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Society's transition towards sustainability comes with radical change, which entails significant threats and opportunities for product development and manufacturing companies, for example related to new legislation, shifting customer preferences, and increasing raw material prices. Smart risk management therefore plays a key role for successfully maneuvering society's sustainability transition. However, from a company perspective, it remains challenging to connect the macro-level societal change with tangible risks for the business on the micro level. Based on interviews with academic and industrial experts, this study identified 21 key aspects for sustainability risk management. Drawing on these results and research from the areas of transition design, strategic sustainable development, and sustainability risk management, a conceptual approach for strategic risk management within the sustainability transition is presented. It builds on layered, double-flow scenario modelling in which backcasting from a vision, framed by basic principles for sustainability, is combined with forecasting from the present. The implications of such scenarios, i.e., risks, can then be identified and managed. By doing so on different scales, connections between macro- and micro-level change can be established. Thereby, product development companies shall be supported in making sustainability an intrinsic part of decision-making across the strategic, tactical, and operational levels to increase competitiveness while contributing to the transition towards a sustainable society. [ABSTRACT FROM AUTHOR]

Companies, striving towards an effective and systematic integration of a strategic sustainability perspective in product innovation, need to treat the implementation of necessary processes and tools, as well as their continuous improvement, as a project in itself. An efficient way to measure the current sustainability implementation level in the organization, as well as guidance for progression, is required. To meet this need, a novel self-assessment was developed, which provides companies with a tool to assess and visualize their current capabilities in relation to key elements for successful sustainability integration in the product innovation process. It includes a scale of different sustainability implementation levels to support building a roadmap for systematic implementation, and to measure progress over time. This research is based on results from previous descriptive work within the area of sustainable product development and learning from applying strategic and tactical assessment tools for eco-design and sustainability maturity. Besides the contribution to practice, this study also contributes to knowledge by specifying detailed aspects for each key element that must be considered to guide sustainability integration. Also, insights from applying different existing tools in real cases are provided. The newly-developed self-assessment method was applied and validated at two case companies. Independent and continuous use of it by the companies beyond this particular study indicate the practical value of the method. [ABSTRACT FROM AUTHOR]

Many of the most important business and economic risks are directly linked to environmental and social issues. This includes both threats and opportunities, not only in relation to reputation, which is often mentioned in this context, but, even more importantly, in relation to innovation capability and legislative change on inevitably more and more sustainability-driven markets. It is, however, unclear through which mechanisms such sustainability risks currently affect companies and how they can be systematically identified and managed. Based on the Framework for Strategic Sustainable Development, this study investigates the dynamics and implications of society's sustainability transition from a company risk management perspective. In addition, exploratory and descriptive studies were conducted at two large product innovation companies to identify current risk management practices and preconditions for sustainability integration. The results reveal that a society moving closer towards a collapse of environmental and social systems leads to increasing sustainability-related threats for unsustainable businesses and increasing opportunities for sustainable businesses. Also, risk management is found to be a promising way for maneuvering in a smart zone between being too passive and being too pro-active in relation to sustainable innovation. The study participants at the case companies were knowledgeable about risk management in general but were largely unfamiliar with risks associated with sustainability and no processes or support tools exist to work systematically with such risks. Key steps to accomplishing an integration of a strategic sustainability perspective into risk management are proposed as: (i) identifying the effects of sustainability issues on internal and external stakeholder value; (ii) actively including sustainability in objective setting and cascading objectives across the levels of the organizational hierarchy; and (iii) developing concrete support for identifying, assessing, and managing economic sustainability risks. Thereby, companies can enhance their competitiveness while providing leadership in the sustainability transition. [ABSTRACT FROM AUTHOR]