Why to eco-design a product and\or a service?
What are the benefits?

Controlling costs and financial gain

“The direct economic impact (increase in income and/or cost reduction) associated with eco-design is encouraging. Almost all companies interviewed as part of the study on the economic impact of eco-design have observed significant improvements in their operating statements. In addition, the intangible impact (enhanced image, relationships with stakeholders, increased creativity) is also significant.”

This is the general conclusion of the Franco-Quebec study “Eco-design: what is the economic impact on the company?” published in December 2008 and notably carried out by four teachers and researchers as well as the eco-design and life cycle management hub, based on a sample of 30 companies (very small businesses, SMEs and large corporations) who have been integrating eco-design into their processes for several years.

The objective was to propose a tentative answer to the question: is eco-design profitable?
This study revealed that eco-design is becoming a corporate profitability and competitiveness factor.

The authors have highlighted impacts affecting the profitability of investments as well as profit margins, cost price, environmental impact, company’s image and creativity, innovation capacity, internal organization and customer relations.
The two prominent findings were that the companies who have repeatedly adopted eco-design no longer want to turn back, while those who have had only one experience are wondering whether they should continue, due to the difficulties encountered, notably technical. Furthermore, an entrepreneurial trend was observed with the emergence of companies founded on eco-design.

The first observation is that this approach has a strong impact on the company’s innovation. 50% of eco-designed products are new products which did not exist before, while 40% replace older products and 10% extend existing ranges.
With regard to the commercial impact, the authors of the study note that “eco-design has not resulted in a deterioration of the company’s profitability”. Above all, they stress that “in the vast majority of cases, eco-design has helped increase the income linked to the sale of products or services whose profit margin is positive, therefore leading to a profit increase in absolute terms”.

The study reveals that for more than half of the companies examined, eco-design has generated income which did not already exist.
For cost price, two trends are emerging:

  • First of all, this approach generates savings on variable costs, primarily due to the reduced use of raw materials and decrease in energy consumption.
  • There are however increases in the proportion of fixed costs, particularly those associated with R&D.
  • However, at the end of the day, companies come out on top with, for 80% of them, profit margins equal to or greater than those of a traditionally designed product.