Identify the general opportunities and threats across the value chain

OVERVIEW

Having identified sustainability-related threats and opportunities, in this activity you will try to identify other sources of threat and opportunity that are not directly linked to sustainability issues.

INPUT

Choice of market to be investigated, from the activity PR.1 Evaluate potential markets.

OUTPUT

A structured list of sustainability challenges and opportunities for the value chain, used in the activity PR.6 Develop a value chain vision.

HOW TO GO ABOUT IT

Try to identify issues or trends that are or could have an impact on your target value chain using the PESTEL prompts table provided on the right.

Capture the issues and trends you have identified in the PESTEL template provided.

Capture details of the information source or an illustrative example of the trend, as this will be useful to provide credibility to your analysis when pitching to prospective companies.

For each issue that you have identified estimate:

Impact–What level of impact could the issue have on the value chain? Use a scale from 1-5 where: 1= Potential to create limited change within a limited part of the value chain, and 5 = Potential to revolutionise or destroy the entire value chain.

Likelihood–How likely is it that the issue will have an impact on the value chain? Use a scale where: 1= Very unlikely, 5= Very likely.

Time scale – When will the issue will start to have an impact on the value chain? Indicate the expected timescale using the categories of: ‘Within 6 months’, ‘Within 2 years’, or ‘More than 2 years’ time’.

Decide which of the issues are ‘significant’ for the value chain by:

Calculating the significance score, where Significance = Impact x Probability.

Decide what score to use as the threshold for significance -9 is suggested.

Review the table and highlight any issues that have a significance score greater than or equal to the significance threshold.

Finally, categorise the significant issues as either ‘opportunities’ (is- sues that might have a positive impact on the value chain) or ‘threats’ (issues that might have a negative impact on the value chain).

Tips & Tricks

OVERLAP BETWEEN HEADINGS

There is inevitably some overlap between the headings used in the PESTEL analysis. For example, a new piece of environmental regulation could be included under the ‘Political’, ‘Environmental’ and ‘Legal’ headings. How you classify is not important as they are only prompts. The important thing is to ensure that all relevant issues have been captured.

ADD YOUR OWN

The prompting questions provided are not exhaustive so try to think of and answer some of your own questions.

OVERLAP WITH LCT

There will also be overlap between the PESTEL analysis and the results of the Life Cycle Thinking template, particularly within the ‘environmental’ and ‘social’ headings. Try to focus on the topics not already captured within the Life Cycle Thinking template.

POLICY GUIDANCE

The accompanying publication Mainstreaming Policies for Eco-Innovation’ (UN Environment) is a useful source of information on types of policies that are being used to stimulate eco-innovation.

PR.5 Identify the general opportunities and threats across the value chain