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Who is the most sustainable of them all?15th of October 2010
Now that sustainability is a primary focus for most companies, how can they differentiate themselves from one another in a market crowded with the same messages?
The concept of sustainability was only developed a few short decades ago, but already it is everywhere. Companies that yesterday declared themselves to be 'green' or 'environmentally-friendly' have changed their message overnight and are now 'sustainable'. But this term is so broad it is open to almost any interpretation. A company whose offices happen to have large windows, for instance, may claim that these are 'sustainable' because employees benefit from the extra sunlight (corporate social responsibility) while heating bills will potentially be lower (energy efficiency).
Similarly a manufacturing plant that has always sourced its raw materials from a local supplier could claim this practice to be sustainable since it eliminates the need for lengthy transport (fuel efficiency) while helping the local community (CSR).
The result is confusing for customers who are finding it hard to differentiate between one 'sustainable' organisation and the next.
Third-party accreditation schemes and ecolabels can help, according to SCA Hygiene Products’ global environment and product safety director Susan Iliefski-Janols. She says SCA is actively working with the EU Ecolabel and around 70 Tork products have already been approved.
However ecolabels can also be bewildering, she adds. “It is sometimes confusing for the consumer to see so many different eco labels. It would be helpful to have fewer labels with a clear message.”
Accreditations from independent bodies can also allow the customer to make a fairer assessment, according to Iliefski-Janols. SCA has been ranked as one of the world’s 100 most sustainable organisations by Canadian company Corporate Knights for six years running, and earlier this year the company was listed in the 2010 FTSE4Good global sustainability market index for the ninth consecutive year.
Some companies declaring themselves to be 'sustainable' do not consider each stage of their products’ life cycle, according to Iliefski-Janols. “SCA has a long tradition of working with sustainability,” she said. “We started to map our environmental impact in a systematic way during the 1990s when we introduced life cycle assessment, supplier standards and sustainability reporting.”
She says a truly sustainable company will recognise that working towards sustainability is an ongoing process and not something that can be achieved overnight. “SCA’s way of working with hygiene products leads to continuous environmental reductions and improvements,” said Iliefski-Janols. “We have high ambitions to be the leader in the sustainability field.”
However, the customer holds ultimate responsibility for making an informed assessment, she says. “We support our customer with sustainability materials that show our way of working and our progress in all steps of the product’s life cycle. But it is up to the customer to make serious comparisons between companies.”
Managing director of Bio-Productions Mike James believes it is the company’s history and reputation that enable it to differentiate itself in the eyes of the customer.
Around 20 years ago Bio-Productions campaigned to outlaw the use of paradichlorobenzene – now recognised as a carcinogen – in urinal blocks. The company now manufactures the Toss Block, a water soluble, less harmful urinal block which is said to remove the need for frequent flushing.
“We set out to make products that are safe to use and I suppose we have trailblazed a little over the years,” said James. “Along the way we have gained a reputation for being honourable.”
In 2008 the company received a Green Heroes award from the Green Organisation - an independent, non-profit group dedicated to promoting environmental best practice around the world.
“We gained this award because of the water savings that the Toss Block can achieve,” said James. “The fact it destroys smells and keeps drains clear means you only have to flush two or three times a day instead of every 10-15 minutes. We estimate this can save 100,000 litres of water per year.”
He sees most third-party sustainability accreditations as the province of the larger organisations and is sceptical about the use of ecolabels. “It is almost as though you join a club and are allowed to put a ‘badge’ on your products,” he said. “These ecolabels don’t seem to have any credibility. But if the sustainability movement gathers pace and ecolabels gain more recognition, then it may become a benchmark people will aspire to.”
Scrubber dryer manufacturer Nilfisk-Advance says its own point of differentiation has been its decision to sign up to the UN Global Compact and Carbon Disclosure Project. “This is for companies who put sustainability high on the agenda – and it is not an easy to standard to comply with,” said ceo Joergen Jensen.
Nilfisk-Advance has a high-profile sustainability policy and claims to be committed to reducing its environmental impact. The company pledges to reduce its greenhouse gas emissions by five per cent each year while also reducing its use of water, detergents and energy wherever possible.
Another factor that makes Nilfisk stand out as a sustainable company is its age, according to Jensen. “We have been in the market since 1906 and we are still here. A company that has been in operation for more than 100 years has to be sustainable and ethical in order to remain in the market.”
Kärcher has come up with its own sustainability standard to differentiate itself from rival companies. “The Kärcher Code of Conduct is geared to UN global conduct and OECD guidelines,” said deputy ceo Markus Asch. “It lays down rules for dealing with people and the environment, and we involve our suppliers in our activities and require them to comply with our Code of Conduct.”
Steers all decisions
Sustainability steers all of Kärcher’s decisions, according to Asch. “Our corporate policy has traditionally been geared to long-term success and we can only achieve this by treating people with respect and by social engagement,” he said. “We also set great store by economic efficiency and environmental protection. We pay attention to sustainability throughout all corporate processes, from development and choice of materials through to production and sales.”
In 1996 Kärcher became the first company in the industry to gain ISO 14001 certification for its environmental management systems, according to Asch. He claims transparency of reporting is becoming increasingly important as the marketplace becomes saturated with ‘sustainable” companies.
“There is a danger of customers getting lost in the plethora of information. Only if they look behind the scenes and understand the processes can customers gain a full picture of how sustainable a company and its products really are.”
Karcher has reduced its annual CO2 emissions by more 1.02 million kilograms by building a woodchip heating station and using two photovoltaic systems, and now uses 340,000 litres less heating oil per year. “We also take care to husband our use of resources. We reduce the water consumption in our pressure washers by means of recirculation and we also recycle more than 95 per cent of our waste. The remainder is disposed in an environmentally-compatible way.”
Differentiating oneself from the competition is a major challenge according to sustainability manager at Diversey Ed Roberts. “How does a consumer make an informed choice when there are so many accreditation schemes - and the criteria for each of them is changing all the time?” he said.
Making false claims
“The fact that ecolabels are becoming the norm means it is difficult for customers to distinguish between companies unless you are a front-runner. And the greenwashing issue means that some companies are making false claims about sustainability with no proof to back them up.
“As a result, many people are currently judging a company’s sustainability on the company’s own claims, or even by a brand name. Some customers believe that if a product has ‘green’ or ‘eco’ in the name it must be environmentally-friendly.”
Around 100 out of Diversey’s 2,000 products are currently ecolabelled. “There are no disinfectants that bear the ecolabel because these are perceived by their very nature to be bad for the environment,” said Roberts. “But you need to consider the social implications of not using disinfectants in a commercial kitchen or a public washroom. There is a growing backlash against ecolabels because they are perceived as being more about the environment than sustainability.”
One of the ways in which Diversey has distinguished itself from rivals is by signing up to the WWF Climate Savers programme. “We consider this to be the gold standard,” said Roberts. “We have made a public commitment to reduce our greenhouse gas emissions by 25 per cent by 2013 from a base year of 2003.”
However, he believes that a sustainable company can only truly differentiate itself by being honest about its activities. “Transparency is the key - you need to be clear about your sustainability monitoring processes and explain what you are including in your assessments,” he said.
“Every company can do better and we ourselves have a way to go. But sustainability is a journey – it is not an end in itself. As you improve you need to set yourself higher targets and goals - and if you are communicating the outcome to your customers, that is the best you can do.”