Nuclear (RT)

10 8 6 4 2 0

0 1 2 3 4 5 6 7 8 9 10 Nuclear (9-Point)

Figure 3.6 Relation between ratings on the 9-point scale and the response time (RT) obtained during nuclear power study.

4. Deconstructing the response times to components As we saw in the previous sections, the experimental design enables us to deconstruct the binary rating according to the contribution of the different messages. The same deconstruction can be done with response times. The only difference is that when we create the grand model for response times, we do not use an additive constant. The ingoing assumption is that in the absence of elements there is no response.

Public driven and public perceptible innovation of environmental sector 87 We write the equation as: Response Time ¼ k1ðA1Þ þ k2ðA2Þ.k16ðD4Þ Table 3.6 shows the results for solar energy and Table 3.7 displays the results for nuclear energy. The tables are sorted in ascending order. Numbers on the right estimate the seconds Table 3.6: Binary coefficients of elements used in the solar power study. Element code A1 D2 B2 C1 C3 C4 D3 A3 D4 C2 D1 A2 B4 B1 B3 A4

Element Solar energy helps protect the environment Newly built houses should have preinstalled solar panels Going solar saves money Solar power is suitable for everyone Solar power is suitable for small companies Solar power is suitable for big companies Grants for companies are needed Solar energy will never replace traditional energy sources Huge solar farms should be heavily supported Solar power is suitable for private people Governments should support domestic solar panels Solar energy has only a little impact on the environment Installing solar panels provides energy independence Going solar helps reduce greenhouse gas emissions Solar panels are reliable and produce electricity every day Solar energy and renewable energy sources will replace traditional energy sources

Coefficient 1.1 1.1 1.2 1.2 1.2 1.3 1.3 1.3 1.4 1.4 1.5 1.5 1.7 1.7 1.7 2.1

Lower coefficients mean faster response time, thus expressing less cognitive load.

Table 3.7: Binary coefficients of elements used in the nuclear power study. C2 C4 A2 B4 B1 D2 C1 D4 D1 C3 B3 A1 D3 B2 A3 A4

Nuclear power is suitable for private people Nuclear power is suitable for big companies Nuclear energy has potential dangers Nuclear power is reliable and efficient Nuclear energy is cheap Nuclear power plants are the past and should not be supported Nuclear power is suitable for everyone New, modern, and safe nuclear power plants should be heavily supported Governments should support nuclear power plants Nuclear power is suitable for small companies Modern nuclear power plants generate zero waste Nuclear energy is safe for the environment Establishing more nuclear plants helps reduce energy prices significantly Nuclear energy use reduces greenhouse gas emissions Renewable energy sources will never replace nuclear energy Nuclear energy is able to feed the increased energy demand of the society

Lower coefficients mean faster response time, thus expressing less cognitive load.

1.1 1.1 1.1 1.2 1.2 1.3 1.3 1.3 1.3 1.3 1.4 1.4 1.5 1.7 1.7 1.9

88 Chapter 3 required for the respondent to process the information in the element. The total response time is assumed to be the sum of the component response times, as a first approximation. The foregoing approach is the easiest but most naive approach. Nonetheless, Tables 3.6 and 3.7 suggest that: 1. the messages for solar energy and for nuclear energy are processed at the same rate; 2. shorter messages are processed faster; 3. key words such as “environment” and “solar panels” drive down the response time, serving perhaps as familiar words and triggers; and 4. descriptions of processes take longer to process than do phrases that are like advertising slogans. In the case of the solar power study, participants answered vignettes listing elements “Solar energy helps protect the environment” and “Newly built houses should have preinstalled solar panels” quickly, which means that the positive effects of using solar panels are in people’s mind and they do not spend a lot of time thinking about whether they agree with these elements. However, the largest coefficient was found in the case of Element A4, “Solar energy and renewable energy sources will replace traditional energy sources,” which suggests that this statement made people think and the statement is not self-evident. When respondents answered the vignettes presenting the nuclear power study, we obtained similar results. The fastest elements were “Nuclear power is suitable for private people,” “Nuclear power is suitable for big companies,” and “Nuclear energy has potential dangers.” These indicated that participants agreed that nuclear power plants are able to produce high amounts of energy required for mainly industrial purposes. A4, an interesting element, namely “Nuclear energy is able to feed the increased energy demand of the society,” showed the highest amount of time required by participants to answer. It showed that this element contains a complex idea and the question of future’s energy need was not entirely clear for respondents.

5. Studies undertaken using the mind genomics approach The mind genomics approach has been used to study several problems of different natures and complexities. In all studies discussed subsequently, the principles of experimental design theory were used to construct the vignette of questions presented to the user. Respondents see combinations of messages (elements) about corruption in a specific topic (here, education), rate each combination according to the perceived degree of corrupt behavior, and then select an emotion that they feel when reading, thus combining a quantitative and a qualitative approach in one study. The data allow for the creation of simple models from regression, showing the part-worth contribution of every element to

Public driven and public perceptible innovation of environmental sector 89 perceived corruption and to perceived positive, neutral, or negative emotion. We use OLS regression models and advanced data mining techniques (k-means clustering) to analyze the data and classify users accordingly. The next section presents a summary of results obtained using mind genomics.

5.1 Study of the case of corruption in education One of the first studies undertaken using mind genomics was “Using a Rule Developing Experimentation Approach to Study Social Problems: The Case of Corruption in Education,” by the same team of researchers. A study including four countries (Albania, Hungary, India, and the United States) was conducted to understand and evaluate linkages between corruption by country and by other factors such as social class (Gere et al., 2019). Initially a set of questions was designed: Question 1: Question 2: Question 3: Question 4: Question 5:

Why is corruption so common, and how does it happen? Why does corruption happen in education (and not education alone)? What happens when corruption infects education? Who does corruption benefit? What should I do about reporting corruption in education?

For each question, a set of responses was designed to be presented to respondents for them to choose and evaluate an answer. The set of responses for the experiment is designed as listed in Table 3.8. These answers were presented to respondents randomly to receive their feedback. This study shows the following results: (a) Segment 1 is the largest segment in terms of base size: 101 respondents, or one of three participants. The model for Question 1, misbehavior, begins with an additive constant of 101. In the absence of elements, Segment 1 is willing to believe the worst, that all behavior is an example of misbehavior. On the other hand, most elements decrease that strong ingoing belief, albeit with little strength. The only element that seems to be slightly more powerful in reducing the perceived misbehavior is D3, Corruption in education benefits school executives and teachers (coefficient ¼ 7). (b) Segment 2 is the second largest segment in terms of base size: 63 respondents, or one of five participants. Segment 2 looks like the converse of Segment 1. Segment 2 begins with an additive constant of 7. This very low value says that in the absence of elements, Segment 2 believes that there is no misbehavior. It is the activities that drive the perception of misbehavior, and not all of them, either. Elements driving the perception of corruption are descriptions of situation and character, respectively. It is the elements of Silo A (answers the question What is the condition of today’s state that

90 Chapter 3 Table 3.8: A 4 3 4 design of ideas created for the corruption in education study. Why is corruption so common and how does it happen? A1 A2 A3 A4

Often, the power or money entrusted for education seems directed toward private gain. Underneath a lot of education spending, one often finds bribery. The state does not ensure real and progressive reforms. The public services function well only when there is a lot of corruption. Why does corruption happen in education (and not education alone)?

B1 B2 B3 B4

The wages are simply not adequate . so people have to take or steal what they can. There is a growing lack of ethics and morals. People are generally honest and do not abuse power. No one really knows what to do to deliver a quality education. What happens when corruption infects education?

C1 C2 C3 C4

Corruption drives up the cost of education . less money for other services. Corruption increases the quality of education. Corruption reduces the safety and functioning of school buildings and properties. Corruption reduces the chances of the poor and disadvantaged people. Who does corruption benefit?

D1 D2 D3 D4

Corruption in education benefits politicians. Corruption in education benefits private companies and corporations. Corruption in education benefits school executives and teachers. Corruption in education benefits me. What should I do about reporting corruption in education?

E1 E2 E3 E4

Reporting corruption . do not know where to report it. Reporting corruption . do not bother . a normal way of life. Reporting corruption . not worth reporting. Reporting corruption . consider potential reprisal.

seems to encourage corruption?) and the elements of Silo B (answers to the question What is the condition of people and of today’s moral character that encourages corruption?) which drive the perception of corruption. The elements in Silos and B are strong drivers of perceived misbehavior. (c) Segment 4 is the third segment in size, with 45 respondents, or slightly less than one respondent in seven. The additive constant for Segment 4 is 55, meaning that approximately half of the people will feel that a behavior is misbehavior in the absence of specific elements. Segment 4 feels that excuses not to report corruption (Silo E) are examples of misbehavior. Segment 4 feels that the widespread about today, the issues challenging everyone, suffice to reduce the judgment of misbehavior. Segment 4 feels in touch with the moral agony of today, perhaps what might be called anomie, feeling that to be a valid excuse for behavior to escape the stigma of misbehavior.

Public driven and public perceptible innovation of environmental sector 91 (d) Segment 3 is the fourth largest, with 42 respondents, about one of every seven. Segment 3 begins with the same middle value for the additive constant, 58. To respondents in Segment 3, issues defining misbehavior are clear corruption (Elements A1 and A2) and the destructive effects of clear corruption (Elements C1eC4). Segment 3 also responds to positives about a people, saying that the definition of a person as honest is definitely not a misbehavior (Element B3), and that the difficulties one faces about reporting corruption cannot be taken as indications of misbehavior (Elements E1eE4). (e) Segment 5 is the smallest of the five mind-sets, with 35 respondents, about one of nine. The additive constant is 23, meaning that Segment 5 is not likely to assign a rating of 7e9, misbehavior, in the absence of clearly communicating elements. Elements that drive the perception of misbehavior come from Silo C (what corruption does) and Silo D (who benefits from the corruption). Segment 5 is also moralistic, finding excuses insufficient to explain or excuse bad behavior. For example, according to Segment 5, one cannot excuse the behavior by saying The wages are simply not adequate . so people have to take or steal what they can. Nor can one excuse the behavior by saying Reporting corruption . do not bother . a normal way of life.

5.2 Study on the threshold: what concerns healthy people about the prospect of cancer? The second study in which the mind genomics approach was used was “On the Threshold: What Concerns Healthy People About the Prospect of Cancer?” This study deals with all of the emotional and mental issues when telling a patient that he or she has a terminal disease such as cancer (Gabay et al., 2018). Unlike other chronic health concerns, the issues surrounding receiving a diagnosis of cancer compound physicianepatient interaction and bring it to the highest level, involving both the emotional and technical aspects of medicine. No physician wants to deliver the news that a patient has cancer. As mentioned earlier, the construct of today’s environment adds to the stress on both sides of the issue. In the traditional model of care, the physician intimately knows the patient and has the advantage of knowing how he or she may react to the news. The physician may know how to break the news in a personalized way. In today’s more impersonal medicine, the interaction may take place between relative strangers. Initially, a set of questions was designed: Question A: What aspect of daily living do you worry that you will lose? Question B: What aspects of your social life do you worry that you will lose? Question C: What physical aspect of yourself do you want to maintain? Question D: What health issues do you think about or worry about? Question E: What discomforts do you think about or worry about?

92 Chapter 3 For each question, a set of responses was designed to present to respondents to let them choose and evaluate an answer. The set of responses for the experiment is designed as listed in Table 3.9. These answers were randomly combined and presented to respondents to collect their feedback. The study suggested that there were two mind-sets regarding this problem: (a) Mind-Set 1: Life Quality Pursuers: they are concerned the result is temporary and think cancer is a chronic disease. They care about their family’s feelings and worry about causing sadness in their family. More important is that with the understanding that cancer is a chronic disease, they want to preserve their quality of life throughout the long-term treatment. They are concerned about being able to maintain a sense of well-being and the ability to enjoy time with friends. Autonomy in daily life is important to them; they want to be able to go shopping without assistance. They care whether they are betrayed by appearance (e.g., their faces look flushed). They are less concerned about pain and other symptoms during treatment. (b) Mind-Set 2: Outcome Worriers: they worry about no recovery and fear the outcome. They are concerned a lot about physical pain and symptoms such as nausea and joint pain. They also have some concern about coping with family when asking for help. However, they care less about perceived autonomy in daily life. They do not care about appearance and self-independence. It is not their concern whether they are still able to preserve quality of life and keep a sense of well-being when they are treated for cancer. The contribution of mind genomics is that it allows clinicians to target the right messages for each person concerned regarding cancer according to each person belonging to one of the mind-sets. Knowing the right psychographic messages before saying a word gives an undoubtedly huge advantage to doctors to shaping effective communications and improving outcomes and well-being.

5.3 Candy is dandy: the mind of sexuality as suggested by a mind genomics experiment Interpersonal relations are and have always been the focus of researchers, from the early days of human society until modern times. Many studies have been undertaken, and books, movies, and poems have focused on this central human behavior to understand and convey findings to large audiences. These findings are important because personal relations have had remarkable effects on our everyday life. Although a large number of studies have been undertaken, this important topic is still being investigated by different researchers through various perspectives (Zemel et al., 2018).

Public driven and public perceptible innovation of environmental sector 93 Table 3.9: A 6 3 6 design of ideas created for “on the threshold: what concerns healthy people about the prospect of cancer?” study. Silo (Question) A: What aspect of daily living do you worry that you will lose? A1 A2 A3 A4 A5 A6

Be able to perform daily routine physical activity: walking, sleeping, eating, etc. Be able to cook for yourself and family Be able to take do moderate physical work Be able to spend time with family and friends Be able to play and enjoy physical activity: gardening, bicycling, etc. Be able to fall to sleep quickly Silo (Question) B: What aspects of your social life do you worry that you will lose?

B1 B2 B3 B4 B5 B6

Enjoy cultural activity: sharing ideas, maintain social life, etc. Enjoy time interacting with friends Keep the sense of well-being Perceived self-independence in daily life Feel emotional balance Perceived autonomy in daily life: go shopping without assistance, etc. Silo (Question) C: What physical aspects of yourself do you want to maintain?

C1 C2 C3 C4 C5 C6

Your hair is as thick as before taking medicine Your skin looks flushed Your weight is in a healthy range Your fingernail color looks better Your new hair starts to come back Special tattoo marked survival, etc. Silo (Question) D: What health issues do you think about or worry about?

D1 D2 D3 D4 D5 D6

Worry about no recovery Expect full recovery Remission might happen Feel you are borrowing time by taking the medicine Knowing the result is temporary Thinking cancer is a chronic disease . Silo (Question) E: What discomforts do you think about or worry about?

E1 E2 E3 E4 E5 E6

Experience headache after taking the medicine and treatment Experience nausea after taking the medicine and treatment Experience fatigue after taking the medicine and treatment Experience joint pain after taking the medicine and treatment Experience stomach ache after taking the medicine and treatment Experience muscle pain after taking the medicine and treatment Silo (Question) F: What aspects do you think about with respect to your family?

F1 F2 F3 F4 F5 F6

Cause sadness in family Fear of outcome Seek compassion from family members Seek empathy from family members Ask family members’ help with chores, such as cooking, cleaning, shopping, yard work Attached to family emotional support

94 Chapter 3 Initially, a set of questions was designed: Question 1: Who is in the scene? Question 2: Where is the scene taking place? Question 3: What fragrance is he or she wearing? Question 4: What are they eating or drinking? For each question, a set of responses was designed to present to respondents for them to choose and evaluate an answer. The set of responses for the experiment was designed as listed in Table 3.10. These answers are presented randomly to respondents with no repetition. Feedback from respondents is then worked on using mind genomics models and results are obtained as follows. Details about this study can be found in Zemel et al. (2018). This study was conducted with respondents from Albania, Hungary, and the United States; it considers the impact of country, age, and gender. The results showed four statistically relevant mind-sets: Mind-Set 4B: sensory. They respond strongly to elements that talk about fragrance and alcohol. Table 3.10: A 4 3 4 design of ideas created for the “candy is dandy: the mind of sexuality as suggested” study. Question 1: who is in the scene? A1 A2 A3 A4

Private: just you two in scene Group: out with friends Double date with a couple Around strangers: no one familiar in scene Question 2: where is the scene taking place?

B1 B2 B3 B4

Romantic setting: walk in the park, picnic, fancy restaurant, etc. Casual setting: movie, casual restaurant, etc. Social setting: bar, club, etc. Home setting Question 3: what fragrance is he or she wearing?

C1 C2 C3 C4

No fragrance Pleasant-smelling cologne or perfume: floral, oriental, etc. Deodorant only: common name brands Shampoo or conditioner smell: nice smell, not overwhelming Question 4: what are they eating or drinking?

D1 D2 D3 D4

Appetizer with multiple alcoholic beverages Entre´e with glass or glasses of wine or alcoholic beverage Only drinks Entre´e with nonalcoholic beverages

Public driven and public perceptible innovation of environmental sector 95 Mind-Set 4D: setting. They respond strongly to the setting described in the vignette. Mind-Set 4C: alcohol. They respond strongly when drinks are mentioned. Mind-Set 4A: opportunist. They respond to nothing other than two people alone. With no additional information provided, respondents in the Opportunity Mind-Set believe more strongly that an erotic encounter will occur within 12 h.

5.4 Study of mental informatics and agricultural issues: global change versus sustainable agriculture The objective of this study was to explore two topics of interest to agricultural economics. The topics were treated from the point of view of the person, not from the traditional point of view of economics (of dollar and cents, and of policy). These two topics are laden with emotion, and therefore are relevant. The first is about the reactions of people to messaging about global change, and the implications of the issue of global change for the correct policy and messaging. The second is the reaction to the sustainability of agriculture, especially protein, put into a concrete, real form, by focusing on other sources of protein, and not just on general issues. The detailed study was presented by Gere, A., Radva´nyi, D., Sciacca, R., Moskowitz, H. (2018). Initially, a set of questions was designed: Question 1: Question 2: Question 3: Question 4: Question 5: Question 6:

What do you think about global warming? What causes global warming? What does global warming cause? What can reduce the effects of climate change? Who should have a major role in fighting climate change? Is corruption tied with a response to climate change?

For each question, a set of responses was designed to be presented to respondents to let them choose and evaluate an answer. The set of responses for question was designed as shown in Table 3.11. These answers were presented to respondents randomly with no repetition. The responses were then worked on using mind genomics models and results were obtained as follows. The three mind-sets that emerged from this tentative analysis suggested the following three groups. The suggestion was based only on elements that performed strongly for the mind-set segments, in which strong performance was represented by high positive coefficients (> 8) and low negative coefficients (< e8). The high positive coefficients represented ideas with which the respondent felt he or she had affinity, i.e., the respondent felt that the idea or element described the person. Negative coefficients represented ideas with which the respondent felt a lack of affinity.

96 Chapter 3 Table 3.11: A 6 3 6 design of ideas created for the “mental informatics and agricultural issues: global change versus sustainable agriculture” study. Question 1: what do you think about global warming? A1 A2 A3 A4 A5 A6

Global temperature is increasing. This is not a question Global warming is only media hype. I do not believe it Some parts of global warming might be true, but not the way presented Adverse effects of global warming are noticeable, even nowadays Climate change is the problem of the future generation, not ours Environmental issues are not my business. I have no influence over them Question 2: what causes global warming?

B1 B2 B3 B4 B5 B6

Global warming is caused by excess agricultural activity Industrial activities are the major contributors to global warming Simply human activity causes global warming Global warming is independent of us. It is completely natural There is no clear evidence of global warming Global warming is caused by deforestation Question 3: what does global warming cause?

C1 C2 C3 C4 C5 C6

Wildlife and their habitats are harmed by changing weather conditions Storms have become more severe in the past few decades More droughts or water shortages are occurring Forests and plant life are continually damaged by intense fires and hot summers Sea levels are rising. Shorelines are eroded more and more In the past few decades, extreme temperatures have been experienced during summer and winter Question 4: what can reduce the effects of climate change?

D1 D2 D3 D4 D5 D6

Reduce climate change. Restrictions are needed on power plant emissions Reduce climate change. International agreement is needed to limit emissions Reduce climate change. Tougher fuel efficiency standards are needed for cars Reduce climate change. Corporate tax incentives are needed Reduce climate change. More people should drive hybrids Reduce climate change. People should reduce their carbon footprints Question 5: who should have a major role in fighting climate change?

E1 E2 E3 E4 E5 E6

Climate scientists should solve the problem The general public needs more awareness to save the planet Energy industry leaders can do the most to reduce emissions All industrial leaders should work together globally to slow climate change Elected officials are responsible for environmental issues Public organizations have the most power to fight global warming Question 6: Is corruption tied with a response to climate change?

F1 F2 F3 F4 F5 F6

Profit and greed overshadow actions against global warming The spread of renewable energy solutions is intentionally obstructed Some politicians want to deny global warming because their constituencies are industrial companies Some people want to fight against climate change unethically because they see a quick profit Corrupt politicians and industry leaders can help to fight against climate change People want to benefit from global warming and are trying to crush it for financial reasons

Public driven and public perceptible innovation of environmental sector 97 Mind-Set 1: Public knowledge Mind-Set 2: Industrial cooperation. Mind-Set 3: Governmental pressure Mind-Set 1: of 52 respondents, 17 responded to the one element that talked about public knowledge and action being key to dealing with global change. The highest performing element stated: the general public needs more awareness to save the planet. Mind-Set 1 disagrees with the assertion that there are no data supporting global change. Mind-Set 1 is not unique in any other way. Mind-Set 2: of 52 respondents, nine believes that it is the job of industry leaders to work together, presumably voluntarily, to solve the problem of global change. They react to the statement All industrial leaders should work together globally to slow climate change. Mind-Set 3: the remaining 26 respondents can barely be bothered to respond to the different elements. They are probably uninvolved. That they constitute half of the population means that for global change, it is not at all a matter of ethics. They do not actively reject being involved in the issues of climate changes. It is just that they are indifferent to the particulars of climate change.

5.5 Study renewable energy: tapping and typing the citizen’s mind The purpose of this research study was to find out consumer preferences and mind-sets to promote consumer participation in imminent new and sensitive public policies, such as that of renewable energy sources. It is important to understand the mind of consumers regarding this issue because consumers bear financial responsibility for such an initiative. Details about this study can be found in Guardiola et al. (2009). With growing scientific acceptance of global warming and aging power plants, it is urgent to consider an integrated renewable energy assessment. The renewable energy industry has been considered a guaranteed growth sector and even crisis-proof owing to global trends underlying its formidable growth (Guardiola et al., 2009). Renewable energy addresses a number of problems ranging from environmental safety to economic security. The search for alternative methods to fuel homes, cars, and businesses was an issue to which many began to pay attention. It is widely accepted that substantial conservation and transitioning toward using renewable energy may aid the environment. When executed sufficiently well, the use of renewable energy could avoid crises that have shaken the international business community. However, those methods must not only be good for the environment, they must meet the economic demands and emotional considerations of consumers (Guardiola et al., 2009). As for other studies, a Web-based survey was designed and implemented to collect data from respondents. Participants were recruited using an email invitation designed for this purpose.

98 Chapter 3 The invitation included a link to a survey entitled “Preserving Energy Assessment.” No further information was given in the survey. Clicking on the link directed participants to the survey, which began with an opening or orientation page. The page explained the concept behind the study and offered minimal information about the study. The chance to win cash prizes was presented as an incentive for participation. Cumulatively, 228 individuals (166 females and 62 males) participated in the Internet-based survey. The design was composed of four silos (or questions), each of which had five elements (or answers). The silos corresponded to general themes. The elements corresponded to individual statements of those themes. Initially, a set of silos was designed: Silo A: Impact Silo B: Cost Silo C: Service Silo D: Transition time period For each question, a set of responses was designed to be presented to respondents to let them choose and evaluate an answer. The set of responses for questions was designed shown in Table 3.12. The input provided by respondents was then worked on using mind genomics models. The results showed two mind-sets that emerged from this tentative analysis. The subsequent discussion presents the results of the study (Guardiola et al., 2009).

6. Segment 1: gradualists The first segment, with 158 participants or 65% of the total group of participants, was labeled gradualists, i.e., “gradual, no tax increase transitioners.” Segment 1 responded only modestly to the strongest performing element (D4), Gradual transition toward using 80% renewable energy and 20% conventional energy. Gradualists were strongly against tax increases. Gradualists had the higher additive constant, 35, which suggested that with no additional information, 35% would rate the concept at 7e9, to denote comfort. The positive elements that drive comfort did not do particularly well. The strongest performing element, D4, had a utility or impact of only þ4. In contrast, poorly performing elements generated high utilities. For instance, when presenting Element B2, Increase county tax by 15% for renewable energy development services, the utility value dropped to e27. This element alone diminished the percentage of comfortable participants from 35% with no element to only 8% with Element B2.

Public driven and public perceptible innovation of environmental sector 99 Table 3.12: A 5 3 5 design of ideas created for the “renewable energy: tapping and typing the citizen’s mind” study. Silo A: Impact A1 A2 A3 A4 A5

Rising energy prices Inadequate supply of electricity Closing Indian Point power station Business relocating to other regions because of high-energy cost Energy prices exceeding New York State and national averages Silo B: cost

B1 B2 B3 B4 B5

Increase county tax by 10% for renewable energy development services Increase county tax by 15% for renewable energy development services Increase county tax by 20% for renewable energy development services Year-end separate renewable energy development bill (based on 10% of property value assessment), to create new service programs Quarterly separate renewable energy development bill (based on 5% of property value assessment), to create new service programs Silo C: service

C1 C2 C3 C4 C5

Free energy conservation evaluation; personal in-home/in-business Service by highly trained and experienced technicians Free yearly reevaluation of all energy service plans Several choices of renewable energy plans Our first-year service plan: “You don’t save, you don’t pay.” Silo D: transition time period

D1 D2 D3 D4 D5

Gradually transition to using 10% renewable energy services in 1 year Gradually transition to using 20% renewable energy and 80% conventional energy Gradually transition to using 50% renewable energy in 2 years Gradually transition to using 80% renewable energy and 20% conventional energy Implement 5-year plan for gradual increased use of renewable energy

7. Segment 2: realists The second segment, which was 70 participants or 35% of the total group, is labeled realists. These individuals preferred elements that emphasized strong action with results, although such strong action would require increased taxes. The segment preferred the winning element (B2), Increase county tax by 15% for renewable energy development services. The realist segment was not interested in gimmicky energy offers. Rather, it preferred a longer, time-lapsed, 5-year transition to renewable energy. The time defined elements show a very low additive constant, 6, meaning that absent any elements, only about 6% of these individuals would feel comfortable about the future. In contrast to what we saw about gradualists, however, the elements can restore a feeling of comfort.

100 Chapter 3 This pioneer study suggested that it may be critical to identify different segments and fine-tune the message to the mind-set of these respective segments.

7.1 Study customer requirements for natural food stores: the mind of the shopper The aim of the study was to obtain information about key factors driving consumer decisions about natural products that may help producers and authorities create better products and increase consumption of natural products (Gere et al., 2018). In the world of natural foods, personalized nutrition, and health, conversations regarding consumer packaged goods that focus only on the goods themselves are significantly lacking in context. The most important concerns tend to focus on the impact on the individual using the product, the physical characteristic of the product, or perhaps the sensory characteristics that can be used for the purposes of messaging and sales. However, when researchers focus solely on the product itself, with little connection to placing these products within the store that sells them or how they fit within the marketplace, significant opportunities are lost. A large 6  6 mind genomics study was created to uncover the minds of natural foods shoppers. Altogether, 51 respondents participated and indicated their response to the question “How likely are you to shop at this supermarket based on this information?” shown in Table 3.13. Results indicated three distinct segments in the data set as follows: Mind-Set C1 (It’s all about the food) responds to food, food freshness, and everyday low prices. Mind-Set C1 is the largest mind-set, composed of more than half of respondents (28 of 51); it has the lowest additive constant (8). For Mind-Set C1, the messages do the work to drive interest: Wants everyday low prices Excited by free food samples and juice stands Likes a selection of both organic and nonorganic products Do not care about rewards and point systems Not concerned with special services Mind-Set C2 (It’s all about customer focus) is much smaller, about one-fifth of respondents. This segment also has a low additive constant (8). Coefficients for this mindset are exceptionally large, 6 in the thirties and forties. Those coefficients are some of the largest ever observed in a mind genomics study. The degree to which the study taps into the hot topic of natural foods and shopping is not clear: Wants efficient service Professionalism is very important Not concerned with child accessibility

Public driven and public perceptible innovation of environmental sector 101 Table 3.13: Six questions that tell a story and six answers (elements or messages) to each question. Question A: How are the products priced? A1 A2 A3 A4 A5 A6

We have everyday low prices Weekly sales with extra discounts on popular items We offer a wide variety of items at competitive prices We always have what you are looking for in stock We guarantee the lowest price or it is free You can purchase gift cards as a gift for someone special in your life Question B: What products are stocked, and how can consumers discover them?

B1 B2 B3 B4 B5 B6

A wide range of fresh and high-quality products are available We restock frequently so we always have what you need We have both organic and nonorganic products available Fresh produce is delivered daily Free food samples so you can try before you buy We have a fresh juice stand so you can be hydrated while you shop Question C: What is special about the stores?

C1 C2 C3 C4 C5 C6

We have many destinations throughout the country We are always nearby and close to your home All of our stores are powered by solar energy Special carts for children and toddlers are available We have special entrances and carts for the disabled We are open 24 h a day and 7 days a week Question D: What are features of the loyalty program?

D1 D2 D3 D4 D5 D6

The membership to our rewards program is free We give exclusive discounts and coupons to members Points earned from shopping never expire Points can be used for store credit based on our points to dollar system We reward customers for using recyclable and nonplastic bags Monthly gifts are awarded based on how much you spent that month Question E: What are the customer-facing amenities?

E1 E2 E3 E4 E5 E6

Our staff is friendly and always ready to help Free delivery is available for your convenience We have an easy and simple return/exchange policy Free parking is available for our customers Our staff is updated in nutritional and health benefits of our products We have a cafe´ that serves dishes made fresh from our products Question F: What makes the store professional?

F1 F2 F3 F4 F5 F6

We support small businesses and local farms We have a high overall customer service rating We handle mistakes and recalls in a professional manner We are serious and efficient in our efforts to ensure quality and service to our customer We have always passed our health inspections with high marks We have been successful in the business for 50 years

102 Chapter 3 Do not care about multiple locations Not interested in buying gift cards Prefers small business tactics over large companies Mind-Set C3 (It’s about convenience and sales) is also much smaller: 12 of 51 respondents. The additive constant for this mind-set is much larger, 35, so that they are similar to typical shoppers. This group does not respond strongly to the special attractions of organic products, whether in a cafe´ that serves the store’s products, or the selection. Mind-Set C3 seems to respond most strongly to price and convenience, as if they are shoppers in a hurry. For them, just make it easy” Wants a clear simple return/exchange policy Product availability for low prices is very important Prefers convenient store hours and delivery Not interested how mistakes are handled Not concerned with fresh produce

7.2 Comparison of text mining and mind genomics 1. The nature of the information: observation versus experiment Nuortimo and Ha¨rko¨nen (2018) used learning machine-based media analysis to deal with the enormous volume of input data from social media data. Text mining uses written information registered on the Internet. It is cross-sectional, with material stretching out over time. Researchers can run temporal data analysis. However, topics not discussed on social media platforms are hard to evaluate. On the other hand, mind genomics is an experiment, with inputs selected, requiring human participants process the information and make choices. Text mining shows patterns of what has happened. Mind genomics shows the structure of the mind from the pattern of forced responses. Mind genomics can study time- and situation-dependent behavior by running the same study with a person over time, or by running a study before, during, and after a critical event. 2. Data source: millions of people emitting versus responses of a small group of test subjects To conduct a mind genomics study, online participant recruiting is suggested. In the world of the Internet, collecting participants is done easily and relatively inexpensively. On the other hand, the cost of participants might be high, depending on the aims of the study. Collecting samples from a special group of people is more expensive than random sampling. This leads to the second difference between mind genomics and text mining. Text mining exists in the world of big data. Text mining studies have no problem acquiring raw material generated from millions of people. The study conducted by Nuortimo and Ha¨rko¨nen (2018), for example, covered three million social media platforms and 100,000 news outlets in 71 languages in 236 regions. This amount of data would be difficult to handle when working with a questionnaire-based method.

Public driven and public perceptible innovation of environmental sector 103 3. Data analysis: correlation-based patterns versus statistics that provide parameters of patterns Data analysis is one of the most pain points of any study. Mind genomics has the advantage of using well-known, traditional methods such as OLS regression and cluster analysis. These methods are easily understood even by a non-statistician, and computations can easily be done using basic tools such as Microsoft Excel or paper and pencil. Text mining is a different story. Big data provide challenges for data processing, representation, storage, visualization, and pattern mining in the research areas of natural language processing, text mining, social networks, machine learning, and sentiment analysis. First, the huge amounts of data are hard to handle for a less experienced user, Second, the input matrix is much more complicated compared with that of mind genomics. The short texts (tweets, posts, etc.) have different length, content and structure; hence before analysis, computational linguistic methodologies are needed. The researchers need to know whether the searched item (e.g., “nuclear power”) stands in a positive or negative context, which can be defined based on the neighbor words. Mind genomics give the metric value of the elements, based on the meaning of the rating scale, and the coefficients of the 16 coefficients. Clustered results enable the researchers to define similarly thinking groups of participants and create classification models to define the mind-set membership of new participants. Finally, the PVI enables the forward use of results for different uses. A collection of PVIs for a general topic area such as the environment, and the deployment of this section of PVIs among individuals to sequence the mind regarding the environment opens up vast new possibilities for understanding the nature and origins of opinions, and even for using the information to create more powerful, persuasive communications. 4. Different results provided by the two methods Text mining (and sentient analysis) usually works with frequencies (e.g., counting the number of positive and negative posts, tweets about solar nuclear energy). Using sentiment analysis, Nuortimo and Ha¨rko¨nen (2018) identified that wind and solar power are the most well-known power sources in social media and editorial publications by creating frequency tables. When talking about sentiments (extracted using text mining), wind and solar power proved to be the most well-known, popular, and positive owing to their high occurrence in the data set. Biomass was found to be unknown (e.g., a limited number of data points were found), whereas it was identified as a positive power source because significantly more positive sentiments were paired with biomass energy. Nuclear and coal power sources showed strong negative sentiments; owing to the high number occurrences, these are well-known by the public. Mind genomics gives a more detailed picture about the mind of the individual respondent for any topic at any time, subject to interventions, either natural or man-made.

104 Chapter 3 All respondents have a personal results vector. These vectors are capable of being compared in toto, by element, or clustered based on similar patterns.

8. Conclusions Mind genomics and text mining are complementary tools. Text mining looks at the way people emit information when communicating. Text mining is the big data of human behavior. To understand behavior, there must be rules created in an ad hoc way. Only then do the data make sense. Text mining provides a great deal of information, but it requires heavy-duty computation to extract the patterns. Metaphorically, text minding can be seen as a concentrated effort with a sea of information, increasing the concentration and usability of information so that the originally dilute input is more structured and usable, with patterns waiting to emerge. However, the patterns must be realized by the researcher who makes the interpretation. Mind genomics can be likened to working with highly concentrated materials, in which the objective is to run simple experiments to extract vital information. One does not need to pore through masses of data. Rather, as few as 50 respondents in a rapid, 4-h effort, from start to finish, allows the research to understand the mind-sets, and in turn to create a PVI. What mind genomics lacks in scope in terms of materials, it more than compensates for in terms of insight, data usability, archival information, and future applications beyond the scientific experiment itself. Mind genomics and text mining work on different inputs with different analytic tools and produce outputs substantially different in nature and scope. They are complementary to each other, rather than competitors. They should be considered companions that help each other to achieve the task of understanding, predicting, and using. We have shown the beginning of this, using text mining, based on millions of data points, to inform the inputs of mind genomics, the experiment.

Acknowledgments AG thanks the support of the Premium Postdoctoral Research Program of the Hungarian Academy of Sciences.

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CHAPTER 4

Implementing environmental sustainability engagement into business: sustainability management, innovation, and sustainable business models Marco Bellucci, Laura Bini, Francesco Giunta Department of Economics and Management, University of Florence, Florence, Italy

Chapter Outline 1. Process innovation and environmental sustainability engagement 107 2. Theoretical frameworks and economic/institutional rationales 109 2.1 2.2 2.3 2.4

Stakeholder theory 110 Legitimacy theory 112 Institutional theory 113 Signaling theory 115

3. Strategic approaches to environmental sustainability 4. Implementing sustainability initiatives 121

116

4.1 A business case for environmental sustainability and environmental sustainability management 4.2 The role of innovation in sustainable business models 127

121

5. Conclusion 132 Acknowledgments 133 References 133 Further reading 142

1. Process innovation and environmental sustainability engagement Companies have been increasingly paying interest to environmental and social issues and devoting substantial attention to social and environmental commitments (Deegan et al., 2002; Bini et al., 2018; Elkington, 1999; Epstein, 2007; Kolk, 2008; Laine, 2010). Although profit has traditionally been the first and only measure of the success of a company, public expectations have changed to encourage organizations to consider social and environmental performance as well (Deegan, 2002; Deegan et al., 2002; Gray et al., 1996; Manetti and Bellucci, 2018; Thorne et al., 2014). There is evidence that Innovation Strategies in Environmental Science. https://doi.org/10.1016/B978-0-12-817382-4.00004-6 Copyright © 2020 Elsevier Inc. All rights reserved.

107

108 Chapter 4 companies recognize communities and the environment as increasingly relevant stakeholders (Mitchell et al., 1997). As a result, societal aims and perceptions often shape company policies, because corporate entities are influenced by (and often influence) the society in which they operate. In the context of growing environmental concerns, the role of large enterprises and corporations in encouraging sustainability has drawn increasing attention (Bellucci and Manetti, 2018). Academic debates and public opinion research have called into question the extended responsibilities of firms in our increasingly interconnected world. By studying issues associated with the greatest challenge humanity is currently facing (climate change), the scientific community has become aware of the need to account for the actions and agendas of companies, especially large ones (Crane and Matten, 2016). Large firms are important global political actors that have great power but also unprecedented responsibilities (Bellucci and Manetti, 2018; Bini et al., 2018). The idea that a firm’s only responsibility is to maximize value for shareholders (Friedman, 1970) is quickly becoming untenable (Freeman, 1984). Enterprises are increasingly willing to address the needs and expectations of their stakeholders (not just shareholders), create shared value (not just shareholder value), and make every part of their business sustainable (Bellucci and Manetti, 2018). Firms are increasingly aware of the need to include sustainability elements in their business models (BMs). This can range from simple green washing tactics to the genuine inclusion of environmentally friendly elements in a company’s BM. The development of sustainable business activities often requires structural change based on integrating market and nonmarket strategies (Jakobsen and Clausen, 2016). An essential aspect for facilitating structural change is innovation (Schumpeter, 2010). Scholarly literature from several different fields suggests that ecological motivations often shape the process of implementing environmental commitments; it also notes that internal organizational contexts (Bansal and Roth, 2000; Lo´pez-Rodrı´guez, 2009) and external factors have a critical role. Moyano-Fuentes et al. (2018, p. 845) illustrate the dynamics of internal organizational levels and the rationales of external institutional contexts by suggesting the following: Managers develop internal organizational activities through improved technological capabilities with the aim of reducing costs, curbing resource consumption, boosting energy efficiency, and reducing pollution-wasted resources (Cainelli et al., 2015; Costa-Campi et al., 2015; Cuerva et al., 2014; Horbach, 2008). One of the most prevalent activities is process innovation, which is deployed by companies to improve their competitive position, removing unnecessary costs and decreasing execution time (Davenport, 1993). Within the external context, taking a normative rational perspective, managers consider the characteristics of the business environment (Arago´n-Correa and Sharma, 2001),

Implementing environmental sustainability engagement into business 109 being sensitive to the increasing pressure exerted by a wide variety of stakeholders (Mazzanti and Zoboli, 2009; Siegel, 2009) in the form of normative, mimetic, and coercive pressures (Campbell, 2007; Lannelongue et al., 2014; Rothenberg and Zyglidopoulos, 2007), which eventually result in proactive corporate environmental behavior.

Innovation is usually investigated by examining its different drivers, dimensions, and outcomes. The emphasis on outcomes in particular has led scholars to differentiate between product innovation and process innovation. The former has been used to illustrate the manifestation of a new or improved product or service, whereas the latter has been used to depict the appearance of developments in the processes through which goods or services are produced. Arguments for focusing on these distinctions often derive from the assumption that their economic, environmental, and social impacts may differ (Fagerberg, 2004; Moyano-Fuentes et al., 2018). Process innovation involves envisioning new work strategies and innovative process design, while discussing how implementation is affected by complex technological, human, and organizational dimensions (Moyano-Fuentes et al., 2018). Moreover, process innovation has the potential to help companies achieve major reductions in costs or production time while producing major improvements in quality and flexibility (Davenport, 1993). Companies are increasingly sensitive to the demand for greater engagement in environmental sustainability (ES) because of pressure from responsible consumers, ethicsoriented managers, and proactive legislators. Nevertheless, the response to these demands requires the allocation of a nonnegligible amount of financial and human resources for the true achievement of ES. As a consequence, companies tend to frame environmental improvement in terms of resource productivity. However, empirical evidence also suggests a link between environmental performance and financial performance (Orlitzky et al., 2003; Waddock and Graves, 1997)). Moreover, it is generally assumed that organizations do well by doing good (Siegel, 2009), which underlines the need for a holistic model of sustainability (Lozano, 2008; Moyano-Fuentes et al., 2018) that considers financial and nonfinancial drivers and performance.

2. Theoretical frameworks and economic/institutional rationales Many theoretical frameworks can explain the various sustainability strategies and activities favored by companies. This section will explore four theories (stakeholder, legitimacy, institutional, and signaling) that focus on the decisions organizations make in terms of process innovation, ES engagement, sustainability management, and disclosure of nonfinancial information. We will also examine the roles competitive and institutional contexts have in shaping sustainability strategies.

110 Chapter 4

2.1 Stakeholder theory Stakeholder theory is an organizational and managerial approach that was originally elaborated by Freeman (1984). It gives each stakeholder a significant voice in making important decisions. The stakeholder concept was also discussed in the works of Rhenman and Stymne (1965) in Sweden and the Stanford Research Institute (1982) and Ansoff (1965) in the United States (Carroll and Na¨si, 1997). Stakeholder theory is rooted in the field of strategic management (Clarkson, 1995; Freeman, 1984; Frooman, 1999b). However, it has also found expression in the fields of organization theory (Donaldson and Preston, 1995; Jones, 1995; Rowley, 1997), business ethics (Miles, 2012; Phillips and Reichart, 2000; Starik, 1995), and accounting theory (Thorne et al., 2014; Manetti and Bellucci, 2016, 2018). Stakeholder theory also figures prominently in the study of social, environmental, and sustainability issues (Wood, 1991a, 1991b). Moreover, it has gained traction among scholars who study sustainable development (Sharma and Henriques, 2005; Steurer et al., 2005). Whereas the traditional shareholder view suggests that companies have a binding fiduciary duty to prioritize the expectations of shareholders, the stakeholder approach argues that several groups and individuals should be involved in the process of managing an organization, including employees, customers, suppliers, financiers, the community, governmental and nongovernmental organizations, political groups, and trade unions. Thus, stakeholder theory is relevant because it seeks to address how organizations affect the environment in which they operate (Manetti and Bellucci, 2018; Hinings and Greenwood, 2003) and questions the traditional idea that profits are the only measure of a firm’s success (Jensen, 2002; Laplume et al., 2008) Donaldson and Preston (1995) argue that stakeholder theory features three distinct categories of analysis: descriptive, instrumental, and normative. From a descriptive point of view, stakeholder theory is used to explain the characteristics and behaviors of companies and other organizations, including how they are managed, how the board of directors addresses the needs and demands of multiple constituencies, how they create and implement various management strategies, and the nature of the organization itself. The instrumental approach tries to identify the potential or effective connections that exist between stakeholder management and the achievement of organizational goals and aims (Manetti and Bellucci, 2018). This includes the links between better stakeholder management and ES engagement, as well as the enhancement of an organization’s reputation within the community. Finally, the normative approach presumes that organizations have a duty to identify and involve stakeholders who have specific interests with the organization, thereby drawing attention to the moral or philosophical guidelines for the operation and management of the corporation (Donaldson and Preston, 1995; Manetti and Bellucci, 2018).

Implementing environmental sustainability engagement into business 111 Generally speaking, stakeholder theory argues that two factors need to be considered when determining how an organization ought to be managed. The first focuses on the importance of creating value for all stakeholder groups rather than just shareholders. Indeed, stakeholder theory stipulates that organizations must not only be accountable to investors and funders but must also balance a multiplicity of stakeholder expectations and interests that can affect or be affected by the organization’s actions (Freeman, 1984). Nowadays, corporate managers often encounter demands from multiple stakeholder groups to devote resources to social and environmental issues (Matten et al., 2003). When analyzing the ES engagement of firms, it is increasingly important to understand how internal strategic decisions (including processes of innovation) consider internal and external stakeholders. Each stakeholder group has a right not to be treated as a means to some end, and therefore must determine the future direction of the firm (Evan and Freeman, 1993; Miles, 2012). Companies need to balance multiple sets of stakeholder expectations. In doing so, they can orient their strategic decisions toward environmentally committed actions, including the need to account for positive or negative environmental externalities. Thus, communities, as well as the environmental ecosystem in which they operate, can become strategic stakeholders. The second aspect that needs to be considered is the right of stakeholders to be informed about the objectives, strategies, activities, and outcomes of the organization, with particular emphasis on ES engagement. Companies can report on their ES engagement by adopting nonfinancial disclosure processes. The disclosure of nonfinancial information is part of the dialogue between a company and its stakeholders, providing evidence that can influence their perceptions (Michelon and Parbonetti, 2012; Gray et al., 1995; Adams and McNicholas, 2007). Sustainability reporting, in particular, enables organizations to explain how they contribute, or hope to contribute in the future, to the improvement or deterioration of economic, environmental, and social conditions at the local, regional, and global levels (GRI, 2013a, 2013b, 2016). A sustainability report (SR) should contain a complete and transparent statement that explains the extent to which the organization contributed to (or more likely, diminished) the sustainability of the planet (Gray, 2010). In other words, an SR requires a detailed and complex analysis of how organizations interact with ecological systems, resources, habitats, and societies (Gray and Milne, 2002). Voluntary SR is thus part of the dialogue between the organization and its stakeholders (Adams, 2002; Gray et al., 1996). According to the scholarly literature, stakeholder expectations that feature stronger strategic roles for the corporation are more likely to be satisfied and influence the organization’s disclosure policies and practices (Gray et al., 1996). Furthermore, there is some evidence that financial stakeholders and regulators are often most effective in demanding voluntary disclosure (Neu et al., 2001). From a practical standpoint, difficulties in defining thresholds for nonfinancial information have led assurance providers to focus mainly on ensuring

112 Chapter 4 stakeholder engagement and the materiality determination process, rather than on defining thresholds (Mio, 2013). The scholarly literature has provided clear indications regarding the need to increase stakeholder involvement and participation in innovation processes and environmental strategies (Bellucci and Manetti, 2018). The quality of ES engagement is closely tied to stakeholder engagement (Thomson and Bebbington, 2005). Moreover, according to Manetti and Toccafondi (2011), various experts have supported the notion that greater stakeholder involvement can bring significant benefits to corporations by enhancing the credibility of reporting and increasing an organization’s ability to interact, during decisionmaking processes, with the outside environment and the internal organization structure (Gray, 2000; Gray et al., 1996; Owen et al., 2001). In short, reinforcing stakeholder engagement mechanisms can support ES commitment strategies and the materiality of nonfinancial information (Bebbington, 2007; Bellucci and Manetti, 2017).

2.2 Legitimacy theory Legitimacy theory focuses on whether a company’s values are congruent with those of society and whether the objectives of an organization meet social expectations. Legitimacy problems can emerge when there is a disparity between community values and the company’s values, activities, and impacts (Deegan, 2002; Patten, 1992). Like stakeholder theory, legitimacy theory has its antecedent in the study of political economy, which claims that economic issues cannot be detached from their political, social, and institutional contexts (Gray et al., 1996; Deegan, 2002). Studies of political economy explicitly recognize the power conflicts that exist within society and the struggles that occur between various groups within it. It is increasingly important for social scientists to consider the societal issues that have an impact on how organizations operate and what information they elect to disclose (Manetti and Bellucci, 2018; Deegan, 2002). Consistent with this view, supporters of legitimacy theory argue that organizations do not have an inherent right to natural, human, or financial resources or even to exist. Organizations exist to the extent that society considers them legitimate (Deegan, 2002) and offer them a social contract to operate. Legitimacy is often considered to be a resource among supporters of legitimacy theory. On the one hand, organizations depend on this resource for survival (Dowling and Pfeffer, 1975); on the other hand, organizations can manipulate how society perceives their behavior and activities (Woodward et al., 2001). Like resource dependence theory (Pfeffer and Salancik, 1978), legitimacy theory stipulates that managers will pursue strategies to ensure the continued supply of resources whenever the supply of that particular resource is deemed vital to organizational survival (Deegan, 2002). Legitimacy theory, however, does not specify that these strategies need to be formulated and

Implementing environmental sustainability engagement into business 113 implemented (Chen and Roberts, 2010); instead, organizations may try to control or collaborate with other parties who are considered legitimate or engage in targeted disclosures of information (Fiedler and Deegan, 2007; Guthrie and Parker, 1989; Oliver, 1990). According to proponents of legitimacy theory, organizations can deliberately increase their ES engagement to reduce their external costs or diminish pressures that are being imposed by external stakeholders or regulators (Tate et al., 2010; Adams, 2002). Therefore, to increase their level of ES engagement in the eyes of their stakeholders, companies can initiate substantial changes and innovations to any processes and internal strategies that involve sustainability issues. Companies can also use ES to differentiate themselves from their competitors, if only because firms that innovate the most often gain a better reputation in environmentally conscious markets (Moyano-Fuentes et al., 2018; Alon and Vidovic, 2015; Eskildsen and Edgeman, 2012). Following normative rationality, companies that are more sensitive to social pressures and social conventions also tend to adopt widely accepted practices, such as those of ES (Moyano-Fuentes et al., 2018). Both economic rationality and social conventions may evolve over time, resulting in a different managerial mind-set and a shift in environmental behavior. Alternatively, companies can also employ SRs and other forms of nonfinancial disclosure to influence stakeholder perceptions of their sustainability commitment (Deegan et al., 2002). In fact, manipulating an organization’s image is easier to accomplish than improving its sustainability performance, supply chain structure, or value system (Dowling and Pfeffer, 1975). In these cases, voluntary disclosure of process innovations linked to sustainability issues is done for strategic reasons rather than because of an assumption of responsibility toward the community. Gray et al. (1996) confirm that corporations that disclose their ES engagement for strategic reasons are more inclined to embellish their disclosures, even if their performance is negatively associated with their sustainability impacts. Independent third-party assurance deflects attention away from bad sustainability performance, reduces legitimacy risks, confers greater confidence among stakeholders, and prevents interventions (Freedman and Patten, 2004; Unerman, 2008; O’Dwyer et al., 2011; Perego and Kolk, 2012). Legitimacy theory predicts that companies that are subjected to public pressure and legitimacy threats owing to poor sustainability performance may also employ third parties to provide assurance of their strategies and report inherent ES (Braam and Peeters, 2017).

2.3 Institutional theory Managers should pay attention to the organizational, economic, and financial factors required to stay afloat in the competitive environment when defining their company’s strategies (Lee and Lounsbury, 2015; Kraatz and Zajac, 1996), while also considering the

114 Chapter 4 institutional demands and pressures exerted by external stakeholders (Moyano-Fuentes et al., 2018; DiMaggio and Powell, 1983; Meyer and Rowan, 1977). Scholarship tends to use institutional theory to explain how social context can influence the decision to adopt internal strategies and implement innovation processes connected to ES engagement (Larrinaga-Gonza`lez, 2007; Larrinaga-Gonza`lez and Bebbington, 2001). According to institutional theory, external social, political, and economic pressures influence the strategies and organizational decision-making of firms (Thornton et al., 2012). Consistent with institutional and neo-institutional theories, ES engagement depends on a number of organizational dynamics and a variety of regulative, normative, and cognitive drivers that are strictly connected to the local context in which the organization is rooted. For instance, Adams (2002) identifies several organizational characteristics and contextual factors that influence managerial decisions to commit to ES and report on nonfinancial information (Bellucci et al., 2018). Larrinaga-Gonza`lez (2007) similarly uses a neo-institutional perspective to explain the development of sustainability management among various institutions. He observes that empirical studies of sustainability management provide some evidence of institutionalization, while further arguing that coercive, normative, and mimetic mechanisms can explain different processes of institutionalization. This current approach has raised concerns about the completeness, validity, accuracy, and reliability of sustainability reporting assurance, because companies may selectively disclose information that will place them in a favorable light in their specific ecosystem (Gray, 2000; Ball et al., 2000; O’Dwyer and Owen, 2005). Institutional theory focuses on three types of drivers (normative, mimetic, and coercive) (DiMaggio and Powell, 1983; Zhu and Sarkis, 2007) that generate isomorphism in organizational processes and can be used to explore the relation between process innovation levels and ES engagement (DiMaggio and Powell, 1983). The differences that emerge in terms of how process innovation responds to these drivers can result in greater or lesser ES engagement (Moyano-Fuentes et al., 2018). Normative drivers ensure that the organization conforms to regulative norms, thus allowing it to be perceived as taking part in legitimate actions (Sarkis et al., 2011). Mimetic drivers, by contrast, appear when companies imitate the actions of successful competitors in the industry in an attempt to replicate the path to success and, consequently, their legitimacy (Aerts et al., 2006). Finally, coercive drivers come about owing to pressures exerted by actors in powerful positions and are crucial in shaping environmental management (Moyano-Fuentes et al., 2018; Kilbourne et al., 2002). Complying with the demands of stakeholders through intense process innovation can lead to a greater emphasis on ES engagement (Moyano-Fuentes et al., 2018). Empirical evidence suggests that normative and coercive pressures drive enterprises to be more environmentally

Implementing environmental sustainability engagement into business 115 conscientious (cf. Ball and Craig, 2010). According to Moyano-Fuentes et al. (2018), in response to normative pressures, Companies perform process innovation to increase ES. For example, companies that implement International Organization for Standardization (ISO) 14,001 modify their processes to satisfy this standard’s ES requirements and to implement new processes to provide for the normative requirements (Castka and Balzarova, 2008). In this sense, the implementation of ISO certification results in process innovations that lead to a competitive advantage (Avermaete et al., 2003). Thus, companies that perform more process innovations are more likely to comply with this normative framework than their competitors. Mimetic pressure is also connected to a greater level of process innovation because many companies imitate any successful ES actions taken by their competitors that are highly valued by customers by changing their own processes (Wanasika and Conner, 2011). The degree and quantity of these process innovations compared with their competitors can enable companies to secure competitive advantages through better customer appreciation, because companies that are more innovative in their processes are typically the best valued (Alon and Vidovic, 2015; Eskildsen and Edgeman, 2012). Coercive pressures also lead to greater process innovation to increase ES. New legal and regulatory frameworks in industry mean that old processes must be abandoned and replaced with new processes that comply with new stipulations. For example, the legal framework limiting CO2 gas emissions has forced many companies to innovate in their processes to reduce their emissions (Theiben et al., 2014). Innovative processes that comply with regulatory restrictions therefore increase ES (p. 846).

Organizations that carry out higher levels of process innovation are better positioned to comply with evolving regulatory frameworks (Castka and Balzarova, 2008), avoid sanctions, avoid hits to their reputation (Theiben et al., 2014), and achieve competitive advantages (Eskildsen and Edgeman, 2012). Therefore, institutional theory can be used to explain how companies that perform more process innovation tend to increase both their legitimacy and their commitment to sustainability (Moyano-Fuentes et al., 2018).

2.4 Signaling theory Moyano-Fuentes et al. (2018) argue that companies that stress environmentally friendly process innovation obtain differentiation advantages over their competitors, such as attracting the most qualified human resources (Benn et al., 2015), securing collaboration with the best suppliers (Theiben et al., 2014), and cultivating an image of a responsible company that is committed to the environment (Alon and Vidovic, 2015). This last advantage can be used as an effective marketing strategy that reinforces the company’s position in niches that are sensitive to environmentally friendly behaviors (Moyano-Fuentes et al., 2018). Organizations may want to signal their predisposition to ES engagement to kill

116 Chapter 4 two birds with one stone: to respond to consumers who long for greater corporate social responsibility and accommodate policy makers who favor greater environmental protections. In the social and environmental accounting literature, supporters of signaling theory claim that organizations voluntarily publish SRs as a means of pointing out their environmental commitment and how their values, goals, and outcomes address diverse social, environmental, and ethical issues (Clarkson et al., 2011a,b). Following this logic, organizations with good financial, social, and environmental outcomes are motivated to disclose their nonfinancial performance to avoid problems of adverse selection (Clarkson et al., 2011a,b). However, studies on voluntary disclosure that use signaling theory have traditionally focused on disclosing financial rather than nonfinancial performance. According to proponents of signaling theory, corporations with better ES engagement indicators should communicate their outcomes and impacts more often than those with lower levels of performance. Indeed, the latter group has a tendency to partially disclose, skip, or even misrepresent their results (Thorne et al., 2014). Thus, high sustainability commitment is positively associated with the organization’s predisposition to disclose social and environmental impacts (Clarkson et al., 2011a,b). Given that expected marginal benefits tend to outweigh the costs of assurance (Braam and Peeters, 2017), signaling theory also suggests that companies with superior ES engagement voluntarily employ independent third parties to provide assurance to signal their superior sustainability performance. It has also been suggested that companies often attempt to increase their ES levels by signaling the adoption of structures and practices of similar organizations with greater ES commitment (DiMaggio and Powell, 1983). As a result, the pressure exerted by stakeholders on a company to be more environmentally conscious can shape strategic decisions so as to produce greater commitment to ES (Adams et al., 2016; Delmas and Toffel, 2004; Sharma and Henriques, 2005). Companies that engage in process innovation are therefore in a better position to address stakeholder requirements because of higher ES levels (Moyano-Fuentes et al., 2018). Moreover, mimetic drivers can lead companies to copy good practices from competitors, thereby producing a contagion of sorts that positively affects both innovation processes and ES engagement.

3. Strategic approaches to environmental sustainability As noted in the previous section, different theories can explain why ES has become a priority for companies. However, empirical research found that the level of engagement varies among companies. In many cases, engagement consists only of communication strategies based on rhetoric and green washing, both of which are used to promote the idea that a company’s products, goals, and policies are environmentally friendly (Blome et al., 2016; Nyilasy et al., 2014). Regardless, a trend has emerged showing that ES debates have shifted from general questions about the responsibilities companies and shareholders have

Implementing environmental sustainability engagement into business 117 toward future generations to emphasizing the mechanisms and processes that allow companies to implement ES (Wang et al., 2016). This is supported, for instance, by the growing presence of specific organizational structures that report directly to senior executive teams, and the expanded involvement of employees in sustainability activities (Ernst and Young, 2012). Stakeholder theory implies that different internal and external stakeholders place implicit and explicit pressure on companies to adopt specific behaviors. Changes in customer preferences, public regulations, ethical motivations, and performance considerations can push stakeholders to demand that companies reduce negative ES externalities and increase positive ones (Sarkis et al., 2010). Consequently, although empirical research often confirms a positive association between stakeholder pressure and the implementation of environmental practices and strategies, there is need for further research on the specific influence of selected stakeholder groups on ES engagement. For instance, Betts et al. (2015) explored the impacts of particular stakeholder groups on environmental management strategies using primary survey data from 502 US-based plants across multiple industries. The authors contribute to the ES operations management literature by exploring the relations among stakeholder pressure, environmental strategy implementation, and contextual factors via hypotheses testing. They found that the influence of stakeholder pressures on implementing ES strategies is affected by industry type. In fact, plants situated in dynamic industries (sectors with a high rate of change and innovation) experience significantly higher levels of stakeholder pressure than do plants that are situated in static industries (featuring lower levels of innovatory change) (Betts et al., 2015). In short, both external primary and internal primary stakeholders are thought to be significantly more important in dynamic industries than static industries (Betts et al., 2015). Further studies should continue to explore how industry type affects perceived stakeholder pressures, placing special emphasis on how it shapes ES strategy implementation. Because ES is conceived of as part of a company’s wider approach to social responsibility, several scholars have investigated how companies react differently to social responsibility. Drawing on the work of Carrol (1979) and Wartick and Cochran (1985), Clarkson (1995) identifies four different approaches that touch on strategies and performance: reactive, defensive, accommodative, and proactive (Fig. 4.1). Companies that have a reactive approach exhibit outright hostility to corporate social responsibility, with managers entirely neglecting environmental and social issues. A defensive approach characterizes managers who consider legality as the prime concern related to sustainability. Thus, their commitment consists of the minimum action needed to be compliant with legal requirements. Companies that adopt an accommodative approach are aware of the need to implement sustainability activities within the organization, and that doing so requires adopting specific management tools and employee training.

118 Chapter 4 Proactive

Anticipate responsibility

Accommodative

Accept responsibility

Defensive

Resist responsibility

Reactive

Deny responsibility

Figure 4.1 The reactiveeaccommodativeedefensiveeproactive scale. From an adaptation of ideas found in Clarkson, M.B.E., 1995. A stakeholder framework of analyzing and evaluating corporate social performance. Academy of Management Review 20 (1), 92-117.

However, they do not believe that ideas about social responsibility should undermine either the company’s business logic or its competitive strategy. The proactive approach, meanwhile, is employed by daring and adventurous companies that see sustainability strategies as an opportunity to renew or reinvent their competitive advantage. Their competitive strategy is based on sustainability, which means that management control and communication systems are used to monitor and disseminate information on performance, as well as economic, social, and environmental objectives. The classification scheme proposed in Fig. 4.1 demonstrates the variety of ES approaches companies can adopt to address sustainability issues. Nevertheless, this classification does not provide information about the drivers that shape how companies implement ES. However, Baumgartner and Ebner (2010) propose a more expansive framework that shows how different strategies are driven by different objectives. Four different approaches are identified: introverted and conservative, which are internally driven, and extroverted and visionary, which are externally driven (Fig. 4.2). Introverted strategies are motivated by risk mitigation. Companies that adopt these strategies do not show a genuine interest in ES. Rather, their purpose is to achieve and maintain conformity and compliance with mandatory requirements. More proactive approaches often feature conservative strategies that mainly focus on the economic effects associated with ES: namely, cost efficiency and process effectiveness. A company’s commitment to environmental concerns usually involves investing in appropriate technologies that allow for the development of adequate procedures and programs, with the ultimate goal of improving economic performance. Companies that focus on extroverted strategies tend to advertise their ES commitment to differentiate themselves from their competitors and increase their credibility.

Implementing environmental sustainability engagement into business 119 Strategy

Orientation

Introverted

Main objective Risk mitigation

Internally driven Conservative

Increasing efficiency

Extroverted

Doing the least that is required Externally driven

Visionary

Doing less than required

Figure 4.2 Environmental sustainability approaches. From an adaptation of ideas found in Baumgartner and Ebner, 2010.

Thus, engagement levels are usually higher than the minimum required by law. Nevertheless, corporate sustainability efforts are often the responsibility of communication departments because by and large, all of these policies are meant to improve the company’s image. These strategies can raise the risk of green washing, especially if they emphasize communication strategies instead of other corporate functions and processes. Visionary strategies are very much oriented toward the impact on the market itself. Companies that adopt these strategies aim to become a market leader in ES issues and/or base their competitive advantage on ES. In their most extreme forms, visionary strategies combine both internal and external drivers as a means of achieving a unique competitive position but often are based on internalization and the continuous improvement of ES issues inside the company. These strategies are the most difficult to implement, because all functions and processes need to be rethought or reinvented to consider sustainability issues. To explain the presence of divergent ES strategies among companies, Lee (2011) proposes a theoretical framework that combines stakeholder theory with institutional theory. Whereas the former focuses on the pressures companies face from specific stakeholders (Evan and Freeman, 1993; Miles, 2012), the latter looks at the institutional factors (e.g., policy, cultural norms, and routines) that affect corporate social behavior (Campbell, 2007; Hoffman, 2001; Marquis et al., 2007). Institutional theory maintains that institutions that pay greater attention to environmental and societal issues will make a greater commitment to sustainability issues. Divergent sustainability strategies can be attributed to different strategic responses to external pressures exerted by both stakeholders and institutional forces. For instance, Lee (2011) argue that the four strategical approaches proposed by Clarkson (1995) (see above)

120 Chapter 4 result from specific external influences that stem from the combined effect of institutions and stakeholders: “By providing regulative, normative and cognitive structures to social behavior, institutions give stability and meaning to social behavior (Scott, 2007). Stakeholders, on the other hand, constitute proximate mechanisms, which refer to more immediate and often micro-level influences that work through direct interactions” (Freeman et al., 2004). In light of this, the matrix reported in Fig. 4.3 suggests that stakeholder/institutional pressures can be used to explain the different strategic approaches to sustainability. The reactive approach, for example, emerges in the context of weak institutional and stakeholder pressures. In such an environment, companies have few incentives to pay attention to sustainability matters. Because market forces often drive companies to compete on cost, a lack of incentives allows companies to avoid any costly responsibilitybased initiative. This approach is associated with a traditional approach to business in which institutions do not recognize environmental and/or social responsibility and shareholders are considered the only one stakeholder that matters. Even today, especially in developing countries, reactive strategies continue to thrive because institutional forces often undermine ideas associated with corporate social and ES, whereas stakeholders are unable to exert sufficient pressure to change a company’s behavior. A defensive approach to sustainability emerges when institutional forces are intense but stakeholder pressure is weak. Any shift that comes about in the institutional structure as a result (for instance, stricter regulations) creates incentives for companies to either reduce

Figure 4.3 Different strategic approaches to sustainability. From an adaptation of ideas found in Lee, 2011.

Implementing environmental sustainability engagement into business 121 negative externalities or create positive externalities. However, defensive strategies are more likely to occur when these incentives are not accompanied and amplified by pressure from specific stakeholders. In other words, companies respond to the requirements of regulation, but they do not develop a real commitment to sustainability. In short, they do not go beyond the basic standards of compliance. Moreover, companies can also try to exert influence through increased lobbying activities to preserve the status quo (Useem, 1984). An absence of stakeholders allows companies to regard institutional forces as external elements that can be ignored or even resisted. The third configuration is characterized by high stakeholder pressure and moderate institutional pressure. When widespread institutional pressure is absent, companies tend to focus on addressing pressing stakeholder issues, which results in reliance on accommodative strategies. Companies that adopt these strategies often do not have a genuine commitment to sustainability. Rather, they implement sustainability policies merely to preserve their economic interests. Finally, the proactive approach is characterized by significant stakeholder and institutional pressure. In this scenario, companies tend to face strong institutional support for sustainability, which in turn grants legitimacy to various stakeholder issues and empowers stakeholders themselves. When pressed on both a macro (institutions) and micro (stakeholders) level, companies are more likely to devise and implement sustainability policies. As a result, companies are more likely to go beyond the minimum requirements imposed by law, adopting proactive strategies that link sustainability to value-creation processes.

4. Implementing sustainability initiatives 4.1 A business case for environmental sustainability and environmental sustainability management It is difficult to judge the real impact of ES on how companies manage their business. Unfortunately, sustainability policies are often shaped by several different factors including economic, ethical, ecological, and sociological issues (Joutsenvirta, 2011). Although many scholars have argued that changes to the traditional economic paradigm were unavoidable (Porter and Kramer, 2011; Yunus et al., 2010), it is reasonable to assume that these types of changes would most likely take a long time to produce a significant effect. The EPSRC Center for Industrial Sustainability (2013) claims that global challenges are projected to rise over the next few decades. Indeed, by 2050, the output of the global industrial system is expected to double while using 50% of current resources and generating 20% of current CO2 emissions. However, there is no reason to believe that companies are willing to completely change their ways of doing business. For instance, it is worth noting how expensive these policies are, because they require an immediate and significant amount of

122 Chapter 4 investment, with uncertain and delayed benefits, many of which are often reaped by society rather than the company itself (Levy, 1997). In light of this, many researchers claim that a firm relation between voluntary societal activities and business success simply does not exist (Schaltegger and Synnestvedt, 2002; Steger, 2004; Wagner, 2007). Schaltegger et al. (2012) notes that because companies are guided primarily by economic interests, managers are required to develop most of their sustainability engagement in relation to the economic goals of the corporation. This implies that corporate sustainability strategies must recognize both economic sustainability and social/ES (Parnell, 2008). While changing the dominant economic paradigm might be nothing more than a pipe dream, it is important to strike a balance between a company’s profitability and growth on the one hand and new ways of doing business that emphasize environmental and social matters on the other. Unfortunately, contemporary management theories do not provide answers to some of the challenges relating to sustainability (Driscoll and Starik, 2004). According to Starik and Kanashiro (2016, p. 13), “current management theories [.] to do not account for the various types of risks to, and potential impacts on both human biophysical and ecosystem health, for current and future generations, nor do they address the integration of these systems with socioeconomic challenges.” Although defining a unique and consistent theoretical framework for sustainability is an ongoing process (Corley and Gioia, 2011), sustainability management research has developed different approaches that touch on social, environmental, and economic issues in an integrated manner, helping to transform the ways in which companies contribute to the sustainable development of the economy and society as a whole (Schaltegger and Burritt, 2005; Whiteman et al., 2013). Generally speaking, all of these approaches refuse to separate ethical issues from business practice because they see these two concepts as being fundamentally linked (Ho¨risch et al., 2014). It is stated that social and environmental issues have to be linked to the core business of a company (Kolk and Pinkse, 2007; Loorbach and Wijsman, 2013). Thus, the idea that companies should address irresponsible environmental practices by redistributing value is generally frowned upon. Instead, companies are expected to focus their efforts on bringing value creation and ES matters closer together (Sze´kely & Knirsch’s, 2005). Environmental concerns are not seen as necessarily conflicting with financial matters. Instead, they can create new opportunities when they are combined effectively (Salzmann et al., 2005). Schaltegger et al. (2011) identify three requirements that are needed to create a business case for ES: 1. Sustainability activities need to be motivated by a genuine will to solve environmental problems instead of merely complying with legal requirements.

Implementing environmental sustainability engagement into business 123 2. Sustainability activities must result in a positive economic contribution in terms of cost savings, increasing sales competitiveness, and improving profitability. 3. Management must be clearly persuaded that its company aims to devise a business case for ES instead of a business case of ES. The former requires a different level of commitment because it tries to bring about economic success through voluntary environmental activities, whereas the latter aims for success with voluntary environmental activities. A business case for ES requires companies to embed sustainability throughout the entire organization, including strategy and operations governance, management processes, organizational structures, organizational culture, and auditing/reporting systems (Eccles et al., 2012; Laszlo and Zhexembayeva, 2011; Smith and Lensen, 2009). The ISO 26000 guidelines (2011) claim that an organization’s daily activities need to be stressed when redesigning its business logic to reflect greater emphasis on sustainability. Indeed, sustainability should become an integral part of the core organizational strategy, with assigned responsibilities and accountability at all levels. Moreover, it should be reflected in both decision-making processes and implementation strategies (Dyllick and Muff, 2016). Addressing sustainability in organizations requires what Porter and Derry (2012) refer to as sustainability thinking. Similarly, Richardson (2008) uses his ideas about complexity thinking to argue that sustainability thinking is “an action-oriented approach designed to apply complexity concepts to sustainability problems” (p. 42). There is no doubt that integrating sustainability policies makes business more complex because it obliges companies to address the needs and demands of several different stakeholders rather than just shareholders. Sustainability policies also force managers to consider both the immediate short-term gains and the significant long-term effects of their organization’s investments and strategies. Finally, sustainability involves multiple performance dimensions, including social, environmental, and economic performance. Thus, a sustainable company faces a multifaceted reality, with three dimensions, multistakeholder, multitimeline, and multiperformance (Porter and Derry, 2012), which traditional businesses do not face. To address this new reality, companies must emphasize adaptivity and resilience. The former deals with the ability to adapt to change while doing so consistently (Anderson, 1999). This concept is similar to resilience, which involves the capacity of a company to adapt continually to change without losing its own identity (Walker and Salt, 2006). A lot of frameworks have been proposed concerning the implementation of ES in business organizations (Azapagic, 2003; Asif et al., 2011; Baumgartner, 2014; Maas and Reniers, 2014; Maletic et al., 2014; Mustapha et al., 2016; Nawaz and Koc, 2018). All of these frameworks feature a common element, a preliminary and necessary condition to the

124 Chapter 4 success of any sustainability initiative: deep engagement from all members of the company, ranging from top managers to rank and file employees. Sustainability management involves so many radical changes to a company’s structure that it simply cannot take place in the absence of a deep and shared sustainability vision and a widespread culture of sustainability (Nawaz and Koc, 2018). The first task required of top managers, then, involves creating a business case for ES, explaining how the company can profit from increasing environmental contributions (Schaltegger et al., 2011). In other words, a strong business case for ES must link sustainability with the company’s core business approach. Schaltegger et al. (2011) state that most companies are capable of identifying one or more business cases for ES (Schaltegger and Wagner, 2006; Steger, 2004). However, these companies are often unable to recognize this trend because of distorted accounting/management information systems (Wallmann, 1995) and other organizational rigidities (Steger, 2004). ES represents a management challenge for companies because there is no clear answer as to whether it pays to be green (Reinhardt, 2000). The success of ES initiatives depends on what kind of idea is adopted and how it is implemented and managed. According to Schaltegger et al. (2011), the drivers that shape a business case for sustainability often feature variables that directly influence economic success, and are therefore related to the drivers that shape a conventional business case. The successful link between a sustainable issue and a business driver is what makes a traditional business a business case for sustainability. As a result, business ideas based on sustainability can be successful because they lead to cost reduction, an increase in profit margins, or risk reduction. In other words, the success of a business case for ES depends on how it is implemented within the organization: it depends on the success of the ES management initiative. ES management can be defined as the formulation, implementation, and evaluation of sustainability-related decisions and actions (Dunphy et al., 2000; Elkington, 1997; Laszlo, 2003; Stead and Stead, 2004; Starik and Kanashiro, 2013). This includes decisions and actions at an individual, organizational, and societal level (Bell and Morse, 2008), as well as different levels of involvement and effort among managers. At the individual level, these types of decisions might include reducing energy consumption in personal transportation, housing, and purchasing consumer goods. At an organizational level, ES management decisions and actions need to involve other entities with whom a company regularly interacts. For instance, reducing energy consumption at an organizational level involves considering the modalities of distribution of products and services. Finally, the subjects involved arise for ES management decisions and actions at the societal level, encompassing institutions, industry associations, and trade and professional associations involved in transportation system planning.

Implementing environmental sustainability engagement into business 125 The most critical aspect of ES management involves how to translate general principles into business practice. This in turn produces several challenges, including “moving away from the notion that all bottom lines are equal, but some are more equal, and from trying to translate the benefits of sustainability into the usual financial measures” (Azapagic, 2003, p. 304). In fact, financial benefits associated with ES initiatives are not always easily quantifiable and often have a long pay-back period. Addressing this problem involves at least two prerequisites: (1) the company must be forward looking, and (2) the company cannot adopt a simple add-on approach to ES management. Instead, a systematic, integrated approach is needed, one that encompasses all business activities. According to Azapagic (2003), a robust ES management framework: • • •

clearly identifies the key ES issues that need to be addressed; includes a useful set of measurements to assess its performance and evolution, thereby ensuring continuous improvements; and employs an adequate communication system to guarantee that relevant stakeholders are kept informed about the company’s ES programs and their progress.

To illustrate the ES management process on a practical level, Azapagic (2003) created the corporate sustainability management system (CSMS), a framework that breaks down the entire process into five different phases (Fig. 4.4). The CSMS framework specifically focuses on sustainability management and is flexible enough to account for different sustainability aspects. Moreover, it facilitates easy integration into existing organizational structures because it is compatible with general management system standards. This is

1. Sustainable development policy

5.Review and corrective actions

4.Communication

2.Planning

3.Implementation

Figure 4.4 Corporate sustainability management system. From an adaptation of ideas found in Azapagic, 2003.

126 Chapter 4 why the CSMS is one of the most cited and well-used frameworks in business circles. In its original version, the framework focused on sustainability management as a whole, but it can be equally applied to ES. The first step in the process consists of ES development policy, which requires identifying threats from unsustainable practices and opportunities that arise from more sustainable ways of working. This is in line with the recommendations provided by the Global Reporting Initiative (GRI) (GRI, 2013b), which states that environmental development policy should incorporate stakeholder expectations and contain statements of principles or policies on environmental responsibility. Threats and opportunities vary considerably from among companies and are strongly influenced by their relation with stakeholders. A stakeholder analysis can provide a company with useful information that identifies environmental issues that can undermine a company’s activities. The second step involves planning. A company should define a series of ES objectives and translate them into specific targets. At the same time, an adequate set of quantitative indicators should be identified. These indicators will have a central role in the success of the entire process. They should be used by management to measure progress and monitor the adequacy of the implementation process. They also represent the basis with which to define the action plans and assign targets and responsibilities at all levels of the organization. The critical sustainability issues identified in the first stage of the process should be used during the third phase ( the implementation stage) to identify ES priorities and align them with other business priorities. In some cases, ES and other business priorities could produce different time horizons. Indeed, ES often needs to remain unchanged for a long period to achieve defined objectives, whereas business priorities often need to be quickly updated to respond to change in a dynamic context. This means that all members of the organization should share the same ES culture and the long-term benefits associated with ES development policy. Moreover, specific projects should be defined for each business area (e.g., production, transport, and procurement) and each project should include detailed action plans that specify staff responsibilities and targets. Finally, the details of these projects should be explained to employees to guarantee necessary alignment and coordination. After all, the active involvement of employees in defining action plans could increase their feasibility and improve their chances of success. Effective internal and external communication, the fourth step in the CSMS framework, is also crucial for the success of any ES initiative. Regular internal reporting can motivate the staff, whereas external reporting can help an organization manage and strengthen stakeholder engagement as well as maintain a good image and reputation. Thankfully, several frameworks have been proposed for external sustainability reporting. Among these, the most widely used framework is the one proposed by the GRI (GRI, 2013b).

Implementing environmental sustainability engagement into business 127 Review and corrective actions represent the final step in the implementation process. Review actions should identify targets that have not been met and implement appropriate corrective actions. The review period normally ranges from 3 months to a year.

4.2 The role of innovation in sustainable business models The success of ES is often related to technological progress that results in innovation (Boons & Lu¨deke-Freund, 2013). Technological innovation has an important role in implementing ES in advanced manufacturing circles because it produces radical changes to the manufacturing process, creating opportunities to lower energy consumption and carbon emissions (Yang et al., 2017). In recent decades, research on sustainable innovation has expanded rapidly, increasing our understanding of the ways in which new technologies and social practices enable societies to become more environmentally sustainable. Researchers from several different disciplines have focused on this topic, including evolutionary economics, science and technology studies, innovation economics, economic sociology, and history (Boons and Lu¨deke-Freund, 2013). This research examines innovation as it relates to both the ecological and social impacts of a product or service (Prahalad, 2005; Seelos and Mair, 2007; Montalvo, 2008). According to Boons and Lu¨deke-Freund (2013), research on sustainable innovation can be divided into three main levels of analysis: organizational, interorganizational, and societal. Research at the organizational level mainly centers on how to transform new inventions into marketable innovation (Arimura et al., 2007; Visser et al., 2008; Horbach, 2008). Interorganizational studies, meanwhile, mostly focus on identifying influential factors that can affect a company’s innovative capacities or produce concrete results in terms of marketed innovations (Seuring and Mu¨ller, 2008; Schwerdtner et al., 2015; Shin et al., 2018). For instance, Kemp and Volpi (2008) examined factors influencing the diffusion of clean technology, showing the importance of both endogenous and exogenous mechanisms. Learning economies and epidemic learning (Kemp, 1997) are considered to be endogenous mechanisms, whereas policy, the characteristics of clean technology, the absorptive capacities of potential adopters, and the age structure of capital are seen as exogenous mechanisms. Finally, studies at the societal level seek to understand societal shifts in terms of technological changes. Often, the existing technology is conceptualized as a regime that is challenged by new innovations that occupy niches in the wider landscape (Geels, 2005). Among the three research levels, interorganizational studies have received the most attention. This is because any company that wants a sustainable innovation initiative to succeed must adopt a wider approach that considers global perspectives and different elements of the system and how they relate to each other (Stubbs and Cocklin, 2008).

128 Chapter 4 First, sustainable innovation requires expanding the concept of value that has traditionally been used in business circles. A sustainable view should use social and environmental goals to create a more holistic approach. Value should be reconceptualized to include not only economic transactions but also relations, exchanges, and interactions that take place among stakeholders (Allee, 2008) and can be represented by value flows (Den Ouden, 2012). “Identifying all the value flows among stakeholders,” Evans et al. (2017) argue, “including the natural environment and society as primary stakeholders, can reveal opportunities for sustainable innovation.” Employing a wider approach to value might lead firms “to change fundamentally the way they organize and engage in economic exchanges, both within and across firm and industry boundaries” (Mendelson, 2000). Sustainable innovation research closely intersects with BM research, a field of study in which the BM is considered “a new unit of analysis that is distinct from the product, firm, industry, or network; it is centered on a focal firm, but its boundaries are wider than those of the firm” (Zott et al., 2011). A company’s BM is seen as a tool that allows managers to understand, capture, analyze, and manage their business better (Amit and Zott, 2001; Magretta, 2002). It reflects the company’s strategy (Casadesus-Masanell and Ricart, 2010), which in turn clarifies the chosen position of the company within the industry value chain: that is, the key assets a company must own and control to capture value (Teece et al., 1997). For these reasons, the BM is also considered a valuable external communication tool (Beattie and Smith, 2013; Bini et al., 2016). Even if a widespread definition is still lacking, the BM concept is closely linked to three main aspects of value: value proposition, value creation, and value capture (Yang et al., 2017). Each dimension points out the relations, resources, and actions that contribute to a company’s competitive advantage. One of the most accepted BM frameworks was proposed by Osterwalder and Pigneur (2010). It features nine components that are divided into four pillars: product, customer interface, infrastructure management, and financial aspects. The product pillar consists of one element: value proposition. The customer interface pillar is divided into three elements: target customer, distribution channel, and relation. The infrastructure management pillar features three elements: resource and capability, value configuration, and partnership. Finally, the financial aspects pillar includes two elements: revenue model and cost structure. A brief description of each element can be found in Table 4.1. Osterwalder and Pigneur’s (2010) framework has become popular among companies and practitioners because it provides a detailed description of several key BM components (Bini et al., 2018). Thanks to related visual design proof (Business Model Canvas), it “has become a de facto standard” among companies (Upward and Jones, 2015).

Implementing environmental sustainability engagement into business 129 Table 4.1: Business Model Components. Pillar

Building block

Product

Value proposition

Customer interface

Target customer

Distribution channel

Relation

Infrastructure management

Financial aspects

Resource and capability Value configuration Partnership Revenue model

Cost structure

• How products and services, as well as complementary value-added services, differentiate a company from its competitors • Why a company’s value proposition could be valuable to the customer • At which stage of the value life cycle a value proposition creates value • How a company identifies its customers • Which segmentation strategy a company adopts to identify its customers • How advertising, promotions, public relations partnerships, and other initiatives are used to maximize the number of customers • Support services involved in the evaluation process and the transactions or after-sales assistance aimed at increasing value for the customer • Initiatives aimed at attracting and acquiring new customers • Mechanisms to extend the duration of the relation between a company and its customers • Every action aimed at selling additional products and services to current customers • How certain inputs and abilities underpin a company’s creation process • How certain activities drive a company’s value-creation process • How various arrangements with one or more entities are able to create value for the company and/or customers • How the value proposition affects revenue streams • How pricing mechanisms are defined • How a company’s value proposition translates into financial performance • How significant costs are managed to reduce their impact on a company’s performance

From an adaptation of ideas found in Osterwalder, A., Pigneur, Y., 2010. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers, John Wiley & Sons.

The BM has a primary role in innovation research. On the one hand, it is a valuable tool for managing innovation processes, products, and services (Teece et al., 1997; Zott and Amit, 2008). On the other hand, the BM can be revised to provide a competitive advantage by changing the terms of competition (Chesbrough, 2010; Demil and Lecocq, 2010). BM innovation does not necessarily lead to the discovery of a new product or service; instead, it emphasizes new ways to create and deliver the existing product or service, as well as new ways to capture value from it (Yang et al., 2017). In other words, the focus of BM innovation is on how to do business, rather than what to do, and it goes further than purely innovations in technology, product, and process (Amit and Zott, 2012).

130 Chapter 4

Figure 4.5 The five pillars framework for sustainability-oriented business models. From an adaptation of ideas found in Lu¨deke-Freund, F., 2009. Business Model Concept in Corporate Sustainability Contexts. From Rhetoric to a Generic Template for Business Models for Sustainability. Centre for Sustainability Management, Leuphana University of Lueneburg, Lueneburg.

Building on the Osterwalder and Pigneur (2004) BM framework, Lu¨deke-Freund (2009) proposed an approach that can integrate broader social and environmental considerations into the value proposition while adding eco-innovation into the value-creation process (Fig. 4.5). They call this new proposal a sustainable BM (SBM). The template proposes two main changes to the original framework. The first concerns the inclusion of a fifth pillar that is oriented toward sustainability. Because environmental and social aspects originate from non-market systems as a social construct, this new pillar has been dubbed the non-market pillar (Figge et al., 2002). Some fifth pillar issues include natural resources or forms of human and social capital that are not (fully) priced. Second, an SBM needs to rethink and reformulate the four traditional BM pillars to consider environmental and social aspects (accentuation). “Whereas the conventional pillars represent the value which is created with and for a firm’s partnerships and networks (infrastructure management), the customer value (customer interface and product) and the focal firm’s profit (financial aspects),” Lu¨deke-Freund (2009) argues, “the accentuated

Implementing environmental sustainability engagement into business 131 areas and the non-market pillar figure out the value that is created with and for society and the environment when a business model is applied to provide customer value” (p. 44). Several theoretical frameworks have been proposed to incorporate sustainability in a BM (Lu¨deke-Freund, 2009; Romero and Molina, 2011; Schaltegger et al., 2012). However, little scholarly work has been done explaining how companies can change their traditional BM into an SBM. One of the most attractive options is known as resource efficiency (Bocken et al., 2014; Rieckhof et al., 2015; Lopez et al., 2019). Compared with traditional process innovation, resource efficiency in an SBM encompasses the entire business, influencing the company’s value proposition by means of a considerable price reduction. According to Bocken et al. (2014), this option features concepts such as lean production (which is oriented toward sustainability), eco-efficiency production, and cleaner production approaches that seek to improve resource efficiency and reduce waste and emission through product and process redesign. Another option is the concept of creating value from waste (Chaudhary and Pati, 2016; Sta˚l and Corvellec, 2018). This concept differs significantly from the resource efficiency approach because instead of trying to minimize waste, it aims to identify and create new value from it. Nonetheless, both options emphasize ES by lowering the demand for energy and resources while reducing waste and emissions. Even the option of substitution with renewable and natural processes is oriented toward ES, although it is based on an entirely different logic (Morioka et al., 2017; Rosca et al., 2017). Instead of making existing processes more efficient, it seeks to render them cleaner by using renewable resources and natural processes. The viability of this option is strongly influenced by the type of technological innovation that makes the substitution of resources and processes more affordable. One of the most successful SBM approaches is the product service system (PSS) option (Joore and Brezet, 2015; Annarelli et al., 2016; Vezzoli et al., 2017). This approach is based on a shift in a company’s BM from offering a manufactured product to offering a combination of product and services. In other words, the company revenue model changes from one based on selling a product to earnings that are based on a pay-per-use strategy. For instance, Xerox was a pioneer of the PSS model (Vezzoli et al., 2017). As a copy machine producer, Xerox’s BM is based on leasing equipment to customers at a relatively low cost while charging a fee for copies in excess of 2000 per month. Because paying a fee disincentivizes printing, Xerox’s BM produces a substantial environmental impact. Nevertheless, the PSS is not necessarily more sustainable than traditional BMs (Mont and Tukker, 2006).

132 Chapter 4 Resource efficiency, creating value from waste, and PSS are excellent examples of innovation-based BMs that can simultaneously encourage ES and safeguard economic efficiency. Skeptics will argue that initiatives that are based solely on the production side of things will produce only limited effects on a social level. More impactful SBM options require the active involvement of customers who resist consumer-oriented lifestyle choices and stress the importance of sustainability-related issues. The best examples of this is the sufficiency-driven BM (Bocken and Short, 2016), an approach that seeks “to moderate overall resource consumption by curbing demand through education and consumer engagement, making products that last longer and avoiding built-in obsolescence, focusing on satisfying ‘needs’ rather than promoting ‘wants’ and fast-fashion, conscious sales and marketing techniques, new revenue models, or innovative technology solutions” (p. 41). For instance, the proliferation of secondary markets (e.g., used cars) could create an incentive for owners to take better care of their items to ensure higher second-hand value. Similarly, a change in the culture of fast fashion could significantly curb excessive consumption and premature disposal of useful products (Evans, 2009). Producers can also have an active role in changing the behavior of consumers by encouraging socially conscious advertising campaigns. However, because social change usually comes about slowly, it is reasonable to assume that it will take some time for these options to become commercially viable and be adopted by large companies.

5. Conclusion Companies have emphasized sustainability in recent years, and so debates about ES are focused on how to merge sustainability considerations with traditional business activities. From a theoretical point of view, several different incentives could bring about a continued and real commitment to ES. To take advantage of these incentives, however, companies need to address several challenges that could potentially transform or even reinvent their way of doing business. Based on a review of the scholarly literature on the topic, this chapter discusses the most important challenges companies must face, while examining the emerging managerial tools that can help companies make the appropriate changes. This chapter also focuses on various theoretical frameworks that can help companies address the challenges related to ES. The business community has developed several different approaches that can be used to implement ES engagement policies, including resource efficiency, creating value from waste, and the PSS. However, this is just the beginning. Thanks to technological change and growing recognition of ES issues, further opportunities are expected to emerge in the near future for companies to embrace sustainable BMs.

Implementing environmental sustainability engagement into business 133

Acknowledgments We wish to thank Charis Galanakis and Katerina Zaliva for their support during the writing of this chapter. Although this chapter is a team effort, Marco Bellucci is the author of Section 2, Section 5 and the coauthor of Section 1; Laura Bini is the author of Section 4 and the coauthor of Section 3; and Francesco Giunta is the coauthor of Sections 1 and 3.

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Further reading AccountAbility, 2008. AA1000 Assurance Standard 2008. Adams, R., Jeanrenaud, S., Bessant, J., Overy, P., Denyer, D., 2012. Innovating for Sustainability. A Systematic Review of the Body of Knowledge. Net-work for Business Sustainability, Ontario. Brown-Liburd, H., Zamora, V.L., 2014. The role of corporate social responsibility (CSR) assurance in investors’ judgments when managerial pay is explicitly tied to CSR performance. Auditing: A Journal of Practice and Theory 34 (1), 75e96. Casey, R.J., Grenier, J.H., 2015. Understanding and contributing to the enigma of corporate social responsibility (CSR) assurance in the United States. Auditing: A Journal of Practice and Theory 34 (2), 97e130. Castello, I., Lozano, J.M., 2011. Searching for new forms of legitimacy through corporate responsibility rhetoric. Journal of Business Ethics 100 (1), 11e29. https://doi.org/10.1007/s10551-011-0770-8. Cohen, J.R., Simnett, R., 2014. CSR and assurance services: a research agenda. Auditing: A Journal of Practice and Theory 34 (1), 59e74. Corporate Register, 2008. The CSR Assurance Statement Report. Corporate Register, London. Darus, F., Sawani, Y., Mohamed Zain, M., Janggu, T., 2014. Impediments to CSR assurance in an emerging economy. Managerial Auditing Journal 29 (3), 253e267. Evan, W.M., Freeman, R.E., 1988. A Stakeholder Theory of the Modern Corporation: Kantian Capitalism. Global Reporting Initiative, 2013a. The External Assurance of Sustainability Reporting (Retrieved from). Global Reporting Initiative, 2013b. Reporting Principles and Standard Disclosure: Global Reporting Initiative. GRI, 2013c. The External Assurance of Sustainability Reporting. Global Reporting Initiative, Amsterdam. Guthrie, J., Petty, R., Yongvanich, K., Ricceri, F., 2004. Using content analysis as a research method to inquire into intellectual capital reporting. Journal of Intellectual Capital 5 (2), 282e293. Hahn, R., Ku¨hnen, M., 2013. Determinants of sustainability reporting: a review of results, trends, theory, and opportunities in an expanding field of research. Journal of Cleaner Production 59, 5e21.

Implementing environmental sustainability engagement into business 143 Kolk, A., Perego, P., 2010. Determinants of the adoption of sustainability assurance statements: an international investigation. Business Strategy and the Environment 19 (3), 182e198. KPMG, 2013. The KPMG Survey of Corporate Responsibility Reporting 2013 (Retrieved from Netherlands). KPMG, 2015. Currents of Change: The KPMG Survey of Corporate Responsibility Reporting 2015 (Retrieved from Netherlands). Laufer, W.S., 2003. Social accountability and corporate greenwashing. Journal of Business Ethics 43 (3), 253e261. Lu¨deke-Freund, F., 2010. Towards a conceptual framework of business models for sustainability. Environmental Management 49 (0), 1e28. Milne, M.J., Kearins, K., Walton, S., 2006. Creating adventures in wonderland: the journey metaphor and environmental sustainability. Organization 13 (6), 801e839. Morris, R.D., 1987. Signalling, agency theory and accounting policy choice. Accounting and Business Research 18 (69), 47e56. Phillips, R., Freeman, R.E., Wicks, A.C., 2003. What stakeholder theory is not. Business Ethics Quarterly 13 (04), 479e502. Simnett, R., Vanstraelen, A., Chua, W.F., 2009. Assurance on sustainability reports: an international comparison. The Accounting Review 84 (3), 937e967. Spaargaren, G., Mol, A., 1992. Sociology, environment and modernity. Ecological modernization as a theory of social change. Society and Natural Resources 5 (4), 323e344.

CHAPTER 5

Open and eco-innovations in traditional industries Laura M. Avellaneda-Rivera, Francisco J. Sa´ez-Martı´nez, ´ ngela Gonza´lez-Moreno A University of Castilla-La Mancha, Albacete, Spain

Chapter Outline 1. Introduction 145 2. Literature review and hypothesis development 2.1 2.2 2.3 2.4

3. Data and methods 3.1 3.2 3.3 3.4

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Network factors in open innovation 147 Breadth of sources 147 External search depth 149 External geographic diversity 152

154

Traditional sector 154 Definition of sample and variables 155 Results in the agri-food industry 156 Results in the tourism industry 161

4. Conclusions, recommendations, and limitations References 171

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1. Introduction Innovation management research indicates that collaboration networks that connect and combine different knowledge flows can stimulate innovation performance. The application of open-innovation strategies involves combining internal and external sources (Chesbrough, 2006; Keicher et al., 2018). In the current global market, innovation is more important than ever to the growth and success of companies in any industry. Today, business policies need to reflect changes in business management and the intense flow of information (Hewitt-Dundas and Roper, 2018; Bogers et al., 2018). Transforming ideas into results for companies requires a range of complementary activities, such as organizational changes, training at all hierarchical levels, marketing tools, and job design (OECD, 2010).

Innovation Strategies in Environmental Science. https://doi.org/10.1016/B978-0-12-817382-4.00005-8 Copyright © 2020 Elsevier Inc. All rights reserved.

145

146 Chapter 5 Interest in open innovation as a field of research has grown exponentially (West and Bogers, 2017). Above all, open innovation refers to the reorganization of resources, the filtering of information, horizontal collaboration on common processes with partners, and the capacity to absorb knowledge and learn quickly (Lichtenthaler, 2009; Kostopoulos et al., 2010; Chesbrough, 2003; Cohen and Levinthal, 1990). Despite growing interest in open innovation, many authors have criticized the lack of research on its application in small and medium-sized enterprises (SMEs) (Keicher et al., 2018; Lee et al., 2010; Steen and Vanhaverbeke, 2016; Del Rı´o et al., 2016; Bossle et al., 2016). However, the possibility of achieving innovation through external cooperation is high (Cohen and Levinthal, 1990; Van de Vrande et al., 2009). In Spain, for instance, 99.8% of companies are SMEs (Ministerio de Empleo y Seguridad Social, 2018) with common features in terms of research and development (R&D). The literature to date has largely focused on the relation between open innovation and high-tech industries (Dodgson, 2018; Sandulli and Chesbrough, 2009; Chesbrough, 2006b; Van De Vrande et al., 2009; Christensen et al., 2005). Several authors have highlighted the need for empirical studies on SMEs (Santoro et al., 2018; Keicher et al., 2018; Gassmann et al., 2010; Chesbrough and Bogers, 2014), especially in traditional industries, where innovation has an important role as a growth factor in an increasingly competitive environment (Trippl, 2011). In the innovation process, knowledge management is required to implement R&D activities involving the creation of new technology. Such efforts are not always undertaken exclusively for commercial purposes but may also aim to reduce costs or production waste to help the environment. In 1996, Fussler and James defined eco-innovation as “new products and processes creating value for enterprises and clients and reducing (negative) environmental effects” (Fussler and James, 1996, p. 364). Eco-innovation has received considerable academic attention in recent years (Romani-Dias et al., 2018; Albort-Morant et al., 2017; Segarra-On˜a and Peiro´-Signes, 2011; Dı´az-Garcia et al., 2015), with particular attention given to European strategic policies (Marin et al., 2015), especially the possibility of generating mutual benefits for the company and affected stakeholders (Rennings, 2000). Climate awareness and external societal pressure can encourage companies to develop new technologies to avoid environmental deterioration or enable savings that mitigate climate change (Rennings, 2000; Calza et al., 2017). Our main aim is to confirm whether innovation activity and external cooperation are relevant in developing eco-innovations in the traditional sector. To this end, we have two specific subobjectives: first, to compare two important industries in Spain (the tourism industry and agri-food), both of which are defined as part of the traditional sector; and, second, to compare them in terms of three network factors (breadth, depth, and geographical diversity). Our work will offer a new perspective to researchers and entrepreneurs on the effects of open innovation on eco-innovation.

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2. Literature review and hypothesis development 2.1 Network factors in open innovation After the publication of Chesbrough’s book (2003) on the open-innovation paradigm, certain aspects have changed to improve its definition and allow the concept to evolve. The earliest studies referred to the two-way exchange of ideas via open channels. However, some authors (Laursen and Salter, 2006) warn that companies might need this knowledge not only in the invention or brainstorming stages but also in the marketing stage. Others note that not all collaborations are for economic purposes, but rather may also be undertaken as a matter of market survival (Bullinger et al., 2010), to create or recombine technology (Katila and Ahuja, 2002; Lee et al., 2010), or in pursuit of indirect benefits by making organizational changes at the company. Leiponen and Helfat (2005) find that companies maintain an open strategy with regard to sourcing ideas and knowledge (breadth of sources) but adopt a different mind-set when it comes to expanding the potential paths to innovation (breadth of objectives). These researchers propose that companies should intentionally use knowledge inputs and outputs to accelerate internal innovation. Many scholars have examined the market effectiveness of using networks to acquire, replace, or complement a company’s internal knowledge base (West and Bogers, 2017; Laursen and Salter, 2006). Based on the contributions of these early studies, the definition of open innovation can be updated as follows: A distributed innovation process based on purposively managed knowledge flows across organizational boundaries, using pecuniary and non-pecuniary mechanisms in line with the organization’s business model. Chesbrough and Bogers (2014, p. 17).

In our research on how to achieve this openness to innovation and establish external links, we have identified three key factors that point to how the gap between external knowledge and companies can be bridged.

2.2 Breadth of sources The first factor is the breadth of sources (BREADTH) used to pursue innovation. Companies can identify or seek external innovation sources by collaborating with multiple external agents or pursuing relations with more specific partners (Nieto and Santamarı´a, 2007). In one of the earliest and most influential articles to analyze the concept of breadth,1 Laursen and Salter (2006, p. 134) define the concept as “the number of external sources or search channels that firms rely upon to improve their knowledge base.” These authors related this factor to exploration (i.e., companies that broadly and openly seek a 1

Cited more than 4968 times since its publication, according to Google Scholar, as of Jan. 2019.

148 Chapter 5 number of external sources will generally acquire greater knowledge and have more opportunities to generate exploratory organizational learning (March, 1991; FerrerasMe´ndez et al., 2015) and will be more likely to obtain positive results). The use of different knowledge sources is determined by their accessibility, including the availability of technological opportunities, the degree of environmental turbulence, and competition (Cohen and Levinthal, 1990; Trantopoulos et al., 2017). Because companies usually have to learn how to get knowledge from external sources by trial and error, the relative accessibility of knowledge is an important factor in generating ideas (Del Corte Lora et al., 2016). Understanding the rules, habits, and routines of the various knowledge channels chosen for cooperation requires considerable time and effort. Because organizations cannot tell whether a wide range of channels has been used successfully, they can develop a certain myopia regarding open innovation (Levinthal and March 1993; Ardito and Petruzzelli, 2017), falling back on relying on internal R&D (Laursen and Salter, 2006). Learning and prior experience are dynamic capabilities of a company that affect both openness to innovation and outcomes. When companies develop knowledge management mechanisms and routines involving external sources, they learn to manage these processes efficiently, increasing the profitability of a broad network within moments of learning, cutting costs and time, and enhancing their performance. Companies need to collaborate with external agents quickly to stay competitive on the market. The literature on the importance of the technical information obtained from external agents as a determinant of eco-innovation processes is scant (Triguero et al., 2013). Horbach (2008) finds positive effects of external cooperation on eco-innovation, especially when the cooperation involves partners apprised of the latest technical knowledge, such as universities or research centers. Cainelli et al. (2012) show that cooperation has a positive effect on ecoinnovation when it is undertaken with partners who have expertise in environmental solutions. These authors argue that in such cases, the impact of the cooperation is twofold, because it both provides training for the company on environmental issues and modernizes its production processes (Sa´ez-Martinez et al., 2016). Horbach et al., (2013) confirm that eco-innovation requires more external knowledge and information sources than general innovation (i.e., innovation not specifically focused on the environment). According to Montresor et al. (2013), this is because environmental innovations have an organizational component. Companies expand their network of external sources to fill knowledge gaps rather than looking for solutions in aspects of innovation. It is difficult for the company to meet these urgent needs internally and similarly difficult with just one or a few external knowledge suppliers. The need to innovate requires a broad network of external agents, because undertaking such a process internally would be slow and expensive. Based on these general arguments, our first hypothesis is as follows: Hypothesis 1a: The breadth of the external search positively affects eco-innovation development.

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With an extensive external network, the company has several options regarding the attention dedicated to each source. If it allocates the same amount of effort and resources to each, the total time spent throughout the network will grow linearly in keeping with the network’s growth. This may not be sustainable owing to the need also to develop internal knowledge. Alternatively, the company can allocate a constant amount of resources to external networks, such that the time dedicated to each agent declines as the breadth of the network grows. The danger of this approach is that companies with a large number of agents may fail to allocate sufficient resources to each source obtained (Dahlander et al., 2016) and thus run the risk of creating weak or superficial links (Carlile, 2004). Such links may not be sufficiently enriching to enable the deep transfer of knowledge needed to obtain eco-innovations. Although weak links can sometimes improve innovation, especially in the initial opening phases (Granovetter, 1983), they are not always effective for transferring complex knowledge, because additional resources are required to recruit them, a situation that performance worsens. Open innovation through cooperation with external agents enhances environmental performance (De Marchi, 2012; Laperche and Uzunidis, 2012; Mogensen et al., 2012). However, when taken too far, it can lead to a decrease in green innovation even more pronounced than with regard to innovative performance in general (Laursen and Salter, 2006). This is because of the explicit and implicit management costs (Ghisetti et al., 2015) and process complexity. Eco-innovators have to assimilate more external technical knowledge owing to the paucity of eco-efficiency competencies within the company. This can increase the pressure on the attention of the company’s resources. According to the attention-based theory, managers need to concentrate their energy, effort, and mindfulness on a limited number of issues to achieve sustained competitive advantage (Ocasio, 1997). Because too many innovative ideas can emerge when a company has a broad knowledge base, breadth can distract the company from achieving successful new environmental improvements. Under the theory of limited rationality (Simon, 1947), attention effort is the most important and valuable factor within a company, and optimal resource management is critical to explaining why some companies are able to adapt so efficiently to their environment. Drawing on these approaches, we propose the following subhypothesis regarding this effect: Hypothesis 1b: The breadth of the external search and eco-innovation have an inverted Ue shaped relation.

2.3 External search depth Companies seem to perceive the lack of suitable partners for cooperation as a significant barrier to innovation. Therefore, a suitable knowledge partner can be a crucial asset worth retaining through intense, sustained interaction. This determines the depth of the

150 Chapter 5 relationship (DEPTH). This second network factor is defined as the extent to which companies draw from their various external sources (Laursen and Salter, 2006). In some of the earliest research on networks and the strength of the links, Ahuja (2000) indicates that external cooperation improves innovation results, provided the external agents’ knowledge does not lead to information overlap, by creating a secure channel that encourages knowledge transfer. However, other authors (Gulati et al., 2000) point out that this relation is not always direct and can be affected by important external factors that define the company, such as its industry or the type of cooperation agent. In their study of network depth, Ghisetti et al. (2015) find two main reasons for its positive influence on eco-innovation. The first is cognitive proximity, which facilitates learning through a network by creating a common cognitive space that enables the sharing, exploitation, and reconversion of knowledge (Spila et al., 2009). A lack of cognitive proximity (i.e., distance) can hinder eco-innovation results, because companies need to expand their knowledge to achieve success (De Marchi, 2012). This distance increases when the alternative production of environmental inputs or materials is dissimilar to the main business, which makes it more difficult to understand and put into practice (Teece et al., 1997). When acquiring new technologies, companies find solutions through agents removed from their usual network (i.e., at a [cognitive] distance from their initial base). Deeper interaction with external agents would result in better eco-innovation results. The second argument for the essential nature of network depth to eco-innovation is that, as noted, companies tend to perceive the lack of suitable cooperation partners as a considerable barrier to innovation (Rennings and Rammer, 2009; Hewitt-Dundas and Roper, 2018; Yang et al., 2017). However, the process is reinforced when it is complemented by an interactive process in which companies forge relations with other companies and the various agents in their environment (Amara et al., 2008). This is because the likelihood of achieving eco-innovations also increases along with skills acquired by the company through its deep interaction with these actors (Montresor et al., 2013). In light of these general arguments, our second hypothesis is: Hypothesis 2a: The depth of the external search positively affects eco-innovation development.

The application of open innovation is not limited to environmental results. The set of knowledge acquired also enables the development of other types of innovation. It would be misleading and difficult to isolate knowledge that can be applied to eco-innovation only from knowledge that can be applied to innovation in general (Ghisetti et al., 2015). Innovations intended to satisfy different groups of clients or that depend on new and unknown technologies are highly uncertain and difficult to measure (Henderson et al., 1998; Ahuja and Morris-Lampert, 2001). The cooperation processes initiated are likely to be abandoned because of the high associated risk (Keupp and Gassmann, 2009).

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Depth studies have found evidence of a curvilinear, inverted Ueshaped relation between depth and innovation results (Katila and Ahuja, 2002; Laursen and Salter, 2006; Arruda et al., 2013; Chen et al., 2011), but there have been fewer such studies than those of breadth (Greco et al., 2015). In their earliest works, Levinthal and March (1981) conclude that using the same elements dramatically reduces the possibility of error and fosters confidence in the process. From this perspective, repeating knowledge with external actors facilitates an understanding of the transferred knowledge and helps the company adapt or grow its competences later on (Katila and Ahuja, 2002). Eisenhardt and Tabrizi (1995) found that deep interaction with external agents makes it possible to arrange activities logically and in an order that enables good management, streamlining the process and injecting it with certain dynamism. However, this relation is not always positive. Dosi (1988) suggested that there are limits to intense cooperation with external sources. In this regard, Katila and Ahuja (2002) identified two important factors. First, beyond a certain point, innovation based on the same knowledge becomes expensive, because the solution identified through the cooperation is too complex to carry out with a small number of channels. Second, the establishment of a permanent network of agents turns the cooperation into a routine and rigid process, barring new contacts from joining. Organizations with deep networks are skilled at adapting to change and thus innovating. Maintaining close contacts with external channels requires attention and sufficient resources (Terjesen and Patel, 2017). Therefore, if a company relies on too many external agents, it may fail to achieve the expected innovation results (Terjesen and Patel, 2017). As noted, under the theory of limited rationality (Simon, 1947), given a company’s limited capacity, excessive searching for external channels can prevent any learning achieved through these channels from positively affecting environmental innovation results. The reasons are twofold: first, the same trusted sources are repeatedly used, even if they fail to produce the necessary technical information to address environmental problems; and, second, the increased costs of obtaining this information are not offset by the results. Ghisetti et al. (2015) suggest that there is a conflict between the commitment to pursue external knowledge intensely and the ability to implement environmental improvement measures, and further, that this conflict may be even stronger than in the case of general innovation. The greater complexity and distance of the external knowledge required by the eco-innovator, combined with the relative scarcity of the necessary green skills to process it, can increase pressure on the attention of the company’s resources with the ensuing negative impact on its performance. Based on these conclusions, we propose the following subhypothesis concerning eco-innovation: Hypothesis 2b: The depth of the external search and eco-innovation have an inverted Ue shaped relation.

152 Chapter 5

2.4 External geographic diversity The literature on cooperation and the search for external sources has revealed interest in interacting with external agents, because it speeds the commercialization of products (Chesbrough, 2003). Open innovation involves attracting innovation from agents beyond the company’s usual geographical scope to open more technological opportunities. Geographical diversity (DIVERSITY) can be defined as external partners’ countries of origin. The number of new useful ideas that can be acquired through external knowledge is limited (Katila and Ahuja, 2002); however, access to external sources of diverse geographical origin usually increases the chances of achieving solutions leading to the creation of new products (Katila and Ahuja, 2002; Laursen and Salter, 2006). Increased network diversity through partners from different industries, companies, or countries makes it possible to achieve greater benefits in terms of resources and learning, as well as to expand the company’s knowledge base. When companies pursue this openness to knowledge beyond their geographic and technological limits, they accelerate the development of increased innovations (Morkertaite and Sekliuckiene, 2016; Presutti et al., 2017), although the results ultimately obtained will depend on their absorption capacity (Ferreras-Me´ndez et al., 2015). Fewer studies have focused on the importance of external knowledge sources beyond national boundaries (Wu and Wu, 2013). The search for national and international knowledge must be coordinated if a company is to succeed on the market, because the two sources are complementary in predicting the success of innovation results. This is because local sources generally lack inspiration (Gallatera, 2015) or the necessary variety to solve problems. In addition, the environment may not offer sufficient opportunities to combine knowledge, which making innovations that do seem less novel. More evidence has been found in highly technology-intensive industrial sectors (Wu and Wu, 2013; Phene et al., 2006; Li and Vanhaverbeke, 2009; Barge-Gil, 2010) than in traditional ones. Wu and Wu (2013) recommended that technology-intensive companies cooperate with various national and international sources. Their results show that when the search for technological innovations related to new products is conducted with both local and international agents, it has a more positive impact than when only international diversity is considered. The combination of both is an efficient way to maximize the learning benefits from the international search. We have found an important gap in the literature on geographic diversity in aspects related to the environment. As noted by De Marchi (2012), Horbach (2008) empirically analyzes cooperation between German companies from various regions with regard to ecoinnovation, but finds weak significance. Ghisetti et al. (2015) demonstrate the relation with search factors such as breadth and diversity of several European countries, but only insofar as it affects these countries’ relations with companies before internationalization.

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Likewise, Kuhl et al. (2016) show that opens cooperation by Brazilian electric companies does not affect aspects of internationalization in terms of the environmental improvements achieved. In an analysis of cases involving multinational companies, Laperche and Uzunidis (2012) confirm improvement resulting from international cooperation with various European and international universities in relation to eco-innovation. These authors show that the multinationals cooperate with a network of researchers across Europe, the United States, Japan, India, and China, above all, to accelerate R&D and lower research costs stemming from the need to strengthen their knowledge in the fields of energy, the environment, and the technical aspects of product development. The common global economic, social, and environmental challenges the international community faces have led it to define a set of shared sustainable development goals (Duran Herrera, 2015). In accordance with this research, both national and international geographical diversity should positively affect eco-innovation. However, there is scant literature on the topic. Pen˜asco et al., (2014) suggest that governments should encourage cooperation with national and international agents as an effective means of promoting eco-innovation. To promote companies’ internationalization successfully, the relevant institutions should design support instruments tailored to the specific characteristics of each industry rather than offering generic solutions. De Marchi (2012) indicates that cooperation in R&D is important to a company’s environmental innovation performance, because it reduces the risks for and costs of R&D (Yu and Rhee, 2015). In keeping with these premises, we propose the following hypothesis: Hypothesis 3a: The geographical diversity of the external search positively affects eco-innovation development.

In their research on geographic diversity, Goerzen and Beamish (2005) indicate that the relation between the geographic diversity of external cooperation and eco-innovation is not linear. Some researchers have suggested that this is because the highest levels of cooperation among different geographic areas fail to yield the expected results. According to Roth (1992), the dispersion of the various actors’ interests can greatly increase the management of information-processing demands; as a result, the organization becomes more complex, which makes it more difficult to achieve eco-results. Managing this knowledge leads to uncertainty and additional expenses, such as network coordination costs (Powell et al., 1996; Galang, 2014), knowledge absorption costs (Cohen and Levinthal, 1990; Laursen and Salter, 2006), or costs arising from opportunistic behavior (Faems et al., 2010). If the geographic diversity is international, the cognitive distance will be even greater, further increasing the expenditure of resources and time required to assimilate and use the knowledge. Based on these findings, we propose our last subhypothesis: Hypothesis 3b: The geographic diversity of the external search and eco-innovation have an inverted Ueshaped relation.

154 Chapter 5 BREADTH

DEPTH

ECO INNOVATION

GEOGRAPHIC DIVERSITY

Figure 5.1 Model and hypotheses.

Our model, which is based on the three proposed hypotheses, is shown in Fig. 5.1.

3. Data and methods 3.1 Traditional sector It is difficult to combine research on SMEs in nonetechnology intensive industries. First such companies are heterogeneous, spanning diverse and mature industries (Trippl, 2011). Second, there is a high level of interaction among companies using different levels of technology (Robertson and Patel, 2007), which makes them interdependent in terms of cooperation on innovation issues. Moreover, before these types of SMEs can be studied, it is necessary to define what is meant by the traditional sector. For current purposes, it refers to the group of technically viable, labor-intensive companies that use intermediate technologies (i.e., that do not require high levels of technological knowledge for production development) (Sa´nchez, 1999; Fonfrı´a, 2004; Calvo, 2000). This perspective obviously stands in sharp contrast to new, dynamic, and advanced industries that show a positive evolution on both the supply and demand sides. The research and innovation activity of companies in the traditional sector is limited; however, empirical evidence shows that they are sensitive to the introduction of high technology and that it can significantly boost both their exports and market share. In addition to accounting for a high share of the country’s industrial activity, the relative weight of the traditional sector in Spain is greater than the European average and that in most European Union member countries (Gandoy-Juste and Gonza´lez Dı´az, 2004). Spain is home to a large number of manufacturing companies in this sector, as shown in Fig. 5.2, which reveals that more than 88% of all manufacturing companies in the country can be considered part of the traditional sector.

Open and eco-innovations in traditional industries Industry in Spain

155

Traditional Sectors

800,000,000 600,000,000 400,000,000 200,000,000 0 net sales of products

turnover

total operating income

Figure 5.2 Analysis of economic data of the Spanish manufacturing industry. From authors with INE Data (2014).

3.2 Definition of sample and variables To test our hypotheses, we used a representative sample of Spanish companies taken from the Technological Innovation Panel (Panel de Innovacio´n Tecnolo´gica [PITEC]). Anonymous data from this panel can be obtained from the website of the Spanish Foundation for Science and Technology (Fundacio´n Espan˜ola para la Ciencia y la Tecnologı´a [FECYT]). A main advantage of PITEC is that, unlike cross-sectional databases with no time dimension, it enables much more accurate estimates of changes in companies over time, which makes it easier to collect more robust data that better reflect companies’ heterogeneous behavior. This is an important methodological aspect because most studies conducted to date have used cross-sectional data (referring only to one wave of the survey), which poses several problems for identifying causal relations. Another advantage of PITEC is that it is a free database available to researchers on the FECYT website. Databases derived from these types of surveys (PITEC or Community Innovation Survey) are widely used in research analyzing companies’ innovation activities for various reasons. First, they follow the guidelines of the Organization for Economic Co-operation and Development’s Oslo Manual (OECD, 2005) and are the result of years of work by various academics and professionals. Second, they enable the comparison of indicators used to analyze the differences among countries and different periods of time, and thus the development of sound empirical evidence. For the current research, we used the 2011 sample, which contains a total of 10,074 companies. Specifically, we analyzed the 592 companies pertaining to the agri-food industry and the 177 companies pertaining to the tourism industry. There is currently no clear consensus on the definition of eco-innovation. The proposed definitions often consider two main aspects: measurement of the environmental impact and the innovator’s intention to implement the innovation. The most difficult part is verifying the effect of a motivation that becomes a result that can then effect a change (CarrilloHermosilla et al., 2010; Kowalska, 2014). Our model uses a subjective measure based on the motivation for the innovation, using a reflective scale to measure eco-innovation.

156 Chapter 5 Specifically, we identify the responses from our database regarding the importance assigned to various objectives related to improving environmental impacts in health and safety on a four-item scale (possible responses were high, medium, low, or not important). This approach has been used in other studies (Horbach, 2008; De Marchi, 2012) and differs from those used for patent analysis in others (Jaffe et al., 1995; Berrone et al., 2013). To facilitate understanding the results without distorting understanding of the effect of the independent variables, we will recode the scores from 1 to 4, in which 1 is “not important” and 4 is “high.” One of PITEC’s nontechnological objectives is to reduce energy and material consumption (Gonza´lez-Moreno et al., 2013; Segarra-On˜a et al., 2015) to improve processes for ecoinnovation. The investments and research that companies dedicate to reducing energy or material consumption can be directly related to reducing costs (Pereira and Vence, 2012; Horbach, 2008). However, in the current research, we eliminated this from the set of objectives, in keeping with Miret-Pastor et al. (2012), who note, “Traditional sectors seek innovations aimed at reducing energy costs in order to increase the value of their products. However, this can distort the results since the primary aim is usually to reduce costs and serve as a variable to improve the company’s processes rather than to eco-innovate” (Miret-Pastor et al., 2012, p. 3). We constructed a variable that includes the eco-innovation objectives appearing in the PITEC questionnaire under Other objectives of technological innovation, as done elsewhere in the literature (Reyes-Santiago and Sa´nchez-Medina, 2016; Segarra-On˜a et al., 2011). Table 5.1 shows the measurement of each variable from the PITEC survey used for this research. The model includes control variables identified in the literature, such as age, size, and group (Kesidou and Demirel, 2012; Ahuja and Katila, 2001; Laursen and Salter, 2006; De Marchi, 2012; Garriga et al., 2013; Cainelli et al., 2015; Chen et al., 2011). Age (YEAR) was measured by indicating the year the company was founded. Size (SIZE) was measured as the number of employees expressed in logarithmic form. Both company size and company age have been used in multiple academic studies (Vega-Jurado et al., 2008), because a positive effect has been found between a company’s age and size and its innovation performance. Likewise, belonging to a group (GROUP) can entail benefits for companies, such as access to specialized skills and inputs, the benefits derived from knowledge feedback processes (Ce´spedes-Lorente and Martı´nez del Rio, 2007), or the possibility of accessing specialized knowledge networks (Hughes et al., 2014).

3.3 Results in the agri-food industry Within the traditional manufacturing sector, agri-food is a key industry in an increasingly competitive environment in which product novelty can be considered a competitive

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Table 5.1: Measurement of independent and dependent variables. Dependent variables Eco-innovation Other objectives of technological innovation: OBJ 11 Reduce environmental impacts OBJ 12 Improve health or safety of employees OBJ 13 Meet regulations or standards on environment, health, or security Reyes santiago and ´nchez-Medina Sa ˜a (2016); Segarra-On et al. (2011); De Marchi and Grandinetti (2012); Del Rio et al. (2016); Weng, Chen and Chen (2015); Horbach (2008);

Independent variables Breadth

Depth

Geographic diversity

Numbers of sources of external information that your company trusts for innovation activities e Customers e Suppliers, competitors e Consultants and commercial laboratory research and development e University e Technology centers

Intensity of relation with external sources (1e8)

External partners’ countries

Laursen and Salter (2006); Montresor et al. (2013); Ghisetti et al. (2015); Trigo (2011); Laursen and Salter (2006); Leiponen and Helfat (2010); Garriga et al. (2013); Ketata et al. (2015)

Laursen and Salter (2006); Chen et al. (2011); Arruda et al. (2013); Leiponen and Helfat (2010); ˜uela et al. Olmos-Pen (2017)

Santamarı´a et al. (2016); Wu and Wu (2014); Srholec (2015)

advantage (Costa and Jongen, 2006). Specifically, food is rapidly becoming a more personalized market (Boland, 2008). Consumers increasingly demand healthy-living products tailored to their individual needs and preferences (Sarkar and Costa, 2008). As for the organization of the supply chain, innovation remains a difficult and complex process for the food industry, mainly because of the number of actors involved in food production. These actors can be small companies, intermediate customers, or end users, resulting in heterogeneous or even contradictory requirements, which can be difficult for companies to meet (Grunert, 2005). In light of these considerations, it is clear that the innovation process has to be managed not only within the individual company but also beyond it, overseeing the process throughout the entire value chain (Costa and Jongen, 2006) to coordinate multiple relations with the different actors involved (Grunert, 2005; Vanhaverbeke and Cloodt, 2006). As these premises show, innovation in the food industry is increasingly based on the decisions and activities of companies themselves, but especially on other players participating in the innovation system. Similar considerations apply to open-innovation

158 Chapter 5 Table 5.2: Percentage of cooperation in innovation with external sources in agri-food sector. < 250 employees Suppliers Customers Competitors Consultants and commercial laboratories research and development Universities and technology centers Other groups

‡ 250

Total

5.69 4.83 1.75 2.20

26.44 33.20 12.45 8.31

6.38 5.76 2.10 2.40

2.85 1.52

16.10 5.19

3.28 1.64

From INE (2016).

mechanisms, because of the number of external innovation sources that must be carefully coordinated (Bigliardi et al., 2010). To access external knowledge, agri-food companies can enter into more or less formal agreements with other actors in their supply chain or with external actors such as universities and research centers. As shown in Table 5.2, cooperation sources are diverse in this industry, although the percentages are still much lower in SMEs than in large companies. As verified by Bigliardi et al. (2010), there is a direct relation between company size and openness in innovation in the food industry. The agri-food industry in Spain consists of more than 22,215 companies (INE, 2016), accounting for almost 12% of all Spanish companies and 15.9% of business turnover. The same data show that in 2015, this industry had the highest percentage of investment in environmental issues of any industry in Spain, at 27.8%. The industry’s efforts in this regard bear witness to the importance of improving processes involved in reducing their environmental impact. In the 2011 PITEC data, this sample consisted of 592 companies. Eco-innovation and green technology pose a new challenge for many industrial companies (Horbach et al., 2013), entailing a need to understand possible risks before making an investment. From the point of view of agri-food industry managers, the main driver of green actions must be a strategy that can protect their production capacity and value (Blasi et al., 2015). Graph 5.1 visually describes the importance of eco-innovation objectives in the agri-food industry, showing the percentage of importance placed on objectives related to environmental issues. The highest percentage is placed on compliance with the requisite safety, health, and environmental standards. As noted in the description of eco-innovation, regulatory requirements are an important external motivation for eco-innovation. By complying with legal requirements, the food industry improves the quality of its products (Horbach, 2008). In the agri-food industry, compliance is moderately important; the consequences of noncompliance might be worse in cases directly related to health (Banerjee et al., 2003).

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Meet regulaons or standard son environment, health or security

Improve health or safety

Reduce environmental impacts

0

5

10

15

20

25

Graph 5.1 Percentages of importance regarding objectives related to environmental innovation in agri-food sector. Table 5.3: Factor analysis of dependent eco-innovation, agri-food sector. Reduce environmental impacts Improve health or safety Meet regulations or standards on environment, health, or security Cronbach a

0.900 0.931 0.904 0.898

As Table 5.3 shows, the factor analysis (extraction) performed on the primary components revealed that the three variables corresponding to the items composing the eco-innovation variable had a value greater than 0.707. These three variables are thus sufficient to explain the dependent variable eco-innovation, with particular weight in the objective improving employee health and safety. We checked the scale’s reliability. As shown in Table 5.3, Cronbach a was .898 (i.e., greater than 8), indicating good internal consistency (Nunnally, 1978). Next, we analyzed the data using an ordinary least squares (OLS) regression. First, we introduced the control variables (company size, group, and age) in the base model. In Model 1, we confirmed the positive relation of the independent variables with ecoinnovation. In Model 2, we added the squared variables to determine whether the relation had an inverted-U shape. The numerical results are shown in Table 5.4. The adjusted coefficient of determination (adjusted R2) indicates the percentage of variation explained by the linear model, considering the number of variables the model includes. Model 1, which includes linear variables, explains 33.5%, whereas Model 2, which includes the quadratic variables, explains 36.2%. Through the analysis of variance regression test, we verified that the explanatory variables provide information about the behavior of eco-innovation in all three of the described models. F is significant in all three models (Table 5.4), which provides support for the hypothesis that breadth,

160 Chapter 5 Table 5.4: Ordinary least squares Regression analysis: agri-food sector. Base Model

Constant Size (Ln] employees) Group Age (year of creation) Breadth of relations Depth of relations Geography diversity Breadth2 Depth2 Geography diversity2 Coefficient of determination F N

b

Error estimate


2.066 0.160*
0.27 0.001

3.616 0.033 0.092 0.002

0.043 9.954* 592

Model 1 Hypotheses 1a, 2a, 3a b
4.588 0.086*
0.063 0.001 0.036 0.095*
0.022

Error estimate 3.026 0.028 0.077 0.002 0.029 0.007 0.054

0.335 50.541* 592

Model 2 Hypotheses 1b, 2b, 3b b

Error estimate


5.147 2.966 0.077* 0.028
0.030 0.077 0.001 0.001 0.025 0.065 0.273* 0.034
0.032 0.129 0.008 0.012
0.005* 0.001 0.003 0.028 0.362 38.222* 592

*P < .01. Ln, In means neperian logarithm.

depth, and diversity (along with the control variables) together explain the dependent variable. With regard to the intensity of the external relations (DEPTH), we found support for Hypothesis 2a, positing a positive relation with eco-innovation, obtaining a significant value in Models 1 and 2. Cognitive proximity encourages learning through cooperating networks by facilitating the modification, sharing, and exploitation of knowledge in accordance with each company’s needs (Spila et al., 2009). The speed with which this knowledge is assimilated will depend on the organizational structure. Agri-food companies have difficulty finding suitable partners or agents; their openness to innovation is hindered by distrust (Rennings and Rammer, 2009). However, when they manage to adapt their needs to a suitable information source, they forge stable links through an interactive process (Amara et al., 2008). With regard to environmental aspects, the creation of formal or informal links provides additional inputs for the learning process, resulting in to new opportunities to access information about markets, technology, and research. These findings are consistent with those of Montresor et al. (2013), who find that a deep relation with partners closer to a company’s own environment increases its chances of achieving eco-innovative processes. No support was found in Model 1 or 2 for Hypotheses 1a and 1b in our analysis of the breadth of the external search. Manufacturing industries tend to give greater importance to depth than breadth (Laursen and Salter, 2006). Such companies need to cooperate

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intensively with agents to solve and avoid potential information-processing problems (Simon, 1947), because business owners have limited decision-making capacity and prefer to work with agents they trust. An excessive number of ideas prevents the suitable selection and exploitation of processes (Koput, 1997). The myriad interests of the various external agents in relation to environmental concerns must be filtered and reduced, and companies must prioritize and select those best aligned with their own interests (Ketata et al., 2015; Ocasio, 1997; Yang et al., 2017). Regression for the agri-food industry sample yielded a negative and nonsignificant result for the variable geographic diversity. Thus, conclusive support was not found for Hypotheses 3a and 3b. This stands in contrast to the findings of Horbach (2008), who confirms the positive effect on eco-innovation, and Barge-Gil (2010), who likewise finds a positive effect and suggests it to be a potential option for nonetechnology intensive companies seeking innovative solutions. This could result from the disperse interests of the various actors, which can greatly increase the management of information-processing demands, rendering the organization more complex and making it difficult to achieve ecoinnovation. The statistical results already point to the low frequency with which companies search for international geographic channels, which are associated with higher spending and uncertainty owing to absorption costs (Ferreras-Me´ndez et al., 2015; Cohen and Levinthal, 1990; Laursen and Salter, 2006) and costs arising from opportunistic behavior (Faems et al., 2010). Model 2 shows that the variable depth2 is negative and significant (
0.005% to 99%) in the agri-food industry, which means that excessive depth in external links can negatively affect eco-innovation. Support was thus found for Hypothesis 2b. This results from excessive reliance on the same trusted sources, even when the technological information they produce is ill-suited to solve the company’s environmental problems or even is obsolete. It is also because the increased costs of obtaining this information are not offset by the results obtained. Agri-food companies that mostly use traditional procedures, removed from new technologies, may see a decline in returns owing to a lack of understanding of complex processes. In addition, if the distance between the company and the external knowledge source is greater than expected, it can lead to a reduction in the eco-innovator’s attention and assimilation. The relative scarcity of specific green competencies to process this information can increase pressure on the attention of the company’s resources, with a consequent decline in performance. As shown in Graph 5.2, this relation has an inverted-U shape, with a high point less than 29 points.

3.4 Results in the tourism industry After checking our results in an industrial industry, and because of the importance of the service sector to the Spanish economy (1,306,570 companies, 5% annual change in

eco-innovation

162 Chapter 5 0 -0.5 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 -1 -1.5 -2 -2.5 -3 -3.5 -4 -4.5 -5 external search depth

Graph 5.2 Inverted U-shaped relationship in agri-food sector.

turnover, and 5,377,000 employees) (INE, 2014), we also analyzed a sample of service sector companies to determine whether implementing open-innovation processes has a positive effect on their results. The service sector has been important to the country’s structural transformation (Gallouj and Savona, 2009). Furthermore, one of challenge of innovation is developing and implementing products/processes and management methods that improve environmental conditions (Magadan Dı´az and Rivas Garcı´a, 2018). Therefore, the study of eco-innovation is a relevant field of analysis in the service sector. Various authors have highlighted the need for research on service companies and open innovation (Segarra-On˜a et al., 2016; West and Bogers, 2017), noting that cooperation with close links, such as suppliers, customers, and competitors, would increase their eco-innovative orientation toward more sustainable services. Innovation work in the tourism industry usually focuses on factors that motivate companies to carry out innovation strategies (Den Hertog et al., 2011; Nagy and Babait‚a, 2016; Hjalager, 2010). Martinez-Ros and Orfila-Sintes (2009) show that factors related to business management have a greater influence on service sector companies than manufacturing companies. In the tourism industry, business management and administration creates several strategic skills for improving service quality (Hjalager, 2010) and managing the risk involved in implementing innovations in services offered to customers. Innovation processes have been shown to be less organized, explicitly managed, and frequently budgeted in most service industries than in industrial companies. Den Hertog et al. (2011) demonstrate that tourism companies are more likely to engage in external cooperation and to combine internal and external knowledge, with a supplier as the main source of innovation in the case of process innovations (Jacob and Tintore, 2004) and with clients in the case of product and service innovations. Tourism continues to be one of the highest-revenue industries in the Spanish economy (Brida et al., 2008). For several decades, it has been critical to growth in Spain, and

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although it is currently undergoing a more complex and fluctuating phase, there is no doubt that it will continue to have a pivotal role in economic recovery (Roura and Morales, 2011). Spain is the world’s fourth most popular tourist destination, after the United States, France, and China. According to the cumulative data, it received more than 64.9 million international tourists in 2015, registering a year-on-year variation of 10.1% in the first half of 2016 (Instituto de Estudios Turı´sticos, 2016). Our sample consisted of 177 companies extracted from the 2011 PITEC survey. Most innovation spending is usually targeted at improvements in telecommunications, especially in the case of travel agencies (Jacob et al., 2004). Technologies developed internally or acquired from suppliers are incorporated with the aim of making the application of innovation a competitive advantage (Martinez-Ros and Orfila-Sintes, 2009) through production efficiency (cost reduction) or greater differences in service (adapted to new customer needs and new forms of commerce). The irruption of new technologies and changes in consumption patterns are producing important transformations in the tourism industry. Some authors point to a third-generation tourism industry (Aguilo´ et al., 2005) with a more discerning demand and products based on quality and environmental criteria. In most cases, adapting to this new tourism will not entail a radical rupture, but rather the evolution of the existing model, with eco-innovation having a decisive role. Tourism is a resource-intensive industry with a large environmental footprint (Hunter and Shaw, 2007). According to the Spanish Ministry of the Environment, the dynamism of the tourism industry can be maintained only by developing and implementing instruments designed to incorporate eco-technological innovation processes in areas ranging from energy savings to environmental stewardship or the creation of new products (Red de Estudios Ambientales, 2007). The results of the factor analysis (extraction) performed to determine the correct value of the eco-innovation construct are shown in Table 5.5. As can be seen, the three variables total more than 0.941. According to Carmines and Zeller (1979), items with loadings greater than or equal to 0.707 can be accepted. The literature further indicates that this condition should be less rigid in low-development scales (Barclay, 1995). Variables lower than this value should be removed from the model. In the social sciences, solutions Table 5.5: Factor analysis of dependent variable of eco-innovation: tourism sector. Degree of importance of following objectives 2009e11 (Question E.6) Likert scale 1e4 Reduce environmental impacts Improve health or safety of employees Meet regulations or standards on environment, health or security *P < .01.

Factor-dependent variable (Eco-innovation)* 0.941 0.989 0.953

164 Chapter 5 Table 5.6: Sample reliability. Eco-Innovation Explained variation KaisereMeyereOlkin Barlett Significance Cronbach a

92.422 0.623 139.527* 0.000 0.959

*P < 0.001.

explaining more than 60% of the variance can be accepted (Hair et al., 1999). Because our value was higher than that, we accepted our items. The reliability analysis of the variables revealed a latent variable composed of three items (reduction in environmental impacts, improvements in employee health and safety, and compliance with environmental health and safety regulations) explaining the dependent variable eco-innovation. To determine the reliability of the measurement scale used for the research on the tourism industry, we used Cronbach a (Cronbach, 1951). The results are shown in Table 5.6. The literature indicates a minimum recommended value of .70 for exploratory research and .80 for nonexploratory research (Nunnally, 1978). The closer the value of Cronbach a is to 1, the greater the internal consistency is of the items making up the measurement instrument. In our sample, Cronbach a was .959 (Table 5.6). We decided to suppress the variable geographical diversity in this study because of its very low frequency and very small variance, as shown in Table 5.7. In the tourism industry, cooperation is carried out with national sources (i.e., companies trust agents in their own country). This may be because service companies pursue eco-innovation primarily to satisfy customer demands (Martinez-Ros and Orfila-Sintes, 2009) while complying with national regulations governing environmental aspects in process improvement and services. We ran an OLS regression to test our hypotheses. First, we introduced the control variables (company size, group, and age) into the base model. We then added linear and squared variables in the following models. The results are shown in Table 5.8. For the current sample, all R2 values were greater than 0.1 in Models 1 and 2, whereas the base model used with the control variables was not determinant. When new explanatory Table 5.7: Frequency and percentage of variable geographic diversity in tourism sector. Frequency Data

0.00 1.00 Total sample

175 2 177

% 98.9 1.1 100.0

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165

Table 5.8: Ordinary least squares Regression model analysis: tourism sector. Base model

Constant Size (Ln employees) Group Year (creation, year) Breadth of relation Depth of relation Breadth2 Depth2 Coefficient of determination F N

b

Error estimate


0192
0.017 0.048 0.001

5.384 0.025 0.079 0.003

0.005 0.285 177

Model 1 Hypotheses 1a, 2a b 2.326
0.021 0.037
0.001 0.042* 0.102**

Error estimate 4.346 0.021 0.064 0.002 0.018 0.011

0.363 19.501** 177

Model 2 Hypotheses 1b, 2b b

Error estimate

2.238 4.365
0.018 0.021 0.026 0.064
0.001 0.002 0.172** 0.065 0.117* 0.079
0.18* 0.008 0.001 0.002 0.379 14.749** 177

*P < 0.5; **P < 0.1.

variables were added, R2 increased or at least remained stable. This was true even when the variable or variables added had no relation to the endogenous variable. Thus, in the current case, R2 always increases from Model 1 to Model 2. We used the F-test to determine the regression model’s fit. The F-test determines whether the relation between the eco-innovation variable and the set of independent variables is significant. In both models (1 and 2), the values obtained had a significance of 99%. In Model 1, we verified that external search breadth is positively and significantly related to eco-innovation (0.042 with a significance of 95%). We thus found support for Hypothesis 1a, showing that companies with a greater range of sources will obtain better environmental results in the tourist industry. This is because eco-innovation is characterized by relatively new and constantly changing technologies (Horbach et al., 2013), requiring SMEs to invest continuously in research that in many cases they cannot afford. The wide range of cooperation agents helps companies renew their innovation knowledge and carry out joint activities to meet users’ needs and comply with environmental regulations. Eco-innovations in the service sector are still in the development stage and are designed to meet emerging needs (Horng et al., 2016). In the tourism industry, companies’ willingness to implement open strategies to access a greater range of knowledge sources has a positive effect on eco-innovation (Ritala and Hurmelinna-Laukkanen, 2013). However, each industry should be studied separately, owing to the strong heterogeneity of the traditional sector (De Marchi and Grandinetti, 2012).

166 Chapter 5 According to the results of Model 1, the variable depth is positive and highly significant (0.117 at 99%). We thus found support for Hypothesis 2a, indicating that the depth of the relation to external partners positively affects eco-innovation. In a service company, external cooperation positively influences decisive external factors for eco-innovation, such as consumer demand for eco-products, competitive pressures, or environmental regulations (Cai and Zhou, 2014). This continuous interaction with the links leads to mutual “learning by interacting” (Amara et al., 2008), and the connections forged between the company and other agents, such as consumers and suppliers, will enrich its social capital and enhance the quality of innovation advice. In Model 2, we added the squared independent variables to confirm Hypotheses 1b and 2b. In this case, the variable breadth2 was negative and statistically significant (
0.18 at 95%), as shown in Table 5.8. The results confirm that the relation between breadth and eco-innovation has an inverted-U shape, which indicates that interacting with too many partners increases uncertainty and decreases the efficiency of eco-innovative results (Muscio et al., 2017). Thus, whereas a wide range of external sources increases a company’s knowledge for making environmental improvements, the effect of this increase will depend on the company’s absorption capacity. Companies need to implement internal organizational mechanisms to enable the transfer and integration of externally acquired knowledge with previously learned knowledge (Cruz-Gonza´lez et al., 2015). The greater complexity of the knowledge, relative lack of green competencies, and pressure to improve performance can produce results that are not always positive. According to the theory of limited rationality, companies need to expend high levels of effort and energy to assimilate external ideas and rapidly implement and institutionalize them (Simon, 1947). This theory confirms that poorly distributed management attention (Dahlander et al., 2016) or a poor internal organization mechanism can lead companies to establish too many (or too few) external and internal communication channels. In such cases, the external search becomes a disadvantage in terms of eco-results, leading to a progressive decline beyond a given number of sources. These theories suggest that there is an optimal number of external cooperation sources, and that any excess or shortfall will result in lower returns. By graphically representing this relationship, we see that greater breadth in the external search has a positive effect on eco-innovation; however, there is a turning point (approximately, cooperation with more than six types of external sources) beyond which the returns diminish, turning the company’s opening efforts into a disadvantage (Graph 5.3). To compare the two traditional industries, we observed the proposed and accepted hypotheses. Table 5.9 summarizes this comparison for Hypotheses 1e3, as well as their respective subhypotheses, for both industries, agri-food and tourism. As can be seen, similarities were found only in Hypothesis 2a concerning the depth of external sources in relation to eco-innovation.

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1.6 1.4 eco-innovation

1.2 1 0.8 0.6 0.4 0.2 0 1

2

3

4

5

6

7

8

breadth of sources

Graph 5.3 Inverted U relationship Breadth and Eco-Innovation in tourism sector. Table 5.9: Hypothesis of manufacturing industry sector and service sector. Hypothesis H1a H1b H2a H2b H3a H3b

The breadth of the external search positively affects eco-innovation development The breadth of the external search and eco-innovation have an inverted Ueshaped relation The depth of the external search positively affects eco-innovation development The depth of the external search and eco-innovation have an inverted Ueshaped relation The geographical diversity of the external search positively affects eco-innovation development The geographic diversity of the external search and eco-innovation have an inverted Ueshaped relation

Agri-Food sector

Tourism sector O O

O

O

O

4. Conclusions, recommendations, and limitations The open-innovation paradigm created by Chesbrough in 2003 has evolved. Studies in the field have grown, and researchers have linked the concept with other aspects, not all of which are economic. Motivations are growing for companies to improve their production processes and undertake environmental improvements, and they are seeking to access innovation through external sources to find quick solutions to assist with their implementation (Kowalska, 2014). Nevertheless, there is a lack of literature on traditional

168 Chapter 5 industries looking to make environmental improvements, which can be an effective tool to ensure their profitability and market survival. We used regression analysis to test the hypotheses of our proposed model empirically on two samples, one from the service sector and the other from the industrial sector. In both cases, we chose mature and traditional industries. We confirmed the existence of three openeinnovation network factors (breadth, depth, and geographical diversity) and their relation to green innovation results and reached a series of general conclusions. First, industry matters when it comes to studying the impact of open innovation on ecoinnovation. Each industry has its own strategic behavior with regard to eco-innovation, including industries that produce similar products with similar production processes. Interpreting the data jointly, as other authors have done (Belin et al., 2009; Montresor et al., 2013; Ghisetti et al., 2015), can lead to inconclusive conclusions regarding similar external patterns in terms of open-cooperation strategies. Low-tech companies have heterogeneous motivations for pursuing environmental measures; this determines the time they have to make those changes. We agree with De Marchi and Grandinetti (2012) and Gulati et al. (2000), who argue that the high heterogeneity of low-tech industries means that each industry must be analyzed separately. Second, we confirmed the importance of the depth of the external search for partners to achieving environmental improvements in both of the analyzed industries. This finding is consistent with those of Ghisetti et al. (2015), who confirm that the chances for new opportunities for companies to make environmental improvements are positively influenced by interacting with external knowledge sources. Companies selling common consumer goods or services must not be closed to the influence of external agents. Connections between the company and other agents, such as consumers and suppliers, will enrich its social capital, which will benefit the quality of innovation advice and be decisive for eco-innovation (Cai and Zhou, 2014; Calza et al., 2017). The external search depth transforms an exchange of specific knowledge into learning through collaboration (Ghisetti et al., 2015); however, we found that traditional sector companies have few cooperative relations, which hampers their ability to learn and manage innovation. Spanish companies in this sector may be at risk for blocking new contacts because they fear a lack of knowledge and creating networks with flawed links that will merely exacerbate the excess of information that is already known; this prevents them from pursuing better links. This was also demonstrated in our model. Our results confirm that overconfidence in links made with cooperation sources can have a negative effect on eco-innovation and suggests an inverted Ueshaped relationship in manufacturing industries. Third, we confirmed that the breadth of the search for external sources can foster the incorporation of environmental improvements at companies in the service sector. This is a

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new contribution, because previous studies generally focused on the industrial sector (Higgins and Yarahmadi, 2014). Cooperation with multiple agents, especially in the early stages of creation (Manzini and Vezzoli, 2003), can add value to services by meeting specific demands. The integration of external ideas reoriented to new environmental trends will accelerate their implementation. By increasing their network of innovation partners, companies will increase their chances of success. However, often companies are not prepared to assimilate so much information from different sources (Zahra and George, 2002). The greater complexity of knowledge, a lack of willingness on the part of the ecoinnovator, a lack of environmental competencies, and the pressure to launch new products can lead to results that are not always positive, which confirms the existence of an inverted Ueshaped relationship between the breadth of sources and eco-innovation. Our analysis highlights the importance of training and the human factor to the development of ecoinnovations (Cuerva et al., 2014). Employee training actions (De Marchi, 2012) to improve the capacity to absorb knowledge are considered a great stimulus to develop ecoinnovations, although they are not decisive enough to effect a dramatic change in the company’s orientation (Monde´jar-Jime´nez et al., 2013). Finally, we were unable to reach a conclusion with significant results regarding geographic diversity. First, the data obtained in the PITEC survey limit the response level to certain countries, making it impossible to obtain information necessary to analyze geographical diversity in depth. Second, the response level in the tourism and agri-food industry samples was fairly low and infrequent, confirming the shortage of companies that cooperate internationally. The collected data therefore demonstrate a lack of confidence in openness to innovation in traditional companies, which look to links that are geographically close to their network of reliable sources when cooperating in terms of process or product innovation as well as aspects of environmental improvement. Our research also has certain limitations. First, it analyzes a specific open-innovation practice, namely, cooperation agreements. Studying other mechanisms that were not included in this research, such as outsourcing or purchasing licenses, could improve understanding of the differences in these practices in relation to the strategy used to search for external sources. Moreover, this study used a static approach: it is a cross-sectional study focusing on certain variables, which limits causality. The analysis sought to visualize a key moment in companies’ strategic behavior. It also has limitations arising from the use of a database that we did not design. As Chesbrough (2010) indicates, open innovation offers many opportunities to create value through the differentiation and personalization of the products offered, including chances to be creative (Marcolin et al., 2017). Few studies have sought to analyze the external cooperation networks of companies from mature industries to achieve environmental improvements because of the heterogeneity of such companies. Thus future research should look at other industries in both the industrial and service sectors to determine whether they exhibit similar patterns of behavior.

170 Chapter 5 The results of this study have implications for management. First, managers should pay attention to the importance of open cooperation as a useful measure for successful ecoinnovation. However, they should consider the different external knowledge sources carefully to maximize the innovation benefits, avoiding overconfidence that might detract from integrating and assimilating the opening process. Institutions should offer incentives to enhance the external cooperation of small companies that lack the resources to create their own R&D departments, as well as companies that do not have the option of updates because of the industry to which they belong. Such measures could generate joint innovation by increasing the number of new products or services launched. Top management should create a favorable climate for cooperation with other sources. Articulating long-term objectives and showing examples of success can encourage employees. Using appropriate incentives, management can also encourage employees to participate in different activities and phases of the process of assimilating external knowledge. Incentive structures can encourage the acquisition of innovation and mitigate the disadvantages of the attitude of “not invented here” (Hosseini et al., 2017). With regard to environmental improvements, one of the most important policy tools will be consumer awareness. Increased market and consumer demand for healthier products and services will encourage companies to change their attitudes and become more environmentally responsible (Rozkrut, 2014). Customers want to be part of companies’ decision-making processes in innovation matters. Nonpecuniary cooperation strategies should be pursued to encourage environmentally minded improvements to products already in a mature stage of the product life cycle. We have also identified limitations in the sample obtained from PITEC to measure ecoinnovation. We are considering developing and conducting our own survey, including data not only on companies’ intention to carry out environmental measures, but also on results achieved by implementing these measures, to gain insight into the product or process improvements applied after open cooperation. One interesting future line of research would be to build a model that includes the direction of knowledge flows (West and Bogers, 2017), which Gassmann and Enkel (2004) divide into three possible categories: incoming (inbound), outgoing (outbound), and both (coupled). Incoming processes integrate internal and external knowledge and are usually carried out in the early stages of innovation. In outgoing processes, ideas not developed by the company are outsourced by means of marketing to external agents. The coupled process combines both of these processes by creating a network of external agents that cooperates with the company on an optimal innovation process. It would also be interesting to include the role of co-creation of knowledge in the agri-food and tourism industries in mixed-knowledge flows. As experts and creators of new ideas, consumers have an important role in product development and in increasing the company’s value creation (Von Hippel, 2005). In highly competitive sectors with generally homogeneous products or services, companies

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implement differentiation strategies to increase the value of the final product. Studying this would make it possible to determine which of these mechanisms is most suitable for environmental improvement measures in traditional industries.

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CHAPTER 6

Achieving environmental sustainability with ecodesign practices and tools for new product development Daniel Jugend1, Marco Antonio Paula Pinheiro1, Joa˜o Victor Rojas Luiz1, Angelo Varandas Junior2, Paulo Augusto Cauchick-Miguel2, 3 1

Production Engineering Department, Sa˜o Paulo State University (UNESP), Bauru, SP; 2Postgraduate Program in Production Engineering, University of Sa˜o Paulo (USP), Sa˜o Paulo, Brazil; 3 Department of Production and Systems Engineering, Federal University of Santa Catarina (UFSC), Floriano´polis, Brazil

Chapter Outline 1. Introduction 179 2. Ecodesign and new product development 182 3. Ecodesign in the context of product portfolio management

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3.1 Strategic 187 3.2 Organizational 187 3.3 Methods and tools 188

4. Practices, methods, and tools 4.1 4.2 4.3 4.4

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Ecodesign checklist 193 Materials, energy, and toxicity matrix 193 Green Design Advisor 195 Environmental-quality function deployment

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5. Drivers and barriers for ecodesign adoption 6. Concluding remarks 202 References 204

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1. Introduction The complexity of the new product development (NPD) process is undeniable in view of the multiplicity of internal and external factors that condition and interfere in a firm’s dynamics. New products are demanded and developed to address specific market segments, incorporate

Innovation Strategies in Environmental Science. https://doi.org/10.1016/B978-0-12-817382-4.00006-X Copyright © 2020 Elsevier Inc. All rights reserved.

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180 Chapter 6 diverse technologies, integrate with other products and services, and adapt to new standards and legal restrictions. NPD is one of the most important business processes directly related to renewal of the product portfolio, and, thus to achieving market competitiveness. This process is relevant to firms that must adapt to the contemporary demands of environmental sustainability of societies around the globe; therefore, it should be definitively included in company strategies. For example, in 2015, the main goal of the Conference of the Parties 21 meeting in Paris, with the participation of representatives from more than 100 countries, was to obtain an agreement with universal participation among all nations to reduce the use of carbon and increase pressure to use renewable energies. Indeed, such pressure will be deployed on companies in addition to their strategy and practices in the area of operations management. In this context, the development of environmentally friendly products is one of the key contemporary issues in the environmental field. Therefore, academics and practitioners have grown to understand and propose means to integrate environmental sustainability into the NPD process (Brones et al., 2014; Pinheiro et al., 2018a). The development of environmentally sustainable products, or green product development, is also considered one of the pressing current themes of environmental management (Dangelico, 2016; Jabbour et al., 2018). In addition to generating benefits for internal and external stakeholders, previous studies such as those of Porter and Van der Linde (1995) and Dangelico et al. (2013) indicated that the development of environmentally sustainable products could favor the differentiation of companies in the market, as it considers them to be companies that respect the environment. Because of the contemporary need to reduce carbon dioxide emissions throughout the product life cycle and develop clean technologies for products and processes by reducing the costs of raw material, water, and energy consumption, the development of environmentally sustainable products can also have positive influences on the operational and innovative performance of firms and contribute to profitability. At the same time, the literature has presented various possibilities for integrating environmental sustainability with the goal of improving NPD performance (Dangelico and Vocalelli, 2017; Sihvonen and Partanen, 2016; Pinheiro et al., 2018). Some research also indicates the need to expand on studies relating to environmental management, especially when considering the phases of product project choices (Carvalho and Rabechini, 2017; Sihvonen and Partanen, 2016), in the planning phase of NPD. For example, Brook and Pagnanelli (2014) stated that the difficulty of integrating aspects of sustainability into innovation projects is a great challenge in product portfolio management in the automotive industry. Carvalho and Rabechini (2017) suggest that the bridge between project management and sustainability is still being built and that it is necessary to construct it to

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expand research that indicates good practice, processes, tools, and management techniques that integrate the project area with sustainability. This chapter also aims to contribute knowledge to this field. Environmentally sustainable products are designed with the concern of reducing environmental impact throughout their life cycle by extracting and acquiring of raw materials; producing energy and materials; and by their manufacture, distribution, and use until final disposal or return of the product to the producing company (Fiksel, 2012). Thus, the development of these products should still be considered in the planning phase in terms of replacing hazardous materials and pollutants; reducing the consumption of resources (such as water and energy) and of waste generation during production, use, and distribution of the product; and aspects in the design phases such as disassembly, reuse, and recycling. At the end of the product life cycle, it is possible for the product to be remade; this may occur through current approaches such as the concept of the circular economy (Prieto-Sandoval et al., 2018). The ecodesign approach, which proposes practices, methods, and tools, is currently well-consolidated to integrate environmental concern into the NPD process, especially when considering the product design phases (Brones and Carvalho, 2015; Luiz et al., 2016). When analyzing the term “ecodesign,” similar terms are found in the literature. Other common terms are “green products” and “design for environment.” In the literature from the 1990s to the beginning of 2000, other similar terms can be found, such as “environmentally conscious design,” “product environmental,” and “sustainable products.” Because the more common term is “ecodesign” (Luiz et al., 2016), this will be used in this chapter. Despite the importance of ecodesign to a suitable environmental performance and the NPD, its adoption is still little disseminated among firms (Dekoninck et al., 2016; Poulikidou et al., 2014). In addition, this is not an easy task for the firms (Brones et al., 2014). These facts demonstrate the importance of expanding the research and dissemination of knowledge in ecodesign, to have alternatives and real possibilities of application, especially for experts involved in the NPD process. To contribute to this discussion, this chapter deals with the ecodesign concept, practices, and tools from three NPD perspectives. The first emphasizes the importance of integrating ecodesign in product portfolio decision-making and in the NPD process. The second perspective deals with methods and tools that can foster the practical application of ecodesign: environmental quality function deployment; the materials, energy, and toxicity (MET) matrix; the Green Design Advisor (GDA); and the ecodesign checklist. Finally, this chapter presents the main issues that motivate ecodesign in addition to some barriers to adopting it. In addition, the chapter describes some examples of ecodesign research and applications in companies operating in an emerging economy (Brazil).

182 Chapter 6

2. Ecodesign and new product development Most companies that aim to have a robust NPD usually adopt an organizational structure for the business process, which is typically divided into stages combined with decision points, called gates (technical and managerial). Actual product development occurs in stages whereas gates assess the progress of projects with regard to various performance measures for their continuity (Cooper, 2014). The process may vary in terms of the number of stages and level of details, depending on the type of product, degree of innovation, and product complexity, among other issues (Clark and Fujimoto, 1991). Structuring and managing product development to achieve effective results is not a simple task, because product development is usually interdisciplinary and multifunctional and should be conducted in an integrated way. Moreover, it is relevant to consider environmental issues in this process. NPD processes have evolved to consider and reduce the environmental impacts of the product during its life cycle, as discussed in this section. In the past two decades, NPD processes have addressed other NPD-related concerns including environmental issues, such as the introduction of ecodesign strategies and other best practices such as product service systems (PSS) and the circular economy, to integrate environmental concerns into the NPD. Therefore, more recent NPD processes have been interested in the environmental impact of products in the final stages of the process (the end of the pipe, e.g., the destination of products and packaging at the end of their life, less consumption of materials, reuse of materials through remanufacturing, and recycling and reuse strategies). The International Organization for Standardization (ISO) also developed a standard to guide companies in integrating environmental aspects into NPD: ISO/TR 14062 (2002). Some publications (Almeida et al., 2010; Dangelico and Pujari, 2010) have highlighted the importance of identifying ways in which companies may apply environmental sustainability practices in new product development projects. In this sense, the work of Gonza´lez-Benito and Gonza´lez-Benito (2005) identified the following set of principles that should be observed to develop environmentally sustainable products: (i) replacement of polluting and hazardous materials; (ii) development of projects that focus not only on reducing resource consumption but also on diminishing waste generation during the production and distribution stages of products to consumers; (iii) product design aimed at reducing the consumption of resources and generation of waste during the use of products by consumers; and (iv) product development focusing on dismantling, reuse, and recycling. Nevertheless, the decision to develop environmentally sustainable products is not easy. Although many consumers wish the products to be environmentally sustainable, few are prepared to pay for environmentally sustainable products (Luttropp and Lagerstedt, 2006).

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Luchs et al., (2012) also highlighted the trade-offs that many companies face in the development of environmentally sustainable products, production costs, final prices, and functions the product can perform in addition to its environmental impact. Ecodesign aims to support companies and designers in developing eco-efficient products by integrating environmental requirements into the initial phases of the NPD process while refraining from negatively affecting the traditional, commercial characteristics of the products, such as design, sales price, and reliability, among others. Ecodesign is also about designing and creating products in a greener way, adopting cleaner technologies, and preventing the generation of waste. Ecodesign has emerged with an environmental sustainability dimension because its main purpose is to reduce environmental impacts in activities within the scope of NPD and the product life cycle. In the context of NPD and environmental management, research into ecodesign intensified in the late 1990s with the emergence of concepts such as product life-cycle management and life-cycle assessment (LCA) (Joshi, 1999). The term originated in the United States in the electronics sector when the industry started to pay more attention to the impact of its products along the NPD process. The sector sought to improve the use of resources, aiming to reduce waste and produce products that were less aggressive to the environment. Another reason was related to customer involvement: in particular, the search for green products. From that time, increasing market demand and legislation have pushed companies from various industrial sectors all over the world toward green and eco-innovation practices (Bocken et al., 2014; Dalhammar, 2016). Whereas eco-innovation is concerned with environmental innovations for the development of new ideas, behavior, products, and processes in the technological, organizational, social, and institutional dimensions (Rennings, 2000), ecodesign focuses on the NPD process. In general, ecodesign can be defined as the consideration and application of environmental aspects in the NPD process (Karlsson and Luttropp, 2006). The main purpose of ecodesign is to design products considering the minimization of their environmental impact during the life cycle and also to reduce the consumption of natural resources (Karlsson and Luttropp, 2006). Thus, it is a relevant concept for an organization’s management of environmental factors because it focuses on integrating environmental aspects throughout the product’s life cycle. In a product project based on ecodesign, quality and customer satisfaction demands must be considered in an integrated manner with the environmental requirements. This is to select solutions according to their environmental impact during the product life cycle: raw material extraction, manufacturing, packaging, use, recycling, reuse, and end-of-life. This should occur considering a balance between the product’s functionalities and environmental

184 Chapter 6 Design for

Product Project

Reuse Reduce Recycle Remanufacturing Disassembly Maintenence Reduce the consumption of energy and water Avoid toxic materials

Concerns

Raw Material Extraction

Recycling

Manufacturing

Logistics and distribution

Remanufacturing

Use

Reuse

Product Disposal

Reverse logistic

Product Treatment

Maintenence/ Disassembly

Figure 6.1 Product life cycle end ecodesign.

requirements (Luttropp and Lagerstedt, 2006). Fig. 6.1 illustrates the stages of product life cycle in companies that design products based on ecodesign practices. Such firms are concerned with environmental issues from the concept of products until the end-of-life (Luiz et al., 2016). As can be seen in Fig. 6.1, reuse aims for new uses for previously discarded products and components. This is to increase the life of these products and components. Because these products have already been discarded and will be reused, it is important for the product to

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be projected to facilitate disassembly (design for disassembly). Reusing, refurbishing, remanufacturing, and recycling depend on the product being easily dismantled. Therefore, a modular approach toward product design is also of paramount importance when considering disassembly, for instance. Furthermore, the project of interchangeable parts and components and the project for new uses also include selecting materials. Remanufacturing is an industrial process applied to the manufacture of other products, by employing materials previously used in other products. Like reuse, it is relevant that logistics planning of the product exists and its transport to places for the remanufacture is facilitated. To optimize remanufacturing, in addition to planning the logistics issue throughout the use and disposal of the product, designers should also focus on product designs that facilitate the removal, replacement, and interchangeability of product parts and components. The designer of new products must also consider the energy consumption of remanufacturing. Whereas recycling promotes material recovery without retaining any design features or specifications, remanufacturing retains the identity of the product and aims to refurbish the product back to a new condition through disassembly and replacement operations. This is in line with the life cycle extension requirements suggested by the trend of the circular economy. Recycling separates the product into its basic components by melting, fusing, and/or reprocessing them into new forms before reuse. According to Manzini and Vezzoli (2016), although it is important to design for recycling, designers should consider the entire product life cycle. After all, the recycling process does not always generate an environmental gain because the combustion of plastics, coal, and paper produces smoke and waste. The use of materials such as copper, nickel, aluminum, and steel, for example, facilitate recycling (Manzini and Vezzoli, 2016). The ideal in terms of resource consumption would entail a reduction in the manufacture of new products. However, this usually does not reflect the realities of the current economic system of many companies and consumers. Therefore, it is recommended to use recycled materials instead of virgin raw materials as well as design durable and lightweight products and use less harmful substances, (Ghisellini et al., 2016). Reduction is aimed at product design that reduces the consumption of materials and energy, whether in the extraction of raw materials from nature or throughout the life cycle of the product, in activities such as use and transportation in distribution and disposal. Other relevant alternatives for this purpose can be the design of products for collective use, the choice of production processes with lower energy and water consumption, and the choice of materials with a low environmental impact. One strategy to mitigate the increase in material consumption and its consequent environmental impacts involves offering product service systems through servitization. By offering an integrated package of products and services, mainly digital ones instead of traditional products, dematerialization

186 Chapter 6 can take place. The focus then is no longer on the physical or material ownership of the product but rather its shared use. Information technologies and mobile apps can be useful in operationalizing this trend. When choosing materials that will make up the product, companies should also avoid those that are considered toxic, such as asbestos, heavy metals, and lead. In this sense, the recommendation is to design products using renewable and biodegradable materials. The maintenance project aims to plan the facilitation of product repair to increase its life cycle and avoid environmental (and also economic) impacts resulting from the repair. Facilitating the replacement of components and providing good operating instructions may be desirable practices for designing for maintenance. Luiz et al. (2016), who systematized publications on ecodesign through bibliometric analysis, observed that the research on the subject is mainly concentrated in Europe. Outside this continent, research is distributed mainly in Brazil, China, Japan, and the United States. Those authors further noted that in addition to the focus on NPD and product design, ecodesign research tends to focus on issues such as sustainable development, environmental regulation, and industry regulations, as well as construction and architecture. Finally, the work showed relevant relations between ecodesign and the LCA, in addition to subjects on environmental legislation and industry regulation.

3. Ecodesign in the context of product portfolio management In response to external regulatory factors and consumer and stakeholder demand, many companies have been adjusting their product portfolios to incorporate improvements in their production processes, and, thus to develop and launch products, services, and the combination of more sustainable products and services (Hoejmose et al., 2012; Marcelino-Sa´daba et al., 2015). Project portfolio management (PPM) can be defined as a dynamic decision-making process for evaluating, selecting, prioritizing, and allocating resources in NPD projects (Cooper et al., 1999). PPM includes decisions about new product projects (e.g., radical and platform product projects) and updates and discontinuities of products currently produced and marketed. The decision about new products that are part of a firm’s portfolio is made in the planning stages of the new products or in the predevelopment stage, when the new product projects are still being planned. The initial stages of the NPD process in portfolio decisions represent an opportunity to improve the environmental impact of products, because this opens possibilities of choosing a set of product development projects with better environmental performance, such as the choice of materials that use less energy in their processing, avoidance of toxic material, and greater possibility of reuse and recycling, among others. Moreover, some studies

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(e.g., Cluzel et al., 2016; Jugend et al., 2017b) indicate that ecodesign practices, when adopted in the initial stages of the NPD, may contribute to the decision-making of new products, and to improve the environmental and innovative performance of firms (Bocken et al., 2014). In the context of the product portfolio, it can be considered relevant to study the selection of products from an ecological design perspective (Jugend et al., 2017b). Portfolio selection can refer decisions to develop environmentally sustainable products. For better environmental performance, the selection of new products should consider environmental factors that are already in the planning phases of NPD and the fuzzy front of innovation. Findings from Jugend et al. (2017b) showed that the specific adoption of green product development practices can improve NPD performance (in terms of strategic alignment, balance, and value maximization). Moreover, the adoption of green product development practices demonstrates a positive effect on creating new opportunities for expanding the markets that the company already operates, for entering new markets, and for improving the company’s capacity to develop new products, processes, and technologies (Brentani and Kleinschmidt, 2015; Kleinschmidt et al., 2007). By systematizing the integration of ecodesign in product portfolio management, Pinheiro et al. (2018) suggest three dimensions: (1) strategic, (2) organizational, and (3) methods and tools. These dimensions are more explored in detail in the following section.

3.1 Strategic Some studies have suggested that the portfolio decisions of environmentally sustainable products should be integrated with the strategic planning of firms (Petala et al., 2010; Pinheiro et al., 2018). Factors such as top management support, periodic portfolio revision, and the adoption of gates are important means for this integration. Top management support is the main factor of success and a prerequisite for considering environmental aspects when developing green products (O’Hare, 2010; Pinheiro et al., 2018). The development of green product decisions should depart from the top management, because it is of paramount importance to incorporate environmental aspects from the decisions at strategic levels (Gouvinhas et al., 2016). In both phases of strategic planning and in the portfolio reviews, it is also recommended that projects be evaluated in the gates in short periods of time (Cooper, 2014). In this sense, it is important to verify that projects of new products meet environmental requirements, in addition to traditional requirements usually assessed in the gates, such as technical, financial, and commercial performance measures.

3.2 Organizational The adoption of multifunctional teams with experts from different functional areas such as research and development (R&D), engineering, marketing, and sales is considered good

188 Chapter 6 practice in NPD management. For the decision to have an environmentally sustainable product portfolio, the recommendation is to integrate these teams with environmental experts who understand the practices, methods, and ecodesign tools. Along this line of thought, Bocken et al. (2014) suggest adopting multidisciplinarity, creativity, and environmental knowledge of teams formed in the initial process of eco-innovation. In research based on Brazilian companies of biodiversity, Pinheiro et al. (2018) recommended that the organizational dimension be complemented by adopting a project management office (PMO) structure, in which it is important to train members in ecodesign practices, methods, and tools. These PMO skills can contribute to a portfolio of environmentally sustainable products. The previous authors also observed that external consultants (from research institutes and universities, for example) could be useful in building multifunctional teams in choosing product designs that meet environmental requirements. Furthermore, integration with stakeholders (for instance, users, universities, and research institutes) is also important to improve decision-making in the portfolio of environmentally sustainable products, because this facilitates identifying external factors of environmental regulation and consumer demand. It may also favor knowledge sharing and information of viewpoints and technical environmental aspects of different stakeholders in the product design decision (Pinheiro et al., 2018). Many stakeholders may also be involved in developing standards and regulations aimed at achieving efficiency in resource use. Material efficiency requirements and standards put pressure on product manufacturers and also help designers address the issue of sustainable resource use (Tecchio et al., 2017).

3.3 Methods and tools Ecodesign methods and tools can support the decision-making of an environmentally sustainable portfolio. The formal application of ecodesign methods and tools is relevant for the development of green products. The literature tends to support applying simple tools when applying ecodesign in portfolio management methods and tools (Cluzel et al., 2016; Rossi et al., 2016). In the checklist method, designers will create a set of yeseno questions that they can adopt and later score and analyze with a simple yes or no (Rousseaux et al., 2017). Methods and tools such as checklists, scoring, and rankings categorize product designs by evaluation systems, usually based on the establishment of environmental criteria. Visual instruments such as diagrams, charts, and matrices can foster the adoption of the life cycle approach and provide an illustrative means to assess interactions among design criteria. Among these instruments are matrices such as (Knight and Jenkins, 2009) the materials,

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energy, chemicals, other (MECO) matrix, the Environmental Product Responsibility matrix, and the MET. The next section details the importance of methods and how to apply them. In assessing this theoretical framework in two Brazilian companies that develop products based on Brazilian biodiversity, Pinheiro (2017) made the following managerial recommendations: U Top management support to insert ecodesign into the firm’s strategy. U The importance of undertaking management efforts that allow the integration of ecodesign in the company’s strategy. U The addition of environmental criteria in the assessment throughout the gates especially related to planning new products in the product portfolio. U The adoption of an organizational structure with a project office that has experts with skills in ecodesign methods, tools, and practices. U The formation of multifunctional teams throughout the NPD process with the participation of specialists in the environmental area. U The hiring of external specialists, when necessary, from environmental management companies to compose the multifunctional teams of new products. U Then intensification of integration with stakeholders to exchange information to select environmentally sustainable product projects. U The use of environmental guides (e.g., ISO 14062, 2002) and typical methods of managing product portfolios (e.g., checklists, scoring models, diagrams), also considering environmental requirements in decision-making (together with technical, financial, and market requirements).

4. Practices, methods, and tools Ecodesign methods and tools can be defined as the use of procedures aimed at integrating the environment into the design of a system (e.g., product, services, industrial plant). This integration involves incorporating the environmental bias of ecodesign into the various functions, departments, and experts of firms. The ecodesign methods and tools may include regulations, standards, scientific methods, and computer-aided tools (Rousseaux et al., 2017). In favor of supervising firms adopting ecodesign, some studies propose their adoption using specific practices, methods, and tools (Bocken et al., 2014; Bovea and Pe´rez-Belis, 2012; Rossi et al., 2016). Brones et al. (2014) suggest adopting an ecodesign from an integrative model. This model contains different levels: (i) macrolevel: strategy and corporate objectives in innovation promoting internal direction, with environmental issues and ecodesign presented and deployed across the firm;

190 Chapter 6 (ii) mesolevel: decisions to develop new products use environmental criteria and ecodesign is integrated into the product portfolio management; (iii) microlevel: includes ecodesign methods and tools in the NPD. In addition to these levels, Brones et al. (2014) propose adopting the soft side of ecodesign, especially human factors that include and encourage the participation of employees and areas, training, and knowledge management. On the soft side of ecodesign, Borchardt et al. (2010) suggests that managerial factors that contribute to the success of projects that apply ecodesign concepts are motivation, communication, and training; work teams; and assistance from ecodesign experts. This topic focuses on the microlevel, with methods and tools. Ecodesign methods and tools can be applied in different phases of NPD, according to their intention to contribute to environmental aspects related to the product life cycle. In the literature, ecodesign methods vary in terms of complexity, the need for quantitative or qualitative data, the knowledge regarding their use in NPD, and so on. More complex tools (e.g., LCA) tend to be applied less owing to the costs and time involved. Prescriptive methods (e.g., checklists, guidelines) are adopted more frequently because they are simpler and easier to apply. Table 6.1 shows the categories of ecodesign tools and methods for NPD. Vezzoli and Sciama (2006) observed that several tools were developed to fulfill ecodesign purposes and classified them into groups: (i) (ii) (iii) (iv)

support in product design and development; assessment of the product life cycle; strategies for sustainable product development; and environmental communication tools.

Luttropp and Lagerstedt (2006) proposed 10 golden rules for ecodesign and suggested the systematization of activities, which include verifying which materials are currently used in Table 6.1: Classification of ecodesign methods and tools for new product development. References

Types of ecodesign methods and tools

Telenko et al. (2008)

Two categories: (1) life-cycle assessment and (2) principles and guidelines for ecodesign Classification according to degree of difficulty and time required to implement (environmental strengths and weakness, selection of opportunities for improvement; and generation of design alternatives), in addition to qualitative, semiquantitative, and quantitative; life-cycle perspective; relation to both traditional new product development (NPD) tools and NPD phase application Three categories: (1) prescriptive, (2) analytical, and (3) design strategy-oriented tools

Bovea and Pe´rez-Belis (2012)

Poulikidou et al. (2014)

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the product and how to replace them with a nontoxic substitute; checking whether the closed loops are established or can be further developed; and providing instructions for the removal and recycling of toxic substances present in the product. When analyzing ecodesign tools and methods, Varandas Junior (2014) identified a wide range of instruments that can be applied to assess the environmental impact of products and identify their critical environmental aspects. These methods and tools also enable the assessment of a comparative analysis of alternative solutions while benefiting customers, companies, and the environment. The methods and tools identified by Varandas Junior (2014) are presented in Table 6.2. Bovea and Pe´rez-Belis (2012) proposed the idea of checking whether a tool or method has a life-cycle perspective and whether it considers all stages of product life. The authors also emphasized the importance of considering the stages of the development project in which each tool or method can be applied. The methods and tools are usually based on traditional NPD tools, such as quality function deployment (QFD), which complements the NPD by adding analyses of environmental impacts. Some examples include the Green QFD (Vinodh and Rathod, 2010); QFD for environment (QFDE) (Masui et al., 2003); environmental-quality function deployment (EQFD) or environmentally conscious quality function deployment; and environmental failure mode and effects (Blivband et al., 2004). In a study carried out in 42 Dutch firms, Bocken et al. (2014) found that LCA and cradle-to-cradle are the most used methods in eco-innovation projects in small and medium-sized firms. According to McDonough and Braungart (2010), product development using cradle-to-cradle principles involves a closed system in which each output can be naturally biodegradable and return to the soil (i.e., the biological cycle) or can be completely recycled into materials of high quality for its subsequent product generation (i.e., the technical cycle). The LCA stands out in many relevant works on ecodesign. This method is used for environmental management when evaluating environmental aspects and potential impacts associated with the product life cycle. It is based on material and energy flow analyses for all stages of the product life cycle (Mestre and Vogtlander, 2013). Other easily understood methods and tools that require little time for application can also be used generally in product life-cycle planning. One of the main examples of this type of tool is the ecodesign strategy wheel (Brezet and Van Hemel, 1997), which visually translates the possible impact of products from a life-cycle perspective by means of an axial diagram. In addition to meeting the need to have a preliminary evaluation of projects, it is a simple tool that reduces the learning effort and application of ecodesign, and thus contributes to introducing an environmental analysis of new product designs. Given these methods and tools, this section details the ecodesign checklist, the MET matrix, green design advisor, and the environmental-quality function deployment.

192 Chapter 6 Table 6.2: Ecodesign methods and tools. Methods and Tools

Description

Analytical methods

Quantitative tools for assessing and providing a detailed measurement of environmental performances of products based on their characteristics, in specific phases of NPD process and life cycle. Tools can be combined to analyze trade-offs between environmental and economic aspects (for example, life-cycle cost analysis). Usually quantitative, these consist of a preestablished rating system and rating scale (which is applied instead of the product life-cycle assessment) to evaluate aspects of the NPD process. Examples are material input per service and cumulative energy demand. Used to organize tasks and integrate roles and departments in the NPD process, as well as stakeholders. They include, for example, the adoption of multifunctional teams and the organization of awareness workshops to discuss environmental aspects to be used in product projects. The design orientation framework consists of guidelines for integrating environmental aspects into the NPD process, including other guidelines for making green products more environmentally friendly. Examples include design for the environment, life-cycle design, design for recycling, and design for sustainability. Reference guides that provide general guidelines for improving environmental performance during the NPD process. Examples include ecodesign and remanufacturing guidelines. Application of numerical data in the phases of a product life cycle. After this, an environmental impact assessment is carried out at all stages of the product life cycle. Examples are eco-indicator 99 and an eco-indicator tool for an environmentally friendly design. Control of prohibited materials through a list based on internal rules, legislation, and internal regulations. The designer must fulfill this list in the NPD process. Support firms on the procedures to be followed to facilitate the integration of environmental aspects into the NPD process (e.g., ISO/TR 14062). Visual mechanisms containing a predefined scale for assessing the environmental performance of products through the relation between two or more relevant sets of data. Qualitative matrices can promote the life-cycle concept and provide an illustrative means to evaluate trade-offs and interactions among design criteria. Examples include the materials, energy, chemicals, other matrix, materials, energy, and toxicity matrix, and eco-function matrix. Computational tools to support the manipulation of huge amounts of environmental information quickly. In addition, they reduce the subjective character and possibility of errors in evaluations made by experts whose knowledge of environmental aspects may be limited. An example is the Green Design Advisor.

Evaluation and classification

Organizational

Design orientation

Guidelines

Environmental indicators

List of restricted materials Manuals and standards Matrices

Software and information systems

NPD, new product development. Based on Varandas Junior, A. 2014. Uma proposta para integrac¸a˜o de aspectos ambientais do ecodesign no processo de desenvolvimento de novos produtos. Tese de Doutorado, Escola Polite´cnica, Universidade de Sa˜o Paulo, Sa˜o Paulo. (in Portuguese).

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4.1 Ecodesign checklist Checklists propose the classification of product designs by means of their binary evaluations, usually based on the establishment of environmental criteria. For example, the Ecodesign Checklist Method, among other proposals, lists the resource use in the project with a binary evaluation by attributing the listed considerations (Knight and Jenkins, 2009). Responses obtained through the checklist (yes or no in each criterion, for instance), allow the product projects to be ranked, serving as an aid to the best outlet decisionmaking in the assessment of projects. This method is used to perform a rapid environmental assessment of a product design and its life cycle; its results are particularly useful during the early NPD stages. The purpose is to present designers with issues to be debated to facilitate a decision on developing the product and generate suggestions that the design team can use to solve environmental problems. The checklist evaluations tend to be simple because the procedures must be previously systematized (Rossi et al., 2016). The ecodesign checklist is useful because it may help the company remember some important aspects at the time of evaluating NPD projects. In the case of the environmental checklist, environmental variables associated with the projects for selecting new products should be added. Checklists can also guide designers in choosing the best design solutions while considering product characteristics (e.g., the material to be used to reduce the impact of its end-of-life). Therefore, each company may prepare the ecodesign checklist according to its needs. Table 6.3 illustrates an example of an ecodesign checklist. By using a checklist model such as the example in Table 6.2, a company may assess all environmental requirements for NPD projects. The amount of yes or no answers received for each item can aid decision-making regarding whether the product will be developed and whether design changes will be required.

4.2 Materials, energy, and toxicity matrix This method is classified as a diagram tool that performs a simplified environmental analysis by combining qualitative and quantitative data. The diagram tool allows the integration of numerical variables into qualitative results to quantify impacts. Moreover, it allows the possibility of modeling the product structure in accordance with ISO 14040 (Rossi et al., 2016). The MET matrix is a structured method for identifying environmental impacts of the product during its life cycle. For its construction, a team with technical experience and environmental knowledge should relate the main inputs and outputs of the potential environmental aspects of material use (M), energy use (E), and toxic emissions (T) to the product life phases, addressing from the acquisition of raw material to the end

194 Chapter 6 Table 6.3: Environmental checklist example. NPD phase Predevelopment

Life cycle phase Design

Acquisitions

Development

Production

Post-development

Distribution Use and end of use

Strategy

Yes No

Comments

Dangerous substances avoided? Less use of energy? Minimizing material/energy input? Easy disassembly, reuse, and recycling? Use of biodegradable material? Prioritize suppliers of raw material nearby? Green suppliers? Dangerous substances avoided? Prioritize suppliers of materials and components nearby? Minimizing material/energy input? Digitalization? Reduce pollution? Optimization? Environment protection? Less energy consumption? Less waste generation? Enable disassembly? Enable recovery? Enable repairability? Reverse logistics prepared?

of the product’s useful life (Byggeth and Hochschorner, 2006). Based on the analysis of the matrix and the aim of meeting customers’ needs, it is possible to establish different environmental strategies to improve the environmental performance of the product. The MET matrix consists of a simple and flexible structure and can be applied for qualitative and semiquantitative assessments. Within the lines, the phases of the product life cycle are shown; in the columns are the environmental aspects associated with each phase of the life cycle. In short, to fill the matrix, it is necessary to discuss the function of the product, the definition of the boundaries of the NPD process stages, and the list of materials, energy, and toxic substances consumed at different stages of the life cycle. Subsequently, an assessment of the critical environmental aspects is required. This method of ecodesign is a visual and useful means to assess the trade-offs and interactions of the project criteria. Therefore, it should be used from the conceptual phases of the NPD to the detailed project, supporting choices that cause less environmental impact on the structure, materials, and production processes. Ecodesign matrices tend to be adopted by companies because they are simple and easy to apply.

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4.3 Green Design Advisor GDA software has an ecodesign approach and can be used in the early stages of the NPD process analytically to simulate, evaluate, and disseminate results of the environmental impact during production, use, and disposal (Ferrendier et al., 2002; Sun et al., 2003). This tool aims to reduce environmental impact, because it handles information on material balance, risks of hazardous materials, and product structure (components, materials, weight, number, type, and arrangement of connections) with a focus on the recyclability of materials. GDA analysis aims to gather multiple scoring criteria with different scales and magnitudes to give designers a consolidated score regarding the environmental impacts of the product. Environmental criteria include (Feldmann et al., 1999; Wixom, 1994) the number of materials, weight of recycled content, recyclable, toxicity, energy consumption, cost, and time for disassembly. Fig. 6.2 illustrates the environmental criteria used in the design alternatives analysis performed by GDA software. The environmental impact assessment of the product (Fig. 6.2) offers designers an end-oflife value perspective of the materials, considering the best combination of disassembly and material value, and provides directions for improvement, resulting in the project’s strengths and weaknesses. The result of the evaluations is a score that reflects the customer’s preferences and values in a given project. The graphics and tables generated by GDA software allow the specific materials and processes to be tracked, helping the designer to choose a material with less environmental impact. The purpose of these computational tools is to support the manipulation of large amounts of environmental information. In addition, the subjective character and the possibility of AlternaƟve 1 AlternaƟve 2

Total Score

Normalized Scores 1

Cost of disposal

0,8 0,6

4,5 Number of materials

0,4 Disassembly Ɵme

0,2

Mass

0 3,9 Energy Toxicity product

Recycled content Recyclability AlternaƟve 1

AlternaƟve 2

Figure 6.2 Output of alternatives provided by Green Design Advisor software.

196 Chapter 6 errors in evaluations made by professionals, whose knowledge about environmental aspects is limited, can be decreased.

4.4 Environmental-quality function deployment QFD is a traditional method applied in NPD. It translates the user demands (voice of the customer) into quality characteristics (product specifications), determining the design quality of an entire product. Then, it systematically deploys quality of each product system into that of each part and process element as well as the relation between them. Aside from conventional applications, there are variations in QFD application when dealing with environmental issues. Wolniak and Se˛dek (2009) present a version of an environmental QFD to list ecological information for product and service alternatives. Nevertheless, their structure is not much different from the traditional QFD with regard to the development of quality matrices. Other proposals aim to integrate LCA into QFD (Cagno and Trucco, 2007). The quality matrix is then divided into four parts, in which the customer voice and voice of environment are related to quality function and environmental goals. Kuo et al. (2009) applied fuzzy logic to assist in identifying and weighing the level of importance of customer requirements, environmental or not. Carried out by a group of experts, each demanded quality is assessed and converted into a fuzzy output. These requirements are related to product specifications in the different phases of the product life cycle: the definition of raw material, design and manufacturing, distribution, use, and recycling. Masui et al. (2003) presented a similar proposal in which they called for QFDE. This method incorporates an environmental voice of consumer and environmental engineering metrics. Therefore, designers can identify the components on which they should focus for the product and analyze which design changes are most effective in improving the environmental performance of these components. In fact, most ecodesign QFD-based methods are simpler versions of a quality matrix, in which environmental requirements are added. There are a few, however, that cannot be considered mere extensions of traditional QFD, because they try to translate demanded environmental issues into design specifications. The drivers and barriers faced by companies also influence the effective adoption of ecodesign, as outlined in the next section.

5. Drivers and barriers for ecodesign adoption The adoption of ecodesign demands changes within the organizational culture of firms, because new management practices in NPD that are oriented toward environmental

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sustainability are adopted. Therefore, it is important to understand the drivers and barriers to adoption (Van Hemel and Cramer, 2002; Jabbour et al., 2018). Among these barriers, the following stand out (Poulikidou et al., 2014; Jabbour et al., 2018): (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x)

no clear environmental benefit; not yet required by legislation; not yet required by customers; commercial disadvantages; conflicts with product requirements; no innovation opportunities; no alternative solutions available; fruitless investment; insufficient time; and insufficient knowledge.

Many of these barriers are associated because the adoption of ecodesign principles are not seen as the responsibility of the sector or employees (conflict between the department and experts), no clear environmental benefit is shown for the company when implementing ecodesign, and no environmentally effective alternative technical solutions are available for the product development (Van Hemel and Cramer, 2002). Other relevant obstacles to adopting ecodesign are (Sellitto et al., 2017) the lack of control over product durability; poor planning of transport and storage volumes; the absence of renewable energy sources or the lack of use of such energy; and the low diffusion of knowledge in industry. These obstacles are aggravated if there is a lack of knowledge and professional capacity in the environmental area for the managers. Ecodesign methods and tools can also be barriers, because they may indicate difficulties in data collection and operation; in some cases, they are simplified, and in others complex. These barriers can be mitigated when there is a structured NPD process with shared knowledge on environmental management and ecodesign (Poulikidou et al., 2014). Using interpretative structural modeling, Jabbour et al. (2018) investigated the main barriers to ecodesign adoption in a Brazilian biodiversity company. The work indicated that the lack of legal incentives influences the lack of knowledge and scientific data for adopting ecodesign. Thus, the authors suggest that the government has an important role in promoting ecodesign, especially in providing the necessary legal incentives to stimulate the adoption of environmentally sustainable practices in product development. Along a similar line of thought, Jugend et al. (2017a) observed that inappropriate legislation from countries and regions may discourage the adoption of ecodesign in companies in Brazil and Portugal. For example, the lack of regulation to avoid coal mining or encourage the use of biodegradable material in the NPD process may be a barrier to adopting ecodesign.

198 Chapter 6 Conversely, there are drivers that stimulate companies to adopt ecodesign in their NPD efforts. Among these drivers, external and internal stimuli are recognized (Dangelico, 2016). Market demands, government regulations, and industrial sector initiatives are important influential external stimuli. For several firms, key drivers in selecting and prioritizing environmental aspects during the NPD process are official regulations and standards and customer demand (Dangelico, 2016; Poulikidou et al., 2014). With increasing consumer willingness to purchase products with high environmental performance, it is evident that boosting brand reputation and value are also important drivers for adopting ecodesign (Sihvonen and Partanen, 2016). For instance, Jaca et al. (2018) point out that a stimulus for adopting environmental practices in NPD is to satisfy consumers who may be more sensitive to greener choices and who are willing to pay more for a sustainable product. Thus, market requirements may influence the decision to apply ecodesign techniques. Research by Dalhammar (2016), Ghisellini et al., (2016), and Jesus and Mendonc¸a (2018) has highlighted that regulations may foster the adoption of sustainable organizational practices, such as ecodesign and the circular economy. Dalhammar (2016) points out that although there are European Union policies that stimulate design for longevity and recycling, there are technical difficulties and economic returns below those expected by companies when adopting the environmental standards required by the government. This causes certain skepticism in many companies with regard to environmental legislation. Owing to motives such as those presented previously, the legislation can be both a stimulus and a barrier to adopting ecodesign. The main stimuli discussed here are presented in Table 6.4. To evaluate the main incentives for ecodesign adoption in companies that operate in Brazil, a survey was carried out in 79 firms (Luiz, 2016). The investigated sample gathered companies from sectors considered innovative by a Brazilian government institution (IBGE, 2016): electronic, chemical, aviation, optical, aerospace, and industrial automation. A structured questionnaire with closed questions was developed. The questions used the Likert 7-point scale (strongly disagree to strongly agree) to assess the level of agreement for each requirement. Fig. 6.3 shows the degrees of agreement within these companies regarding the importance of stimuli investigated for adopting ecodesign. The results indicate that the stimuli suggested by the literature and used to compose the research instrument have an effective influence on the companies’ decisions to employ environmental practices in developing new products. Compliance with legal requirements and new market opportunities received the highest score among the companies investigated, and thus most encourage companies to adopt ecodesign. On the other hand, the environmental benefits stimulus had the lowest median among the variables surveyed, as illustrated in Fig. 6.3.

Table 6.4: Ecodesign practices with internal and external stimuli. External stimulus

Practices Selection of lowimpact materials Use of recycled materials Reduced use of materials (dematerialization) Reuse of materials (dematerialization) Minimization of energy consumption/use of renewable sources Optimization of production Distribution optimization Reduction of environmental impact during use Increase product life cycle Development of new products concepts Modularity, customization,

Internal stimuli

Customer Supplier Competition New market Environmental Legislation requirements development pressure opportunities benefits X

X

X

X

X

X

X

X

X

Reduction of costs

Acquisition of new Improving knowledge company Brand Opportunity and image differentiation for innovation technologies

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X X

X X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X X

X

Continued

Table 6.4: Ecodesign practices with internal and external stimuli.dcont’d External stimulus

Practices flexibility, and product configuration Servitization and product service systems design Adoption of environmental indicators to evaluate projects and products Biomimicry (natural principles used in product design)

Internal stimuli

Customer Supplier Competition New market Environmental Legislation requirements development pressure opportunities benefits

X

X

X

X

X

X

X

Reduction of costs

X

X

X

X

X

X

Acquisition of new Improving knowledge company Brand Opportunity and image differentiation for innovation technologies

X

X

X

X

X

X

X

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Environmental benefits Synergy with other requirements of the firm

Innovation opportunities

7 6 5 4 3 2 1 0

Compliance with legal requirements

Cost-cutting

Corporate image improvement

Mean Median

New market opportunities Product quality improvement

Figure 6.3 Comparison of mean and median for stimulus to adoption of ecodesign.

As mentioned earlier, Fig. 6.3 also shows that compliance with legal requirements and new market opportunities stand out as stimuli for adopting ecodesign in companies that operate in Brazil. With respect to compliance with legal requirements, this result is aligned with the literature on environmental management, because compliance with legal requirements is in agreement with other publications (Cluzel et al., 2016; Dalhammar, 2016) as an important stimulus for adopting ecodesign. That is, legislation is an important stimulus for adopting environmental practices associated with developing new products. Similarly, the potential of ecodesign and environmental concerns in developing new products is also recognized as a means to provide new market opportunities (Dangelico, 2016; Dangelico et al., 2013). Studies by Dangelico et al. (2013) and Dangelico and Vocalelli (2017) state that the development of environmentally sustainable products has the potential to expand participation in markets in which the company already operates, as well as to meet new markets, especially those demanding a more proactive posture with regard to environmental sustainability. The possibility of using ecodesign to reduce production costs was also a stimulus considered relevant by companies. Possibly, the lower expenditure of energy, water, and reuse of materials, for example, is related to this result. In line with the proposals of Porter and Van der Linde (1995), this observation also indicates that this environmental concern, within the development of products, generates operational financial benefits. Therefore, these are potential drivers for companies to adopt ecodesign. Among the internal stimuli,

202 Chapter 6 ecodesign can be used as a means to reduce costs and improve product quality. On the other hand, the environmental benefits stimulus had the lowest average among the variables surveyed. This result requires further research, possibly by applying a qualitative approach with in-depth case-based research.

6. Concluding remarks This chapter contributes to practitioners and researchers in the field of environmental management, NPD and project management, and innovation management. Besides conceptualizing ecodesign, it presents relations with developing new products and managing product portfolios. Moreover, it presents ecodesign practices, methods, and tools as well as drivers and motivators for its application. Among the methods and tools to be adopted for ecodesign, those that are more easily understood and applied by teams involved with the NPD process should be prioritized. This may foster the adoption of ecodesign in companies. The methods and tools detailed in this chapter (e.g., ecodesign checklist and E-QFD) are aligned with this approach and can facilitate the adoption or improvement of ecodesign practices that are already adopted. It is understood that there are other ecodesign methods and tools that have not been addressed in this chapter, such as LCA, and Design for X (remanufacturing, disassembly, and others), which also deserve attention. Among drivers and barriers, this chapter shows that compliance with legal requirements is both a stimulus and a barrier to adopting ecodesign. This chapter also highlights that legislation is an important stimulus for companies of different sizes in the context of an emerging economy, such as Brazil. The dissemination of this result may be important for policy makers, who should guide legislation on stimuli for ecodesign adoption and other environmental sustainability practices. On the other hand, among drivers investigated for adopting ecodesign, environmental benefit was the one with the least importance. Recognizing that this result deserves to be investigated in more detail in future research and in several countries, the importance attached to this requirement, added to the other results, suggests that companies are driven more by external stimuli for ecodesign adoption (e.g., new market opportunities and compliance with legal requirements) than by internal stimuli. Currently, there is a tendency in environmental sustainability to adopt PSS and the circular economy model in NPD. PSS and the circular economy have broader concerns than ecodesign, involving, for example, new patterns of consumption, sharing of products and services, use of information technology, and prolonging the useful life of products. For a transition to the circular economy, it is relevant for companies to consolidate the practices, methods, and tools of ecodesign as a preliminary phase, which will provide them with the

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maturity to achieve a circular economy. The topics covered in this chapter, such as understanding the concept and how to apply its key practices, methods, and tools, and identifying its barriers to adoption and drivers, are elements relevant for dissemination and support for ecodesign adoption in companies. An understanding of these topics can also increase understanding of agents responsible for formulating public policies in the environmental area, which may favor adopting ecodesign by several firms. In addition, many product development projects based on a sharing economy have been mushrooming in both industrial and consumer business destinations because natural resources are finite and global populations are steadily growing. Traditional models that involve wasteful products for consumers to buy and own require reinvention; however, few empirical effort has been undertaken to understand the life cycle of these products. In the context of developing new products in a sharing economy, regarding the life-cycle extension, considerable attention has been given to additive manufacturing. Product development projects with application such as on-demand printing of spare parts and direct deposition repair can affect the sustainability of PSS (Tukker, 2015). By definition, products projects are user-oriented/use-oriented and require a high level of customer proximity, both geographical and relational, to be convenient and reliable. To save material and improve performance, additive manufacturing tools are gaining ground with practitioners who seek support in the early stages of NPD. Despite the multitude of studies suggesting the adoption of a sharing economy, research has pointed out that the application of technological trends in NPD can satisfy the market’s product needs (Barni et al., 2018; Luchs et al., 2012; Zanetti et al., 2016). However, this practice is still incipient in companies. Also, based on the trend toward a greater concern for sustainability, one implication is the need and opportunity to consider ways to extend product life, such as the development of easily upgradeable, modular products. The pace in which a sharing economy, as well as technological transformation, has been advancing is transforming the business landscape. These trends have swiftly moved to a set of capabilities that need to be deeply embedded across functions and operations, enabling managers to have a better basis for understanding markets and making business decisions. A common premise is that when information on goods is shared, the value of these goods grows for the company, individuals, and the community. In this context, Barni et al. (2018) claimed that digital platforms may foster the creation of stakeholder ecosystems in a multisided marketplace. Research opportunities to consider are defining how to simulate product use and measure product quality assuming multiple users of the same product, as well as identifying decisions and rules that optimize design trade-offs between product simplicity and ease of use while enabling different users and usage contexts. Furthermore, relations among ecodesign and subjects such as the circular

204 Chapter 6 economy, the sharing economy, additive manufacturing, PSS, synthetic biology (e.g., biofuels, food, and genetic engineering), and industry 4.0 can be configured as future trends in the development of environmentally sustainable products and environmental sustainability.

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CHAPTER 7

Green and low-carbon technology innovations Xiaodong Lai1, Qian Shi2 1

School of Economics and Management, South China Normal University, Guangzhou, China; 2School of Economics and Management, Tongji University, Shanghai, China

Chapter Outline 1. Introduction 209 2. Methodology and search criteria 210 3. Overview of the literature from the web of science database 211 3.1 3.2 3.3 3.4 3.5 3.6

Literature Literature Literature Literature Literature Literature

classified classified classified classified classified classified

by by by by by by

period sequence 211 country and territory 216 research method 217 research level 220 research subject area 222 key words cluster 223

4. Literature classified by major themes 4.1 4.2 4.3 4.4 4.5 4.6

224

Regulation or policy innovations 225 Technology innovation adoptions and diffusion 229 Technology transfer 231 Technology innovation management and capability 233 Basic research and advance development 235 Entrepreneurship innovations 237

5. Result and discussion

238

5.1 Insight from our exploration 238 5.2 Recommendations for future direction

242

6. Conclusion 244 Acknowledgments 245 References 245

1. Introduction The global warming, frequent natural disasters, and resource shortages that are occurring in the 21st century are forcing people to think of new ways to save the earth. Many Innovation Strategies in Environmental Science. https://doi.org/10.1016/B978-0-12-817382-4.00007-1 Copyright © 2020 Elsevier Inc. All rights reserved.

209

210 Chapter 7 countries are focusing on the development of a low-carbon economy and intensifying their low-carbon technology. Low carbon development relies on technology innovations and policy regulation. It drives an energy evolution and the establishment of a new economy development with less greenhouse gas (GHG) emissions to prolong climate change (Energy White Paper: Ou, 2003). To understand the past, present, and future with regard to innovations in technology in green and low-carbon research and practice, this chapter used as the source of the primary database the Science Citation Index (SCI) and Social Sciences Citation Index (SSCI) from the Web of Science (WOS) as a particular intellectual domain for analysis. The purposes of this chapter were to provide facts to help researchers and practitioners understand what issues or subjects have been addressed in green and low-carbon technology innovations and point out trends for the next generation of sustainable-oriented research. The remaining parts of this chapter are divided into four sections. Section 2 presents the methodology and search selection. In the third section, an analysis of the literature is conducted by classifying it into different types. In the fourth section, an extensive detail study is presented on international research themes of low-carbon technology innovations. A brief discussion and conclusion are given in the last section.

2. Methodology and search criteria Through our exploration of literature reviews within the domain of the social energy system and sustainable development, we found that renewable energy is a big area for improving climate change and saving energy for sustainable development. It is a rich research area from the perspective of energy systems instead of technology innovations, although there has been little literature from the perspective of low carboneoriented green technology (Shi and Lai, 2013). Carbon emissions are becoming a serious issue threatening the welfare of human. Traditional green research focuses on saving energy, but saving energy does not always lead to low-carbon emissions. Research on the problem of carbon emission is the mainstream in existing green technology research. Therefore, this chapter continues to explore the research exploration (Shi and Lai, 2013) to further investigate the trends and status of low-carbon and green technology innovations. This chapter employs a method for reviewing articles cited in the SCI and SSCI databases with low-carbon technology innovations and green technology innovations as the topics. The earliest published article related to low-carbon and green technology innovations appeared in 1994 (Loevinsohn et al., 1994). By pulling all articles from 1994 to 2018, 1450 articles were identified that fell within the domain of the topics “low-carbon technology innovation” and “green technology innovation.” Seven overlapping articles were omitted and a total of 1443 were kept as the research sample. In addition, by scanning the titles and abstracts of each article published from 1994 to 2018 and using related key words for double review, it was found that 1436 articles mainly focused on the

Green and low-carbon technology innovations 211 theme of low-carbon or green technology innovations. Considering the search engine objective problem, some articles with such a subject may not be 100% retrievable. Therefore, the authors of this chapter modestly believe that this approach was likely to have presented nearly every related article in these two databases. We cannot possibly provide a truly comprehensive review for all articles, especially those in a particular research field (e.g., chemistry and ecobiology). However, we think that many interesting insights arise through a detailed review of these articles. In our research, we organized articles using seven different approaches: (1) period sequence, (2) country and territory, (3) research methods, (4) research level, (5) research subjects, (6) key words cluster, and (7) themes of articles (this is separately analyzed in the fourth section). With these approaches used in this chapter, we propose an indication of the trend of low-carbon and green technology research and help readers to understand milestones throughout the development of green and low-carbon technology innovations. This work may also serve on-site practitioners to understand the research from a worldwide perspective.

3. Overview of the literature from the web of science database 3.1 Literature classified by period sequence The raw data retrieved from the databases of SCI and SSCI in WOS with timelines and publication by country or territory are shown in Table 7.1 and are depicted as a time series bar graph in Fig. 7.1. It shows the yearly distribution of publications in the field of green and low-carbon technology innovations. Obviously, from 1994 to 2000, few articles related to low-carbon or green technology innovations were published internationally. Only 26 articles appeared according to our review. However, from 2001 to 2005, there were 121 articles, four times more than in the previous period. We browsed these articles and examined their research domain, which mainly focused on green technology instead of low-carbon technology innovations. Later, in 2006e10, there was a dramatic increase in information that consisted of 1290 articles. The research domain of low-carbon technology publications increased as well, because the concept of low-carbon had become recognized by the public. Many countries started to concentrate on reducing carbon emissions, which has become a concern of the general public worldwide the global warming and the impact of climate change. This has been especially true since 2007, when the United Nations (UN) conference on climate change opened in Bali, Indonesia, and the UN framework convention on climate change took place. It reflected a steady increase of more than four times compared with numbers before 2005. Both developed and developing countries have become more focused on being responsible for emissions, especially developing counties.

212 Chapter 7

Table 7.1: Literature publication status on low-carbon and green technology innovations from 1994 to 2018. Country United States Canada England European Union Japan India Singapore China Others Subtotal Country United States Canada England European Union Japan India Singapore China Others Subtotal

1994

1995 1 1

0

1996

1997

1

1

1 0

0

1998 6 1

1

0

1999

2000

2001

3 2 4

1 1

1 2 3

2002

2003

4

3 1 1 3 2

3 3

2004

2005

2006

2007

2 2 2 2 1

4 2 1 4 1

5 1 7 5 1 1

1 12

1 20

2017

2018

Total

35 8 34 101 4 6 2 53 0 243

36 11 50 90 7 10 3 65 0 272

301 67 243 549 36 38 13 211 34 1436

2 1 1 3

1 1 1

1 3

0 2

1 2

0 7

1 9

0 2

2008

2009

2010

2011

2012

2013

10 3 12 10 3 2 1 3 0 44

12

12 2 4 20 1 1

23 4 13 26 2 2 2 5 4 77

17 3 19 46 2 1

34 7 12 35 3 3 1 13 4 108

6 15 2 1 1 2 0 39

3 4 43

9 3 97

1 6

0 10

2014 32 11 16 42 3 4 6 7 114

4 10 2015

21 3 20 52 2 2 1 24 0 125

0 8 2016 37 5 37 83 2 4 26 0 194

2 1 11

Green and low-carbon technology innovations 213

Figure 7.1 Literature on low-carbon and green technology innovation publication status from 1994 to 2018. QTY, quantity.

International publications in the field have begun to appear in China and Indian from Asian areas, and in Ethiopia from Africa (Table 7.2).1 When these data are combined into two groups, such as the amount of publications from developing countries and developed countries (Table 7.2), an interesting phenomenon appears. It can be seen that there is strong contrast in the overall publication growth rate of developed countries and developing countries (Fig. 7.2). The amount of publications in developed countries gained 50.3 articles per year whereas that of developing countries had only 9.5 article per year. To verify further whether the phenomenon is an absolute or relative increase, the yearly overall number of publications was checked in the WOS from the 1994 to 2018 and expressed as a percentage share comparison based on data in Table 7.3. The quota of literature retrieved from the WOS with the criteria of low-carbon and green technology innovations rose as well; the curve showed the same trend as that in Fig. 7.1. The same was true for the increase in articles written by authors from developed or developing countries. This means that the increasing trend was real no matter what the perspective on the absolute or relative numbers. 1

This conclusion is drawn from the publication status but that does not mean that other countries do not contribute to carbon emission reduction because most countries paying strong attention to emissions now, especially members of the Kyoto Protocol.

214 Chapter 7

Table 7.2: Literature publication status classified by developed and developing countries. Country Developed countries Developing countries Subtotal Country Developed countries Developing countries Subtotal

1994 0 1 1

1995 2 1 3

1996 2 0 2

1997

1998

2 0 2

7 0 7

1999 9 0 9

2000 2 0 2

2001 6 0 6

2002

2003

10 0 10

10 0 10

2004 8 0 8

2005

2006 2007

9 2 11

11 0 11

19 0 19

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Total

39 3 42

36 2 38

39 3 42

70 5 75

87 9 96

92 13 105

104 6 110

99 24 123

164 26 190

184 53 237

196 65 262

1207 229 1436

Figure 7.2 Literature publication status classified by developed and developing countries. Sub-TTL, subtotal. Table 7.3: Relative increasing trend of literature compared with overall publication amount in world of science (WOS).

Year

Total quantity in WOS

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

7,061 216,785 230,227 236,800 241,590 249,912 253,077 253,393 262,709 275,323 289,587 308,198 324,746 345,308 367,370 390,517 413,870 445,985 465,554 478,783 490,070 511,283 529,444 546,531 485,669

Quantity of low-carbon/green technology innovations 1 3 2 2 7 9 2 6 10 10 8 11 12 20 44 39 43 77 97 108 114 125 194 243 272

The cutoff for these data is Nov. 26, 2018.

Developed countries 0 2 2 2 7 9 2 6 10 10 8 9 11 19 39 36 39 70 87 92 104 99 164 184 197

Developing countries 0 0 0 0 0 0 0 0 0 0 0 2 0 0 3 2 3 5 9 13 6 24 26 53 65

% vs WOS 0.01% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.04% 0.04% 0.06%

% of developed countries 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.03% 0.03% 0.04%

% of developing countries 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01%

216 Chapter 7 Literatures on Low Carbon and Green Technology Innovation by Country/Territory Singapore 1% India 3%

others 2% USA China 14%

USA 20%

Canada

Japan 2%

Canada 5%

EU 37%

England 16%

England EU Japan India Singapore China others

Figure 7.3 Literature on low-carbon and green technology innovations by country/territory.

These trends show that the academic field is paying increasing attention to innovations of low-carbon and green technologies. In addition, the publication of literature in relevant subjects in developed countries accounts for a large proportion of the total publications; that is, developed countries invested more compared with developing countries and articles on the development of low-carbon energy technology and development model have increased, which indicates that new research areas of low-carbon and green technology innovations mainly focus on technology development and model innovation. The new trend that focuses on technology development represents the needs of modern society for the level of innovations: that is, the hard demand for the development of new technology to improve relevant industry benefits. In 2015e16, there was a large increase in the number of relevant publications shown in Fig. 7.2. In 2015, a climate change conference was held in Paris, in which climate control target was the focus, and the combination of academic research and social production became more closely integrated.

3.2 Literature classified by country and territory As shown in Table 7.2, we conducted an overall review of articles by each country or territory and classified them according to conventional economic entity group, such as the United States, the European Union, England, and Asia. Then, we drafted a publication distribution pie chart, shown in Fig. 7.3. The quantity of literature from the United States, Canada, the United Kingdom, and Europe made up over 50% of total publications (57%). Literature from Asian countries made up a small percentage in the 24 years from 1994 to 2018, in which China occupied 11%, Japan 2%, India gained 2%,

Green and low-carbon technology innovations 217 and Singapore shared 1%. From the discussion in Section 3.1 and this section with regard to regional analysis, there was a clear technological trajectory of low-carbon and green technology innovations from England, Western Europe, North America, and then Asia and other developing areas such as Africa. The United States gained 20% in the number of publications; the most highly cited publication is from US authors (Vachon and Klassen, 2006a), an article that aims to extend the “collaborative paradigm” proposed by others in prior research beyond a supply chain’s core operations. The article was cited more than 492 times as of Nov. 2018. Understanding that recent publications do not have much time to earn citations, and thus that the impact of their citation cannot be determined accurately (Manthiram et al., 2015), we chose a reference from the crown indicator proposed by the Centre for Science and Technology Studies in Leiden University2 and the raw citation data in WOS, refined articles that received over 150 citations (see Table 7.4), and calculated their average citation rate per year. Two interesting phenomena appeared: (1) articles with a high citation rate were mostly written by authors from developed countries such as the United States, England, France, Japan, and Hungary. Few were from developing countries, except India. (2) Articles that had a high citation rate did not indicate that they have a high yearly citation rate, although we believe that articles with a high yearly citation rate may be classified as representative of these countries contributing to research on low-carbon and green technology, especially for seven articles remarked with asterisks in Table 7.4. On the other hand, the top five famous journals that published on the topics of low-carbon and green technology innovations were the Journal of Cleaner Production (153 articles), Energy Policy (110 articles), Sustainability (57 articles), Renewable Sustainability Energy Reviews (43 articles), and Technological Forecast and Social Change (42 articles each). The most influential journal, Journal of Cleaner Production, accounts for 10% of 1436 total published articles. The first article in the Journal of Cleaner Production was written by Feder and Umali in 1993, “The Adoption of Agricultural InnovationdA Review” (Dodds et al., 2015).

3.3 Literature classified by research method We conducted a further review of these articles from the perspective of research methods. Referring to the literature of Shi and Lai (2013), we divided the research methods into four categories: conceptual, model, empirical, and qualitative. We explored only articles cited in the SCI and SSCI databases and selected highly cited and popular articles. In this way, we obtained 774 articles for analysis. Table 7.5 and Fig. 7.4 show the distributions of those articles across conceptual, model, empirical, and qualitative methods for every 5 years and 2

Source: http://www.socialsciences.leiden.edu/cwts/products-services/leiden-ranking-2010-cwts.html.

Table 7.4: Top cited literature on low-carbon or green technology innovations.

Items 1 2 3 4 5 6 7

Authors Vachon, S. and Klassen, R. D. (Vachon and Klassen, 2006b) Manthiram, A. and Chung, S. H. and Zu, C. X. (Ambec et al., 2013) Johnstone, N. and Hascic, I. and Popp, D. (J Johnstone and Popp, 2010) Wilson, A. D. and Baietto, M. (Wilson and Baietto, 2009) Miyawaki, A. (Miyawaki, 2003) Conley, T. G. and Udry, C. R. (Conley and Udry, 2010)

11

Jayalakshmi, M. and Balasubramanian, K. (Jayalakshmi and Balasubramanian, 2008) Paish, O. (Paish, 2002) Horvath, I. T. and Anastas, P. T. (Horvath and Anastas, 2007) Menanteau, P. and Finon, D. and Lamy, M. L. (Menanteau et al., 2003) Feder, G. and Umali, D. L. (Feder and Umali, 1993)

12

Fischer, C. and Newell, R. G. (Fischer and Newell, 2008)

13 14

Grubler, A. and Nakicenovic, N. and Victor, D. G. (Gru ¨bler and NebojsaVictor, 1999) McMillin, K. W. (Mcmillin, 2008)

15

Melville, N. P. (Melville, 2010)

16 17

Lee, S. Y. (Lee, 2008) Hockerts, K. and Wustenhagen, R. (Hockerts and Rolf, 2010) Lin, D. and Zhao, Y. Y (Lin and Zhao, 2010).

8 9 10

18 19 20 21 22 23 24 25 26 27 28 29

Geels, F. W. and Faruk, O. (GeelsFrank, 2012) Bledzki, A. K. and Fink, H. P. and Sain, M. (Faruk et al., 2014) Wolsink, M. (Wolsink, 2012) Harmsen, G. J. (Harmsen, 2007) Qu, X. L. and Brame, J. and Li, Q. L. and Alvarez, P. J. J. (Qu et al., 2013) Olguin, E. J. (Olguı´n, 2012) Genus, A. and Coles, A. M. (Genus and Coles, 2008) Vachon, S. and Klassen, R. D. (Vachon and Klassen, 2006b) Ambec, S. and Cohen, M. A. and Elgie, S. and Lanoie, P. (Ambec et al., 2013) Ben, L. and Potter, S. (Ben and Potter, 2007) Ozaki, R. and Sevastyanova, K. (Ozaki and Sevastyanova, 2011)

Country United States United States France

Citation Average citations times (>[150) per year 492

41*

436

145.3*

402

50.25*

370

41.1*

United States Japan United States India

366 342

24.4 42.8*

332

33.2*

England Hungary

326 318

20.4 28.9

France

316

21.1

United States United States United States United States United States Korea Switzerland

315

12.6

313

31.3*

304

16

276

27.6

254

31.8*

213 210

21.3 26.3

195

17.7

186 178

31 44.5*

176 172 171

29.3 15.6 34.2*

171 171 164

28.5 17.1 13.7

157

31.4*

154 150

14 21.4

United States England Germany Netherlands Netherlands United States Mexico England United States France England England

Green and low-carbon technology innovations 219 Table 7.5: Percentage distribution of literature by research methods every 5 years. Types Empirical Qualitative Conceptual Model Subtotal

1990e93 1 0 0 2 3

1994e98 3 0 2 3 8

1999e2003 3 0 1 10 14

2004e08 7 4 5 29 45

2009e13 38 9 8 94 149

2014e18 161 31 32 325 549

Total 213 44 48 469 774

Rate 27.5% 5.7% 6.2% 60.6%

Figure 7.4 Percent distribution of literature by research methods.

the total quantity from 1990 to 2018 according to each method. Table 7.6 shows that the model articles gained 60.6% and the empirical articles gained 27.5%. We think this is why researchers are keen to use data and models to better illustrate the relation among elements to adapt to the need to develop low-carbon or green technology and for adopting practical technology. The model method can help in applying the influence of technology innovations in a practical setting. The most representative publication using the formal model method is by Kittner et al (Kittner et al., 2017a). In the article, a two-factor model is employed that integrates the value of investing in materials innovations and technology deployment. It provides a direction for developing cost-effective, low-carbon electricity. The article was cited more than 29 times so far. Another representative publication is by Davis et al. (Davis and Gertler, 2015a). This article uses a model to describe the relations among temperature, income, and air-conditioning. It gives the reader a good example of the contribution of low-carbon technologies. The qualitative research of green technology or low-carbon technology focuses on comparisons between technologies. For example, Nikolaidis et al. (Nikolaidis and Poullikkas, 2017) introduce an overall comparison between different hydrogen production

220 Chapter 7 processes. They conclude that thermochemical pyrolysis and gasification are economically viable approaches that provide the highest potential to become competitive on a large scale in the near future. In addition, Ibn-Mohammed et al. (2017) present a critical review of some existing photovoltaic (PV) technologies compared with perovskite-structured solar cells (PSCs) to verify that the new solar cells are more economical and environmentally friendly than traditional silicon-based technology. The empirical research method is a powerful way to adopt technology or analyze the relation of different factors. For instance, Jayalakshmi (Nikolaidis and Poullikkas, 2017) and Wolsink (Shane and Ulrich, 2004) et al. introduce the adoption of low-carbon technology in the electrical industry; Fischer et al. (Veugelers, 2012) explore the impact of environmental and technology policies on low-carbon development; and Ozaki et al. (Miao et al., 2017) discuss factors that make consumers adopt green technology innovations. Three other authors (Lin et al., 2013) use an empirical research method to analyze relations among market demand, green product innovation, and firm performance. In addition to technology adoption and field experiments in different industries, the empirical method is used to research the impact of low-carbon technology policies and the application of low-carbon technology in the market. The research employed a conceptual method to introduce the low-carbon and green technology concept from different perspectives such as innovations, new technology applications, and policy. For example, Manthiram et al. (Ambec et al., 2013) introduce lithiumesulfur batteries through their progress and prospects. This article was cited more than 434 times as of 2018. In addition, Faruk et al. (Juan Luis Sua´rez de Vivero, 2007) introduce natural fiber-reinforced composites. These articles discuss the latest developments in low-carbon or green technology innovations. The most outstanding representative authors are McMillin (Hounkonnou et al., 2012), Melville (Foxon, 2013), Ambec (Pearson and Foxon, 2012), Dodds (Dodds et al., 2015), and Veugelers (Veugelers, 2012). Model and empirical research will still dominate in quantity for some time because the research can be more practical and accurate using these two methods. However, conceptual (6.2%) and qualitative (5.7%) methods should not be ignored because of their extension and quick development. In addition, actual technology adoption needs theoretical support. Thus, we hope that researchers will contribute more concepts and theoretical systems driving low-carbon and green technology development.

3.4 Literature classified by research level We reviewed all of the articles’ main contents based on the individual abstract descriptions. For the purposes of analysis, we took the research-level code scheme as the reference per Schumpeter’s microemesoemacroeconomics definition (Dopfer, 2012) and classified the articles into microscopic, mesoscopic, and macroscopic levels.

Green and low-carbon technology innovations 221 For articles involved with concepts, basic research, product design, risk management, empirical research, models, entrepreneurship innovations, and technology innovation capability, we coded them as being at the microscopical level. The top three cited articles at this level are by Vachon and Klassen (2006b), Manthiram et al. (Ambec et al., 2013), and Wilson and Baietto (Ozaki and Sevastyanova, 2011). For articles involved in a country’s or territory’s economy development, the country or territory’s technology adoption and diffusion, national policy or technology promotion, regional economic development, technology adoption, and so on, we coded them as being at the mesoscopic level. The top three cited articles are by Wolsink (Shane and Ulrich, 2004), Hounkonnou et al. (Hounkonnou et al., 2012), and Foxon (Foxon, 2013). Finally, for articles regarding policies, regulations, global mechanisms, global ecosystems, concepts, and sustainable development, we coded them as being at the macroscopic level. The top three articles are by Johnstone et al. (Ben and Potter, 2007), Jayalakshmi and Balasubramanian (Nikolaidis and Poullikkas, 2017), and Menanteau et al. (Wilson and Schwarzman, 2009). Fig. 7.5 shows the distribution of the three research levels. The macroscopical level gained 20%, the mesoscopic level occupied 20%, and the biggest share fell in the microscopic fields, at 60%. This phenomenon shows that current research focuses on specific and concrete aspects, especially technology innovations, and most is about applying new technology in firms and improving the environment. Compared with earlier data, the number of articles in the three research levels significantly increased. Microscopic-level research grew fastest, notably studies from China, at more than 100 publications. Most articles at the microscopical level are about inventions in new technology and methods, including the technique of detecting chemical substances, improvements in technology, and so on. Besides, research at the mesoscopic level has an upward trend related to the impact of the green revolution on industry and territory, including acceptance of the green Literatures Distribution Classified by Reasearch Level 19.99%

19.57%

60.45%

Macroscopical

Mesoscopical

Microscopical

Figure 7.5 Literature on low-carbon and green technology classified by research level.

222 Chapter 7 economy and new technologies in society, the efficiency of new technologies in some industries, and so on. For example, Lin et al. (2018) analyzed the green technology innovation efficiency of China’s manufacturing industries, and Gibbs et al. (Gibbs and O’Neill, 2014) investigated the development of the green economy in the Boston region by reexamining and retheorizing work on sustainability transitions from a spatial perspective. As for the macroscopic level, most work is related to national policies, including the impact of different policies on different technological innovations, the assistance of policies to renewable energy technologies entering the market, and so on.

3.5 Literature classified by research subject area We classified these 1436 articles according to their research subjects. Based on the original analysis chart downloaded from the WOS database, a total of 81 research subjects were involved with green and low-carbon technologies. Some articles are multidisciplinary: for example, Brown and Vergragt (2014), Laitner et al. (1998), and Juan Luis Sua´rez de Vivero (2007). To understand the actual classification better, we consolidated the overlapped research subjects. For a subject with one article, we put it into an “others” category. We simplified our results and show them in Table 7.6. Table 7.6 shows that the distribution of research subject is environmental sciences ecology (456 articles; 32%), business economics (260 articles; 18%), science technology: other topics (206 articles; 14%), engineering (180 articles; 12%), energy fuels (107 articles; 7%), public administration (43 articles; 3%), materials science (35 articles; 2%), chemistry (27 articles; 1%), and agriculture (22 articles; 1%). The rest of the articles are multidisciplinary or marginal research subjects (100 articles; 7%). Compared with the earlier review, we can see that environmental sciences ecology is still the largest subject (32%) and energy and fuels (renewable energy and new energy) remain steady in proportion (7%), whereas management has the largest proportion of decline, from 13% to 3%. At the same time, the proportion of research in business economics and science technology rose sharply, both at a rate of 10%. This significant increase indicates that the social and economics academic circle paid higher attention to technological contributions to developing sustainability. Table 7.6: Literature on low-carbon and green technology, classified by research subject. Subject Environmental sciences ecology Business economics Science technology: other topics Engineering Energy fuels

Quantity

Rate of 1436

Subject

Quantity

Rate of 1436

456 260 206

31.755% 18.106% 14.345%

Public administration Materials science Chemistry

43 35 27

2.994% 2.437% 1.880%

180 107

12.535% 7.451%

Agriculture Others

22 100

1.532% 6.964%

Green and low-carbon technology innovations 223 The trend of low-carbon and green technology research appears to be an interdisciplinary research with themes related to the environmental subject, science technology, business economics, engineering, and energy and fuels, which account for 80% of the total. The research articles of the top two areas (environmental sciences ecology and business economics) are much more than for other industries, such as chemistry and agriculture, accounting for 50% of the total. The top five areas in the review of articles (Shi and Lai, 2013) is about for 67% of the total. In other words, the trend in the interdisciplinary field remains unchanged but with an increase in social participation, it is relatively concentrated in several subject areas.

3.6 Literature classified by key words cluster We seek further the research trajectory of scholars from the paper key words cluster. First, we searched core journals with the theme of green technology innovation or low-carbon technology innovation in the WOS and found 1436 instance in the relevant literature. Then, we imported the data into Citespace for key word co-occurrence analysis, obtained the atlas, and sorted the key word frequency into a table. As can be seen from the figure (Figure 7.6), key words with a high frequency were “innovation,” “technology,” “policy,” “sustainability,” “system,” “performance,” “management,” “energy,” “climate change,” and “model.”. Technological innovation-related key words gained the highest frequency of occurrence. Energy shortages, climate change, environmental degradation, and other phenomena have made people more aware of the importance of sustainable development, and technological innovation is an important driving force for sustainable development. Many governments have introduced various policies and adjusted industrial structures to promote the innovative development of technologies, improve the efficiency of energy use, and support

Figure 7.6 Low carbon and green technology publication key words cluster with frequency of occurrence.

224 Chapter 7 the innovative development of low-carbon and green technologies and new and renewable energy. For example, renewable energies such as wind energy, biotechnology, solar energy, and water and other green energy are key areas for researchers to explore and develop.

4. Literature classified by major themes The main subject discussed here is articles related to low-carbon and green technology innovations, which is more specific and restricted to the low-carbon or green field compared with normal innovations. However, this subject has similar areas of application to product innovations, technology innovations, technology transfer, technology diffusion, regulation or policy innovations, and even innovations for individual firms or organizations. Based on the character of low-carbon or green technology innovations, we decompose the broader subject and code the research themes of low-carbon and green technology into six themes. This is taken from the references of the article by Shane and Ulrich (2004) with some modification: (1) regulation or policy innovations, (2) technology innovation adoption and diffusion, (3) technology transfer, (4) technology innovation capability, (5) basic research and advance development, and (6) entrepreneurship innovation (Table 7.7). We examined the 1436 articles’ abstract contents and categorized the articles based on this code scheme. A total of 42% of articles are discussed with the theme of technology Table 7.7: Major themes and subthemes code scheme with domain of low-carbon and green technology innovations. Major themes 1. Regulation or policy innovation

2. Technology innovation adoption and diffusion

3. Technology transfer

4. Technology innovation capability

5. Basic research and advance development

6. Entrepreneurship innovation

Subthemes 1.1. 1.2. 1.3. 1.4. 2.1. 2.2. 2.3. 3.1. 3.2. 3.3. 4.1. 4.2. 4.3. 4.4. 5.1. 5.2. 5.3. 6.1. 6.2. 6.3.

Effect of innovation on economic growth Factors influencing the rate of innovation Tools used by policy maker Impact of specific policies Pure technology introduction Technology adoption method introduction Technology diffusion introduction Patent Learning Technology spillover and policy impact Management innovation Design innovation Process innovation Organization innovation Conceptual Framework/models Risk innovation and management Entrepreneurship green design strategy Enterprise decision-making Individual or company achievement

Green and low-carbon technology innovations 225

Figure 7.7 Literature on low-carbon and green technology innovations, classified by themes. QTY, quantity.

adoption and diffusion; 26% involve the theme of policies and 12% explore basic research and advanced development. Articles with a content involving the theme of technology transfer gained 10% whereas those conducted with the theme of technology innovation capability occupied 8%. The rest (3%) fell into the theme of entrepreneurship innovations. The details of distribution are shown in Fig. 7.7. A further detailed analysis by differently categorized themes was illustrated in six sections. For research purposes, we also added some authors’ literature involved in this type of theme instead of 1436 articles only we stated above.

4.1 Regulation or policy innovations The theme of regulation or policy is one of the main and traditional research areas of technology innovations. It has a critical impact on technology innovation theory. We classified articles that related to policy into four categories: effects of innovation on economic growth, factors influencing the rate of innovation, policy tools used by policy makers, and the impact of specific policies. About one-tenth of articles mentioned the relevant content of economic growth. Kemp et al. (Kemp and Soete, 1992) explored the relations between specific trajectories of technological change and economic growth. In 2005, Foxon et al. (2005) analyzed the existing innovation system of new energy and renewable energy technologies in the United Kingdom. In 2011, Foxon et al. (Foxon, 2011) used the coevolutionary framework to assess the impact of the transition to a low-carbon society on economic growth and prosperity. Anderson et al. (Anderson and Winne, 2007) used a dynamic model of energy systems to explain that discoveries and innovations have positive effects on national and

226 Chapter 7 international policies on climate change. Montalvo et al. (Montalvo, 2008) mentioned the enormous potential of clean technology for economic growth and the challenges that policy makers face when designing policies. In 2012, Pearson et al. (Pearson and Foxon, 2012) suggested that to realize significant long-term economic benefits from low-carbon transitions as early as possible, systematic efforts and incentives are needed to promote the replacement of low-carbon innovations and high-carbon technologies. Li et al. (Li and Lin, 2016) applied the panel error correction model to investigate the impact of research and development (R&D) investment activities, economic growth, and energy prices on energy technology patents in 30 provinces of China from 1999 to 2013 and found that the cointegration relation had a positive impact on economic growth. Miao et al. (2017) used the stochastic frontier analysis method to investigate the influence of green technology innovations on natural resources use efficiency and to analyze factors that influenced natural resource use efficiency. The authors found that with the innovation of green technology, the usage level of natural resources was comparatively higher and the trend of change was rising. Alvarez-Herranz et al. (2017) explained the interplay among energy regulation, economic growth, and carbon emissions. Zainuddin et al. (2017) applied the partial least-squares technique to analyze Malaysia data of the Clean Development Mechanism and discovered that continuous diagnostics and mitigation (CDM) implementation has a significant positive impact on economic growth. Liu et al. (Liu and Bae, 2018a) investigated the causal linkage among CO2 emissions per capita, energy intensity, real gross domestic product per capita, industrialization, urbanization, and share of renewable energy consumption in China from 1970 to 2015. They applied autoregressive distributed lag (ARDL) technology to examine the cointegration and short- and long-run estimates and implement the vector error correction model (VECM) to analyze the directional causality among the time series data. As one of the main policy suggestions, they concluded that green and sustainable urbanization can promote economic growth without causing environmental degradation, so it should be encouraged. Taking renewable energy as an instance, Johnstone et al. (Ben and Potter, 2007) analyzed the patent data of 25 nations from 1978 to 2003, studied the impact of environmental policy on technological innovation, and found that public policy has an essential role in determining patent applications. Smerecnik et al. (Smerecnik and Andersen, 2011) investigated the dispersion of environmental sustainability innovations in North American hotels and ski resorts. Results showed that the adoption of sustainable innovation is closely related to the simplicity of sustainability innovation and the level of leadership in hotels and resorts. The perceived comparative advantage of sustainability innovation and the common innovation of hotels and resorts are also linked to the adoption of sustainabilityenhanced innovations. Lanoie et al. (2011) used a database that includes observations from about 4200 facilities in seven Organisation for Economic Cooperation and Development nations and found that those data strongly supported the weak version of the Porter

Green and low-carbon technology innovations 227 hypothesis that environmental regulation will incentive environmental innovations and comparatively supported for the narrow version that flexible environmental policy regimes give firms greater incentive to innovate than do prescriptive regulations, but did not support the strong version that properly designed regulations may cause cost-saving innovations that more than compensate for the cost of compliance. Shi et al. (Alvarez-Herranz et al., 2017) reviewed a large number of documents on green technology and low-carbon technology innovation and concluded that green and low-carbon technology innovations cannot be separated from policy or regulatory mechanisms. By analyzing the relevant influences between policies, Lindman et al. (Lindman and Soderholm, 2016) showed that learning by doing is one of the factors affecting technological innovations, in addition to research and development. Menanteau et al. (Wilson and Schwarzman, 2009) examined tools used by European countries in renewable energy policies, including bidding systems, quota systems, and feed-in tariffs system, and suggested that the feed-in tariffs system is more efficient than a bidding system. Nakata et al. (2011) reviewed how to apply energy models to achieve a low-carbon society under the energy system approach. Kanada et al. (2013) discussed the relation between low-carbon technology innovations and policy designs. Mercure et al. (2014) analyzed climate policy tools for the decarbonization of the global electricity sector and showed that from a diffusion and path dependence perspective, the impact of policy portfolios does not correspond to the sum of the effects of individual instruments: there is synergy between policy instruments. Fuerst et al. (2014) examined the diversity in the use of Leadership in Energy and Environmental Design (LEED)-certified commercial buildings in 174 core-based statistical areas in the United States. In terms of policy effectiveness, we found that just the obligatory requirement to achieve LEED certification for new buildings has a notable positive impact on market penetration. Schmidt et al. (Schmidt and Huenteler, 2016) identified four technologies that require different types of functions and combined case studies to arrive at a heuristic approach to predicting the localization effects of deployment policies for diverse types of technologies in countries with various income levels. Fischer et al. (Fischer and Salant, 2017) used a two-pool, theoretical model with high- and low-cost extractors to assessed policy choices, policy choices combined with increasing the size of the regulated coalition, raising the tax (or tightening the cap) within the regulated coalition, and accelerating cost reductions of the clean technology. Rogge et al. (Rogge and Schleich, 2018) used a bivariate Tobit model to explore the link between policy mix characteristics and low-carbon innovation; they found that future research on low-carbon and ecological innovations should focus more on the characteristics of policy portfolios than on policy tools and the need to consider how to measure policies in innovation surveys to provide more comprehensive policy recommendations on green innovation.

228 Chapter 7 Some articles on this topic explored the impact of specific policies. Paish et al. (Ibn-Mohammed et al., 2017) stated that owing to the positive environmental protection policy of Europe and the assistance of favorable tariffs for green electricity, small hydropower will regain strength in Europe in coming decade. Fischer et al. (Veugelers, 2012) evaluated different policies to reduce carbon dioxide emissions and promote renewable energy innovation and diffusion and discovered that the optimal policy mixtures can achieve emission reductions at a lower cost than any single policy. Grimaud et al. (Grimaud and Rouge, 2008) concluded that the optimal environmental policy in an endogenous growth general equilibrium framework delayed the exploitation of resources and the level of pollution emissions, redistributed research efforts, reduced the amount of gray research, and facilitated green research. Wilson et al. (Nakata et al., 2011) studied the chemicals policy in the United States and conclude that existing policies generated a chemical market that underestimates the impact of chemicals on health of humans and the safety of the environment. Golombek et al. (Golombek et al., 2010) suggested that if the government is able to subsidize R&D optimally, it will still have the motivation to implement a preannounced future policy. If the provided R&D subsidies are below the optimal subsidy, the current (subgame perfect) carbon tax rate will surpass the optimal carbon tax rate. Van der Vooren et al. (van der Vooren and Alkemade, 2012) presented an agent-based model of competition between several emerging and market-ready low-emission vehicle technologies and the dominant fossil fuelebased internal combustion engine vehicles, and explained the impact of different policy measures on technological change and their impact on the strategic actions of business participants. More specifically, collaboration and standardization strategies can promote technological change by synergies without risking early lock-in. Geels et al. (Laitner et al., 1998) applied a multilevel perspective as a heuristic framework to analyze interactions among industry, technology, markets, policy, culture, and civil society. Andersson et al. (Andersson and Karpestam, 2012) studied the legislated carbon tax in Australia and suggested that contemporary climate legislation should be complemented with a supplementary set of policies aimed at promoting the capacity to change the economy structurally. Abolhosseini et al. (Abolhosseini and Heshmati, 2014) suggested that compared with feed-in-tariffs (FIT) with renewable portfolio standard policies, employing a carbon emission tax may be a useful way to moderate emissions at the lowest cost. Moreover, employing an emission trading mechanism may be a useful way to moderate emissions at the lowest cost when the government applies a market view policy. Al-Saleh et al. (Al-Saleh and Mahroum, 2015) presented a critical review of the interaction between green policy instruments and green business models from a behavioral view and found that most green business models may pass costs to others and skirt regulations in response to the green policy. Arvanitis et al. (2017) explored the indirect impact of policies on performance through adoption or innovation, and found that the impact of energy-related technologies on business economic performance is generally positive. Gramkow et al. (Gramkow and Anger-Kraavi, 2018)

Green and low-carbon technology innovations 229 showed that some fiscal instruments, such as low-cost finance for innovation and fiscal incentives for sustainable practices, have significantly promoted inducing green innovation. Throughout the review of these articles, it can be seen that the different policy implementations have diverse effects owing to the various cost structures and maturities of renewable energy. The innovation of renewable energy can be induced by policies. Each country has its own preferences for policy implementation. The feed-in tariffs are relatively more practical. The data from 25 high-income countries between 1978 and 2003 showed the relation between policies that encourage renewable energy and innovations in renewable energy. It is analyzed by controlling the relative price of the alternative factors, the demand factors, general scientific ability, the after controlling the relative differences in the economies, the patents tendencies, and the number of patents. Results showed that for the renewable energy sources of solar and wind energy, the feed-in tariffs had a significant positive impact on solar energy, but when controlling other policies, it would not have a significant impact on wind energy innovation, and the renewable energy country (REC) target was the opposite. Tax policies and voluntary projects had no significant impact. Through the article that examined the impact of Korea’s feed-in tariffs and renewable portfolio standard (RPS) policies on its renewable energy sources from a governmental and producer perspective, we can see that the Korean government believed that RPS, rather than FIT, can increase the economic efficiency of PV power generation and reduce the economic efficiency of nonphotovoltaic energy. On the contrary, producers believed that RPS would increase the economic efficiency of nonphotovoltaic energy. Through the article that drew conclusions from the study of European governments’ environmental protection policies, we find that governments tended toward FIT policy when developing low-risk renewable energy and toward RPS policy when facing the market. Through the article that analyzed data from four Western European countries from 1977 to 2009 and probed the impact of feed-in tariffs policies and public R&D support only on wind power generation, results showed that both had a positive impact on wind power, but public R&D support policies had only a limited impact without FIT policies.

4.2 Technology innovation adoptions and diffusion The theme of technology innovation adoption and diffusion was a major impressive body of research of low-carbon or green technology innovations for our researchers. A total of 91 articles explored this theme. We divided the theme into three subthemes: pure technology introduction, technology method or theory introduction, and technology diffusion introduction. Several articles introduced pure low-carbon and green technology adoptions in different fields such as chemistry, agriculture, building, mines, and the manufacturing industry

230 Chapter 7 (such as automobiles) (Adnan et al., 2017; Mannan et al., 2017; Rennings et al., 2013; Soderholm et al., 2017). Adnan established electric vehicles as a feasible long-term solution for the future of technology in the vehicle industry (Adnan et al., 2017). Smerecnik and Andersen studied the diffusion of environmental sustainability innovations in hotels and ski resorts (Smerecnik and Andersen, 2011). Some practical technology adoptions were introduced in countries such as England (Owen et al., 2014), China (Huang et al., 2018; Zhang et al., 2017), Malaysia (Khorasanizadeh et al., 2016), Canada (Parkins et al., 2018), Brazil (Gil et al., 2015), Austria (Geels and Johnson, 2018), Sri Lanka (Jayaweera et al., 2018), and Africa (Kijima et al., 2011). Technology innovation and diffusion theories were discussed and extended. Bose developed an integrative framework in green information technology (IT) research (Bose and Luo, 2011). Feder and Umali reviewed the theoretical and empirical literature on the adoption of agricultural innovations over a decade (Feder and Umali, 1993). Heyes and Kapur set up a strategic model of R&D in which a polluter can deploy technologies developed in-house or license technologies developed by specialist outsiders (Heyes and Kapur, 2011). Koebel explained challenges involved in innovations in home building, as well as providing planners with strategies to influence innovation in the industry (Koebel, 2008). Pacheco provided a consolidated comprehensive framework of eco-innovation in companies (Pacheco et al., 2018). Yun and Lee examined key factors of renewable energy systems diffusion from a socio-technological perspective (Yun and Lee, 2015). Technology adoption theory with an empirical application base is also a key research theme. For example, Costantini showed that the effects of eco-innovations reduced environmental stress and that the strength of these impacts varies across the value chain, depending on the technology adopted and the type of pollutant under scrutiny (Costantini et al., 2017). Fuerst investigated variations in the adoption of LEED-certified commercial buildings across 174 core-based statistical areas in the United States and modeled the determinants of the proportional LEED-certified space (Fuerst et al., 2014). Hattam and Greetham used an equation to simulate the uptake of low-carbon technology within a real local electricity network that was situated in the United Kingdom (Hattam and Greetham, 2018). Montalvo investigated the level of diffusion and exploitation of cleaner technologies (Montalvo, 2008). Shampine and Tolley analyzed 10 cases of joint procurement experiments of on-grid solar PV energy in Finland to deepen an understanding of how low-carbon experiments can contribute to climate change mitigation (Shampine and Tolley, 2003) Subramanian researched the CC (carbon capture) capabilities and enterprise integration literature in the context of logistics services (Subramanian et al., 2014). Wigboldus used three cases to research agricultural innovations (Wigboldus et al., 2016). Zhou investigated the specific example of a demonstration project in China to support the large-scale diffusion of green technology and its pilot implementations and revealed that these demonstrations face a different set of diffusion barriers (Zhou et al., 2015).

Green and low-carbon technology innovations 231 Zhu studied how Chinese manufacturers adopt green supply chain management practices and whether this adoption affects their performance, contributing theoretical advancements to the diffusion of innovation theory (Zhu et al., 2012). The themes of technology diffusion policy were recommended in theoretical and empirical analyses in several articles that covered innovative public procurement (Ghisetti, 2017), dynamic efficiency in CO2 emissions abatement (Gonzalez, 2008), renewable and lowcarbon climate change mitigation objectives (Hudson et al., 2011), mechanisms that can accelerate the global diffusion of climate-friendly technologies (Janicke, 2015; Laitner et al., 1998) and sustainable energy technologies (Mallett, 2016), the intrafirm diffusion of green energy technologies (Stucki and Woerter, 2016), and the function of official development assistance in Africa (Tigabu et al., 2017). Here are three typical examples. Veugelers (Adnan et al., 2017) showed that beyond the supply of a public clean R&D infrastructure and clean public procurement, the development and adoption of new clean technologies by the private sector needs to be ensured to reduce GHG emissions. Coad (Coad et al., 2009) mainly focused on how consumer motivation can be tapped to encourage the adoption of cleaner technologies. Trianni (Trianni et al., 2013) discussed factors affecting the perception of barriers to the diffusion of technologies and practices for industrial energy efficiency by small and medium-sized enterprises (SMEs). This exploration shows that people make great efforts in actual experiments and adopt low-carbon and green technology, such as the sample survey, case study, or field study with primary data. Typical research articles are influential. For example, Qinghua and Sarkis [186] have had more than 108 times citation as the end of 2018. “The models that underlie much of the diffusion literature have their roots in physical diffusion processes.” Low-carbon and green technology innovation diffusion lead regional economic development and save energy with low-CO2 emission or zero-energy emissions. Furthermore, this review provides information indicating that the researchers’ focus is on introducing new energy, developing renewable energy and new methods, and improving processes and even conceptions or cultural ideas. This is a new trend of low-carbon and green technology development.

4.3 Technology transfer In introducing the technological track of the green revolution, Parayil (2003) expresses that technology transfer and local adaptive work in the green revolution was carried out in the international public domain. Lema (Lema and Lema, 2013) use the case of wind power CDM to expand the focus to how technology transfer occurs, and then suggest that research and policy should pay more careful attention to the relation between international low-carbon technology transfer mechanisms and local technological capabilities.

232 Chapter 7 Urban (Urban et al., 2015) finds that technology transfer can be fully successful only when host governments and organizations have the capacity to absorb new technologies. Moreover, he introduces the concept of geographies of technology transfer and cooperation (Urban, 2018) and shows that there is an increase in indigenous innovation capabilities, resulting in technology transfer. Liu (Liu and Liang, 2011) explores potential policies and schemes promoting the transfer of CCS technologies to developing countries, and then attempts to understand technology transfer, including its benefits, barriers, and definition. Later, Rai (Rai et al., 2014) finds that weak intellectual property regimes are indeed a hindrance to diffusing certain classes of low-carbon technologies. Rennkamp (Rennkamp and Boyd, 2015) suggests that international technology transfer and cooperation should contribute to boosting domestic capabilities to advance technological development. Blohmke (2014) combines the field of technology transfer and technologyspecific aspects with sustainable development objectives, and then points out that assessments of the complexity of technology should be integrated into technology transfer mechanisms. However, Lema (Lema and Lema, 2016) suggests that the nature of technology transfer changes over time, so it is significant to differentiate among countries at different levels of development. Pueyo (2013) suggests that enabling frameworks need to be in place to allow foreign technologies to flow and be absorbed. The article identifies these enabling factors by analyzing 10 case studies of low-carbon technology transfer processes based in Chile. Martinsons (Martinsons et al., 1997) suggests that environmental technology transfer is considered in terms of nurturing green business in Greater China. Ai (Ai et al., 2015) studies the impact of various technological progress patterns on China’s regional environmental performance using spatial econometrics and finds significant spatial effects of technology innovation and, technology transfer on China’s regional environmental performance. In addition, Ockwell (Ockwell et al., 2008) highlights some key policy considerations for facilitating low-carbon technology transfer to developing countries. Moreover, Meyer (1995) gives two examples of environmental nongovernmental organizations in Latin America, which contribute to technology transfer. The realization of technology transfer in the green revolution is influenced by many factors. The process of international low-carbon technology transfer needs to consider fully the capacity of absorbing countries and governments and the obstacles of intellectual property rights systems. At the same time, the increase in independent innovation capacity will have a positive role in technology transfer. From the perspective of historical development, in the environment of rapidly improving independent innovations and intensified international competition, the transfer of green low-carbon technology in developed countries will have a more positive impact on developing countries. Developing countries should also try their best to improve their technology adaptation level and absorptive capacity to accept the technology transfer of the green revolution proactively.

Green and low-carbon technology innovations 233

4.4 Technology innovation management and capability The theme of technology innovation capability is rather broad. For analyses such as one just cited, we divide them into four subthemes, such as the innovation research of management capability, design capability, process control capability, and organization innovation capability. Six articles discussed innovation management related to green technology and low-carbon technology innovations. Tarawali reflected the role of management concept innovations in the development of green technology innovation when studying the development process of the improved farming system in West Africa (Tarawali et al., 1999). Through an analysis of crop yield, the important role of green management innovation in improving land fertility and realizing sustainable development was demonstrated. Lee (2008) studied the buyer’s green supply chain management practices and described the content of small and medium-sized suppliers participating in the green supply chain program, revealing that resources and organizational capabilities of suppliers are becoming increasingly loose (Lin et al., 2018). Wu (2013) discusses the relations between green supply chain integration and green innovation and points out that to improve green innovation performance, managers should strive to integrate resources and capabilities among their organizations, suppliers, and customers. Managers should constantly pay attention to market demand trends and maintain a close technical network among supply chain partners. Taking 211 Taiwan IT manufacturers as the research object, Wu (2013) discusses the impact of green innovation on environmental uncertainty by means of hierarchical moderating regression analysis (Wu, 2013). Thurner studies the annual and environmental reports of the six most prominent industry players in oil and gas from 2008 to 2010 and analyzes their evolving green management approach. Then he concludes that companies adopt more environmentally friendly production technologies that are more influential than government regulations. In other words, management concept innovation has a huge role in green technology innovations (Thurner and Proskuryakova, 2014). Martin-Rios employs innovation management and social constructivism to study the interrelation between foodservice regulations and waste management innovations, and finds that their implementation in the foodservice sector depends on management’s beliefs, knowledge, implementation, and actions, reflecting the development of management concepts and promoting the development of green technologies (Martin-Rios et al., 2018). Scarpellini describes the measurement of specific financial resources applied by the company and its internal management to the ecological innovation process (Scarpellini et al., 2018). Design method innovation is also a critical research theme in technology. Two typical articles presented here are useful for our practitioners to study. Perez-Valls proposes that green capabilities are based on practical (green practices), dynamic capabilities of practices and structures that can be used to identify opportunities, make full use of

234 Chapter 7 opportunities, and employ them to transform organizations on the basis of which key variables that link structural design and green practice to organizational performance in strategic flexibility reflect that design method innovation is also an important way to promote green technology innovation (Perez-Valls et al., 2016). Haley (2017) explored how to design and operate public sector institutions to avoid potential pitfalls and effectively implement technology-specific policies. The researchers list 10 institutional design principles and their relation to sustainability transformation research, and pointed out that design method innovation can have an important role in sustainable development (Haley, 2017). Regardless of the technology innovation itself, the subject of process innovation is also well-accepted by our researchers, particularly in the big construction induction of green innovation. For example, Mirghafoori found that supply chain agility has a positive impact on green performance by mediating organizational strategy, customer satisfaction, and financial performance (Mirghafoori et al., 2017). Ardito proposed that green supply chain management orientation has a positive impact on waste and water productivity, and thus discovered that process innovation promoted green innovation (Ardito and Dangelico, 2018). Fu proposed that environmental regulations and corporate characteristics are the most widely studied factors affecting the adoption of sustainable process technologies (Fu et al., 2018). Organization innovation is another support for low-carbon and green technology. It has three subthemes: the effort of organization structure, communication patterns, and decision-making. Only a small number of typical articles relate to the impact of organizational innovation on green technologies and low-carbon technology innovations. Antonioli studied whether corporate joint implementation of organizational innovation and training can promote its adoption of environmental innovation (EI) and whether this correlation is part of the Porter hypothesis framework. Results show that the only case in which industry-specific issues are observed to be strictly complementary in organizational change involves CO2 reduction, a relatively complex type of EI, but only if the sample is limited to more polluted (and regulated) industries. This evidence is consistent with Porter’s assumptions (Antonioli et al., 2013). Ketata suggests that although sustainable innovation offers companies considerable new opportunities, it adds complexity. This, in turn, requires certain organizational practices and capabilities to address the challenges ahead. Investment in employee training is more important than technology research and development spending. It illustrates the important role of organizational innovation in green technology innovation and low-carbon technology innovation (Ketata et al., 2015). Aboelmaged (2018) examines the impact of technology, organization, and environment drivers on sustainable manufacturing practices (SMPs) and the impact of these practices on competitiveness, and finds that stress, management support and employee involvement have had a positive impact on SMP (Aboelmaged, 2018).

Green and low-carbon technology innovations 235 When looking for literature, we also found new classifications of research, such as capacity innovation, enterprise technology trajectories, and green information systems, which have implications for green technology innovations. Marcus first proposed that unique capabilities are essential for continued competitive advantage (Marcus and Geffen, 1998). Hofmann (2012) used a dynamic capability literature in research, employing advanced technology, interenterprise relationship experience, and product innovation capabilities as three capabilities to support companies’ efforts to become greener. The author presents evidence of the relation between potential capabilities and environmental management practices (Dong et al., 2008). Chassagnon proposes the concept of innovative leadership and finds that the powerful influence of innovative leadership is measured in terms of innovative persistence and novelty (Chassagnon and Haned, 2015). Wu et al. (2016) suggests that dynamic organizational capabilities and ecological innovation are necessary conditions for sustainable development. This analysis provides a possible direction showing that the effectiveness of innovation depends not only on technology but also on the related responsible stakeholder concept of innovation and its capability across management, organization, and process innovation. Based on the deep research, it can be surmised that the capacity innovation, ecological innovation, leadership, and technology trajectory all will become important factors influencing green technology innovations. It is a result of core team cooperation, and there is a lot of potential in this area for research. This literature shows that research on green technology innovation in enterprise management has gradually turned from macro to the micro aspects. After analyzing the green macrostrategy of enterprises, scholars began to pay more attention to microfactors such as enterprise organization, system design, and innovation ability. Meanwhile, government policies have become an important influencing factor of the low-carbon and green economy, and the direction of future research.

4.5 Basic research and advance development The fifth theme is basic research and advanced development. Thirteen articles explored this type of theme in our review. Nine articles presented advanced technology development with conceptual or qualitative methods. They explored innovations from the concept, mechanism, technology foresight, and multilevel perspectives to enrich the related innovation theory. For example, Parayil (2003) (Desrochers, 2008) presented two approaches on mapping with technological trajectories of the green revolution and the gene revolution. Short and Lomas (2007) recommended a hybrid environmental design strategy. Farley et al. (2010) offered a global mechanism for sustaining and enhancing payment for ecosystem service schemes of CO2

236 Chapter 7 emissions and deterring carbon emissions. Furthermore, Li et al. (2010) conducted the advanced technology status like biotechnology, they reviewed the development status of industrial biotechnology in China, including chemical, energy, and environment resource innovations, and proposed related suggestions for the industrial biotechnology revolution. Davis and Gertler (2015b) use high-quality microdata from Mexico to describe the relations among temperature, income, and air-conditioning and found that continued advances in energy efficiency or the development of new cooling technologies could reduce the impacts of energy consumption. Similarly, growth in low-carbon electricity generation could mitigate increases in carbon dioxide emissions. Bolton and Foxon (2015) extend the low-carbon development scope and draw on the social shaping of technology literature to develop a broader understanding of infrastructure change as a dynamic sociotechnical process. They then propose an empirical focus on developing more flexible and sustainable energy distribution systems as key enablers for the United Kingdom’s low-carbon transition. Ibn-Mohammed et al. (2017) presented a critical review of some existing PV technologies compared with PSCs, including material and performance parameters, production processes and manufacturing complexity, economics, key technological challenges for further developments, and current research efforts. Cherp et al. (2018) proposed a metatheoretical framework from the perspective of integrating technoeconomic, sociotechnical, and political issues with national energy transitions. It conceptualized national energy transitions as a coevolution of three types of systems: energy flows and markets, energy technologies, and energy-related policies. Pan et al. (2018) presents exciting advances and challenges related to air electrodes and their relatives. After a brief introduction of the Zneair battery, the architectures and oxygen electrocatalysts of air electrodes and relevant electrolytes are highlighted in primary and rechargeable types with different configurations. Six articles initiate a series models expounding on the theory of technology innovation. First, a winewin innovation model of manufacture practice was developed and suggested to return to a private property rights approach to mitigate pollution problems whenever possible (Desrochers, 2008). Then, Dong et al. (2008) explored the promising model proposed by Klein and Sorra in 1996. They found that information systems implantation effectiveness was influenced directly and indirectly by the innovation-value fit, and indirectly by the implementation climate. Third, Kuroda et al. (2008) presented a new phenomenon-based simulation model to approach process intensification based on a comparison with the states and the trend of process intensification in the United Kingdom, Europe, United States, and Japan. This article pointed out that the expected process intensification would involve the design and development strategy for process technology. Finally, Ponte et al. (2009) offered a cooperative design model for developing complex IT artefacts. All four typical articles indicate that modeling research or adoption is a good way to illustrate the theory and guide practice. Kittner and Kammen (Kittner et al., 2017b)

Green and low-carbon technology innovations 237 analyzed the deployment and innovation using a two-factor model that integrates the value of investment in materials innovation and technology deployment. Complementary advances in battery storage are of utmost importance to decarbonization alongside improvements in renewable electricity sources. It charted a viable path to dispatch storage that enables combinations of solar, wind, and storage to compete directly with fossil-based electricity options. Liu and Bae (2018b) employ ARDL technology to test the cointegration and short- and long-run estimates, and apply the VECM to analyze the directional causality among the time series data. The basic research of policy instruments and mechanisms among different interested groups is necessary for technology innovation implementation. Ulhoi (2008) studied interactions among the role and potential of technology innovation, information cooperation, and government agency and found it was a dynamic interorganizational collaboration as strategic drivers of a renewed market-driven green development in industry. Then, he suggested “the ways in which governments have and can nurture and support an environmentally more sustainable development.” Cherp et al. (2018) conceptualized national energy transitions as a coevolution of three types of systems: energy flows and markets, energy technologies, and energy-related policies. He used the three perspectives as an organizing principle to propose a metatheoretical framework to analyze national energy transitions. The basic research has covered most areas of green and low-carbon technology innovations. It involves research on approaches to policy instrument and mechanism, models, chemical, energy, environment resource industry, biotechnology, and so on. In addition, it is expected that more interdisciplinary research will emerge in the future. Solving existing problems from different disciplines is also a direction of future research.

4.6 Entrepreneurship innovations The last theme of low-carbon and green technology innovations is the role of entrepreneurship innovations. We divided this theme into three subthemes: entrepreneurship green design strategy, enterprise decision-making, and individual achievement. Five articles appeared from 1985 to 2018 involved in the role of individual. Some outstanding articles are mentioned here. Bergek (2013) considers entrepreneurship in studying the transformation of energy systems to meet the needs of a low-carbon economy. The research framework emphasizes the impact of four major investor-related factors on the investment process and should be studied in future research: motivation, background, resources, and personal characteristics. It reflects the role of entrepreneurial personal characteristics in making decisions about low-carbon technology innovations (Liu and Liang, 2011). Bocken (2015) interviewed a

238 Chapter 7 sample of leading sustainable venture capitalists and other key stakeholders in sustainable entrepreneurship and found that sustainable venture capitalists can demonstrate sustainable business forms by balancing financial and social and environmental returns. After that, Gasbarro suggested that sustainable entrepreneurs have a vital role in promoting sustainable development. Through empirical research, the role of sustainable entrepreneurs from visionary and capable explorers is examined (Gasbarro et al., 2017). Studying how to design an appropriate university system and factors that influence the sustainable entrepreneurship of university support systems, Fichter suggests that sustainability should and can be integrated into the university’s entrepreneurial support system, which can address sustainable entrepreneurship in education. The problem is to prepare for future green entrepreneurs. This argument reflects the important role of entrepreneurs in green technology innovations (Fichter and Tiemann, 2018). Jiang, found that green entrepreneur orientation has a positive impact on the environment and financial performance (Jiang et al., 2018). In exploring these articles, it is seen that entrepreneurship is a key player in the process of green and low-carbon sustainable innovations. However, the technological innovations used in cooperation are mainly cost-oriented. Our detailed exploration of these articles is not extensive. However, we are witnessing low-carbon and green technology innovations involving many different types of topics that are more complex than our normal technological innovations, because their impact has a profound impact on people’s living environment and different lines of business, and it is significant. Some topics have changed over time, leaving lots of room for our researchers. Here, we have not found many articles on low-carbon and green technology performance evaluation systems, which is another direction for further research. The entrepreneurial individual factors have attracted much scholarly attention, especially since 2015. The theme of entrepreneurship dominates within the scope of the different type of entrepreneurs, the social corporate responsibility, the decision effect of entrepreneurs on enterprise’s green low carbon technology innovation, and the role of entrepreneurs in green and low carbon economy development or society improvement. Moreover, Scholars have begun to pay attention on the role of education in cultivating entrepreneurs’ green entrepreneurship, which is a critical element of sustainable development.

5. Result and discussion 5.1 Insight from our exploration Through the analysis of articles in the WOS from 1994 to 2018, we found that although the research topics of low-carbon and green technology innovations varied, the main idea

Green and low-carbon technology innovations 239 focused on technology adoption, diffusion, transfer, policy recommendation, or implementation, and current advanced technology development, which can be regarded as a convergence out of divergence. In the period sequence and territories analysis of the articles, we initialized a positive journey of green and low-carbon technology innovations from England, West Europe, and North America, then developing regions such as Asia and Africa. Especially for research status in Asia, China acts as an emerging star and its publications are obviously higher than before. This is helpful for our researchers to have a full understanding of the green and low-carbon development road map. Based on the overall review for publications from 1994 to 2018, we saw that low-carbon and green technology innovations are becoming compared with energy-innovation related topics. They is becoming a dominant research subject coupled with social energy system innovations contributing to low-carbon and sustainable development. Another phenomenon we explored is the research of low-carbon and green technology innovation in West Europe and North America, which is more advanced than in developing areas such as China, India, and Asia, and other developing countries in Africa, as claimed in Section 3.2. The contributions in North American, England, and other Western European countries are obviously more than other new economies combined such as Japan, China, and India. One more impressive insight we discovered in the literature written by authors from developing countries is that the research is not only technology innovation itself but also technology adoption and transfer. Moreover, articles with a high citation rate are mostly written by authors from developed countries such as the United States, England, France, Japan, and Hungary. Few are from developing countries, except India. Articles that gained a high citation rate do not indicate that they have a high yearly citation rate, although we think that articles with a high yearly citation rate can be classified as representative of countries contributing to research on low-carbon and green technology. Compared with the research methods of innovation, articles with empirical methods predominated over other research methods because the research can be more practical and accurate. It indicates that empirical studies are more welcome in low-carbon and green technology innovation. However, the conceptual (6.2%) and qualitative (5.7%) methods should not be ignored with extension and quick development. In addition, actual technology adoption needs theoretical support. It assumes that the concepts and theoretical systems driving low-carbon and green technology development research is more welcome. Another impressive feature of these articles is that the low-carbon and green technology research covers 54 subjects within multidisciplinary fields, whereas most fall into environment science, management, energy and fuels, and economics.

240 Chapter 7 Based on the review of research levels in Section 3.4, and compared with results in the article (Shi and Lai, 2013), the number of articles in three research levels has increased significantly. Microscopic-level research has grown fastest, notably studies from China, at more than 100 publications. Most articles at the microscopic level are about inventions of new technology and methods, including the technique of detecting chemical substances and improvements in technologies. Besides, research at the mesoscopic level has an upward trend related to the impact of the green revolution on industry and territory, including the acceptance of the green economy and new technologies in society, the efficiency of new technologies in some industries, and so on. The research subject area review in Section 3.5 shows that the trend of low-carbon and green technology research appears to be interdisciplinary research with themes related to environmental subject, science technology, business economics, engineering, and energy and fuels, which account for 80% of the total. Research articles of the top two areas (environmental sciences ecology and business economics) are more numerous compared with other industries, such as chemistry and agriculture, and account for 50% of the total. The top five areas in the review of articles (Shi and Lai, 2013) are about for 67% of the total. The trend in the interdisciplinary field remains unchanged, but with the increase in social participation, it is relatively concentrated in several subject areas. The key words cluster analysis in Section 3.6 shows that technological innovation-related key words have the highest occurrence frequency, such as “innovation,” “technology,” “policy,” “sustainability,” “system,” “performance,” “management,” “energy,” “climate change,” and “model.” Technological innovation is an important driving force for sustainable development. Various policies and adjusted industrial structures are introduced to promote the innovative development of technologies, improve the efficiency of energy use, and support the innovative development of low-carbon and green technologies and new and renewable energy. For example, renewable energies such as wind energy, biotechnology, solar energy, water, and other green energies are key areas for our researchers to explore and develop. From the analysis in Section 4, one crucial phenomenon comes to our attention: besides most research themes of technology adoption and diffusion, green and low-carbon technology innovations cannot be isolated from policy or regulation regimes. Innovation research from multiple perspectives such as social culture and social energy systems and is needed for low-carbon development. This opens us the wider consideration that low-carbon technology or green technology innovations are not just pure technology but a cross-functional activity; as a consequence, the technology becomes a low priority compared with social innovation, such as savings and improvement in efficiency. Pure technology innovation cannot be a savior; it needs to integrate with the whole social system innovation to drive low-carbon economy development against the background of climate change.

Green and low-carbon technology innovations 241 The review in Section 4.1 indicates that the effects of different policy implementations have diverse effects owing to various cost structures and the maturities of renewable energy. The innovation of renewable energy can be induced by policies. Different countries have different preferences for policy implementation. In the renewable energy sources of solar and wind energy, feed-in tariffs had a significant positive impact on solar energy, but when controlling other policies, it would not have had a significant impact on wind energy innovation. Tax policies and voluntary projects had no significant impact. The Korean government believed that RPS rather than FIT could increase the economic efficiency of PV power generation and reduce the economic efficiency of nonphotovoltaic energy. On the contrary, the producers believed that RPS would increase the economic efficiency of nonphotovoltaic energy. The governments tended toward FIT policy when developing lowrisk renewable energy and tended toward RPS policy when facing the market. The finding in Section 4.2 shows that the technology adoption theory with empirical applications is also a key research theme. It covers innovative public procurement, dynamic efficiency in CO2 emissions abatement, renewable and low-carbon climate change mitigation objectives, and mechanisms design. People make great efforts in actual experiments to adopt the low-carbon and green technology, such as the sample survey, case study, or field study with primary data. Typical research articles are influential, Low carbon and green technology innovation diffusion lead regional economic development. It saves energy with low CO2 emissions or zero-energy emissions. Furthermore, the researchers focus on introducing new energy, renewing energy, creating new methods, improving processes, and even coming up with new concepts or culture ideas. This is a new trend in low-carbon and green technology development. In Section 4.3, the realization of technology transfer in the green revolution is influenced by many factors. Low-carbon technology transfer needs to consider fully the capacity of absorbing countries and governments and the obstacles of the intellectual property rights system. The increase in independent innovation capacity will have a positive role in technology transfer. From the perspective of historical development, in the environment of the rapid improvement of independent innovation ability and intensified international competition, the transfer of green low-carbon technology in developed countries will have a more positive impact on developing countries. Developing countries need to improve their technology adaptation level and absorptive capacity to accept the technology transfer of the green revolution in proactively. The technological management and capability analysis in Section 4.4 showed that the research of green technology innovations in enterprise management has gradually turned from the macro to the micro aspect. After analyzing the green macrostrategy of enterprises, scholars have begun to pay more attention to microfactors such as enterprise organization, system design, and innovation ability. Government policies are becoming an important influencing factor of the low-carbon and green economy, and the direction of future research.

242 Chapter 7 In Section 4.5, an advanced technology development analysis is explored from concept, mechanism, technology foresight, and multilevel perspectives to enrich the related innovation theory. The basic research of policy instrument and mechanism among different interested groups is necessary for technology innovation implementation. The basic research covers most areas of green and low-carbon technology innovations. It involves research into approaches to policy instrument and mechanism, models, chemical, energy, environment resource industry, and biotechnology. In addition, more interdisciplinary research is expected to emerge in the future. Solving existing problems from different disciplines is also a direction of future research. Finally, Section 4.6 shows that individual factors of entrepreneurs have gained much of scholars’ attention, especial since 2015. The research themes of entrepreneurship are within the scope of entrepreneurs’ type, the social corporate responsibility, the decision effect of entrepreneurs on enterprise’s green low carbon technology innovation, the role of entrepreneurs in green and low carbon economy development or society improvement, and the role of education in cultivating entrepreneurs’ green entrepreneurship, which is a critical element of sustainable development.

5.2 Recommendations for future direction Based on the exploration of the content and trend analysis from the perspectives of period sequence, country and territory, research methods, research level, research subjects, key words cluster, and themes of articles in Sections 3 and Section 4, we have witnessed our researchers’ contribution and are impressed with their consummate methodology and rich theory base. Although we also acknowledge some research limitations owing to the differences in background among the countries, here we summarize some recommendations for directions in future research for our researchers and practitioners as reference and discussion. First, we would like to deepen the understanding of low-carbon and green technology innovations to enrich the studies of methodology and theory. We recommend that researchers pay more attention on the exporation of theory extension and popularization of low-carbon concept. Especially for research from an economical and social perspective, the concept innovation among residents. Second, we recommend our researchers conduct more experiments, field investigation, and case studies, which would be more convincing for the practitioners. Furthermore, we are encouraged to draw on alternative methodologies from other fields of study, such as the electre-method in renewable technology diffusion (Beccali [Beccali et al., 2003]) and field

Green and low-carbon technology innovations 243 cases or experimental methods, the adoption of factors analytical techniques, computer simulations, and model-based methodologies such as linear regression models. ELECTRE method is a family of multicriteria decision analysis methods(MCDM) originated in Europe in the mid-1960s. The acronym ELECTRE stands for: ELimination Et Choix Traduisant la REalite´ (ELimination and Choice Expressing REality). This method was to choose the best action(s) from a given set of actions and was soon applied to three main problems: choosing, ranking, and sorting. Right now, they are used in the fields of business, development, design, and popularly, as well as energy planning. Third, we propose cross-level studies moving forward on low-carbon promotions, such as research on cross-cultures among different enterprises, regions, organizations, and other different stakeholders; especially international companies engaged in this type of innovation are undertaking more responsibilities. Research depends not only on scientific research organizations but mostly on practice. This would be helpful to enhance the speed of technology innovation diffusion in both developed and developing counties. Fourth, low-carbon and green technology innovation is a global phenomenon with many countries serving as locations where technological innovations occur. It is like a global fashion. We encourage researchers or practitioners to use cross-disciplinary teams worldwide to conduct truly international research, such as the global cooperation mechanism, global ecosystem research, global cross-cultural studies on interaction on sustainable development, etc. All team members in this group are encouraged to share information to keep the most advanced and updated research achievements. Fifth, low-carbon and green technology innovation is multilevel research and covers different subjects and multidisciplinary subjects. Research with low carbonebased green technology includes not only energy savings, renewable and sustainable consumption, and transition research, technology development, etc. but also human or social behavior research, eco-service, and green accounting. Here, we encourage researchers to build research teams combining science, environment, chemistry, energy, fuels, engineering, material science, social science, management, and even psychology and other scientists from different fields, who can bring multiple perspectives and methodologies to the foundation of research questions to test hypotheses. Sixth, we encourage our researchers to think more creatively about how to incorporate a wide range of new technology innovations, new technology, renewable energy, and energy-saving research into a big potential domain. Finally, from the participants’ perspective of low-carbon and green technology innovations, government is the key to sustainability development; thus, government policies are becoming an important influencing factor of low-carbon economy and the green economy. Moreover, as the main participants, entrepreneurial factors have gained lots of scholarly attention. The themes of entrepreneurial spirit, corporate responsibility,

244 Chapter 7 the effectiveness of entrepreneurs on enterprise’s green low-carbon technology innovation, and the role of entrepreneurs have become a new engine of low-carbon economy development.

6. Conclusion This chapter examined literature enlisted in the database of WOS on topics about green technology and low-carbon technology innovations from 1994 to 2018. Based on the literature review, some conclusions are drawn: (1) the research of Western Europe and North America is highly advanced compared with other developing countries, especially in terms of new resources and renewable energy technology innovations. A positive journey of green and low-carbon technology innovation is outstanding. (2) Empirical research, such as sample surveys and field studies with primary data, is prevalent and dominates other methods (conceptual, qualitative, and formal models research). (3) Research subjects are multiperspective and multidisciplinary, covering environment science, management, energy and fuels, economics, and social behavior. To date, research fields mainly focus on technology adoption, diffusion, transfer, policy-making or implementation, and advanced technology development. New vibrancy of advanced theoretical and methodological research is particularly needed, especially for low-carbon technology innovation trajectory, performance evaluation, government policy instruments, and multilevel cooperation among enterprises, governments, and entrepreneurship development. (4) The trend of low-carbon and green technology research appears to be interdisciplinary with themes related to environmental subjects, science technology, business economics, engineering, and energy and fuels. (5) Different policy implementations have diverse effects owing to the various cost structures and maturities of renewable energy. (6) Green and low-carbon technology innovations cannot be isolated from policies or regulation regimes and are becoming a new underpinning of current sustainable development coupled with social energy systems contributing to eliminate climate change. From this review of 25 years of the literature within the domain of low-carbon and green technology innovations, it encourages us to conclude that the research is more diverse, multifaceted, multidisciplinary, and multifocused than normal technology innovations. Researchers are focused on introducing new energy, developing renewable energy and new methods, improving processes, and even coming up with new concept or cultural ideas. This type of innovation is a complex, multilevel, and socially constructed process that is like an increasingly robust sun to attract researchers to perform in the developing fields. It shows strong evidence of future trends in developing the new and renewable sources technology, new vibrancy of theoretical and methodological advances such as low-carbon technology innovation trajectory, low-carbon performance evaluation, government policy instruments and multilevel cooperation among enterprise, governmental policies, and so on. New and advanced theory explorations are the research themes of future directions.

Green and low-carbon technology innovations 245 An online supplement to these articles is available at http://apps.webofknowledge.com/ summary.do?product¼WOS&search_mode¼GeneralSearch&qid¼5&SID¼2EOi2idE3 pcBG2jdboA&page¼1&action¼sort&sortBy¼PY.A;LD.A;VL.A;SO.A;PG.A;AU.A& showFirstPage¼1.

Acknowledgments This research is supported by the Social Science Planning Project of Jiangxi Province (12th Five-Year Plan) (No. 15GL28); the Humanities and Social Sciences of Ministry of Education Planning Fund (No.19YJA790037); the Ninth China Postdoctoral Special Foundation (No. 2016T90789); and the Nature Science Foundation of Guangdong Province (No. 2018A030313269).

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CHAPTER 8

Sustainable and innovative practices of small and medium-sized enterprises in the water and waste management sector Leonardo Borsacchi1, Patrizia Pinelli2 1

ARCO (Action Research for CO-development), PIN Scrl - University of Florence, Prato, Italy; Department of Statistics, Computer Science, Applications “Giuseppe Parenti” (DiSIA), University of Florence, Florence, Italy 2

Chapter Outline 1. Introduction and background 2. Water management 263 3. Waste management 272 4. Future perspectives 284 5. Conclusions 287 References 287 Further reading 290

255

1. Introduction and background At a global level, the emerging demand for sustainability in supply chain management and for commodities by consumers and other main stakeholders pushes organizations to be held responsible for their environmental and social performance. In fact, in addition to increased demands for strong economic performance, interest is increasing not only in qualitative factors related to production but also in how an organization handles sustainable and innovative practices, considering environmental issues, also in relation to its territory. Moreover, in a globalized market, organizations’ policies must comply with international standardized regulations and procedures. Thus, traditional production processes require innovation capable of optimizing different phases in terms of necessary input and output produced. Commodities, goods, and technological entities have to be considered the result of a transformation. This transformation process, by applying energy and human work to raw materials, makes the output suitable for satisfying needs and Innovation Strategies in Environmental Science. https://doi.org/10.1016/B978-0-12-817382-4.00008-3 Copyright © 2020 Elsevier Inc. All rights reserved.

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256 Chapter 8 requirements. A technological process transforms an input into an output. Along with an input coming from a previous step, the process may require additional raw materials, energy, and additional resources and a workforce. Thus, within each manufactured product and commodity, there are physical inputs as well as stories of people and workers, lucky and unfortunate inventors, and successful and unsuccessful ideas (Nebbia, 2002). Moreover, the harmonious and sustainable development of a territory does not happen by chance; rather it is (or should be) pursued by actors and stakeholders of the territory itself (Biggeri et al., 2015). Together with the main output, transformation can generate waste and environmental and social impacts, as outlined in Fig. 8.1. In addition, waste from a process can be considered a new raw material (by-products) for the same process or others: a circular approach. For years, there have been tentative approaches to accounting that consider the flow of materials. In fact, because of the need to manage the natural capital, it is necessary to add an accounting of the flow of materials to traditional indicators such as financial, patrimonial, and economic. Many economists have studied the topic. In addition, considering their interest in technology, resources, and the circulation of goods, commodity scientists have proposed solutions for material accounting by formulating models and indicators. Following the progress of Commodity science studies, which were mainly based on economic factors created and determined by the origin and nature of goods in relation to the technical conditions of transformation and properties required by the market, at first they were tentatively mainly based on accounting resources and energies. Thus, the model proposed by Salvadori in 1933 considers the energies requested by a process to transform an input in output. According to Salvadori, each transformation needs a sum of energies that is always higher than the theoretical energy that it represents. We identify ε to be the theoretical unit of the energetics mass of an output and Se the sum of energies (or energon) spent to obtain it. So, we obtain Se > ε. The energon may not be constant for a given output, whereas the theoretical energy is constant. Consequentially, Se
ε ¼ h tends toward a minimum, depending on all conditions of use of the available energies. The value of h is susceptible to a minimum: when the transformational technology reaches this minimum, the related process could be considered the most

Figure 8.1 Production inputs and outputs.

Sustainable and innovative practices 257 economical. Reaching an even lower value for h foresees change in the process, including methods of energy saving or recovery (Salvadori, 1933). In line with Salvadori’s theory, we can similarly reflect, in broader terms, on resource use as well as waste generation. Generally, the mass of the useful output obtained from a transformation is lower than the mass of the used resources. Moving from this concept, theoretically it is possible to consider each output as the sum of resources needed by the technological transformation. We identify m to be the mass of useful output, and Sr the total mass of resources spent to obtain it. For instance, the quantity of waste (u) generated by the transformation Sr
m ¼ u needs to be minimized, favoring recovery and reuse. Studies on Commodity science consider economic factors created and determined by the origin and nature of a good or commodity in relation to the technical, environmental, and social conditions of transformation and the properties required by the market as well as its life cycle. For this reasons, considering resources and economic factors, Nebbia moved from the classic inputeoutput economic model proposed by Leontief, which includes the dimensions of productions (agriculture and industry) and consumption (families), and added further dimensions. In fact, all materials entering the economic and production system are obtained directly or indirectly from nature, to which they will subsequently return, even if in a modified form. It must also consider that an accounting study on material flows must be confined in time and space. Consequentially, some of the materials used can be part of outputs with an average life of more than the unit of time considered in the analysis. They therefore represent stocks. More, considering the material flows, the difference between the materials entered in a transformation and that found in the useful output are waste. Also, some waste does not return to nature; after treatment, it can be used in a circular mode. Finally, in the flow of materials, it is necessary to consider imports and exports (Nebbia, 2017). It is possible to create a simplified matrix (Fig. 8.2) including the following dimensions: nature, agriculture, industry, families, waste treatment, stocks, and imports/exports. For a more complex model, it needs to break down the various dimensions with a greater level of detail. For example, nature includes air, water, soil, plants, and animals. More detailed accounting, with increasing units of time and space, becomes complex owing to the amount of information needed and their availability. The heterogeneity of the flows, for both quantities and value, must also be considered. Nebbia also defined the resulting gross domestic product of materials as the total materials used by families plus stocks and exports, minus imports: GDPM ¼ Xn4 þ Xn6 þ ðXn7
X7n Þ In a futuristic scenario, Nebbia hypothesizes that the price of a commodity could depend on the associated waste generated during its production or final disposal at the end of life. Nowadays, a process should be designed to eliminate or at least reduce the production of waste and by-products with environmental and economic benefits. This concept is the basis of the circular economy (CE), applicable to all sectors, which aims to replace the

Nature Agriculture Industry Families Waste treatment Stocks Imports

Nature

Agriculture

Industry

Families

Waste treatment

Stocks

Exports

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Xn7

X1n X2n X3n X4n X5n X6n X7n Xnn

Figure 8.2 Matrix of material flows. From Nebbia, G., 2017. Ecologia ed Economia. Tre tesi per il futuro. pp. 53e72. Andrea Pacilli Editore. Manfredonia. ISBN: 978-88-9376-013-3.

concept of the linear economy (Stahel, 2016), enabling the development of a paradigm in which the model overcomes the concept of an economy that closes the loop with waste (Ellen MacArtur Foundation, 2015), representing the path to a systemic transformation. Each life step of an output, product, or commodity has to be optimized until the end of life. At this point, it must be recovered and reused as starting material in another supply chain, adding value to the chain itself. The application of a CE aims to eliminate waste through the superior design of materials, products, systems, and business models (Ellen MacArtur Foundation, 2012). Theoretically, a CE mainly deals with environmental economics and industrial ecology. In fact, where several industrial activities operate, many different by-products are generated. Therefore, an industrial ecosystem represents a group of enterprises that use each other’s materials and by-products, reducing the level of waste (Glavic and Lukman, 2007), creating a positive initiative of industrial symbiosis (Chertow, 2000). The consumption of energy, raw materials, and additional resources (including water) is optimized in an industrial ecosystem, with by-products from one process serving as a raw material for another. In fact, industrial symbiosis is defined as “engaging traditionally separate industries in a collective approach to competitive advantage involving physical exchange of materials, energy, water, and/or by-products” (Ohnishia et al., 2017). A CE has the potential to transform productions, services, and consumption within the same supply and value chain, as well as different chains (Hislop and Hill, 2011). At the microlevel, by the developing strategies, a positive connection is possible among producers, distributors, consumers, and recyclers, promoting a closed-looped system. Considering a production process, the delivery of eco-designed outputs means that they are made using recycled and renewable resources, as well as with components that

Sustainable and innovative practices 259 are longer lasting and easier to maintain, upgrade, recycle, or repair by product owners or professional repair facilities (UNEP and TU, 2009). Environmentally, eco-design can reduce resource consumption, contributing to obtain higher recycling rates and reducing waste generation (EMF, 2013). Thus, the Ecodesign Directive requirements for energyrelated products provide a framework for setting minimum environmental standards and energy efficiency requirements for energy-related products (EU, 2009). Furthermore, the CE approach includes social issues, together with economic and environmental ones. According Gunter Pauli (2015), the introduction of innovations inspired by nature generates multiple benefits, including jobs and social capital, offering more with less. This extended vision is also known as the blue economy. The transition to a CE can represent a challenge, especially for organizations whose processes, technologies, structures, and supply chains are conceived of as linear. Transformation requires a set of investments to have adequate technologies and processes, train workers, and upgrade relations within the chain. In fact, at the macrolevel, by recovering waste as a quality secondary raw material, the CE would reduce demand for primary raw materials, which would also contribute to reducing dependence on imports, to avoid the risks of the price volatility of international commodity markets and supply scarcity owing to geopolitical factors. According to the principles of circularity, there is a range of potential uses of by-products as second raw materials. Despite this, technological, economic, or legislative constraints hamper the use of by-products. The reasons for sustainability and environmental impacts suggest rapidly switching to a circular paradigm (Ghisellini et al., 2016). Public sector intervention and support could help organizations to stimulate a transition. The European community has a long-standing commitment to sustainability and environmental, safety, and health issues and through its programs, it has directly and indirectly attempted to convey repeatedly (European Commision, 2015) the transition to starting and developing competitive innovation. To stimulate this transition, in 2015, the European Commission adopted a Circular Economy Package. Turning waste into a resource is an essential part of this package because of the loss to waste of around 600 million tons of potentially reusable or recyclable materials (Koop and van Leeuwen, 2017). The package consists of an action plan with concrete actions and measures from production and consumption to waste management and the potential market and reuse of secondary raw materials and by-products (European Commission, 2015). It aims to include revised legislative proposals. These actions aim at both promoting to close the products’ life cycle, as well as bringing benefits for the environment, society, and the economy. During the Dutch Presidency of the European Union in 2016, with the Pact of Amsterdam, urban authorities were involved in the so-called Urban Agenda for the European Union (EU). Cities, member states, and European institutions started sharing experiences and discussing issues on EU legislation, funding and knowledge. Among these work groups (i.e., partnerships), there is the one for the CE. The European Partnership on the Circular

260 Chapter 8 Economy is made up of six urban authorities: the city of Oslo (coordinator), The Hague, Prato, Porto, Kaunas, and the Flanders region; the member states are Finland, Poland, Slovenia, and Greece; the European Commission (involving specific DGs); and other institutions and organizations. Through meetings and continuous debates, the work carried out within the partnership highlights a series of strategies, actions, and studies. Overall, according to the EU, cities have an essential role in developing a CE: they act as enabling factors for potential measures through which they can influence both consumers and businesses (Kirchherr et al., 2017). Urban areas become the privileged place in which to develop innovative policies and produce effective positive results by reducing energy consumption, lowering emissions, and managing waste in a circular way. Urban policies also could improve the quality of life of European citizens. The Urban Agenda for the European Union focuses on a more effective and coherent implementation of existing EU policies, legislation, and instruments. Drawing on the general principles of Better Regulation, EU legislation should be designed to achieve the objectives at minimum cost without imposing unnecessary legislative burdens. The Urban Agenda intends to enhance the knowledge base on urban issues and exchange best practices and knowledge (e.g., Better Knowledge). Thus, cities need to develop and communicate their long-term, holistic vision about their circular ambitions. Application of the circular approach within a territory (e.g., urban area) involves municipalities, the main production activities (including small and medium-sized enterprises [SMEs]), other relevant stakeholders, and citizens to create new economic and social opportunities lowering the depletion of new resources. The proposed model for CE (Fig. 8.3) describes a holistic and systematic governance bringing together public authorities, universities, enterprises, nongovernmental organizations (NGOs), and citizens. The system includes three connected areas: residential, industrial, and agricultural land and forestry. This model envisages the following forms of interactions: • • • •

public authorities promote research and innovation for the CE; citizens and NGOs engage with research institutes to explore potential innovations, with strong attention to social implications; SMEs work together with citizens to codesign new business models for circularity services; and businesses and public authorities collaborate to define and deploy circularity services in the public interest, including sustainable public procurements.

Through holistic and systematic circular governance at an urban level, this model may enhance research and innovation initiatives within a circular approach and engage citizens and NGOs in developing startups for new business activities (profit and nonprofit).

Sustainable and innovative practices 261

Figure 8.3 Circular model approach.

For enterprises, the transition to a CE requires innovation for adequate technologies and processes (innovate the process). New production procedures and practices go along with an effective waste management system, mainly based on the 3 R’s: reduce, reuse, and recycle. In fact, reuse means using waste as a raw material in a different process with no structural changes, whereas recycle refers to structural changes in materials within the same process (EEA, 2004). Three more R’s have been added: remanufacture, recover, and redesign (Jawahir and Bradley, 2016). In particular, recovery is an activity applicable to materials, energy, and waste; it is the process of restoring wasted entities for beneficial use, including for purposes other than the original ones (EEA, 2004). Therefore, it also means the reuse and transformation of existing buildings (rethink the city), in particular unused ones situated in industrial areas, to: 1. create new economic and social opportunities without consuming new land (following the paradigm of zero-volume growth);

262 Chapter 8 2. improve the environmental performance of buildings and infrastructures throughout their life cycle; and 3. propose new urban scenarios. According to other studies, the CE can be summarized in five cyclical fields of action: take, transform, distribute, use, and recover goods and materials (Park et al., 2010; Stahel, 2016) and the transversal actions of industrial symbiosis. Beyond the environmental aspect, the challenge of waste reduction entails economic and social facets. New policies have to consider both citizens and entrepreneurs to reduce the gap within potential bad waste management and rebuild social cohesion. In particular, a main goal of adopting this approach is to strengthen social cohesion at an urban level (rebuild social cohesion) by constructing an inclusive and supportive community based on the principle of sharing and creative reuse as a means to stimulate innovative driving forces for business activities, starting from recovering waste and materials that others consider refuse or rejections, and considering social purposes and charity within the paradigm of the sharing economy (Borsacchi, Barberis & Pinelli, 2018). Moreover, positive social effects include the creation of jobs and increased consumer trust in sustainable products and services (Fiksel, 2003). This chapter focuses on circular practices of SMEs in the water and waste management sector, analyzing the drivers that lead these firms to adopting more sustainable and innovative processes. Sustainability in both the water and waste sectors is a major concern owing to current linear-based legislation that hinders virtuous behaviors at the micro- and macrolevels. The major part of proposed models and case studies outlined in the chapter concerns the city of Prato, one of the largest textile districts in Italy, because of its active involvement within the EU Partnership on Circular Economy as well as its consolidated know-how regarding fabric recycling and water reclamation and reuse at an industrial level. Further case studies describe SME best circular practices at the European level as well as models applicable at the urban level such as integrated circular systems. Moreover, inspired by the evolution of commodity science studies, the authors propose ideas contributing to a discussion on CE. After this introduction, the chapter is structured as follows. Section 2 reports main issues concerning water reclamation, treatment, and reuse, including best practices and innovative solutions. Special focus is on the evolution of the legislative framework on water reclamation for agricultural purposes. Next, Section 3 presents case studies on efficient circular waste management with a specific focus on the textile, food, and electronic sectors, whereas Paragraph 13.4 outlines future ideas and perspectives on strategic innovative solutions to enhance the transition of SMEs to more responsible and sustainable management. The chapter concludes with some final remarks. Potential overlaps among sections are necessary to allow a precise description of each argument and finding.

Sustainable and innovative practices 263

2. Water management Water represents one of the most essential components of the biosphere. The availability of good-quality water is essential for people, nature, and economic activities. Increasing amounts of water are required each day for agriculture, energy production, and manufacturing. Cities need to address the emerging scarcity of water reserves that threatens the long-term availability of fresh water for citizens and activities of production. Climate change is exacerbating the situation by increasing variability in rainfall, causing more frequent droughts and floods. At the same time, the demand for water is predicted to increase significantly at a global level in coming decades. Accelerated urbanization and the expansion of municipal water supplies and sanitation systems contribute to the rising demand. Relevant EU legislation on water includes: • •

•

• •

Directive 91/271/EC: urban wastewater treatment Directive (1998)/83/EC: drinking water directive. Its objective is to protect human health from the adverse effects of the contamination of water intended for human consumption, by ensuring that it is wholesome and clean Directive (2000)/60/EC: water framework. Since 2001, a common implementation strategy has been in operation, bringing together national experts, stakeholders, and the commission involved Directive (2006)/7/EC: bathing water quality. To monitor and assess bathing water. Directive (2006)/118/EC: groundwater. Developed in response to the requirements of Article 17 of the Water Framework Directive.

At an urban level, clean water is used not only for drinking but also for a wide range of purposes (street cleaning, gardens, and sports field irrigation). Urban growth is challenging because of dramatic increases in the generation of municipal wastewaters. Nevertheless, this growth is an opportunity to overcome inadequate water management practices and adopt innovative approaches, which can include using treated wastewater and by-products. More efficient water reuse could be essential in the transition toward a CE. Many cities are realizing that the reuse of high-grade urban water is much cheaper than the alternatives. In particular, the most extensive report on municipal water reuse, written in 2010 by Oxford’s Global Water Intelligence, states that despite having little impact on water scarcity, reclaimed water is the future for water reuse. This water can also be employed indirectly for drinking (i.e., for the water supply) by blending it in reservoirs or injecting it into the aquifer. The growth of usefulness of reclaimed water will be quicker than desalination technologies. Following a circular approach, cities of the future will be more resilient, inclusive, and livable. Also, the Sustainable Development Goals (SDG), in particular SDG 6 (Ensure availability and sustainable

264 Chapter 8 management of water and sanitation for all) and SDG 11 (Make cities and human settlements inclusive, safe, resilient, and sustainable), call for the promotion of sustainable urban water management for safer and more inclusive and resilient cities. The challenges can be discussed globally by clustering cities into five distinct categories of sustainability: 1. 2. 3. 4. 5.

cities lacking basic water services, wasteful cities, water-efficient cities, resource-efficient and adaptive cities, and water-wise cities (Koop and van Leeuwen, 2017).

An integrated approach in terms of water supply, wastewater treatment, and drainage services needs to be followed to protect the environment and biodiversity and safeguard citizens’ health and well-being. Water and urban planning, architecture, landscaping, energy services, waste services, and mobility services are synergistic and interdependent. Cities need a long-term framework of their sectoral challenge made into a proactive and integrate urban agenda to minimize costs and to become more resilient, inclusive, and livable. The composition of municipal wastewater can vary considerably, reflecting the range of contaminants released by various domestic, industrial, commercial, and institutional sources. Wastewater from domestic sources is usually relatively free of hazardous substances, but there are increasing concerns about emerging pollutants, including commonly used medications that, even at low concentrations, may have long-term impacts (Jones et al., 2007). SMEs often discharge their wastewater into municipal systems or directly into the environment. According to the United Nations World Water Development Report for 2017, over 80% of all wastewater is discharged without treatment. A water treatment plant (WTP) has a fundamental role in the water supply chain because it enables water sanitation and reuse. Wastewater cannot be released directly into the environment because soil, sea, rivers, and lakes are unable to degrade quantities of polluting substances beyond their own disposal capacity. The main pollutants that can be removed after treatment are biodegradable organics (e.g., biochemical oxygen demand), suspended solids, nitrates, phosphates, and pathogenic bacteria. In fact, at the local level, with several activities and productive processes, many different by-products are generated (e.g., wastewater), and the range of potential uses for them can be equally diverse, according to CE principles. At the urban level, this kind of collaboration can advance social relationships among the involved local actors, including surrounding neighborhoods. Because of risks to human health and the environment, water reuse has strong limitations in the existing regulations. More efficient reuse of water is essential in the transition toward a CE.

Sustainable and innovative practices 265

Figure 8.4 Systemic circular approach and interactions among areas. WTP, water treatment plant.

A more sustainable urban water cycle needs new infrastructures and the definition of innovative policies. All water sources (freshwater supply, rain, rivers, and wastewater) need to be interconnected with each other and with other urban areas (parks, roads, energy, and waste) so that efficiencies and circular synergies arise from a coordinated approach (Fig. 8.4). WTPs, which carry out processes in which organic and inorganic pollutants are removed from sewage, figure in the connection points among different areas. The proposed model is water-wise cities inspired by the approach of “rethink the city” (see Section 1). Main pillars are the definition of a shared vision among stakeholders and policy makers, the strong commitments of city governors, the increase in knowledge, and capacities and awareness among citizens. To facilitate communication between WTPs, citizens, and main stakeholders, including SMEs, certification is one method generally based on requirements outlined in international standards. Regarding drinking water, an innovative example of the introduction of company certification is Empresa Municipal de Aguas y Saneamiento de Murcia (EMUASA S.A.), a local treatment water plant in Murcia, Spain. In 2011, the organization began implementing the requirements of the standard ISO 22000:2005 “Food safety management systems” to demonstrate the application of a model of safety

266 Chapter 8 management system of water for human consumption. The organization decided to adopt the standard, which was mainly designed for the food industry, considering its own potable water process as food production. To meet all of the standard’s requirements, it was necessary to adapt the documentation of existing management systems, create new documents and define new procedures, and verify compliance with all prerequisites. A complete risk analysis was carried out according to Hazard Analysis and Critical Control Points (CCP) methods, involving all stages of the process. More than 108 events were identified as potential risks for water safety. In particular, five were categorized as CCPs and 42 as operational prerequisites; 30 could be managed only through an emergency plan and the remaining 31 were not significant. The system undergoes periodic reviews. According to an application of international food standards, internal food defense procedures need to be designed and adopted. In EMUASA, three of the defined CCPs are related to the voluntary contamination or sabotage of facilities that may affect the safety of water. This is why the organization has opted for perimeter fencing, access control, and presence detection tools. Whereas in the case about Murcia we talked about an innovative strategy at the managerial level in the production of drinking water, in the following example we will consider a virtuous case that fully meets the CE approach. In fact, in Prato, one of the largest Italian industrial districts and one of the most important textile and clothing production centers in the world, the local WTP is a clear example of a closed circle. The textile district has more than 7200 SMEs. Thus, the Gestione Impianti Depurazione Acque S.p.A. (GIDA) was created in 1981 after Italian law 319/76 was introduced regarding wastewater treatment. At that time, the Municipality of Prato and the Prato Industrial Union agreed on an appropriate response to the law; through the constitution of GIDA, they created a centralized treatment plant avoiding requiring each textile enterprise in the district to have its own treatment plant. This solution also represented a good economic solution for the whole district. It created a synergy that guaranteed indisputable balance between the basic needs of the textile industry and the inalienable needs of the population of Prato. GIDA treats urban wastewater as a mix of domestic wastewater and industrial wastewater (coming from textiles), meeting the requirements of Italian legislation. The industrial aqueduct is 75 km long; it is one of the largest industrial plants in Italy and covers an area of around 1,500,000 m2. After the purifying process and special posttreatment, water is distributed back through the industrial aqueduct to textile SMEs (nearly 400) that use water for their processes, closing the loop. The Baciacavallo plant (Fig. 8.5) is composed of two water lines constructed at different times, 1980 and 1986. Wastewater is collected from an old sewer for domestic customers and from two industrial districts. Wastewater coming from the sewer is treated with mechanical screens, sand traps, and primary sedimentation and then accumulates in two equalization tanks and is sent to biological basins consisting of sections of

Sustainable and innovative practices 267 WTP Baciacavallo Bypass

Prato

Water from gas treatment

Coarse screening

Water raising Sludge from other plant

Fine screening

Sand Trap

Water from dehydrataon

Flocculaon

Sludge Equalizaon

Primary Seling

Thinckening

Oxi/Nitrificaon

Dewatering with centrifuges

Second. Seling Incineraon and gas treatment Terary Seling Bypass

Ozone Treatment

River Discharge

River Discharge

Ashes and dust from gas

Figure 8.5 Scheme of wastewater treatment plant of Baciacavallo. WTP, water treatment plant. From GIDA spa.

nitrification and oxidation. After these treatments, the wastewater is subjected to sedimentation, tertiary treatment, and ozonation. Finally, it is discharged into the Ombrone River (Guerrini et al., 2016). The sludge that is produced during the treatment of sewage is thickened, dewatered by centrifugation, and then incinerated. On weekdays, the plant can treat up to 130,000 m3/d of sewage, breaking down as much as 100,000 kg of chemical oxygen demand per day and 4,500 kg of surfactants per day. WTP allows for

268 Chapter 8 several stages of the overall process. In more detail, the process starts with pretreatments, in which wastewater coming from the sewage collector is treated using two coarse vertical grids. The wastewater is then raised by four screws (Archimedes screw pumps) and sent to fine screening. The solid material is collected in a container and disposed of as a waste (European Waste Catalogue [EWC] Code 19:08:01 Screen), while the wastewater is collected by the drainage system that discharges to start the process cycle. Residues present in the liquid phase are separated from the wastewater using two vertical fine grids. The solid phase is collected in a container and disposed as waste by EWC Code 19:08:01 Screener, similar to what occurs for the coarse screen. After fine filtration, the flow of wastewater is divided into two treatment lines that cross through four circular tanks, called sand traps, each with a volume of 50 m3. The solid waste obtained is collected in a container and disposed of in a similar way as in the first step of gridding (EWC Code 19:08:01 Screening). Primary treatment consists of four slowmixing tanks of 10,800 m3 in which the sewage is exposed to ferric chloride and anionic polymer, and five rectangular tanks, in which the settling of solids takes place. The settled sludge is periodically extracted and transferred to the thickening tanks of the sludge line. Each line is equipped with a rotating grid for filtering and separation of floating solids extracted from the primary sedimentation. The wastewater from the primary treatment is stored in two circular tanks of 11,000 m3 each, which serve as equalization basins. Subsequently, the wastewater is sent to oxidation tanks for biological treatment. In the secondary treatment, the previous effluent is sent to four oxidationenitrification tanks equipped with superficial rotors that provide air required for the oxidation process. After nitrification, the wastewater is sent to four circular sedimentation tanks equipped with mechanically driven scrapers that continually drive the collected sludge toward a hopper at the base of the tank, where it is pumped to sludge treatment facilities or recycled to the same oxidation tank to increase the sludge retention time. In particular, the extracted sludge from the sedimentation can follow two different paths: 1. back to the oxidation tanks to keep the concentration of biomass constant, or 2. toward thickening tanks through four pumps. With the tertiary treatment that follows, wastewater flows into two mixing tanks equipped with electric mixers, to which aluminum trichloride and an anionic polyelectrolyte are added. The sludge produced in this phase is then collected and sent by four 40 m3/h sludge extraction pumps to sludge-thickening line tanks. Then, wastewater coming from the tertiary treatment is sent to a pumping station through a pipe. From there, it is sent to the contact tanks of ozonation, through four 1500 m3/h submersible pumps. The purpose of ozone treatment is to reduce the color and concentration of surfactants, which were not degraded by the biological-oxidative process. Ozone is generated by means of four ozonizers working with pure oxygen. Ozone is produced from liquid oxygen, which is

Sustainable and innovative practices 269 stored in four tanks external to the system and converted into a gaseous form through vaporized water. Ozone generators (vessels) produce gas by passing high-intensity electrical discharges through the oxygen in a gaseous form. The process produces heat, which is disposed of by a refrigeration system that provides a constant operating temperature with a yield of about 10% (kilograms of ozone [O3] on kilograms of oxygen [O2]). Thus, the gas mixture produced is blown through a network of porous disks in three contact basins consisting of four compartments, in which the water extracted from the tertiary treatment has flowed. Excess sludge from the tertiary and secondary treatments is sent to a thickener (thickening), with a capacity of 900 m3, and subsequently to two other thickeners of similar volume, to which extracted sludge from primary sedimentation also converges. From these two thickeners, the sludge is then extracted and sent to the dehydration section. Overall, the sludge line consists of gravity thickening, mechanical dewatering by centrifugation, and sludge incineration. The sludge produced from the treatment plant after mechanical dewatering with an average concentration of about 25e27% dry matter is stored in three silos with a total capacity of 186 m3. From there, it is taken through alternative pumps to feed the incinerator. When the sludge production exceeds the capacity of the furnace, or in case the latter stops, the sludge can be taken directly from the silos and loaded onto trucks for disposal. The incineration stage uses a 10-level incinerator of 100 t/d. Inside the oven, the following process steps can be identified: 1. 2. 3. 4. 5.

sludge drying, decomposition of organic substances, combustion of volatiles, combustion of fixed carbon, and cooling of the ash.

The system is supplied with postcombustion, a wet scrubber tower for fumes, a dust collector, and a continuous emissions analyzer for compliance with pollution regulations and to protect the atmosphere. These tools will continuously monitor the major traditional pollutants present in emissions, such as carbon monoxide, total dust, total organic carbon, hydrochloric acid, sulfur dioxide, and nitrogen dioxide, as well as the oxygen content, water vapor content, temperature, pressure, and volumetric flow rate. Water for irrigation and food production is a major worldwide issue, considering that agriculture accounts for over 70% of global freshwater withdrawals and up to 90% in some fast-growing economies (UN, 2017). Moreover, as the climate changes, both flooding and droughts are likely to become more frequent in European Mediterranean countries. At the European level, disparities in existing water reuse standards generate differences in the production costs of food products.

270 Chapter 8 Generally, because of human health and environmental risks issues, water reuse has limitations in existing European regulations regarding water and wastewater. Moreover, differences in national and regional legislation have led to differences in the possibility of cities and organizations using existing knowledge. Although public and private demand for reclaimed water is high, there are strong restrictions to using clean water from wastewater treatment plants (here called “reclaimed water”). However, reclaimed water can be used for several purposes such as street cleaning, irrigation of parks and gardens, and industrial purposes. After all, according to the final use, different standards of water quality are required (Voulvolis, 2018). Furthermore, according to European legislation, the term “urban wastewater” is defined as domestic wastewater or a mixture of domestic wastewater and industrial wastewater and/or runoff rainwater. Most cities have just one system for collecting urban wastewater; it merges wastewater from industrial and commercial activities, resulting in limitations for these cities to reuse water according to current legislation. Whereas water reuse encounters numerous barriers in the EU, this practice is commonly used in other countries (i.e., Israel, Australia, and Singapore). In Europe, identified barriers to water reuse are, among others, more burdensome regulatory requirements for industrial production activities compared with urban wastewater; the lack of minimum quality requirements for water in its different uses and processes; and the fact that reused water is less attractive than freshwater (EU Commission, 2018a). Both southern member states such as Spain, Italy, Greece, Malta, and Cyprus and northern member states such as Belgium, Germany, and the United Kingdom have in place numerous initiatives regarding water reuse for irrigation, industrial use, and aquifer recharging (Alcalde-Sanz and Gawlik, 2017). Cyprus and Malta reuse more than 90% and 60%, respectively, of their wastewater, whereas Greece, Italy, and Spain reuse 5e12% of their effluents, which clearly indicates a huge potential for further uptake (EU Commission, 2015). The feasibility of food-crop irrigation with treated effluent from a vegetable transformation and canning factory (agri-food) is being tested at a site in southern Italy (Capitanata), within the framework of the EU-funded project Demoware. Wastewater produced during the different industrial processes of washing, steaming, cooking, etc. is treated with conventional activated sludge and tertiary membrane filtration. The produced effluent is used for crop irrigation after storage in closed tanks and on-demand UV disinfection (i.e., in line with the irrigation pumps), to counteract possible microbial regrowth. In Italy, the level of stringency in existing water reuse standards has been reported to be an obstacle to further uptake solutions, owing to the high administrative burden and costs associated with local authorities. The situation is likely to remain unchanged in the absence of an EU action related to the harmonization and simplification of standards. Furthermore, GIDA is involved in an EU-funded project on the reuse of treated water, called IRRIGATIO. The project aims to assess the chemical/microbiological contamination and productivity of

Sustainable and innovative practices 271 selected fruit species grown under irrigation with different kinds of reclaimed wastewater in the agricultural production chain. Within cities involved in the project (i.e., Marrakech, Amman, Cairo, and Prato), abandoned areas or unused fields have been identified and used for pilot activities of urban gardening and for periurban farming systems. The output focuses on raising the average quality of products by adopting eco-friendly procedures and by irrigating with treated water. Farming procedures follow the principles of sustainability (e.g., use of fertilizers, workforce) as well as operative issues (harvest and storage) and are adapted to specific agro-ecologic and sociocultural contexts. The need to address the issue of reclaiming water at the European level was acknowledged in the 2012 Commission Communication “A Blueprint to Safeguard Europe’s Water Resources” (European Commission, 2012). Moreover, a number of actions to promote water reuse were included in the communication from the Commission’s “Closing the LoopdAn EU Action Plan for the Circular Economy” in 2015 (European Commission, 2015), including an action to prepare a legislative proposal on minimum requirements for water reuse for irrigation and groundwater recharge. According to the latest Intergovernmental Panel on Climate Change report, Mediterranean water stress is projected to increase from 9% at 1.5 C to 17% at 2 C, compared with the period 1986e2005. For these reasons, both the European Parliament, in its Sep. 2015 Resolution on the follow-up to the European Citizens’ Initiative Right2Water, and the Committee of the Regions, in its Dec. 2016 opinion on “Effective Water Management Systems: An Approach to Innovative Solutions,” encouraged the commission to draw up a legislative framework on water reuse (EU Commission, 2018a). Soon after, on May 2018, the proposal “Regulation of the European Parliament and of the Council on Minimum Requirements for Water Reuse” was published (EU Commission, 2018b). The aim of the proposal was to set basic requirements and limits for using urban wastewater (e.g., treated civil and industrial waters) for agricultural irrigation purposes (EU Commission, 2018c). The EU Partnership on Circular Economy welcomed the proposal. Indeed, the reuse of treated water for agricultural irrigation is attractive, considering the large amount needed for this activity. Given the trend of increasing water scarcity in many European cities, the urban use of reclaimed water, such as street cleaning and irrigation of green spaces, should also be encouraged. These activities have the potential to trigger new positive collaborations between private and public entities (e.g., industrial symbiosis), to find innovative solutions for using resources, and thus to increase revenues while reducing waste. The EU Partnership on Circular Economy proposed some key points that effective regulation on using reclaimed water for irrigation purposes should include: 1. Considering the same approach, regulations should extend water reuse for civil purposes (e.g., street and car washing, watering of flower beds, public gardens, and parks) in addition to agriculture. Nevertheless, cities ready to experiment or scale up water reuse for urban purposes sometimes face barriers coming from national legislation.

272 Chapter 8 A European regulation setting common minimum requirements on water reuse for civil purposes, given the free movement of persons, offers the opportunity to lift those legal barriers, provides legal certainty, and drives investments in the water collection infrastructure, while ensuring that citizens enjoy the same level of protection across the EU when visiting urban areas irrigated with reclaimed water. For each purpose, it is crucial to define distinct levels of quality, according to the impact on human health and the environment. 2. An effective risk assessment should be conducted. A competent authority should be in charge of overseeing risk management in collaboration with entities responsible for water reuse projects, operators of reclamation facilities, and users. To guarantee standardization in risk management, the regulation should expressly indicate a reference to internationally recognized standards (i.e., ISO 31000:2018). This will facilitate the work of the bodies responsible for issuing the authorization of the plant and subsequent verification. 3. To ensure that the reclaimed water is safe, thus protecting citizens and the environment, collaboration among reclaimed plant operators and food operators could create a positive industrial symbiosis. Thus, further indications for food operators (e.g., end users) should be added to urge them specifically to consider hazards linked to the use of reclaimed water for irrigation (e.g., to plan specific quality analyses, when requested). When using reclaimed water, end users must be ensured of the use of appropriate reclaimed water, based on the quality classes included in the proposal. At the city level, this kind of collaboration can advance social relations among the involved local actors, including surrounding neighborhoods.

3. Waste management Waste management is one of the main issues with which cities and enterprises deal because of its intrinsic association with environmental, social, and economic drivers. An integrated approach (i.e., having comprehensive picture of flows, adopting a waste life cycle, and implementing best and green practices) is needed to increase sustainability. One of the main sectors that generates waste is agri-food. For instance, 88 million tons of food waste per year are estimated to be generated in the EU, associated with 143 billion euros of estimated costs (FUSIONS, 2016). Prevention and reduction of food waste represent a challenge for all actors in the food chain, from food producers (farmers, food manufacturers, and processors) to those who make foods available for consumption (hospitality sector and retailers) until the final consumers. Several reasons can be considered to develop advanced valorization practices of food residues and by-products. This waste is simultaneously abundant, readily available, underused, and renewable. Moreover, it is generally composed of significant quantities of

Sustainable and innovative practices 273 bioactive molecules, i.e., carbohydrates, proteins, triglycerides, fatty acids, and antioxidants such as phenolics. In fact, residues coming from agriculture are primarily characterized by a high environmental impact precisely because of their organic component, requiring a high cost of disposal. Moreover, these compounds may be used for their favorable technological, biological, and nutritional properties, transforming waste in a second raw material (Schieber et al., 2001; Sze Ki Lin et al., 2013). For instance, during the production of olive oil, great amounts of waste and by-products such as olive oil wastewater (OOWW), olive pulp residues, and leaves are generated. Much epidemiological research has shown a correlation between the consumption of extravirgin olive oil, typical of Mediterranean countries, and a lower incidence of cardiovascular risk. Furthermore, medical and phytosanitary studies have highlighted particular biological properties for Olea europaea L. minor polar compounds (MPCs), such as antioxidant properties, coronary vasodilator actions, and anticholesterolemic and hypoglycemic activities. Based on numerous studies (Pinelli et al., 2003; Visioli et al., 1998; Tuck and Hayball, 2002; Fito´ et al., 2007), it can be said that the main polyphenolic compounds that can be found in extravirgin olive oil are tyrosol, hydroxytyrosol, oleuropein, and other secoiridoid derivatives. However, these beneficial compounds are also present in olive oil by-products (Mulinacci et al., 2001). More precisely, in olive leaves, the main constituent is oleuropein, a phenolic secoiridoid glycoside, whereas in olive pulp and OOWW, we can find hydroxytyrosol. Both compounds are well-known for antioxidant and antimicrobial properties (Benavente-Garcı´a et al., 2000; Bernini et al., 2015; Ciriminna et al., 2016; Moudache et al., 2016; Thielmann et al., 2017). There is great interest in the recovery of these compounds from the agro-industrial waste of olive oil production in consideration of the wide spectrum of the biological activities of O. europaea L. antioxidants. Generally, phenolic compounds have already gained a large amount of attention because of their biological activities, especially as inputs in the highevalue added products supply chain (Romani et al., 2017). Concerning the disposal and final uses of olive oil wastewater, there is a strong potential for the associated organic matter and its phenol assimilation (Kapellakis et al., 2015); however, its legislative restrictions must be considered. OOWW is a dark, bitter, sticky, viscous liquid mainly generated in the three-phase olive mills during olive oil production and historically used by Mediterranean farmers as an herbicide, pesticide, fungicide, and fertilizer. It is composed of fat (49.4%), water (47.3%), carbohydrates (0.7%), proteins (0.7%), and ash (0.9%), and it has a relatively high content of phenolic compounds (289 mg gallic acid equivalent/100 g) (Silvestri et al., 2006).

274 Chapter 8 The quantity of OOWW produced in an olive oil extraction process ranges from 0.55 to 2 L/kg of olives. Thanks to the presence of its proteins, polysaccharides, mineral salts, and other useful substances for agriculture, such as humic acids, OOWW has high fertilizing power. Therefore, OOWW could be used as a 100% natural, low-cost fertilizer available in large amounts. Unfortunately, besides these useful substances for agriculture, the phenolic composition of this wastewater prevents it from being disposable. In particular, the phytotoxic and antibacterial properties of OOWW have been attributed to its phenolic content, which are nonbiodegradable and consequently unsuitable for further use as a fertilizer or irrigation water. OOWW are currently disposed of by being spread on agricultural soil, especially by SMEs. However, that practice has uncertain environmental sustainability (Niaounakis and Halvadakis, 2006). To process the by-products of olive mills and valorize them as new products of high added value, an innovative experimental facility was created in 2007 in the center of Italy. The process, patented by ENEA (ENEA-Verdiana, Patent WO, 2005123635), is based on membrane filtration technologies. It was implemented with Patent PhenoFarm EP 09425529 for the “Production of concentrated and refined active ingredients from byproducts of Olea europaea L. using membrane technologies and liquid absorption chromatography on resin.” The main goal of this new process is the recovery and valorization of MPCs, in particular polyphenolic molecules with high antioxidant power, which are naturally present in olives. The plant is located near an olive grove and adjacent to the local olive oil mill. This allows the immediate processing of the byproducts of oil production, in particular the vegetable biomass (i.e., leaves) and OOWW. MPCs are normally only minimally conveyed in oil during the production process (150e400 mg/L). The rest, which is water-soluble, remains in large quantities in the OOWW. Diversified technologies are used to extract the molecules of interest (simple phenols, secoiridoids, hydroxycinnamic acids, flavonoids, lignans, and anthocyanosides) according to the starting matrices. The production process is based on the use of membrane separation technologies to obtain different commercial extracts, which are useful for different applications, thanks to their antioxidant and antiradical properties. MPCs are recognized as inputs for several productions in different sectors, such as food, cosmetics, and herbal medicines. Regarding the treatment of olive leaves, the process consists of the initial water extraction of the vegetal material, followed by selective fractionation in four steps: (1) microfiltration (MF); (2) ultrafiltration (UF); (3) nanofiltration (NF), and (4) reverse osmosis (RO). Owing to these steps, different outputs with an economic value can be obtained (Romani et al., 2017). Continuing with the description of the plant (Fig. 8.6), we start with the pre-treatment process, after which the solution passes through the MF membrane unit. This operation

Sustainable and innovative practices 275

Figure 8.6 Scheme of process of extraction, Patent PhenoFarm EP 09,425,529. MF, microfiltration; NF, nanofiltration; RO, reverse osmosis; UF, ultrafiltration. Redrawn from Romani, A., Scardigli, A., Pinelli, P., 2017. An environmentally friendly process for the production of extracts rich in phenolic antioxidants from Olea europaea L. and Cynara scolymus L. matrices. European Food Research and Technology 243 (7), 1229e1238.

involves a separation between the MF concentrate, which will feed the anaerobic digestion, and the permeate, which represents the feed for the subsequent separation process. The NF step removes particles up to 0.001 mm in diameter, thus obtaining poor permeations of metal ions, free of viruses and bacteria. The obtained output is a fraction with a good concentration in polyphenols, already marketable. On the other hand, the NF permeate results in RO, the fourth block of membranes. It consists of a physical treatment that uses membranes that retain the molecules of the electrolytes, in particular sodium chloride, and allows only the water molecule to pass through. The obtained fraction is a concentrate that can be considered a finished product with a high content of active ingredients compared with the products in the previous phases. Moreover, it is a permeate that is essentially osmotic water, which can be reused in the process, for example, to extract olive leaves. Once the different filtration steps are complete, the output fractions need further treatment by evaporation at a low temperature or a spray-dried technique to increase their concentration.

276 Chapter 8 As for the olive leaves, fresh and/or naturally dried, they reach the plant after being removed from the olives. They are chopped and weighed, and a report must certify the date and place of the leaves’ collection. Main steps of the process are: 1. Collection: the leaves are deposited in bags after removal from the olives. Then, they are transferred to the extraction machine. 2. Traceability is guaranteed using recorded documents. 3. Loading: Once the transfer of the leaves is complete, the outside door is closed; it is opened in the production area for loading into the extractor, to minimize risks for contamination. 4. Washing: the loaded leaves are washed through a jet of cold pressurized clean water. Washing water is then discharged. At the end of the loading operations, it is advisable to clean and disinfect the floor adjacent to the extraction machine. 5. Extraction: A green extraction is performed in a Rapid Extractor Timatic series (from Tecnolab S.r.l., Perugia, Italy) using solideliquid extraction technology. The extraction is performed with water in a stainless-steel basket at 60 C. The working cycle is fully automatic and alternates between a dynamic phase, obtained at a set pressure (7e9 Bar) and a static phase necessary to transfer the substance into the extraction solvent. Forced percolation is generated during the stationary phase, which, because of the programmable recirculation, ensures the continuous flow of solvent into the interior of the plant matrix. This process avoids both oversaturation and the formation of preferential channels, thus ensuring total extraction of the active principles from the vegetal matrix. 6. Filtration: The extracts pass through the filtration stages (MF, UF, and NF) that allow separation into the various permeates and concentrates. Before each process, the containers used to handle liquids are cleaned and sanitized. In particular, diafiltration occurs at the end of the filtration when a predetermined concentration value has been reached. Demineralized water is pumped to increase the polyphenol yield in the output; then, concentrates are properly stored. 7. Preservation and packaging: At the end of filtration, outputs are concentrated products of UF, NF, and RO. A cleaning and sanitization protocol is in place for the warehouse area. The storage areas and containers are checked to prevent bacterial or weed contamination. The described innovative process results in individual extracts that, individually and combined, have specific applications owing to their biological activities, leading to new formulations in different application fields, including the pharmaceutical, cosmetic, food, and functional food industries. Extracts from leaves could be sold as functional food ingredients. Classification and authorization (or notification obligations) procedures for the obtained outputs depend on the starting matrix. Labels and the composition of the goods need to be communicated to the health ministry, which is also in charge to authorize the production site. In particular, the useful antioxidant properties of hydroxytyrosol may be important in the search for natural replacements for synthetic antioxidant food additives.

Sustainable and innovative practices 277 A previous investigation (De Leonardis, Aretini, Alfano, Macciola and Ranalli, 2008) demonstrated that olive leaf phenol extract is a good antioxidant for food lipids, even at doses lower than 100 mg/kg (as hydroxytyrosol). Moreover, it seems to have no cytotoxic effects, nor does it inhibit the growth of lactic acid bacteria. For these reasons, and in view of their recognized nutraceutical activities, olive leaf phenol extracts can be used as a foodstuff ingredient. This innovative separation process performed with physical technologies can be defined as Best Available Technology; the Environmental Protection Agency recognizes it. The amount of waste cooking oil generated varies depending on the ways in which different countries use vegetable oil, according to their eating habits. Many countries have set policies that penalize the disposal of these oils into waste drainage. Used cooking oil (UCO) is generated by a variety of sectors and sources; the main ones are restaurants, food industries and households, and schools and hospitals. Oils derived from companies (fast food, restaurants, and cafeterias) follow a different control regime compared with oil for domestic use. Although the enhanced use of vegetable oil for production activities exists plan, currently a standardized waste oil chain for domestic oil does not. Instead, there are only growing initiatives for collection and recovery. These types of wastes are classified as nonhazardous according to the European Waste Code, but they are considered highly harmful to human and animal health, and especially to the environment. UCO is composed of different mixtures of oils that are discarded from industrial deep fryers and large restaurants. UCO can result from canola oil, sunflower oil, palm olein, and soybean oil; it may also contain a significant amount of animal fats derived from cooking. UCO may be completely unprocessed (raw) and it generally contains elevated impurities, water, and levels of free fatty acids. In severe cases, low-grade unprocessed UCO products may contain bags, gloves, plastic, towels, and other items that find their way into collection bins. Therefore, the latter must undergo an intense process of dewatering and filtration from sludge. Although the market for UCO is still relatively premature, it has changed dramatically over the past few years. Some years ago, when this market did not yet exist, UCO was expensive for restaurants and food processors, because it was simply considered waste. Currently, UCO producers pay restaurants and hotels for this material before its processing. The situation is completely different for extra-EU countries, because animal feed production derived from UCO is allowed (for instance, in the United States and China). In Indonesia, UCO can even be reused as cooking oil for human consumption. The latter is explicitly forbidden in China, but it is reported to be used to a large extent. A black market employing approximately 300,000 people in Beijing alone has emerged that unlawfully sells processed UCO blended with fresh oil to restaurants. This so-called gutter oil poses a serious threat to the health of Chinese consumers and has forced the Chinese government to establish official UCO collectors who sell UCO for biodiesel production (Toop et al., 2013).

278 Chapter 8 Aviation is one of the strongest growing transport sectors. It is expected to grow by 4.5% annually worldwide in by 2050 because it performs an important social function in the current global society. In particular, the growing middle class in India and China alone might double global air traffic (Eco-Skies, 2013). If fuel consumption and CO2 emissions were to grow at the same rate, CO2 emissions derived from worldwide aviation in 2050 would be nearly six times their current figure. Hence, the aviation industry has committed itself to achieving carbon-neutral growth by 2020 using a variety of initiatives and to reducing 50% of net CO2 emissions by 2050 compared with 2005 levels (Rosillo Calle, Trhan, Seiffert and Teeluckingh, 2012). Erratic fossil fuel prices and increasing awareness of the urgency need to cut emissions are driving the sector’s investigations into different and alternative resources for fuel production. In the long term, biofuels (fuels originating from biomass) could provide airlines with the opportunity to mitigate volatile jet fuel prices by diversifying their supply and reducing the impact of possible carbon taxes. The effects of using jet biofuel in terms of social, economic, and environmental issues depend on the value chain organization, in particular on the choices of feedstock and technology. Well-managed biofuel production chains produce multiple positive effects on ecosystems and social systems in terms of enhanced biodiversity, soil carbon increase, and improved soil productivity, greenhouse gas (GHG) reductions, less dependence on fossil energy sources, reduced erosion effects, stimulation of local employment, and strengthening of local, regional, and national economies. Moreover, differently from its main competitor (traditional jet fuel), the market for jet biofuel could be characterized by local development, with the creation of a supply chain in which feedstock producers may be directly involved in obtaining the final product, similar to what happens for biofuel supply chains. The innovation and industrialization of advanced biofuel production technologies have been driven by road transports. To promote the development of aviation biofuels, meeting EU sustainable targets by 2020 (such as net carbon reduction, no competition with fresh water requirements and food production, and no impact in terms of deforestation or biodiversity loss), drop-in biofuels are considered to be the best alternative to fossil fuels (IATA, 2015). Drop-in jet biofuel must meet the same chemical specifications as conventional jet fuel. This implies that the key factor for developing the market is related not only to the aviation manufacturing sector but also to the innovation process of the biofuels industry, in terms of the feedstock supply and refining process technology. This means that biomass must be converted through advanced processes into pure hydrocarbon fuels that are fully compatible with existing systems. Production can be carried out through various possible options, thermochemical or biochemical pathways, some of which are still undergoing investigation and demonstration stages by companies and research institutions worldwide. Currently, only two methods are ready for testing on a significantly large scale and have been approved by International to

Sustainable and innovative practices 279 produce certified jet fuel: FischereTropsch (from fossil coal or gas feedstock) and hydroprocessing. Fuels obtained by these processes are certified for used at a maximum 50% blend with standard fossil jet fuel (IATA, 2012). The conversion of lipids into paraffinic fuels through hydrogenation is the most industrially developed option and certainly one that is technically ready for large commercialization. With around 2.7 million tons of production per year, hydrotreated vegetable oil (HVO) has been commercially developed by various companies to produce biomass-derived diesel fuel of higher quality. The commercial application of HVO in the aviation sector and its large-scale production will be strongly connected to the feedstocks used, for two reasons: environmental and economic issues. Even if an advanced process is applied, the feedstock will remain conventional; therefore, it is essential to use sustainably grown crops (such as Camelina sativa) or waste oils (as used cooking oils or other oily residues) to ensure compliance with sustainability criteria (Tacconi et al., 2015). The aim of the ITAKA project, conducted in collaboration with Neste Company, is to support the development of aviation biofuels focused on the role of UCO as a renewable feedstock for developing drop-in renewable fuels in an economically, socially, and environmentally sustainable manner. In terms of environmental, regulatory, and market aspects, the European reference framework on aviation biofuels has been implemented in these past years. Globally, the main directives regarding biofuels are: 1. the Renewable Fuel Standard in the United States, 2. the EU Renewable Energy Directive (RED), and 3. the Fuel Quality Directive (FQD) in Europe. As for Europe, whereas the FQD sets specifications for fuel quality, the RED establishes a mandatory national target for the overall share of energy consumption from renewable sources in European member states. In particular, it sets the objective of 10% of renewable energy consumption in the transportation sector in 2020 and promotes the use of highly sustainable biofuels through specific mechanisms such as double counting. The latter method implies that the RED target is lowered because a smaller quantity of biofuels in transport is required to meet the target. Since 2012, the aviation sector has participated in the EU emissions trading system (ETS), the first and largest international trading scheme on GHG emissions that works according to the cap and trade principle. Thus, airlines flying to and from European airports have to add the cost of carbon dioxide emissions allowances to that of buying jet kerosene (ATAG, 2012). The main solution for airlines to avoid the ETS added cost is to use biofuels meeting the RED sustainable requirement. However, there are some important

280 Chapter 8 developments in the European regulatory field, because both directives are under revision. Two facts could have a relevant impact on these regulations: 1. Since Jan. 2013, it has been mandatory for jet biofuels to meet RED sustainable requirements to be eligible for exemption from the EU ETS mechanism. 2. An Indirect Land Use Change (ILUC) may be introduced as a new parameter to evaluate the sustainability of a biofuel, together with the usual direct emissions. Currently, direct land use change and ILUC are the most relevant factors influencing the environmental benefits of biofuel production. In Mar. 2013, the certification system Roundtable on Sustainable Biomaterials (RSB) was the first to approve the Low Indirect Impact Biofuels (LIIB) methodology to recognize biofuels with a low indirect impact. LIIB promotes practices that reduce the risk of displacement and competition with food production and biodiversity conservation, including the use of waste and residues, increasing yields, intercropping, and the use of abandoned lands. In the same period, the first RSB-certified jet fuel derived from vegetable oil and greases became available with the certification of SkyNRG by its supplier Dynamic Fuels. Dynamic Fuels produced drop-in fuels and supplied more than 15 flights worldwide, including KLM. In addition, Camelina Company Espan˜a, a partner in the ITAKA Project implemented by Renewable Energy Consortium for Research and Demonstration, Florence, Italy, became RSB-certified in Oct. 2013 (IATA, 2012; Tacconi et al., 2015). Jet fuel produced from Camelina oil using hydrotreating or jet fuel produced from soybean oil, oil from annual cover crops, algae oil, or other waste oils, fats, or greases all are qualified as advanced biofuels. Among these advanced biofuels, jet fuel from UCO stands out for its particular qualities. It offers 60% less CO2 emissions than fossil fuel equivalents, with a carbon footprint about 60% lower than that of conventional jet fuel; it also reduces other pollutants such as sulfur and nitrous oxide. Although the largest market is still captured by the biodiesel industry, there is ample room for even more growth in the aviation sector. However, unlike pure vegetable oils, significant variability in chemical parameters caused by the varying composition of UCO makes this feedstock indirectly suitable in thermal catalytic processing. Nevertheless, another important additional quality makes UCO an attractive feedstock. It avoids two of the most critical drawbacks of the biofuel debate: food versus fuel and ILUC. Indeed, it is not an agriculture product because it cannot be directly linked to controversial practices such as the displacement of food crops, GHG-emitting land clearances, or the unsustainable use of nitrogen fertilizer. The Dutch Company SkyNRG, one of the most well-recognized firms specialized in marketing and supply chain logistics in the aviation biofuel world, was the first company to source HVO from UCO, which was ready to be blended with conventional jet fuel. In particular, since 2011, SkyNRG has provided biofuel from used cooking oil to major airlines that perform

Sustainable and innovative practices 281 commercial biofuel flights. However, it is not completely true fact that UCO and all other waste and residues can be considered ILUC-free. In 2000%, 75% of recycled fats and greases, including UCO, were used in animal feed. Ten years later, one-third of all US production of UCO was diverted to biodiesel or HVO production at quadrupled prices (Yaccino and Steven, 2012). Therefore, UCO increased as a biodiesel feedstock could potentially cause the animal feed industry to employ a cheaper and more appealing option such as palm kernel meal, a by-product of palm oil. Wasted electrical and electronic equipment (WEEE) such as computers, televisions, fridges, and cell phones is one of the fastest-growing waste flows in Europe; it is expected to reach 12 million tons by 2020. WEEEs are a mixture of heterogeneous materials whose components can cause huge environmental and health problems if not properly managed and disposed of. To improve the environmental management of WEEE, contribute to a CE, and enhance resource efficiency, improvement in collecting, treating, and recycling such waste at the end of its life is essential. To address these problems, the EU developed specific legislation on WEEE, mainly revised in 2012. WEEE Directive 2012/19/EU became effective in 2014. In 2017, the commission adopted the WEEE package, implementing Regulation 2017/699 and establishing a common method to calculate the weight of electrical and electronic equipment placed on the national market in each member state and a common method to calculate the quantity of WEEE generated by weight in each member state. In Korinthos, Greece, the Hellenic Recycling Center S.A. (EKAN S.A.), founded in 2002, dismantles and recovers WEEEs, as well as removes hazardous waste. EKAN is organized in specialized treatment sectors, for the complete and proper recycling procedure of WEEEs. The plant is shaped for the annual processing of 30,000 tons of electrical or electronic devices, including information technology and telecommunications equipment, medical devices, and large and small appliances. The process is organized as follow: (1) sorting of appliances into groups and subgroups; (2) weighing and temporary storage of appliances in designated areas; (3) removal and separate storage of hazardous substances and components (i.e., chlorofluorocarbons, capacitors, batteries, ink); and (4) final dismantling of appliances and recovery of materials that can be reused. Moreover, after they are cleaned of hazardous substances and components, appliances or parts of appliances are sorted through separators (intermediate [i.e., electromagnet, vibrating platform] or final [i.e., magnetic drum, eddy current, induction systems, and optical systems]) or granulators for material recovery. Final recovered outputs are disposed of by materials and destination. Adjacent to the EKAN plant is the production site of Hellenic Fridge Recycling S.A. (HFR S.A.), which has operated since 2008 to dismantle and recover fridges. EKAN and HFR operate in industrial symbiosis. Both sites have in place certified international management systems (i.e., quality, environment, workplace safety).

282 Chapter 8 The textile industry is characterized by the consumption of high levels of resources such as water, energy, chemicals, and fiber materials, which places high pressure on the environment. Since the end of the 20th century, textile manufacturers and end users have been committed to public and private entities in multiple initiatives to reduce textile waste and promote textile recycling and reuse. For this reason, the implementation of shared good practices is under way among responsible textile enterprises across Europe, with the support of research and development (R&D) centers and universities, in deeper integration between research and innovation policies for the sector’s sustainability. For instance, the main goals of the Interreg Europe project called Research Centers of Excellence in the Textile sector are to share experience and knowledge about the management, processing, transformation, and reuse of different sources of textile waste, and to share (for further implementation) best practices and technologies in the field of recycling in textile and waste disposal with other European regions. The organization firmly believes that sustainability-driven research and innovation will primarily concern production processes and product development; the project addresses six key topics: 1. 2. 3. 4. 5. 6.

recycling in textile and waste disposal; water consumption and energy-saving, sustainable company organizations; new sustainable chemistry, including reduction of chemical substances; smart textiles and new ways of production; eco-creativity, natural fibers, short value chains; new materials and new applications.

Currently, Europe rejects 6 million tons of garments per year and only 25% is recycled (WRAP, 2017). Recycling companies can classify rejected garments for second use or develop new yarns or nonwovens for different uses with unwearable garments after being crushed, stripped, and fiberized. At the industrial level, more and more EU companies are able to collect textile waste not only from their own processes but also from external sources to produce commodities and high-tech products. There are some successful examples in Europe that reprocess textile waste coming from industrial sources (i.e., carbon fiber, polyolefins, polyester). NGOs can also profit from waste recovery (mainly garments), which is an interesting source of employment. Some R&D projects have been launched that are supported by private and public entities. Interesting initiatives have been identified that consider not only the revalorization and recycling of industrial textile waste for high-tech applications but also the reuse of domestic and apparel-based textile waste. This means that we are assisting in an alternative reconsideration of the expected end uses of textile waste. Among the innovative projects and ideas, the use of natural fiberereinforced composites for the automotive industry deserves to be mentioned. The underlying idea is the partial substitution of natural fibers with reclaimed carbon fibers in newly developed products at an attractive price range. The aim of the project is to achieve a homogeneous blend of fiber materials, despite their different properties and processing behavior, to ensure easy processing.

Sustainable and innovative practices 283 Besides the availability of the required fiber materials (natural, thermoplastic, and recycled carbon fibers), the most challenging issue is to invest in technical equipment that allows proper processing of the blended natural and reclaimed carbon fibers (RESET, 2018). In Prato, since the postwar period, textile waste management has represented one of the main drivers of textile district development: recovery and recycling of natural fiber from rags and used clothes were the basis of Prato’s yarn and textile industry. Prato has always been a model of innovation in this sector. Historically, it based its industrial fortune on reusing waste from the textile process and on second-hand clothing from all over the world. The evolution of materials technologies, together with progressively changing market demands, has led to a profound transformation of industrial processes and the use of materials. New players have entered the textile industry context. Since the 1990s, a tailoring district handled mainly by the Chinese community has settled in Prato’s industrial areas. In this context, synthetic textile waste that was unsuitable for use in the traditional recycling process has become a new challenge to be addressed from collection and the end of life management points of view. Currently, discarded scraps of synthetic textile ending up in landfills is a key problem for the city and the textile district. It is estimated that in the Prato district alone, more than 50,000 tons of textile waste is produced annually. This represents a huge cost for textile and clothing companies, for the municipal waste company, and for the entire community in general. Furthermore, since Jan. 2017, textile waste has been considered special waste and can no longer be disposed of in undifferentiated bins. Often, these scraps are left in the street or in hidden places, or even burned in the countryside. At best, textile waste is collected by a waste management municipal company, but it is unlikely to be further processed and reused in the production cycle. Main factors that limit the possibility of waste recovery are the great variety of textile fibers, which makes the classification and recycling problematic, and the illegal disposal of textile scraps, mainly by Chinese-owned companies. Beyond the environmental aspects raised by the incorrect and illegal disposal of textile waste, the issue entails economic and social factors. It generates economic cleavages undermining the principles of competition between enterprises on the one hand, and on the other, social cleavages between Italian and Chinese communities, jeopardizing the integration process of this community and the efforts made so far to build a multicultural city. The City of Prato can be conceived of as a great experimental recycling district, a model for development and management under the principles of the circular economy, and a virtuous paradigm with citizens taking care of their own territory and institutions being closer to citizens’ needs. The adoption of holistic and systematic governance with the three proposed pillars in Section 1 (Reducing waste, Rethinking the city, and Rebuilding social cohesion) will contribute in the long run to progressive improvements on this topic at the urban level. Moreover, this approach will contribute to enhancing the engagement of citizens and NGOs in exploring the potential of innovations and codesign of new business models for circularity (Borsacchi et al., 2018).

284 Chapter 8

4. Future perspectives SMEs engaged in sustainable practices should create storytelling about a product or service to explain how it relates to circularity. The white paper Communicating the Circle of Go Circular, recommends that SMEs showcase the benefits of a CE and the achieved results through the company’s storytelling (Go Circular, 2015). Effective business communication should operate on multiple levels to reach a wide audience, especially stakeholders. Good communication will also enhance citizens’ awareness, contributing to better knowledge goals. Among the methods SMEs can use for external communication to main stakeholders, there are certifications, labels, and traceability. Concerning sustainability, many international standards and certifications are implemented to ensure requirements and expectations regarding their environmental impact. ISO standards are periodically reviewed, and, in Sep. 2015, a new ISO 9001 standard was published. At the same time, the Standard ISO 14001:2015 was released. Two of the most important goals in the revision of both main management ISO standards dealt with developing a simplified set of requirements that were applicable to small, medium, and large organizations, with no disparities. Nonetheless, they allowed flexibility in handling standardized management systems. Thus, any organization, regardless of sector, size, location, or type, can implement a tailored system to demonstrate the effective planning, operation, and control of processes and their continuous improvement. In 2017, British Standard released the BS 8001:2017 “Framework for implementing the principles of the CE in organizations” guide. It consists of principles and recommendations for organizations willing to translate the CE concept and theory into practical actions. In particular, the guideline is structured on six principles related to the CE: innovation, stewardship, collaboration, value optimizations, transparency, and systems thinking. The overall idea suggests that components, products, and materials should be kept at their highest utility and value at all times, placing emphasis on the importance of an economy that is restorative and regenerative (Pauliuk, 2018). Because it is a guidance standard, the principles are not meant to be prescriptive, but rather functional for flexible use. Thus, BS 8001 is not intended or suitable for certification purposes. Circular economy principles could be integrated into the implementation of environmental management systems based on ISO 14001 or EMAS directives (European Commission, 2017). SMEs could demonstrate their engagement in socially responsible practices and sustainability following the requirements of international certifiable standards (i.e., SA 8000), applying local socially responsible labels or guidelines outlined in the ISO 26000 standard.

Sustainable and innovative practices 285 Nonprofit organizations can decide to follow the requirements of the US standard B-Corporation (B-Corp), based on “social and environmental performance, public transparency, and legal accountability, aspiring to use the power of markets to solve social and environmental problems.” B-Corp certification is a voluntary system promoting business sensitivity toward environmental and customer satisfaction issues, involving all the actors of the process (workers, community, and environment) and standing as an alternative governance model (B-Corporations, 2017). This approach finds its full application in the management system within a new B-Corp certification frame, with the aim of supporting the creation of a community of companies interested in promoting social and environmental concerns, and encouraging the development of an adequate legal framework benefiting business. Using indicators, this standard measures the impact of benefit companies and the orientation toward value creation. Indicators consider the following areas: governance, workers, community, environment, and customers. For instance, the area of environment provides for a constant and continuous assessment of the inputs (i.e., power, water, and raw materials) while monitoring the impact on the outputs (thus considering the effects produced by emissions and the different types of waste produced), transportation, and distribution. In this case, such factors need constant monitoring aimed at improving environmentally related performance in reducing the impact on the environment. Among local socially responsible labels, Responsible Business Textile, created in 2017, promotes ethical and productive rules within the textile sector as a crucial factor for local development and the sustainability of productive chains. Access to this voluntary certification scheme is permitted to all organizations operating along the textile/clothing supply chain in the area of the Province of Prato, including those that produce fabric, yarn, ready-to-wear-fashion, and knitwear. These organizations have to provide objective evidence of the adoption of behaviors and good practices beyond mandatory law requirements, as well as of transparency of their actions: 1. Employees’ welfare: the organization has promoted at least one action to increase the welfare of its workers and their families by providing services and benefits beyond those mandatory by law through specific policies: that is, by developing positive experiences of negotiated welfare. 2. Corporate citizenship: the organization has implemented one or more social, cultural, or sports activities, strengthening social cohesion at the community level. 3. Environmental awareness: the organization has introduced habits and good practices to reduce the environmental impact of its production procedures, and has demonstrated responsible behavior with regard to the environment. 4. Traceability: the organization has introduced at least one measure of transparency by applying an appropriate traceability system by documenting relevant evidence.

286 Chapter 8 This standard would have the potential to contribute to promoting ethical productions. In this regard, the concept of corporate citizenship combines socially responsible practices, thus contributing to a higher quality of life for the communities that surround them while maintaining high profitability for stakeholders (Borsacchi, Biggeri and Ferrannini, 2018). Policy makers at the national and local levels should prioritize subsidies or fiscal incentives to promote the adoption of responsible management among virtuous firms. In addition to other certified standards attesting to the environmental commitment of an organization, considering the high interest in the topic of water use and reuse, a potential new label or certification could be developed to validate the amount of recycled or reclaimed treated water being used within a production process. If properly applied (i.e., based on consistent indicators), this label, which would be applicable in each production sector, could contribute to increased awareness among consumers and stakeholders in general. Legislative and technological barriers may hinder the transition from a linear to a CE. Regarding waste management, legislation concerning the use of by-products imposes the precise identification of the origin of waste, besides the exact characterization of the materials. The application of an effective traceability system can be a great support to comply effectively with the legislation. An accountancy system of waste flows is in place in some countries to trace waste from production to final disposal. Thus, a structured and documented traceability system could be a possible effective solution to identify waste potentially qualified for the purposes of recovery, recycling, or reuse. Waste traceability could be implemented through blockchain technology. The latter could identify special waste, tracing the flows and their possible destinations for recovery and reuse as secondary raw materials. More results could be achieved by applying this approach in homogeneous production districts or in urban productive areas. Tracing material flows (e.g., waste, second raw materials), could optimize destinations and promote their reuse within a circular approach. The destination could be the same supply chain (thus creating a closed cycle) or another supply chain, generating so-called industrial symbiosis. To trace the flow and define a correct and effective destination, waste differentiated by origin and quality could be identified by the encrypted codes of the blockchain. Large companies involved in a supply chain already implement traceability procedures and are able to follow the inputs of the process and constantly determine quality and quantity. However, these documented procedures may be less widespread in smaller companies. Blockchains are already employed by some companies (mainly in the food sector) to guarantee traceability along the supply chain and for marketing reasons, but this new use of blockchains involves domestic and special waste flows at the urban level, filling the information gap (a waste is codified by the productive sector, not by its effective composition or by tracing its production paths). Using blockchain platforms, SMEs will be able to store and share information along the chains. This technology could enhance the integration of small firms

Sustainable and innovative practices 287 in more structured and informative chains. By its own architecture, this technology could offer an affordable solution to both SMEs and large organizations in an original and innovative way, contributing to the diffusion of CE practices.

5. Conclusions The adoption of strategic innovative solutions has become essential for SMEs and entrepreneurs for their business models and policies to transition to more responsible and sustainable management. The proposed case studies focused mainly on waste coming from the food, textile, and electronic sectors. The circular approach used by the authors was inspired by Commodity science research, which proposes innovative and feasible ideas contributing to the current discussion on the CE. In particular, it is worth highlighting the opportunity that waste from a sector can become a second raw material for a different one, which also favors industrial symbiosis initiatives at the local level. Regarding water efficient reuse, a particular focus has been dedicated to the evolution of the legislative framework on water reclamation for agricultural purposes. Legislative revision processes aimed at eliminating restrictions while respecting the principles of the health and safety of people and protecting the environment must go hand in hand with technological evolution and contribute to resolving pressing and growing climate changeerelated problems. Resources and new tools must be dedicated to raising people’s awareness of the issues of circularity. More, policy makers should prioritize subsidies to promote the adoption of environmental responsibility by virtuous enterprises. Finally, continuous knowledge systematization undoubtedly represents a key pillar to enable positive ecosystems for SMEs toward an effective transition to a CE.

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Sustainable and innovative practices 289 Glavic, P., Lukman, R., 2007. Review of sustainability terms and their definitions. Journal of Cleaner Production 15, 1875e1885. Go Circular, 2015. Communicating the Circle. Are Circular Economy Communication Strategies Starting to Connect? http://www.gocircular.com/uploads/5/0/6/3/50632287/communicating_the_circle.pdf. Guerrini, A., Romano, G., Ferretti, S., Fibbi, D., Daddi, D., 2016. A performance measurement tool leading wastewater treatment plants toward economic efficiency and sustainability. Sustainability 8, 1e14. Hislop, H., Hill, J., 2011. Reinventing the Wheel. A Circular Economy for Resource Security. Green Alliance. IATA, 2012. Report on Alternative Fuels. IATA, 2015. Report on Alternative Fuels. https://www.iata.org/publications/Pages/alternative-fuels.aspx. Jawahir, I.S., Bradley, R., 2016. Technological elements of circular economy and the principles of 6R-based closed-loop material flow in sustainable manufacturing. Proceedia CIRP 40, 103e108. Jones, O.A., Voulvoulis, N., Lester, J.N., 2007. The occurrence and removal of selected pharmaceutical compounds in a sewage treatment works utilizing activated sludge treatment. Environmental Pollution 145, 738e744. Kapellakis, I., Tzanakakis, V.A., Angelakis, A.N., 2015. Land application-based olive mill wastewater management. Water 7, 362e376. https://doi.org/10.3390/w7020362. Kirchherr, J., Reike, D., Hekkert, M., 2017. Conceptualizing the circular economy: an analysis of 114 definitions. Resources, Conservation and Recycling 127, 221e232. Koop, S.H.A., van Leeuwen, C.J., 2017. The challenges of water, waste and climate change in cities. Environment, Development and Sustainability 19, 385e418. https://doi.org/10.1007/s10668-016-9760-4. Moudache, M., Colon, M., Nerı´n, C., Zaidi, F., 2016. Phenolic content and antioxidant activity of olive by-products and antioxidant film containing olive leaf extract. Food Chemistry 212, 521e527. Mulinacci, N., Romani, A., Pinelli, P., Galardi, C., Giaccherini, K., Vincieri, F.F., 2001. Polyphenolic content in olive oil waste-waters and related olive samples. Journal of Agricultural and Food Chemistry 49 (8), 3509e3514. Nebbia, G., 2002. Le merci e i valori. Per una critica ecologica al Capitalismo. Jaka Book, Milano. ISBN: 88-16-40580-5. Nebbia, G., 2017. Ecologia ed Economia. Tre tesi per il futuro. Andrea Pacilli Editore, Manfredonia, pp. 53e72. ISBN: 978-88-9376-013-3. Niaounakis, M., Halvadakis, C.P., 2006. Olive Processing Waste Management: Literature Review and Patent Survey, vol. 5. Elsevier, p. 10. Ohnishia, S., Dongb, H., Gengb, Y., Fujiic, M., Fujitac, T., 2017. A comprehensive evaluation on industrial & urban symbiosis by combining MFA, carbon footprint and emergy methods Case of Kawasaki, Japan. Ecological Indicators 73, 514e515. Park, J., Sarkis, J., Wu, Z., 2010. Creating integrating business and environmental value within the context of China’s circular economy and ecological modernization. Journal of Cleaner Production 18, 1494e1501. https://doi.org/10.1016/j.jclepro.2010.06.001. Pauli, G., 2015. The Blue Economy/version 2.0: 200 Projects Implemented; US 4 Billion Invested; 3 Million Jobs Created, None edition. Academic Foundation. ISBN: 978-9332703100. Pauliuk, S., 2018. Critical appraisal of the circular economy standard BS 8001:2017 and a dashboard of quantitative system indicators for its implementation in organizations. Resources, Conservation and Recycling 129, 81e92. Pinelli, P., Galardi, C., Mulinacci, N., Vincieri, F.F., Cimato, A., Romani, A., 2003. Minor polar compound and fatty acid analyses in monocultivar virgin olive oils from Tuscany. Food Chemistry 80 (3), 331e336. Reset e Research Centers of Excellence in the Textile Sector, 2018. Good Practice Handbook 3. Project Number PGI00016. https://www.interregeurope.eu/fileadmin/user_upload/tx_tevprojects/library/file_ 1536059287.pdf. Romani, A., Scardigli, A., Pinelli, P., 2017. An environmentally friendly process for the production of extracts rich in phenolic antioxidants from Olea europaea L. and Cynara scolymus L. matrices. European Food Research and Technology 243 (7), 1229e1238.

290 Chapter 8 Rosillo Calle, F., Trhan, D., Seiffert, M., Teeluckingh, S., 2012. The potential and role of biofuels in commercial air transport e biojetfuels, Task 40 Sustainable International Bioenergy Trade. In: IEA Bioenergy 2012. http://task40.ieabioenergy.com/wp-content/uploads/2013/09/T40-Biojetfuel-ReportSept2012.pdf. Salvadori, R., 1933. Merceologia Generale - Principi teorici. Riproduzione anastatica del volume del 1933. Fondazione Istituto Internazionale di Storia Economia F. Datini, Prato, pp. 245e247. ISBN: 978-88-95755-67-0. Schieber, A., Stintzing, F.C., Carle, R., 2001. By-products of plant food processing as a source of functional compounds d recent developments. Trends in Food Science and Technology 12 (11), 401e413. Silvestri, N., Fila, G., Bellocchi, G., Bonari, E., 2006. An indicator to evaluate the environmental impact of oil waste water’s sheddding on cultivated fields. Italian Journal of Agronomy 2, 243e256. Stahel, W.R., 2016. The circular economy. Nature 435e438. https://doi.org/10.1038/531435a. Standard ISO 9001, 2015. Quality Management Systems. Requirements Standard Social Accountability 8000:2014. Standard ISO 14001, 2015. Environmental Management Systems. Requirements with Guidance for Use. Standard ISO 26000, 2010. Guidance on Social Responsibility. Standard ISO 31000, 2018. Risk Management. Sze Ki Lin, C., Pfaltzgraff, L.A., Herrero-Davila, L., Mubofu, E.B., Abderrahim, S., Clark, J.H., Koutinas, A.A., Kopsahelis, N., Stamatelatou, K., Dickson, F., Thankappan, S., Mohamed, Z., Brocklesbyc, R., Luque, R., 2013. Food waste as a valuable resource for the production of chemicals, materials and fuels. Current situation and global perspective. Energy and Environmental Science 6, 426e464. Tacconi, D., Chiaramonti, D., Prussi, M., Buffi, M., 2015. ITAKA e Collaborative Project FP7 e 308807. D2.6 Information Related to Economic, Social and Environmental Parameters 2nd, RE-CORD. Thielmann, J., Kohnen, S., Hauser, C., 2017. Antimicrobial activity of Olea europaea Linne´ extracts and their applicability as natural food preservative agents. International Journal of Food Microbiology 251, 48e66. https://doi.org/10.1016/j.ijfoodmicro.2017.03.019. Toop, G., Alberici, S., Spoettle, M., Van Steen, H., 2013. Trends in the UCO Market. Ecofys. https://www.gov. uk/government/uploads/system/uploads/attachment_data/file/266089/ecofys-trends-in-the-uco-market-v1.2. pdf. Tuck, K.L., Hayball, P.J., 2002. Major phenolic compounds in olive oil: metabolism and health effects. The Journal of Nutritional Biochemistry 13 (11), 636e644. UN, 2017. The United Nations World Water Development Report 2017. UNEP, TU, 2009. Design for Sustainability d A Step-By Step Approach. United Nations Environment Programme and Delft University of Technology, Paris and Delft. Visioli, F., Bellomo, G., Galli, C., 1998. Free radical-scavenging properties of olive oil polyphenols. Biochemical and Biophysical Research Communications 247 (1), 60e64. Voulvolis, N., 2018. Water reuse from a circular economy perspective and potential risks from an unregulated approach. Environmental Science and Health 2, 32e45. WRAP, 2017. Mapping Clothing Impacts in Europe: The Environmental Cost, Prepared by Sarah Gray. Yaccino, Steven, 2012. Thieves Seek and Restaurants Used Fryer Oil. The New York Times. http://www. nytimes.com/2012/01/08/us/restaurants-used-fryer-oil-attracting-thieves.html?_r¼0.

Further reading European Commission DG e ENV, 2015. Optimising Water Reuse in the EU. European Environment Agency, 2005. Annual Report 2004. ISBN 92-9167-761-2 ISSN 1561-2120. Oxford Global Water Intelligence, 2010. http://www.prweb.com/releases/water/reuse/prweb3009814.htm.

CHAPTER 9

Innovative and sustainable membrane technology for wastewater treatment and desalination application Pei Sean Goh1, Tuck Whye Wong1, Jun Wei Lim2, Ahmad Fauzi Ismail1, Nidal Hilal3 1

Advanced Membrane Technology Research Centre, School of Chemical and Energy Engineering, Faculty of Engineering, Universiti Teknologi Malaysia, Johor Bahru, Johor, Malaysia; 2Department of Fundamental and Applied Sciences, Universiti Teknologi PETRONAS, Seri Iskandar, Perak, Malaysia; 3Centre for water Advanced Technologies and Environmental Research (CWATER), College of Engineering, Swansea University, Swansea, United Kingdom

Chapter Outline 1. Introduction 292 2. Membrane processes

293

2.1 Pressure-driven membrane processes 293 2.2 Osmotically driven membrane processes 295

3. Membrane development

296

3.1 Membrane fabrication 296 3.2 Membrane modifications 298 3.3 New classes of membranes 302

4. Membrane technology for wastewater treatment

302

4.1 Heavy metal removal 302 4.2 Color removal 304 4.3 Oily wastewater treatment 306

5. Membrane technology for desalination 308 6. Membrane technology for energy generation 310 7. Innovation and sustainability of membrane technology 310 8. Conclusion 313 Acknowledgments 313 References 313

Innovation Strategies in Environmental Science. https://doi.org/10.1016/B978-0-12-817382-4.00009-5 Copyright © 2020 Elsevier Inc. All rights reserved.

291

292 Chapter 9

1. Introduction Global water resources are inadequate to meet the water demands of the human population, which is growing exponentially. Industrialization, climate change, and other human activities have further worsened the scenario (Elimelech and Phillip, 2011). In this respect, water reuse has become a widely accepted approach to sustaining the water supply. Wastewater treatment has long been implemented to supply clean water and support economic development (Gehrke et al., 2015). Various forms of traditional technologies such as coagulation and adsorption have been conventionally used on a large and industrial scale. Desalination, the process of desalting brackish and seawater, is also a promising technology to address issues related to water shortage and pollution. Desalination can be performed thermally and by means of membranes (Subramani and Jacangelo, 2015). Currently, thermal-based desalination is widely used in many waterstressed counties, particularly in Middle Eastern regions. There has been a positive shift from these conventional technologies to the use of membrane technologies owing to advantages exhibited by the latter (Subramani and Jacangelo, 2015). The increasing acceptance of membrane technology in wastewater treatment and desalination is mainly because of the ability of membrane technology to handle a wide range of feed water with high operational reliability. Membrane technology is also capable of producing product water and freshwater that is of high quality with respect to the removal of microorganisms, dissolved ions, and suspended solids (Alzahrani and Mohammad, 2014). Other advantages of membrane technology include its small footprint and its modularity; in addition, it can be easily retrofitted into conventional systems to achieve a synergistic effect for excellent separation. With advances in the development of both polymeric and ceramic membranes, the performance of membranes can be heightened to handle many emerging pollutants that are too challenging for conventional treatment processes. Principally, membrane separation involves selectively separating substances through membrane pores. Membrane processes for wastewater treatment and desalination can be further classified into several categories based on other criteria such as the driving force and filtration mechanisms. Two main processes of membrane technology are (1) pressuredriven and (2) osmotically driven (Alsvik and Ha¨gg, 2013). In the former process, pressure is exerted on the feed side of the membrane, which acts as the driving force to separate feed water into clean permeate water and highly concentrated retentate, which is normally disposed of or further treated by other means. The most commonly used pressure-driven membrane processes are reverse osmosis (RO), nanofiltration (NF), ultrafiltration (UF), and microfiltration (MF). In osmotically driven membrane processes, which are normally represented by forward osmosis (FO) and pressure-retarded osmosis (PRO), the naturally generated osmotic pressure serves as the driving force of filtration. In contrast to typical

Innovative and sustainable membrane technology 293 membrane processes that apply high pressure, FO and PRO have gained in popularity because they consume little energy while maintaining high performance in terms of the water quality and productivity (Achilli and Childress, 2010; Shaffer et al., 2015). Membrane design and fabrication are some of the most important strategies to ensure the efficiency and sustainability of membrane technology. Tremendous efforts have been put toward improving the performance of membranes through various approaches, including the use of novel and smart membrane materials and the incorporation of functional nanomaterials and additives, as well as the design of a new class of membrane that demonstrates features of conventional removal technology to achieve synergistic effects for pollutant removal. These strategies have promoted the advancement of membrane design and fabrication that surpass the performance of the conventionally used membranes. These membranes have attractive features such as high productivity and rejection; excellent mechanical, chemical, and thermal stability; high resistance toward harsh chemicals; and the ability to maintain integrity at a wide range of pH and temperatures (Wang et al., 2018a). This chapter provides an overview on the innovative and sustainable development of membrane technology in wastewater treatment and desalination. Membrane processes based on hydraulic and osmotic pressure are first outlined. The development of and progress in the design and fabrication of high-performance membranes are discussed. The applications of membrane technologies in wastewater treatment, desalination, and energy generation are reviewed. Finally, the outlook for the future is briefly highlighted and conclusions are drawn.

2. Membrane processes 2.1 Pressure-driven membrane processes In typical pressure-driven membrane processes, the membrane acts as a barrier to hinder the passage of unwanted substances while allowing water to pass through. The pressure difference between the feed water and the permeate side is the driving force that allows the water to transport through the membrane pores. Unwanted substances are retained based on some physical characteristics such as charges, size, and shape. Depending on the size of the retained particles and substances, pressure-driven membrane processes can be further distinguished into four main classes, i.e., MF, UF, NF, and RO. Among these processes, MF membranes possess the largest pores (0.1e10 mm) and the lowest applied pressure. Because of the large pore size, MF membranes offer high permeability at low pressure (Abadi et al., 2011). UF membranes have a pore range of 2e100 nm with low water permeability but high applied pressure compared with MF. The typical pressure range of UF is 1e10 bars. Sieving is the main mechanism in both MF and UF, in which

294 Chapter 9 they can be effectively used to separate suspended solids, colloids, and bacteria. In many membrane separation processes, MF and UF have been commonly used as a pretreatment to remove or reduce substances that can cause problems for subsequent treatment processes such as NF and RO (Lau et al., 2014). NF has properties between UF and RO, with a typical pore size of around 1 nm. NF is capable of removing relatively smaller organic micropollutants such as dyes and biological particles (Mohammad et al., 2015). The separation of NF involves both size exclusion and surface charge mechanisms. Upon contact with aqueous solutions, the membrane surface containing functional groups such as carboxylic acid and sulfonic acid can become slightly charged owing to the ionization of these functional groups. Depending on the materials used, these functional groups can exhibit acidic or basic properties. NF membranes is also known as loose RO membranes, because it can potentially be used to separate inorganic salts such as divalent ions (Abdel, 2018). Hence, NF has also been applied for water softening and desalination (Lai et al., 2016). NF can offer rejection up to 95% for common divalent ions such magnesium and calcium ions. In terms of separation mechanisms, it is known that the separation of NF is not solely based on size exclusion, but also Donnan and dielectric effects in which surface charges and the diffusion of charges particles are involved in rejecting ionic substances. NF and RO share some common features: they are commonly used to remove dissolved substances and both require a high hydraulic pressure for operation. NF and RO also use similar types of membrane materials and configurations. Compared with RO, NF has higher water productivity and requires lower specific energy consumption (Abdel, 2018). However, for monovalent ion separation, NF exhibits rejection only in the range of 50e80% (Li et al., 2017). RO is a process involves the separation of dissolved salts and microorganisms through membranes using high hydraulic pressure that is greater than naturally occurring osmotic pressure. The most common application of RO is the desalination of seawater and brackish water. RO has overtaken thermal-based desalination technologies such as multistage flash and has become the leading desalination technology. The salt removal efficiency of RO is as high as 99.8% of sodium chloride (Qureshi et al., 2013). RO can provide an almost intact barrier for pathogen removal owing to the subnanometer scale of the RO membrane pores. Therefore, RO has also been used in wastewater treatment for water reuse applications. The wide acceptance of RO technology on a worldwide scale mainly results from the significant improvements achieved in optimizing the process and in membrane development, which have reduced operational costs (Jamaly et al., 2014). With these innovations, energy consumption has been greatly reduced because of the improvement in membrane flux. The design and development of more robust membranes also reduce costs involved in cleaning and membrane replacement.

Innovative and sustainable membrane technology 295

2.2 Osmotically driven membrane processes FO and PRO are osmotically driven membrane processes that have become important in addressing global issues regarding clean water and a sustainable energy supply (Lutchmiah et al., 2014). Both FO and PRO require a draw solution of high osmotic pressure to draw water from the feed side. The product fresh water is then separated from the draw solution using an appropriate separation method. Compared with RO, FO has several attractive advantages that make it an alternative to desalination and wastewater treatment (Qasim et al., 2015). FO can overcome inherent fouling issues found in typical pressure-driven membrane processes. Unlike RO, which unselectively forces all components in the feed stream toward the membrane surface, osmotic pressure in FO allows selective molecules to be drawn across the membrane, minimizing the fouling and problems of compaction (Valladares Linares et al., 2013). Most important, FO requires almost no external power source during separation. Only a very low pressure is required to allow the circulation of fluids in the system. The main challenges for the practical use of FO are the lowperformance membrane and the shortage of a suitable draw solution that allows cheap and simple recovery. Generally, FO membranes should have properties such as high salt rejection, high water flux, and low concentration polarization (Coday et al., 2015). Meanwhile, the ideal draw solution should possess features such as high osmotic pressure and low cost, and they should be able to be recovered using easy and economical approaches. Early in its development, ammonium bicarbonate with a low molecular weight and high solubility had been widely used as the draw solution. It can be easily recovered by heating the substance to form ammonia and carbon dioxide. More recent efforts have switched to a magnetic draw solution that offers convenient recovery (Ge et al., 2013). Whereas FO processes have been developed for desalination and wastewater treatment, PRO is an emerging technology that can potentially be used to harvest energy through the process of mixing fresh water with saltwater (Cui et al., 2014). Theoretically, RO is the inverse process of RO, but instead of using hydraulic pressure, PRO uses the osmotic pressure of seawater to desalinate water while producing energy (Altaee and Sharif, 2015). The feed solution in a PRO system is a low-salinity solution that passes through the membrane into the pressurized solution with higher salinity. When the permeate is depressurized through a hydro turbine, power can be generated. Statkraft, a Norwegian company, commissioned the first PRO prototype to produce energy based on the salinity gradient concept using PRO. However, the plant operation was terminated few years later because of the small capacity of the plant and the low osmotic power for practical use. A high-performance membrane is the most critical factor for achieving a commercially attractive power density. PRO has also been explored as a complementary process to recycle and reuse RO brine in the hybrid system of RO-PRO (Kim et al., 2013; Achilli et al., 2014).

296 Chapter 9 The RO brine concentrate can be recycled as a draw solution instead of being discharged into the seawater. At the early stage of PRO development, conventional RO membranes were adopted in PRO processes (Logan and Elimelech, 2012). Progress in PRO technology focuses on developing a high-performance PRO membrane (Logan and Elimelech, 2012).

3. Membrane development 3.1 Membrane fabrication Material selection is one of the most important considerations in membrane fabrication. Two main materials to be considered are polymers and ceramics (A. Sh.K et al., 2016; Yin and Deng, 2015). Polymers are the most common class of material used to fabricate membranes. The availability of many types of polymeric materials allows polymeric membranes to be fabricated affordably. The performance of various types of polymeric membranes has been extensively studied; they have reached a stage of maturity on the membrane market. Some polymeric membranes that can be found commercially are polysulfone (PSf), polyethersulfone (PES), polyetherimide (PEI), and polyvinylidene fluoride (PVDF) (Grosso et al., 2014). These polymers share some common desirable characteristics for membrane fabrication, such as the ease of processing, robustness and readily availability on the market. Table 9.1 summarizes some membrane processes for wastewater treatment and desalination, with their commonly used membrane materials and fabrication techniques. Ceramic membranes have a few attractive advantages over polymeric membranes, such as high chemical and thermal stability as well as excellent mechanical strength (Hofs et al., 2011). These features allow ceramic membranes to be applied under many harsh operating conditions that involve a wide range of pH, the use of harsh chemicals, and elevated temperatures. However, Table 9.1: Membrane separation techniques and commonly used polymeric materials and fabrication techniques. Membrane process Microfiltration

Polymeric materials

Ultrafiltration

Polyvinylidene fluoride, PES, polyetherimide PES, PSf,

Nanofiltration

PSf, PES, polyamide

Reverse osmosis/forward osmosis/pressure-retarded osmosis

Cellulose acetate, PSf, PES, polyamide

PES, polyethersulfone; PSf, polysulfone.

Fabrication techniques Phase inversion, stretching, track-etching Phase inversion, solution wetspinning Phase inversion, interfacial polymerization, layer-by-layer deposition Phase inversion, electrospinning, interfacial polymerization, layer-by-layer deposition

Innovative and sustainable membrane technology 297 stumbling blocks that hinder the wide application of ceramic membranes at an industrial scale are the cost of the materials and challenges in large-scale production compared with their polymeric counterparts. Commonly used materials for ceramic membranes are alumina, titania, zirconia, and zeolites (Goh and Ismail, 2017; Zhu et al., 2014; Gao et al., 2011). Research that focuses on using low-cost materials is expected to increase the feasibility of ceramic membranes in more applications at an industrial level (Suresh et al., 2016). According to the system design and other operation requirements such as throughput and footprint, membranes can be fabricated in various configurations, the two most common one of which are flat sheet and hollow fiber membranes. Phase inversion is a widely used technique to fabricate membranes because it is easy to perform and owing to the availability of a wide range of polymer and solvents (Macchione et al., 2006). In brief, phase inversion is based on phase changes that involve separating polymer dope into a polymer-rich solid phase and a polymer-lean liquid phase. The solid phase forms the membrane matrix and the liquid phase creates pores within the membrane matrix. By changing and optimizing the phase transitions of the process, the membrane morphology can be well-tailored to fit its application. The main challenge with phase inversion is to identify a suitable solvent to completely dissolve the polymer. N-Methyl-2-pyrrolidone, dimethylacetamide (DMAc), and dimethyl sulfoxide are solvents commonly used to dissolve polymers such as PVDF, PEI, and PSf (Lalia et al., 2013). Electrospinning is also gaining popularity for membrane fabrication. This technique applies high voltage between a negatively charged polymer solution and the metallic collector (Shi et al., 2016). The polymer fibers are sprayed from the nozzle and collected as a randomly oriented fibrous mat. Compared with a membrane produced by phase inversion, electrospun fibers have higher porosity and an interconnected open pore structure. These features are attractive for enhancing the permeability of the membrane. However, commercial applications of electrospinning are still in their infancy owing to the cost and challenges of large-scale fabrication (Hou et al., 2017). In term of structure, the membranes used for MF, UF, and NF are asymmetric with a porous sublayer and a dense selective layer. The sublayer normally acts as the support to provide mechanical strength, whereas the top layer governs the separation capability of the membranes. The membrane that typically used RO, FO, and PRO processes is known as a thin film composite (TFC) (Werber et al., 2016a). The TFCs consist of two distinct layers. The bottom substrate layer is commonly fabricated through phase inversion to obtain a polymeric substrate that is of the UF range. Subsequently, a dense selective layer, which is normally polyamide, is formed through interfacial polymerization of two monomers, each dissolved in an aqueous and organic solvent. Some parameters to be considered during interfacial polymerization are the types and concentration of monomers, the contact time of the monomers, the aging time, and the temperature. These parameters can critically

298 Chapter 9 influence the properties of the polyamide layer formed in terms of the density of polymerization, surface morphology, and selectivity. The thickness of this selective layer is minimized to reduce resistance to the permeate flow. As another option, the polymeric substrate can be cast on a layer of polyester fabric to provide additional mechanical strength to the TFC membrane (Li et al., 2015). Another attractive method to introduce a selective layer atop the substrate is through layer-by-layer assembly. This approach has commonly been used for thin film fabrication. It is implemented by building up multilayers of oppositely charged polyelectrolytes to form a dense selective layer. The assembly is solely based on electrostatic attraction between layers. Layer-by-layer technique has advantages over interfacial polymerization because the procedure is simpler and less expensive (Xu et al., 2015). The number of layers can also be controlled to optimize the thickness, flux, and selectivity of the selective layer. Compared with asymmetric polymer membranes, TFC offers flexibility in terms of the material design, in which the substrate and selective layer can be made of different materials based on the desired properties for their applications. In addition, membrane modification can be performed separately on the substrate, on the selective layer, or both (Kim et al., 2016).

3.2 Membrane modifications Membrane modifications are performed to alter the physicochemical properties of the membrane, improving separation performance in terms of flux and rejection (Werber et al., 2016b). Another purpose of membrane modification is to render antifouling properties to the modified membranes (Aslam et al., 2018). Fouling is a phenomenon caused by the accumulation of substances on the membrane surface and/or within the membrane pores. Fouling is an inevitable event that causes a serious deterioration in performance, particularly the flux and productivity of the membrane. Moreover, fouling imparts additional operating costs because frequent membrane cleaning and eventual membrane replacement are required. Membrane modification can be achieved via a few approaches. Polymer blending can alter the surface characteristics without greatly changing the bulk morphology and properties of the membranes (La Mantia et al., 2017). Polymer blending can significantly change the hydrophilicehydrophobic balance by mixing two polymers with desired properties, and hence improving the flux and selectivity of the resultant membranes (Mural et al., 2018). Membrane surface modification can be generally divided into physical and chemical methods. In the former method, the modifying components are coated on the membrane surface without involving the formation of covalent bonding. As such, the chemical properties of the membranes are well-retained after modification. Some hydrophilic components such as chitosan and polyethylene glycol can be dip-coated onto the membrane surface to enhance the hydrophilicity of the membranes. Surface coating can be feasibly performed by direct pressurized filtering of the hydrophilic materials over the membrane surface. The coated or adsorbed substances are retained on the membrane

Innovative and sustainable membrane technology 299 surface through physical interaction such as electrostatic attraction (Hirsch et al., 2018). As such, a limitation of this modification technique is the poor adhesion of the coated substances and the membrane surface. This causes the coated materials to easily detach from the surface after a certain period of operation. To tackle this problem, some efforts have been made to introduce functional groups that can act as bridging agents or anchor sites to establish chemical bonding between coated materials and membrane surfaces. In chemical modification, covalent bonds are formed through interactions between the membrane surface and the modifying agents (Ayyavoo et al., 2016). Often, the membrane surface is chemically activated through irradiation before reactions with foreign substances. Compared with physical means, chemical modification can ensure higher stability because the modified surface can remain intact over a longer period. Plasma treatment is a simple modification method to create active groups on the membrane surface. In the presence of inert gases such as helium and argon, the formation of oxidative groups can be facilitated on the membrane surface (Yan et al., 2008). Reactive groups such as peroxides and hydroperoxides can then contribute to the enhanced flux. The main challenge of this technique is to ensure the integrity of membrane, because plasma treatment involves a complex chemical reaction and may damage the membrane structure and consequently result in the deterioration of mechanical strength. A grafting technique based on activating the membrane surface using techniques such as UV photoirradiation, plasma, and polymerization is also a versatile approach to modifying polymeric membranes (Wei et al., 2010). Among these activation techniques, UV photon irradiation is the most widely applied because of its simplicity, energy efficiency, and cost-effectiveness. Irradiation can be performed on both flat sheet and hollow fiber membranes, in which the UV irradiation generates surface radicals to act as anchor sites for monomers. Advancements in nanotechnology and science have opened doors to more innovative designs of membranes (Pendergast and V Hoek, 2011). The fascinating properties exhibited by various classes of nanomaterials have enabled the fabrication of highperformance membranes. Some desired properties such as the hydrophilicity of metal oxide nanoparticles, frictionless and hollow structures of tubular nanomaterials, and antimicrobial properties of metal nanoparticles have been harnessed to improve the properties of membranes in term of flux, rejection, and antifouling behaviors. Attention has been focused on translating the unique properties of the nanomaterials to membranes through combinations of nanomaterials and membrane materials to form the nanocomposite membranes or mixed matrix membranes. Upon the introduction of metal oxides such as TiO2 and Fe2O3, the hydrophilicity of the nanocomposite membranes can drastically improve membrane flux, and thus the productivity of the separation process (Mollahosseini and Rahimpour, 2013). Carbon nanotubes (CNTs) and titania nanotubes (TNT) have also been favorably used for this purpose. The frictionless tubular structure of CNT allows the fast transport of water molecules through the hollows with minimum

300 Chapter 9 resistance (Lee et al., 2015; Liu and Cheng, 2013). As a result, water flux can be enhanced in several magnitudes. The improved membrane hydrophilicity can also significantly contribute to enhanced antifouling properties (Tan et al., 2017). With enhanced hydrophilicity, the tendency of nonpolar substances such as organic matter and protein molecules to attach can be reduced. The incorporation of antimicrobial nanomaterials such as silver nanoparticles and singlewalled CNTs has a similar role in combating biofouling (Shahkaramipour et al., 2017). The adhesion of microbes such as algae, fungus, and bacteria on the membrane surface has a significant negative impact on the membranes. Compared with organic and inorganic fouling mentioned earlier, biofouling can be problematic because the microorganism can multiply over time and cannot effectively be dealt with through typical membrane cleaning. The antimicrobial properties of silver nanoparticles can control and minimize biofouling by inhibiting biofilm formation on the membrane surface (Faria et al., 2017). Several approaches have been established to introduce nanomaterials into the polymer matrix. Direct addition of nanomaterial into the polymer dope before flat sheet casting or hollow fiber spinning is one of the most commonly reported approaches. Another popularly applied approach involves coating and grafting nanomaterials onto the assynthesized membranes (Mahdavi et al., 2017; Yang et al., 2017; Anjum et al., 2016). The physical and chemical interaction allows the nanomaterials to be deposited onto the membrane surface and ensures the maximum exposure of the nanomaterials. This approach is particularly attractive for nanoparticles that can render antimicrobial properties. The direct interaction of silver nanoparticles coated or grafted on the membrane surface with wastewater that containing both fungus and bacteria such as Escherichia coli and Staphylococcus aureus can maximize the growth inhibitory effects of the silver nanoparticles (Biswas and Bandyopadhyaya, 2017). Mechanical strength is an important factor to be considered, particularly for a long-term high pressure operation such as NF and RO. With high mechanical strength, the membrane can maintain integrity and resist structural changes or collapse caused by high-pressure compaction. Carbon-based nanomaterials such as multiwalled CNTs and graphene oxide (GO) have been applied as reinforcement materials (Hu et al., 2015; Zhao et al., 2014a). Incorporation of these nanomaterials within the polymer matrix allows load transfer between the two entities and improves mechanical strength. Despite the interesting properties provided by these nanomaterials in heightening the properties of the nanomaterial-incorporated membrane, successful membrane modification using nanomaterials mainly relies on the dispersion state of the nanomaterials within the polymers. Nanomaterials tend to form agglomeration because of their high surface area. The formation of agglomeration within the polymer matrix results in the formation of voids at the polymerenanomaterial interface, diminishing the unique properties of the nanomaterials. For instance, the agglomeration of nanomaterials incorporated within the

Innovative and sustainable membrane technology 301 selective layer of thin film nanocomposite (TFN) membrane results in a drastic drop in rejection owing to the formation of undesirable voids (Ma et al., 2012). To tackle this issue, various forms of nanomaterial modification have been investigated. Amination, silanization, mild acid oxidation, molecular wrapping, and surfactant dispersion are some commonly applied nanomaterial modifications. In general, these modifications aim to introduce surface functionalities to the nanomaterials so that the compatibility of modified nanomaterials and polymer matrix can be improved and better dispersion can be achieved. Another attractive concept of membrane modification involves the development of a biomimetic membrane, which borrows ideas of biological systems by incorporating biological elements such as aquaporin (Perry et al., 2015). Such a membrane is inspired by naturally occurring transport efficiency and selectivity that evolved in living organisms over billions of years. Fig. 9.1 shows a schematic diagram of separation and antifouling strategies of a bacteria related to the functions of biomimetic membranes (Shen et al., 2014). The external membrane surface layer with a pore size of 2e8 nm and the nonporous lipid bilayer can be related to the UF and RO-FO membrane, respectively. The protein-facilitated lipid bilayer can be used as the channel to facilitate the transport of water and improve the flux of the biomimetic membranes. The biological antifouling surface used for biofoulants ranging from small proteins to entire organisms is an interesting feature to render antibiofouling features to the resultant

Figure 9.1 Biological membrane separation of a bacterial organism (Shen et al., 2014). ATP, adenosine triphosphate; Pi, inorganic phosphate.

302 Chapter 9 biomimetic membranes. The mechanisms involved in antifouling are surface physiochemical interactions that repel the attachment of foulants, release chemicals that prevent the adhesion of biofilms, and construct a nanoscale topology that minimizes contact between the membrane surface and the biological surface (Zhao et al., 2014b).

3.3 New classes of membranes Another effective way to heighten the performance of membrane technology is to add functionalities and additional roles to the membranes. Two relatively new classes of membranes derived from conventional MF-UF processes are photocatalytic and adsorptive membranes. Photocatalysis and adsorption have long been used for wastewater treatment based on the special features rendered by the materials. Photocatalysts remove unwanted organic pollutants through a photodegradation reaction upon irradiation of UV or visible light. On the other hand, adsorbents remove pollutants through physical and/or chemical interactions between pollutants and adsorbent surfaces. Despite the effectiveness of these two processes, their practical application is largely limited by the difficulty of handling the suspended photocatalysts and adsorbents after water treatment. Secondary treatment is always required to remove or separate particles from the aqueous medium. Innovations in photocatalytic and adsorptive membranes have favorably addressed these issues (Dzinun et al., 2015; Subramaniam et al., 2018; Sunil et al., 2018). In these classes of membranes, photocatalysts and adsorbents are introduced into the membrane matrix, which acts as a host of these materials. In common practice, the photocatalyst and adsorbent particles are first synthesized and modified for optimized performance before they are incorporated into the polymeric membrane matrix. With such an innovative membrane design, synergistic effects can be achieved in which the membranes can simultaneously perform photocatalysis or adsorption while filtering unwanted substances. Incorporation of the photocatalyst and adsorbent particles in the polymeric matrix allows the membrane to be reused and the secondary treatment for particle separation can be excluded.

4. Membrane technology for wastewater treatment 4.1 Heavy metal removal Heavy metal ions such as chromium, arsenic, and lead have caused serious pollution and health issues. NF and RO can effectively remove heavy metal ions owing to sieving and surface charge effects (Nedzarek et al., 2015). However, because of the high energy consumption and low productivity, efforts have been made to modify conventional UF and MF membranes to improve the selectivity of the membranes toward heavy metal ions. Gebru and Das reported the removal of chromium (VI) ions using cellulose acetate UF membranes incorporated with TiO2 nanoparticles (Gebru and Das, 2018). To improve the

Innovative and sustainable membrane technology 303 affinity of heavy metal ions toward the membrane and improve removal efficiency, the TiO2 nanoparticles were modified with amine functional groups to develop chemical reactions between the amine groups and heavy metal ions. The porous structure and high surface area of TiO2 nanoparticles enabled the aminations to take place easily within the pores. The presence of aminated TiO2 nanoparticles improved the removal efficiency in which a Cr (VI) removal of 99.8% was achieved at pH 3.5. At this pH, the protonated amine group on the TiO2 nanoparticles established electrostatic interaction with the species of Cr (VI) present in the form of anions such as chromate (VI) ions. The presence of TiO2 nanoparticles improved the antifouling properties of the membranes; hence, they were easily cleaned and regenerated. The removal efficiency was only slightly reduced to 96.6% after four cycles of washing and regeneration. Fang et al. also reported modifying UF membranes for heavy metal removal (Fang et al., 2017). In their study, adsorptive UV membranes were developed by enhancing the internal pores of the membrane with polydopamine nanoparticles through self-polymerization. A three-dimensional network of polydopamine was formed within the porous structure of the PES membrane from bottom to top via circulatory filtration. The presence of these nanoparticles provided more active sites and lengthened the contact time for the adsorption of heavy metal ions on the membranes. As a result, the adsorption capacity of Pb2þ, Cu2þ, and Cd2þ on PESePDA-R membranes was 20.23, 10.42, and 17.01 mg/g, respectively. However, regeneration studies indicated that enhanced polydopamine was not stable upon washing. As a result, performance was recovered at only about 84.6%. Another energy-efficient approach for heavy metal removal is through the FO process. Liu et al. developed an FO membrane using the layer-by-layer approach to form the polymer network (Liu et al., 2017). Polyethylenimine and sodium alginate polyelectrolyte pairs were alternately assembled on a PVDF substrate that was functionalized with polydopamine. The performance of the resultant FO membranes was tested for the removal of several types of heavy metal ions, namely Cu2þ, Ni2þ, Pb2þ, Zn2þ, and Cd2þ, from the aqueous solution. Different membrane and operation parameters such as the number of bilayers, the concentration of feed and draw solutions, as well as the time, pH, and temperature of the wastewater were studied and compared. An optimized heavy metal removal of above 99% for all five types of heavy metal ions could be achieved when three bilayers were assembled on the PVDF substrate and 1 M magnesium chloride was used as the draw solution. The high rejection of the FO membrane resulted from the optimized number of bilayers that had formed a sufficient thickness and compactness to hinder the passage of heavy metal ions without compromising the flux. At the highest rejection of 99.3%, flux of 14 L/m2 h was achieved. As shown in Fig. 9.2, the presence of amine groups also facilitated the adsorption of heavy metal ions on the layer-by-layer assembled surface. The electrostatic repulsive force between the metal ions and the surface formed a barrier to reject incoming heavy metal ions.

304 Chapter 9

Figure 9.2 Schematic of interaction between amine functional groups on the layer-by-layer assembled membrane and incoming heavy metal cations (Liu et al., 2017). PEI, polyetherimide; PVDF, polyvinylidene fluoride; NH2, amine; SA, sodium alginate; PDA, polydopamine.

4.2 Color removal The discharge of large quantities of dyes and pigments into water bodies is a matter of great concern because they pose direct serious threats to health and the environment. Subramaniam et al. (2017) developed PVDF UF hollow fiber photocatalytic membranes incorporated with different loadings of TNT. As shown in Fig. 9.3A, TNT is tubular-structured TiO2 that has been widely used to improve the hydrophilicity of the nanocomposite. Owing to its tubular structure, TNT is endowed with a high surface area and a great amount of surface hydroxyl groups. The high surface area has offered larger surface active sites for the attachment of surface hydroxyl groups. In that study, The PVDF-TNT membranes were used to decolorize aerobically treated palm oil mill effluent (AT-POME), which appeared to be brownish. PVDF membranes incorporated with 0.5 wt % TNT demonstrated the highest filtration performance with a color removal efficiency of 59% and flux of 35.8 L/m2$h, as presented in Fig. 9.3B. The improved flux compared with the neat PVDF membrane was ascribed to an improvement in membrane hydrophilicity caused by the presence of abundant hydroxyl groups found on the surface of TNT. These hydroxyl groups facilitated the transport of water across the membranes. The membrane fouling and reusability studies implied that all TNT incorporated membranes experienced less severe fouling and were able to maintain a flux recovery of 80% after five cycles of operation. The same group of researchers reported the performance of that membrane under UV light irradiation in a submerged photocatalytic membrane reactor (Subramaniam et al., 2018). Upon UV light irradiation, the photocatalytic property of TNT was activated

Innovative and sustainable membrane technology 305

Figure 9.3 (A) Transmission electron microscope images of titania nanotubes (TNT). (B) Rejection and flux performance of polyvinylidene fluoride (PVDF)-TNT membranes with different loadings of TNT (Subramaniam et al., 2017). AT-POME, aerobically treated palm oil mill effluent; BSA, bovine serum albumin; TNT, titania nanotube; PWF, Pure water flux.

to perform simultaneous filtration and photodegradation. They observed that the color removal efficiency greatly improved from 34% to 67% when the photocatalytic property was initiated compared with filtration alone. In this condition, the TNT not only acts as an additive to improve the hydrophilicity of the membranes, it serves as a photocatalyst to photodegrade the lignin and tannin pigments found in the AT-POME wastewater. Moreover, the photocatalytic activity had a positive impact on reducing fouling susceptibility, because the foulants were photodegraded into simpler and smaller substances. As a result, a flux loss of merely 5.7% was observed after five cycles of operation. Zeng et al. (2016) fabricated PVDF NF membranes incorporated by halloysite nanotube (HNT). To tackle the issue related to the aggregation of HNT, the HNT layered

306 Chapter 9 nanoparticles were first modified with a 3-aminopropyltriethoxy-silane silane coupling agent to improve dispersion before addition into the polymer dope. The performance of the resultant membrane was tested for Direct Red 28 dye removal. The hydrophilicity of the membranes was improved upon the addition of HNT to facilitate water transport but hindered the passage of dye molecules. Electrostatic interaction between the PVDF-TNT and dye molecules was established and facilitated dye rejection because of the negative charges rendered by HNT nanoparticles. The highest rejection of 95% was achieved by the PVDF membrane incorporated with 3 wt% of silanated HNT. In another study, a biomimetic dynamic membrane was fabricated by Chen et al. for dye wastewater treatment (Chen et al., 2018). Laccases and CNTs were introduced on the commercial UF membrane surface through physical adsorption and filtration. In this nanocomposite system, CNTs acted as the absorbent to abate contact between the dye molecules and the membrane surface. The laccase enzyme immobilized within the absorptive layer reinforced enzymatic activity and performed in situ pollutant degradation. As such, membrane fouling and absorption saturation could be simultaneously minimized. The effects of adsorbent and enzymes on dye removal were evaluated. At a sufficiently high loading of laccase up to 74.6 g/m2, a sustainable capacity was achieved in which the enzyme could efficiently perform catalytic degradation to reduce the tendency of absorption saturation. As a result, only 20 g/m2 of CNT was needed to achieve optimized dye removal efficiency. Because of the synergistic effects of the absorbent and enzyme, the biomimetic dynamic membrane exhibited higher antifouling ability and long-term reusability. The flux was sustained over 120 L/m2$h even after seven cycles of operation. After the absorption process, the foulants could also easily be removed by simple backwash cleaning.

4.3 Oily wastewater treatment Because of the nature of oily wastewater, membranes tend to foul easily in it or in the produced water treatment (Venkatesan and Wankat, 2017). Therefore, it is desirable to design highly antifouling membranes to enhance their sustainability for this application. Zwitterionic polymer has emerged as a class of modifying agent that renders antifouling properties to the modified membranes. Structurally, zwitterionic polymers have equal anion and cation groups in their molecular chain, which allow them to be highly hydrophilic and demonstrate high resistance toward nonspecific protein adsorption and bacterial adhesion. Surface grafting of zwitterionic monomers has been widely performed on UF and FO membranes to treat oily wastewater. Ong et al. developed a double-skinned FO membrane composed of a PES substrate sandwiched between a selective polyamide top layer and a zwitterionic brush at the bottom layer. The poly(3-(N-2methacryloyloxyethyl-N,N-dimethyl)ammonatopropanesulfonate) (PMAPS) brush grafted at the bottom surface of PES increased the hydrophilicity. When tested in an FO mode using 2 M NaCl as the draw solution, the double-skinned membrane exhibited a high water flux of 13.7 L/m2$h and reverse salt flux of 1.6 g/m2$h, with a rejection of 99.9%.

Innovative and sustainable membrane technology 307 Lee et al. established a simpler approach to introducing the PMAP zwitterionic polymer by incorporating it into the PES substrate of an FO TFC membrane. During phase inversion, the hydrophilicity of PMAPSs has enabled the formation of a well-defined finger-like structure at the PES substrate, which in turn facilitated the transport of water. TFC incorporated with 1 wt% of PMAPs exhibited oil rejection of 99.9% and water flux of 15.8 L/m2$h. The flux was enhanced by almost 30% compared with the unmodified TFC. Owing to the strong hydrophilicity of the membrane, it showed excellent water recovery after a high concentration of 10,000 parts per million (ppm) oil emulsion. Only simple deionized water rinsing was required to recover the flux. Hydrogen bonding between the eSO3 functional groups of PMAPS and incoming water molecules formed a hydration layer that prevented the attachment of oil molecules and improved the antifouling properties of the membrane. Yan et al. fabricated a hybrid membrane using the interception effect of a porous CNT network. Hydrophilic polyacrylic acid brushes were incorporated into the network of CNTs to form an underwater superoleophobic structure through covalent functionalization (Yan et al., 2019). The functionalization was performed through a simple filtration method and the porosity was proportional to the membrane thickness. During separation of the oil-in-water emulsion under 0.09 MPa vacuum pressure, the superoleophobic surface of the hybrid membrane allowed the rapid transport of water while achieving a separation efficiency of 99%. Antifouling nanofibrous MF membranes incorporated with GO were developed by Ahmadi et al. (2017). The membrane, consisting of sulfonated PVDF, PVDF, and GO, was fabricated through electrospinning. At an optimum 0.5 wt% of GO, the hydrophilicity of the membranes was improved owing to the presence of various hydrophilic groups such as carboxyl, epoxy, and hydroxyl functional groups on the planar structure of GO. Complete removal of oil was achieved by the membrane owing to the small pore size of the membranes to hinder the passage of oil particles effectively across the membranes. Electrostatic repulsion between sulfonated membrane surfaces enriched with sulfonic groups and oil particles improved the antifouling properties. The nanofibrous membrane exhibited low irreversible fouling of 41% and a high flux recovery ratio of 59%. Ahmad et al. reported the modification of flat sheet polyvinyl chloride PVC-UF membranes using bentonite nanoclay to improve surface morphology hydrophilicity and antifouling behaviors to treat produced water (Ahmad et al., 2018). Bentonite with high cation exchange capacity had a significant role in changing the viscosity and rheology of the casting solution, and thus the morphological properties of the flat sheet membranes. The presence of bentonite changed the storage and viscous modulus, which later improved the solventewater exchange rate in the gelation bath. The UF membrane with a composite of PVC, DMAc, and bentonite at a ratio of 12.0:87.23:0.77 demonstrated the highest loss tangent and dynamic viscosity. As a result, the surface porosity and density as well as roughness were greatly enhanced. With the desired morphological properties,

308 Chapter 9 the UF nanocomposite membrane exhibited an oil rejection of 97% and flux of 186 L/m2$h when treated with an oil-in-water emulsion. Because of the high hydrophilicity and antifouling properties rendered by bentonite, the membrane also achieved promising results of 93% oil rejection and 94 L/m2$h water flux when it was tested with produced water with a salt concentration of 35,000 ppm.

5. Membrane technology for desalination RO and FO are the two most extensively studied membrane technologies for seawater and brackish water desalination. Although both techniques use TFC membranes as the barrier to separate salts and obtain fresh water, the design of the membranes focuses on different aspects. Generally, the membranes for both processes exhibit high water flux and high salt rejection. Nevertheless, because of the use of high hydraulics during the operation, the mechanical strength of RO membranes is of concern, to reduce the likelihood of membrane compaction (Ruiz-Garcı´a and Nuez, 2016). Pressurized conditions also exaggerate the fouling process; hence, many studies have been performed to improve the antifouling properties of RO membranes. On the other hand, an FO operation only requires osmotic pressure, hence, fouling is less severe and the mechanical integrity of the membrane is less important. The motivation for membrane design and modification focuses on increasing the hydrophilicity of the membranes, not only to improve the overall water flux but also to minimize the internal concentration polarization (ICP) effects (Qi et al., 2012). ICP is an FO-exclusive process that occurs within the support layer owing to the accumulation of salt, which results in the reduction of the osmotic pressure gradient across the membrane. This eventually leads to a decrease in water flux. A simple and time-saving membrane modification strategy to render antibiofouling to RO membranes was reported by Wang et al. (2018b). The modification involves rinsing a polyamide RO membrane in a mixture of n-hexane and 2,2,3,4,4,4-hexauorobutyl methacrylate (HFBM) followed by UV irradiation to initiate the grafting process. The HFBM-grafted membrane is then immersed into a tobramycin (TOB) aqueous solution. After the introduction of HFBM brushes with low surface energy and TOB segments with high hydrophilicity and antimicrobial features, the modified membrane exhibited synergistic effects of fouling release, resistance, and contact killing. Consequently, the grafted membrane showed 100% inhibition toward E. coli and Bacillus subtilis. The modified membrane had a water flux of 54.1 L/m2$h and salt rejection of 99%, comparable to the unmodified membranes. In addition, the grafted layer remained intact after chemical cleaning owing to the stable chemical modification. Hibbs et al. developed an antibiofouling RO membrane by coating quaternary ammonium functionalized PSf on a UF-PSf substrate (Hibbs et al., 2016). Quaternary ammonium has trimethoxysilyl functional groups to impart antimicrobial functionality, and thus was expected to improve

Innovative and sustainable membrane technology 309

Figure 9.4 (A) Spray coating of quaternary ammoniumepolysulfone (PSf) thin film on PSf ultrafiltration substrate. (B) Cross-sectional image of resultant coated reverse osmosis membrane (Hibbs et al., 2016).

the antibiofouling properties of the resultant RO membrane. By spray-coating the alcoholequaternary ammoniumePSf ionomer solutions, as shown in Fig. 9.4A, quaternary ammonium functionalized PSf with different chain lengths was firmly attached on the substrate surface. Spraying formed an approximately 10-mm thin film with a density of 10 mg/in2, as shown in Fig. 9.4B. Antimicrobial testing revealed that regardless of the chain length, the quaternary ammoniumePSf ionomer coated membranes had excellent biotoxicity and killed 100% of E. coli bacteria. A promising rejection of 98.5% was also observed, which implied that a dense and intact coating layer was introduced on the membrane surface. Because of the charge interaction between the quaternary ammonium and the substrate surface, delamination was not observed throughout the operation. However, the water flux drastically decreased compared with that of the commercial RO membrane owing to the increased resistance of water transport. This suggested that despite the feasibility of coating to improve the properties of the membrane, optimization of the coating thickness is required so that the antifouling properties of the membrane are not improved at the expense of water productivity. Rezaei-DashtArzhandi et al. fabricated a high-flux and high-rejection FO TFN by incorporating halloysite in the substrate and graphitic carbon nitride in the polyamide thin film layer (Rezaei-DashtArzhandi et al., 2018). The presence of 0.05 wt% graphitic carbon nitride significantly reduced the contact angle of the TFN membranes to 10 degrees. The increase in the hydrophilicity in turn resulted in a high water flux of 18.8 L/m2$h, which was improved by about 270% compared with the neat TFC membranes. This improvement was attributed to the planar structure of graphitic carbon nitride, which can shorten the water transport path, whereas some defect sites found on the nanomaterials allowed more water to permeate through the channels. In terms of antifouling properties, the water flux decline was less severe in the TFN incorporated with 0.05 wt% and the membrane performance could easily be recovered through simple washing. The negatively charged

310 Chapter 9 surface caused by the incorporation of graphitic carbon nitride within the PA layer was beneficial for desorbing the foulant molecules during the cleaning process.

6. Membrane technology for energy generation To generate promising osmotic power through the PRO process, PRO should possess the features of both RO and FO membranes. High mechanical strength, high flux, and antifouling are some of the desired features of PRO membranes. Liu et al. fabricated TFN with polyacrylonitrile PAN) incorporated with silver nanoparticles as substrate. PAN was been selected because of its high chemical stability and tunability (Liu et al., 2016). Before the formation of the polyamide layer via layer-by-layer assembly, hydrolysis was performed to modify the chemical structure of PAN so that good adhesion was formed between the polyamide layer and the porous substrate. The incorporation of silver nanoparticles improved the hydrophilicity, which in turn enhanced the antifouling properties. With the optimum loading of 0.02 wt% silver nanoparticles, water permeability was enhanced by 25% compared with the neat TFC membranes. The TFN also demonstrated excellent antibiofouling properties owing to the presence of silver nanoparticles. The membrane exhibited antimicrobial activities against gram-positive B. subtilis and gram-negative E. coli in which 6 log colony-forming units (CFU) reduction and 5 log CFU reduction were observed for B. subtilis and E. coli, respectively. Son et al. embedded CNTs into a PES support to improve water flux for the resultant TFN. The CNT-incorporated PES substrate was also modified through chemical etching to increase porosity and hydrophilicity (Son et al., 2016). As a result, the water flux improved by 87% compared with neat TFN when the membrane was tested using 0.5 M NaCl as the draw solution. However, the power density was obtained in the range of 0.5e1.6 W/m2, which was still below the commercially attractive range.

7. Innovation and sustainability of membrane technology Membrane technology has a significant role in maintaining the water supply using different valuable water sources such as wastewater and seawater. Increasing acceptance and application in industries are mainly attributed to the sustainability of membrane development (Tufa, 2015). Many advantages of membrane technologies compared with conventionally used approaches have also prompted the transition. Membrane operation allows decentralized reclamation and reuse to be implemented in which long distance transfers of the product water can be avoided. The need to identify new protected catchments is also unnecessary. In addition, membrane technology has shown promise in terms of technical aspects such as reliability, ease of use, system scalability, flexibility, and adaptability. This has fulfilled institutional requirements and increased general sociocultural acceptance. To ensure the sustainable development of membrane technology,

Innovative and sustainable membrane technology 311 various membrane processes for wastewater treatment, desalination, and energy production have been assessed with different focuses such as economic, environmental, ecosystem, technological, and societal impacts (Miller et al., 2015; Darwish et al., 2009; KPMG, 2012; Goh et al., 2016a). Major drivers for the sustainability of membrane development are the cost of implementing desalination and wastewater treatment as well as the environmental impacts of these processes. From an economic point of view, the primary impedance is related to energy consumption, especially for RO seawater desalination. Modern RO plants typically consume energy in the range of 3e4 kWh to produce 1 m3 of freshwater (Tufa, 2015). Of this, a large portion of energy consumption is used to pressurize the seawater to 60e70 bars. Another critical issue related to pressure-driven membrane operations is the emission of greenhouse gases and other air pollutants, which can significantly exacerbate global warming. One sustainable solution to this issue is to use alternative resources such as renewables (Ghaffour et al., 2015; Eltawil et al., 2009). The idea of using renewable resources is attractive and the number of studies is increasing owing to the huge potential of renewable resourcesedriven RO desalination plants to meet the water demand while reducing carbon dioxide emissions. The possibilities of using solar, geothermal, and wind to drive desalination plants have been actively investigated (Gude, 2016; Ma and Lu, 2011). However, currently, several technological limitations related to the stability of the resources and the cost of construction need to be overcome for practical large-scale applications. Identification of possible environmental threats involved in membrane fabrication and during the processes is necessary to justify ethical issues associated with membrane implementation. Potential environmental effects can be classified into direct and indirect impacts. By taking desalination as a typical example, the direct impact is related to the intake of seawater, which causes the serious loss of aquatic organisms when they are drawn into the desalination plant with seawater. During the operation, membrane processes can become an environmental threat especially to marine creatures if the discharge is improperly managed. In particular, the discharge of concentrated brine with high total dissolved solid contents from RO desalination plants has significant detrimental effects on the environment. It has been proven that one of the largest plants in the world, the Ashkelon desalination plant, has a yearly seawater intake of about 315 million m3 and discharges RO brine with a total solid concentration that is almost double that of seawater (Einav and Lokiec, 2003). Strategies related to process intensification, careful material selection, and enforcement of regulations could have a direct impact on reducing the overall environmental threat. Research and development in membrane fabrication is broadening. The use of nanomaterials as additives in membrane fabrication presents a huge advantage in improving performance. As mentioned earlier, many advances in research have witnessed

312 Chapter 9 the potential of reducing the energy consumption of membrane processes by developing innovative nano-enabled membranes that can effectively increase the flux and productivity of fresh water. Despite their advantages, the environmentally friendliness, stability, and practicability of nanomaterials in advancing membrane processes are still debatable (Goh and Ismail, 2015). Currently, different top-down and bottom-up approaches have been well-established to synthesize nanomaterials. However, some of these approaches require high temperatures and involve the use of hazardous chemicals. To ensure sustainable development in this field, an important area for focus is the bio- and green synthesis of nanomaterials that can reduce the production of harmful by-products to the environment (Akin et al., 2014). Moreover, the leaching of nanomaterials from nanocomposite membranes may pose a significant environmental threat (Goh et al., 2016b). Some of the fabrication techniques of nanocomposite membranes, such as coating and grafting, involve the deposition or attachment of nanomaterials on the membrane surface. During high-pressure and long-term membrane operations, the stability of this deposited layer may be compromised and result in leaching of nanomaterials into water bodies. As such, long-term performance evaluation is critical to avoid the possibility of secondary pollution. The exceptional properties of nanomaterials and the resultant nanocomposite membranes have allowed unprecedented improvement in membranes’ performance. However, large-scale or mass production of nanomaterials to meet industrial requirements is a major challenge to be tackled. Many synthesis routes of nanomaterials involve carefully controlled reaction conditions to result in a low yield of nanomaterials with desired properties. More reliable, simple, and reproducible fabrication techniques are needed to speed the adoptability of this innovation in industry. The reliable long-term operation of membrane processes is important to the sustainable development of this technology. A major concern related to this is membrane fouling, which has resulted in a decline in performance. The deterioration of flux and productivity as a result of membrane fouling has been well-investigated based on the critical flux concept. Membrane cleaning is periodically performed to remove foulant layers before membrane replacement takes place (Jiang et al., 2017). Different cleaning protocols have been extensively studied; one of the most straightforward and effective cleaning procedures involves the use of chemicals. During the chemical cleaning process, chemicals such as chlorine bleach, sodium hydroxide, and hydrochloric acid are used to remove the foulant before typical backward or forward flushing. A case study by Park et al. based on the desalination plant at Chuja Island, Korea showed that although the brine discharge did not have significant toxicity to impart negative impacts on the tested marine organisms, high toxicity was detected in the chemicals, solvents, and additives used for membrane cleaning (Park et al., 2011). The selection of ecofriendly chemicals and low concentration use are necessary to minimize the adverse impacts that result from the discharge of chemicals.

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8. Conclusion Membrane technology has experienced steady and progressive development for desalination and wastewater treatment. Because of its advantages, membrane technology has become an attractive alternative to many conventionally used techniques. One of the most significant areas of progress in this field is the design of membranes to heighten separation performance. The selection of a suitable membrane process and optimization of membrane properties for the identified application are crucial because they dictate the efficiency of removal as well as the cost incurred during the process. This chapter focuses on the development of sustainable and high-performance membranes for several niche areas, including heavy metal and color removal, oily wastewater treatment, desalination, and energy generation. Currently, many fabrication methods have been established and successfully implemented for membrane modification to improve membrane separation performance and long-term stability. The selection of an appropriate method strongly relies on the compatibility of membrane materials with the additives, the durability of the membrane materials for modifications that might involve harsh conditions, costeffectiveness, the purpose of separation, and the types of operation as well as the practicability for large-scale operations, so that they are commercially attractive. It is anticipated that with advances in the field of membrane development and system optimization, high-performance membrane technology will continue to flourish in various separation processes, particularly on a large commercial scale. Also, despite the promise of membrane technologies in addressing various issues related to wastewater treatment, desalination, and energy production, the implementation of membrane processes should be closely monitored to estimate their long-term effects, particularly from an environmental point of view.

Acknowledgments The authors would like to acknowledge financial support provided by Universiti Teknologi Malaysia under Research University Grant 18H65, the Ministry of Higher Education under HiCOE Grant 4J183, and Fundamental Research Grant Scheme (FRGS) 4F920.

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318 Chapter 9 Shahkaramipour, N., Tran, T.N., Ramanan, S., Lin, H., 2017. Membranes with surface-enhanced antifouling properties for water purification. Membranes 7, 1e18. https://doi.org/10.3390/membranes7010013. Shen, Y., Saboe, P.O., Sines, I.T., Erbakan, M., Kumar, M., 2014. Biomimetic membranes : a review. Journal of Membrane Science 454, 359e381. Shi, J., Wu, T., Teng, K., Wang, W., Shan, M., Xu, Z., Lv, H., Deng, H., 2016. Simultaneous electrospinning and spraying toward branch-like nanofibrous membranes functionalised with carboxylated MWCNTs for dye removal. Materials Letters 166, 26e29. https://doi.org/10.1016/j.matlet.2015.12.024. Son, M., Park, H., Liu, L., Choi, H., Kim, J.H., Choi, H., 2016. Thin-film nanocomposite membrane with CNT positioning in support layer for energy harvesting from saline water. Chemical Engineering Journal 284, 68e77. https://doi.org/10.1016/j.cej.2015.08.134. Subramani, A., Jacangelo, J.G., 2015. Emerging desalination technologies for water treatment: a critical review. Water Research 75, 164e187. https://doi.org/10.1016/j.watres.2015.02.032. Subramaniam, M.N., Goh, P.S., Lau, W.J., Tan, Y.H., Ng, B.C., Ismail, A.F., 2017. Hydrophilic hollow fiber PVDF ultrafiltration membrane incorporated with titanate nanotubes for decolourization of aerobically-treated palm oil mill effluent. Chemical Engineering Journal 316, 101e110. https://doi.org/ 10.1016/j.cej.2017.01.088. Subramaniam, M.N., Goh, P.S., Lau, W.J., Ng, B.C., Ismail, A.F., 2018. AT-POME colour removal through photocatalytic submerged filtration using antifouling PVDF-TNT nanocomposite membrane. Separation and Purification Technology 191. https://doi.org/10.1016/j.seppur.2017.09.042. Sunil, K., Karunakaran, G., Yadav, S., Padaki, M., Zadorozhnyy, V., Pai, R.K., 2018. Al-Ti2O6a mixed metal oxide based composite membrane: a unique membrane for removal of heavy metals. Chemical Engineering Journal 348, 678e684. https://doi.org/10.1016/j.cej.2018.05.017. Suresh, K., Pugazhenthi, G., Uppaluri, R., 2016. Fly ash based ceramic microfiltration membranes for oil-water emulsion treatment: parametric optimization using response surface methodology. Journal of Water Process Engineering 13, 27e43. https://doi.org/10.1016/j.jwpe.2016.07.008. Tan, Y.J., Sun, L.J., Li, B.T., Zhao, X.H., Yu, T., Ikuno, N., Ishii, K., Hu, H.Y., 2017. Fouling characteristics and fouling control of reverse osmosis membranes for desalination of dyeing wastewater with high chemical oxygen demand. Desalination 419, 1e7. https://doi.org/10.1016/j.desal.2017.04.029. Tufa, R.A., 2015. Perspectives on environmental ethics in sustainability of membrane based technologies for water and energy production. Environmental Technology and Innovation 4, 182e193. https://doi.org/ 10.1016/j.eti.2015.07.003. Valladares Linares, R., Li, Z., Yangali-Quintanilla, V., Li, Q., Amy, G., 2013. Cleaning protocol for a FO membrane fouled in wastewater reuse. Desalination and Water Treatment 51, 4821e4824. https://doi.org/ 10.1080/19443994.2013.795345. Venkatesan, A., Wankat, P.C., 2017. Produced water desalination: an exploratory study. Desalination 404, 328e340. https://doi.org/10.1016/j.desal.2016.11.013. Wang, Z., Wu, A., Colombi Ciacchi, L., Wei, G., 2018. Recent advances in nanoporous membranes for water purification. Nanomaterials 8, 65. https://doi.org/10.3390/nano8020065. Wang, Y., Wang, Z., Wang, J., Wang, S., 2018. Triple antifouling strategies for reverse osmosis membrane biofouling control. Journal of Membrane Science 549, 495e506. https://doi.org/10.1016/ j.memsci.2017.12.047. Wei, X., Wang, Z., Zhang, Z., Wang, J., Wang, S., 2010. Surface modification of commercial aromatic polyamide reverse osmosis membranes by graft polymerization of 3-allyl-5,5-dimethylhydantoin. Journal of Membrane Science 351, 222e233. https://doi.org/10.1016/j.memsci.2010.01.054. Werber, J.R., Deshmukh, A., Elimelech, M., 2016. The critical need for increased selectivity, not increased water permeability, for desalination membranes. Environmental Science and Technology Letters 3, 112e120. https://doi.org/10.1021/acs.estlett.6b00050. Werber, J.R., Osuji, C.O., Elimelech, M., 2016. Materials for next-generation desalination and water purification membranes. Nature Reviews Materials 16018. https://doi.org/10.1038/natrevmats.2016.18.

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Index Note: ‘Page numbers followed by “f ” indicate figures, “t” indicates tables’.

A About Waste law, 12, 13f Academic research, 34 Adoptions, technology innovations, 229e231 Agri-food industry, 156e161, 158t, 159f, 159t, 162f

B BimiLeap, 80 Binary coefficients, 87t Breadth of sources (BREADTH), 147e149, 154f Business model components, 129t Business models (BMs), 108e109

C Carbon-based nanomaterials, 300 Carbon nanotubes (CNTs), 299e300 Chemical modification, 299 Circular economy, 257e260 Circular model approach, 261f Clean Development Mechanism, 225e226 Closed-looped system, 257e259 Continuous diagnostics and mitigation (CDM) implementation, 225e226 Corporate sustainability management system (CSMS), 125e126, 125f Covalent bonds, 299 Critical Control Points (CCP) methods, 265e266

D Deeper analysis, 78e79 DEPTH, 149e150, 154f, 160

Desalination, 308e310 Diffusion theories, 230 Directive 2008/98/European Community (EC), 2 Directive No. 1999/31/EU, 13e15 Directive No. 2008/98/EU, 13e15 Distribution of ratings, 77e78 Dividing respondents, 80e83

E Ecodesign, new product development (NPD) process barriers, 196e202 checklist, 193, 194t classification, 190t drivers, 196e202 energy, 193e194 environmentally friendly products, 180 environmental-quality function deployment, 196 environmental sustainability, 180e181 external stimuli, 199te200t Green Design Advisor (GDA), 181, 195e196, 195f integrative model, 189e190 internal stimuli, 199te200t International Organization for Standardization (ISO), 182 life-cycle assessment (LCA), 183, 191 materials, 193e194 mean and median for stimulus, 201f methods, 189e196, 192t new product development, 182e186

321

practices, 189e196 product life cycle, 183e185, 184f product portfolio management (PPM), 186e189 methods and tools, 188e189 organizational, 187e188 strategic, 187 product service systems (PSS), 182 QFD for environment (QFDE), 191 quality function deployment (QFD), 191 raw materials extraction, 183e184 recycling, 184e185 reduction, 185e186 refurbishing, 184e185 remanufacturing, 184e185 reusing, 184e185 tools, 189e196, 192t toxicity matrix, 193e194 Eco-innovation, 34 Energy generation, 310 Entrepreneurship innovations, 237e238 Environmental innovation (EI), 234 Environmentally friendly products, 180 Environmentally sustainable product innovation academic research, 34 benefits, 35e36, 37f drivers, 36e41 eco-innovation, 34 economic gains, 36 environmental gains, 35

Index Environmentally sustainable product innovation (Continued) external collaboration partners, 44e54 building relationships, 48e49 characteristics, 49e51 considerations, 51e54 firms, 44e46 external influences, 39 external regulations, 41 firms, 34 future research agenda, 59e62 literature contradictions, 60e61 venues of investigation, 61e62 government regulations, 39 green product, 34 incremental innovations, 41e43 innovation, 34 internal collaboration, 54e55 market demand, 40e41 motivations, 36e41 radical innovations, 41e43 recyclability, 35 success factors, 55e57 technological uncertainty, 43e44 Environmental-quality function deployment (EQFD), 191, 196 Environmental sustainability (ES) business case, 122e123 business model components, 129t business models (BMs), 108e109 companies, 109 corporate sustainability management system, 125e126, 125f economic/institutional rationales, 109e116 environmental sustainability management, 121e127 Global Reporting Initiative (GRI), 126 institutional theory, 113e115 legitimacy theory, 112e113

process innovation, 107e109 signaling theory, 115e116 stakeholder theory, 110e112 strategic approaches, 116e121, 118fe120f sustainable business models, innovation in, 127e132 theoretical frameworks, 109e116 Environmental sustainability management, 121e127 Escherichia coli, 300 European Union (EU) policy, 1975, 4 External search depth, 149e151

F Food-crop irrigation, 270e272 Foregoing approach, 88 Forward osmosis (FO), 292e293 Fundacio´n Espan˜ola para la Ciencia y la Tecnologı´a (FECYT), 155

G Gasification, 219e220 Geographic diversity, 152e154, 154f Gestione Impianti Depurazione Acque S.p.A. (GIDA), 266e268 Global Reporting Initiative (GRI), 126 Global warming, 71 Global water resources, 292 GLOB/INF pressure, 23 GLOB/INST pressure, 23 Government regulations, 39 Graphene oxide (GO), 300 Green and low-carbon technology innovations entrepreneurship innovations, 237e238 exploration, insight from, 238e242 future perspectives, 242e244 Leadership in Energy and Environmental Design (LEED)-certified

322

commercial buildings, 226e227 literature publication status, 214t, 215f methodology and search criteria, 210e211 publication amount, 215t qualitative research, 219e220 regulation or policy innovations, 225e229 research and advance development, 235e237 Science Citation Index (SCI), 210, 217e219 Social Sciences Citation Index (SSCI), 210, 217e219 technology adoption theory, 230e231 technology innovation adoptions and diffusion, 229e231 technology innovation capability, 233e235 technology innovation management, 233e235 technology transfer, 231e232 themes, 224e238, 224t Web of Science (WOS), 210e224 Green Design Advisor (GDA), 195e196, 195f Green product, 34 Green technology, 158

H 2,2,3,4,4,4-Hexauorobutyl methacrylate (HFBM), 308e309 Hierarchy of waste, 4e7 Hypothesis development, 147e154

I Incremental innovations, 41e43 Industrial symbiosis, 286e287 Innovation, 34 Institutional theory, 113e115 Integrative model, 189e190 macrolevel, 189 mesolevel, 190 microlevel, 190

Index Intentional pressures, 9e10 Internal collaboration, 54e55 International Organization for Standardization (ISO), 182 Interorganizational analysis, 127

L Leadership in Energy and Environmental Design (LEED)-certified commercial buildings, 226e227 Legitimacy theory, 112e113 Life-cycle assessment (LCA), 183, 191 Low Indirect Impact Biofuels (LIIB) methodology, 280

M Market demand, 40e41 Membrane fabrication, 296e298, 296t Membrane technology carbon nanotubes (CNTs), 299e300 chemical modification, 299 classes of membranes, 302 covalent bonds, 299 desalination, 308e310 energy generation, 310 forward osmosis (FO), 292e293 global water resources, 292 graphene oxide (GO), 300 innovation, 310e312 membrane fabrication, 296e298, 296t membrane modifications, 298e302 microfiltration (MF), 292e293 nanofiltration (NF), 292e293 nanotechnology and science, 299e300 osmotically driven membrane processes, 295e296 pressure-driven membrane processes, 293e294 pressure-retarded osmosis (PRO), 292e293 reliable long-term operation, 312 reverse osmosis (RO), 292e293

sustainability, 310e312 thermal-based desalination, 292 titania nanotubes (TNT), 299e300 ultrafiltration (UF), 292e293 wastewater treatment color removal, 304e306, 305f heavy metal removal, 302e303 oily wastewater treatment, 306e308 Methane, 2 “Methodical Recommendations of the Reasonable Community Waste Management”, 26 MET matrix, 194 Microfiltration (MF), 292e293 Mind genomics studies BimiLeap, 80 cancer, 91e92, 93t choreography, 74e77 corruption in education, 89e91, 90t customer requirements, 100e102 deeper analysis, 78e79 distribution of ratings, 77e78 dividing respondents, 80e83 experimental design, 76 foregoing approach, 88 global change vs. sustainable agriculture, 95e97 gradualists, 98 interpersonal relations, 92e95 materials and methods, 74, 75t mental informatics and agricultural issues, 95e97, 96t neurophysiological processes, 84e85, 86f nuclear energy studies, 75t nuclear power, 83, 84t ordinary least squares (OLS), 73 performance of elements, 81t personal viewpoint identification (PVI), 81e83, 82f politically correct response, 73 ratings analysis, 76e77 ratings recoding, 76

323

raw material, 74, 75t realists, 99e104 renewable energy, 97e98 response times, 77e78, 86e88 sexuality, 92e95 solar energy, 75t, 78e79, 79t studies undertaken, 88e98 surface analysis, 77e78, 78f text mining, 102e104 Motivations, 36e41 Municipal solid waste, 2

N Nanofiltration (NF), 292e293 NAT/INF pressure, 23 NAT/INST pressure, 23 Network factors, 147 Neurophysiological processes, 84e85, 86f Non-market pillar, 130e131 Nuclear power, 73, 83, 84t

O Open and eco-innovations breadth of sources (BREADTH), 147e149, 154f data and methods, 154e166 agri-food industry, 156e161, 158t, 159f, 159t, 162f sample and variables, 155e156 tourism industry, 161e166, 163te165t traditional sector, 154 depth of the relationship (DEPTH), 149e150, 154f, 160 employee training actions, 168e169 external agents, 148e149 external geographic diversity, 152e154, 154f external search depth, 149e151 green technology, 158 hypothesis development, 147e154 medium-sized enterprises (SMEs), 146 network factors, 147

Index Open and eco-innovations (Continued) organizational learning, 147e148 research and development (R&D), 146 Ueshaped relation, 151 Ordinary least squares (OLS), 73 Ordinary least squares Regression analysis, 159, 160t Organisation for Economic Cooperation and Development, 226e227 Organizational analysis, 127 Organizational learning, 147e148 Organization innovation, 234 Osmotically driven membrane processes, 295e296

P Panel de Innovacio´n Tecnolo´gica (PITEC), 155, 169e171 Perovskite-structured solar cells (PSCs), 219e220 Personal viewpoint identification (PVI), 81e83, 82f Photovoltaic (PV) technologies, 219e220 Pressure-driven membrane processes, 293e294 Pressure-retarded osmosis (PRO), 292e293 Proactive approach, 121 Process innovation, 107e109 Product life cycle, 183e185, 184f Product portfolio management (PPM), 186e189 Product service system (PSS), 131 Protein-facilitated lipid bilayer, 301e302 PVI. See Personal viewpoint identification (PVI) Pyrolysis, 4e5

Q QDA Miner text analysis, 22e23 QFD for environment (QFDE), 191 Quality function deployment (QFD), 191

R Radical innovations, 41e43 Recycling, 4e5, 35, 184e185 Reduction, 185e186 Refurbishing, 184e185 Remanufacturing, 184e185 Renewable energy, 97e98 Research and development (R&D), 146 Response times, 77 Reusing, 184e185

S Salvadori’s theory, 256e257 Sample reliability, 164t Signaling theory, 115e116 Small and medium-sized enterprises background, 255e262 circular economy, 257e260 circular model approach, 261f closed-looped system, 257e259 Critical Control Points (CCP) methods, 265e266 food-crop irrigation, 270e272 future perspectives, 284e287 globalized market, 255e256 industrial ecosystem, 257e259 irrigation and food production, 269 Nebbia hypothesizes, 257e259, 258f nongovernmental organizations (NGOs), 260 ozone treatment, 268e269 production activities, 260 production inputs, 255e256, 256f production outputs, 255e256, 256f public sector intervention, 259e260 reclaimed water for irrigation purposes, 270e272 reuse, 270 Salvadori’s theory, 256e257 sustainability, 262e264 Sustainable Development Goals (SDG), 263e264 systemic circular approach, 265f

324

urban wastewater, 270 waste management, 272e283 water management, 263e272 Societal analysis, 127 Sociotechnical transition, 22 Sociotechnical transitions, 7e10 Stakeholder theory, 110e112 Staphylococcus aureus, 300 Stockholm Convention on Persistent Organic Pollutants, 13e15 Strategic approaches, 116e121, 118fe120f Surface analysis, 77e78, 78f Sustainability, 262e264, 310e312 Sustainability-oriented business models, 130, 130f Sustainable business models, innovation in, 127e132 Sustainable Development Goals (SDG), 263e264 Sustainable manufacturing practices (SMPs), 234 Systemic circular approach, 265f

T Technological innovation-related key words, 223e224 Technological uncertainty, 43e44 Technology adoption theory, 230e231 Technology innovations, 230 adoptions, 229e231 capability, 233e235 diffusion, 229e231 management, 233e235 Technology transfer, 231e232 Text mining, 70e72, 102e104 Thermochemical pyrolysis, 219e220 Thin film nanocomposite (TFN) membrane, 300e301 Tourism industry, 161e166, 163te165t Toxicity matrix, 193e194 Traditional sector, innovations, 154

Index U Unintentional pressures, 9e10 Urban wastewater, 270 Ueshaped relation, 151 US standard B-Corporation (B-Corp), 285 UV photon irradiation, 299

V Value capture, 128 Value-creation process, 128, 130 Value proposition, 128 Vector error correction model (VECM), 225e226

W Wasted electrical and electronic equipment (WEEE), 281 Waste management system (WMS) aviation, 278 biofuel production technologies, 278e279 Directive 2008/98/European Community (EC), 2 environmental and human health problems, 2e3 EU Renewable Energy Directive (RED), 279 Fuel Quality Directive (FQD), 279 hydrotreated vegetable oil (HVO), 279 Low Indirect Impact Biofuels (LIIB) methodology, 280 methane, 2 microfiltration (MF), 274e275 municipal solid waste, 2 Olea europaea L., 273

olive oil wastewater (OOWW), 273e274 Roundtable on Sustainable Biomaterials (RSB), 280 theoretical framework, 4e10 European Union (EU) policy, 1975, 4 hierarchy of waste, 4e7 intentional pressures, 9e10 pyrolysis, 4e5 recycling, 4e5 sociotechnical transitions, 7e10 sustainability transitions, 9 unintentional pressures, 9e10 waste sector, 7e10 Ukrainian, 10e21 About Waste law, 12, 13f economic activity and households, 15, 17t handling waste by economic activity, 17, 18t “Methodical Recommendations of the Reasonable Community Waste Management”, 26 methodology, 22e23 problems, 10t source/type of pressure, 23, 24te25t statistical data, 15e21 Stockholm Convention on Persistent Organic Pollutants, 13e15 waste generation and treatment, 15, 16t Waste generation by regions, 18, 19t

325

used cooking oil (UCO), 277 vegetal material initial water extraction, 274 Waste sector, 7e10 Wastewater treatment color removal, 304e306, 305f heavy metal removal, 302e303 oily wastewater treatment, 306e308 Water management Critical Control Points (CCP) methods, 265e266 food-crop irrigation, 270e272 food production, 269 irrigation, 269 ozone treatment, 268e269 reclaimed water for irrigation purposes, 270e272 reuse, 270 urban wastewater, 270 Web of Science (WOS), 210e224 literature classification country and territory, 214t, 216e217, 216f key words cluster, 223e224, 223f period sequence, 211e216, 212t, 213f photovoltaic (PV) technologies, 219e220 research level, 220e222 research method, 217e220, 219f research subject area, 222e223, 222t themes, 224e238, 224t Winewin innovation model, 236e237