Through its eco-innovation methodology, UNEP has been supporting SMEs across regions in the development and application of a business model that incorporates sustainability throughout all business operations based on life cycle thinking and in cooperation with partners across the value chain. Eco-innovation entails a coordinated set of modifications or novel solutions to products (goods / services), processes, market approach and organizational structure which leads to a company’s enhanced performance and competitiveness. This approach can help small and medium-sized enterprises (SMEs) access new and expanding markets, increase productivity, attract new investment into the business, increase profitability across the value chain, and help them stay ahead of regulations and standards.
Thinking from a life cycle perspective means considering all phases of the product life cycle, from extraction of raw materials through material processing, manufacturing, distribution, use, repair and maintenance to disposal or re-use. This approach allows companies to evaluate where significant progress can be made against the major challenges faced by industry, anticipate and avoid future ones. Adopting this perspective works best in cooperation with suppliers, customers and other partners across the value chain.
Companies evaluate their position in the value chain, analyze the hotspots that affect their business and seek innovative solutions in collaboration with value chain partners to strengthen their market position and competitiveness. Actual transformation is likely to be achieved by implementing the elements of the new strategy on a gradual, progressive and targeted basis, but these steps take place within the framework of the company’s long-term strategic drive towards major change.
Through this method, eco-innovative companies create value for the business, the environment and society in general. The result is a more flexible company, able to respond to changing market trends with novel solutions ahead of competitors. Contrary to a short-term outlook that leads to incremental improvements and results in only limited progress and benefits, eco-innovation represents a long-term strategic drive towards sustainability.
By adding sustainability at the core of a business strategy the concept of Eco-Innovation can support small and medium-sized enterprises to become more resilient, including during times of crisis:
- By working on joint sustainable solutions to common problems, significant shared gains can be achieved with better commercial, environmental and social value;
- With lower production costs through greater material or production efficiency, minimized waste, optimization of distribution channels and reduced lead-time;
- Good relationships through the value chain approach help develop proactive communication on emerging challenges and risks to adapt; and
- Producers that rely less or not exclusively on import supplies (for example, by sourcing certain materials locally or through on-site recycling) are less prone to the crisis.
