Sustainability: What Consumer Goods Companies Are Doing

Consumer goods companies are companies that make products for consumers. These are companies like Coca Cola, Kodak, General Mills, PepsiCo, Procter and Gamble (P&G), and Whirlpool.

The companies I mentioned, is part of Dow Jones Sustainability Index (DJSI) North America and members of Business Roundtable (BR).  I’m using data from DJSI (registration req.) to select the companies and BR for their ‘short version’ of their members’ sustainability programs.

Even though, BR has 97 members listed on their website, not all companies is part of DJSI. Only the above listed companies included in both data. 

Business Roundtable, is an association of CEOs of leading companies with near $6 trillion in annual revenues and more than 12 million employees. It comprise nearly one-third of total value of the U.S. stock markets. 

DJSI, are global indexes tracking the financial performance of the leading sustainability driven companies worldwide. DJSI has a number of indexes in addition to their customized indexes: world index, European indexes, North America, US index, and sustainability Asia/Pacific index. 

Sustainability as practical business solutions

Coca Cola

Energy management and climate protection programs is part of their global sustainability agenda. In their line of business – energy, packaging and water – affected company the most. Water is fundamental not only to the company business but also for the health of the communities they serve and the ecosystems. 

Some of the things they do:

  • Their goals is to improve energy efficiency of their cooling equipment by 40 to 50% by the end of 2010.
  • Phasing out the use of hydrofluorocarbons (HFCs) in all of their equipment by 2015. 
  • Aim for zero waste packaging by recycling and reusing food grade PET (polyetylene terephthalate..phew) plastic. (you see PET symbol on a plastic bottle) Recycling and reusing PET reduces waste and greenhouse gases and use less energy.

Kodak

Kodak goes for innovation (making products that use less resources, i.e. energy), energy management and greenhouse gas emissions in their sustainability programs. At their largest’s site, they have real-time energy data for those in charge so they can identify energy reduction opportunities (on the spot?). With these improvements, they reduce 40% of energy and greenhouse gases.

The sustainability goals include, via Kodak:

  • raise awareness of their commitment to sustainability and expectations of employees.
  • qualify all new commercialized products to Energy Star criteria.
  • improve the environmental attributes of products throughout their life cycle.
  • reduce greenhouse gas emissions by 50% from worldwide operations by 2012

General Mills

As a food company, General Mills dependent on agriculture for many of their ingredients. Eventually climate change and the environment are big issues for them. That’s why the company set aggressive goals to reduce energy consumption and greenhouse gas emissions worldwide by 15% in 2010. Already more than half attained this goal. Other initiatives related to reducing energy use includes, via General Mills:

  • turning off the lights, installing solar panels, and green roofs on their facilities.
  • reduced solid waste generation rate by 24.5% since 2005.
  • one of the largest users for post-consumer recycled paper packaging. 
  • leftover oat hulls from making Cheerios are being used to help fuel a power plant near Minneapolis that generate enough electricity to power 30,000 homes and they are now building their own biomass burner to heat and power their oat milling facility near Minneapolis. 

P&G:

We see a little bit different twist for sustainability from P&G. The co. linked growth strategy with their purpose and make sustainability “at the heart of their business model.”

Purpose: to touch and improve the lives of world’s consumer now and for generation to come. 

Growth strategy: we will grow P&G’s business by touching and improving more consumers’ lives in parts of the world… more completely.

From there the company designs their sustainability strategies to help make a difference in environmental footprint of their products, business operations, around employees and suppliers. 

They tackle climate change on two front: 

  1. Reducing the greenhouse gas emissions from their own operations.
  2. Helping consumers save energy and reduce their own GHG emissions through development of sustainable products. The thinking beyond this is: if every household in the US used cold water for laundry, the energy savings would be somewhere around 70-90 billion (with a “B) kilowatt hours per year. 

The co. goes beyond this to make further change down their supply chain line through sustainability score card. (we’ll explore on this some other time). 

PepsiCo

Pepsi ties their commitment to sustainability as performance with purpose that is part of the company’s business strategy. They put priority on protecting earth’s natural resources. PepsiCo is on track to meet their goals: to reduce water consumption by 20%, electricity consumption by 20% and fuel consumption by 25% per unit of production by 2015 as compared to 2006. 

The co. also put in place policies for sustainable packaging, agriculture, and environmental sustainability.

Some other ways PepsiCo do to manage their environmental footprint:

  • their Frito-Lay plant use concentrated solar power that generates nearly three-quarter of the heat used in SunChips manufacturing process. 
  • clean their Gatorade bottles with purified air instead of rinsing with water. 
  • adopt LEED guidelines for new construction.
  • on average, Pepsi cooler and vending machines consume less energy than their 2004 models.  

Whirlpool

Whirlpool sustainability focused on creating new and innovative products that consume less energy and water, improving their processes and using less materials. In 2009, they introduced front-load washers that could save US consumers more than $1,000 in water and energy over the lifetime of the product. More than 85% of the materials that make up their products can be recycled.

The co. also facing out CFC gases in refrigerators to prevent further ozone layer depletion to nanoceramic procedure which reduces chemicals in waste-water during product painting process. [via Whirlpool]

Takeaways

What’s interesting about these companies is that even though they’re part of the same sector according to DJSI, but the sustainability path they take vary from one another. There’s different shades of sustainability.

However, most company shares the main principle of sustainability and that is about using less resources. Whether it’s energy, water, raw materials. The thinking on reusing, reducing, and recycling. 

If you’re not on the sustainability bandwagon yet, to get you started, you want to ask yourself this question:

– What is the purpose of sustainability for your business?

– How do you want to integrate it to your business’strategy?

– Who else needs to be on board?

Everything else builds from there.

If not, you can start identifying the environmental issues  that could potentially be a challenge for your industry here and take it from there.

Business Roundtable Report: Enhancing Commitment to Sustainability 2010

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Author: Dewita

Co-founder Ecotwist Labs.

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