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Responsibility

Innovating the green supply chain: where cold becomes the new ‘hot’

Grace Segran |

Proctor & Gamble's Ariel detergent 'Turn to 30' campaign, launched in 2006, was aimed at bringing about long-term change in behaviour by getting people to wash their clothes at 30 degree celsius for the good of the environment, saving up to 40 per cent of energy used. Recently P&G came out with a detergent that washes at only 15 degree celsius, which is essentially cold water.

“Innovating to marry better performance and better sustainability is what we are good at - that’s what we’ll continue to do,” said Gianni Ciserani, president (West Europe) for P&G, during a panel discussion at the European Business Summit held recently.

The consumer often has to choose between sustainability and performance, and companies win some consumers and lose some others.

“All our data indicate that this is the right strategy when there is a trade-off -- innovation that is able to eliminate the trade-off between sustainability and better performance,” says Ciserani.

Another panellist, Dominique Reiniche, president of Coca-Cola Europe, says her company recently released details of the carbon footprint of some of its most popular drinks.

“It is the first time that the carbon footprint of any brand of sparkling drinks has been certified by the Carbon Trust,” she says. “This will help to bring home to consumers that carbon is everywhere – and in all that we consume.”

Coca-Cola is working with the Carbon Trust to measure greenhouse gas emissions across the full lifecycle of selected drinks in a variety of packaging formats, “giving a more reliable and relevant picture to consumers,” says Reiniche.

Sustainable consumption patterns

Individual households consume more than one third of all energy used in the European Union and produce around two-thirds of municipal waste. Food and drink, housing, and private transport account for almost 80 per cent of environmental pressures. These are also major areas of consumer spending.

“Against this backdrop, the need to foster more sustainable consumption and production is abundantly clear,” says Jivka Staneva, deputy head of the cabinet of the European Commissioner for consumer affairs. “We need an overall policy that will help consumers to act in a more sustainable way, while at the same time, promote energy efficiency and the competitiveness of European businesses. In times of economic and financial crises, both producers and retailers play a crucial role in helping to create sustainable consumption patterns in society.”

Staneva emphasised the importance of communicating the environmental benefits of products, taking responsibility for the products at the end of their life, and designing products with aspects such as durability in mind, in order to create sustainable consumption patterns. “This is the production and consumption cycle that can help consumers, producers and retailers alike, because all actors are looking to cut costs to be able to survive.”

While some companies are genuinely trying to clean up their act in terms of their environmental impact, others are paying little more than lip-service and may even be putting out misleading statements. Greenwash advertising confuses consumers and causes them “to deviate from sustainable behaviour, as they do not have confidence in the messages anymore,” Monique Goyens, director general of the European Consumers’ organisation BEUC told INSEAD Knowledge on the sidelines of the summit. “We need to stop it by more active enforcement of provisions related to misleading advertising and unfair commercial practices, more deterrent sanctions, and a code of conduct on ethics in green advertising.”

Shared responsibility

The general consensus of the panel is that responsibility must be shared by all, a partnership in which all stakeholders are working towards the same goal, each through their own means. “While public authorities can provide incentives and a favourable framework for innovative actions, other stakeholders have an impact at different stages of the life-cycle of products,” says Staneva.

Reiniche adds she is “convinced that nothing can happen with one partner only. All stakeholders need to reinvent and tackle the immense challenges of rescuing the planet.”

For Goyens, the economic downturn should not be an excuse for not setting high goals. “Companies are innovative and creative, and they should use these assets to tackle sustainability.”

A long process

Sustainability is a long process, says Jean-François van Boxmeer, chairman and CEO of Heineken. There is trial and error, and it requires a lot of humility to recognise and be able to admit to making mistakes.

One also has to be open to partnerships. Stakeholders who are more knowledgeable need to bring their points of view to the table and from that dialogue will emerge solutions, he says.

“At the end of the day we are competing – we are competing in the sector, we are competing for consumer preference. When sustainability becomes part of the business agenda of companies, we also compete on that. Whatever Coca-Cola, P&G and Heineken are doing, that’s competing on who’s going to be the best in class, while making sense of our business,” says Boxmeer. “Competition is emulation and that is the best guarantee that sustainability will be serious and that it will be part of the business. It is not a fad but here to stay.”