Portfolio
Sustainability
Assessment
thinkstep AG
Hauptstr. 111-113
D-70771 Leinfelden-Echterdingen
T: +49 711 341 817 0
www.thinkstep.com
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Why Portfolio Sustainability Assessment?
Companies want to gain a systematic overview on the
risks and benefits from sustainability issues in their
portfolio.
Existing methodologies such as LCA can be effort- and
cost-intensive to assess complex portfolios, and cover
mainly environmental aspects.
There is a need for a robust, scalable and workable
approach that uses lifecycle thinking and covers the 3
pillars of sustainability, and addresses (developing)
market and regulatory requirements.
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Source: Driving Revenue Growth Through Sustainable Products and Services, IRRC Institute, Research Report R-1583-KBI, 2015
0% 50% 100% 150% 200% 250% 300% 350%
GE (Energy / Industrial)
Philips (Electronics / Health Care)
Siemens (Health Care / Industrial)
Dow Chemical (Chemicals)
DuPont (Chemicals)
Kimberly Clark (Consumer Goods)
Change in Revenue from Sustainable Products and Services vs. Change in Total Company Revenue in % (2010 vs. 2013)
Change in Total Company Revenue Change in Revenue from Sustainable Products and Services
Revenue growth from sustainable products
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What is the value for companies?
Increased sustainability performance of portfolio translates into
tangible business benefits:
3
Reduced risks
2
Faster growth with more sustainable solutions
4
Stronger focus on customer needs and better market communication
5 Improved corporate image and stakeholder relationship
6 Improved transparency towards investors
Clearer strategy, better decisions
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The BASF Experience
"We systematically steer our entire portfolio towards more
sustainable solutions to derive new business opportunities
for BASF meeting customer and industry needs."Dirk Voeste, Vice President Sustainability Strategy at BASF
Sustainable Solution
SteeringTM
Accelerator
Substantial sustainability contribution in the
value chain
Performer
Meets basic sustainability standards in the
market
Transitioner
Specific sustainability issues which is actively
addressed
Challenged
Significant sustainability concern identified
and action plan in development
23,0%
74,1%
2,6%
0,3%
BASF and thinkstep are in a strategic partnership on Sustainable Solution SteeringTM since 2015
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Portfolio Sustainability Assessment at a glance
Step 1
Definition of
sustainability
needs and trends
in the value chains
Step 2
Evaluation and
categorization of
product sustainability
performance in the
market application
Step 3
Development of
action plans to
manage risk and to
develop market
opportunities
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Developing a Portfolio Steering approach –
Building Blocks
The method will be based on BASF Sustainability Solution SteeringTM method and adapted to
customer‘s needs and requirements. The method consists of three building blocks: Qualifier Check,
Benefit Assessment and Concern Intensity Assessment
Qualifier Check
Benefit Assessment
Concern Intensity
Assessment
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Check for basic sustainability
requirements
Corporate minimum requirements
Stakeholder requirements
Economy Society Ecology
Check for basic sustainability requirements
Basic sustainability requirements are defined together with
customer and can include
– legal and regulatory standards
– code of conducts and company policies
– value chain or eco-label requirements and stakeholder signals
– developing sustainability requirements (e.g. Circular Economy
package of European Commission)
view on full life-cycle and covering the 3 pillars of sustainability
Qualifier Check
Reasoning
A solution that is today legally compliant in its respective application and region and in demand from
external customers might face stricter legal requirements, a negative customer perception or public
pressure in the future.
To remain competitive and reduce liability risks, solutions that are likely to be affected by a sustainability
concern immediately or in the foreseeable future are systematically and proactively identified with the
Qualifier Check.
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Concern Intensity Assessment
9
+
ChallengeUrgency
• Low - medium pressure to solve the concern as the
risk is likely to materialize in the distant future or will
shortly be remedied
• Medium - high pressure to solve the concern as the
risk is likely to materialize in the immediate future or
action plan is not developed yet
• Low: mitigation measures internally practicable with
reasonable effort (e.g. adoption of sourcing policy)
• Medium: mitigation measures demanding (e.g.
substitution, phase-out), moderate effort required to
succeed (e.g. advocacy)
• High: mitigation measures critical (e.g. no substitutes
available), high effort needed to succeed (e.g. R&D,
investments)
Gaps
identified
Transitioner
Challenged
Low Medium High
Low - medium
Medium - high
Urgency
Challenge
In case a product in its respective application cannot pass the Qualifier Check, it is subsequently subjected
to a Concern Intensity Assessment. Here, the improvement status of the product is critically evaluated:
The product’s concern intensity is judged by an urgency and a challenge assessment.
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Products that have successfully passed the Qualifier Check are subjected to a Sustainable Development
Benefit Assessment.
Benefit Assessment
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Check for sustainability value contribution
5-10 relevant sustainability criteria are defined
together with the customer and can include:
– mix of environmental, economic and social criteria
– contribution to UN Sustainable Development Goals
– examples: cost savings downstream, reduction in
carbon emissions, energy savings, resource
efficiency, health and safety, biodiversity, water,
circularity, etc.
+
Performance
Contribution
• Substantial contribution to at least one
sustainability criterion (and no negative impacts)
• Performance better than alternative solutions
(benchmark)
Accelerator
Performer
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Input across function and regions needed
Final assessment considers the sustainability performance in the
regional product application. Therefor input is needed across functions
and regions.
SustainabilityProcess owner; cross-BU consistency
ControllingProduct lists; economic information
MarketingMarket performance of product;
New opportunities, marketing strategy
RegulatoryMinimal legal requirements;
upcoming regulatory standards
R&DAction plans for products at risk,
new product concepts
Product SafetyProduct (eco-)toxicology issues;
stewardship programmes
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Web-based application supports data collection
across business units, regions and functions
Progress on data collection;
automatic notifications upon completion
Integration of
economic data
from e.g. SAP
Data series
over time
Questionnaire can include single
choice, multiple choice, values,
input for calculations, free text.
„Released“ function to
garantee 4-eye principle
e.g. for auditing.
Definition of roles and sub-sets of information
input required from different functions and regions.
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Web-based application supports data evaluation
and reporting
Automatic classification
based on questionnaire input
Results of
individual
regional
product
applications
Customizable analytic and
reporting functionalities
Cumulative results of
sales by classification
Possibility to include analytics in relation to
time series, regions, product categories.
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Application in several sectors for different goals
Electronics
& High-tech
Chemicals &
Pharma
Agriculture
& Food
Construction
& Building
Packaging
Metals &
Mining
Consumer
goods
The tripleS approach is applicable to
different settings.
Classification of raw materials,
precursors or intermediate products
Classification / risk assessment of
individual suppliers
Score-cards of consumer products
Systematic assessment – across life-cycle – applying economic, ecological and social
criteria to address relevant corporate, legislative and stakeholder requirements.
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Portfolio Sustainability Assessment is implemented in a
three step approach
DEVELOPPILOT
Covestro´s Sustainable
Portfolio Steering methodology
IMPLEMENT
Adapt Sustainable Solution
SteeringTM approach tailored to
the specific needs of company
• Screening of value chain hot-spots
(materiality analysis)
• Focus interviews
• Workshops
Definition of basic sustainability
requirements, definition of value
chain-specific SD benefits and
criteria
• Responsibility Assignment Matrices
(RACI)
• Implementation plan
PILOT
Apply method and tool in a pilot
to verify decision tree structure
and processes, data collection,
criteria applicability and
assessment consistency and
quality.
Roll out Sustainable Solution
SteeringTM method across the
entire portfolio (product groups,
sales regions, applications):
• Workshops & webinars to create
understanding and momentum for full
implementation
• Coaching of project team /
sustainability team
• Consultancy to integrate portfolio
assessment results into superior
management tools and sustainability
strategy
Company drives implementation;
thinkstep supports and consults
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Portfolio Sustainability Assessment in a nutshell
Systematic and cross-functional assessment of portfolio in regards to
actual, developing and perceived sustainability requirements
Identification of products that are likely to be affected by regulations and/or
a negative market perception in the future - and pro-active mitigation of
(reputational) risks
Identification of value drivers i.e. products or new product concepts that
outcompete the benchmark with regards to sustainability
Definition of strategies and plans that shape company portfolio in order
meet future demands of customers and keep/expand a leading market
position
Systematically steer entire portfolio towards more sustainable solutions
to achieve new business growth.
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Hauptstraße 111-113
70771 Leinfelden-Echterdingen
Germany
Phone: +49 711 341817-0
Fax: +49 711 341817-25
www.thinkstep.com
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Dr. Martijn Gipmans
Principal Consultant
Chemicals & Life science
Hauptstraße 111-113
70771 Leinfelden-Echterdingen
Germany
Mobile: +49 152 22561164
www.thinkstep.com