Sustainability impact and effects analysis - A risk management tool for sustainable product development

Abstract

Integrating a strategic sustainability perspective in product development requires that decision-makers can connect socio-ecological sustainability aspects to tangible business implications in the short- and long term. Only then will there be the driving forces necessary for adopting sustainable product development practices. A risk management approach can be used to enable strategic proactivity by exposing the potential consequences of sustainability-related decisions, for example in relation to reputation, legislative change, the ability to attract top talent, or meeting customer needs. Through an action research approach and by building on previous findings and existing tools and methods, this study presents the Sustainability Impact and Effects Analysis. This novel method and risk management tool combines the familiar format of the well-established Failure Mode and Effects Analysis with a strategic sustainability perspective. Designed to be applicable in early stages of the product innovation process, this tool aims to increase decision-makers’ awareness of sustainability risks and provide them with a practical way for how to identify, assess, and treat such risks. The tool was developed in close collaboration with industry and tested in two different companies. The results indicate the effectiveness of the tool for identifying and analyzing sustainability risks, as well as deriving and monitoring strategies for how to manage them strategically, also leading to an increased awareness of the interconnections between socio-ecological sustainability aspects and business implications. Thereby, it can provide support for companies in how to work with product development in a way that contributes to society's transition towards sustainability, while benefiting the own organization.