In 2010, I wrote a piece on sustainability. At the time, my point of view was that it’s a challenge too big and too complex for governments alone; particularly with the financial growth of nations such as China, Brazil and India, where consumers were beginning to get a taste of their newly acquired buying power. Back then I thought it would take a change in human behavior to have a real impact on business practices … people seeing the threats to their environment the way they once saw the threat of smoking to their health.
So, it’s 2016, where do we stand?
In 2010, I wrote a piece on sustainability. At the time, my point of view was that it’s a challenge too big and too complex for governments alone; particularly with the financial growth of nations such as China, Brazil and India, where consumers were beginning to get a taste of their newly acquired buying power. Back then I thought it would take a change in human behavior to have a real impact on business practices … people seeing the threats to their environment the way they once saw the threat of smoking to their health.
So, it’s 2016, where do we stand?
From protecting reputations to saving money
McKinsey has surveyed global companies in 5-year intervals on the subject of sustainability. The early research shows that companies joined the sustainability revolution in order to keep up and not fall behind this megatrend. Their primary motivator was reputation. ‘Yes indeed, we’re all over sustainability…here’s our program.’ Later surveys showed significant changes in both attitude and practice: “Sustainability has long been on the agenda at many companies, but for decades their environmental, social and governance activities have been disconnected from core strategy. Most still take a fragmented, reactive approach, launching ad hoc initiatives to enhance their “green” credentials, to comply with regulations or to deal with emergencies — rather than treating sustainability as an issue with a direct impact on business results.”
But midway through the second decade of this new millennium, companies that have seen the cost-saving advantages of sustainable practices are reaping the rewards. Packaging comes to mind! With the retail footprint shrinking, more and more people are ordering online. So rather than schlep things home from the store, they click “buy” and wait for the package to arrive. This trend has put a lot of pressure on packaging companies to manage the ethics of consumer demand versus impact on the environment. And it’s not just small consumer purchases that compound the dilemma. One leading packager had a regular order from a company that made custom-designed iron doors; each weighing over 1,000 lbs. Traditional corrugated packaging added to the weight, impacting transportation and labor (it took 16 men to move the package) and they often arrived damaged. Using a laminated solution, the packaging was lighter and more protective. Assembly went from 16 hours to 6. Savings on packaging was 50 percent. And energy savings on transportation was reduced by 30 percent. Everybody wins.
There are many examples like the above, but according to McKinsey: “Overall, the relationship between sustainability and quantifiable value is still somewhat unclear.” One-third of executives responding to a recent survey said “they don’t know how much sustainability initiatives add up to shareholder value at their companies.” Plus, the share that rate sustainability’s contribution to short-term value as positive has only inched up since earlier surveys.”
How businesses are paving the way
The corporate response to sustainability is all over the board. A simple Google search on CPG companies and sustainability brought up a Kraft site dedicated to the subject. It’s a simple listing of the steps they are taking and the outcomes under categories such as: energy, waste, packaging, water and transportation. It lists the percentages of reduction in each area; a good report card on its sustainability efforts. I’m sure a deeper look at the company’s product and packaging solutions reveals sustainability efforts throughout the organization. But putting out a report card is one way to keep the “green” police at bay.
Companies such as IKEA are launching well-publicized initiatives such as its “People and Planet Positive Strategy.” According to Chief Sustainability Officer Steve Howard: “We are investing heavily in both energy efficiencies and renewable energy. We have a goal to produce more renewable energy than all the energy we use by 2020. Plus we’re rolling out energy-efficient lighting, which will save our stores around €15 million in electricity costs every year.” Looking to “green” their supply chain, IKEA conducts more than 1,000 audits per year to ensure all of its suppliers meet the social and environmental requirements in the company’s supplier code of conduct, IWAY. Kanani says, “Through joint projects, our suppliers improved energy efficiency more than 10 percent. This is good for the environment and also results in cost savings for IKEA suppliers.”
IKEA recently started selling solar panels. It reports that 90 percent of its customers want to save energy at home. Kanani sees sustainability as a business opportunity and believes there is no turning back: “Sustainability has gone from nice to do to a must-do. It is about building a successful business for the long term. Sustainability will be a decisive factor in determining which businesses will be here in 20 or 30 years’ time.”
Product design at the forefront
Product designers are making some of the most innovative contributions to sustainability, either by replacing existing products or envisioning new ones in the new product development (PD) process. A few examples...
LEGO designers created more planet-friendly materials for the company’s toy bricks with the same properties and durability of the old ones, in order to maintain consumer satisfaction while upholding its planet promise.
Apple products have been improved over the years to become more sustainable. Electricity consumption during the “sleep” mode on the iMac has improved 97 percent. And toxins have been eliminated from the whole design process.
Our client fairlife has reinvented the milk category. With sustainability at the center of its business model, fairlife focuses on sustainable practices and animal welfare to naturally produce organic milk that is more nutritious, lactose- and hormone-free and higher in calcium and protein. Its success is characterized by the corporate theme, ”Believe in Better.”
One of my favorites is “Always Bee,” a honey brand we helped to create. Derived from “homesteading,” the product was conceived to address the plight of the honeybee defined as “collapse disorder.” We designed a sustainable package made from a recycled material. We used a natural cork and a label printed with water-based soy inks and designed on seeded stock which, when replanted, will flourish into wild flowers and attract honeybees.
Circling back
So was my 2010 prediction true? Sadly, I fear not enough has occurred and the industry has moved on from “sustainable” buzzword to the “innovation” it girl. I can only trust that all of this innovation thinking and activity is seriously considering sustainability as part of the solution. Do we have another 6 years to wait, I wonder?
I recently attended the Cleaning Products Conferences in Sao Paulo and Rome – events I had hoped would be tackling the subject head on, considering the products that most of the delegates produce poison our rivers with their product or packaging … sometimes both. What became evident very quickly in both conferences is that if “sustainability” is covered in a few slides during any of the presentations then it seems to be a passing grade for the audience that the company or brand is at least “trying” to address the issue. Sorry, ladies and gentlemen – not good enough by a long shot.
However, a bright spot during the conference in Sao Paulo was a Brazilian company called Wise Waste. This was something different, something fresh, provocative – a challenge with real, everyday solutions. Sustainability is action and with fearless collaboration that I suggest if you have made it this far in reading then you discover for yourself.
Is sustainability a movement that will only succeed through human behavior? Yes and no. A review of the current research shows that the combined efforts of regulators, business strategies and product designers, as well as consumers, are having the greatest impact. I still believe you can’t legislate human behavior, but when people see others in their neighborhoods and at their workplaces making real efforts to improve the environment, the result can be viral! Keeping up with the Jones’ could have a whole new meaning and a far greater impact beyond the cosmetic.
Published Apr 29, 2016 11am EDT / 8am PDT / 4pm BST / 5pm CEST