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Incorporating 30 Elements of Consumer Value to Maximize Sustainability Returns

The SSC Team December 1, 2016 Tags: , , , , , , , Strategic Sustainability Consulting No comments

Occasionally we run across an article that is so jam packed with information and application to the world of corporate sustainability that we don't want to summarize a single word.

Instead, we recommend you stop what you're doing right now and read every single word of the recent article, The Elements of Value, from the September issue of the Harvard Business Review.

The article's implications for how B2C companies can position their own sustainability activities to generate consumer value are invaluable ways to approach sustainability strategy in product and service design and development. 

Yes. Mind. Blown.

Now that you're really understanding how this can truly transform your business, contact us so we can help get you on the path. The hardest part is usually the first step. We're here to help.

 

Can ‘fast fashion’ and sustainability exist in the same world?

The SSC Team October 11, 2016 Tags: , , , Strategic Sustainability Consulting No comments

From Levi’s to Target to Eileen Fisher to Nike to H&M, the conversation is suddenly all about recycling. And it’s about time they got serious about that. 

“It’s been estimated that the global apparel industry generates as much as $2.5 trillion in annual revenue and that it will double in the next decade. What’s more, despite efforts to collect old clothes by retailers and nonprofits such as Goodwill Industries, the overwhelming majority of items eventually wind up in landfills, at least in the U.S. Americans dispose of about 12.8 million tons of textiles annually, which amounts to about 80 pounds for each man, woman and child, the U.S. Environmental Protection Agency estimated.”

Those are some pretty eye-opening statistics about the impact “fast fashion” is having on our environment.

It’s good to finally see companies looking both at increasing lifespan, slowing down the cultural speed of consumerism and disposal, and now, finally, looking at meaningful ways to recycle textile products.

Which direction do you think will have the most positive impact on the environment: changing consumer behaviors and pushing less buying and disposing, or changing product life cycles? Let us know in the comments.

The Secret to Getting a Green Premium

The SSC Team August 2, 2016 Tags: , , , Strategic Sustainability Consulting No comments

Enjoy this post from the SSC archives

There has been a lot of talk lately about whether or not customers are willing to pay more for green products. And just like any kind of market research, you can usually find a study to support whatever theory you're currently promoting.  

For example, in August 2013, an article from Sustainable Brands proclaimed, “50% of Global Consumers Willing to Pay More for Socially Responsible Products”. Just a few months earlier, a Harris Interactive poll said that, “78% of U.S. consumers were already buying products specifically because of their social or environmental profile”.

Not so fast. There are a number of articles that argue the opposite -- that consumers are NOT willing to pay a price premium for so-called "green" products. In September 2012, an Advertising Age article noted, “As More Marketers Go Green, Fewer Consumers Willing to Pay For It”. And perhaps most compelling, P&G's CEO flat out declared that, “consumers aren't willing to pay a green premium,” in a video hosted by the Wall Street Journal.

Why the disconnect? Turns out the devil is in the details -- it's the difference between what consumers SAY and what they really DO. Here's an excerpt from No, Consumers Will Not Pay More for Green:

“Consumers will consistently tell surveys that they are willing to pay more for socially and environmentally superior products…A major utility company, for example, surveyed rate payers asking if they would pay a small premium for ‘green electricity.’ The response was overwhelmingly ‘Yes!’ However, when the product was offered, fewer than 5% actually signed up.”

 This leaves companies in a bit of a conundrum. How do you get consumers to pony up extra money for green products? This issue is important for many reasons--innovation can be expensive, and paying better wages for laborers and higher margins for raw materials can seriously impact the profitability of a product or product line. 

So how do you do it? 

The secret might be in how you talk about the sustainability or the "green-ness" of your product or service. It's not enough to spout out key statistics or throw an eco-label on the packaging. New research suggests that it's all in the story. 

In her article, Want to Raise Prices? Tell a Better Story, Francesca Fenzi shares insight about consumer purchasing practices.  “As a business owner, you probably believe that quality is what drives consumers to buy your product. Certainly, superior execution and customer service go a long way toward making your business a success.”

Ty Monague, author of True Story: How to Combine Story and Action to Transform Your Businessbelieves that customers will pay more for a good story.  Take, for example, a 2006 experiment by New York Times magazine columnist, Rob Walker, which tested a hypothesis that stories sold products. Writers were asked to create a story that evoked human interest to accompany a handful of cheap items worth less than $5 each, such as a wooden mallet, a lost hotel key, a plastic banana. He put the objects up for sale on Ebay with the narratives- and was surprised by the results. “On average, the value of the objects rose 2,700 percent,’"wrote Montague. 

Maybe the reason that today's eco-conscious products have trouble commanding a price premium is because their social and environmental stories are communicated poorly--or worse, not at all. Unless the consumer can make a human connection to the story behind the product, it's likely going to remain at a price disadvantage and fighting it out with other traditional products in a competitive marketplace.

So the next time you think about green products--whether you are buying them or selling them--consider whether the story has been crafted in a way to appeal to your values, your history, or your humanity. Are you more willing to shell out a couple extra bucks to be part of that story?  Leave us a comment or join the conversation on Twitter!

Turning a Profit on Sustainability: Are Target, Ikea, Nike, and Unilever Just Engaging in Greenwashing 2.0?

The SSC Team July 19, 2016 Tags: , , , , Strategic Sustainability Consulting No comments

For the past few years, global consultancies GlobeScan and SustainAbility have surveyed 900 sustainability professionals to evaluate which companies have best integrated sustainability into their corporate strategy.

Not surprising, Unilever held the top spot again for the sixth straight year for its leading-edge sustainability performance and strategy. Joining Unilever on the list were a number of high profile consumer brands, like Patagonia, IKEA, Tesla, Coca-Cola, and Nike, among others.

These companies, and others including Target, Whole Foods, and GE, are making loads of money through their sales of legitimately sustainable products and/or practices.

But let’s not put them on a pedestal just yet. Just because a company is strategic, and just because a billion-dollar portion of their income comes from sustainably produced products, does not mean they are even close to being truly sustainable – with sustainability defined as mitigating the social and environmental effects of their business operations throughout the entire product life cycle, from corporate management, to production, waste, distribution, operations, and disposal.

There are a number of the problems in confusing sustainable products with sustainable companies.

First, there are the temporal tradeoffs in sustainability.

Second, there is the idea that segmenting a business from its products, and declaring that business sustainable is somehow possible. Holding up organizations against a better framework of measure is needed, and providing more transparency on sustainability metrics should be mandated to help educate consumers, not just market to them.

Similar to the recent changes in the nutritional labeling practices to educate consumers on their actual sugar consumption, the emergence of a better way than a “survey of how sustainability consultants feel” or even jargon-filled GRI reports buried on a corporate website, needs to become the norm.

Certifying organizations need to talk about what percentage of a business must be sustainable for the entire organization to be considered sustainable. Can companies make chemicals for agriculture that help reduce water, and chemicals for warfare and still be considered sustainable? Can a manufacturer make one line of sustainable home goods, yet deliver products with a 3-year lifespan and no ability to be recycled and still be sustainable? Can a retail outlet sell reusable water bottles and Styrofoam cups in the same store and still be considered a model for consumer sustainability?

In the end, we know as sustainability consultants and professionals that, even though Unilever is the model for integration of sustainable practices in their business, and even though we love what Patagonia and IKEA and others are doing to make meaningful changes for environmental and social good, we are a long way from true “sustainability.”

Many of these consumer brands continue to capitalize on the consumer desire for “green” products, and are still pushing the cyclical, disposable, must-have-the-latest-trend consumerist behaviors that result in waste.  

Unless an organization is net zero or net negative, then it really cannot be considered “sustainable.” And as consultants, professionals, marketers, and executives, if we continue to pat each other on the back too loudly for our sustainable milestones, or sustainable strategies, or sustainable product lines, we may confuse consumers into believing our work is nearly finished. 

Turning a Profit on Sustainability: Are Target, Ikea, Nike, and Unilever Just Engaging in Greenwashing 2.0?

The SSC Team July 19, 2016 Tags: , , , , Strategic Sustainability Consulting No comments

For the past few years, global consultancies GlobeScan and SustainAbility have surveyed 900 sustainability professionals to evaluate which companies have best integrated sustainability into their corporate strategy.

Not surprising, Unilever held the top spot again for the sixth straight year for its leading-edge sustainability performance and strategy. Joining Unilever on the list were a number of high profile consumer brands, like Patagonia, IKEA, Tesla, Coca-Cola, and Nike, among others.

These companies, and others including Target, Whole Foods, and GE, are making loads of money through their sales of legitimately sustainable products and/or practices.

But let’s not put them on a pedestal just yet. Just because a company is strategic, and just because a billion-dollar portion of their income comes from sustainably produced products, does not mean they are even close to being truly sustainable – with sustainability defined as mitigating the social and environmental effects of their business operations throughout the entire product life cycle, from corporate management, to production, waste, distribution, operations, and disposal.

There are a number of the problems in confusing sustainable products with sustainable companies.

First, there are the temporal tradeoffs in sustainability.

Second, there is the idea that segmenting a business from its products, and declaring that business sustainable is somehow possible. Holding up organizations against a better framework of measure is needed, and providing more transparency on sustainability metrics should be mandated to help educate consumers, not just market to them.

Similar to the recent changes in the nutritional labeling practices to educate consumers on their actual sugar consumption, the emergence of a better way than a “survey of how sustainability consultants feel” or even jargon-filled GRI reports buried on a corporate website, needs to become the norm.

Certifying organizations need to talk about what percentage of a business must be sustainable for the entire organization to be considered sustainable. Can companies make chemicals for agriculture that help reduce water, and chemicals for warfare and still be considered sustainable? Can a manufacturer make one line of sustainable home goods, yet deliver products with a 3-year lifespan and no ability to be recycled and still be sustainable? Can a retail outlet sell reusable water bottles and Styrofoam cups in the same store and still be considered a model for consumer sustainability?

In the end, we know as sustainability consultants and professionals that, even though Unilever is the model for integration of sustainable practices in their business, and even though we love what Patagonia and IKEA and others are doing to make meaningful changes for environmental and social good, we are a long way from true “sustainability.”

Many of these consumer brands continue to capitalize on the consumer desire for “green” products, and are still pushing the cyclical, disposable, must-have-the-latest-trend consumerist behaviors that result in waste.  

Unless an organization is net zero or net negative, then it really cannot be considered “sustainable.” And as consultants, professionals, marketers, and executives, if we continue to pat each other on the back too loudly for our sustainable milestones, or sustainable strategies, or sustainable product lines, we may confuse consumers into believing our work is nearly finished. 

If LeBron Drove a Prius, Would You? Celebrity Endorsements for Green Products

The SSC Team April 19, 2016 Tags: , , , Strategic Sustainability Consulting No comments

Athletes and celebrities have been pitching consumer products for what seems like … ever. But instead of pushing tennis shoes and Cadillacs, what if athletes and celebrities were pushing hybrids, smart thermostats, energy-efficient light bulbs- or pushing the idea of not purchasing anything at all?

An entrepreneur in New Zealand has centered an entire business model, Project LiteFoot, around getting the nation’s most famous athletes and sports clubs to compete (naturally) in a carbon footprint reduction contest, effectually modeling behavior and encouraging green purchasing habits of their biggest fans. They’re seeing results in New Zealand, but would it work in the U.S.?

Maybe. We definitely have a celebrity-focused culture. Elle is already tracking our “greenist” celebrities. And we do love our athletes. Already the EPA is working with sport organizations to “green” the in-game experience and SXSW hosted a ‘greening the big game’ session at its annual conference.

But are these activities leading to meaningful behavior changes for U.S. consumers? Or is this just a waste-reduction/waste-diversion effort benefitting teams and facilities, but not filtering into consumer behavior?

At this point, the potential of green products marketed by celebrities – promoting lasting green behavior – remains untapped here in the U.S. 

It’s exciting to see club-level and league-level activities moving toward waste reduction and energy efficiency at the massive spectacles of our sporting events, but using celebrity endorsements to mainstream the idea of adopting green technology could be a big boost in getting the “average” person into the “eco” column.

Have you seen a great celebrity endorsement that could help mainstream green purchasing? Let us know in the comments.

 

 

 

 

 

Food & Beverage Industry Demonstrates How “Business Success” Can’t be Achieved Without Sustainability

The SSC Team January 14, 2016 Tags: , , , , , , , , Strategic Sustainability Consulting No comments

The connections between increased revenue and investment in sustainability programs are complicated.

Even today, sustainability professionals continue to “make the business case” for sustainability.

It’s true that sustainability programs require an investment—in staff, in reporting, in communications, in change management—and the case for making smart investments for maximum results must continue to be made.

However, as we enter 2016, we should no longer need to make the case for sustainability itself.

Although directly linked financial benefits are sometimes difficult to identify, research suggests companies that fully integrate sustainability principles and practices into their strategic operations do outperform peers financially.

The counterargument is that these same companies are just more strategic overall, sustainability or not, so they will perform well simply because of a culture of innovation, risk mitigation, long-term planning, and thought-leadership.

Wrong.

The fact is, as we enter 2016, a company can’t even be considered a strong, strategic player without sustainability being one of its core principles. Sustainability has made it into the short list of core principles of true strategic leadership. In other words, you can’t have one without the other.

Case in Point: The Food & Beverage Industry

Pure Strategies, a sustainability consulting firm focused on the food and beverage industry, recently published results of a survey of major global food and beverage companies.

In the 2015 report, 18% more food and beverage companies, 100% of companies surveyed, are developing or implementing sustainability programs (from 82% in 2013), and 46% of the companies reported increased sales (up from 19% in 2013).

What the report tells us is:

  • More than ever before, food and beverage companies are implementing sustainability programs based on best practices of the companies that have already implemented sustainability programs
  • As the best-practice modeling increases throughout the industry, more food and beverage companies are reporting increased sales
  • The leaders of these food and beverage companies are tying industry-wide sustainability best practices directly to their increased sales

The food and beverage survey shows how sustainability, as a core strategic focus, is permeating the very operating principles of an entire industry – and a significant percentage of companies are making more money in the process.

Using food and beverage as an example, any company looking to become a long-term leader in any sector should look seriously at its approach to sustainability.

Sustainability must truly be integrated into a company’s core strategic plans, or it will likely get left behind.

If your company looking to integrate industry best practice planning into its sustainability strategy, a great place to start is with a sustainability assessment and peer benchmarking report.

 

 

 

RILA’s 2015 Retail Energy Management Report: 3 Takeaways

The SSC Team September 22, 2015 Tags: , , , , Strategic Sustainability Consulting No comments

By: Alexandra Kueller

Last week, we took a look at RILA’s Retail Sustainability Management Report, and today we’ll be looking at RILA’s Retail Energy Management Report.

Earlier this year, the Retail Industry Leaders Association (RILA) announced their brand new Retail Energy Management Maturity Matrix, which hopes to be a tool that will be used by retail executives, individual companies, and industry-wide to help companies focus on energy management. In September 2015, RILA released their Retail Energy Management Report that uses the matrix to analyze energy management initiatives from over 100,000 RILA member companies.

Taking the 23 dimensions related to energy management RILA has identified from six key sectors, the report looks at where the companies rank in terms of maturity: are they starting, just standard, excelling, leading, or at the next practice already. RILA presents their key findings from each dimension, then provides resources for companies to reach the next level, case studies to look over, and how to get involved on a greater scale.

Here are three observations that really stood out to us:

Dedicated energy management teams

At 85%, a large majority of the retailers surveyed indicated they have at least one fill time energy staff person, with the average company retaining about 3 full time staff members. Despite only 15% of respondents not having a full time energy management staffer, roughly 50% of the companies indicated that they use a third-party or consultant to help with their energy management. With energy management often linked to sustainability, less than 25% of the energy teams report to their company’s sustainability/CSR department, instead a lot of the energy teams report to either the Facilities or Real Estate departments.

Continuous energy management improvement

From 2014 to 2015, all dimensions except for five saw improvement in overall energy management. The sectors People & Tools and Energy Consuming Systems saw the biggest gains, with almost every dimension hitting the maturity level of “standard”. While there weren’t significant strides from last year (except for “Food Service”), the growth is still positive. As more robust energy teams and goals are put in place, there will hopefully be an increase in energy management maturity in the future.

No one has hit a plateau

And speaking of increasing energy management over the next couple of years, many retailers indicated that there are many new initiatives in place. RILA has even forecasted that many of these new initiatives, plans, and goals will help push many of the retailers to an average maturity level of “excelling”, with some companies reaching “leading” status. Even retailers that are currently at “leading” or “next practice” have indicated that more work is going to be done with energy management within their company.

Looking to start a new sustainability project but need to gain support? Find out ways to gain that support for your new project or idea here!

3 Observations from RILA’s Retail Sustainability Management Report

The SSC Team September 17, 2015 Tags: , , , , , , Strategic Sustainability Consulting No comments

By: Alexandra Kueller

This past spring, the Retail Industry Leaders Association (RILA) announced their brand new Retail Sustainability Management Maturity Matrix, which hopes to be a tool that will be used by retail executives, individual companies, and industry-wide to help companies become more sustainable. Fast-forward to September 2015, and RILA just released their Retail Sustainability Management Report that uses that matrix to analyze sustainability initiatives from over 50,000 RILA member companies.

Taking the 27 dimensions related to sustainability management RILA has identified from seven key sectors, the report looks at where a lot of the companies rank: are they starting, just standard, excelling, leading, or at the next practice already. RILA presents their key findings from each dimension, then provides resources for companies to reach the next level, case studies to look over, and how to get involved on a greater scale.

Here are three observations that really stood out to us:

What comprises a retail-based sustainability team?

RILA offered a breakdown of how many retailer’s sustainability teams look like, and over 50% of those surveyed indicated that there is one person or no full time employee dedicated to sustainability (and a surprising 10% of companies have 10 or more people working on sustainability full time). Often times, the sustainability team will set the sustainability goals for the company, but almost a quarter of the retailers said they do not have sustainability goals. And in terms of budgeting for sustainability, almost 75% of companies said their budget either stayed the same or increased over the past year.

The leaders are well ahead of the pack

When looking at how the retailers did across all dimensions, it becomes apparent most companies are falling firmly in the "standard" category (or rather a 2 on a 1-5 scale). But the leading companies aren't just one or two steps higher, they are already at the "next practice" level (or a 5 on a 1-5 scale). Looking at all of the dimensions, over half the time the leading company was getting top marks - only in 4 dimensions was the leading retailer at the "excelling" level (or a 3 on a 1-5 scale). Leading companies obviously know what they're doing when it comes to sustainability, so now there needs to be an effort to get everyone else up to their level.

A shift to the supply chain

Overall, the supply chain section was one of the weakest, with many companies falling between the “starting” and “standard" category, but as retailers begin to solidify their internal sustainability, there is a growing focus on supply chain sustainability. Companies have started to engage suppliers about various sustainability issues, such as the need to reduce energy and water.

Looking to start a new sustainability project but need to gain support? Find out ways to gain that support for your new project or idea here!

Workplace Movement Toward Environmental Sustainability – Pt. 2

The SSC Team May 7, 2015 Tags: , , , , , , , , , , , , , Strategic Sustainability Consulting No comments
By: Alexandra Kueller Two weeks ago, we introduced the Retail Industry Leaders Association’s (RILA) brand new Retail Sustainability Management Maturity Matrix. The Matrix hopes to be a tool that will be used by sustainability executives, individual companies, and industry-wide. We also noted that while the Matrix is designed with the retail industry in mind, we think that is has a wide applicability beyond just the retail sector. Last week, we discussed the first three sectors that are featured in the Matrix. Today we are focusing on the final four of the seven sectors. Hoping to provide a more in-depth look at how RILA hopes to benchmark across the industry in terms of environmental sustainability, we are going to look at what it would take for a company to become a leader in that sector.

Retail Operations

Environmental sustainability extends to all aspects of a company, including their retail operations. Whether it is a store or corporate offices, a company should be putting in effort to make these areas as sustainable as possible, such as having facilities be LEED certified. Other ways to make your retail operations more "green" can include incorporating green standards for all new warehousing and participating in the ENERGY STAR program. The Retail Operations sector has three different dimensions:
  • Store/Corporate Offices
  • Warehouses/DCs
  • Data Center & Applications

Supply Chain

Supply chain sustainability might not be the first aspect of a company's sustainability plan to come to mind, but it is no less important than any other aspect. To be a leader in the retail industry when it comes to supply chain sustainability, a company must demonstrate the reduction of environmental impact through the optimization of transportation, work closely with suppliers to help improve their sustainability metrics, and be more transparent when it comes to audit statistics (e.g., percent of non-compliant factories). The Supply Chain sector has three different dimensions:
  • Transportation/Logistics
  • Supplier Engagement
  • Supply Chain Transparency & Traceability

Products

When someone thinks of a retail organization and sustainability, often times their first thought is "how sustainable is the product?" RILA recognizes that product sustainability is a key component in a company's overall environmental sustainability and offers some suggestions on how to be a leader when it comes to making a company's product more sustainable. Some examples are using renewable energy sources during manufacturing, offering take-back services, and designing products with a "cradle to cradle" outlook. The Products sector has three different dimensions:
  • Product & Packaging Design and Development
  • Owned Manufacturing/Production
  • Product & Packaging End-Of-Life Stewardship

Environmental Issues

And finally, true environmental sustainability cannot happen if a company does not focus on the environmental issues at hand. How a company addresses these issues - energy, waste, recycling, etc. - in the context of the retail sector is telling, and some industry leaders are already paving the way. Some of these companies are implementing leading waste technologies and policies, establishing green chemistry programs that helps reduce toxins, recycling and reusing water, using alternative energies, and more. The Environmental Issues sector has four different dimensions:
  • Energy & GHG Emissions
  • Water & Wastewater
  • Waste & Recycling
  • Chemical & Toxics
Last fall we attended the annual RILA Sustainability Conference. Read about some of our thoughts on the conference here.