How to Win Customers and Save Money with Sustainable Products

Verdantix budget growth for sustainable investment

by | Aug 30, 2013

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Verdantix budget growth for sustainable investmentCorporate spending on product sustainability initiatives will accelerate as sustainable product pioneers such as H&M, Nokia and Puma share evidence of the business benefits they achieved, according to a report from Verdantix.

Companies including Adidas, Danone, GSK and Jaguar Land Rover are investing in product sustainability and reaping the benefits such as improved consumer trust, reduced logistics costs and lower exposure to supply risks, says Rodolphe d’Arjuzon, Verdantix global head of research.

Product Sustainability: The Dos, Don’ts And Business Benefits, draws on data from a survey of 250 heads of sustainability in 13 countries as well as interviews with product sustainability experts at PE International, PRé Consultants, Pure Strategies and Quantis.

The study finds that 69 percent of sustainability executives say it is important or very important to improve performance on sustainable product innovation in the next 12 months. Thirteen percent of respondents anticipate increasing spend on product sustainability in the double-digits and 32 percent plan single-digit increases.

Among the firms interviewed for the report, at least 80 percent achieved cost savings on logistics and materials, while 67 percent mitigated resource scarcity risks and regulatory risks. Only 7 percent claimed to have achieved a price premium for their sustainable products.

Business benefits from product sustainability investments are emerging on an industry-specific basis, Verdantix says. For example, consumer products firms target improvements in brand trust, mitigating risks from supply shortages and differentiating products in the eyes of retailers. Meanwhile consumer electronics brand owners aim for an edge in the innovation cycle, anticipating the impact of new regulations on materials such as polyvinyl chloride (PVC) and improving value propositions through lower GHG emissions, which reduce road tax rates for customers. And suppliers to businesses and governments invest in product sustainability to meet strict green procurement rules and achieve preferred supplier status.

Verdantix will host a webinar about the report on Sept. 12.

Kraig Haberer, chief operating officer for SiteHawk, a cloud-based MSDS and chemical data management firm, makes the business case for product sustainability in an Environmental Leader column published last year.

Product sustainability programs’ benefits include risk mitigation and the gained competitive advantage of producing zero-footprint or near zero-footprint products, Haberer writes. Smart organizations are discovering ways to grow the top line, reduce costs, minimize risk, and find new markets, all of which support key corporate initiatives.

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