Embed Climate in Corporate Product Design Teams
Environmental Defense Fund and OnePointFive Academy
Decisions made during research and development (R&D) influence a product's environmental footprint as well as its ability to perform under changing market and operating conditions. Incorporating climate considerations early in the innovation process enables organizations to identify opportunities for improvement and create products better suited to evolving customer preferences supplier requests, regulatory requirements, and cost constraints.
Achieving product performance, compliance, and cost objectives increasingly requires consideration of the environment. Resource scarcity, climate-related supply chain disruptions and environmental pollution can affect resilient product development and reliable material access.
At the same time, growing demand for sustainable solutions is reshaping how R&D budgets are allocated. PwC estimated that companies could spend approximately $100 billion annually on sustainability-related innovation and product development over the next three to five years. Further, In a McKinsey survey of 78 product-development professionals across industries, 48% rated their organizations a 6 or 7 out of 7 for integrating sustainability into R&D. These trends suggest that R&D teams face both greater pressure and new opportunities to develop products that align with evolving customer, supplier, and regulatory expectations.
Evaluate Design Concepts Against Business and Environmental Criteria
Although R&D accounts for 5% or less of a product’s cost, it can influence up to 80% of its resource footprint. This makes the ideation phase one of the highest-leverage moments to improve both product performance and cost structure.
R&D team should evaluate product design ideas using environmental & business metrics such as product life cycle assessment, material intensity, energy demand, recyclability, and supply chain resiliency, in addition to traditional measures such as design, customer uptake, manufacturing feasibility and cost.
Industry frameworks & approaches can be leveraged by R&D teams here, such as the 12 Principles of Green Engineering & Ellen Macarthur’s Circular Design Guide for product design considerations, Multi-Criteria Decision Analysis (MCDA) as an statistical approach to weight up environmental & business metrics across product design alternatives, and WBCSD’s Circular Transition Indicators (CTI) for industry standard metrics.
Assess Environmental Impacts Across the Life Cycle
Next, Life Cycle Assessment (LCA) is a standardized method for measuring a product’s environmental impacts across its full life cycle—from raw material extraction and manufacturing to distribution, customer use, and end of life. Aligned with international standards such as ISO 14040 and ISO 14044, LCA can help R&D teams compare product design options, conduct sensitivity analyses of iterative changes, and evaluate impact categories available in industry-aligned life cycle inventory (LCI) databases, including energy use, water use, waste, and toxicity. Define the scope, functional unit, and system boundaries to ensure consistent comparisons. Use cradle-to-grave assessments for a full-system view or cradle-to-gate analyses for faster, early-stage iteration.
Collect data on materials, energy, water, emissions, and waste from laboratory testing, pilots, suppliers, or secondary databases. Consider using LCA software—such as Ecochain, openLCA, SimaPro, or Sphera— along with databases such as EcoInvent, to quantify selected product impact categories across relevant life cycle stages, timeframes, and system boundaries. For preliminary analyses or early-stage product assessments, companies may also use simpler spreadsheet-based modeling tools such as Excel. While less rigorous than dedicated LCA software, these tools are often more flexible, accessible, and widely used for screening assessments, comparing design alternatives, and identifying environmental hotspots. Use the results to prioritize redesign efforts around the most significant impacts, such as substituting lower-impact materials, improving manufacturing efficiency, simplifying product architecture, or reducing packaging before the next stage gate.
Redesign Around Life Cycle Impact Hotspots
Once life cycle hotspots have been identified, R&D teams should focus redesign efforts on the stages responsible for the greatest environmental impacts. For example, if material production is the largest source of emissions, teams can evaluate lower-carbon alternatives, increase recycled content, or reduce material use through lightweighting.
Addressing lifecycle hotspots is not only a sustainability opportunity but also an increasingly important business and regulatory consideration. As Extended Producer Responsibility (EPR) policies expand globally and across U.S. states, companies are facing new requirements related to the environmental impacts of their products and packaging. Insights from life cycle assessments (LCAs) and environmental product declarations (EPDs) can help organizations identify priorities, improve reporting, and reduce regulatory risk. For example, Oregon’s Plastic Pollution and Recycling Modernization Act (RMA), which took effect in July 2025, requires producers to report information on packaging materials, weight, and related environmental attributes. Failure to comply may result in financial penalties and other enforcement actions.
If manufacturing is a major source of impact, teams can reduce emissions by simplifying product architectures, minimizing processing steps, or selecting materials that require less energy to produce. If end-of-life impacts are significant, products can be designed for disassembly, repair, reuse, or recycling. By focusing redesign efforts on the most significant lifecycle hotspots, organizations can reduce emissions while maintaining product performance and managing cost and supply chain risks.
Beyond addressing immediate hotspots, R&D teams can embed circularity principles into product specifications from the outset. This may include designing for durability, disassembly, repairability, energy efficiency, and longer product lifespans. The Ellen MacArthur Foundation provides tools and frameworks that can help organizations integrate these considerations into existing product development processes.
Collaborate Across Functions
Effective material and design decisions require cross-functional coordination. In addition to working with sustainability leaders, R&D teams should partner with procurement to identify scalable materials that meet performance, cost, environmental, and supply reliability needs, while also engaging finance to connect design choices to lifecycle cost and ROI. This alignment helps demonstrate how upfront design changes can reduce long-term costs, improve margins, and support competitiveness.
Optimize Research and Development Operations
Improving efficiency within R&D labs and pilot operations directly boosts development speed while managing costs. To achieve this, teams can integrate smart energy-monitoring tools onto high-demand laboratory equipment, allowing them to optimize equipment scheduling, identify energy-intensive processes, and automatically power down idle systems. Project teams can likewise adopt Design of Experiments (DoE) methodologies to statistically optimize testing workflows—ensuring they gather the maximum amount of high-quality data using the fewest physical test runs possible.
Digital modeling and simulation offer another powerful way to accelerate timelines. By building virtual prototypes, engineering teams can test and refine multiple design scenarios digitally before committing to physical builds. This approach significantly reduces material waste in the lab, shortens iteration cycles, and improves the accuracy of design evaluations and confidence in final decisions.
Measure and Improve Performance
R&D teams should track environmental performance alongside traditional business metrics. One approach is to expand the traditional Balanced Scorecard into a Sustainability Balanced Scorecard, either by integrating sustainability metrics across existing categories or by adding a dedicated sustainability or ESG dimension.
Relevant metrics may include the percentage of products meeting eco-label or green certification criteria, reductions in material intensity, emissions reductions achieved through product redesign, and cost savings generated through resource efficiency improvements. Integrating these measures into existing performance management systems helps ensure that sustainability objectives are considered alongside cost, quality, innovation, and customer outcomes.
Organizations should track a mix of input, process, and outcome metrics. Input metrics might include the percentage of the R&D budget allocated to low-carbon or sustainable innovation initiatives. Process metrics could measure the extent to which life cycle assessments (LCAs) are incorporated into product design and development decisions. Outcome metrics may include reductions in Scope 1, 2, and 3 emissions associated with products, improvements in product circularity, or the percentage of revenue generated from more sustainable products and services.
Case Study
Nestlé Cuts Emissions Through R&D
Nestlé applied its R&D expertise to develop lower-carbon ingredients and improve the environmental performance of agricultural raw materials. In 2024, participants in the Nescafé Plan achieved reductions of 20%–40% in greenhouse gas emissions per kilogram of green coffee in locations where farm-level data were collected. Nestlé attributed these results to regenerative agriculture practices, including optimized fertilization, soil cover, mulching, and composting.
Nestlé also incorporated packaging considerations into product development. By the end of 2025, 89.5% of its packaging was reusable, recyclable, or compostable, and the company had reduced its use of virgin plastic in packaging by 28% from a 2018 baseline. Nestlé reported pursuing lighter packaging, alternative materials, recycled content, and reusable and refillable systems as part of its approach to reducing packaging waste.