Mhlnews 7025 Sustainability Business 0

Turns Out What's Good for Business is Good for the Environment

May 14, 2017
Sustainability isn't just a feel-good corporate PR move—it's a solid strategy to productivity and growth.

Sometimes when a company goes after one goal, another and larger goal is achieved.

This happened to AkzoNobel, a global manufacturer of paints, coatings and chemicals. Energy costs were an uncomfortably high percentage of production, so the company began investigating other sources of energy. Turns out renewable energy, when secured through public/private power purchase agreements, could cut costs. And the larger goal of being a good steward of the environment was achieved as well.

Over the past five years AkzoNobel has not only increased its use of alternative energy sources from 30% of total energy expenditures to 45%, but they've also provided energy to the grids in some cities.

Instead of losing energy as part of some production processes, the company is now giving back clean energy. And that wasn't even one of their corporate goals!

Other companies have incorporated environmental considerations in all decisions. Footwear maker Nike, for example, has an app called Making that engineers can use to see the environmental effects of their material choices on water, chemistry, energy and waste and on whether the material uses recycled or organic material—using data gleaned from its public Material Sustainability Index.

Moving from inside the walls of the operation to the end users, some of the largest companies are stepping up their sustainability efforts by extending them to product offerings. When consumer packaged goods giant Unilever recently purchased Sir Kensington's, it acquired a vegan mayo made from aquafaba, a sustainable material that fits perfectly in line with Unilever's vision to make "sustainable living commonplace.” The company boasts that it is transforming the food industry by committing to produce food that tastes good, does good and doesn't cost the Earth.

The retail world has been on this sustainability bandwagon for a while, too. One such group—the Sustainable Apparel Coalition—consists of hundreds of major apparel and footwear brands and retailers in an effort to help move the industry to measure their environmental and social and labor impacts and identify areas for improvement.

And consumer research demonstrates that efforts of a more sustainable supply chain are being rewarded in the marketplace. Research shows 63% of consumers are "very or somewhat likely” to feel more connected or loyal to a clothing brand that offers apparel made of natural fibers like cotton or wool. And 45% say they would be more loyal to those offering sustainable clothing.

Sustainability efforts in the supply chain are pushing forward at a fast pace as well. Target recently issued a number of sustainability initiatives for suppliers to follow. And not be outdone, Walmart, one of the founders of the Sustainable Apparel Coalition, is calling for its suppliers to remove a billion metric tons of greenhouse gas emissions from its supply chain by 2030. In fact, Walmart brought many of its major suppliers to its headquarters for a dialogue on it's possible to save money while treating the environment with respect. Cereal maker Kellogg Co., for instance, says it could save $30 million by reducing waste 15% by 2020

This model of seeing the business advantage of creating environmentally-focused practices will be especially important in the current political climate, as the Trump administration is calling into question the credibility and relevance of environmental initiatives and guidelines.

But when I spoke with Andre Veneman, corporate director of sustainability at AkzoNobel, he said that his company and many others will continue to support the Paris Agreement, and will stay the course when it comes to their goals of being responsible companies.

"While you can debate ideology [and tactics], such debate isn't necessary,” explains Veneman. "There are such huge opportunities to improve business across the value chain that sustainability makes its own business case.”

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