Chief Product Officer (CPO)
Circular economy, the idea of recycling, refurbishing and reusing existing materials for as long as possible, is gaining traction in today’s economy. It also fits in with the philosophy of ESG risk management. All materials consumed in an organization’s product design should be used in such a way that they can be recycled indefinitely. This needs to happen on a timescale that’s relevant to people and not 1,000 years into the future.
What are the top 3 things the CPO should activate immediately?
What are the CPO’s key considerations with respect to ESG risk?
Produce a more circular result
The CPO needs to center the design and development of products around the organization’s ESG Risk strategy.
What gets measured gets done. Determine the environmental benefits and impact at each stage of a product’s life — from raw material extraction through its use phase(s) to final disposal and recycling. A product lifecycle analysis policy and process should be established to guide the design and development of the products.
Related case study
Large personal care company:
▉ A leading beauty and personal care company needed help measuring the impact of their product and had limited visibility across their supply chain. The EY organization designed and implemented a unique tool that assessed and improved the environmental and social impact of an existing or future product. The EY organization also helped them create a risk map of their supplier network.
Implement transparent design practices
Having an understanding of the materials that are used to design the products and how vendors who provide those material are selected across the entire value chain of the product development is a key imperative for the CPO. For example, the ESG risk strategy for the product design phase should give consideration to minimal usage and shorter cycle time for scarce resources so they can be recovered sooner for reuse. Materials that can be transported within as small a geographic range as possible should be prioritized over materials with longer transportation times to reduce the CO2 emissions at the product design and development phase.
Study your packaging
Product packaging provides a significant opportunity to minimize your carbon footprint and demonstrate your commitment to ESG principles to the consumer.
Research teams should be constantly monitoring what’s happening in the packaging space and what options might best serve your needs, with a bias to dematerialization of packaging. In addition, the CPO and their teams should pay particular attention to tech startups, whose enthusiasm and energy to develop new solutions to old methods could be a great fit from both a cultural and operational standpoint. Let’s include an example to bring this to life.