In the promotional sector, most suppliers and distributors report that the general demand for “green” products has waned. While interest may have dropped, there is still a thriving and growing market in this niche space. In fact, marketplace trends paint a quite different picture. Consider these examples:
- In the past two years organic food products have grown at a rate double that of conventional products and have reached more than $30 billion in sales, according to a study by the Organic Trade Association.
- A 2012 study of global executives by consultancy Accenture showed one-third of those surveyed could not keep up with customer demand for sustainable products and services.
- Major retail and consumer brands such as Wal-Mart and Nike are leading the charge on phasing out hazardous chemicals and developing indexes to measure the environmental attributes of their products.
As a promotional distributor that specializes in ethical sourcing and environmentally responsible products, our company has been working with suppliers and clients on these issues from day one. While we’ve realized great gains, there are (at least) five key barriers we face in trying to change the way products are made.
Our clients, brands such as Patagonia, UNICEF, Organic Valley Foods and AVEDA, ask us not only to source certified organic cotton t-shirts, recycled-content products and products that are easily recyclable at their end of life, but they ask us to ensure products arrive minimally packaged. So why is it so hard to find products that meet their expectations?
1. Change is hard. As anyone who has had to implement a new policy can attest, change is hard. You may have the strongest rationale, the best business case and the leadership on board, but sometimes getting people to break patterns and habits is difficult.
One of the areas we’ve worked with suppliers on is packaging. Many of our clients request products to arrive with the least amount of packaging possible while still ensuring the goods aren’t damaged.
In one memorable example, we had the client sign off on minimal packaging and guarantee to accept goods even if there was some damage to the imprint. Also, when we specified our packaging requirements on the purchase order we had buy-in from our supplier at the senior leadership level. And still the goods arrived sleeved in a standard poly bag within a box encased in peanuts inside a larger carton. While we thought we had covered our bases, the supplier’s team on the floor that day was not alerted to the need to package our run differently.
2. There are institutional barriers. Barriers can come from the most unlikely of places. Working on packaging with another supplier, we found their insurance policy for damaged goods had standard packaging specifications included. If goods were rejected by a client because of damage and the standard packaging protocol had not been followed, they risked not being able to make a claim. To truly address change in the manufacturing process, you have to take a systems approach and map out all the possible areas that can accelerate or impede change.
3. There is confusion about environmental claims. Knowing what is and what isn’t a green product can be an overwhelming task. There is a lot of uncertainty as to what is an environmentally preferred product, and until recently there has been little guidance on the regulation of environmental claims and quite a bit of green-washing. As a result, the lack of clarity has enabled wide-reaching recyclability and eco-friendly claims with little substantive back-up.
The newly revised Federal Trade Commission (FTC) Guidelines on the Use of Environmental Marketing Claims have brought clarity to these issues.
A particularly relevant guideline is the new definition for “recyclable” claims. Moving forward, one has to prove that more than 60 percent of residents in the intended market area have easy access (e.g., blue box program) to recycling facilities for that product. Consider the application of that guideline on the claim that a non-woven polypropylene tote bag is recyclable in U.S. markets. It would not be considered a valid claim and could be subject to fines.
4. Timelines work against it. As much as we try to align our clients’ marketing priorities to their merchandise programs, the reality is that promotional merchandise is often a last-minute purchase that doesn’t always have the luxury of a planned campaign to reflect environmental criteria. This is compounded by the fact that much of the promotional purchasing is made by buyers who may not be briefed on the company’s environmental programs or commitments.
5. Principles and policies don’t always align. On the client side, we often see a disconnect between stated commitments to environmental responsibility and on-the-ground practices. While more and more companies have stated corporate social responsibility policies, many of them do not translate to the tactical or operational level of purchasing.
I recall a study that found more than half of Fortune 100 companies had corporate-level environmental statements but less than a quarter of those translated that sentiment into environmental purchasing policies. Without more sustained demand from our clients, I can appreciate that it is difficult for suppliers to rationalize change.
The Way Forward
Recent improvements to consumer product regulations in both Canada and the U.S. are fueling change and requiring suppliers to take closer looks at the manufacturing processes and materials in their supply chains.
More than anything I’ve seen in our eight years in the business, the focus on product safety presents itself as the perfect launch pad to consider improvements to the environmental attributes of the products we sell. While we retool to ensure product safety standards are met, it’s the ideal time to address other barriers to change and manufacture products with better environmental attributes.
Denise Taschereau is co-founder and CEO of Fairware (UPIC: fairware), a Vancouver, Canada-based promotional products distributor that specializes in sustainable products. She is also a member of PPAI’s Green Task Force. Reach her at firstname.lastname@example.org.
>>Green Up More than one-third of companies surveyed in an annual study by MIT Sloan Management Review and the Boston Consulting Group are reporting a profit from their sustainability efforts, a 23-percent rise from the prior year. The findings stem from an analysis of 2,600 executive and manager survey responses from companies around the world.
- 37 percent report profits from their sustainability efforts; this figure is up six points over last year
- 46 percent say they find it difficult to quantify the intangible effects of sustainability
- 37 percent say it conflicts with other priorities
- 40 percent say the higher operational costs of sustainability initiatives take away from profit
- 33 percent cite an additional profit drain—increased administrative costs connected to documenting and tracking sustainability programs.
Nearly half (48 percent) of companies report changing their business models due to sustainability opportunities, a 20-percent increase over last year. North America has the lowest percentage of companies changing their business models as a result of sustainability, as well as the lowest percentage of companies reporting profits after changing their business models due to sustainability.
More than 60 percent of respondents at companies that had changed their business model and also had sustainability permanently on their management agenda said they had increased profits from pursuing sustainability.
Sixty-two percent of respondents said their company CEO has a strong commitment to sustainability; however, only 16 percent said their company has a chief sustainability officer.
The future was clear to a majority of respondents—70 percent said they expected their company’s commitment to sustainability, through investment and management attention, to increase in the next year. The number one reason cited for this investment is “improved brand reputation.” Compared to other regions of the world, North American companies still lag in the integration of sustainability into their business models and practices, which researchers said is because sustainability has not fully taken hold in the region, spurring companies to act.