University of Vaasa - Vaasan yliopisto

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In the analysis of the BASF Success and chemical management services and their
business models we have used the simple framework proposed by Halme et al. (2007)
in the context of materials and eco-efficient service innovation. The framework for
defining business model consist four questions for probing the market viability of a
service. First, each business has to consider what benefits can users or customers
derive from the service (compared to more traditional ways and means of fulfilling
their needs) i.e. added value to the customers. Second, they have to understand the
competitive advantage the service offers to the customer i.e. the strength of the
service in relation to competitive alternatives. Third, they have to understand what
capabilities and other resources does the provider or the network of providers have
and what capabilities and resources they still need. Fourth, they have to figure out
how the service is financed i.e. how the income flow is formed.
Eco-efficiency (EE) is one of the key concepts in analyzing BASF example 12 .
Origins of the concept lay in the early 1990s and since then have been utilized in
many different contexts. The fashion of the concept was that for the first time, at
least in business, the focus of environmental consequences was withdrawn to the preprocesses
as minimizing material throughput instead of end-of-pipe solutions. The
use of EE has been justified that it creates more benefits i.e. added value with smaller
resource and material usage and thus smaller environmental consequences. As EE
combines two dimensions of sustainability ecological and economic efficiency it
gives an opportunity to interpret interrelation of these dimensions. However the third
social dimension of sustainability is not included and thus needs to be added
separately when overall sustainability is assessed. This has proved to be surprisingly
difficult which can also be seen in the variety of eco-efficiency based tools for
analysis (KCL-ECO 13 , SimaPro 14 etc.) and paraller, yet not over lapping Corporate
Social Responsibility p standards. However it is very rare if not non-existing to see
all the three dimensions of sustainability used in a way that they contribute to each
other or are integral part of each other.
Although the practical implementation of eco-efficiency in companies has been
strongly promoted by the World Business Council for Sustainable Development
(WBCSD) (See e.g. DeSimone et al. 1997) and has gain favor in public, for example
the implementation of EE in publicly listed companies in Finland has been weak
(Hoffrén & Apajalahti 2009; Erkko, Melanen & Mickwitz 2005). The main reasons
of sticky adoption of EE in companies are the lack of suitable and determining tools,
goals and targets. Continuous improvement of EE alone is necessary condition to
reach more sustainable development (SD), but at the same in most cases it is not
sufficient condition (Hoffrén & Apajalahti 2009). Main critic of EE is the relativity
of the measure. As EE is relative measure despite increased efficiency the
availability of natural resources and the waste absorption capacity of the environment
can continue to decline. In practical measurement of EE economic dimension often
dominates and determines the direction of eco-efficiency (Apajalahti 2008). Other
critic is related to too small improvements as EE is compatible with modern
12 The data collected on practical measurement of eco-efficiency in IFEE –project (Indicators framework for ecoefficiency)
was funded by the Academy of Finland. Information and more on the results of IFEE can be found
from Apajalahti (2008).
13 For further information www.kcl.fi/page.php?page_id=166
14 For further information see www.pre.nl/default.htm