Today, the global environment presents many challenges. The demand for oil and natural gas is expected to exhaust known reserves by 2045. The effects of climate change are becoming increasingly evident; and lack of access to clean water has become a mounting crisis.

A growing number of large and small businesses view these global environmental problems as business opportunities. Why? Because there are major profits to be made by those that develop solutions to these pressing issues.

Use the links below to learn how businesses are using environmental problems as catalysts to develop innovative new products and services.

Green Technology Innovation
Servicizing
Take Back Programs

Green Technology Innovation

Successful businesses not only meet the world's needs, but anticipate them. Innovation is the key. It is the driver of competitive advantage, growth, and profitability.

Financial and Technical Assistance for Technology Developers

• Environmental Technology Opportunities Portal
  Information on government programs that help fund development of new environmental technologies and offers information on existing environmental technologies.

• National Center for Environmental Research
  Information on funding opportunities for scientific research in the environmental sciences that will improve EPA's scientific basis for decisions on national environmental issues.

Small Business Innovation Grants

A few federal programs provide grants to small firms engaged in scientific research and development (R&D). The federal government's SBIR (Small Business Innovation Research) and STTR (Small Business Technology Transfer) programs award a specific percentage of federal R&D funds to qualified small businesses. SBIR/STTR programs encourage small firms to undertake scientific research that helps meet federal R&D objectives, and have high potential for commercialization if successful.

The following federal agencies award SBIR/STTR grants:

• Department of Agriculture (USDA)

• Department of Defense

• Department of Education

• Department of Energy

• Department of Health and Human Services

• Department of Transportation

• Environmental Protection Agency (EPA)

• National Aeronautics and Space Administration (NASA)

• National Institute of Standards and Technology (NIST)

• National Oceanic and Atmospheric Administration (NOAA)

• National Science Foundation

Case Studies and Examples

• Green Biz Leaders
  Features hundreds of examples of how companies of all sizes and sectors align environmental responsibility with business success, as judged by independent agencies and organizations.

• Social and Environmental Entrepreneurs (SEE)
  Examples of some of the projects that SEE was affiliated with in their beginning phases.

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What is servicizing?

Servicizing is typically defined as selling the function of a product or the service it provides, rather than the physical product. For example, consumers buy server capacity instead of computers, voicemail service instead of answering machines, or automobile painting services instead of paint. Ownership of the product remains with the manufacturer/supplier to whom the customer pays a fee based on use. The customer can obtain the functionality of the product by directly using it, e.g., leasing office equipment, or can have it delivered by the manufacturer/supplier, e.g., onsite chemical management. The manufacturer/supplier, who knows the product including the associated liabilities and waste reduction opportunities, is responsible for maintaining it, and at the end its useful life, for recovering and recycling or disposing of it. In some cases, such as chemical service management, the manufacturer/supplier may also provide a variety of services such as tracking chemical inventories for its customers, restocking them as needed, handling regulatory paperwork, and removing the empty containers.

What are the potential business benefits of servicizing?

The trend towards servicizing is based on the notion that customers don't really want the product, but rather the functionality that it offers; and further, if economic relationships can be structured to encourage this shift in focus, many opportunities for meeting human needs with fewer physical goods will emerge. The theory is that this dematerialization should, in turn, not only lead to fewer environmental impacts, but the opportunity for manufacturers and suppliers to save money on materials and energy, to build and maintain strong customer relationships, and to potentially make more money than they could by selling their products outright.

What types of products are good candidates for servicizing?

Typical candidates for servicizing are products that have a limited lifespan or can be supplied as a service rather than a product. Examples include electronics, photocopiers, chemicals, cleaning supplies, and equipment - especially expensive, specialized equipment that would be costly for customers to acquire, repair and maintain themselves.

Examples of business that are servicizing products include car sharing companies, such as Zip Car; and music distribution, including Apple iTunes and Napster.

Is servicizing appropriate for your product?

To determine whether servicizing may work for your product, begin by considering what your consumers really want from it. Then ask yourself whether they want to own it outright for a good reason such as the ability to depreciate it for tax purposes. Can you persuade them otherwise? For example, assuming you can prove your product meets certain codes or policy, can it help your customer meet their environmental goals? Or, given the environmental risk and potential liability associated with the product, would the customer benefit from leaving responsibility for handling the product with the manufacturer/supplier so that it can concentrate on its primary line of business? Finally, make sure to fully investigate whether servicizing will really lower your costs.

Tools

• Tips for Starting a Servicizing Program

• Checklist for Implementing a Servicizing Program

Further Reading

• Moving from Products to Services

• Environmental Markets : Opportunities and Risks for Business

• The Demanufacturing Difference

• Leasing : A Step Toward Producer Responsibility

• Contracting For Servicizing (Harvard Business School Working Paper)

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What is a take-back program?

Take-back programs give manufacturers the physical responsibility for products or packaging at the end of their useful lives. By accepting used products, manufacturers can acquire low-cost feedstock for new manufacturing or remanufacturing activities, and offer a value-added service to the buyer. Many companies have made take-back an essential part of their business operations. Currently, most take-back programs in the U.S. are voluntary, while legislation in many European countries requires manufacturers to take responsibility for the waste costs associated with their products and packaging.

What types of products are good candidates for take-back?

Good candidates for take-back programs include products with packaging that is reusable or recyclable, e.g., disposable cameras and cardboard; products that become obsolete rapidly or have limited lifespan, e.g., furniture, electronics and appliances; products that contain significant material or energy value after use, e.g., power tools and batteries; and products that contain valuable components that can be refurbished and reused, e.g., photocopiers and printer cartridges.

• Elements of Starting a Take Back Program

• Checklist for Implementing a Take Back Program

Case Studies

• Electronic Manufacturers Take Back Programs - Profiles Apple, Cannon, Dell, Epson, Gateway, IBM, Lexmark, Sony, Xerox and Nokia

• Kodak Recyclable Cameras

• Anheuser-Busch Reusable Packaging

Additional Resources

• Product Stewardship Institute

• Western Electronic Product Stewardship Initiative

• Northwest Product Stewardship Council

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