- Channel partners are pushing brand owners to provide detailed information on how they have reduced carbon emissions.
- A green jump-start plan that suits a specific business can be built in methodical stages.
- The market and regulatory landscape call for greater responsibility and more transparency. Sharing a vision and a plan for addressing key impacts will allow brands to operate comfortably in this landscape.
Consumers are waking up to the idea that the products they use leave an eco-footprint. They’re learning it not from fringe environmental groups but from mainstream companies: Nokia, the Helsinki-based maker of mobile devices, asks customers to “pledge to unplug” their cell-phone chargers; IKEA provides no shopping bags at checkout; and Seventh Generation differentiates its laundry detergent on biodegradability. In 2010, growing numbers of people understand that every opportunity to use less energy, create less waste, or opt for down-the-drain ingredients that won’t harm the environment makes for a healthier world and saves money, besides.
The growing eco-awareness has big implications for the beauty industry. In the 2009 ImagePower Green Brands Survey* of greenest brands in the U.S., Burt’s Bees, Tom’s of Maine, Procter & Gamble, and Dove all made the top ten. In two of the most powerful findings from the survey, those polled stated that they would spend more on green products in the future, and they want to buy from companies they believe are environmentally responsible. Consumers care first and foremost about their own health (which drives the safety emphasis stance of the industry). But increasingly, they say they also care about the impact these products have on the environment.
Consumers are not alone in demanding more green. Channel partners—most famously Wal-Mart, with its scorecard system—are pushing brand owners to provide detailed information on how they have reduced carbon emissions, waste and packaging. Research on beauty companies conducted by Esty Environmental Partners found that direct marketing and franchised distribution companies are also hearing from their sales reps and franchisees. The consistent message is, “What is our brand doing about the environment? What’s our green story?” Simultaneously, state regulators, in response to consumer demands, are pressing hard on ingredient disclosure, and the U. S. Environmental Protection Agency is beginning to focus on the presence of specific chemicals (some used by the beauty industry) in products themselves and in freshwater systems.
For a number of reasons, including a lack of resources, small and medium brand owners—which constitute a large portion of the beauty industry—lag behind large players on most environmental sustainability best practices. They simply lack the time and resources to engage on a topic that may seem difficult to get organized around, and may appear to offer questionable return on the investment of time. Yet make no mistake, small companies face many of the same pressures as bigger companies, as well as the same opportunities. And, a green jump-start plan that suits a specific business can be built in methodical stages, starting with those that save the most money. (And don’t worry—you don’t begin with a “green product” launch.)
Adopting Green Business Practices
For beauty brand owners seeking to get started with a green strategy, the most effective approach is to organize your efforts into three simple stages: 1) demonstrate leadership; 2) address core impacts; and 3) communicate.
1. Demonstrate leadership: If you are the CEO or CMO, develop a vision for environmental responsibility that fits with your company’s capabilities, brand and culture. Make a statement and set achievable goals for 12 months from now. The goals should include environmental improvement targets and cost-saving targets. Offer employees rewards for successful ideas and actions that contribute to reaching the targets.
2. Address core impacts: Identify your company’s biggest environmental impacts and take steps to reduce them. Based on Esty Environmental Partners’ work with beauty companies, it is recommended that there should be a focus on the following areas to find both savings and environmental opportunities:
- Energy: Energy use reduction is the best place to start, whether you own manufacturing facilities or simply rent office space. Lowering energy reduces expenses and cuts greenhouse gas emissions. Begin by assembling and analyzing energy bills or hiring an energy auditor to identify high-energy usage that you control (such as lighting and HVAC). Reduction strategies include short-term ROI technologies, process changes, establishing low-energy procurement policies and developing good office hygiene—such as turning off printers and computers at night. There may also be ways to reduce corporate travel. Be sure to measure your baseline before you start, and keep track of cost and energy usage savings as you proceed.
As part of Bath & Body Works’ recent energy and water-efficiency retrofit of its headquarters building, 75% of lighting motion sensors were found to be overly sensitive. Adjustments to these motion sensors saved 18,020 kilowatt hours in a three-month period at a savings of more than $750.
- Manufacturing and office waste: Companies can become more aggressive in managing waste and reducing the amount sent to landfill. Waste metrics should ideally show the waste stream declining over time, while the percentage of recycled waste within that stream increases. Lower waste reduces handling costs and hauling fees, while recycling and composting can generate revenue. In 2008, Burt’s Bees held a Dumpster Day to identify trash that should be recycled and also began composting at its corporate office and manufacturing plant. The expanded recycling program and composting initiatives will lead to an estimated $25,000 in annual savings.
- Water consumption: For companies that do their own manufacturing, reducing water use can be a significant contribution to the sustainability story. Although water is not priced aggressively in most markets and does not usually represent as significant an area of savings as energy and waste, there are growing pressures on water quality and availability and, in time, it is likely to become more important and costly. Strategies may range from manufacturing process changes, to landscaping improvements, to low-tech investments such as hot water reuse, low-flow toilets and repairing leaks. In 2007, Avon converted the vacuum system at its Springdale, Ohio, facility, designed to operate manufacturing equipment, to waterless vacuum pumps, saving $63,000 and more than 16 million gallons of water a year. Between 2004 and 2008, Avon was able to reduce its total water consumption by 20%.
- Packaging and shipping: Primary and secondary packaging reduction needs to be addressed in time, but any new product development or relaunch presents the opportunity to apply design-for-environment thinking to packaging. Using less material (for example, eliminating multilayered liners), designing shapes and standard sizes that allow for more units to be shipped per carton, and light-weighting are all opportunities to save money and be greener. For tertiary or shipping packaging, using standard sizes that correlate to product designs minimizes the need for filler and avoids “shipping air.” Further savings can come from deploying reusable shipping boxes.
Aveda tries to use the least amount of material possible to produce safe and durable packaging. By using 80% recycled polyethylene bottles, it has cut its annual consumption of virgin high density polyethylene by 300 tons.
- Supply chain and logistics: Are there opportunities for your suppliers to apply the same thinking you are applying about energy use and packaging to their businesses, thus saving you money? Look at how they pack, package and ship to you. Similarly, look downstream to examine how your products get to and through your sales channel. Is your carrier offering you the best option? For shipments that don’t absolutely positively need to be there overnight, shipping via sea or rail saves money and greatly reduces carbon emissions compared to air.
Starting in 2010, Henkel will cut its annual CO2 emissions by about 7,000 metric tons by shipping products by rail instead of trucks in Germany.
3. Communicate: Share your vision, your plan for addressing key impacts and your success with your most important audiences. These may include employees and suppliers as well as consumers. Many companies shy away from talking about their actions in environmental responsibility—fear of being accused of greenwashing is a frequently cited factor. But doing and saying nothing is the greater risk, as the market and regulatory landscape call for greater responsibility and more transparency.
Taking simple steps toward environmental sustainability contributes to a healthier world. It also saves money and helps people understand how choosing your brand lowers their eco-impact. Now that’s beautiful.
Amy P. Longsworth is a partner with Esty Environmental Partners, a management consulting firm that helps corporate clients build high-impact environmental strategies that create sustainable business value. Longsworth specializes in environmental marketing and communications, and has worked on environmental strategy for leading consumer goods and personal care products companies. She can be reached at [email protected].