adidas has announced new advances in how it develops key apparel ranges to reduce waste while maintaining performance and style. Both the Running and adidas by Stella McCartney teams have worked to change the way they make patterns to increase the efficiency of their new product ranges by reducing fabric waste.
The company created a short animation, in collaboration with Big Animal Productions, to highlight this conscientious new design and production process:
It has the potential to benefit 173 million workers in global supply chains and provide livelihood benefits or savings of US $30 billion annually, according to Vodafone and Accenture.
What is the ‘it’? It’s a series of six disruptive opportunities for mobile to enhance the lives of workers in global supply chains. Details are laid out in their report, Connected Worker: How mobile technology can improve working life in emerging economies, with corresponding reach, benefits and business case for each of the six:
What are the 100 solutions that can bring about a sustainable society? Scandinavian think tank Sustainia has launched its third annual global campaign to find the answers. With a worldwide alliance of companies and organizations, the goal is to identify the world’s 100 leading sustainability projects and technologies across sectors such as food, fashion, energy, smart homes etc. Collectively, the solutions will form the 2014 Sustainia100, a comprehensive guide to state-of-the-art sustainability practices in various industries and regions.
2degrees is calling for organisations with inspiring examples of sustainable practice to shout about their success stories by entering this year’s Champions Awards.
The only sustainable business awards voted entirely by industry peers, the 2degrees Champions Awards are the ultimate recognition for individuals and companies using innovation to push the boundaries of sustainable business.
Last year’s winners included a range of start-ups, SMEs and FTSE-listed businesses including Unilever, The Co-operative Group, Sky, O2 and SC Johnson.
On being voted a winner in 2013, Sky’s Daniella Vega said: “In many ways it’s a lot more powerful and humbling than being selected by a group of judges. There’s something very healthy about being scrutinized by your peers.”
But perhaps what makes the 2degrees Champions Awards so different to the multitude of other awards schemes out there is the power it holds as a stakeholder engagement tool. And not just for those companies who win, but for all those who even enter.
From asking your employees to vote or, like O2, bringing your commercial teams to the ceremony, the 2degrees Champions Awards is “actually an engagement tool in its own right. Even if you’re not a winner,” says O2’s Katie Hyson, “you can drive the enthusiasm and interest in that particular project.”
What’s clear is that the 2degrees Sustainability Champions Awards is an awards scheme like no other in that, from a stakeholder engagement stance, at least, they create many winners before a vote has even been counted.
Entries for the 2degrees Champions Awards are being accepted until midnight on February 14, 2014.
This article was sponsored by 2degrees
Private sector sourcing commitments from companies such as Unilever, Coca Cola, Starbucks and Home Depot are driving major market growth for sustainable commodities, according to the State of Sustainability Initiatives (SSI) Review 2014.
Once thought of as instruments primarily tailored for niche markets, voluntary sustainability standards such as Fairtrade, Rainforest Alliance and Organic are gaining traction in mainstream markets. The trend towards mainstreaming of sustainability standards is strongest among newer sector-specific initiatives that explicitly target mainstream markets.
Besides the companies named above, the review documents a persistent trend in sustainable sourcing commitments by manufacturers including Dole, Chiquita, Tetley, Twinings, Hershey's, Lowes, Nestlé, Ferrero Group, Mars, Ikea, adidas and others. The growing number of companies that have made commitments to source sustainably illustrates the critical role that the private sector plays in overall market growth of products certified under these initiatives, SSI says.
The average annual growth rate of certified production across all commodity sectors (excluding biofuels) in 2012 was 41 percent, outpacing growth of 2 percent in the corresponding conventional commodity markets. Growth in certified production was strongest in the palm oil sector which experienced 90 percent growth in 2012. Hershey’s, for example, last year achieved its commitment to source 100 percent mass-balanced RSPO (Roundtable on Sustainable Palm Oil)-certified palm oil more than a year ahead of its original 2015 commitment, and announced it will achieve 100 percent traceable and sustainably sourced palm oil by the end of 2014. Other leading sectors were sugar (74 percent), cocoa (69 percent) and cotton (55 percent).
The research found that compliant production attained significant market penetration in several major commodity markets. Certified coffee, which led in terms of market penetration, reached a 38 percent market share of global production in 2012 (up from 9 percent in 2008). To help consumers make sustainable choices with their coffee consumption, last year a new Green Coffee Carbon Footprint Product Category Rule (CFP-PCR) was published, providing the first CPR for the calculation of greenhouse gas (GHG) emissions from coffee production.
Other certified commodities with significant market share for sustainable production in 2012 include: cocoa (22 percent); palm oil (15 percent) and tea (12 percent).
The SSI Review 2014 also reveals a long-term trend of declining depth of sustainability criteria coverage among voluntary standards over the past decade. This trend might be enabling more producers to enter sustainable supply chains, but also highlights the growing importance of answering questions related to the field-level impacts created by voluntary sustainability standards.
Overall, the SSI Review concludes that the opportunities for voluntary standards to enable positive transformational change across major mainstream markets are now well-established and continue to grow, but that taking full advantage of them will require a better understanding of field-level impacts as well as a host of strategic policy measures to support technical assistance and cost-internalization at the market level.
Bacardi Limited, the world’s largest privately held spirits company, has pledged to obtain 40 percent of the sugarcane-derived products used to make its rums from certified, sustainable sources by 2017 and 100 percent by 2022 — an industry first — as part of a new global sustainability campaign.
Marking the 152nd anniversary of the company’s founding, Good Spirited: Building a Sustainable Future builds on current programs and efficiencies that reduce water and energy use and greenhouse gas (GHG) emissions, and sets new goals in three primary areas: responsible sourcing, global packaging and operational efficiencies.
“Protecting the natural resources we use to create our brands, at every step along the value chain, is central to our corporate responsibility,” said Ed Shirley, Bacardi's president and CEO. “We’ve always set the bar high. Now, we’re taking our solid, sustainable foundation to the next level.”
To achieve its lofty goal of 100 percent sustainable sourcing, Bacardi says it will continue to support sustainable sugarcane farms in Fiji that take measures to protect the islands’ Great Sea Reef. The company will focus on obtaining all raw materials and packaging from sustainably sourced, renewable or recycled materials while maintaining or enhancing the economic status of growers and suppliers.
In a move towards more sustainable packaging, Bacardi plans to reduce the weight of its packaging by 10 percent by 2017 and achieve 15 percent by 2022. The company says it collaborates with its partners — including glass and paper suppliers — to make packaging more environmentally friendly.
Through the new initiative, Bacardi also will redouble its efforts to reduce water use and GHG emissions, by cutting water use by 55 percent (by exploring innovative treatments for water left over from production) and GHG emissions by 50 percent by 2017.
Notably, Bacardi is striving to achieve zero-waste-to-landfill at all of its production sites by 2022. At Bacardi’s rum distillery in Puerto Rico — the largest in the world — demolition crews recycled more than 150 truckloads of concrete without sending any debris to landfills. The concrete is being reused in the construction of new blending facilities.
“Bacardi considers global environmental innovation part of its DNA,” says Eric Kraus, Senior Vice President, Chief Communications and Corporate Affairs Officer, who leads Bacardi corporate social responsibility initiatives. “Our goal is to return to the environment at least as much as we take away. We’re setting a sustainability standard for others in the spirits industry to follow.”
Since it began tracking its global impacts on the environment in 2006, Bacardi claims to have reduced energy use by more than 25 percent and water use by 54 percent. The company achieved this in part by using wind power for producing rum in Puerto Rico, repurposing water used to clean barrels and mulching retired barrels for use on landscaping. Bacardi also switched from fossil fuel to hydro energy for Martini vermouth production in Italy, transformed leftover botanicals into fertilizer and livestock bedding, created an energy efficient blending and shipping center in Scotland for Dewar’s and William Lawson’s Scotch, and transformed the historic Laverstoke Mill in England to a green-certified distillery for its Bombay Sapphire gin that will be powered using biomass and hydro-electrical energy sources.
Diageo, another global beverage company (which produces Guinness, Bailey's, Tanqueray and Johnnie Walker, to name a few), announced last year that it is hoping to achieve zero waste to landfill at all of its sites by 2015. The company's latest sustainability and responsibility report boasted a more than 53 percent waste reduction in 2013.
 | To learn more about how companies worldwide are cleaning up their #SupplyChains, check out the editorial channel. |
This week, Canadian forest-conservation NGO Canopy commended the world’s largest tissue manufacturer, Kimberly-Clark Corporation — global producer of Kleenex, Huggies, Kotex and dozens of other paper towel, diaper and family-care brands sold worldwide — on the release of a cutting-edge study of the existing and potential raw materials for its products. The comprehensive lifecycle analysis (LCA) was authored by the Georgia Institute of Technology, with Canopy bringing independent expertise to the advisory board.
“With an eye to protecting our planet’s remaining ancient and endangered forests — and not trading off one environmental issue for another — we have reviewed countless lifecycle assessments related to traditional forest products,” said Canopy campaign director Amanda Carr. “The key to our endorsement of Kimberly-Clark’s report is that this study includes measurements for biodiversity and carbon stored in our global forests as part of the environmental considerations.”
With the inclusion of eight key environmental indicators, such as land occupation, human toxicity, climate change and water depletion, the study concluded that Kimberly-Clark’s use of recycled paper, along with alternatives such as bamboo and wheat straw waste, had reduced environmental impacts when compared with traditional use of forest fiber.
“Canada’s ancient and endangered boreal forests continue to be made into toilet paper and incontinence products — this study is exciting because it weighs the other options for a global company that had over $20 billion (USD) in sales last year,” noted Carr. “That is a lot of purchasing power exploring what is best for our planet. With Kimberly-Clark’s existing leadership on paper procurement and forest conservation, the science behind making the right choices is now even clearer.”
Canopy says the public release of the study offers not only Kimberly-Clark, but all forest product-consuming companies and producers throughout the supply chain, an invaluable resource to make the most informed choices when it comes to sourcing fiber.
Kimberly-Clark says that in 2012, it achieved its Sustainability 2015 goal of sourcing 100 percent of its virgin wood fiber from suppliers whose forestry operations or wood-fiber procurement activities are certified by a third-party forest certification system, with over 52 percent coming from FSC-certified sources.
In other exciting alternative-paper-fiber news, Pulp Green Tech Holding, an R&D-focused company that owns Thai Gorilla Pulp Ltd., announced last week that it has successfully created a high-grade paper pulp made from empty palm fruit bunches, which are most often treated as waste material from the palm oil extraction process. The company estimates that roughly 95 percent, or 300 million tons, of this raw material is currently discarded per year.
In the context of the huge market for fast, disposable fashion, H&M’s brand promise to offer quality fashion at the best price might seem like an oxymoron. But the brand is determined to make good on its goal to “provide fashion for conscious consumers” by making quality clothing more widely accessible.
"We want to make sustainable fashion more democratic," Helena Helmersson, H&M's head of sustainability, told Reuters last week. "We don't aim for sustainability to be a luxury thing.”
But are consumers buying it (so to speak)? Not according to several reports that rank brands according to customer perceptions of their ethical practices.
In May, the Serviceplan Group — a German company that conducts an annual survey on companies' reputations — released its third annual "Sustainability Image Scores" (SIS) survey, which shows the effect of sustainability initiatives on a company's image, consumers' willingness to buy and customer loyalty, and how the company's sustainability efforts and the marketing of those efforts are perceived by consumers and brand users. H&M eked in at #102 of the 103 companies ranked.
In keeping with Serviceplan’s findings, H&M placed similarly dismally in Brandlogic & CRD Analytics’ most recent (2012) Sustainability Leadership Report, which comprehensively scores and compares real and perceived sustainability performance for 100 leading global brands. Its first year on the list, H&M appeared in the “Laggards” category, reserved for brands that fall below the mean on both their sustainability perception score (SPS) and their sustainable reality score (SRS), on which the retailer received a 40.8 and 38.0, respectively.
"What hurts H&M is an assumption that they must be exploiting their workers because they produce cheap clothes," said Joachim Schoepfer, head of corporate reputation for the Serviceplan agency.
Granted, the Brandlogic/CRD report is about a year-and-a-half old at this point, and since then the Swedish retailer has been featured prominently in the press for its sustainability efforts in a variety of areas — from sourcing of materials such as cotton (H&M is the world’s biggest user of organic cotton); to conserving water and eliminating toxic chemicals, to collecting used clothing for recycling into new; to committing to higher standards for worker safety and wages.
H&M’s Conscious Collection, which debuted in 2011, incorporates organic cotton, linen, hemp and jute and recycled polyester, wool, plastic and other materials. But the fact that the company sources most of its clothing from factories in China and Bangladesh, where average wages are a far cry from what would be considered livable in Western countries, likely accounts for a disconnect for consumers between “ethical” and cheaply made “fast fashion.”
“There is a misconception that lower prices in the stores mean bad working conditions or less pay," Helmersson went on. "Made in Bangladesh' is something that I'm proud of. Our presence in Bangladesh is coming with so much positive impact if you think about the alternative jobs for women in Bangladesh."
The brand admitted its commitment to pay all textile workers a living wage could lead to higher prices, but would that dissuade even their loyal customers from supporting the brand? Recent studies show a rise in the number of Aspirational consumers, a group nearing 2.5 billion worldwide that consider style, social status and sustainability when shopping. This combined with a recent survey H&M says has found that 47 percent of its customers were interested in more environmentally friendly products in 2013, up from 27 percent in 2012, should protect the brand from backlash should slight price increases prove necessary.
So what’s missing? If in a world of ever-increasing corporate transparency H&M continues to walk its talk, and create and live up to new standards for the “ethical fashion” industry to follow, consumer perceptions should begin to align more closely with the brand’s reality.
Volvo Construction Equipment’s Braås site in southern Sweden has become its first carbon-neutral facility and is claimed to be the first construction equipment production plant in the world run entirely on renewables.
The 45,000 m2 site, which specializes in the design and manufacture of articulated haulers, is now powered entirely by renewable energy sources — including wind, biomass and hydropower.
The move follows in the footsteps of sister company Volvo Trucks, whose Ghent facility set the standard for emissions-free industrial manufacturing in 2007.
“As one of our core values, environmental care informs everything we do at Volvo,” says Niklas Nillroth, Volvo CE’s VP of Core Value Management & CSR. “So we are extremely proud that the Volvo Group is leading the way, not just in one industry, but two.”
Braås’ first step towards carbon neutrality began in 1999, when it commissioned local energy supplier Växjö Energi AB to install a district heating plant, fuelled by wood chips, to provide central heating for its employees and the town’s residents. Braås then joined a Volvo Group initiative in 2007 that saw it switch to green electricity.
"Locals and the site’s 1,000 employees put pressure on Växjö Energi AB to run the district heating plant on biomass only."
These first two initiatives cut the site’s level of CO2 neutrality by 87 percent in 2008. The final push to reach 100 percent began two years ago: Acccording to Volvo, staff identified the greatest source of energy consumption as the liquefied petroleum gas (LPG) burners, which were used to heat the rust protection treatment ovens to 60°C. These were replaced from September 2013 with district heating. The burners in the component paint shop, which reach temperatures of 120°C, were also altered to electrical heating. In addition, the site’s diesel forklifts were substituted with electric models.
Meanwhile, locals and the site’s 1,000 employees put pressure on Växjö Energi AB to run the district heating plant on biomass only — regular oil had previously also been used during peak times and maintenance.
Volvo says the next step is to focus more on energy saving activities in particular, reducing the idling consumption at the site. One initiative will involve recycling waste heat from the treatment ovens and burners and using it to heat the buildings.
In other carbon-neutrality news, last fall Microsoft announced it had achieved carbon-neutrality after the introduction of an internal carbon fee for renewable energy and carbon offsets, which led the tech giant to increase its purchase of green energy in the US by 70 percent in 2012. And Lego Group announced in December that it had partnered with WWF to improve its performance on a range of environmental priorities and committed to becoming not only carbon-neutral, but net positive, through the use of 100 percent renewables by 2016.
This post first appeared on the 2degrees blog on January 21, 2014.
In a bold yet intuitive move for a pharmacy, CVS Caremark announced Wednesday that it will stop selling cigarettes and other tobacco products at its more than 7,600 stores across the US by October 1, 2014. It is the first action of its kind by a national pharmacy chain.
With more than 480,000 deaths annually, smoking is the leading cause of premature disease and death in the United States, CVS says. While the prevalence of cigarette smoking has decreased from around 42 percent of adults in 1965 to 18 percent today, the rate of reduction in smoking prevalence has stalled in the past decade.
"Ending the sale of cigarettes and tobacco products at CVS/pharmacy is the right thing for us to do for our customers and our company to help people on their path to better health," said Larry J. Merlo, president and CEO of CVS Caremark. "Put simply, the sale of tobacco products is inconsistent with our purpose."
CVS expects it will lose approximately $2 billion in revenues on an annual basis from the tobacco shopper, no inconsiderable sum. However, the company has identified incremental opportunities that are expected to offset the profitability impact. More importantly, this decision more closely aligns the company with its patients, clients and health care providers to improve health outcomes while controlling costs and positions the company for continued growth.
"As the delivery of health care evolves with an emphasis on better health outcomes, reducing chronic disease and controlling costs, CVS Caremark is playing an expanded role in providing care through our pharmacists and nurse practitioners,” Merlo continued. “The significant action we're taking today by removing tobacco products from our retail shelves further distinguishes us in how we are serving our patients, clients and health care providers and better positions us for continued growth in the evolving health care marketplace."
This spring, CVS will be launching a program aimed at helping people to quit smoking, including information and treatment on smoking cessation at CVS/pharmacy and MinuteClinic along with online resources. The program will be available broadly across all CVS/pharmacy and MinuteClinic locations and will offer additional comprehensive programs for CVS Caremark pharmacy benefit management plan members to help them to quit smoking.
"Every day, all across the country, customers and patients place their trust in our 26,000 pharmacists and nurse practitioners to serve their health care needs," said CVS president Helena B. Foulkes. "Removing tobacco products from our stores is an important step in helping Americans to quit smoking and get healthy."
Approximately seven in ten smokers say they want to quit and about half attempt to quit each year, CVS says. The company hopes that reducing the availability of cigarettes will also reduce the amount of consumed. While it is likely cigarette addicts will simply go elsewhere to make tobacco purchases, the CVS anti-smoking campaign holds promise for helping smokers to finally quit.
Last year, in its 2012 CSR Report, pointed to research that patients are increasingly turning to their pharmacists for guidance on a range of health care issues beyond simple advice on their medications. This likely influenced the company’s decision to eliminate cigarettes, to better align its brand with its mission statement of improving health nationwide.
CVS regularly educates customers through its Project Health Events, where individuals can receive free health screenings to check blood pressure, body mass index, glucose, total cholesterol and even receive oral or dental care. Last October and November, CVS held several events aimed at helping customers make sense of their healthcare coverage options under the Affordable Care Act (ACA).
IKEA has expanded the use of sustainably sourced cotton in its products to 72 percent, up from 34 percent in 2012, according to a recent announcement.
The furniture company uses around 0.6 percent of all cotton grown around the world, and in 2013 sourced 79,000 tons of cotton from more sustainable sources; it used a total of 110,000 tons of cotton in 2013.
IKEA says the increase comes from its work with the WWF on the Better Cotton Initiative (bcI), an independent organization that sets social and environmental criteria for more sustainable cotton production, of which IKEA is a founding member. The cotton industry is troubled with several sustainability issues, including intensive use of water and chemical pesticides and fertilizers, child labor problems and health risks associated with the use of chemicals.
IKEA claims its latest improvements come from an increase in 'better cotton' (59.3 percent from more sustainable sources), cotton grown to other sustainability standards in the US and cotton from farmers working towards the BCI standards.
"Some people suggested IKEA should abandon cotton altogether and some said we should move our sourcing to 'safe' countries like the US,” said Guido Verijke, BCI chair and director of the IKEA Better Cotton Project. "But IKEA is big enough to change things, so instead we decided to work with WWF and do something about the problem."
The company says it also is looking for ways to use cotton more efficiently. For example, IKEA launched a project to standardize the way it constructs fabric, which could reduce the amount of cotton IKEA needs for a piece of fabric by up to 15 percent.
In 2012, H&M, another Swedish company and a fellow member of the BCI, launched a garment recycling initiative to reduce clothing waste, and recently launched a new denim line made from recycled fibers. The range of jeans, vests and jackets will all contain 20 percent recycled cotton — the maximum amount that can be used without compromising the quality. The company claims this new project will “close the loop” on their recycling initiative.
Experts in public health have struggled with enabling behaviour change for years. The sustainability sector should learn what it can from their experiences.
Consumer behaviour change is the challenge of our time. As governments and brands are beginning to realise, upstream improvements are relatively easy to make compared with the herculean task of shifting consumer behaviours downstream. While the sustainability community is just beginning to get to grips with the gravity of this challenge, our colleagues in public health have been wrestling with it for decades. Great progress has been made, but hard lessons have been learned — costly, time-consuming lessons that we can all learn from.
No they don’t. They need practical tools. Public health has spent decades firing messages and health information at target audiences with little demonstrable impact on behaviour. With message fatigue reaching epidemic proportions and behavioural science clear on the limitations of rational appeals, public health has finally drawn back from its relentless campaigning to focus more on clear, actionable steps, combined with practical support to implement them. Information is necessary for change but is not sufficient. It will only contribute to behavioural outcomes if it is integrated with consideration of how we create conditions in which the information can be acted on.
No we don’t. We need to take them on a journey. Having travelled the long, hard road of tobacco control and smoking cessation, public health knows this all too well. Behaviour change is a journey, not an event. It happens over time, it goes through different stages, encounters different obstacles and doesn’t necessarily move forward all the time. One-off, tactical interventions may trigger temporary, symbolic behaviours — give up X for a day; turning off Y for an hour, etc — but sustainable change requires long-term strategic approaches based on robust behavioural theories and models of change.
No they don’t. Contexts drive behaviours. For decades, public health laboured under the common sense assumption (supported by the more traditional social psychology literature) that the attitudes we hold determine the behaviours we manifest: if people agree that excessive alcohol consumption is a bad thing, they won’t drink to excess. This radical reductionism is not only wasteful (it doesn’t work), but also unethical. An exclusive focus on internal psychological constructs (such as attitudes) places disproportionate emphasis on the individual as the locus for change, and removes due consideration of the social and structural influences that surround them. Effective and ethical behaviour change interventions take a holistic approach that influence at the social and structural levels, not just the individual.
No it won’t. But collaboration will drive innovation. While the intention-action gap is relatively new to sustainability, it has been public health’s arch nemesis for decades. In both cases, it is rooted in the simple fact that what people say and what they do are often two very different things, especially when it comes to issues that have a normative or moral dimension … such as health and sustainability behaviours. Despite this, most market research is still built around methodologies that drag people out of their natural context, sit them in a room and ask them what they think. While some would say that public health has only just started to listen to citizen perspectives, considerable work has been done recently under the banners of co-design, co-creation and co-production to base public health behaviour change efforts on collaboration rather than consultation.The surge of quantitative, survey-based data demonstrating how consumers intend to recycle more, buy more ethically, base purchase decisions on brand behaviour, etc have a role to play in building our insight and establishing baselines. However, sustainability behaviour change needs to quickly begin moving on from the neat rows of tick boxes to the messy complexity of people’s real lives as the primary source of inspiration for effective intervention.
No we don’t. We need an empowering approach. The use of shock or fear appeals is a public health addiction that is hard to shake: the tumours growing out of cigarettes, the drunk people flying off buildings, the graphic car crashes. However, while these approaches generate widespread publicity and evaluate well for recall, the spike in awareness rarely correlates with any sort of sustainable behaviour change. Thanks to the recent popularisation of behavioural economics, and particularly the work of Daniel Kahneman, we know how adept the human cognitive system is at protecting itself from emotions that it would rather not have to deal with. Dramatic depictions trigger defence mechanisms just as quickly, if not more quickly, than they trigger emotions and the viewer has recall to a range of strategies to distance themselves from the message. For sustainability behaviour change, this means moving away from Armageddon and extinction as motivators to more positive depictions of a future built from the behaviours we seek to bring about.
No we don’t. We need tailored strategies based on the particular needs of specific segments. The entire preventive health agenda in the UK over recent years has been defined by challenge of health inequalities: the fact that certain sections of society consistently display poorer health outcomes. The long, hard lesson that public health has learned is that one-size-fits-all approaches to behaviour change, such as mass-media campaigns, run the risk of actually widening health inequalities. That is, they accelerate change among those who are already considering it or implementing it — almost invariably the whiter, better educated, and more affluent — while ignoring those who could benefit most from intervention. Segmentation is nothing new to sustainability, but it generally isn’t applied with anything like the same rigour as it is in public health. There is clearly much to learn from this. Specifically a shift to thinking in terms of sustainability inequalities would focus resources on sections of society that are most in need of intervention, rather than those that are easiest to engage, and it would facilitate the development of more effective interventions, based on the real needs of real people.
No it’s not. Work, money and family are important. The rudest of all awakenings for public health was the realisation that it’s not really that important to most people’s lives. Yes, people value “health” in the abstract, but especially when it come to preventive health and lifestyle-related illness, it’s simply not proximate or relevant enough to influence day-to-day life.This has led to the recognition that if we are to effectively drive behaviour change, we need to locate our issue within people’s existing value sets and priorities, rather than seek to extend their values sets to encompass our issue. In very basic terms, we make healthy eating about being able to play football with your son, rather than about preventing heart disease; we make being smoke-free about attracting the opposite sex, rather than preventing lung disease. Culturally, sustainability is a scientific issue and most behaviour change work is built on the assumption that people will attach as much importance to climate change, species diversity and resource depletion as the scientists do. It is essential therefore that when it comes to consumer behaviour change, we take their lives — not our issue — as a starting point.
| For more examples of how organizations are driving #BehaviorChange, check out our editorial channel. |
Interface announced this week it has reached a series of major sustainability milestones at its European manufacturing facility in Scherpenzeel, The Netherlands. As of January 2014 the plant has been operating with 100 percent renewable energy, using virtually zero water in its manufacturing processes and has attained zero waste to landfill. This is a key achievement for the facility and a significant step forward for the company as it strives towards Mission Zero — Interface’s pledge to eliminate any negative impact it has on the environment by 2020 and by doing so, become a restorative enterprise.
Interface started its Mission Zero journey in 1996 and by 2013 had reduced its GHG emissions by 80 percent and water use by 87 percent in Europe. The company has recently introduced several innovations that are significantly reducing its impact on the environment further still, achieving 95 percent water reduction and 90 percent carbon reduction from January 2014. One example is the company’s recent switch to renewable gas at its Scherpenzeel facility — the gas is created by anaerobic digestion of fish waste, which is filtered to natural gas and pumped into the grid. The other main innovation implemented has been a water recirculation system through closed-loop piping.
“2014 is a landmark year for us in many ways as we celebrate 20 years of Mission Zero, and these figures from our European manufacturing operations show just how far we’ve come and what can be achieved with the right mind set and ambition," said Rob Boogaard, CEO of Interface in Europe. “However, while our achievements are to be celebrated, this is certainly not a time to be complacent. For us, Mission Zero is not simply about reducing our own direct impacts — it’s also about taking full responsibility for the entire lifecycle of our products. Our goal is to cut the umbilical cord to oil, with the result that 44 percent of our raw materials in Europe are already recycled or bio-based. We’ve come a long way but our Mission continues.”
Interface isn’t the only company to make bold, net-zero commitments in recent months: The Hofmühl Brewery in Eichstätt, Bavaria announced in October that, thanks to a combination of a solar thermal system and bioenergy (generated from brewer grains, yeast and other typically wasted matter created during beer production), the facility is not only supplementing its energy supply but making it completely self-sufficient, and it expects to become a net-zero facility by 2018; in November, Walgreens opened its first net-zero pharmacy in Evanston, Ill.; and Lego Group announced in December to running on 100 percent renewables, and becoming net positive, by 2016.
Umicore’s ranking as #1 on the 2013 Global 100 index of most sustainable companies was met with healthy skepticism by social justice advocates and environmental purists. The company’s history as Union Minière du Haut Katanga created devastation that Umicore will need to continue to remedy at a hefty price tag.
For those of us who are conversion advocates, Umicore is the type of company that embodies the belief in sustainability and conscious capitalism as a corporate doctrine (some would say “religion”). Umicore’s radical transformation has taken 46 years to achieve. Its sustainable business model not only rescued the company from substantial losses but also diversified its product offerings, generating significant financial returns.
The change was not easy. Imagine taking the risk of defying shareholders by saying, in essence:
Not knowing whether these investments would pay off, Umicore asked shareholders for their patience and loyalty, and asked employees to shift from an operational focus to an innovation focus while performing to new standards of operation. At best, investors must have wondered if there were toxic fumes in the executive suite offices that may have been causing delusional planning strategies, and employees were probably deciding whether to jump ship or hang on for dear life.
Sustainability has only become mainstay business parlance in the last five years. Before this it was perceived as the fantasy domain of environmental extremists. Many global business experts argued sustainability could never make business sense let alone generate profits. Reality has proven naysayers wrong. Today Umicore operates in 34 countries (including South Africa, Malaysia, India, Argentina and Brasil) with 2012 annual revenues of €12,548M (US $16,922M), a total of 14,438 employees, and a five-year average Net Profit Margin of 1.96 (beating the industry’s five-year average Net Profit Margin of -20.55). The company’s 2012 expenditures on R&D were over 6 percent of revenues (€180 million, US $243.6 million). Five-year averages for ROA and ROI are comparable to industry. Umicore’s ROA is 6.28 versus 7.62; its ROI is 10.30 versus 11.26. Umicore’s five-year average ROE exceeds the industry’s at 13.62 versus 12.99.
Porter argues strategy is not about being the best in the business, supplying a niche market or operational excellence. All these are tactics which enable strategy. Strategy is about creating a unique offering that clearly differentiates an organization from others operating in its industry and/or market space. Strategy must be flexible enough to accommodate any of the company’s product/service offerings and responsive enough to deal with any market condition. Most importantly, companies must be crystal clear and firmly committed to the decision of what customers they are not going to serve and which markets they are not going to pursue. Christensen offers Disruptive Innovation (developing quality affordable alternatives for new market segments) as one means of achieving this. Mauborgne posits that Value Innovation (aka Blue Ocean Strategy) enables a unique positioning within existing markets by focusing on meeting the needs of the customer in a way that is so enhanced it is very difficult for others to replicate. Sustainability has enabled Umicore to stay alive and stay competitive. It is ranked #7 on the 2014 Global 100 (placing it ahead of competitor BASF [#12] for two years in a row). Although it still owns and operates a zinc mine, Umicore now practices urban mining— the process of reclaiming compounds and elements from products, buildings and waste. Its operations prove sustainability is not about greenwashing but rather a focus on delivering long-term value and profits in ways that enhance our environment and build a better society.
A more in-depth examination of Umicore’s strategic transformation can be found in this case study.
This post first appeared in Snapshots of Success from Developing Markets on February 2, 2014.
IKEA is launching a new marketing campaign in the UK this weekend called “The Wonderful Everyday,” which will explain the brand’s values and sustainability ethos to consumers, according to Marketing Week.
The first ads, which launch tomorrow (February 8), mark the Swedish retailer’s first sustainability-focused campaign. Created by Mother, the UK’s largest independent ad agency, the first TV and radio spots will focus on touting energy-saving LEDs as an alternative to incandescent lightbulbs, which IKEA has committed to phasing out by 2016.
“This is a sustainability campaign but also a brand campaign,” IKEA’s UK and Ireland marketing manager, Peter Wright, told MW. “We need to explain what we stand for and celebrate that.”
The first round of TV ads show a dark forest, which slowly becomes illuminated, tree by tree, with the voiceover saying: “By 2016 we will only sell energy-efficient LED lightbulbs. Sometimes small things can make a big difference.”
Wright told MW that the campaign is paying homage in part to the company’s roots in Smaland, Sweden, where people are “thrifty and resourceful” and sustainability is a natural way of life.
Wright said he believes now is the right time for IKEA to speak about its commitment to sustainability as people increasingly look for ways to reduce their energy consumption and bills. He claimed that by switching to LED light bulbs, the average household could see up to a 85 percent decline in that cost.
According to MW, the campaign will of course include a social media component, featuring tips on more sustainable living, with plans for a broader social media push later in the year.
This isn’t the first time the home-goods giant has encouraged more sustainable consumption: In October, IKEA launched its “Second Hand” campaign, which aimed to resell customers' used IKEA furniture alongside new products through an online "flea market." The campaign successfully sold every used piece that was selected to be a part of the program.
IKEA seems to be practicing what it’s about to preach with regard to more conscientious consumption: The company also announced earlier this week that it has expanded the use of sustainably sourced cotton in its products to 72 percent, up from 34 percent in 2012.
| For more examples of how brands are using #Communications to share their values with consumers, check out our editorial channel. |
This post first appeared on CSRwire's TalkBack blog on January 7, 2014.
This is part two of the Creating Sustainable Apparel Value Chains series. Read part one: Transforming the Industry.
Myanmar’s readymade garment industry is currently tiny when compared to that of neighboring Bangladesh. The former’s 350 garment factories currently in operation are minute in comparison to the latter’s 5,600. The industry in Myanmar earned 917 million dollars in 2012, up from 770 million dollars in 2011. What’s more, exports are now projected to rise fast following the recent lifting of sanctions that had held back the country’s textile and garment industry.
Written by the co-author of this post, Dr. Maximilian Martin, Creating Sustainable Apparel Value Chains focuses on the Gordian knot question: How can an adherence to social and environmental standards be reconciled with international competitiveness? This dilemma facing Myanmar today is surprisingly similar to that of other emerging market sourcing locations.
The report provides a response in the context of a number of trends that are changing value creation in the industry, such as the rise of fast fashion, the impact of the emerging circular economy, and the rise of the Asian market. It also identifies a number of key levers that could make a disproportionately positive contribution (relative to resources and efforts deployed) if “pulled” — catalyzing industry transformation in the process. These include:
1. Recognize that competitiveness and social and environmental performance are neither mutually exclusive nor a zero-sum game.
A respondent to the Impact Economy survey for the report offered:
“Social compliance has become a threshold requirement to doing business; you simply cannot compete without it. Therefore, there is no trade-off — social compliance is necessary [for] success.”
The challenge now is to achieve this new standard of practice, and to secure the capital needed in order to do so. The solution can be found in next-gen manufacturing.
A redesign of production processes paired with better infrastructure and training can save up to 20 percent of chemical inputs, up to 40 percent of energy, and up to 50 percent of water. This is the economic rationale for building humane working conditions and an improved environmental footprint. The savings opportunity in water provides an illustration: Because water usage may not carry a cash cost in many production locations (and it is often not even metered), incentives are needed to make progress with this part of the equation. From an investor perspective, the cash cost of water can serve as the business rationale for deploying capital, and the case for water savings will only strengthen as water scarcity becomes increasingly accentuated around the world. However, energy and chemicals both pollute and cost money today.
2. Chemicals are the 800-pound gorilla of worker health and safety — and redesign of production processes allows for considerable savings.
The apparel supply chain is very resource-intensive. This is particularly true of chemical inputs, which account for approximately 25 percent of globally manufactured chemical usage, according to Greenpeace. Between 100 and 1,000 grams of chemicals are used to produce one kilogram of fabric. Exposure to chemical substances in textile products may result in considerable negative health outcomes, ranging from acute poisoning to long-term consequences such as cancer.
The short timeframe inherent to producing fast fashion (i.e., only about 14 days for a fast fashion retailer such as Inditex/Zara) means then that there is no time to systematically test the end product. Researchers found that the residue of a variety of hazardous chemicals was present in clothing made by 20 global fashion brands. But the use of chemicals in the production process can be improved. Selecting the least hazardous chemical inputs, rather than focusing on testing the output products, provides one possibility for advancement.
Also, after offshoring to emerging markets, workers are typically trained insufficiently in how to work with hazardous chemicals and often lack adequate protection. An important step: better training for workers.
Process optimizations like these can reduce the amount required to manufacture a given product, often generating savings of up to 20 percent.
3. (Impact) investing can be used to make critically needed upgrades to industry infrastructure.
Basic tactics such as replacing old energy-intensive looms and installing LED lights cut energy usage, maintenance costs and reduce emissions while improving visibility and worker safety — with costs of the LED lights often covered from the savings in avoided electricity costs within 36 to 72 months. Capital is needed for this kind of upgrading, though, and local capital markets face major limitations.
The report’s good news, however, is that the cost of capital can be covered by impact investing that seeks to improve social and environmental conditions while also enabling producers to save money and investors to make returns.
For example, CDC, a UK development finance institution, and Brummer & Partners AB, a leading Swedish hedge fund group entered into an investment partnership where the former invested $10 million (along with a number of other investors) into the first Bangladesh-focused private equity fund launched in 2008, providing growth capital to firms in the country’s export, agriculture, health, education, IT and services sectors. Ananta Apparels Limited is one of the firms that received a $1 million investment to build a new production facility that meets world-class standards in lean manufacturing and social and environmental performance.
The report also emphasizes that to achieve a sustainable future for the industry, we can and need to move in scale.
In Myanmar, investment will be key to making this shift happen. A respondent to the Impact Economy survey put it well:
“If a country like Bangladesh could both be a low-cost provider and a transparent, ethical one, it would be unstoppable.”
Using (impact) investing to improve manufacturing by reducing chemicals, energy and water inputs could provide the economic basis. In our next post, we will cover other key additional levers (i.e., improving working conditions and replicating the best practices of leading players) that will be critical to achieve the necessary leap forward toward sustainable value chains in the apparel industry.
| To learn more about how organizations worldwide are cleaning up their supply chains, check out our editorial channel. |
In an interesting "band-aid" proposition, oil and gas exploration and production company Range Resources recently announced it would like to start using the waste rock material brought to the surface at fracking sites — known as gas well drilling “cuttings” — as a paving material.
Pennsylvania state Department of Environmental Protection spokesman John Poister says the Range application for a state general permit is the first by a Marcellus Shale gas drilling company under a state “beneficial use” general permit. The project would constitute the beneficial use of vertical drill cuttings from natural gas wells as an aggregate in a stabilized soil pavement for construction of Marcellus and Utica Shale well pads and access roads, according to a notice in Thursday’s Pennsylvania Bulletin, where state permitting actions are recorded.
The notice said DEP received the registration from Range Resources on January 10. A 60-day public comment period began February 1.
Range Resources says the company has long wanted to use drilling cuttings for road and pad construction, noting that it’s allowed in Texas. Granting the beneficial-use permit not only would save the company money by reducing its disposal and road and pad materials costs, it also would "benefit the environment" by reducing the amount of mined aggregate needed and the amount of waste material sent to landfills.
Currently, the drilling cuttings material is classified as “residual waste” and is either buried on site or mixed with wood chips and transported to a landfill for disposal. In 2012, shale gas drillers disposed of close to a million tons of waste in Pennsylvania landfills, most of it drill cuttings.
But these drill cuttings are not clean — some of those trucked to landfills set off radiation alarms, which compelled the DEP in January 2013 to start studying and testing for radioactivity in drill cuttings, wastewater and equipment at more than 100 sites across the Pennsylvania.
Range Resources insists there is no reason to believe there will be any adverse environmental impact, especially since the company would be using only vertical cuttings, not the horizontal shale cuttings, which can contain more radiation. Additionally, the material must pass state standards for road building materials before it can be used. The company suggests use of the cuttings could eventually be expanded to include local and state road paving.
There is a risk that drill cuttings can potentially contain radiation or other contaminants associated with drilling mud, according to Briana Mordick, a petroleum geologist and staff scientist with the Natural Resources Defense Council. If used as paving material, those contaminants can leach or wash out of the material and pollute soil and nearby waterways. To protect against this, drill cuttings would need to be properly tested and characterized prior to their use on roads and drill pads. To assess the risk to surface waters and the environment, scientists would need to know the contaminants in the cuttings.
On a more positive note, last year the Climate News Network reported that researchers from the University of Kansas are experimenting with ways to produce cement that will absorb CO2 emitted from factory flues, by adding waste residue from biofuel production to the cement mix. The by-product, lignin residue, is a woody substance produced from generating biofuel from cellulose waste such as wood chips and straw, which is usually burned or buried. When the Kansas team added 20 percent lignin waste to their cement, the subsequent chemical reaction delivered a concrete considered 30 percent stronger than traditional types. Civil engineer Feraidon Ataie, one of the lead researchers on the project, said the process not only delivers a stronger, more sustainable alternative to traditional cement; adding value to the by-product rather than just landfilling it can also help reduce the cost of bioethanol production.
In related news, the New York Timesreported in December that Milwaukee is using cheese brine, usually a waste by-product of the cheese-making process, to de-ice the city’s icy roads this winter. The city says the brine is a cheaper and more environmentally friendly alternative to rock salt, which can end up polluting waterways.
Less than a year ago at Sustainable Brands ‘13, leading brand innovators from around the world came together in San Diego for the seventh year to address some of their biggest sustainability challenges. These innovators realize that no brand is an island and many challenges they face are shared by their peers, competitors, suppliers and customers. In order to support shared learning and collaboration beyond the conference itself, members of the SB advisory board designed a new structure — the SB Collaboratory— to provide a forum for these professionals to come together to share experiences, ask questions, learn from each other and brainstorm a path forward.
One of the issues that rose to the top of the conversation in June was employee engagement. Study after study indicates a significant correlation between employee engagement, financial returns, and the success of sustainability efforts. Recently CDP released the findings from its annual study of carbon emissions, which found that companies that engage their employees in sustainability are twice as likely to realize emissions reductions and four times more likely to generate monetary savings. A prior meta-analysis by Gallup found a consistent and significant correlation between employee engagement and company performance across nine indicators including customer loyalty, profitability, productivity and turnover. It is no surprise, then, that documenting the ROI of sustainability as an employee engagement focal point, and moving beyond elementary “green team” initiatives to those that enable multiple parts of an organization to generate meaningful innovation is an emerging practice that SB community members have been anxious to come together to discuss.
An initial discussion led by SB board member Jeff Mendelsohn, who shared his vision of the potential associated with embedding sustainability into all corners of the company, originally took place in spring 2012. In 2013, the conversation continued, with further shape given to the current state and challenges experienced around the topic, suggesting community interest and readiness for an ongoing discussion within a Collaboratory setting. Further research was done to poll interest in participating after the conference, and last month, a year-long dialogue group launched the first formal SB Collaboratory initiative focused on assisting participants in driving deeper internal sustainability engagement and measured business results.
To date, brand innovators, communications and PR leaders, sustainability leaders, supply chain leaders and HR leaders have come together from companies such as Annie’s, BASF, Caesars, DIRECTV, eBay, Eastman, Green Mountain Coffee Roasters, HP, Interface, Kohl’s, Mattel, SAP, Symantec and Target.
It’s not too late to join. Participation in the Collaboratory can be included as part of a Silver SB Corporate Membership or above. Individuals from non-member brand companies may also apply to participate with permission of the group. Visit the Collaboratory page for more information on how to participate in this year-long learning circle and bring the benefits of engaged employees to your organization.
On Feb. 5, drugstore chain CVS Caremark announced that it will stop selling tobacco products.
It’s a big deal. Here’s why.
It signals a step towards more businesses saying, “It’s wrong. So we’re stopping.” Even when the financials — what the sustainability world calls “the business case” — don’t support it in the short term.
I’d like to suggest that CVS’ announcement moves the ball downfield for more business decisions based on social and environmental impacts. It creates new, safe middle ground to operate more openly from the “morals” argument as a valued partner to the “money” business case argument.
To back up, let’s remember that Target made a similar decision to stop selling tobacco — in 1996. (Thanks to Kathrin Winkler for the tip.)
At the time, Target’s up-front reason was cost savings. The company said that selling tobacco products was too expensive to continue in the short term because of 1) shoplifting and 2) overhead costs for (inadequate) anti-theft measures.
Today, CVS leadership says it’s taking tobacco off the shelves as a long-term strategy to pivot from being a seller of goods to a provider of health services. Over time, the estimated $2 billion annual sales hit won’t matter.
In 1996, Target said, “It’s a money decision,” because adding, “And also, it’s wrong for kids to smoke and we care about our customers’ health,” probably wouldn’t have flown.
Today, I feel, CVS has more room to say, “It’s wrong. So we’re stopping” for a few reasons:
On this last point, I believe that sustainability’s greatest strength has always been that it’s the right thing to do. I’m inspired by Lincoln’s appeal to our fellow humans’ better angels, rather than just their bank balance.
BT’s Kevin Moss has written about this dilemma, and suggests that the sustainable business world might go about fixing it with “case studies for successful resolution that give the practitioner confidence and tools to use, based on examples where these dilemmas have been successfully addressed."
So to that end, here are some resources to support “morals and money” decision making:
1. See the third point in Andrew Winston’s Feb. 5 HBR blog post
2. The Guardian’s Jan. 2013 coverage of a Nature climate change piece showing that “engaging the public in the moral rather than economic case for sustainability might be more effective, with lessons to be learned at policy level.”
3. Disney’s June 2012 move to stop taking junk food advertising, countered by rival Nickelodeon’s July 2013 statement that it wouldn’t follow suit.
4. The key finding from Fairleigh Dickinson University’s 2013 research survey of sustainability motivations: New Jersey business owners are incorporating sustainability practices into their businesses “because it’s the right thing to do.”
5. And finally, WWF’s 2010 Common Cause initiative exploring how values can bring people together.
We’re all too familiar with the fact that, sometimes, the right thing to do doesn’t add up to be best thing to do money-wise in the short term. But when leaders decide to value long-term sustainability over short-term financial results, amazing things are possible. It’s not just the Ray Andersons and Paul Polmans of the world anymore. CVS’ leaders decided to say, “It’s wrong. So we’re stopping.”
More will follow.
Organic milk comes with a dose of healthful omega-3 fatty acids, which help prevent heart disease and are linked to additional health benefits. Normally associated with seafood or dietary supplements, these valuable nutrients can also come from some dairy products, according to research published last month in PLOS ONE. The study included milk from Organic Valley, the nation’s largest farmer-owned cooperative, which has been on the path to understanding the fatty acid profile of its products since 2009. What the coop experienced along the way provides companies in all industries three important reminders about effective corporate sustainability efforts.
The new research, led by Washington State University, tested over 380 whole milk samples to compare the omega fatty acid content of organic and conventional milk. The organic milk had 62 percent more omega-3 fatty acids and 25 percent fewer omega-6 fatty acids, with almost the identical fat content as conventional milk. This resulted in not only more desirable omega-3s in the milk but also what some consider a more preferable proportion of omega-6 to -3 fatty acids for better health.
This pattern has consistently been repeated over the years that Organic Valley has been testing its products. The coop’s work has gone further to demonstrate that the amount of pasture or forage in the cow’s diet is proportionate to the omega fatty acids in the milk.
Jonathan Reinbold, Sustainability Program Manager at Organic Valley, adds that, “Our research demonstrates that higher quality forage elevates the omega-3 content even higher. Pasture is key, especially high-quality pasture.” This information has helped the coop develop and provide resources, from soil testing and consultation to feed analysis and animal nutritional guidance, so members can make informed changes at the farm.
As a result, the omega-3 fatty acid metric is driving progress. There may be opportunities for new or untapped metrics across companies and industries that can push toward other beneficial changes. Can your company research and deploy new data for key issues important to your business? Could you enhance women’s empowerment, water availability or chemical sustainability?
To have the power for change that Organic Valley has experienced, the metrics should:
The higher levels of omega-3s in Organic Valley’s milk are the result of the coop’s systems approach to cultivation. There are interdependent considerations that interact dynamically, including nurturing the soil, caring for the animals and managing the pasture. To support its farmers in implementing best practices, Organic Valley has a team of experts that includes a soil agronomist, veterinarians, and a ruminant nutritionist.
“Taking care of land and animals will produce better food and a healthier consumer,” Reinbold says.
This goes way beyond the benefit of higher omega-3s in the milk. The land stewardship and effective grazing encouraged by Organic Valley can create a carbon sink by sequestering carbon dioxide from the atmosphere. There is also potential for less soil erosion and better water-holding capacity in the land. Reinbold notes that Organic Valley farmers experience “mutually beneficial activities producing vibrant ecosystems on the farm and high-quality food.”
It is important for companies to better understand such interdependencies in their supply chain. I wrote about the decline in the bee population as another illustration of the need for this view. Such insights may reveal mutually reinforcing benefits and greater sustainability.
How many companies are evaluating human health side-by-side with greenhouse gas emissions and labor ethics? Surprisingly, very few. The recent upsurge in attention to chemicals of concern in products like soaps and cosmetics highlights the need for explicitly including human health in sustainability initiatives. While companies have worked to comply with laws and regulations on product safety, companies now need to change their approach to effectively improve the health and environmental profile of the materials in their products.
Organic Valley’s holistic approach to cultivating higher levels of omega-3s brought the coop a surprising range of sustainability benefits beyond a healthier product. What breakout progress could await companies that incorporate new metrics, system thinking and human health into their business decisions?
