Life Cycle Thinking: Driving Product Development, Innovation & Marketing PE INTERNATIONAL (PE) worked with Johnson & Johnson to develop their proprietary Earthwards® process comprised of a product evaluation scorecard, governance system, and third party assurance process. Today, Earthwards® recognized products lead by example. They compete favorably in the market, successfully address consumer preference for environmentally thoughtful products and transparent, relevant sustainability claims. Earthwards® recognized products also deliver clear, meaningful impacts. The Earthwards® product development and innovation process at Johnson & Johnson has successfully positioned life cycle thinking within marketing, communications, and brand - driving innovation deeper into the organization’s culture. It started as a way for product teams to assess the social and environmental impacts of a product across its full life cycle, and today, Earthwards® ensures that products improve in ways that positively impact consumers, the planet, and the bottom line. Life Cycle Thinking MEANINGFUL IMPACTS Differentiated by design and messaging, the Earthwards® process has the goal of delivering 60 recognized products by 2015. While 60 products may seem small for such a large company, they will represent exceptional products that achieve substantial improvements. Further, even products which are not ‘recognized’ benefit from participation and insights from the program itself. Johnson & Johnson’s extensive family of pharmaceutical products, for example, has the potential for considerable impact reduction due to the inherent complexity and longer lifetime of these products. Johnson & Johnson is an entity that operates in 60 countries with over 250 subsidiaries. Because they produce medical devices, pharmaceuticals, as well as some of the world’s most recognized consumer packaged goods, reducing product impacts strategically across their brands becomes the goal. NEUTROGENA® NATURALS PURIFYING FACIAL CLEANSER ›› Sales will help promote clean water projects in the United States ›› Packaging contains 30% post-consumer recycled content ›› Product formulation leverages natural plant derived ingredients where possible and the average of the line is 94% natural Life Cycle Thinking: Driving Product Development, Innovation & Marketing PRODUCT EVALUATION SCORECARD AND PROCESS When developing the Earthwards® process, PE supported Johnson & Johnson in identifying seven material categories where they would focus their efforts in order to achieve their corporate goal of reducing environmental impacts. Products that successfully emerge from the Earthwards® process are typically recognized if they have achieved improvement in at least three of the following seven categories: materials, packaging, energy reduction, waste reduction, water reduction, positive social impact or benefit, and product innovation. MATERIALS PACKAGING ENERGY WASTE WATER The Earthwards® process consists of four steps. While the first two are required for all of Johnson & Johnson’s new products, the final two steps are available for products that have significant sustainability improvements and are pursuing Earthwards® recognition: 1.Satisfy prerequisites: Teams ask a series of questions to evaluate risks and ensure compliance to relevant product stewardship regulations. 2.Life Cycle Screening: Team takes the product through a screening that examines and prioritizes the product impacts across the full life cycle from material sourcing to end-of-life. 3.Identify Potential Improvements: A product which shows significant improvements in three or more categories can qualify as an Earthwards® recognized product. 4.Review: Product team submits results to a review board to determine if the product warrants Earthwards® recognition. 3 SOCIAL INNOVATION Life Cycle Thinking: Driving Product Development, Innovation & Marketing GOVERNANCE SYSTEM & THIRD PARTY ASSURANCE BUILDING LIFE CYCLE THINKING INTO PRODUCT DEVELOPMENT PE helped Johnson & Johnson develop the overall governance system for Earthwards® to enable a consistent yet flexible approach required to successfully implement the Earthwards® process as it is scaled. To ensure its credibility, the Earthwards® process undergoes annual auditing. Through smart planning, auditors have access to the necessary information at the right time, cutting down auditing time and effort and making sure that the process of improving products can continue. PE has always known that a simple life cycle assessment (LCA) screening is a powerful tool to encourage life cycle thinking. While understanding raw materials is a natural first step, end-of-life has traditionally been beyond the scope of product development teams. Johnson & Johnson has embedded LCA screening as part of the Earthwards® process, and today, life cycle thinking including the consideration of end-of-life, is an integral part of the product teams approach. For example, the Earthwards® team works directly with product teams during development of product concepts to secure significant improvement across at least three Earthwards goal areas. Having identified these areas of opportunity, the Earthwards® team leads on-demand, eco-innovation sessions designed to explore and develop new ideas quickly, with the highest level of durability. “ The use of lifecycle thinking is reinforced by the market response to successful products. For areas where Johnson & Johnson has adopted lean manufacturing ideas internally, LCA acts as a tool to help show improvements in key areas to customers, like energy use or packaging reduction, and also it helps identify actual savings across the lifecycle, including in customer supply chains. “ The governance system is comprised of a Review Board consisting of Johnson & Johnson product developers and brand owners, as well as external subject matter experts from organizations such as Practice Greenhealth, the S.C. Johnson Business School at Cornell University, and World Wildlife Fund. The Board reviews each application for Earthwards® recognition, thereby ensuring strict quality standards and brand reputation. UL Environment provides ongoing annual assurance review of the Earthwards® process and verifies that process guidelines and minimum requirements are met. Earthwards® has become a branded change management process that frames credibility-based decisions in new terms. It recognizes, improves, celebrates and communicates our commitment to Our Credo Values to customers and provides value back to the company. — Keith Sutter, Sr. Product Director, Johnson & Johnson 4 Life Cycle Thinking: Driving Product Development, Innovation & Marketing MEANINGFUL SUSTAINABILITY CLAIMS Earthwards® gives Johnson & Johnson the confidence they need to communicate clearly why these products are preferred. Earthwards® is not an eco-label; you won’t find it on a Johnson & Johnson product. But you will find claims about the environmental and social performance of products on product packaging and web sites. In a world awash in sustainability claims, Johnson & Johnson has integrated life cycle thinking into marketing successfully. At the intersection of life cycle thinking, market intelligence, sustainability claims and customer preference, Johnson & Johnson now looks at the most relevant, salient, and impactful parts of product manufacturing and finds ways to communicate and reduce impacts where it counts. That means that the insights and achievements from the Earthwards® process now communicate real product improvements that actually matter both on the shelf and in customer’s lives. “Earthwards® has two purposes,” says Al Iannuzzi, Senior Director, Worldwide Environment, Health & Safety and leader of the Earthwards® process. “The main purpose is to make our products greener - that’s the genesis for the whole project but, in addition, we also want to be able to communicate the benefits to our customers who desire greener products. We wanted to have a robust process that would enable us to be very comfortable with the green claims we are bringing to the marketplace.” 5 ACCELERATING THE BUSINESS In keeping with Johnson & Johnson’s Healthy Future 2015 sustainability goals, one of the significant goals is to achieve 60 Earthwards® recognized products by 2015. At the end of 2012 they are well over half way to achieving this goal with 34 products having achieved Earthwards® recognition, spanning all three market sectors. Al Iannuzzi points out that “many of our Earthwards® products sit at the top of their product categories, proving that our approach is helping drive our business success and address the needs of our customers.” MAKING A DIFFERENCE Measuring whether or not the Earthwards® process is making a difference was always going to be difficult. With PE’s extensive experience with enterprise sustainability management and product sustainability auditing, Johnson & Johnson was able to develop metrics that allow them to determine to what extent their efforts are working. Al Iannuzzi explains; “We use a metric that measures the percentage of Earthwards® generated claims that are actually being used to communicate with customers. The higher this percentage the more impact we know we are having and the more valuable the process becomes.” Life Cycle Thinking: Driving Product Development, Innovation & Marketing CLIMBING UP THE SUSTAINABILITY RANKINGS In just one year, Johnson & Johnson has been able to improve their position on the Interbrand Best Global Green Brands ranking. With the help of the Earthwards® process they have successfully become the sixth best Global green brand in the world. Al Iannuzzi sums it up, “at Johnson & Johnson, we believe human health benefits from a healthy planet. Making our products more sustainable through design magnifies their benefits and is simply good business.” Johnson & Johnson Caring for the world, one person at a time... inspires and unites the people of Johnson & Johnson. The company embraces research and science - bringing innovative ideas, products and services to advance the health and well-being of people. Employees of the Johnson & Johnson Family of Companies work with partners in health care to touch the lives of over a billion people every day, throughout the world. Johnson & Johnson has more than 250 operating companies in 60 countries employing approximately 129,000 people. Their worldwide headquarters is in New Brunswick, New Jersey, USA. PE INTERNATIONAL is one of the world’s most experienced sustainability software, content and strategic consulting firms. With 20 years of experience and 20 offices around the globe, PE INTERNATIONAL helps clients understand sustainability, improve their performance and succeed in the marketplace. Through market leading software solutions and consulting services, PE INTERNATIONAL has worked with some of the world’s most respected firms to develop the strategies, management systems, tools and processes needed to achieve leadership in sustainability. Visit us at: Contact us: PE-International.com James Fava Follow us on: facebook.com/PE.International twitter.com/pe_experts 6 Senior Director, Strategy & Business Development Founder, PSRT and Five Winds Strategic Consulting PE INTERNATIONAL, Inc 2260 Baseline Road, Suite 102 Boulder, CO 80302 Keith Sutter Sr. Product Director Sustainable Brand Marketing Environment Health Safety and Sustainability Johnson & Johnson 410 George Street New Brunswick, NJ 08901
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