Systematics for the sustainability assessment of companies

The term sustainability plays a major role in the areas of economy, ecology and sociality and influences many industries, including the automotive industry. Therefore, in the following interview, we focus on the question: How can you evaluate whether products of an automotive company are sustainable? To give you an answer, our Energy Technology Cluster, in cooperation with our Automotive Cluster, has developed a system that makes it possible to quantify the sustainability of products - across all industries. The background is explained by Prof. Dr.-Ing. habil. Oliver Mayer, head of the Energy Technology Cluster, and Holger Czuday, head of the Automotive Cluster.

Holger, the term sustainability is defined differently. Why is that so? And what do you understand by it?

Holger Czuday: Right, you can find in the literature very diverse definitions for the term and you can define it from different points of view. In the context of my daily work, I understand the term to mean that sustainable development can or must be assigned to three pillars: Economy, Environment, Social. Therefor it is necessary to act in these three areas to achieve sustainability. If you want to consider, for example, a country or evaluate companies or products in their sustainability, then it is quite necessary to examine all three of these aspects.

If I evaluate products as sustainable - does that mean in reverse that the whole company is sustainable?

Holger Czuday: No, you cannot automatically assume that. You must clearly distinguish between corporate sustainability and product sustainability. Sustainable products should be designed to be as durable as possible. They should be resource-efficient and, as far as possible, reusable after use. They should also pose no risk to health. And the focus here is clearly on the environmental aspect with the product. If we look at corporate sustainability, then this concerns the entire enterprise that develops, manufactures and produces this product. Here, it is not only the product of the company itself that is considered sustainable, but, as I said, the entire enterprise must be evaluated. Here again, social, ecological and economic aspects play a role. So, a very broad approach in distinction to the product.

So, it may well be that a product is sustainable, but the whole company does not yet act sustainably?

Holger Czuday: That would be correct in doubt, but then the company would have somehow done something wrong. The sustainable product would already be included in the valuation of the company. But there we come now already too much in depth and to the methodology of the study.

Then I like to lead over to Oliver: You have developed a systematic to evaluate the sustainability of products. How did you go about it?

Oliver Mayer: To go into depth here in the context of this podcast episode is not feasible. But that's why we wrote the study , which can be downloaded for free on our website. Nevertheless, briefly explained: our objective was mainly to show a methodology that is simple and practical. For this methodology we used different methods, which are already known, for example the function analysis from the TRIZ method. With this, we have identified functions of products and components and also classified them into useful functions, but also into functions that we actually don't want to have, but which are there nonetheless. Let's think of a car, it simply has a space requirement. Although it would be nice if it didn't have a space requirement. Then we used the best method, which is simply the environmental or the sustainable counterpart, where we say, "How can these elements here be coupled with the functional analysis so that we link the environmental, social and economic aspects?" And the third is value analysis, which is also not new, but related so that the results can be weighted.

You also gave a good tangible application example in the study. Holger, can you illustrate this for us?

Holger Czuday: Yes, with pleasure. We have in the context of the study taken two vehicles that are available on the market. This is, on the one hand, a BMW three in the diesel version and the Tesla model three. Of course, we could have taken any other models from other manufacturers. These are two examples that were just at disposal  available here and we examined them according to the methodology that Oliver has just touched on. Now you can say: "Tesla won". Both the vehicle under consideration, i.e. the Model 3, and the company were each rated as more sustainable here. But of course it's not quite that simple. The devil is in the details to a certain extent! And as I said, the methodology that Oliver has presented here, with very many different evaluation criteria, is best read in the study at your leisure in more detail.

If I as a company become aware of this study and now want to make the analysis for my products ... Can I use your systematics across industries, or does it work exclusively for the automotive industry?

Oliver Mayer: You can of course use the systematics in other industries. We have used the automotive industry only for our study as an application example. I would like to emphasize here: The systematics has not yet been broken down to the last detail. That will only develop over time. I mean, how you evaluate sustainability varies by industry or company. But it is a starting point on how to begin. And it will continue to develop on that basis. We have also tried this out with photovoltaic modules or washing machines. And the feedback was quite interesting. They said, "A hell lot of work, but it works!" And in this respect, we are quite confident that this methodology can be applied across industries and especially to small and medium-sized enterprises, because it draws a lot on tools that are already known there.

If I as a company want to apply your systematics, is it enough to read the study and I can then jump right in or how do I go about it?

Oliver Mayer: Well, I would say it's like with any methodology. Sure you can download the study and some will say, "I can, that's enough for me, let's get started!" Usually, questions arise and we want to encourage discussion as part of the networking - Holger with Automotive and me with Energy. So, we'd love people to give us feedback on how it worked for them. Just stay in dialogue to develop the system further. The easiest way is to approach the Energy Technology cluster or the Automotive cluster via email contact. Feel free to contact Holger or me directly. Then we can help here and also learn ourselves. We also want to offer a seminar, a workshop, a day to get started. We did that once on a trial basis and feedback came in and we realized: We still have to sharpen this or that corner. Above all, you also learn application examples that you hadn't thought of before. In this respect, it's really give and take. I can only appeal, whom it interests, gladly contact.

Holger, sustainability is the one catchword. When I look at the industry, the second big buzzword is transformation. How do you support in the process?

Holger Czuday: We have since one and a half years ago the Transformation Pilot Automotive to this end. Also on behalf of the ministry, we are specifically seeking contact with companies, especially SMEs, to talk about their challenges. In other words, not just about innovation and new approaches - we do that, too, of course - but also to ask specifically: "What problems are you facing in this transformation process? Have you actually recognized what it means to develop products sustainably? Maybe to develop new products, to go into other industries... If certain product categories simply disappear in the automotive industry, keyword combustion engine...?". That's why the Transformation Pilot Automotive is additionally available here as a contact. Here, too, we can discuss the topic of sustainability in greater depth.

Oliver Mayer: Perhaps I may add something here: We no longer work separately as a cluster, but together. Cross clusters - Energy, Automotive and New Materials, Mechatronics & Automation. So at Bayern Innovativ, transformation is also happening internally. We have recognized that it no longer works on a divisional basis, but that you have to think in terms of the entire system. And that is also something where we continue to develop and what we deliver as a special feature.

Is that perhaps also just the approach to which we are challenged to find the best solutions: to work together?

Oliver Mayer: Absolutely. That's also a transformation that's taking place. You see this learning at universities: it's not the single chair, it's the combination of multiple subject expertise. And that is the reason why we worked together for the study and will continue to work together in the future.

Holger Czuday: Incidentally, it is the basic idea of Bayern Innovativ to initiate co-operations, to think around the corner, to bring together appropriate partners. And why not us as internal partners? So we live the principle, not only between the energy technology cluster and the automotive cluster, but also with the colleagues from the new materials, mechatronics & automation etc.

Finally, back to your study: can I as a company use your developed systematics to find the entry into my individual transformation process?

Oliver Mayer: Yes, that is a beautify formulation. The moment you move into new territory, it's always nice to have a railing somewhere. And with this study, we offer such a railing, so that you can shimmy your way through as a company. And once you've done that, then you usually move on. Then you say, "Hey, that's not so bad, that makes sense too." And then it goes onward. And that was precisely the objective of this study. To show an entry point. It's not witchcraft, it's not rocket science or anything like that. You just have to do it consistently and follow through once, and then realize, "Hey, we can continue on that path." And the point is, the sooner you start, the more competitive you are. Not only in Bavaria or in Germany, but also internationally.

Download the study mentioned here!