Smart Corporations Partner for Sustainability, Business Growth

by | Apr 16, 2014

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image for article 1This article is sponsored by Procter & Gamble.

Smart corporations see sustainability not only as an environmental responsibility but as an opportunity to build the business, and partnerships with other organizations multiply the benefits of their sustainability initiatives.

A number of companies, from CPGs like Procter & Gamble to retailers like Walmart and auto manufacturers like Ford and beyond, are using a variety of innovative sustainability initiatives and partnerships to ensure their continued strength in a world becoming more concerned with sustainability and renewability.

Partnerships Strengthen Business Relationships

Retailers are a powerful force in this partnership approach, as they provide an opportunity to reach consumers directly.

One such alliance is the partnership formed between P&G’s Children’s Safe Drinking Water (CSDW) program and Walmart in the UK and Canada. The P&G CSDW program was started in 2004 to bring clean drinking water to people in developing countries, or in areas affected by natural disasters, via water purification packets developed by P&G. A small water treatment packet, about the size of a packet of sugar, turns a ten-liter bucket of highly contaminated water into clean drinking water in 30 minutes.

Through the new partnership, Walmart has displays in its stores, highlighting the global need for safe drinking water and the work of the CSDW program, and encouraging shoppers to buy a P&G product. With every purchase, P&G donates another day of clean drinking water to those in need.

“Forming partnerships with retailers expands the reach of the program and strengthens our business partnerships with the retailer,” says Allison Tummon Kamphuis, Children’s Safe Drinking Water Leader for P&G.  To date, the program has provided a total of seven billion liters of clean water, the equivalent of providing one liter of clean water for every person on the planet, P&G announced yesterday. (Image shown is the family that received the seven billionth liter of clean water through P&G CSDW.)

P&G has also been working with NGOs and nonprofit organizations around the world on the CSDW program. Two of these, the World Health Organization and UNICEF, help raise awareness around the issue of clean drinking water. P&G says these partnerships have been critical to CSDW’s success. The company now works with a range of more than 140 organizations around the world.

Partnership programs are attracting the attention of industry associations like the Retail Industry Leader’s Association (RILA), which are studying, measuring and citing these partnerships as a source of success. “Retailers that develop long-term strategies for sustainability engage with their communities and suppliers, and partner with nongovernmental organizations. Doing so will ensure that they are pursuing the opportunities with the greatest impact given the resources,” says Adam Siegel, RILA vice president for sustainability and retail operations.

These NGO partnerships have brought another business benefit to P&G: the company acquires new knowledge about reaching consumers in areas that it may not normally reach. Additionally, countries are more open to foreign direct investments when the company already has a profile in the country from the humanitarian standpoint, Tummon Kamphuis says.

Another example of retailer and manufacturer partnerships is Lowe’s collaboration with manufacturer DeWalt. The two have partnered to sponsor tool trade-in events that provide both an opportunity and an incentive to recycle outdated power tools, says Carl Smith, president and CEO of Call2Recycle. Customers were invited to trade in cordless power tools and received a $50 coupon toward DeWalt products.

Similarly, Staples Canada partners with Call2Recycle to collect and recycle batteries (re-chargeable and alkaline). The program helped Staples Canada and its customers divert more than 23,630 kg of batteries from landfills in the third quarter of 2013, an increase of 44.3 percent over Q3 2012.

Collaborations Educate, Advance Sustainability

Collaborations of multiple companies working together on sustainability issues can speed improvement and education. One such collaborative is the electric utilities project of the World Business Council for Sustainable Development (WBCSD). The group, made up of a partnership of companies including ABB, Eskom, CLP Holdings, EDF, Entergy, Hitachi, and Statkraft, has written a new report, Building a Resilient Power Sector. The report explores the climate risks that electric utilities face and examines how the industry should act to build resilience. It provides over 20 examples of the different solutions electric utilities companies are putting in place to face these challenges. Peter Bakker, CEO of the WBCSD, said that climate change presents a growing risk for the utilities industry, with rising temperatures and sea levels, the possibility of more strong winds, heat waves, heavy rain and drought. The member companies pooled their expertise to assess the risks and develop responses to these challenges and help utilities make decisions on how to move forward. Producing such a report also strengthens the participating companies’ reputations as thought-leaders in the industry.

Another such partnership is aimed at improving the sustainability of products and product packaging. The Plant PET Technology Collaborative (PTC), established in April 2012, is focused on the research and development of plastic polymers made entirely from plant-sourced materials and consists of five member companies: The Coca-Cola Company, Ford Motor Company, H.J. Heinz Company, NIKE, Inc., and P&G. Polyethylene terephthalate (PET) is a lightweight and durable plastic that is used by all PTC companies in a variety of products and packaging. Developing PET that is derived from renewable materials represents a significant opportunity to reduce environmental impact.

Sometimes, corporations hoping to advance the cause of sustainability must take enormous risk, often without the promise of foreseeable return, says Art Dodge, CEO of ECORE International. Dodge mentions ECORE International’s partnership with Nike on its closed loop recycling process, which takes granulated whole shoe materials from Nike’s facilities to produce a range of interlocking rubber tiles, performance flooring and underlayment. In order to attempt to address the complex challenge in achieving sustainable mobility and accessibility, automaker Ford works with the University of Michigan’s Sustainable Mobility and Accessibility Research and Transformation (SMART) project and says the partnership will produce a new systems approach for addressing the problem.

Companies Can’t Do It Alone

By reducing packaging, compacting a product, or using renewable materials, there are environmental savings throughout the lifecycle, but also financial savings for the company, according to Len Sauers, vice president of global sustainability for P&G.  However, he adds, just because something is renewable doesn’t necessarily mean it’s better for the environment. “You have to go through a lot of scientific evaluation to make sure that what you’re doing is not worse than sticking with something not renewable.” For example, when P&G first began researching the use of sugar cane to make sustainable “plastic” bottles for its Pantene NatureFusion line, it first needed to ensure that using sugar cane rather than petroleum is more beneficial in terms of the energy, land and water used.

In order to do a complete lifecycle assessment, P&G partners with external subject experts, including the World Wildlife Fund (WWF), to conduct research on sustainable sourcing. “The WWF has a very strong technical base; our scientists can come together with theirs to work toward an understanding of the sustainable sourcing of renewable materials. This is, in many ways, how you build a business,” Sauers says.

As four out of five retailers plan to engage in nearly all aspects of product supply chain sustainability in coming years (per RILA’s 2013 Retail Sustainability Report), retail partnerships will continue to make sense, especially when, on the manufacturing end, companies continue to create products using renewable materials and sustainable practices. “Collaboration is becoming imperative for effective sustainability action,” according to the RILA report. “Managing the full product lifecycle…first requires alignment within the company…and then partnerships with suppliers.”

Regulation alone, or companies or governments acting in isolation, are unlikely to significantly alter the long-term outlook of the global supply chain, says Dodge.

While solutions to the problem of renewability and sustainability will come from the creative efforts of businesses committed to societal and environmental improvement, they will most likely be driven by economic opportunity rather than corporate conscience or regulatory fiat, Dodge says.

Progressive companies recognize these economic opportunities. “Sustainability is both an environmental responsibility and an opportunity to build the business,” says P&G’s Sauers. “Responsibility is important, but around 2007, we began to see lot of attention drawn to the topic of sustainability, from the government, from NGOs. As all this started to happen, we thought, ‘Can sustainability be an opportunity to grow? Where can sustainability also help find cost savings? How can we uncover eco-efficiency?’ This was when things started to change for us, taking this new combined focus.”

This article is sponsored by Procter & Gamble.

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