04 asei 20121120_singapore final_ryu

ASEM Eco-Innovation Index (ASEI) 2012 Measuring Sustainable Future for Asia and Europe

22nd November 2012 Singapore by Sustinvest

ASEM Eco-Innovation Index (ASEI) 2012 Project

Strictly Private & Confidential 2

Background of ASEI (1)

The concept of Eco-Innovation was first developed and promoted in Europe. Since then, the concept has been diffused into national and regional policies and initiatives in Europe. There has been previous works on developing frameworks or guidelines to measure eco-innovation but only one index (Eco-Innovation Scoreboard) exists that quantitatively measure eco-innovation Eco-Innovation Scoreboard only measures European countries using data source focused on European countries such as EUROSTATS, EUROBARAMTER ASEM Eco-Innovation Index is the first attempt to measure eco-innovation of countries beyond Europe The concept of Eco-Innovation is slowly understood by Asian countries, thus important to include Asian countries when measuring eco-innovation status of countries.



Sustainable Development

ASEIC Focus

SMEs

Eco-Innovation

Encourage win-win development of SMEs in ASEIC Member countries

Enhance communication & partnership between Europe & Asia on eco-innovation

Expected Outcome of ASEI

Background of ASEI (2)

In line with the vision of ASEIC(ASEM SMEs Eco-Innovation Center), the ASEI anticipates Asian countries and companies particularly SMEs to participate in promoting eco-innovation To establish an active communication stage between Europe and Asia with eco-innovation data Stepping forward from understanding the concept of eco-innovation to measuring eco-innovation


Objective: To develop as an international tool to quantitatively and qualitatively measure the level and status of eco-innovation of ASEM member countries

Project Duration Time: Started in June 2012 and expect to end in Dec 2012 (scheduled to be officially launched in December 2012)

Project Initiated by ASEIC (ASEM SMEs Eco-Innovation Centre) & Funded by SMBA (Small and Medium Business Administration)

Project Implemented by: Sustinvest (Korea’s first Social Responsible Investment & Sustainability Research & Consulting firm) with support of Sustainalytics



Expected Outcome: 1) Evaluate each country’s capacity and potential on eco-innovation and identify different

levels of eco-innovation in Europe and Asia

2) Promote eco-innovation at regional and global level creating an active stage of communication between Europe and Asia

3) Encourage governments to enhance their eco-innovation related policies and regulations

What is Eco-innovation?

“Eco-innovation is any form of innovation resulting in or aiming at significant and

demonstrable progress towards the goal of sustainable development through reducing impacts on the environment, enhancing resilience to environmental pressures, or achieving a more efficient and responsible use of natural resources.”

- European Commission Eco-Innovation Action Plan (2012)


1996

The concept of eco-innovation firstly introduced (Claude Fussler et al, 1996)

2011

ASEM ASEIC Established

2013 2012

The Global Cleantech Innovation Index launch (Cleantech Group & WWF)

2008 2004 2007 2009 2010 2000

Environmental Performance Index launch (Yale & Columbia University)

EU Eco-Innovation Scoreboard launch

(The Eco-Innovation Observatory)

12th European Forum on Eco-Innovation

2006

Project/Initiative

Workshop/Forum

Index Development

Others

ASEIC

EU Commission: Environmental Technologies Action Plan (ETAP) initiative launch

OECD Workshop on Environmental Innovation & Global Markets

European Forum on Eco-Innovation Launch

OECD Global Forum on Environment & Eco-Innovation

1st ASEM Eco-Innovation Index Launch

- OECD Project on Green Growth & Eco-innovation launch - EU Commission Eco-innovation initiative launch

History of Eco-Innovation



Why Measure Eco-Innovation? (1)

1) Importance of Eco-innovation in Green Growth Agenda

Eco-innovation is a “key pre-requisite for sustainable development”* at macro level as it brings positive synergetic effects towards economic, social and environmental conditions of a country.

*The future of Eco-Innovation The Role of Business Models in Green Transformation, OECD, 2011

“Eco-innovation aims to create both economic and environmental value, and business models act as a value driver and enabler of green technologies and solutions… Many governments now regard eco-innovation as part of their growth strategy” (OECD, 2012)

“Eco-Innovation is increasingly perceived as a business opportunity, which could emerge in many different sectors. (UNESC, 2011)



“… no existing measurement approach can capture the overall trends and characteristics of eco-innovation. Further progress in benchmarking and indicators might include the development of an “eco-innovation scoreboard” which combines different statistics or the design of a new dedicated survey.”

“… the field of eco-innovation lacks statistics and indicators. The challenge consists very much of trying to align two well-developed but different set of indicator bodies, the environmental and the innovation set… a considerable need for conceptual as well as methodological clarifications in order to develop eco-innovation indicators.”

“Further progress in benchmarking and indicators might include the development of an “eco-innovation scoreboard” which combines different statistics or the design of a new dedicated survey” (OECD, 2009)

“So far quantitative empirical analysis of eco-innovation is very limited…. Defining and operationalizing eco-innovation is the key problem” (EEA, 2006)

Why Measure Eco-Innovation? (2)

2) Enhance Comprehensive Understanding of Eco-innovation


Purpose of ASEM Eco-Innovation Index

Trends: Understand eco-innovation trends in Europe and Asia Status: Identify the eco-innovation status of ASEM member countries Gap Difference: Close the eco-innovation gap difference between Europe and Asia Strength & Opportunities: Analyze strength and opportunities of eco-innovation for each country and region Policy Making: Motivate emerging economies to accelerate the rate of developing and preparing appropriate eco-innovation policies and strategies at national & regional level Raising Awareness: Raise awareness on eco-innovation at local, regional and global level Encouragement: Encourage society and companies to increase eco-innovation efforts


Analyze limitations and strengths of current sustainability and eco-innovation related index

Determine assessment standards & countries Study related research data and literature Gather feedback from renowned experts

Define a clear concept of eco-innovation to be measured

Create assessment

framework Aggregation Outcome Report

1st ASEI 2012 Weighting

determination

Select best available data source,

criteria & indicators Measure & analyze

연구 기획

Enhance & improve assessment tool and methodology

Incorporate advice & feedback Expand country coverage

2nd ASEI 2013

ASEI Development Methodology

Step 1.

Step 2.


Important Factors when building ASEI Framework

Defining the Concept of eco-innovation -Assessment framework for eco-innovation vary depending on how eco-innovation is defined “So far quantitative empirical analysis of eco-innovation is very limited…. Defining and operationalizing eco-innovation is the key problem” (EEA, 2006) Pre-study of sustainability and eco-innovation related indexes: EPI (Environmental Performance Index), GII (Global Innovation Index), GCI (Global Competitiveness Index), Cleantech Index, EIO (Eco-innovation Observatory Index), etc. Determine Assessing Countries

Analyze limitations and strengths of current sustainability and eco-innovation related index

Determine assessment standards & countries Study related research data and literature Gather feedback from renowned experts

Define a clear concept of eco-innovation to be measured

Step 1.


15 countries

20 countries

30 countries

1st Screening: Economic Level Select top 30 countries based on the average of the country's ranking of GDP in total and that of GDP per capita

3rd Screening: Information Availability Select 15 countries based on data availability and information credibility

46 ASEM member countries

2nd Screening: Level of Environmental Load Select top 20 countries with heaviest environmental load based on total CO2 emissions, CO2 emissions per capita, trends in CO2 emissions, level of water scarcity and water consumption per capita

Austria, Belgium, China, Denmark, France, Germany, India, Indonesia, Italy, Japan, Korea, Malaysia, Sweden, Thailand, United Kingdom

ASEI 2012 Assessed 15 Countries

Selection Criteria of Countries for 1st ASEI


2nd Stage: Index Development & Assessment (1)


Create assessment framework

Select best available sources

for indicators

Aggregation

Weighting determination

Measure & analyze

Qualitative Research

Outcome: ASEI Report

Pre-studied eco-innovation frameworks consisted of input, process and output criteria ASEI framework consists of four criteria: -eco-innovation capacity -eco-innovation activities -eco-innovation supporting environment -eco-innovation performance


Eco-Innovation Capacity Includes indicators that reflect country’s capacity & potential to generate eco-innovation

Eco-Innovation Activities Includes indicators that reflect country’s current eco-innovation activities (green technology, EMS, etc)

Eco-Innovation Supporting Environment Includes indicators that evaluate government’s effort in creating supporting environment to promote eco-innovation and enhance overall green competitiveness of companies, industries and the economy

Eco-Innovation Performance Includes indicators that measure a country’s resource efficiency, economic, social and environmental performance

ASEI Assessment Framework Storyline



Due to lack of statistical data source related to eco-innovation at national level, accountable generic data was determined to create composite indicators Currently available eco-Innovation indexes focus on measuring eco-innovation of advanced countries, mostly European countries using sources from EUROSTATS and other European research institutes. -Limited data is available to measure various aspects of eco-innovation of Asian countries. Expert's AHP Survey Process: - Environment/sustainable management experts were selected and asked to participate in the AHP survey - Based on the experts survey results, relative importance of each indicators and its reliability were calculated. - Based on the calculated importance, 20 indicators were selected and applied to the ASEI framework.

Included SMEs representative indicators




for indicators

Aggregation


Measure & analyze




Criteria Indicators

Eco-Innovation Capacity

Country’s Economic Competitiveness

General Innovation Capacity

Level of Awareness on Sustainability Management

Value of Investment in Green Technology SMEs

Jobs in Green Technology Industry

Eco-Innovation Activities

Renewable Energy Utilization level

Green Patents

Level of Commercialized Green Technology SMEs

Green Technology SMEs at Early Stage

Level of Environmental Management

Turnover of Environmentally Friendly MNEs

Eco-Innovation Supporting Environment

Investment Maturity of Green Technology Industry

Government’s R&D Expenditure in Green Industry

Level of Environmental Laws

Country’s Commitment to International Environmental Agreement

Eco-Innovation Performance

Green Industry Market Size

Water Consumption Intensity

CO2 Emission Intensity

Energy Sustainability Level

Level of Environmental Impact on Society

ASEI Assessment Framework






for indicators

Aggregation


Measure & analyze



Due to lack of statistical data source reliable qualitative research was added to analyze the trends and issues on eco-innovation for each country Research policies, regulations and programmes that are related to eco-innovation Included business case studies representing various ways of implementing eco-innovation at firm level


Country Eco-Innovation Capacity

Eco-Innovation Activities

Eco-Innovation Environment

Eco-Innovation Outcome

Austria 56 31 68 39 Belgium 70 37 61 34 China 55 32 70 32 Denmark 88 65 58 60 France 75 48 67 56 Germany 75 41 63 50 India 60 27 59 17 Indonesia 45 19 49 15 Italy 53 43 55 40 Japan 65 31 57 48 Korea 61 38 60 28 Malaysia 54 18 56 25 Sweden 85 79 79 67 Thailand 49 17 46 18 United Kingdom 82 66 87 47

ASEI 2012 Results


0

20

40

60

80

100

Eco-InnovationCapacity

Eco-InnovationActivities

Eco-InnovationSupporting

Environment

Eco-InnovationPerformance

EU Average ASIA Average

European and Asian countries are at different stages of understanding and implementing eco-innovation The EU is the frontrunner of eco-innovation leading the global eco-innovation market, initiatives, trade and industry. In comparison to the EU countries, Asian countries are just starting to get familiar with the term “eco-innovation.” Europe and Asia are in different maturity level of eco-innovation. As late starter of eco-innovation, Asian countries are behind in all four criteria of examined scope of eco-innovation

ASEI 2012 Results: Regional Findings


1. Growing Eco-Innovation Capacity in Asia Asian countries like Korea, India, China

demonstrate rapid growth in eco-innovation capacity and growing awareness on green growth

0102030405060708090

100

Eco-Innovation Capacity Eco-Innovation Activities

2. Importance of bridging the gap between Eco-innovation Capacity & Eco-innovation Activities Top runners of eco-innovation show smaller gap

between eco-innovation capacity and eco- innovation capacities (e.g. Sweden)

Bridging the gap between eco-innovation capacity and eco-innovation activities is a challenge for both European and Asian countries

Governments need to play a central role through government regulations and policies to transform eco-innovation potential to actual activities that can eventually improve the environmental performance at national level.

ASEI 2012 Results: Five Main Regional Findings (1)


3. Growing Support for Eco-Innovation from Asian governments

Strong correlation between eco-innovation supporting environment and eco-innovation activities (e.g. top runners of ASEI are United Kingdom, Sweden and Denmark)

While the regional policy mix of European countries targets direct stimulation of eco-innovation (e.g. EcoAP) Asian countries have different policies and regulations with varying focused areas and targets related to eco-innovation set at national level


Increasing support from the Asian governments on renewable energy, green technology and other environment related areas


4. Europe puts effort on both Non-Technical and Technical Eco-innovation European countries demonstrate various types of non-technical eco-innovation via mostly changing its

operation process, marketing strategy, designs of products and production process

Asian countries’ eco-innovation is more technical focused with green technology funding programmes


5. Different Stage in Eco-Innovation Performance Many European countries are achieving both environmental and economic outcomes through good eco-

innovation performance while Asian countries lag behind

6. Each Country has its own eco-innovation focus and strengths Due to different economic, social, political and cultural environment and levels each country demonstrates

eco-innovation activities on the basis of each country’s strength and opportunity


ASEI 2012 Results: Country Findings

e.g. Sweden


Firm linkage between eco-innovation capacity, activities, environment and performance is crucial for eco-innovation to contribute to green growth Integration of innovation and environment focused policies, national strategies, business models, regulations, awareness, products, designs, services, technologies and practices is beginning of any eco-innovation activities Some Asian countries like Korea are striving their way to put eco-innovation at the heart of their green growth agenda following the frontrunners (European countries) Qualitative and quantitative analysis helps to analyze the signs of what types of eco-innovation may emerge in the next ten years in which country and region Broader understanding of the concept eco-innovation provides wider space for various eco-innovation activities to emerge in different sectors in a variety of novel ways

Conclusion


Conclusion

Limitations and Challenges Better quantitative data and qualitative analysis on eco-innovation are needed for more accurate

measurement of eco-innovation

Lack of availability of comparative data for eco-innovation puts the limitation on ASEI especially for Asian countries

2013 2014 2012

15

ASEM Member

countries46

24

Number of Countries

ASEI 2012: 15 countries ASEI 2013: 24 countries ASEI 2014: 46 countries

Expand number of countries to be assessed

Improve assessment framework improving the limitations of ASEI 2012


04 asei 20121120_singapore final_ryu

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