Thinking Outside of the (Mail) Box: How Sustainability Can Drive Innovation

One of the most exciting things about corporate sustainability is how it drives innovation.  The concept of sustainability implies the long-term, so companies that embrace it as a core value must think beyond the next fiscal year.  It is this push to predict future needs of both people and planet that has spurred some enormously innovative products and services.  The examples of this are endless: think concentrated laundry detergent, car share services, and CFLs.

It is a known fact that companies need to know how to periodically pivot their business models to ensure continued success. For instance, Amazon and Barnes and Noble remained ahead of the curve in their shift from traditional print books to e-books.  Borders, on the other hand, was late in catching on to this trend and developing its own e-reader.  The company was unable to compensate for this oversight and as a result, filed for bankruptcy in 2011.  (Granted, whether or not these e-readers are actually better for the environment than traditional printed books is another story.)

So when companies like the United States Postal Service stick their heels in the ground and choose tradition over innovation at the expense of the environment, it raises an eyebrow.  A few months back, the USPS ran this commercial, in which it makes the absurd claim that snail mail is somehow more secure and convenient than electronic mail.  The ad seems like a desperate attempt by the USPS to promote a service that is becoming more obsolete each day.  If the USPS really embraced sustainability, it would view the shifting needs of customers as an opportunity to leverage its well-respected brand and create new services that reduce paper waste and reliance on fossil fuels.  For instance, the USPS could create an electronic equivalent of a certified letter or offer an email platform that provides an extra level of security backed by the company.  Clearly, the USPS has an amazing opportunity to embrace sustainability and innovation, but it may suffer the same fate as Borders if it remains stagnant in our ever-changing world.

Employee Engagement: Is It Just a Myth?

I was at an event on CSR at Social Media Week where Susan MacPhearson of Fenton said,

"employees are the single largest untapped resource in the execution of CSR strategy". 

This statement really stuck with me, and after dwelling on it for weeks, I realized how true it really is.

Companies often boast about their level of employee participation and commitment to CSR initiatives. However, to what extent are employees actually being engaged? Think about some of the most environmentally and socially responsible companies (for me, Nike and Timberland come to mind). Now think about the last time you supported these companies by purchasing a product from one of their stores. Were the employees who helped you aware of the environmental attributes of the products they sold? If you asked an average Nike employee about their Considered Design initiative, how would they respond? Chances are, the average employee will be grossly uninformed about such programs.

In fact, I know first hand that knowledge of CSR initiatives is not "trickling down" from the corporate office to the regional sales floor.  As a lead cashier at a major retail store, I had no idea that the company had made any commitment to CSR or published a CSR report until I googled it.  Our atrocious habit of throwing away 500+ plastic hangers a day made me believe sustainability was a low priority for the company.  Ironically enough, the company's CSR report states, "We are committed to incorporating sustainability into all aspects of our operations and have a fundamental responsibility to minimize our impact on the environment".  Moreover, it says, "Associates at all levels of our organization offer their time, enthusiasm and energy, as well as personal and Company resources in support of many worthy causes through a variety of local, national and international organizations."  So why am I not witnessing any of this myself?  The company's bold commitment to CSR is something to be shouted from the rooftops, yet even employees are unaware.

This lack of awareness is not only plaguing retail companies. A few months ago, I posted about this topic after I attended a networking event at NYU:

I attended a program through NYU’s Wasserman Center today and had the opportunity to meet and network with employees and recruiters from big name companies like Deloitte, Morgan Stanley, IBM, AOL, Macy’s, Black Rock, and Barclays. Since I am looking to get into the CSR field, I asked them what their respective companies were doing in this space. I was a bit disappointed to find that most of them were unable to speak to anything significant their companies have achieved in terms of CSR. I happen to know that most of these companies are taking sustainability concerns into account to some degree, with the exception of Barclays, who will be receiving a Public Eye ”Award” this month. Therefore, this lack of awareness points to a significant problem.

So why is this happening?  Why do employees (especially those, like myself, who are interested in participating in CSR initiatives!) remain an untapped resource?  I'd love to hear your thoughts about how to solve such a problem!  

Eco-Label Challenge #1: Abundance of Labels Creates Confusion and Mistrust

The eco-label trend has virtually exploded in recent years. Essentially, there is an eco-label for nearly every type of environmental attribute possible. Though this is beneficial in the sense that companies are guaranteed to find a label that properly fits their product’s environmental accolades, it is also a major problem. With 140 eco-labels in the United States and 426 worldwide, there is bound to be redundancy and overlap among them. Indeed, Duke University’s Corporate Sustainability Initiative reports that in a recent study, forty-three percent of labeling agencies recognized redundancy of their label in the marketplace (Vermeer et al., 2010). This is a challenge for companies, because many are forced to seek multiple certifications for the same accolade to be considered legitimate. Additionally, this is problematic for consumers, as the diversity of eco-labels within a particular product category creates confusion. When there are too many eco-labeling schemes serving the same industry sector, consumers begin to question which of these labels are actually meaningful. This abundance results in consumer distrust of such labels, since it communicates to them that there is no standard or regulation for eco-label creation and use.

One example of this problem involves labels certifying ethical treatment of livestock. Two well-respected labels governing this sector, the Animal Welfare Approved label and the Certified Humane label are extremely similar in terms of their requirements for certification. Both verify the humane treatment of farm animals from birth through slaughter and have similar standards for space, handling, and feeding. This redundancy in labeling criteria forces farmers to decide which certification to pursue; choosing the label that best communicates their accomplishments to consumers is of utmost importance. Unfortunately, it is difficult to predict which label will resonate with consumers, especially because the multiplicity of labels falsely implies that there is a difference between them. Clearly, competition among equally reliable labels can be detrimental for all parties involved.

Even when two labels certifying the same product type have differing stringency of criteria, the competition between them can still be problematic. A 2009 study analyzed the competition and environmental effects of multiplicity of eco-labels within a given market. The study found that when information is incomplete, or in other words when consumers are unaware of the environmental benefits of the two eco-labeled products, the existence of two labels leads to a rise in prices and a reduction in the environmental qualities of the goods (Youseff & Abderrazak, 2009). This is because the incentive to certify products to the highest standards becomes null when consumers do not take into account the label in their decision to buy a product. This is certainly an unfortunate effect of the abundance of labels in use today.

Next up is Challenge #2: Low Awareness and Recognition among Many Consumers.  Stay tuned!

References:

Youssef, A.B., & Abderrazak, C. (2009). Multiplicity of eco-labels, competition, and the environment. Journal of Agricultural and food Industrial Organization, 7(2).

Vermeer, D., Clemen, B., Michalko, A., Nguyen, D., Noyes, C., Akella, A., Bunting, J. (2010). An overview of ecolabels and sustainability certifications in the global marketplace. J.S. Golden, (ed.). Nicholas Institute for Environmental Policy Solutions, Duke University

Eco-Labels 101

As someone who is extremely neat and organized, the clean and concise manner in which an eco-label delivers an environmental message is attractive to me. This small graphic affixed to product packaging can communicate an immense amount of information to a consumer about the environmental impact of a product in a highly visible way. An eco-label is defined by the Global Ecolabelling Network (GEN) as:

a label which identifies overall environmental preference of a product (i.e.good or service) within a product category based on life cycle considerations. In contrast to a self-styled environmental symbol or claim statement developed by a manufacturer or service provider, an eco-label is awarded by an impartial third party to products that meet established environmental leadership criteria (2004).

Consumer Reports lists 140 eco-labels that are commonly found on U.S. products. Eco-labels are an important consumer education tool because they provide simple information about the environmental attributes of a product at the point of purchase. Recognized labels can communicate to a consumer that a product meets a particular environmental standard in just a glance. Eco-labels are more useful to consumers than lengthy corporate responsibility reports or ratings websites because they are, theoretically, simple to use and require little time, research, and effort.

Eco-labels have the potential to meet three major objectives. Eco-labels are first and foremost a tool for educating consumers and building awareness of sustainable product options. By simply observing an eco-label on a product, consumers are informed of the environmental attributes of the product and can differentiate between brands. The eco-label provides environmental information about a product that consumers cannot reasonably ascertain on their own. Even if consumers are not already concerned about environmental impacts of products, eco-labels can “serve as a communication vehicle for awareness transfer to the market at large” (Bratt et al., 2011, p. 1631).

Secondly, eco-labels offer producers an opportunity to display their environmental accomplishments in a way that is verified by a third party. An eco-label “offer[s] a market incentive to environmentally innovative and progressive businesses” (GEN, 2004). Eco-labels give businesses a leading edge in the market and also explain any price premiums that are often inherent in products that are responsibly produced. Overall, “the label is expected to affect the purchasing decision in favor of the labeled product and thereby be morally as well as economically rewarding for those companies that have been awarded the label” (Bratt et al., 2011, p. 1631).

The final objective of eco-labels is to drive sustainability. Eco-labels are meant to be a market-based instrument for improving environmental conditions. By encouraging innovative businesses and green consumerism, eco-labels can potentially eliminate the need for command and control solutions to environmental problems, or at least set the stage for future legislation.

This all sounds brilliant, right? Unfortunately, however, the eco-label world is not without its problems. In my next few posts, I will highlight the major challenges that eco-labels face in achieving the above objectives and will offer recommendations for improvement. Stay tuned for Challenge #1: Abundance of Labels Creates Confusion and Mistrust.

References:

Bratt, C., Hallstedt, S., Robert, K.H., Broman, G., Olkmark, J. (2011). Assessment of eco-labelling criteria development from a strategic sustainability perspective. Journal of Cleaner Production, 19, 1631-1638.

Global Ecolabelling Network. (2004). Information paper: Introduction to ecolabelling. http://www.globalecolabelling.net/docs/documents/intro_to_ecolabelling.pdf.

Maya Albanese: A Leader in Sustainable Business

Maya Albanese is a young, bright, and influential player in the world of sustainable business.  She is less than five years out of college and has already made quite a name for herself through her various endeavors across the globe.  Maya is currently a part of the Rainforest Alliance team and charged with expanding the portfolio of companies that sustainably and efficiently source, sell, and promote tropical commodities such as coffee and bananas.  She previously worked as an assistant buyer of furniture at Williams-Sonoma Inc  and at the Commercial Service of the U.S. Embassy in Paris, France.  Maya, a self-described “yes-woman”, takes every opportunity she can: she spent seven months backpacking through South America while writing, learning the Spanish language, and doing conservation work.  In her spare time, she writes a column for GreenBiz called “How She Leads”, participates in cause modeling, launches activist campaigns, maintains a well-read travel blog, and serves as a brand ambassador for responsible organizations.  Maya clearly has a wealth of experience in the sustainability space (and beyond), so I sat down to learn more about her and her career thus far.

On her passion for sustainability and her chosen career path:

Maya was brought up in a family in which being a part of the solution was encouraged.  “I’ve always known that I wanted to make change.  I come from a family of activists and from a culture of being politically engaged and not sitting on the sideline.”  Maya’s father is a professor of economics and consumer behavior and her mother is a composer and musician, which, she explains, is probably where she derived her creativity, business sense and ambition.  “I used to be a total nag in terms of getting people to recycle and be responsible about the environment and then when I got to college I realized that was actually something about me that wasn’t just annoying.  It was something I was naturally passionate about and it would be easy for me to work in and it wouldn’t even feel like work.”

“Working with the private sector and working with big business in operations to make positive change appeals to me more than being just an activist”, she states.  Maya has worked in the public and private sector, and currently works in the NGO world at Rainforest Alliance.   “Throughout my entire career it has always been about sustainability and environmental and social change. What I’ve realized is you have to play with the big guys because they are the ones with the influence and the resources.  They’re some of the biggest economies in the world so sitting there pointing your fingers from the sidelines is not being a part of the solution.”

On public, private, and non-profit sectors and her work in each:

“They’re definitely really different and I wouldn’t say I had a preference but I did have a goal upon graduating university that I wanted to try out public, non-profit, and private sectors”.  Maya elaborated: “I wanted to go on the inside of these structures and figure out how they work and which I liked the best because it’s important to have idea of all the full landscape of all the stakeholders involved.  The public, private, and non-profit sectors all have really key roles to play and none are more important or better so I’ve really valued my time working [within each of them] but they’re all really different.” 

Maya had the opportunity to hold a true business role while working in corporate merchandising  at Williams Sonoma.   Her role as sustainability assistant there was something that she did out of passion.   She told me her experience at Williams Sonoma was really interesting because it was very bottom-line driven.  “I got a really good window in on what it’s like to be a sustainability person at a company where sustainability is not really tied to people’s performance reviews.  It was really quite an uphill battle.  At Rainforest Alliance everyone is working there because they’re passionate about its work, not the money.  They are working at it because they like Rainforest Alliance and their morals align with its mission and that’s really cool to see.  Here I don’t have to influence other people because they already get it.  I think another advantage to working at an NGO like Rainforest Alliance is that you have the opportunity to consult with a bunch of companies that want to partner with you versus being confined to the structure and desires of one corporate board or entity."

Maya then provides me with some wise words concerning her experiences: “Public sector, private sector, and non-profit are all huge umbrella terms generalizations and working in a sustainability role at Williams Sonoma is nothing like working in a sustainability role at Nike or Microsoft because they face completely different issues. Companies that are publicly owned can’t make sweeping changes and broad general public statements like a company owned by a family for 200 years can.  So you in deciding your career you have to take each open position as a different animal not by sector necessarily."

On the name she’s made for herself and her advice for other young people interested in this field:

Maya is incredibly humble and thanks me when I mention how impressed I am with how far she’s come in just a few years since she graduated.  “Every day I wished I’ve accomplished so much more.  I guess that’s the unfortunate symptom of being an over achiever and someone who is anxious to make change in the world.”  As for advice, Maya says it’s all about being passionate but rational.   “The number one reason I’ve gotten the jobs I’ve gotten and the exposure I’ve gotten is because I’ve put myself out there and said, “I know I don’t have a graduate degree or an MBA but hey, I’m gonna do a damn good job at this because I’m passionate about it”.  When you put your mind to anything, you can do it well. I think people really want to see confidence and passion and enthusiasm and dedication to the company and the cause.  Nobody is going to succeed in the sustainability world unless they are a cheerleader and a preacher and someone who can really influence the people at the top and the consumers at the bottom.   You have to pair that passion and creativity and idealism with straight business sense.  I’m always going to want to do more than I can do and I have to consider the bottom line because ultimately nothing is going to succeed for you in your career unless you have that rational, practical business-minded sense.   I think that’s why I’ve succeeded. People may be drawn to my energy or passion, but they wouldn’t hire me if they also didn’t think I was knowledgeable and rational about what’s possible and what’s not possible.”

 On commonalities among the women she has interviewed for her How She Leads column:

“I wouldn’t say there is any over-arching theme or trend. I think what is interesting about the column is how varied [the women’s] backgrounds are…the type of woman in the role in terms of experience and passion varies by company and what that company needs to work on the most.”

“To get really down-home gritty about it, women in general see sustainability as an issue affecting generations to come.  As women we have a maternal instinct and a lot of these women [that Maya has interviewed] have children and they want to see that their children’s children have clean drinking water and have fresh air to breath and good food.  Being a mom, or even just being a woman if you haven’t had kids, makes you much more inherently aware and concerned about this issue of sustainability for future generations.  That’s often a response I get when I ask women why they are passionate about [sustainability].”