For some people, it is asking a lot to believe in a future that
seems to hold so little promise. Al Gore’s movie on global
warming, “An Inconvenient Truth,” leads us to believe
that we can expect more storms like Hurricane Katrina because of
our greenhouse-warmed world. Gore’s dire predictions of death
and destruction might lead some of us to wonder if it is too late
to read the labels; to do good even when it is not expected. His
apocalyptic vision of smoggy skylines, gridlocked traffic and smokestacks
are interspersed with crashing glaciers and storm-ravaged cities.
Most retailers are ready to paint their stores green. They know
that green is good for business; it is the “right” thing
to do. In order for retailers to sell green, they must buy green.
Suppliers must be ready to manufacture sustainable product lines.
A growing number of companies see the interests of investors and
those of the environment as closely aligned. Most of today’s
environmental initiatives are not just public relations campaigns
intended to fool consumers. Instead, many corporations are going
green because they’ve recognized the gigantic profit opportunities
in doing so—and the competitive danger of lagging behind.
Multi-billion-dollar retail giant Wal-Mart has launched an aggressive
program to encourage “sustainability” of the world’s
fisheries, forests and farmlands; to slash energy use and reduce
waste; to push its 60,000 suppliers to produce goods that don’t
harm the environment; and to urge consumers to buy green. Wal-Mart’s
real environmental impact is expected to come through influencing
its supply chain. Its influence will also be passed forward to its
customers. Wal-Mart has direct, personal relationships with millions
and millions of ordinary Americans, putting the retailer in a prime
position to educate them about eco-friendly products.
A few months ago, Wal-Mart President and CEO Lee Scott unveiled
“Sustainability 360”—a company-wide emphasis on
sustainability extending beyond Wal-Mart’s direct environmental
footprint to engage associates, suppliers, communities and customers.
In describing this initiative, Scott said, “Sustainability
360 takes in our entire company — our customer base, our supplier
base, our associates, the products on our shelves, the communities
we serve. And we believe every business can look at sustainability
in this way. In fact, in light of current environmental trends,
we believe they will, and soon.”
As an example of this way of working, Scott also announced the company’s
intention to introduce “global innovation projects”—one
of which is a challenge for Wal-Mart associates and suppliers to
start thinking about how to remove non-renewable energy from the
products the company sells.
This admirable effort is not entirely altruistic. Business eco-makeovers
need not be an act of altruism. Reducing waste—wasted energy,
wasted packaging and wasted time—is the very essence of good
management. Wal-Mart knows it can make money by selling environmentally
friendly products. Wal-Mart pushes GE compact fluorescent light
bulbs, and consumers are beginning to catch on. Sales across the
industry are up, while sales of traditional incandescent bulbs have
fallen. Spurred on by that kind of success, Wal-Mart has formed
14 sustainable value networks made up of employees, suppliers and
environmentalists. These groups get together regularly to brainstorm
how products that do not hurt the environment can be made or bought.
The result: Wal-Mart has become the world’s largest buyer
of organic cotton. It introduced fair-trade coffee at its Sam’s
Clubs. It began selling some organic foods in the spring, and will
introduce others this fall. And it is pushing suppliers to use smaller
packages to cut waste. From now on, if you are a manufacturer selling
to Wal-Mart, you had better be thinking about smaller packaging,
less packaging and recyclable packaging.
Coca-Cola, for one, has made a commitment to minimizing the ecological
impact of packaging. It is described as its 3E—efficiency,
effectiveness and eco-innovation—approach to design. Coca-Cola
is improving packaging efficiency through eliminating raw material
use, and ensuring that the materials used are safe and resourceful
over their entire life. Coca-Cola designers strive to develop new
environmental technologies that enable responsible packaging innovation.
Perhaps nowhere has this work been more pronounced than in its efforts
in plastic bottle packaging, wherein technologies continue to advance,
including production of “recycling-friendly” caps, labels,
inks, adhesives and bottle colors.
Downsizing a product’s package can be tricky. Packaging provides
a vehicle for brand communication. It is a way to protect products
from damage and contamination, and include important safety and
usage information. The problem is, although the contribution of
packaging to the total waste stream is small by weight, it represents
a higher proportion of household waste by volume. Products are sold
on store shelves by volume. Bigger packages get more shelf space
and can catch consumers’ eyes better. That was the problem
when Wal-Mart pushed Unilever to downsize its laundry detergents.
Naturally, Unilever was reluctant to lose shelf space.
Incidentally, Unilever practices the life-cycle assessment to evaluate
the potential effects of products on the environment. The company
is using the knowledge gained to find additional ways to reduce
overall impact from packaging and distribution across its product
categories.
Wal-Mart is mapping whole product lines to find out where there
may be potential for negative environmental impact along the way.
Wal-Mart has developed a “Packaging Scorecard” program
to gauge the progress vendors are making in reducing packaging waste
and assisting in the protection of natural resources and the environment.
This program is part of Wal-Mart’s initiative to reduce vendor
packaging by five percent by 2013.
Subsequently, Unilever’s priorities include developing an
overall strategy, mapping its packaging footprint and progressing
the sustainability issues around the materials used. As these issues
affect the whole consumer goods industry, Unilever works in partnership
with industry and stakeholder groups like the Sustainable Packaging
Coalition, a group of more than 50 companies including packaging
producers, users and retailers, to explore joint action. The Sustainable
Packaging Coalition is a project of GreenBlue, a nonprofit organization
that provides technical, administrative and mission support to the
Coalition.
GreenBlue began as a nexus of projects at McDonough Braungart Design
Chemistry (MBDC), the private sustainable product and process design
consultancy co-founded by American architect William McDonough and
German chemist Michael Braungart in 1995. The institute stimulates
the creative redesign of industry by focusing the expertise of professional
communities to create practical solutions, resources and opportunities
for implementing sustainability. GreenBlue uses design as a leverage
point for effective action.
There is more to these corporate efforts than just being good corporate
citizens and courting public approval by taking on a top-of-mind
issue. There are huge cost savings as well. Being an efficient and
profitable business goes hand-in-hand with being a good steward
of the environment. Wal-Mart’s environmental enterprises are
paying off much like the rest of its business model—in economies
of scale, long-term profits and industry influence.
Retailers from specialty to chain to department store seem enthusiastic
about sustainable products. Environmental impact is starting to
effect consumer spending, and many marketing executives are paying
attention.
Starbucks is another major corporation that has shown real leadership
by demonstrating how its supply chain can be a powerful tool for
conservation and sustainable livelihoods. Starbucks defines sustainability
as an economically viable model that addresses the social and environmental
needs of all the participants in the supply chain, from farmer to
consumer. By expanding purchases through its C.A.F.E (Coffee and
Farmer Equity) Practices program and paying premium prices, Starbucks
is providing farmers with an important incentive to grow coffee
in an environmentally friendly manner.
C.A.F.E. Practices are used to evaluate, recognize and reward producers
of high-quality, sustainably grown coffee, and were developed in
collaboration with Scientific Certification Systems (SCS), a third-party
evaluation and certification firm. SCS has positioned itself for
the coming wave of interest in sustainability through its launch
of the SCS Sustainable Choice brand, the first certification program
that recognizes comprehensive sustainability achievements.
Identifying standards and sustainable practices for the textile
supply chain is one of many initiatives that reflect Wal-Mart’s
commitment to leadership in business sustainability. The scope and
scale of the company’s business presents great potential to
effect positive change. Through its business sustainability program,
Wal-Mart takes advantage of and creates opportunities both to influence
its own operations and to lead change in the business world at large.
Wal-Mart’s efforts cast a long shadow. Corporations increasingly
understand that their purchasing decisions can either enhance or
detract from their socio-environmental responsibility profile. For
such clients, “off the shelf” certification programs
may not be the best fit, due to product availability, supplier compliance
or program complexity. A new sustainability certification program
for carpets and rugs introduced just two months ago is already building
significant momentum, indicative of a growing drive in the green
building sector to address social responsibility issues alongside
environmental improvements and product performance.
The plan is to expand the SCS Sustainable Choice brand into other
building industry product categories. “In every industry sector,
purchasers, specifiers and consumers are increasingly demanding
full accountability for the sustainability of the products they
use,” said Linda Brown, SCS executive vice president. “And
product manufacturers are taking notice.” Brown cited an October
2006 Financial Times magazine article that reported that more than
two-thirds of chief executives of mid-sized to large companies surveyed
“believe that sustainability is vital to their profitability,
and more than two-thirds say it will remain a high priority.”
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