environmentally friendly Archives

It’s not just a product’s quality that compels consumers to purchase it. More people today care about how the item was manufactured and whether the company is harming the environment.

Studies show sustainability is a factor driving customers’ buying decisions. Recent research by IBM revealed that nearly six in 10 consumers surveyed are willing to change their shopping habits to reduce environmental impact, and nearly eight in 10 indicated sustainability is important to them.

That’s why companies can’t afford to pay only lip service to sustainability issues, says David Radlo (www.davidradlo.com), best-selling author of Principles of Cartel Disruption: Accelerate and Maximize Performance, and an internationally recognized expert on corporate innovation and leadership.

“Organizations are under increasing pressure from customers, investors, employees, banks, legislators and insurance companies to embrace social and environmental concerns,” Radlo says. “Studies increasingly show that the business benefits of sustainable strategies can be quantified and are real. There is a significant amount of money to be made and saved in the area of sustainability. It can give you a competitive advantage and improve your brand image, and it can also spur innovation.”

Radlo offers these points on how companies can prioritize and improve sustainability while turning it into a win-win for the environment and their business:

Assess your company’s sustainability level. “Most companies don’t know where to start,” Radlo says. “You start with a complete assessment. As it is conducted, link your sustainability efforts to the strategic plan and how it will impact your stakeholders. Determine your current status and what improvements you’d like to make.”

Identify ways to reduce waste and emissions. “Waste and pollution are indicators of inefficiencies, which tend to generate unneeded costs and environmental problems,” Radlo says. “The goal is to achieve breakthroughs that would lead to manufacturing without any form of waste and no carbon equivalent emissions. Waste elimination is achieved at the source through product design, producer responsibility, and waste reduction strategies down the supply chain. Some concepts to eliminate waste include cleaner production, product dismantling, recycling, reuse, and composting.”

Create an implementation plan and operationalize. “Develop your people for this important transition,” Radlo says. “Along the way, improve your processes and focus on the outcomes you wish to achieve. What measurement can you put into place concerning your customers, employees, stakeholders, and shareholder loyalty?”

Permeate the work culture, in addition to financial sustainability, with a go-green mentality. “The more that overall sustainability is ingrained and practiced in your culture, the stronger the company’s commitment is, and the message spreads organically and authentically,” Radlo says. “When your organization becomes a steward of the environment, and you fully integrate sustainability into your culture, the company now has a long-term vision and the processes in place to continue it.”

“Sustainability works for the greater good of any organization,” Rado says, “and it creates progress toward environmental and social improvement.”

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David Radlo (www.davidradlo.com), best-selling author of Principles of Cartel Disruption: Accelerate and Maximize Performance, is an internationally-recognized expert in leadership, innovation, and growth. He is a partner with RB Markets-Achievemost, a Masters professional outside director, a growth coach, and an International Fortune 500 speaker. He is experienced in the U.S. and globally, building sustainable consumer food brands such as Born Free, Farmer’s Best, and Egg-Land’s Best, and has personally negotiated agreements with Fidel Castro. He works with senior executives, venture firms, private, public, family, and college entities. His accomplishments in his 28 years as a CEO include delivering a six-fold increase in earnings before interest, taxes, depreciation, and amortization (EBITDA), and a 30-fold increase in enterprise value. He is a graduate of Tufts University and NYU’s Stern School of Business.

Corporations around the world love to promote their environmental bona fides, touting their at-times Herculean efforts to minimize their carbon footprint.

But desiring to be environmentally friendly and truly accomplishing that goal are two different things, as illustrated recently by Amazon’s acknowledgment that its carbon footprint grew 15% last year despite efforts to curb its impact on climate change.

As it turns out, the details about many companies’ eco-friendly accomplishments are often enveloped in mystery, in some cases even for the businesses themselves.

“The Amazon situation is just an example of the bigger problem surrounding corporate claims of environmental responsibility,” says Rajat Panwar, Ph.D. (www.rajatpanwar.com), an associate professor of Sustainable Business Management at Appalachian State University.

“Most global corporations now make such claims, but the reality is that half of the carbon emissions since the industrial revolution have happened within the last 30 to 35 years. It seems that corporate environmental disclosures hide more than they reveal.”

Why is it so difficult for many companies to achieve their goals of reducing their carbon emissions or otherwise limit the damage they do to the environment? Panwar says one problem is corporations often outsource much of their work, which not only reduces their control over the environmental impact they have, but also their very knowledge of that impact.

Panwar says one study analyzed reports that 1,300 firms submitted to the Securities and Exchange Commission. That study revealed 80 percent of those firms could not even determine the country of origin of their products, much less any information about their carbon footprint.

“My research has found that firms that are more socially and environmentally responsible tend to perform their functions themselves rather than outsource those functions to third-party vendors,” he says.

For companies that truly desire to have a positive impact, Panwar says three issues are critical:

How companies measure emissions makes a difference. Companies’ carbon commitments and pledges should be about absolute emissions, not emissions per unit of revenue or sales, Panwar says. But too often companies link their emission-reduction goals to how much money they are bringing in, at least partially negating what should be the ultimate goals.

Eco-friendliness can’t stop at the corporate door. Carbon commitments should encompass all operations across supply-chains. In the case of companies such as Amazon, the majority of emissions actually happen offsite and can be reduced only through concrete steps taken at the supply chain level. “This is a serious issue because many companies don’t even know who their downstream suppliers are.” Panwar says. “Companies like Amazon can gather applause for their pledges, but the actual impacts are hidden in the supply chains.” Consumers who want a true reckoning of how well a company is reducing emissions need to ask companies to provide those numbers,

Supply networks should not be far-flung. In late June, Amazon announced creation of a $2 billion Climate Pledge Fund to invest in companies that make products and technology that help protect the Earth. But the details of how such a plan will play out are important, Panwar says. A good approach, he says, is to promote local supply networks so that emissions are minimal, visible and monitorable.

“I am glad that we are beginning to see through the discrepancy between corporate pledges and corporate environmental impact,” Panwar says. “When it comes to emissions and especially the effects of a global supply chain, I believe we are entering a new era in which transparency has to be made more transparent.”

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Rajat Panwar, Ph.D. (www.rajatpanwar.com), is an associate professor of Sustainable Business Management at Appalachian State University. He previously was an assistant professor at the University of British Columbia. He also has been an Affiliate Faculty member in the College of Forestry at Oregon State University, and with the Governance, Environment, and Markets program at the School of Forestry and Environmental Studies at Yale University. Panwar holds two doctorate degrees, one in Corporate Sustainability from Grenoble École de Management in France, and one in Forestry from Oregon State University.

Does Your Company Care About The Environment As Much As Consumers Do?

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