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The REAL Benefits of Product Sustainability

Recently, Pure Strategies issued a report entitled, Advancing – On the Path to Product Sustainability. This 2015 report determined the benefits of product sustainability efforts from phone interviews with 152 companies with sales greater than $250MM. The report also included feedback and comments from Walmart, Clorox, Johnson and Johnson, Hewlett Packard, North Face and others. As evidenced, the survey covered a broad base of industry sectors including clothing, healthcare, food, etc.

Nearly everyone contacted in the survey reported that their company was engaged with product sustainability goals and objectives! The results and benefits from product sustainability efforts and programs were then broken down into a number of categories with the reported progress achieved including ongoing directives:

Cost Savings:

  • Logistics and Supply Chain (49%)
  • Packaging (47%)
  • Manufacturing (38%)
  • Product Materials (26%)

Demand and Growth:

  • Increased Sales (46%)
  • Retailer Requirements (43%)
  • Consumer Demands (43%)

Risk Reduction:

  • Supply Chain (50%)
  • Future Regulatory (49%)

Reputation:

  • Brand Enhancement (33%)

Engagement:

  • Employee (57%)

The documented results and benefits from developing sustainable products are similar to and reinforce the reported benefits from other surveys and reports conducted in recent years.  One major new reported area of progress is employee engagement, highlighting that workers and employees feel empowered, and positively influenced, when engaged with product sustainability initiatives. To achieve these impressive results, the companies surveyed highlighted several areas within both corporate alignment and business integration as the key reasons for success. For corporate alignment the crucial outcomes included:

  • Obtaining leadership engagement and buy in: 93% of the best reporting companies had obtained top management support through needed resources, a positive culture, and accountability measures. The key success factor is to have management actively participating and helping to advance these initiatives across management departments.
  • Determining relevant and structured business goals: 81% of the companies surveyed had structured product sustainability goals in 2013, with 100% of all companies surveyed having product sustainability goals in 2015! The key success factor is to link product sustainability goals to creativity, revenue growth, and management of the overall product portfolio.

For business integration, the crucial outcomes included:

  • Embedding sustainability into core business processes and practices: Depending on the product development stage, companies reported between 50%-80% or a high level of product sustainability integration into core business practices and processes. 93% of companies reported that packaging design and development now was their top investment priority. The key success factor is to fully embed sustainability best practices into all aspects of the product life cycle, from concept to end of life, to ensure all customer and supply chain demands and expectations are successfully met. 
  • Developing key performance metrics for business and company tracking: 24% of the companies surveyed indicated that executive compensation was directly tied to sustainability performance. The key success factor is to track product sustainability sales and revenue growth as part of overall business relevant metrics.

Overall, what are the key takeaways for businesses? Those companies that prepared, progressed, and performed well on product sustainability efforts reported that they achieved twice as many benefits than those companies with less robust programs regarding cost savings and earnings! Furthermore, the company revenues and growth from sustainable products and services represented a six fold increase over the 2010-2013 timeframe. The REAL benefits of product sustainability are here to stay!

I wish you the best on your sustainability journey!

Norman Christopher is Director, Office of Sustainability Practices, Grand Valley State University and Author of Sustainability Demystified