Sustainable Development Goals
‘Sustainable Marketing is about influencing customer behavior to create both profit and positive societal change. It is about what you market and the way in which you market.’ This blog explains various sustainable development goals and marketing tactics.
BUSINESS IN THE COMMUNITY
Marketers are both the supervillains and superheroes of sustainability. As supervillains they spend their time encouraging people to buy more, promoting unsustainable consumption.
As the WWF puts it, ‘Marketers are blamed for a multitude of sins: encouraging ever greater consumption of alcohol, fatty foods, empty calories, water and biological resources; using too much packaging;
limiting the useful life of products so that people are forced to replace them earlier than necessary; producing greenhouse gases. The list seems never-ending.
On the other hand, as superheroes, ‘the real power lies in the hands of the marketer – the creative folks who have the power to design and promote cleaner products and technologies and help consumers evolve to more sustainable lifestyles.’
The way that people buy and consume products has an impact on the planet and society. So as superheroes, marketers can use their power to inspire and orient positive changes in consumer behavior in several ways.
First, they work to identify, anticipate, and satisfy customer requirements profitably by identifying opportunities for more sustainable products.
Second, they market their products in a responsible way that does not promote over-consumption or misinformation through greenwashing. Third, they communicate information about the product and how best to use and dispose of it so we can make more educated decisions.
Why is it important?
Opportunities. Although surveys differ (estimates range widely from 5% to 75%), a potentially large percentage of consumers are ready and looking to purchase products on sustainability grounds but currently don’t because these products are either not accessible or unavailable. It is a growing market that is not yet being effectively reached.
Bad news can spread quickly. Whether the news has substance or not, the rise of social networks and influencers means that you are not the only one developing your marketing message. Not having a consistent, well-thought-out message will be picked up and can have a lasting negative effect on your brand.
Good news can also spread quickly. If you take sustainability seriously, and it shows through in your products and marketing campaigns, others will do the marketing for you by spreading the news as best practice.
In some markets, such as organics and fair trade products, governments and NGOs run awareness campaigns that indirectly promote products with these labels.
Return on ignoring. By being transparent in their communications with stakeholders, companies can build trust and loyalty with their customers. Leading companies in this area are building their reputations on years of work rather than a campaign they can stand behind for a month.
Internally and externally. Marketers have a crucial job in providing consistent messages about sustainability and the company not only to external customers but also, perhaps more importantly, to employees and internal teams.
The impact is in the use. Considering that the majority of the impact of a product (80%) is actually in the way that it is used and disposed of, marketers can play a key role in educating the consumer on how to best use and dispose of the product in order to reduce the full lifecycle effects of the company’s products.
Selling products. A company can put a lot of effort and investment into creating a new, more sustainable product but if the marketing department doesn’t do its job, the product will not sell – sending a strong message to the company that sustainability isn’t worth it.
The key concepts
Marketers are present throughout the lifecycle of a product and have many opportunities to embed sustainability in their work in the following ways:
Identify who your customer is
Identify what your customer wants
Determine how much to charge
Determine how best to sell those products/services
Determine the best way to present and protect those products
Communicate your sustainability commitments and characteristics
Increase awareness about the issues that are important to your company
Help raise money for causes that are important to your stakeholders
How to promote your sustain ability commitments don'ts
Increasingly, customer concern for the environment and society is translating into a demand for more sustainable product options and choices. The extent of this increased demand, however, is a contentious issue.
Numerous studies propose numbers of consumers being prepared to buy ‘green’ that range from 5% to 75%.
Private research firms and the producing companies themselves are working to segment the green consumers to better understand who their customer is and what they want. This has resulted in an ever-growing variety of groupings, for example:
Those who will buy sustainable products no matter what.
Those who will buy green but expect high standards and quality.
Those who are not sure what to think but do want to buy green if it is easy and straightforward.
Those who are completely confused as to what to buy and therefore end up not buying green.
Those who stay away from green products and are uninterested in this area altogether.
The majority of consumers are in the middle group. They are ready to purchase green but influenced by a variety of different sustainability factors to different degrees.
It has proved difficult to isolate the so-called ‘green consumer’ for several reasons:
Some studies tend to overstate green behavior by focusing on what people say they do, but not on what they actually do.
Other studies understate the potential by focusing on only one element of green products (e.g., whether a consumer would buy products that are organic but not looking at products designed to increase efficiency).
The potential market can be overlooked by looking only at the demand for existing products but not the potential demand for products that do not yet exist in this area.
Decisions are based on a range of factors often combined together. Consumers will choose a hybrid car for both environmental and cost-saving reasons or may choose organic food because it tastes better and is healthier, not just because it is better for the environment.
As mainstream products become more sustainable, consumers will be buying green whether or not they consciously realize it. Consumers are not always familiar with or may not truly understand the meaning of the terms used in the surveys – such as ‘green,’ ‘sustainability,’ etc.
They do not necessarily know what exactly a green product is or how to recognize a green company.
By attempting to relate a consumer’s environmental concerns to what they purchase, we may be looking in the wrong place. Many of the significant contributions the consumer can make toward environmental quality actually come from product use, maintenance, and disposal.
Therefore, when considering why people would purchase sustainable products, it is more important to understand the compromises and tradeoffs consumers are being asked to make.
Getting to this stage will then allow companies to focus on providing the products that people actually want and need, thereby making it simple for consumers to do their part. Some of the hurdles to be overcome are:
Many consumers still see ‘green’ products as being inferior. Consumers are looking for green products that work as effectively, or better than, non-green options. Often, they will not buy green products on the basis of environmental benefits alone, and instead are looking for added selling points.
Consumers don’t want to pay much extra or sacrifice quality for greener products. They will only pay a premium if they feel that premium is justified, based on the guarantee of certain environmental or social factors, or added value to the consumer.
Consumers are looking for products that aren’t just making an impact far away, but that impact them directly as well. They will be more likely to respond to product attributes that will personally benefit them, such as ‘safe,’ non-toxic, cost-effective rather than just biodegradable or fair trade.
Consumers will tolerate only minimal inconvenience in using green products and don ’t want to have to go out of their way to buy them. Products need to be easy to use and available at mainstream distributors.
Many consumers may be interested in buying more sustainable products but currently lack the right information at the right time to make those decisions. They don’t necessarily expect companies to have perfect green credentials but will look for a commitment to improving and evidence backed by facts, for example through recognized eco-labels.
If a product is of high quality, readily available, and at a reasonable price it has the potential to capture market share. In an interview with Harvard Business Review, Steve Bishop from Ideo said ‘don’t bother with the green consumer.’
He said that companies spend time trying to connect with those people who really understand the issue, the green niche so to speak, but in the process, risk alienating their base who have different values and who are interested in solving their own personal needs before saving the planet.
The solution? Rather than focusing on the features of a product, focus on consumer needs in order to cater to all consumers.
Those involved in marketing sustainable products should be interested in the following categories of consumers:
The ever-growing conflicted consumer. This group, which is estimated at being anywhere between 25% and over 50% of consumers in some markets, believes that the companies they currently buy from are unethical and are building resentment toward the brands.
Examples include certain fast-food restaurants for the perceived damage their food causes to children. This is a group of apparently loyal customers that are ready to leave as soon as a more ethical alternative product or service becomes available.
Another important consumer group for green products is women. Women spend about 85 cents of every dollar spent and make more than half of family and business-to-business spending decisions.
Consumers are taking sustainability labels seriously and are asking companies to react to these issues.
Product evangelists are your free sales force, they are the ones that do not just believe in your product, but believe in it so much that they will tell others about it. Finding the right tools to engage with this group will increase sales, loyalty, and generate consumer insight.
With increased levels of awareness about sustainability issues, young people are not just getting involved, but are increasingly influencing their parents’ decisions in this area.
A sustainable product is one that provides environmental, social, and economic benefits over its full lifecycle. Some could argue that there is no such thing as a truly sustainable product.
All products need energy, water, and materials to be designed, produced, and used. But much work is being done to reduce the impacts of products across the lifecycle.
Companies have two fundamental choices when it comes to creating sustainable products. First, they can take an existing product and make it greener. This involves many of the concepts introduced in eco-design, including using more sustainable materials, production processes, disposal, etc.
Second, they can identify customers’ needs and wants and develop entirely new products that are able to better address these in a more sustainable way.
Consumers are looking for a variety of different kinds of sustainable product options (or combinations of), including:
Products that present a solution. This could be a product that is a better alternative to what is currently available. The focus is on identifying a need and providing a product that satisfies that need.
Products that are safer. Several sustainability products, for example, those that use fewer chemicals and have more natural ingredients such as organic, aim at providing healthier, safer options for consumers (e.g., green cleaning products such as 7th Generation and Ecover).
Products that save money. Many green products on the market right now, especially new technologies (both very simple or complex), allow consumers to not only reduce their energy or water use for example but also to save them money (e.g., solar panels which enable a consumer to both generate their own power and sell excess power into the grid).
Products that make them feel good. Certain products may or may not have any intrinsic sustainability characteristics but the companies producing them or the products themselves support causes that the consumer perceives to be important. Supporting those products makes the consumer feel as if they have done their part in making the world a better place.
Products that make them look good. Some consumers are looking for products that look like they are green in order to communicate to others their green credentials (e.g., hybrid cars or green luxury goods).
Products that make it easy to switch. Consumers are looking for products that make their life simpler, not more complicated, and they are looking for products that make it easy to switch.
Consumers are also looking for products, brands, or retailers that are doing the work for them, such as products that all uphold certain standards so that they do not have to think about every single purchasing decision.
Products that are high quality. Consumers are looking for products that are high quality (e.g., Mountain Equipment Co-op in Canada guarantees its products, which can be returned at any time for exchange, refund, repair, or credit).
Products that aren’ t doing harm. Consumers are increasingly interested in supporting products that are not doing harm to society and the environment, in particular as the levels of awareness increase in the impacts of many of these products and processes.
Marketers have a role to not only question the underlying assumptions behind product development but also, in some cases, to question the product altogether.
Some producers may assume that consumers need to physically own a product in order to be satisfied with their purchase. But generally, it is the use of the product itself rather than the purchase that generates the satisfaction.
With this in mind, marketers should rethink not only the way that products are designed but how the entire product experience is designed. Can the product be rented, borrowed, reused, or repaired?
Will it need to be disposed of? Traditional discussions around the purchase itself need to make way for more discussions about what happens after the purchase.
A post on the blog of TerraCycle’s founder explains some of the dilemmas that companies face with a price. The company has a line of eco-friendly cleaners that are just as good as synthetics and, in some cases, better.
They are packaged in used soda bottles and retail at US$2.99, cheaper than other eco-brands, but 70 cents more expensive than other household cleaners.
‘So here’s the question,’ asks Tom Szaky: ‘Our sell through at our retailers is very strong, so we could keep our price at $2.99, and be the best price in the eco-field but still be a premium to the national brand. Or we could cut our margin and either match or even beat the prices of the conventional brands.
It would hurt margin, but it should increase market share. It would be a bold but tempting move since we may be able to gain market share beyond the “eco-cleaner” category. What do you think we should do?’
Pricing products is a tricky business, whether they are green or not. Getting the price right is crucial; price it too high and you may miss the mainstream market but price it too low and consumers may see it as a lesser quality product.
Price consistently comes up as a barrier to moving sustainability to become more mainstream, but it is not alone.
It is only one part of the decision-making process for customers, along with quality for example. ‘How much more would you be willing to pay for greener products?’ contains a powerful message which promotes the image of the environment as an additional cost burden on business and consumers.
It would perhaps be more appropriate to ask consumers, ‘Do you want to continue buying products that are inexpensive because they damage the environment?’
While the pricing of the product from the company’s side often rests on their actual costs, what a consumer is willing to pay for a more sustainable product is more related to the perceived value it brings to both the customer and to the environment and society as a whole. Determining how much a consumer is willing to pay for a sustainability product comes down to these points:
The perceived value (financial). This has to do with the total value that the customer is getting from the product or service itself, and how much value they are getting from this product as opposed to another one. This includes:
CFC light bulbs, for example, maybe a little bit more expensive than traditional light bulbs to buy, but they will cost the consumer less over time because of they last longer and use less energy.
Indirect costs. Is the product worth enough to the consumer that they are willing to go out of their way to buy it? Is it higher quality, or does it result in increased consumer satisfaction? Is the product easy to find, easy to use?
The perceived value (ethical). This does not have to do with the product itself, but rather with the claims that the product makes. How much does the consumer value the environmental and social guarantees the product is making?
This also depends on how much knowledge the consumer has about different issues, and therefore whether they are able to understand the positive changes that the company has made to society or to the environment. It also has to do with how far they believe the impacts being claimed are true. This includes:
Direct impact. Supporting a product that was made using sustainable materials, sustainable processes, fair trade, recyclable materials, etc.
For example, a consumer choosing to buy paper that is recycled and FSC certified knows that they are protecting forests and supporting the responsible management of the world’s forests.
Indirect impact. For example, some companies will link parts of their profit to social and environmental causes relevant to or of interest to their business. This is either through the price you pay, or as a percentage of profits.
Customers then feel that they are doing something good by buying the product, especially if they care for the cause, and that if they are being asked to pay a premium it is going to the right place (see ‘Cause-related marketing’).
Another challenge in this space is companies who overcharge for green products knowing that a particular group of consumers will be willing to pay for them. A study by Accenture found that 60% of respondents admitted to charging a premium of 5% to 25% compared with non-sustainable goods.
The price premium on sustainability items was often seen by the customer as a sort of sustainability tax, and taxes are typically meant to penalize and discourage a behavior.
Surveys show that consumers overwhelmingly want to buy healthier, greener products but do not want to pay more for them. Therefore, competitive pricing is sustainability’s path to mass-market adoption. WalMart has realized this and is working to provide more sustainable options at competitive prices.
The place in the marketing mix generally refers to where and when consumers will acquire a particular product or service. This includes several elements such as where the product is made and how the products are transported. Here we will focus on where the product is being sold; the retailer.
In this context, retailer includes any organization that sells and delivers a product to the consumer, and it can include supermarkets, stores, restaurants, and department stores.
Retailers have often been perceived as not only playing a passive role in sustainability but in some cases being part of the problem. According to UNEP, the world’s 200 largest retailers account for 30% of worldwide demand. Therefore, actions by retailers have a significant effect in this area, and in many cases, retailers are actually leading the changes.
WalMart, for example, states that with roughly 10 000 suppliers, 200 million customers each week at 10 000 retail units in 27 countries and more than 2.2 million associates, they ‘have the ability to reach and influence people on a level unattainable by any other company.’
Their strategy includes goals and targets in their supply chain, in the products they sell, their employees, and the communities they operate in and source from. Wal-Mart aims to be supplied by 100% renewable energy, to create zero waste, and to sell products that sustain our resources and the environment.
Retailers have a number of areas to review in building and improving sustainability:
Retailers should ensure that their own operations are sustainable and that they are controlling and managing their environmental and social impacts in energy and water conservation, waste management, and recycling in stores and distribution centers.
Over 130 Kohl department stores in the USA now have 40% of their power provided by solar panels on the roof. Because of the high upfront costs of the panels, SunEdison, a solar energy services company, paid for the panels and is selling the electricity to Kohl.
Site selection. Retailers are looking not just at how they build their new buildings but also where. Tesco, a supermarket chain in the UK, has looked to build new stores on brownfields, mean-ing redeveloping lands in urban areas for new uses rather than expanding outward to rural or agricultural areas.
Where products come from. The sourcing of consumer products includes working with suppliers to favor the development of products that are more sustainable.
For example, Starbucks started integrating conservation principles into its best-buying practice, and by working with Conservation International implemented CAFE standards which set ambitious goals to ensure high-quality coffee is grown and processed in a manner that is both socially and environmentally responsible.
Eliminating unsustainable products. Some retailers are eliminating products they consider to be unsustainable from their stores and, where possible, offering more sustainable alternatives.
After a 6-month consultation with its over 100 000 members, The Co-op, a food retailer in the UK, revised its product portfolio in support of more sustainable options, including banning the sale of eggs from caged hens in favor of free-range and organic eggs.
Educating the customer. Retailers are providing more sustainable options for their customers to choose from. They are also educating their staff about these options, and pricing and promoting them appropriately.
Where the product is placed. Retailers are making more sustainable products easier to find and easier to buy. Green products in some countries are confined to the health food aisle or store, which can limit the number and kinds of customers these products potentially attract.
Office Depot publishes a special catalog with its green offerings (over 2200 items), and in-store these offerings are placed alongside less green alternatives which have significantly increased sales.
How the product is sold. Retailers are also exploring new ways to get the products to consumers in the first place. Allegrini, an Italian producer of biodegradable detergents, developed Casa Quick.
Casa Quick takes its detergents in mobile vans from house to house and allows families to refill their bottles, paying only for the quantity taken. Consumers receive a kit of plastic flasks which are easy to carry from house to van.
Presentation of products in-store. Several international companies – such as Unilever, IKEA, McDonald’s, and PepsiCo – are working together through the global initiative Refrigerants Naturally! to combat climate change by replacing harmful gases with natural refrigerants in point-of-sale cooling machines.
Retailing differently. The REI (an outdoor company) store in Boulder, Colorado, is not just a LEED-certified green building but also a community center. The floor plan is designed around a central resource area with meeting rooms, information kiosks, and a children’s play area.
Retailers can also provide a spot for consumers to bring back products for reuse and recycling. Many electronic stores already have facilities to collect used batteries and super-markets will collect used plastic bags. Electronic store Best Buy offers several recycling programs to the public, whether they bought the products at the store or not.
They can bring them in for free recycling, they can trade in used electronics for gift cards, they can bring them in for repairs via their ‘Geek Squad’ program, or they can sign up for the Buy Back program when they buy a new product, allowing the customer to bring the product back in-store for a partial refund at the end of the product’s life.
Packaging is the first part of the consumer’s tangible experience with your product. If a product or a company promotes itself as green and then uses excessive or unsustainable packaging, it is not sending a consistent message to the customer.
Packaging should not only be seen as something that protects the product, but also as an opportunity to connect with the customer and transmit information about the product, what it is made of, how best to use it, and how to dispose of it when a consumer is finished using it. There are two components to sustainable packaging:
1. The packaging. Companies are making the packaging itself more sustainable. This includes looking at:
Materials used. According to the Sustainable Packaging Coalition, sustainable packaging is packaging that:
is beneficial, safe, and healthy for individuals and communities throughout its lifecycle;
meets market criteria for performance and cost;
is sourced, manufactured, transported, and recycled using renewable energy;
maximizes the use of renewable or recycled source materials;
is manufactured using clean production technologies and best practices;
is made from materials healthy in all probable end-of-life scenarios;
is physically designed to optimize materials and energy;
and is effectively recovered and utilized in biological and/ or industrial closed-loop cycles.
Reducing the amount of packaging. The European Packaging Directive, for example, sets strict requirements to prevent the use of excessive packaging. In response to this, Danone spent three years re-engineering their yogurt packaging to significantly reduce the packaging used, saving the company US$2.5 million a year in the process.
Getting rid of all packaging is not the answer either. Under-packaging can be as much of an issue as over-packaging in terms of wasted energy and resources from ruined goods. Packaging needs to be considered in the context of the design and manufacturing of the product.
Packaging across the lifecycle of the product. Producers must think about how much is being used and what kinds of materials are being used as part of the packaging, whether it is primary (the packaging customers see), secondary (the packaging used to ship to retailers), or tertiary (the packaging used to ship the products from the manufacturers).
Keeping it simple. Amazon’s Frustration-Free Packaging initiative is designed to free customers from difficult packaging.
Instead of being packaged in hard-to-open and hard-to-recycle plastic and cardboard packaging, Amazon works with leading manufacturers such as Microsoft and Mattel to package products in a simple, recyclable cardboard box.
The design of the packaging. O2 redesigned their packaging to encourage customers who didn’t need a charger to opt out of receiving a new one when they upgraded their phone.
This had multiple knock-on effects, allowing phones to be posted through letterboxes (reducing courier deliveries), and offering a simple way to recycle their current phone.
Rethinking the packaging. There are large numbers of innovations in the area of sustainable packaging – from stores such as Unpackaged in London, which only sells products in bulk and encourages customers to bring their own packaging, to toys whose packaging can be transformed into a second toy.
Eliminating packaging. In 1985 Swiss retailer Migros began selling toothpaste tubes without the unnecessary boxes they usually come in and went on to remove excess packaging from everything from yogurt to drinks.
2. The messages on the package. Companies should also take the opportunity to communicate with the consumer through the packaging in the following ways:
Sustainability information. Several companies take the space on the packaging as an opportunity to communicate their commitments and actions in this area, including goals and information on the causes that are important to the company as well as how the consumer can get more involved.
Materials used (or not used). Timberland’s EcoMetrics label is a sort of nutritional label for shoes that lets customers know exactly what went into making the shoes. It lists the product’s energy use, global warming contribution, and materials efficiency.
How to use. Labels are also the ideal location to give users simple and easy-to-understand information about how best to use the product in order to minimize the negative impacts, and also maximize the positive impacts.
How to dispose of. Labels are being used to provide information for consumers on what to do with the product, or packaging, once they are finished with it. This can involve:
Providing details on how the product itself can be returned, repaired, or reused. Kiehl's, a skin and hair product company, has a loyalty card which is stamped every time a customer returns an empty Kiehls container.
Once you get a certain number of stamps, you can get free products. Other companies provide financial incentives, for example, a deposit that is refunded if you return the used packaging or a discount on your next purchase.
Providing details on how to dispose and recycle. Marks and Spencer in the UK provide clear information on its packaging telling the consumer which parts of the packaging are recyclable and which are not.
As the market for socially and environmentally preferable products continues to grow, so does the need for customers to sift through the increasing number of environmental and social claims used in the marketing of these products and services and to understand what they mean.
Eco-labels, found on a wide variety of products, tell consumers about certain environmental or social standards the product complies with. Labels exist for a wide range of product and service qualities, including, but not limited to, energy and another resource efficiency, sector-specific labels, organic and other food-related labels, social labels such as fair trade, recycling, product content, and design.
The variety and types of eco-labels continue to grow, and many eco-labels are introduced throughout this blog in the relevant areas. According to the ISO standard on eco-labels (14020), there are three major categories of eco-labels.
Type 1: Third-party claims are awards given by a third party requiring a product to meet certain independently set criteria. These show leadership characteristics rather than just presenting information, and are often accompanied by public awareness campaigns to educate consumers about what the label means. Examples include:
Regional and national eco-labeling schemes such as the EU Flower, Germany ’s Blue Angel – considered the first and oldest environmental label, Nordic Swan, Japan’s Eco Mark, India’s Indocert, and New Zealand’s Environmental Choice.
Sector- or issue-specific labels which have a narrower focus than national programs, such as the Rainforest Alliance certification which promotes and guarantees improvements in agriculture and forestry, the Fair Trade label which guarantees producers were paid fair prices, or industry-specific labels such as the chemical industry’s Responsible Care Initiative.
Type 2: Green claims are the manufacturers’ or retailers’ own declarations. Since these are not given by a third party, it is more difficult for consumers to compare them with other brands or to fully understand what the claim means. Examples include:
Statements such as ‘100% recycled,’ ‘natural,’ ‘carbon neutral,’ and ‘environmentally friendly.’ Where not regulated by law or no evidence is shown, these statements are often not reliable and are found on products that are not always what they claim to be.
Company private labels. Private label initiatives have a wide range of truthfulness and usefulness. An example of a well-regarded private label is the Philips’ Green Logo, which is used on electronic products that meet certain environmental criteria across the whole lifecycle.
Products with the logo have been certified by external auditors that they are 10% more efficient than other products on the market within a given product category.
Type 3: Environmental declarations quantify information about a product based on lifecycle impacts and should allow products to be compared easily because they consist of quantified information about aspects such as energy output.
Unlike other labels they do not judge products, leaving that task to consumers. Rather, they provide something similar to a nutrition label found on food products but instead, this label outlines environmental impacts throughout the lifecycle.
Compared with type 1 and type 2, much less work has been done in this area but some examples include labeling products with their carbon footprints and Timberland’s ‘nutritional label’ featured on its products that give buyers information about the environmental footprint of that product.
Good eco-labeling initiatives involve the participation of government, industry, and commercial associations, retailers and companies, consumers, as well as other interested parties such as academics, media, and the international community.
A product must comply with all the required criteria to be awarded a label and must be retested regularly. According to the Global Eco-Labelling Programme, an effective labeling program should:
Be voluntary. It should be the decision of the business to participate in the program.
Distinguish leadership. Claims should not imply a product is exceptional if all other products share the same general characteristics.
Be based on sound scientific and engineering principles with a strong focus on lifecycle considerations to assure customers that all aspects of the product’s development have been taken into account.
Be credible. Often eco-labels are managed by well-respected and recognized third-party organizations and used by well-respected companies, which increases the product’s credibility.
Be measurable and comparable. Claims should be made only if they can be verified. Methods used can include international standards, recognized standards, or methods developed by industry, provided that they have been subjected to peer review.
Be based on open and accountable processes that can be monitored and questioned. They should operate in a business-like and cost-effective manner.
Several challenges exist in this area. The range of existing and new eco-labels is making it confusing for customers to understand what it all means, especially when private company labels are added to the mix.
Some labels have strict requirements to adhere to while others require very little effort to get certified. However, more work is being done in this area to make it easier for consumers and companies to understand these labels.
Social marketing refers to programs and campaigns that aim to raise public awareness in order to introduce more sustainable behaviors relating to the environment (e.g., energy or water conservation and waste reduction) or society (e.g., health, voting).
Social marketing does not look to sell a product or service, but rather to encourage or modify a behavior by applying traditional marketing principles and techniques to influence a particular audience’s behaviors for individuals’ and society’s benefit.
The goals of social marketing can include:
accepting a new behavior (e.g., composting food waste);
rejecting a potentially undesirable behavior (e.g., starting smoking);
modifying a current behavior (e.g., increasing physical activity from 3 to 5 days of the week);
abandoning an old undesirable behavior (e.g., talking on a cell phone while driving).
Social marketing campaigns can be focused either on one-time actions (e.g., install a low-flow showerhead) or on promoting repeated behavior (e.g., take 5-minute showers).
One example is the Rock the Vote campaign in the USA, which aimed to engage the political power of young people through the use of music, popular culture, and new technology to incite young people to register and vote in elections.
Governments and not for profits regularly run these sorts of campaigns, but increasingly industry is doing so as well, as a way to gain support for their sustainability efforts.
As NGO Utopies puts it, ‘these campaigns often seek to encourage consumers to behave responsibly and are usually the work of companies which, having incorporated social responsibility into the products or services they supply, require a matching commitment from their customers for their actions to be really effective.’
Among the best-known, private-sector social marketing campaigns were the Body Shop’s Against Animal Testing campaign in the mid-1990s, which led to a UK-wide ban on animal testing of cosmetic products and ingredients in 1998 and raised awareness with consumers about their products which were not tested on animals.
The ‘look behind the label’ campaign at Marks and Spencer in the UK was an educational campaign aimed at teaching its customer base to appreciate the changes that the company was about to make to their products relating to fair trade, sustainability, non-GM, and animal welfare.
It then followed with Plan A, outlining all the steps that the retail company was going to take to be more sustainable in those areas.
In France, food retailer Leclerc conducted a campaign about the impact of plastic bags in 2003 that was followed by the adoption of an amendment banning non-biodegradable plastic bags in stores.
Social marketing applies traditional marketing techniques to sell a particular behavior rather than a product or service. These include:
1. What is the issue that you are communicating about and why is it important? What is the behavior you want to change and why? Take a look at successful campaigns that have taken place around the world as a starting point. Understand why people don’t want to change and help them get over those hurdles.
2. Who are you communicating with and why? This is the group of people that the campaign will be focused on. Focus on target markets that are ready and willing to act rather than one that is resistant to change.
3. What are your messages? The message should include clear instructions on how to act. Make sure it is simple and doable. Sometimes this message will be accompanied by a physical product that helps with the change.
For example, encouraging people to use less water could be accompanied by a list of where to buy low-flow showerheads.
4. What are they giving up/gaining? The audience should be given information about the costs (both monetary and non-monetary) of the current and any alternative behavior (e.g., smoking includes the cost of a box of cigarettes but also the cost to your health and the health of others around you).
You can also add incentives to help guide the behavior, for example having special lanes on the highways for cars with two or more people.
5. How will your message reach the audience? This includes how you promote the message as well as the physical location where the audience will perform the desired behavior or where the message is made available to the public.
6. How will you know if the campaign has been a success?
Social marketing campaigns will also often include working on laws or regulations that influence the desired behavior.
Monitoring the campaign allows you to learn how the message changed your target audience, whether it had an impact, and revise it as needed. Use prompts such as stickers and commitment to motivate people to continue to change. Let people know how the campaign went.
Cause-related marketing differs from social marketing in that it focuses on raising awareness and concern for a social issue (e.g., global warming), but it typically stops short of trying to change the behavior itself.
Companies explore cause-related marketing as a way of differentiating themselves, or of enhancing their reputation, and also to increase sales and contribute to a cause that is important to their stakeholders.
Cause-related marketing usually involves a partnership between a for-profit company and a not-for-profit organization promoting the product to raise money for the not for profit. Cause-related marketing can take several different forms:
Sales based. Donation programs, where a company donates a percentage of its sales to a particular charity over a certain period of time.
Support for customer-aligned charities. Provide funds to charities that support causes that are important to your stakeholders.
Support causes aligned with business purpose. Endorse a cause that is a natural extension of the company’s own business.
The phrase ‘cause-related marketing’ was first used by American Express in 1983 to describe its campaign to raise money for the restoration of the Statue of Liberty. American Express made a donation to the Statue of Liberty every time someone used its charge card in the area.
As a result, at the time not only did they raise US$1.7 million for the project but the number of new cardholders grew by 45% and card usage increased by 28%.
The success of a cause-related marketing campaign depends on finding the balance between doing something that benefits your company and what your customers perceive as being good for the community. Some tips:
Pick a not-for-profit or issue that means something to your target market. Over 1000 businesses worldwide make up One Percent for the Planet, where members contribute 1% of sales to environmental groups around the world.
Mountain Equipment Co-op joined in 2007 and has since contributed over US$17 million toward conservation, including launching – with Canadian Parks and Wilderness Society – The Big Wild, an ambitious project to protect at least half of Canada’s public land and water wild forever.
Give your customers a way to showcase their good deed. The RED campaign was created to raise awareness and money to help women and children affected by HIV/AIDS in Africa.
Companies involved sell a range of red-colored products such as Motorola red phones, American Express red card, Apple’s red iPod, Gap’s red t-shirts, and red Converse shoes. A percentage of each RED product sold is given to AIDS programs through the Global Fund.
Combine efforts for bigger change. The Glue Network provides a platform for companies and their customers to come together to raise money to make a bigger change. A range of brands from around the world empower their customers to invest their charity dollars in particular projects that the customers believe are most important.
Give people something to talk about and get engaged in. Innocent drinks organize a ‘super gran woolly hats’ promotion every year in the UK to raise money for Age Concern (over 25 000 older people die of cold-related illnesses every winter in the UK).
The public is taught, through the website and knitting sessions at grocery stores, to knit miniature hats. Innocent puts the hats on top of their bottles around Christmas time and 25 pence for every bottle sold with a hat on it is given to Age Concern. Through this campaign over £1 million has been raised since 2008.
Give what you do best. Quite a few companies are exploring the ‘one for one model,’ where for every product sold the same product goes to a person in need. For every pair of TOMS shoes purchased, a pair of new shoes is given to a child in need.
Ark Collective sells backpacks and then donates one to a poor schoolchild in the USA. Warby Parker not only donates a pair of glasses for every one sold but also provides training to low-income entrepreneurs in developing countries to start their own businesses selling glasses.
Be consistent. Made for Good is a consortium of like-minded apparel brands that support a range of charities and issues including curing diseases, educating our youth, assisting the poor, and protecting the environment. A percentage of all product sales is used to raise money for these charities.
Green and choice fatigue. Customers are being bombarded with so many different kinds of sustainability messages and products that they often do not know which are real and which aren’t. The growing prominence of eco-labels is helping, but also adding to the confusion.
Increased risk either way. There is a risk of not moving into green marketing but also a risk when a company does.
Sometimes the media is more inclined to question and attack relatively good companies attempting to move forward on sustainability, rather than highlighting the poor environmental performance of companies who have not become involved in sustainability.
Lack of overarching standards. There is a lack of standards for determining exactly what makes a green product or a green company. Increased regulations and public awareness are needed to help educate consumers on how to understand the increasing number of standards.
Getting pricing right. Sustainable products are seen as being more expensive and often consumers don’t understand why.
Choice editing. Should retailers be taking unsustainable options off the shelves to favor more sustainable options?
Consumer support. Many companies report producing more sustainable products based on consumer demand but then consumers don’t buy these.
Confusing messages. Marketers can work to promote more sustainable products, but this only works if consumers are able to accurately and effectively interpret the information they give and the claims they make on their packaging.
Trends and new ideas
Green = inexpensive
Green products are generally seen as being more expensive than conventional choices. This may be true now, but the future is likely to see a dramatic shift.
In fact, the same reasons that explain why green products have historically been priced higher could become the reasons why they are more affordable. For example:
Full costs across the lifecycle. Green products often already include many of the costs that other products don’t (such as the cost of disposal), making them more expensive. When comparing traditional costs of manufacture, many green products actually cost less to produce and to use.
They also cost society less in terms of other direct costs and indirect costs, such as pollution and health effects. As more companies begin to analyze and incorporate the true full cost of production, we may actually see a complete flip, where unsustainable products become much more expensive.
Economies of scale. Pricing often comes down to simple supply and demand. Many of the materials used in these products have been more expensive because there has been less of a demand for them.
As the demand goes up for more sustainable alternatives and they are produced in larger quantities, the price of these products could go down. At the same time, the cost of unsustainable options is going up, for example, products produced using petroleum products.
Providing certain guarantees. These types of products are often providing a set of guarantees regarding safety, sourcing, health, and environmental impact that may cost a little bit more to insure.
As regulations and industry standards start requiring all products to uphold certain standards, other non-green products may also start to bear these costs, creating a more even playing field.
Economic to eco-embedded
Ecoiconic is defined as ‘eco-friendly goods and services sporting bold, iconic markets and design, helping their eco-conscious owners show off their eco-credentials to their peers.’ Eco-iconic is not about all green products.
It is about those that from their appearance or stories actually show that they are green and in doing so attract recognition from their peers, in the same way as traditional status symbols do.
The best-known examples are cars such as the Toyota Prius. A New York Times article asked the question, ‘Why are Prius sales surging when other hybrids are slumping?
Because buyers want everyone to know they are driving a hybrid.’ Another, perhaps more important, trend that is slowly overtaking it is eco-embedding, ‘making products and processes more sustainable without consumers even noticing it.
Communicating with the customer virtually
One of the oldest adages in marketing is that ‘word-of-mouth is the best advertising.’ Customers have always received information and made choices based on word of mouth. But the level of information has exploded with the Internet and social media.
The amount of information overwhelms – stories, opinions, and facts highlighting both good and bad practices are constantly shared through blogs, wikis, and other social networks where people with the same interests come together to discuss those interests.
These networks are not only being used by consumers interested in learning more about sustainability but increasingly by companies as a way to connect directly with their current or potential customers.
Product developers are tapping into them to gather intelligence and ideas, directly from the customer, on what kind of products they should provide and how to make their current products better.
Starbucks at http://mystarbucksidea.force.com is a space where users can post and vote on ideas for everything from new products to store design.
Retailers are starting to explore a whole new kind of retail space . . . one that either doesn't last or doesn’t stay in one place. Brands are using empty retail space to create pop-up stores to increase awareness of their products or create some buzz. Others are creating tiny versions of their stores that can be moved around into public spaces.
Illy created a temporary coffee shop out of a standard shipping container in Venice, complete with tables and chairs. Timberland created a micro shop in New York City made out of 450 discarded plastic drinking bottles.
Honest Tea put up unmanned pop-up shops across the USA that relied on an honor system where passers-by who wanted to buy one of their products had to drop US$1 into a box.
Groups have been involved in boycotts for years, encouraging consumers not to buy a particular product or from a particular company because they are seen as unethical or unsustainable.
Today this is being flipped around. Buycotts are when individuals are actively encouraged to spend their money at particular stores as a way of supporting the sustainability efforts of those companies. Several groups are set up around the world to coordinate these boycotts, including Carrotmob.
Here, organizers make an agreement with a business that wants to make a change, then Carrotmob organizes hundreds of people to visit that business on a particular day. The business then uses the money to make the proposed social or environmental improvement (Vote with your money).
The barcode reinvented
Labels are taking on a life of their own. Marketers have been exploring opportunities to tap into the potential of the one item that billions of people have with them all the time and use the most throughout the day: their cell phones. How? Through the use of a barcode called the Quick Response (QR) code.
These special barcodes are designed to be read by mobile phones with built-in cameras, a feature now standard on cell phones. Companies put a special barcode on posters, magazines, interactive billboards, even lawns.
Once scanned by the cell phone camera, a message or set of instructions (such as a website or phone number) embedded in the QR code is revealed automatically on the phone’s display.
In Japan, senior citizens use the QR code to check bus times. Others are printed on t-shirts, directing interested people to visit the website of the wearer. Companies are also exploring snap tags, which can also be scanned with a phone camera.
Apps for the phone are also proving very popular. Clorox, for example, has an app that provides up-to-date information on all the ingredients in its products.
Advertising dos and don’ts
How not to communicate . . . greenwashing Although there is clearly a rise in sustainability leaders, it seems that there is also a parallel rise in greenwashing.
According to TerraChoice, greenwashing is ‘the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service’ (note that companies will also ‘greenwash’ social issues).
It is believed that the term comes from a journalist who, in 1986, was covering the hotel schemes where you choose to keep your towel rather than washing it ‘for the good of the environment.’
The journalist examined the record of companies who promoted these schemes and concluded that since they did almost nothing else for the environment (at the time), and since towel schemes increased their profits by reducing washing costs, guests had to be cynical of their motives.
So why do people greenwash? Some say it is because of ignorance, some do it for quick wins. The best reason for avoiding greenwashing is that you should be spending your money on something better, something which helps people change behavior, to adopt a greener way of life.
Ultimately it is your credibility and reputation that is on the line, and once lost, these are very difficult to regain. Consumers and marketers should think twice about:
1. Green and social imagery. Just because something is packaged green and has trees on it or has pictures of children and farmers, it doesn't ’t mean that it is actually environmentally or socially friendly.
2. Using general statements. The same thing goes for products that use statements such as ‘socially friendly,’ ‘natural,’ ‘bio,’ ‘hypoallergenic,’ etc. When checked, many of these fail to live up to their promises unless accompanied by a recognized eco-label or regulated by the government.
Surprisingly many of these, such as the word ‘natural,’ are not regulated by national legislation even though they can be very misleading.
3. Missing the point. A product that is water efficient could be very energy inefficient. Beware of companies using one claim to distract from the key sustainability issues of a particular product.
4. When a label is not all it claims to be. Having an environmental management system in place, or an environmental or social policy, or being part of a voluntary network, does not automatically make a company, or a particular product, more sustainable.
Make sure these are backed up with policies and practices that are auditable, quantifiable, and have targets and objectives.
5. Giving options consumers can’t act on. Saying that a prod-uct has an environmental or social feature that consumers not only can’t check but also can’t follow up on is misleading.
This includes products that are recyclable but where no facilities currently exist to recycle them.
The recent push for biodegradable bags could be another example, as many of these are only biodegradable in certain environments, not when buried in a landfill.
6. When it isn’t really as good as it seems. This relates to claims that may sound good but aren’t really doing what they say.
For example, organizations which claim to be carbon neutral or have carbon-neutral services when neutral was achieved by buying offsets rather than through actual energy efficiencies.
7. The product may be good, but the company definitely is not. It is hard to take claims made about environmentally and socially friendly products seriously when the company producing the product has been shown to be anything but environmentally and socially friendly.
This includes companies that advertise or speak about corporate ‘green’ commitments while lobbying against pending or current environmental laws and regulations.
8. Baby steps. When a product makes tiny improvements and makes a big fuss about it. For example, a magazine claiming to have turned green because one issue was made of 10% recycled paper, leaving you wondering about the other 90% and all other issues of the magazine.
There are several NGOs and online groups working to bring out examples of greenwashing, including the CorpWatch Greenwash awards and Greenpeace. Greenwashing index allows people to view company ads and judge for themselves whether they are greenwashing or not (www.greenwashingindex.com).
Consumers can report what they believe to be greenwashing to national advertising organizations in many countries and often these organizations will follow up on claims made.
How to communicate . . . responsible marketing There is an increasing number of advertising and marketing codes, both mandatory and voluntary, which outline responsible marketing practices at the international, national, and company-specific level.
These include regulations dealing with misleading or deceitful advertising, voluntary codes, and professional association codes. A few such ideas include:
1. Be good. Do not market to groups by creating unnecessary pressure or concerns. For example, companies who use awareness campaigns to scare people about a supposed illness and then sell the medicine.
Unilever’s Marketing Principles require that marketing practices do not convey misleading messages, do not undermine parental influence, do not suggest time or price pressure, and do not encourage unhealthy dietary habits.
2. Be honest.
Be transparent about what you are doing and share your successes and your challenges. Don ’t just make stuff up, make sure whatever you do, say, or claim is backed up and easy for the reader to understand.
Seventh Generation reports on all the things that are wrong with its product and that it is still working on those areas.
Innocent included on its fruit juice bottles how much of the content of the bottle was recycled and that they were working on the rest (a year later they were at 100%). Avoid abusing consumers’ concern for the environment or taking advantage of their possible lack of knowledge in this area.
3. Be creative. It seems that all ads for green business use trees and flowers. Look at other ways of getting your message out. The Creative Gallery on Sustainability Communications includes around 1000 campaigns produced by companies, public authori-ties, and NGOs from all over the world.
4. Be positive. Stay away from doom and gloom and instead surprise the customer with a positive message. Keep the message simple and easy to remember.
5. Be consistent. Consistency should exist between your engagement or initiatives and your image and product lines. It should be reinforced across your marketing messages as well as between your internal and external operations.
6. Make the connection. Communicate how products are relevant to people ’s lives and needs. Empower your customers by giving them something they can do. Get your customers involved.
7. Focus on what is important to your audience. Toyota Prius focused on fuel economy and quiet ride more than saving the planet. Link environmental and social benefits to things that concern customers in their daily lives and of which you can measure the impact.
Consumers are bombarded with messages every day from supposedly green companies. A lot of the information makes it seem that no matter what a company says, nothing is changing. There are lots of (continued ) companies that are truly working on these issues. For the consumer, here are some tips on how to do your part:
Don’t assume that everyone is lying or telling the truth, just pay attention to what they are claiming (for example, on their labels and packaging) and use your common sense to see if it looks right.
Don’t blindly believe all the bad things or good things you read, check the sources of the information and where possible check more than one source.
Question companies who aren’t doing anything at all . . . or who seem to be doing too much. Don’t hesitate to contact those companies and request that they do something or find information to back up what they say they are doing. You are one of their stakeholders, they need to listen.
Report misleading messages. Many countries, including at the international and company levels, have guidelines for environmental and social marketing claims.
In many instances, customers who feel that a company is not telling the full truth can report them to relevant authorities who will investigate.
Following a complaint to the Council of Better Business Bureau, Clorox was told to make changes to some of the claims it made on how its green products work.
Reward companies who you feel are doing it right. Either through buying their products, telling the company, or telling others.
Chefs around the world are exploring molecular gastronomy, mixing science with cooking. Forward-thinking chefs such as Heston Blumenthal bring food to a whole new level by questioning the assumptions about what food is and redefining what food could be.
One of his treats is a candied beetroot and grapefruit lollipop with edible wrappers which look like plastic but melt in your mouth.
Edible packaging may not take off anytime soon in the world of business, but it does reflect an increasing number of innovative ideas to make the lifecycle of products and processes more sustainable – which can, and will, help businesses flourish.
Increasingly, successful businesses share three characteristics with chefs like Blumenthal: (1) they question assumptions; (2) they think across disciplines; and (3) they are creative about the way that products are made. These characteristics underlie modern operations management.
Operations management is all about a company’s supply chain and product lifecycles: its products and services; how they are designed, how they are made, how they are used, and how they are disposed of.
It is the area that has the biggest direct impact on sustainability, since all the things we make and the way we make them affect our natural and social resources.
Sustainability brings innovation into the supply chain, challenging our assumptions about the way things have always been done, and creating products and processes that are not only better for business, but better for society as well.
Until recently, management in many companies believed that what happened in parts of their supply chain, from design choices to overseas contractors, was not their responsibility.
Today, organizations are realizing that not only is it their responsibility, but that proper management can bring about competitive advantages. As we continue to move into the 21st century, sustainability and operations management will increasingly go hand in hand.
Why is it important?
There’s a lot of room for improvement. Considering that on average, 80% of a product’s overall cost is a consequence of its design, 93% of product materials do not end up in saleable products, 80% of products are discarded after first use, and 99% of materials used in the production of or contained within goods are discarded in the first six weeks, there is obviously a lot of room for improvement and innovative ideas.
Responsibility is shifting up the supply chain. Not long ago, it was up to the consumer to choose to be greener, but today, consumer demand is shifting this responsibility to the retailer to provide these products.
In some countries, it is becoming mandatory to display the environmental performance of some products, either on the product labels or the shelves. As more retailers decide to engage in more sustainable procurement strategies, the companies making the products will also have to uphold those standards in design and production.
Reduce costs and improve operational efficiency. By using fewer and safer source materials and less energy, transportation, and water resources, and by making processes more efficient, a company can significantly reduce production and labor costs.
Creating simpler products that are easier to disassemble and recycle reduces waste and disposal costs and gives a company the potential to reuse products. It can also reduce labor costs through reduced need for training.
Compliance with existing and future legislation. Steady increases in legislation and regulations drive operations management decisions on many fronts.
Regulations are being enacted to increase transparency in supply chains and standards, such as the European Union ‘take back’ laws, which require manufacturers to take back vehicles and electronic equipment sold in a particular country and recycle or dispose of them safely after use.
Increasingly, we are seeing product taxes put in place to discourage people from buying certain products; banned materials lists are covering more and more substances (e.g., chemicals) and packaging waste and pollution prevention regulations are on the rise.
Increased risk of bad press. Organizational stakeholders, the media, and others no longer hesitate to expose and report any questionable aspects of a company’s supply chain, including incidents of child labor, forced labor, illegal waste dumping, and product recalls.
This can result in significant losses not only to sales but also to a company’s hard-earned reputation.
Improved quality and customer satisfaction. Many consumers are looking for products that allow them to save money but also make them feel they have made a positive impact on society and the environment.
Delivering and promoting simpler, more efficient products that have reduced operational costs and result in reduced environmental impact can mean improved customer satisfaction and increased market share.
Eco-labeling schemes, ‘design for’ products, and other environmental awareness programs are creating an increasingly educated consumer who is not only willing to buy products designed for the environment and society but may even boycott those that are not.
The key concepts
The operations management approach to sustainability involves analyzing products and processes throughout their whole lifecycle and ultimately aims to have zero impact. However, products and services are produced and distributed through complex supply chains, where to potentially reach zero impact one needs to:
Design the product smartly upfront
Use non-harmful materials and components
Create more efficient processes
Use sustainable technologies to support these processes
Doing more with less
Source them through optimized supply chains
Move products and services from point A to point B
Move from waste treatment to waste prevention
Consider sustainability aspects across all stages
Bring information together to enable better decision-making
Suppliers and contractors
Box: Lifecycle assessment
Box: Information technology/information systems
Eco-design, also known as ‘design for the environment,’ concerns designing or redesigning a product or service to take into account the environmental (and social) impacts throughout its lifecycle. Best practices in eco-design involve:
Re-thinking the product and its functions from raw materials on up in order to make it more efficient, thereby reducing the use of energy and other natural resources.
Reducing energy and material consumption throughout a product’s lifecycle.
Re-placing harmful substances with more environmentally friendly alternatives.
Selecting materials that can be Re-cycled, and building the prod-uct so that it disassembles easily to allow recycling.
Designing the product so parts can be Re-used.
Improving the product durability and ease of Re-pair so that the product does not need to be replaced as often.
Products that follow some or all of the above-mentioned eco-design concepts often state that they are a ‘design for’ product (e.g., design for water conservation, design for disassembly, etc.).
Eco-design principles can be applied to a single product or service, or a production process. Computer company HP, for example, has been working to design products that are easier to recycle by integrating clear design guidelines and checklists to assess and improve the recyclability of its products.
They do this by using a modular design to allow components to be removed, upgraded, or replaced, eliminating glues and adhesives by using snap-in features, reducing the number and types of materials used, using single plastic polymers, and using molded-in colors and finishes instead of paint, coating, or plating.
Some things to keep in mind:
Understand your existing products. When redesigning an existing product, a good way to understand eco-design and how it can relate to your project involves physically taking apart the product, looking at the different components, and identifying excessive use of materials as well as opportunities to make improvements in packaging, product use, production, materials, and disposal.
Understand what people really want or need. The key to successful design is to observe what people do and understand how people feel and think and to use these observations as inspiration for designing or redesigning a product.
Often there is a disconnect between what people say and what they actually do, which is why the insights cannot simply come out of market surveys or focus groups: people often don’t say what they think or do what they say.
Create designs that engage the customer. The key is to create products and services that inspire engagement and encourage positive behavior. Many people buy the Toyota Prius not for the return on investment, but for the experience.
One of the features drivers like is the constant information displayed about the fuel economy drivers are getting and how they can get more. Drivers can then take this information and compare it with other users through an online forum on the Toyota website.
Because of changing oil prices, new regulations, and pressure from consumers and retailers, industrial chemistry is working to clean up its act.
Green, or sustainable, chemistry is about designing, developing, and implementing chemical products and processes that reduce or eliminate the use and generation of substances that are hazardous to people and the environment.
It involves rethinking the chemicals themselves, and how they are being used, as well as searching for greener, more environmentally and socially acceptable alternatives.
Considering that chemistry – chemicals and chemical processes – delivers over 95% of all the products used in society, green chemistry is a key area in sustainability. Green chemistry involves:
Designing safer chemicals, with little or no human or environmental toxicity.
Designing less hazardous chemical syntheses.
Using renewable materials such as wastes or by-products from other processes.
Using safer solvents or avoiding their use altogether.
Increasing energy efficiency by running reactions at room temperature and pressure.
Designing chemicals that degrade after use rather than accumulating in the environment.
Providing real-time information during syntheses to minimize or eliminate byproducts.
Minimizing the potential for accidents
Internationally, a number of regulations and laws govern use or prohibition of chemicals ’ transportation and disposal, including the Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade and the Stockholm Convention on Persistent Organic Pollutants.
In Europe, REACH (Registration, Evaluation, Authorization, and Restriction of Chemical Substances) gives greater responsibility to industry to manage the risks from chemicals and provide safety information on the thousands of substances in use.
A large number of companies – such as BASF, Microsoft, and Johnson & Johnson – are phasing out chemicals considered harmful.
The legislation is not the only driver. Many organizations are using green chemistry as a way to produce unique and innovative products in the market, often to fill a demand by the consumer for more natural products.
German carpet producer Donau-Tufting decided to remove heavy metal colorings and vulcanization chemicals from the carpets they make. The company gained an advantage in the market over its competitors, when the new carpet rapidly achieved an additional 25% turnover.
Reducing or eliminating the need for hazardous chemicals means a company does not need to invest in training and systems to manage and dispose of the waste.
Dow Chemical Company, an international company which has a focus on exploring sustainable chemistry options, leases the use of its organic solvents rather than selling them through SAFECHEM.
Once the customer is finished with them, rather than being left with the responsibility to dispose of them, Dow recovers the chemical and, where possible, recycles it for future use.
There are also a growing number of initiatives from companies who are releasing more information on the ingredients used in their products, in particular, the chemicals. SC Johnson has put together a website which provides a closer look at the ingredients it uses in its products.
Doing more with less
Enter an appliance store in Europe or the USA, for example, and you will see energy labels showing the energy usage of the different products.
Consumers, whether to cut bills or be more responsible, are looking for products that use less energy and water. Businesses are also interested in cutting their energy and water use for the same reasons.
The growing international movement focused on sustainable consumption and production has roots in both the private and public sectors. The idea is that natural resources can be used more efficiently – it’s not just about consuming and producing less, but also consuming and producing differently.
Two concepts that put this idea into practice are gaining momentum:
Eco-efficiency, developed by the WBCSD, ‘is a management philosophy that encourages business to search for environmental improvements which yield parallel economic benefits.’
It is not simply about making incremental efficiency improvements; it is about stimulating creativity and innovation in search of new ways of doing things throughout the full value chain. The philosophy encompasses three broad objectives:
Reducing the consumption of resources – including energy, materials, water, and land – while also enhancing the recyclability and durability of products and closing material loops.
Reducing the impact on nature – including air emissions, water discharges, waste disposal, and dispersion of toxic substances – while focusing on the sustainable use of renewable resources.
Increasing product or service value – providing more benefits to customers through product functionality, flexibility, and modularity plus additional services, focusing on selling the functional need that customers want.
Cleaner production is a preventative approach to environmental management where the environmental impact is minimized.
UNEP, who introduced the concept in 1989, defines it as ‘the continuous application of an integrated preventive environmental strategy to processes, products, and services to increase overall efficiency, reduce risks to humans and the environment. Cleaner production can be applied to the processes used in any industry, to products themselves and to various services provided in society.’
Technological innovation is an important part of finding solutions to our economic, social, and environmental problems. These technologies are generally categorized into four areas:
Remediation technologies treat environmental problems after they have occurred and attempt to repair or remediate the damage. These include soil and water cleanup methods and are typically very expensive.
Abatement technologies capture or treat pollutants before they escape into the environment using physical, chemical, or biological mechanisms to reduce emissions, like clean coal or sewage treatment systems. Abatement technologies are usually capital intensive, require lots of energy and resources to operate, and generate their own waste.
Pollution prevention technologies include improved or alternative industrial and agricultural processes that avoid the production of pollutants (e.g., paper making that eliminates chlorine bleaching) as well as alternative products that result in less pollution through their use and disposal (e.g., lead-free petrol, biodegradable detergents, mercury-free batteries, and water-based paints).
Sustainable technologies are the ultimate goal and focus on achieving low or no ecological impact (100% recyclable and non-toxic) and using resources efficiently. Examples include daylight-sensitive lighting, bicycles, cost-effective non-polluting renewable energy technologies, and non-bleached recycled paper.
Clean technology or ‘cleantech’ is considered by many to be the largest economic opportunity of the 21st century. The venture capital industry invested US$8.4 billion in cleantech in 2008.
Clean technologies are technologies that reduce or eliminate their environmental impact through resource efficiency, improving performance, and minimizing waste.
Cleantech is seen as so key to the future of their business that GE has committed US$10 billion cumulative investment from 2010 to 2015 in cleantech. They have been looking in particular at renewable energy, efficiency, and smart grid technologies.
There are a growing number of innovations in sustainable technology in the fields of renewable energies such as solar, wind, and alternative fuels, but also in agriculture, infrastructure, recycling, efficiency, transportation, and storage. Initiatives are abundant, at all levels and in all industries in this area. For example:
Devices that collect energy to generate electricity are being fitted to bicycles in Times Square, revolving doors in the Netherlands, and even dance floors in nightclubs.
Xerox research concludes that 40% of paper printed in the office is discarded after one use, so the company is developing the reusable paper where the image disappears after 24 hours and is reusable 10 times.
A scientist in Taiwan invented an organic chlorophyll battery which can supply electricity within 10 seconds of being made wet with water or any kind of beverage.
The ‘soil lamp’ is an LED light that takes advantage of the electricity generated by the chemical reaction between metallic strips of zinc and the minerals and organisms in the damp soil.
Smog-eating cement was invented in Italy and in the presence of light, breaks down air pollutants like carbon monoxide, nitrogen oxide, and benzene through a natural process called photocatalysis. It is now being used in buildings across Europe, as well as North America.
Kites are being explored instead of windmills as power generators. Kites eliminate the need for expensive infrastructures such as towers and have the potential to supply energy at a fraction of the current cost of electricity in Europe today.
Innovation in existing technologies goes beyond alternative energies; it can also be applied to bring about social change. Social change innovations are occurring in the information and telecommunication areas in particular.
For example, Vodafone ’s mobile payment service allows customers without bank accounts to use mobile phones for financial transactions. Citi’s biometric ATM allows customers in developing countries to access services using fingerprints.
Suppliers and contractors
Why is a close relationship with your suppliers important? One reason: the failure of supplier relationships can have a catastrophic effect on the company brand and image.
This is clearly illustrated by the example of Nike in the 1990s. The company was held accountable by the global public for the child labor practices of their suppliers in Asia, which in turn had a long-standing detrimental effect on its reputation.
Today, companies are realizing that they are accountable to their stakeholders and the public for activities throughout their whole supply chain, including the actions of their suppliers.
By working closely with suppliers, companies of any size can minimize the risk of unknowingly being exposed to negative impacts, and can also understand the environmental and social impacts their products and services have throughout their full life-cycle while exploring ways of creating a better product.
Suppliers usually know their products inside and out, putting them in a good position to help maximize efficiencies and minimize waste. At the end of the day, their business is your business as well.
PepsiCo works closely with their suppliers to ensure that they are working with like-minded companies, and to see what they can learn from suppliers who are further ahead in this journey than they are. As their sustainability strategies evolve, they expect their suppliers to evolve with them.
According to John C. Scott, PepsiCo Director of Responsible and Sustainable Sourcing, ‘Setting expectations for performance with suppliers is good for PepsiCo because it results in suppliers running their businesses more effectively and reducing costs, which ultimately translates into having a better economic relationship with the supplier.
While we recognize we still have a lot to learn in this area, we’re working with them while we continue to refine our approach.’
As you execute your supplier selection strategy and build supplier relationships, keep the following points in mind:
Create a policy for improving the economic, environmental, and social sustainability performance of suppliers.
Integrate sustainability criteria into supplier contracts (e.g., minimum performance standards, code of conduct, performance against targets). Ford Motor Company requires ISO 14001 certification from 5000 of its suppliers with manufacturing facilities.
To help suppliers meet these goals, Ford developed and pro-vided ISO 14001 Awareness Training and created Environmental Recognition awards that recognize suppliers for outstanding environmental achievement and innovation.
Work with suppliers to help them craft their sustainability strategies. Consider hosting a forum where suppliers and buyers can discuss and question decisions and can move forward with real action items.
You are likely to find that many suppliers don’t know where to start and such a forum allows them to learn from the buyer and other suppliers who have already started the journey.
Because of a desire to certify its suppliers that are using forestry products, PepsiCo brought nearly 200 of its largest suppliers together with leading not for profits, NGOs, and government organizations to explain PepsiCo ’s approach and commitment to work with credible organizations that promote responsible business practices, and how those programs tie into expectations for PepsiCo’s suppliers.
Through their supplier outreach programs, PepsiCo also empowers employees to work with suppliers to set goals and monitor improvement in resource conservation programs such as Energy Star and carbon disclosure.
Conduct a baseline assessment of suppliers ’ current sustainability performance. HP’s Supplier Environmental Performance Review Questionnaire aims to provide a tool to gather consistent information on supplier environmental practices and to optimize the transfer of environmental performance information between purchasers and suppliers.
The Body Shop, Canon, and McDonald’s have all instituted rating systems to evaluate existing and potential suppliers on a number of sustainability criteria while others, such as P&G and Wal-Mart, use sustainability scorecards with their suppliers.
Vendors with higher ratings receive a larger percentage of business while increasingly vendors who fail to qualify risk not getting their contracts renewed.
Don’ t ignore the suppliers of suppliers. Many suppliers are themselves managing other suppliers, an area where problems can easily arise if not managed carefully. Companies need to work to make sure their values spread throughout the supply chain.
Novo Nordisk’s sustainable supply chain management program, launched in 2002, works with their main suppliers as well as their second-tier suppliers (those that supply to main suppliers) to support human rights and labor standards, as well as to ensure that sound environmental practices are in place.
Send consistent messages.
Many suppliers work with different companies at the same time. Thus, one of the major challenges for suppliers is keeping track of each company’s individual sustainability programs and targets that it must meet.
In order to ensure that suppliers are receiving consistent messages in terms of minimum standards from the different companies they work with, several international initiatives have also been put into place to help.
AIM-PROGRESS is a group of large international companies working together to develop common guidelines on responsible sourcing. Sedex is a service that connects businesses and their global suppliers to share ethical data.
Support local suppliers. Wherever possible focus on working with local suppliers and even on developing and empowering the local business network. In South Africa, Spier Vineyard’s procurement strategy focuses on supporting locally owned businesses with a focus on creating more wealth and jobs for the local community.
Take a step by step approach. In recognition that their suppliers are at different levels when it comes to sustainability, IKEA created a staircase model applicable to suppliers delivering or producing articles that contain solid wood, veneer, plywood, or layer-glued wood.
Suppliers range from level 1 where the origin of the wood must be known and must not originate from intact natural forests, all the way to level 4 where forests are certified through the Forest Stewardship Council.
IKEA aims to have 100% of its suppliers at level 4. This has brought multiple benefits. For example, the number of wood supply chain audits conducted in 2007 decreased from 90 to 50 due in part to the increased documentation requirements for full FSC chain of custody certification.
Fair Factories Clearinghouse provides information on labor practices in factories around the world (www.fairfactories.org).
In the USA, the Green Suppliers Network is a collaborative venture between industry, the US Environmental Protection Agency, and the US Department of Commerce (http://www.greensuppliers.gov). For more on ethical supply chains, see Sedex and AIM Progress
Transportation systems move goods and people around the globe. However, our increasing reliance upon traditional transportation systems brings its own set of problems to bear: air and noise pollution, traffic congestion and road accidents, over-reliance on non-renewable resources, as well as land use to name a few.
Companies today are looking not just at how their products are created and packaged, but also on the impact that transportation has on the lifecycle of a product. Across the sector many initiatives are taking place to positively impact fuel efficiency, and environmental and personal safety:
Cars and trucks. Companies are choosing to buy more fuel-efficient vehicles, including hybrids and electric cars, and are filling up with alternative fuels where they are available (www.Canadian Renewable Fuels Association) or even using vegetable oil from restaurants.
Driver training programs result in better driving practices that not only reduce fuel consumption but also improve road safety (Greener Driving-UNEP).
In order to reduce the incidence of chemical transport highway accidents, Dow Chemicals and DuPont jointly introduced a Behavior-Based Safety Program to influence the behavior of drivers through observation, coaching, and communication.
WalMart, which owns the second largest private truck fleet in the USA, has committed to doubling its fleet’s fuel efficiency by 2015.
SC Johnson saved US$1.6 million annually through its Truckload Utilization Project, which combines multiple customer orders and different products to send out the most fully loaded and best-configured trucks in order to maximize each truck’s carrying capacity and shipping routes. Shipping companies such as UPS, FedEx, and DHL have similar policies.
Transportation by sea underpins global trade, with 90% of the world’s international trade traveling by sea. While not without its own problems, shipping by sea generally has a lower environmental impact than air or road transport.
One example of vessel operators and port authorities working together to reduce pollution in the Los Angeles port in the USA, which now provides clean electrical hook-ups shore side to avoid cruise and container ships from having to operate generators and engines while docked.
Shipping company Bremen introduced the world’s first cargo vessel with the innovative SkySails towing kite system.
This wind propulsion system harnesses wind energy to assist in propelling the ship, and depending on wind conditions can lower fuel costs by between 10% and 35%. A small freighter could save over US$250 000 in fuel costs per year using this system.
The Global Industry Alliance is encouraging the shipping industry to share approaches on limiting the number of invasive species transferred in ballast water, the leading cause of introducing marine alien species (Home - GloBallast).
The Sustainable Shipping Initiative brings together some of the biggest names in the maritime sector to look at how they can contribute to – and thrive in – a sustainable future (The Sustainable Shipping Initiative).
Air transport. The volume of passenger and freight transport by air is expected to continue to grow, as are demanded by stakeholders to make air travel more sustainable.
At the current rate of growth in air travel and transportation, the UK’s Royal Commission on Environmental Pollution calculates that, by 2050, emissions of greenhouse gases from aviation will account for more than half of the UK’s impact on global warming.
To combat this, the International Air Transportation Association – as well as the Clean Sky initiative in Europe – are working to cut the industry's emissions. One way to achieve this is through advances in aircraft technology that improve fuel efficiency, while simultaneously reducing both operating cost and pollution.
The use of composite materials to reduce weight was introduced in the Airbus A380. The industry is also researching ideas like aircraft with blended wing bodies that would make less noise and use up to 25% less fuel than conventionally shaped aircraft.
Operations managers reviewing their transportation strategy should keep in mind the importance of sourcing raw materials locally where possible, as this can not only reduce transportation costs but also help support the local industries that supply them.
Scania, a leading manufacturer of heavy trucks and buses as well as industrial and marine engines based in Sweden, has the following recipe for sustainable transportation:
Transitioning now to renewable fuels.
Increased investments in developing hybrid technology.
Driver training can improve fuel efficiency by 10–15% and results in lower damage and maintenance costs.
Correct tire pressure, rolling resistance accounts for about 30% of a vehicle’s fuel consumption.
Improved efficiency of the transport system by eliminating empty or near-empty runs.
Greater cargo capacity through longer vehicles and maximized cargo space.
Reduced air resistance by correctly fitting objects mounted on the truck.
Better fuel economy with the latest technology.
Believe it or not, waste has become exciting. We may have once thought of waste as dirty, uninteresting, expensive, and useless, but today, numerous pressures are combining to make waste management a focal point in sustainability.
Faced with increasing regulations, public pressure, raw material, and landfill shortages, and the need for increased resource efficiency, companies are moving away from the waste treatment approach and toward waste prevention and reuse.
Apart from obvious environmental and societal benefits, cost remains the most serious driver for improving waste management.
Treatment, handling, transportation, and disposal of waste all add significant costs to a business, especially when the waste is hazardous. Hidden costs, such as the loss of raw materials, cost of treatment, time and energy, are often ignored and can increase the true price tag of waste as much as five to twenty times.
From a business point of view, pollution and waste represent the incomplete, ineffective, or inefficient use of raw materials. Since waste does not enhance customer or stakeholder value, it has no place in business.
According to the New Zealand Business Council for Sustainable Development, ‘Zero Waste means a 100% resource efficient economy where, as in nature, material flows are cyclical and everything is re-used or recycled harmlessly back into society or nature.
“Waste” as we think of it today will cease to exist because everything will be viewed as a resource.’ Today, many global companies such as DuPont and Xerox are aiming for zero waste. Carpet company Interfaceflor has a mission to achieve zero waste.
They define waste as any cost that doesn’t produce value to their customers, including scraps or materials sent to landfills as well as resources, time, and energy wasted when they don ’t do things right the first time. This also includes zero emissions and zero oil, a tough challenge since carpets are currently made with oil.
In rethinking waste management, companies should first and foremost identify what the waste streams are, and how much waste is being generated throughout the lifecycle and supply chain from raw materials to packaging. Then a company should look at:
1. Preventing the waste altogether. Considering product design to avoid producing waste in the first place.
2. Reducing waste. Minimizing the amount of waste produced through design, procurement, and less packaging.
Recycling and reusing. Where waste cannot be prevented, as many of the materials as possible should be recovered through recycling or reuse.
4. Improving disposal and monitoring. Where there is no other choice, waste should be disposed of safely and appropriately.
Several waste management strategies are rapidly gaining popularity that addresses one or more levels of the waste hierarchy:
Extended producer responsibility.
The EU has several directives that oblige member states and EU producers to set up and participate in product take-back schemes for electronic goods and automobiles.
These schemes, also called EPRs, have been established to push for changes at the source that reduce the environmental impacts of products throughout the lifecycle.
EPRs place the physical and financial responsibility on producers to recover and then dispose of, recycle, or reuse their products. These schemes can also be extended to include the responsibility to provide information on the environmental and social properties of the products manufactured.
Overall, the EPR strategy not only encourages companies to follow principles such as eco-design and minimization of hazardous materials but also shifts the cost of waste collection away from municipalities. It also forces producers to better internalize the full costs of waste.
Turning a product into a service. Schindler, an elevator company, determined that rather than selling its high-quality elevators as a product, it would rent out a ‘vertical transportation system’ to its customers. The decision benefits everyone. The company keeps the asset on its blogs and remains responsible for all service and repairs.
Schindler can also invest in providing the most up-to-date quality product they can and provide more tailored solutions to the needs of their customers, which helps them attain their profit objectives. Xerox ’s leasing program recovers and reuses materials and components from copiers, including toner.
Both Schindler and Xerox represent a new trend – companies that are exploring what is known as Product Service Systems (PSS), moving from selling a product to renting the service that the product provides.
The idea of PSS is nothing new; launderettes, movie theaters, and libraries are all based on the same principle. What is new is the way that increasing numbers and types of businesses are exploring these opportunities by re-examining the original assumptions behind an existing product, material, or service decision.
Instead of traditional product decisions based on resources available, and ability to sell, these companies are focusing on the original need the product fulfills and providing that service instead.
Byproduct synergies (also known as industrial ecology or industrial symbiosis) involve a range of organizations – such as companies, offices, and government – acting together as a single ecosystem, taking one company’s byproducts and waste and selling or sharing them as primary inputs to another company.
The idea behind byproduct synergies is to design and operate industrial systems as living systems.
Within a company. BASF’s Verbund is an integrated system within its manufacturing plants that allows byproducts and waste from one plant to serve as the raw materials in another plant. Calculations show that this saves the company about €500 million each year at the company’s Ludwigshafen site alone.
Between two companies. The Carlton United Brewery in Australia sells the extra yeast produced in its brewery to Kraft, which uses it to make Vegemite, a popular yeast-based spread.
On a small scale. Green Zone in Sweden combines a Ford car service center, a Statoil fuel station, and a McDonald’s, all of which are heated using a central heat pump and ground source technology.
Surplus heat generated by the McDonald’s grills as well as the heated coolant water from Statoil’s refrigeration system is transported to the central heat pump, thus allowing the buildings to benefit from the energy surplus.
On a large scale. In the Danish industrial town of Kalundborg, over 20 partners share waste and other materials including Asnacs (the largest coal-fired plant in Denmark), Statoil (an oil refinery), Novo Nordisk (a large biotechnology company), a plasterboard company, and the town of Kalundborg.
There are also a growing number of initiatives internationally that enable one business to sell their waste, regardless of what that might be, to another business.
Recycle Match, for example, allows sellers to post waste or recyclables, buyers can bid on the materials, and the materials go to the best bid. Some companies have similar systems set up internally as well.
Ensuring quality. A number of corporations are looking at preventing waste from occurring in the first place, in part by ensuring quality and minimizing waste. Many quality-focused approaches originate from Japanese business mentality.
Hoshin Kanri says that the success of the product or process development is directly linked to the ability of an organization to put into practice its strategic goals. Kaizen is ongoing, continuous improvement.
It can be implemented in corporations by improving every aspect of a business process in a step-by-step approach, while gradually developing employee skills through training and increased involvement.
Poka-Yoke is designed either to prevent an error from happening or to make an error obvious at a glance.
This approach aggressively seeks to eliminate the possibility of errors and waste and to increase resource efficiency in the entire product lifecycle.
Lean manufacturing, based on the methods pioneered in the Toyota production system, focuses on eliminating waste, enhancing quality, and delivering value to customers while achieving environmental performance goals at the lowest cost.
Lean manufacturing derives specific strategies and actions from the idea that environmental waste does not add value to the customer, is a sign of inefficient production, and that it affects production flow, time, quality, and cost.
Lean typically targets seven kinds of waste: overproduction, inventory, transportation, motion, defects, over-processing, and waiting.
Creating new products from old ones. Some companies are exploring how they can create new products using waste from old products.
TerraCycle collects non-recyclable packaging from a range of food and drink items and turns it into backpacks and other items sold in major department stores. Method cleaning company makes new plastic bottles using waste plastic recovered from the ocean.
Starbucks is doing research to see how they can transform food waste – in particular, the 5000 tons of used coffee grounds produced each year – into a key ingredient used in making plastic, laundry detergent, and other everyday products.
Worn Again works with large companies to turn their existing textile waste – through upcycling, downcycling, and reuse – into new products.
For example, they created a range of bags and accessories for Virgin Atlantic using old airline seat covers.
Tapping into garbage dumps. There are several threads of thought that now involve how garbage that has already been disposed of in landfills can be mined for resources.
Methane gas produced by decomposing garbage in dumps in New Jersey is captured and used as fuel to generate electricity. There are 21 landfills being used like this in the state, and 445 across the USA.
Dumps are also being mined for materials. For example, in the USA about 680 000 tonnes of aluminum cans are thrown out every year, totaling about US$1.83 billion worth of metal per year.
The world throws away 18 million tonnes of electronic waste each year, and one tonne of scrap from discarded computers can contain more gold than can be produced from 16 tonnes of ore.
So, why aren’t more companies tapping into this? As mining garbage is costly and often hazardous, many are finding that the best use of their resources is to stop products from reaching the landfill, to begin with, Challenges?
Gathering information. The transparency of supplier information is not always available and accurate, especially when you are looking beyond just a company’s suppliers to also look at the suppliers of those suppliers.
Misalignment between companies and their suppliers. Often there is a lack of effective communication between companies and their suppliers. Suppliers do not have financial incentives, such as increased orders or preferential contracts, and are not given any support for putting in place sustainability systems.
Also, each company has different requirements for its suppliers, making it complicated and expensive for suppliers to engage.
A large number of standards. The increasing number of regulatory and industry codes with different requirements is generating confusion, and often results in multiple audits all with different recommendations.
These efforts take time. Sometimes it is unrealistic to look at the whole supply chain. Changes are often easier to make incrementally, or one step at a time. Companies should adopt a process of continuous improvement.
Ideas. The biggest challenge often lies in just learning how to tap into your creativity and to imagine the possibilities.
Inspiration from nature
Tapping into nature for inspiration is nothing new. What is gaining momentum is the use of nature as inspiration for new and better technologies, an idea made popular through the concept of biomimicry. Biomimicry ‘studies nature’s best ideas and then imitates these designs and processes to solve human problems.’
Nature is the source of ‘technologies’ that have been used by the natural world successfully and sustainably for the past 3.8 billion years.
Increasingly, biologists, engineers, architects, and business leaders are coming together to learn how to tap into and use nature as inspiration for the development of new products or to completely redesign existing ones.
So how does it work? The Shinkansen bullet train in Japan, which travels at 200 miles per hour, used to make lots of noise as it emerged from tunnels.
The chief engineer, an avid bird-watcher, tried modeling the front of the train after the Kingfisher bird’s long pointed beak, which enables the bird to dive from air into water with a very little splash.
The result was a train that was not only quieter but used 15% less energy, even when the train traveled 10% faster. One does not need to be a biologist to explore these opportunities as they surround all of us.
Some tips to get started in product design through biomimicry:
1. Don’t ask ‘What do I want to design?’ Instead, ask ‘What do I want my design to do?’ and ‘Why do I want my design to do that?’
2. Ask ‘Does nature do this function, and if so, how?’
3. Explore natural models by going outside and doing first-hand research.
4. Brainstorm multiple solutions.
Products that do more
We are starting to see the beginning of a new era, in which both companies and consumers are not just content with ‘doing no harm,’ but actually look for ways to ‘do more good.’ Already we see homes installed with solar panels ‘selling’ excess energy back into the power grid.
What’s next on the horizon? Perhaps, cars that not only generate enough energy to run themselves but also put extra energy into the electrical grid and engines that filter the air, releasing it cleaner than it came in.
The next time you are waiting in line, keep an eye out for floors that use the footsteps of pedestrians to generate power, a great way to provide the energy needs of supermarkets and railway stations.
The Spinnaker Tower in Portsmouth, UK, will be using this technology on the stairs that visitors go up to reach the 560ft high viewing platform.
The next wave of global consumerism will focus more on selling products that make it easy for people to ‘go green’ and on allowing consumers to save money . . . or even make money by being green.
Throughout this blog, we have talked about how companies are looking at environmental and social issues across their supply chains.
How they make their supply chain more sustainable is often communicated to the consumer through eco-labels (see blog 11). But eco-labels are merely a starting point for some companies and consumers.
In the past, consumers got information about the positive and negative aspects of product lifecycles from consumer websites, but increasingly the producers themselves are providing that information via the ‘backstory’ as it is called.
Icebreaker, an outdoor clothing company based in New Zealand, has tagged its garments made from merino wool with a code that customers can enter on the website to check out the product’s history – known as a ‘Baacode.’
In Japan, grocery shoppers can use cell phones to scan RFID tags on food items to find out more details about the origins.
Companies are exploring a range of ways to make their factories more sustainable, many of which are explored throughout this blog. PepsiCo has come up with an interesting plan to reduce water consumption by aiming to use the water taken from the 350 000 potatoes it uses annually.
Since potatoes are made up of 80% water, it is hoped that within the next few years all water used in UK factories will be from the potatoes, taking them off the water mains completely.
NGOs have been increasingly active in identifying and organizing campaigns against companies who are pursuing unsustainable activities in their manufacturing facilities. Greenpeace.
for example, has had a series of campaigns including Detox and Dirty Laundry, which raise awareness and push for action against pollution coming from textile manufacturing plants in China.
As a result, companies such as Nike, Puma, and Adidas are pledging to eliminate chemical discharges throughout their supply chain by 2020 and formed the Sustainable Apparel Coalition to collaborate in taking action.
People are being asked on a day-to-day basis to make decisions about changes to their lifestyles in order to prevent something bad from happening in the future, a future their children will see, but they themselves may never see.
Many sustainability messages focus on issues that are not tangible for the consumers, either because they are occurring far away, will not occur during this lifetime, or are difficult to observe on a daily basis.
The solution is to focus on those things that do impact consumers and communicate this to them.
According to the UNEP/Wuppertal Institute Collaborating Centre on Sustainable Consumption and Production, 80% of data currently collected focuses on impacts from manufacturing; however, 80% of the impacts themselves occur during end use.
More and more we will see companies providing information to customers to enable them to use and dispose of the products sustainably. This includes monitors that show how much energy, gasoline, and water is being used in real time and how this translates to money saved and environmental impact.
Exploring new materials
Many eco-friendly raw material alternatives are being explored for use in everything from textiles to building materials, including algae, soy, bamboo, organic cotton, and hemp. For example, Patagonia makes fleece sweaters using recycled plastic bottles.
Bioplastics which have similar properties to plastic but are made of natural sources such as corn, potatoes, tapioca, and sugar are already being used in cars and shampoo bottles. Car manufacturers are looking at making greener cars using bananas, pineapples, and dandelions.
Dell ships its servers in mushroom-based packaging instead of foam. Researchers in Spain have even found a way to turn leftover cheese into food packaging.
There is even an annual competition focused just on rethinking the brick to make it more sustainable. Nike has a Sustainable Materials Index which lists over 16 000 materials used in their products each year.
Websites such as Ecolect, Materia, and Material Connexion (The leading materials-driven design resource.) provide searchable databases and information on a variety of sustainable materials options.
Companies have been using crowdsourcing for years now as a way of involving their customers and the general public in their brands.
Random Hacks of Kindness is a community of over 5500 innovators who work to make the world a better place by developing practical, open-source technology solutions to respond to some of the most complex challenges facing humanity.
They work on solving problems posted by companies such as Yahoo! and Nike (www. rhok.org). An Austrian manufacturer asked customers to come up with new flavors for its all-natural hemp milk drink.
In the USA one politician started a ‘Make your own law’ contest, inviting the public to write legislation with the promise that the best would be introduced as a bill.
Now we are seeing a move toward co-creation when individuals or groups come together to design a whole new product or service. The car industry has tried to innovate for the past 100 years, but for the most part, cars look the same as they always have.
Loco Motors has an online community of car lovers who collaborate and compete to design vehicles incorporating sustainability and efficiency, for regional communities. The winning designs are then produced and sold to those communities.
The lifecycle approach (LCA) looks at the environmental and social aspects and impacts of a product or a service across all stages of production and consumption, from design to disposal.
For each part of the LCA, the company looks at the inputs, what is needed to make the product, for example, energy, materials, labor, and outputs, what comes out of the system, e.g., products, waste, emissions.
Lifecycle thinking can be applied at several different levels; to the whole product, just one part of the system, or a particular decision for a material.
Companies then choose to either make changes across the whole lifecycle, or just those with the biggest impact, or a combination that represents incremental improvements.
For example, when P&G conducted a lifecycle assessment of its laundry detergents it found that 85% of greenhouse gas emissions were coming from customers heating the water to do the laundry.
In response to this new information, it developed cold-water detergents that both saved customers money on energy bills and reduced their emissions. It was the first company to launch cold-water detergent in both the USA and Europe.
According to the UNEP/SETAC Lifecycle Initiative, a lifecycle approach promotes:
Awareness that our selections are not isolated but are part of a larger system. For example, the decision to purchase office paper. It takes 24 trees to create 50 000 sheets of paper and 2.3 cubic meters of landfill space to dispose of it.
Thus, the choice to procure recycled paper and paper products from sustainably managed forests and to reuse and recycle paper after use impacts multiple points in the system.
Making choices for the longer term and considering all environmental and social issues associated with those. Thinking about the whole lifecycle of a product helps avoid making short-term decisions that can have a lasting negative influence, such as over-fishing or releasing pollutants into the air.
Improving entire systems, not single parts of systems. Lifecycle thinking was initially designed to prevent decisions, for example, that fix one environmental problem but cause another unexpected or costly problem to arise.
This approach helps prevent shifting problems from one lifecycle stage to another, from one region of the world to another, and from one environmental or social issue to another.
Informed selections but not necessarily ‘right’ or ‘wrong’ ones. Lifecycle thinking helps put the decisions that are made about products and processes into context to look at the unintentional impacts of our actions, such as damaging nature or supporting unfair labor conditions.
If we fully understood the impact of these actions, we might choose to act differently, in the best interests of people and planet.44
For businesses, this approach also helps to understand products, processes, and services better and the impacts these can have on the environment, on society, and on the company at every step.
Companies can make better decisions and find opportunities to improve products and processes and ultimately, their bottom line.
For companies such as Johnson and Johnson, tracking the life-cycle costs avoided as a result of sustainability projects has helped them to build a strong business case for environmental goals and programs.
Tips on conducting a lifecycle assessment
Understand what your goal is before starting. This includes why you are looking at your product’s lifecycle, and what kind of information you need to know in order to make the necessary decisions.
Determine how much information you need. There are so many different elements of a product that you can gather information on that it can very quickly become overwhelming. Understand that the lifecycle will not give you all the answers. It should be used as one component of a decision-making process.
The lifecycle assessment checklist
The following checklist provides a range of topics and issues to address in analyzing the lifecycle of a product:
Design. The lifecycle begins at the design table, where designers of products or services decide on what the product or service will be produced, the need it fulfills, and the resources needed to produce it.
Follow the principles of eco-design to create simpler designs with fewer components that are easy to separate for repair and recycling, and are modular to permit easy repair, recycling, upgrades, or service; and create efficient production processes that aim for zero impact.
Uphold labor standards and human rights throughout the lifecycle. Design products that minimize the use of chemicals, incorporate recycled and recyclable materials, use more durable materials and reduce waste and energy use during production and use.
Sourcing material. Once the materials have been selected, they need to be sourced (e.g., wood, minerals, water, etc.).
Use materials with less environmental impact, for example, timber from sustainable forests.
Work with suppliers that use sustainable processes to extract raw materials.
Source locally available materials and resources.
Apply green chemistry to production processes, and minimize and phase out purchase, use, handling, and disposal of materials and substances that are hazardous or toxic.
Work with suppliers to increase supply chain efficiency.
Use byproducts or wastes from one process in another product or process.
Production and manufacturing. Raw materials are transformed into the product through a series of processes.
Use eco-efficiency and clean production concepts in production processes.
Reduce material variety and weight. Aim for sustainable technologies.
Meet all applicable environmental regulations, safety and performance standards, and labor and human rights standards.
Sell byproducts to others as primary inputs.
Packaging and transportation. Once created, a product is then packaged and transported to distribution centers and to the customer.
Use minimal, robust, reusable, returnable, recyclable packaging. Look at innovative solutions such as labeling the product instead of packaging.
Design products that are easier to transport and store.
Use reusable or recyclable shipping containers, pallets, skids, or packaging.
Use fleet management tools, techniques, and technologies to optimize distribution and shipping efficiency.
Use. How the product or service is actually used has quite an impact on the overall lifecycle of a product.
Use fewer resources and cause less pollution and waste during use. Optimize functionality and service life by communicating multi-functional, modular features, part load operations, upgradeability, energy efficiency, simplicity, increased durability, reliability, reusability, easy maintenance.
Educate users about how to best use and dispose of products.
Look at other inputs needed for use (such as for cleaning or maintenance).
Increase the service intensity and/or leasing options for your products. Encourage customer sharing, swapping.
Disposal and end of life. Finally, the end of the lifecycle is how the product is disposed of after use.
Reduce the environmental impact of disposal by allowing easy reuse, recycling, ease of disassembly, the ability to remanufacture.
Find innovative uses for waste.
Label reusable and recyclable content.
Educate consumers about how to dispose of products.
Provide product refurbishment, remanufacturing, refilling, or other services.
Offer exchange or take-back program for old or used products. Swedish jean company Nudie Jeans provides consumers with free repair kits to fix jeans. Kits include denim patches, needle, thread, thimble, and even a booklet and online video to help with the repair.
Information technology/information systems
Information technology and systems play a key role in allowing an organization and society to move forward with sustainability goals by facilitating the collection and analysis of information which can allow a business and its employees to make better, more sustainable decisions both at work and in their everyday life.
Because IT and IS are so important to sustainability, these topics are also brought up throughout the different blogs of the blog.
Information technology (IT), which is often also called information and communication technology (ICT), describes the technology and equipment used to display, process, transmit, or store information.
The IT industry is currently responsible for 3% of the global carbon footprint and IT applications have a very large potential to enhance performance across the economy and society (the remaining 97%).
According to the Global E-Sustainability Initiative (GESI), IT-enabled solutions offer the potential to reduce GHG emissions by 16.5% and yield US$1.9 trillion in savings.
Telstra in Australia, for example, estimated that the use of telecommunications could reduce the country’s greenhouse gas emissions by 5% by 2015 using wireless and GPS to schedule personnel between jobs at remote sites to reduce distance traveled;
enabling flexible working for knowledge workers to save office space, to have devices that turn off when they are not being used, and replacing business air travel with video conferencing. Some elements of green IT include looking at:
Reducing energy use. Green IT is very much about making electronic equipment more efficient and sustainable, both in the production of the equipment, its use, and eventual disposal/ recycling/reuse.
Choosing electronic products. Companies are increasingly buying electronic equipment that is more sustainable. Several tools, such as the Electronic Product Environmental Assessment Tool (EPEAT) and eco-labels such as Energy Star and Blue Angel, help make that choice easier.
Reducing toxicity. Some IT equipment contains hazardous substances such as flame retardant, mercury, and cadmium. In the EU, the Restriction of Hazardous Substances initiative (RoHS) restricts the use of certain hazardous materials in electronic products. IT equipment also often includes the use of non-renewable resources such as lead, tin, or copper.
Increasing product longevity. End of life accounts for a large part of the IT industry’s ecological footprint. Creating equipment that is upgradeable, modular, and lasts longer is key.
Greening data centers. A lot of work is being done around making data centers more efficient, in particular in terms of air management and cooling systems.
Dealing with e-waste. Electronic waste is a big problem because it contains toxic material. Some e-waste can be sold because it contains substances that can be recoverable, such as gold and silver. Countries and regions, such as Europe, have regulations which ban e-waste from landfills.
Ethical issues. A growing discussion revolves around exploring the ethical issues in new IT innovations, such as issues around the 3D printing of weapons, artificial intelligence, or privacy issues.
Information systems (IS) are any combination of information technology and people’s activities that support operations, management, and decision-making. Green IS refers to the design and implementation of information systems that contribute to sustainable business practices.
For example, IS can help an organization reduce transportation costs with fleet management systems and dynamic routing of vehicles to avoid traffic congestion and minimize energy consumption.
Green IS is increasingly being developed to give us access to information on demand, to know where things are at any given moment – whether that be a package or a person – and to provide a single source of accurate data to help with decision-making. Uses also include:
Creating smarter, more sustainable cities such as smart buildings, logistics, vehicles, grids, etc.
Creating smarter supply chains by bringing together information from across the supply chain, including the ability to share information around logistics, management, tracking, monitoring but also resource reuse and recycling.
Creating smarter organizations by bringing together information that already exists around sustainability across the system and gathering new information to raise awareness and provide information for better decision-making.
Taking the data and putting it into perspective so people can collect, analyze, report, set strategies, set targets all from the same viewpoint.
Putting the information into the right person’s hands, whenever they need it and wherever they are.
UPS has a project called telematics, where its delivery trucks each have a black box that records data such as seatbelt usage, harsh braking, idling time, reversing, speed, and routes.
The data is then mined to determine how the company could use its fleet better. UPS was able to cut idle time by 24 minutes per driver per day with an estimated fuel saving of US$188 per driver per year.
With 90 000 drivers, this has made a big impact not only on the bottom line but also in terms of reducing emissions and resource consumption.
Unilever, PepsiCo, Marks and Spencer, and other companies that make up the Cool Farm Institute – a group helping growers to reduce the carbon footprint of their produce and livestock – produced a free online tool for farmers to calculate and reduce their footprint.
Another sustainable agriculture group made up of companies such as Wal-Mart, Kellogg, and Coca-Cola created the Fieldprint Calculator, a free tool to help growers analyze how their farming practices impact natural resources.
The increased availability of information through IT and IS is also helping consumers and individuals to make smarter decisions in their daily life. This can include monitors that give real-time information on energy use in the house, for example.
In the USA and Canada, ‘NEST’ smart thermostats are being installed in homes which not only allow remote control from smart devices but also learn your heating/cooling patterns and save energy when the home is empty.
SAP is looking at a project to see if they can break down an individual's ecological footprint within a particular company. Employees would receive a message stating what their footprint in the company this year was, and what percentage of fellow employees had the same footprint, to raise awareness and encourage action.
The bike-sharing scheme Velib in Paris is successful because of its sophisticated information system. Each station has a computer terminal from which an individual can purchase a subscription, recharge an account, or determine available bicycles at nearby stations.
RFID tags that connect each bike to the station enable the locking mechanism. Green IS increases the convenience of Velib, meaning more people use the service.
The challenge with IT and IS in an organization is that there is often limited organizational capacity to commission and manage these types of projects.
In addition, organizations often have a ‘busi-ness as usual’ approach to IS and IT – meaning that they are reluctant to change because of the high costs of implementation or the perceived lack of return on investment.
New technology and information systems often require individuals to learn how to use them, which can take a lot of time and effort. However, companies are increasingly realizing that they cannot move forward with their sustainability goals unless they have access to information, and IS is key in providing this.
HR and Organizational Behavior
‘CSR – HR = PR. If employees are not engaged, Corporate Social Responsibility becomes an exercise in public relations. The credibility of an organization will become damaged when it becomes evident that a company is not “walking the talk”.’
CANADIAN BUSINESS FOR SOCIAL RESPONSIBILITY
At a recent sustainability conference, the keynote speaker addressing one of the challenges of sustainable development said, ‘Money is not the issue, it’s people!’ The speaker had a point.
Companies everywhere are putting in place sustainability programs but are not always seeing the benefits and impacts that they expect.
This is because the success of a sustainability strategy depends on being able to integrate these issues into the company’s culture and the way a business operates on a day-to-day basis.
To do this you need to align the key systems and processes on which delivery of an organization's sustainability programs depend (e.g., managing change, developing competencies, supporting engagement, managing talent, encouraging diversity, recruitment).
All managers within an organization play a role in embedding sustainability into the culture of that organization.
The Human Resources department generally has constant links with all groups within a company, and a finger on the pulse of the whole organization.
The people in this department play a key role in promoting positive behavior, creating an engaging workforce, and creating an environment where sustainability is embedded in every aspect of the employee’s lifecycle, from recruitment to retirement.
Not only should HR play a key role in the development of a sustainability strategy, it should also play an even more important role in implementing that strategy by embedding it into the way the organization works, making sure that what a company says they are doing is consistent with what they are actually doing.
Why is it important?
Highly strategic issue. More than half of the Global Reporting Initiative indicators can be considered to be related to HR. There is a growing international consensus that human capital management will become the biggest strategic issue for business.
Poor human capital management is considered to be one of the biggest threats to the long-term success of the global business.
Changing labor markets. Taking sustainability issues seriously will help companies recruit and retain top talent. Graduates and potential employees at all levels are increasingly asking to work for companies with serious commitments to environmental, social, and ethical responsibility and know how to identify corporate ‘greenwashing’ rhetoric.
Saves money. It is a myth that HR represents the ‘soft’ side of the business. In fact, HR is a costly business if not taken seriously. Replacing an employee often costs two or three times his or her salary. Keeping employees happy and motivated reduces recruiting and attrition costs and reduces absenteeism.
Increased productivity. Organizations with an internal commitment to sustainability experience happier employees. Not only do they get involved in meaningful activities, but they also bring employees together and teach them new skills.
Studies show that 75% of employees who consider their employers to be sustainable exhibit high levels of commitment and that employees with high levels of commitment perform 20% better than their peers and are 87% less likely to leave the organization.
Reputation. No matter how slick the web and media presentations, a company’s sustainability policy may be perceived merely as greenwashing if its employees are not informed and actively engaged in carrying out this policy through their relationships with customers and stakeholders.
The key concepts
Embedding sustainability thinking into a company’s organization involves integrating it into the underlying systems and processes that govern behavior within that organization.
Systems and processes to embed sustainability thinking
Sending consistent messages about sustainability across the company
Attracting and hiring the right people to carry out that strategy
Retaining those employees in the organization
Providing incentives and rewards that are in line with sustainability
Providing employees with the right tools
Advice for ensuring successful change programs
Creating a culture of sustainability
Motivation and rewards
Talent development and training
Creating a culture of sustainability
The story often goes like this: XYZ company decides to get involved in sustainability, puts together a sustainability strategy with goals, sends an internal memo around the organization saying they are now going to be more sustainable, but neither implements the strategy nor achieves the goals. What went wrong?
Putting in place systems and processes related to sustainability within an organization is not always enough. Few managers understand that in order to be successful and really reap the full benefits, they must be committed to mainstreaming sustainability into the values and belief systems already present in the organization.
Organizational habits – the way in which people work and make decisions, on a day-to-day basis – must be understood and molded to accept the necessary changes, move forward, and make sustainability goals possible.
Sustainability isn ’t just something you do, it is a way of thinking that can be applied to everything you do; a sort of lens through which to see the world in a more environmentally, socially, and economically profitable way.
If all employees see through this lens then the necessary changes are embraced and new opportunities emerge.
Of course, embedding sustainability into the culture of an organization is easier said than done. A company’s culture is made up of the values, beliefs, underlying assumptions, attitudes, and behaviors shared by a group of people.
It is a set of rules that govern how employees work together, some written but mostly unwritten.
A culture is not just something you create, or that you can simply change. It is formed over time by the people, processes, and systems that a company follows, and is a result of taking action and being consistent.
Every organization has its own unique culture, so not surprisingly some cultures will make it more challenging to embed sustainability thinking than others. Several elements contribute to an organization’s culture:
The basis of a company’s culture is commonly formed by the founder of the company and the values that she or he based the company on.
If the founder built the company upon values that are intricately linked to sustainability or that support sustainability, it will be easier to embed sustainability into the culture.
The CEO. The individual at the top of the organization has a tremendous influence over how an organization operates. People take action based on her or his words and actions. A consistent message from the top will help to push change across the company. An inspired leader will play a key role in motivating and inspiring others to action.
The employees. Many times the culture of a company is created not by those at the top but rather is created from the bottom up by the employees themselves.
Management. A large part of the culture is also driven by the managers of a company, what they pay attention to, how they react to situations, how they communicate with others, what they reward, and which issues they consistently support.
Mission, value statements. Many organizations have a set of written rules such as mission statements or formal declarations that attempt to explain what the company stands for.
It is not enough to just have these, they must really represent what the company is and where it wants to go and be part of the culture. Many companies make changes to these to reflect their focus on sustainability.
Codes of conduct. Codes of conduct throughout the organization guide the behavior of people by telling them what behavior is and what is not acceptable in the workplace. These take the form of both written and unwritten codes (i.e., culturally or historically accepted ways of behaving). These should be understood and practiced by the organization.
What is rewarded? How employees are judged, rewarded, and the criteria for promotion and firing tells a lot about what is expected of employees and how seriously sustainability is taken by the company.
How people interact. How people interact within the organization. Do they work together, do they share information, or is there competition within? This isn’t just about those in the company, but also the perceptions of potential employees, business partners, customers, etc. that can be even harder to change.
Material aspects. These are tangible aspects of culture which are often the most important ways in which culture is manifested, reinforced, and communicated. This can include rites and rituals. How the office space is organized and used can also say a lot about the culture of an organization.
Everyone agrees that communication is important. Nevertheless, many companies are not communicating their sustainability strategies effectively to their employees in a way that allows them to become actively engaged and involved.
Different companies have chosen different ways of communicating their sustainability strategies to employees. Shell produced a biodiversity management primer brochure that brings together the information that employees need to know about the company’s position in relation to biodiversity.
It explains what biodiversity is, why it is important for the company, what the company ’s commitments are and, most importantly, what managers at Shell can and should do to manage their impacts and help conserve biodiversity.
The CEO of carpet company Interface meets with senior management regularly to discuss sustainability issues. Those senior managers then go on to communicate the message to their staff. This continues until all members of staff have been informed. Approaches to communicating sustainability are both top-down and bottom-up.
Communication on sustainability should answer the following three questions:
1. Why is sustainability important to the company? Why are these issues important to the company? How do they affect the company? Why have leaders of the company chosen to act? Once an individual understands why most of the battle is already won.
2. What is the company doing about it? Information should be given relating to how the company is reacting to this risk or/and opportunity. Is there a new partnership, a new code of conduct, a new goal?
If an issue is truly important to the company and there is a strong reason why employees will see that message delivered consistently through the different levels and processes of the company.
3. What can employees do? Communication should not only be about raising awareness of the direction of a company and its sustainability strategy. A major part of communication needs to be aimed at how this affects the employee and what their role is.
Recruiting is a two-way process. A company’s engagement in sustainability depends in large part on the kind of people it has working for it.
The company needs to adjust recruiting processes to attract employees with the necessary skills. To be competitive in recruiting, companies can no longer ignore sustainability because graduates and new employees are asking for it and are often pre-assessing the social and environmental performance of companies before choosing an employer.
Potential employees are increasingly looking to work for companies that have a good reputation, are ethical, provide a good work environment, and share the same beliefs as they do. When looking at embedding sustainability into your recruitment processes, consider the following:
Recruiting strategy. The first step of HR in supporting the company's sustainability strategy is to align its recruitment strategy with it.
This means aligning recruitment processes (including job descriptions) to that sustainability strategy based on identifying the skills, experience, knowledge, and attitudes of potential staff members.
A clear strategy makes people want to work for you and ensures that you get very strong applicants who know why they want to work for you.
External communication. Candidates for recruitment should be sent consistent messages about what the company represents through the company website, the recruiting website, and all other recruiting communications. Information on what the company is doing in sustainability should be consistent across all communications and should be easily accessible.
Interviewers should be armed with knowledge about the company’s sustainability policies not just so they ask the right questions, but also so they can answer those that interviewees may ask them.
If the individual giving the interview cannot answer simple questions made by the interviewee about the company’s sustainability direction, then this can send the message that it is not everyone ’s business and that the company isn’t serious about it.
The employment package. When putting together a package to recruit employees into the company, look at all the different elements of that package from pension funds (sustainable of course) to opportunities for employees to take paid or unpaid time off to do community service.
An individual’s job description sets out what they will be expected to do and what their roles and responsibilities are. Sustainability should be incorporated into this.
First messages. Once you have the right people you need to set their expectation of how things work in the company. If it really is important these messages will be delivered consistently and from the start. Employees arrive at a company fresh and open to learning, so take the opportunity to inform them as soon as they enter the door.
This involves not just training (explained further on) but also the way new employees are introduced to the company. Are office greening projects emphasized during the tour of the buildings and facilities? Are these issues introduced to new employees from day one?
Current employee recommendations. Current and past employees can be very effective ambassadors, spreading the message about what a company stands for to the public, potential customers, and also to potential employees.
According to a survey by KPMG, only 20% of workers who felt that their bosses lacked integrity would recommend the workplace to recruits.
In comparison, 80% of the respondents who believed their company managers had strong ethics would recommend their organization.
Organizations are looking for employees who will give 100% to the organization, who will go above and beyond what is expected. Employees are looking to work for companies with a stimulating environment. Employee engagement is when both meet: when an employee is committed to the organization and pushes forward its missions and goals.
Engaged workers are much more likely to be committed and productive. Studies done by PwC show that employees who are more committed to their employer perform 20% better than their peers and are 87% less likely to leave the organization.
However, engagement is an attitude that is nurtured over time.
Some of the drivers of engagement include:
A sense of feeling valued and involved, with the potential to make a positive difference to the company.
Freedom to voice ideas that managers not only listen to but respond to.
Opportunities to develop on the job.
A sense that the leaders of the organization care about the well-being of employees and the planet.
A feeling by employees that they are well informed about what is happening in their organization.
The belief that managers and the CEO are walking the talk.
Companies that engage employees on issues of sustainability find the benefits diffuse throughout the organizational hierarchy. Involved employees are a source of knowledge and provide feedback to management about ways to move forward. Employees want to understand the contribution that they can make.
There are countless ways to engage employees in your sustainability efforts in a way that benefits the employees, the company as a whole, and often the environment and the community:
In defining the strategy. IBM’s Big Green Innovations program includes environmentally focused initiatives, looking at advancing water management, alternative energy, and carbon management.
The idea came out of the IBM innovation jam in 2006, which involved 150 000 employees blogging for two to three days, and resulted in 30 000–40 000 new ideas. These were narrowed down to 10, which the company decided to adopt, of which Big Green Innovations was one.
In identifying problems. Employees can be using sensors in identifying problems before they occur. One company has a program in place that involves all of its employees in identifying health, safety, and environmental risks. Every employee is required to report at least one potential environmental hazard into the system each year.
In coming up with solutions. Employees are often best placed to identify ways that their jobs could be done better. In order to take advantage of this, many companies have systems in place so that when employees are asked for their ideas and suggestions they can be processed, assessed, acted on, and feedback is given.
The 3M Corporation has been doing this since 1975 when they set up their 3P program (Pollution Prevention Pays), which relies on the voluntary participation of employees to identify ways to reduce pollution across operations. Innovative ideas are recognized with 3P Awards. Projects must meet three criteria:
Eliminate or reduce a pollutant.
Benefit the environment through reduced energy use or more efficient use of manufacturing materials and resources.
Save money – through avoidance or deferral of pollution control equipment costs, reduced operating and materials expenses, or increased sales of an existing or new product.
In the local community. Employees are increasingly asking for opportunities to get involved in the communities in which their businesses are working and are looking to work for companies that provide those opportunities.
Employees who are active in community projects through their company are more likely to feel a stronger sense of belonging to the company, increasing employee morale, motivation, and commitment.
Intel Corporation is an example of a company that embraces the volunteerism philosophy. Among its many programs, its Intel Involved Program enables employees to volunteer thousands of hours in the communities where they work.
By giving them time to explore these issues. Bill Gates, in his speech at the Davos Summit in 2008, called on corporations to ‘dedicate a percentage of their top innovators’ time to issues that could help people left out of the global economy.
This kind of contribution is even more powerful than giving cash or offering employees time off to volunteer.’ Companies such as 3M and Google dedicate 15%–20% of employees’ work time to projects of their choosing.
By encouraging healthier lifestyles. Wal-Mart’s Personal Sustainability Project (PSP) is a voluntary project that helps the company’s employees integrate sustainability into their own lives by making small changes to everyday habits. PSP Captains are trained in each office to educate other employees about the program.
Employees then choose a goal to improve their own health and wellness or the health of the planet over the next four to seven weeks to monitor progress. Unilever’s Personal Vitality campaign launched in 2005 is focused on promoting the well-being of employees in terms of fitness of body, heart, mind, and spirit.
Many companies have employee engagement strategies. Check their websites for more information.
Motivation and rewards
Once an overall strategy and direction for the company is decided upon and goals and targets have been set, the next step is to rally the full organization around reaching those goals. Sustainability targets will not be reached simply by telling people that they exist.
To be truly effective, incentives need to be put in place to ensure that sustainability targets and goals are met. Rewards should focus on promoting and reinforcing the desired behaviors; they should be promoted within the organization and easily understood by all. Here are some pointers:
Be clear on the objective. Decide what kind of behavior you want to promote and reinforce and clearly align incentive programs to reward that behavior. Objectives need to be inspiring and not be seen as merely an extra burden for employees.
Identify and eliminate de-motivating factors that undermine the achievement of sustainability goals. Give individuals who are in a position to make sustainability changes, but do not have sufficient authority or financial and human resources necessary to achieve the sustainability goals, the tools to be able to make changes.
Performance Appraisal. Employees are often given individual and team targets on which they are appraised at the end of the year.
If measurable long-term sustainability goals and targets are important to the organization they should be incorporated into these appraisals and it should be clear that employees will be judged on their success.
An employee who is compensated for maximizing short-term accounting earnings is less likely to be committed to long-term projects.
Promotion and bonus eligibility.
With sustainability tied into job descriptions and performance appraisals, bonuses and promotions can, therefore, be tied to reaching set sustainability goals. SC Johnson has a company Greenlist that provides environmental ratings for all ingredients used in its products.
Annual Greenlist goals are tied to the bonuses of people at officer and management level. Further bonuses are set within the relevant R&D groups and linked to annual merit increases.
Understanding what motivates people is key to providing an incentive structure that will motivate a company’s employees to achieve its sustainability goals.
Employees are not just motivated by financial reward, they are often equally or more motivated by a wide range of factors – everything from feeling a sense of achievement, advancement, and belonging to something else.
e.g., challenge, contribution to society, sense of ownership and involvement in a project, financial rewards, intellectual interest, job security, pride in organization, recognition, and respect, responsibility, and a sense of wellbeing of the work environment
Talent development and training
In order to be successful, a company’s sustainability strategy must be understood and practiced throughout the organization and not just by a few managers or specialists.
Employees need to be given the tools to be able to implement sustainability in their jobs. Therefore, sustainability should be part of the initial training from day one until the day the employee leaves the company.
This can be done by using training to raise the general awareness about sustainability in the company and what its priorities are, the strategy, how it affects employees, and what their role is in implementing it.
Training can also be about specific parts of sustainability that are relevant to different job functions. These topics should also be embedded in already existing training that is required for specific jobs.
There are several delivery methods for training. In-class training courses can be used to raise the general awareness about these issues as well as provide specific tools and knowledge.
One way is to identify key personnel and ‘train the trainers’ who will help spread the message. PwC did this by sending its top 400 employees to a sustainability executive leadership program.
Another way is to use web-based training, often simple online modules that are compulsory for employees to complete and which allow managers to track their progress online in order to ensure that their employees are fulfilling these requirements.
Some elements of sustainability are not easy to learn through web modules or in-class lectures but need to be experienced in order for the employees to learn both the knowledge and skills required.
These include certain skills that are critical for all aspects of the company, including exploring and implementing new ideas, questioning the standard ‘business as usual’ practices, multidisciplinary thinking, creativity and innovation, leadership and networking to name but a few.
Basic skills. Marks and Spencer, a British retailer, has been providing free literacy and numeracy classes to workers in their supply chain in Morocco. The factories have rearranged their work schedules to allow the employees to take the 3-hour classes on the premises.
This literacy training program has involved more than 1000 supply chain workers in Morocco, increasing productivity by 15% as workers read instructions themselves and need less supervision.
Secondments. A growing number of companies send some of their employees to international organizations and NGOs for a short duration.
The individuals learn a set of skills and leadership capabilities and the organization benefits from their application when the employee returns. For example, consulting firms sending employees to work in international organizations.
Job rotation. Some companies aim to integrate sustainability principles into everything they do. After a stint in a sustainability position, an employee goes on to a new department where he or she can share the experience and knowledge with a new team in a new work context.
Placements. Top employees at Accenture have the opportunity to work on non-profit consulting projects in developing countries with the Accenture Development Partnership. It started off as an activity to recruit and train staff but today has grown to be part of the strategic direction of the company to provide a new range of services to customers in developing markets.
Community Engagement. The prime objective of community involvement has always been and will continue to be to benefit charities and communities. However, increasingly volunteer programs are proving to be not just good for the communities, but also good for the companies involved.
Volunteer opportunities can develop certain skills for employees including communication, teamwork, managerial, professional, and technical skills to name a few.
Often companies will raise the awareness of employees and then wait for miracles to happen. Most employees – and in particular managers – have a series of big folders sitting on their office shelves from past training sessions that they rarely look at again.
Post-training follow-up is just as important as the training to support newly trained employees who are motivated to apply their ideas and skills about sustainability to their work. There is no point sending them off to training if there is no way for them to incorporate this new knowledge into their regular jobs.
A growing number of NGOs, consulting firms, and businesses offer sustainable business courses at different levels and for different durations. Several universities now offer short and long programs around sustainability and business.
Raising the importance of HR in general. Most do not fully understand the crucial role of HR in an organization, let alone the role that HR plays in sustainability. HR is often seen simply as a support function rather than a strategic piece of the puzzle.
The fact that titles usually seen around the executive table are CEO, CFO, CIO, COO but typically no CHRO, serves as a reminder that HR is not seen in the same way as other support functions.
Bringing it all together. Many companies will have different employee engagement activities happening throughout the organization but not one overarching strategy to bring them all together in a strong, clear, consistent message.
Building capacity. Employees in HR themselves are often not equipped with the skills and tools to play a part in contributing and implementing sustainability strategies.
There is a need to build their knowledge as key players in influencing others in the organization. Leaders must make sure that the organization is ready for the changes and that this isn’t seen as adding work to people’s jobs.
Joint role of management and HR. HR’s role is to implement management decisions, and without top management working with HR none of the corporate goals and targets can succeed. Neither can do it without the other but often there is little communication between the two.
Cost versus an asset. Employee and related programs are often seen as a cost to be controlled rather than an important asset in an organization. Community engagement programs, training, and personal development are seen as costs without looking at the benefits to the overall profitability of the organization.
Measuring effectiveness as well as efficiency. HR can play a vital role in measuring the impact that its programs have on the state of implementation of the company’s sustainability strategy. Often the correlation is difficult to see.
Benefits are often intangible. A key challenge is that many of the benefits of sustainability practices at an employee level are often difficult to measure. For this reason, they are often ignored.
Training is key. A survey by Accenture and the UN Global Compact found that 1 in 4 CEOs felt that the lack of skills and knowledge about sustainability with their senior and middle managers was one of the main challenges in being able to put together and implement a sustainability strategy.
Trends and new ideas
– Linking pay and sustainability – Creating great workplaces
– Diversity – Changing the way we talk
– Skills for sustainability – Rise of the CSO
Linking pay and sustainability
Increasingly, companies are factoring achievement of sustainability goals into their employee salary and bonus programs. For example, at Novozymes, the company pays 25% of the annual bonus based on short-term financial measures, 25% on long-term financial measures, 25% on short-term sustainability measures, and 25% on long-term sustainability measures.
Companies like Alcoa link 20% of variable compensation plans to sustainability. A growing number of companies also link employee bonus structures to sustainability, including linking sustainability performance targets to bonuses.
For example, GSK set a target for energy consumption and mandated a 5% reduction in one year and linked that to bonuses. At the end of the year, they ended up reducing energy use by 11%.
One of the tools being explored as a means of mainstreaming sustainability issues into appraisal systems is the sustainability balanced scorecard.
The balanced scorecard is already being used by many companies and is a performance measurement framework that adds non-financial performance measures to traditional financial metrics to give managers and executives a more ‘balanced’ view of organizational performance.
A sustainability balanced scorecard, as the name suggests, incorporates the sustainability measures and targets of an organization into performance metrics. These new expanded versions are being used to integrate sustainability into operations.
For example, McDonald’s uses a scorecard that links performance indicators to relevant environmental guidelines for suppliers.
The scorecard is intended as a tool for suppliers to measure and report upon performance related to a particular guideline. HSBC uses scorecards to measure sustainability development on an individual basis and gives incentives based on this. For more on this topic see Ceres ‘The road to 2020,’ the ‘UNPRI’s’ ‘Integrating ESG Issues into Executive Pay,’ and WBCSD’s ‘People Matter Reward.’
In the past, companies sought to increase diversity for many reasons, but increasingly there are clearer business reasons for implementing a diversity plan. As companies expand geographically, they will encounter a greater diversity of their customer base.
Having employees from a variety of socio-economic, ethnic, linguistic, and religious backgrounds will give companies an edge in predicting and understanding consumer preferences, and allow them to communicate more effectively with their customers.
The diversity of educational and skill backgrounds also brings different ways of viewing and solving problems to an organization. Look at the innovative work being done through the biomimicry movement, where biologists are sitting at the table with businesses to find profitable business solutions inspired by nature.
Investors say that the strength of some companies is their cultural diversity. Schlumberger, a leading service company in the Oil and Gas sector operating in over 80 countries, employs over 118 000 employees from more than 100 countries. Investors consider one of its major competitive advantages to be the diversity of its international workforce.
Skills for sustainability
As seen earlier in this blog, a number of organizations are trying to map out the skills required not just by a sustainability professional or individuals looking to work in the field of sustainability, but by all individuals working in the business sector to ensure that sustainability becomes mainstream in their organizations. These include but are not limited to:
Influencing. The ability to influence change, influence leadership, and others who can make sustainability happen within an organization.
Communication. The ability to communicate at all levels of the organization with various stakeholder groups, in particular, government and not for profits. The ability to communicate information to different groups in the way most relevant to those groups.
Knowledge. Be knowledgeable about the issues, of the business and industry, of stakeholder groups, of how to get things done within the organization, and who to work with.
A range of soft and hard skills. The ability to network, build consensus, project manages, exhibit leadership skills, and solve problems.
Global awareness. The ability to see what is happening outside the company, outside the industry, outside the country in this field.
Inspiration. The ability to inspire and motivate those around you, to think outside the box, to be positive but realistic.
Creating great workplaces
Creating a work environment where employees can succeed goes beyond upholding basic labor standards. It is about creating an environment where innovation is both encouraged and expected. It is about creating a work environment that people want to be in.
Good places to work tend to receive more qualified job applications, have lower levels of turnover, higher levels of customer satisfaction, greater creativity, and innovation, and benefit from higher productivity and profitability.
According to the Great Place to Work Institute, the quality of a great workplace is measured by three interconnected relationships;
the relationship between employees and management, between employees and their jobs/company, and the relationship between employees and other employees. Some things that can make a great place to work include:
Work environment. Noise, lighting, color, safety, and food.
Flexibility. Job sharing, sabbaticals, telecommuting, flexible working hours.
Work-family benefits. Domestic partner benefits, adoption assistance, eldercare services, childcare services.
Work–life balance. Gym memberships, professional training or educational support, medical checkups, language courses, resting rooms, washers, and dryers.
Profit sharing. Companies are finding more ways to share their profits with employees through programs such as stock options and deferred profit sharing.
Unusual. Scuba diving certification, relaxation rooms, dance classes – you name it, some company is trying it.
Changing the way we talk
If you want to change the way your organization approaches sustainability, it may be as simple as changing the way that you talk and the language that you use. Changing the kind of language you use to refer to sustainability can raise awareness about the issues and get people excited about it. For example:
Moving away from blaming and complaining about taking responsibility and doing something.
Moving away from vague, dull terminology to words that are clear and that inspire.
Moving away from making people feel guilty to inspiring people to get involved.
Moving away from wishes and hopes to make strong commitments to action.
Moving away from ignoring to getting informed.
Moving away from seeing all the reasons why not to looking at all the reasons it could be.
Moving away from seeing it as a problem, a risk, or a cost to seeing it as an opportunity.
Moving away from it being someone else’s responsibility for taking responsibility.
Moving away from you the individual to us the team, the organization, the community, the country, the planet.
Moving away from being told or telling people what to do to working together to determine what needs to be done.
Moving away from one-time events to continuous progress.
Moving away from boring to fun.
Moving away from saving the planet to language that speaks more to individuals and business.
The rise of the CSO
In 2004, DuPont named its first Chief Sustainability Officer. Since then several other companies have followed.
Although there are no standardized guidelines as to what the scope and authority of the role are (usually splitting their time evenly between core business and operations, internal engagement, external engagement, and developing a strategy), each year more and more companies of all sizes are creating a space for this position.
Their backgrounds are always different but they all have a deep knowledge of their company and industry and have been part of their companies for many years. Not all are given the role of CSO. Many are made director, VP, SVP, even chief green officer but all report to or close to the CEO.
Companies are also putting in place a range of new Chief Officer spots, such as Chief Innovation Officer, Chief People Officer, Chief Learning Officer, Chief Knowledge Officer, all of which often have something to do with sustainability.
However, as the trend is on the rise so are those who say that the position isn’t necessary at all but instead should be everyone in the executive core’s responsibility.
Many CEOs themselves have been quoted as saying that it is, in fact, their responsibility to be CEO and CSO. Others, such as GE and Unilever, have decentralized sustainability across the management team and appoint leaders to run specific initiatives.
Sustainability, no matter what you are trying to do, all comes down to change: changing the way something works, the way that people think, the way that people act, behaviors, assumptions, etc.
However, some 50%–70% of all major programs of change fail to meet their objectives, including many change programs relating to sustainability. So, understanding and taking change seriously is key to sustainability.
There are many reasons why initiatives fail, but ultimately change programs often do because they fail to engage the very people they are trying to change – including the underlying thought patterns, outlooks, and behaviors of employees. Whether the change is a major one (e.g., a merger) or a minor one (e.g., a recycling program) here are some tips:
Get to the root cause of the problem. Be clear what you are trying to change and why. Change the right things for the right reasons. Focus on the causes, not the symptoms.
Create a vision. Know where you want to go. Set audacious targets that inspire debate and that unite people. Be flexible.
Gather information. Take time to observe how people do their jobs every day. Ask people how they think things should change. Understand what makes people tick and why people might resist change.
Get support. Unless the change process is coming from and supported by upper management it will go nowhere. Identify those who support and those who do not support the change.
Build a coalition of people who will help bring about the change. Understand the nature and culture of the organization, the relationship networks. Understand who the key people in your organization are that can influence the desired outcome.
Create ownership. Involve people in creating the vision and the plan. If they feel they are part of the change they are more likely to implement the change.
Identify change champions. Identify and train key people who are aware, motivated, and seeking to take action to act as champions and be a point of communication and motivation in the group.
Empower people. Survey after survey shows that people are interested in these issues but there is a gap between interest and action. This is in part because of information overload. Make the change relevant to people and their job. Give them the knowledge, tools, and opportunities.
Take different approaches. Recognize that behavior change does not take place in the same way for all people and that different people may be at different points along the change curve (awareness, motivation, action).
Recognize people’s emotional response to change. Ignorance (not knowing), shock (the first response), denial (pretending it isn’t important or true), anger (blaming yourself or others), depression (feeling as if nothing I do can make a difference), resignation (letting go of old ways), exploration (exploring benefits of change), integration (taking ownership of the change).
Lead by example. Ensure that senior managers are leading by example. Employees will have a hard time changing their behavior if they do not see those above them doing so.
Manage expectations. Don’t get employees too excited about sustainability and then not deliver – focus on keeping energy levels up, but not so high that they will tire people.
Choose your fights wisely. You will not be able to change everything or everyone.
Communication. Focus your messages. Be clear and consistent. Use stories and best practice. Be honest.
Create a sense of urgency. Change does not necessarily fail because of resistance, rather because of inertia within the organization. Creating a sense of urgency can provide that push for an organization to really get on top of things.
Be patient. Often there is a delayed response to changes in an organization.
Celebrate wins and learn from failures. Failure allows you a chance to understand where you went wrong and to learn from your mistakes. Celebrate wins to keep momentum and positive energy levels up.
Institutionalize new approaches. Change should become a part of the way people operate. Just get started. Don’t worry about all the details before getting started, just get started. Having pilot projects can be a good way to learn lessons and test out approaches.
Keep it light. People find change hard enough as it so makes it as easy as possible for them. Don ’t use guilt or make people feel like it is going to increase their workload.
We tend to remember 10% of what we read, 20% of what we hear, 30% of what we see, 50% of what we read, hear, and see, 70% of what we say, 90% of what we both say and do.