Sustainability as a Value Proposition
By Ben Miyares*
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0Wal-Mart CEO Talks Sustainability
CEO and president Lee Scott, Wal-Mart Stores, Inc., in a beginning-of-the-year meeting with store managers on January 23, 2008, discussed what the company was doing to improve its performance in three areas of worldwide social concern: health care, energy efficiency, and ethicial sourcing. Here are some highlights of his speech that apply to sustainability and sourcing.
- Taking waste and non-renewable energy out of our supply chain reduces the amount of pollution and greenhouse gases our suppliers send into the atmosphere. Helping customers buy more sustainable products and be better stewards of the environment reduces their own carbon footprint.
Future Supply Chain
- One of the most difficult issues that every major company faces is ensuring that the products they buy from outside suppliers are made well and made right.
- Now it is one thing to say you want to do this. It is a whole different ballgame to actually do it, especially for a retailer of our size. But your Wal-Mart will do this.
- Our first action will apply to all suppliers who work with us through global procurement, who are domestic importers, or who are manufacturers of Sam’s Club or Wal-Mart private brands. We will require these suppliers to demonstrate that their factories meet specific environmental, social and quality standards. We have already started doing this, and we hope to extend the requirement to all the suppliers I mentioned within the next three to five years.
- Second, we will only work with suppliers who maintain our standards throughout our relationship. So we will make certification and compliance part of our supplier agreements and ask suppliers to report to us regularly. Any supplier that fails to keep its word will be required to take prompt and serious action. If a supplier fails to improve and fix the problem, we will stop working with that supplier.
- Third, we will favor–and in some cases even pay more–for suppliers that meet our standards and share our commitment to quality and sustainability. Paying more in the short term for quality will mean paying less in the long term as a company. Higher quality products will mean better value, fewer problems, fewer returns and greater trust with our customers. Saving people money is a commitment to our customers throughout the life of the product.
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The following Packaging Trends report is based on the presentation: “Sustainability as a alue Proposition,” by Ben Miyares of the Packaging Machinery Manufacturers Institute given at the organization’s 2007 Annual Meeting. Presented here are some highlights in outline format.
Sustainability
“A state or process that can be maintained indefinitely. The principles of sustainability integrate three closely interline elements -the environment, the economy and the social system -into a system that can be maintained in a healthy state indefinitely.”—British Columbia Ministry of Forests, 1996.
There are Four Great Packaging Truths:
- Packaging evolves to reflect the changing needs of the market and change is constant.
- There are no absolutes.
- Without machinery, packaging is just origami.
- Without machinery, packaging is not sustainable.
CPG Manufacturers
- “We do have ongoing projects with a sustainability aspect to them and have an executive group trying to determine if this type of work should become a separate platform, or classification, or if it should be integrated into all other types of projects (cost savings, quality improvement, growth, etc.) and considered more of a norm in all we do.” –Small Brewer.
- “We’ve been tracking, measuring progress and reporting our material (including things like water) usage for years, but haven’t called it ‘sustainability’ until that has become the buzz word.” -Personal Care Company.
- “Sustainability has been around before but called something different, “Cost Savings”; package size, material, & cube efficiency. Now when looking at cost savings you’re looking at total lifecycle with impact on the end of life, disposal.” -Hard Goods Company.
Wal-Mart’s Scorecard
Wal-Mart’s Packaging Scorecard is based upon 7 Rs:
- Remove packaging: eliminate excess.
- Reduce packaging: shrink and concentrate.
- Reuse packaging: pallets, plastic crates.
- Renewable packaging: pushing PLA versus PVC.
- Recycled content: but don’t cut quality.
- Revenue: achieve above principles at cost parity or cost savings.
- Read: educate yourself on sustainability.
What Wal-Mart scores:
- Greenhouse gas/CO2 emissions: 15%,
- Material health/safety: 15%,
- Packaging/product ration: 15%,
- Cube utilization: 15%,
- Transportation: 10%,
- Recycled content (post consumer): 10%,
- Recovery value: 10%,
- Renewable energy: 5%,
- Innovation (energy): 5%
Sustainable Packaging Criteria
- Beneficial, safe & healthy for individuals and communities throughout its life cycle;
- Meets market criteria for performance and cost;
- Sourced, manufactured, transported, and recycled using renewable energy;
- Maximizes the use of renewable or recycled source materials.
- Manufactured using clean production technologies and best practices;
- Made from materials healthy in all probable end of life scenarios, Physically designed to optimize materials and energy;
- Effectively recovered and utilized in biological and/or industrial cradle to cradle cycles.
Sustainability Tactics
The following are some of the sustainability tactics being employed by manufacturers of consumer product goods:
- Reduce environmental impact of manufacturing operations,
- Convert from petrochemical plastics to bioplastics,
- Focus on reducing energy/water/packaging,
- Lighter weight containers,
- Closed-loop recycling,
- More biodegradable packaging,
- Reduce CO2 emissions and landfill disposals,
- Review progress through independent audits,
- Report sustainability accomplishments.
*Ben Miyares joined PMMI as vice president, Industry Relations in 1998. He has worked in the packaging business since 1963 as a writer, analyst, packaging consultant, conference organizer, commentator and frequent speaker on packaging topics at numerous international conferences, association meetings, corporate and consumer programs.
Miyares administers the annual Packaging Hall of Fame educational awards program and serves as principal liaison to the Packaging Management Council, an organization of senior packaging directors.
For more information, email Ben at: BMiyares @pmmi.org; website: www. pmmi.org.
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