Sustainability for Corporate Leaders
The buck stops at the top when it comes to corporate leadership and environmental responsibility. Sustainability has become a core element of corporate strategy, and the creation of effective policies and programs plays a crucial role in supporting it. From the time the term was coined over 25 years ago, the Triple Bottom Line of Planet (environmental performance), People (social performance) and Profit (economic performance) has increasingly found its way into the lexicon of leadership.
Not that many years ago, recycling and zero waste initiatives were viewed by executives as convenient proxies for sustainability. Having an active recycling program was offered as proof of a company’s commitment to the environment. Now, however, companies are grappling with a broader view of sustainability that also focuses on carbon footprint, water conservation, plastic pollution, and other environmental priorities.
Business leaders must also be mindful of greenwashing claims and the reputational damage it can cause, as well as address the challenges of achieving high recycling rates in increasingly complex supply chains. It is well worth the effort, however. An emphasis on zero waste and sustainability can help deliver positive economic outcomes.
Creating Recycling Policies and Programs
Recycling policy, like other corporate policies, provides guidance, consistency, accountability, and clarity on how an organization operates. While policy speaks to guiding principles, programs are interventions designed to help achieve policy goals. For instance, a company may have a zero-waste policy and institute programs to support it such as facility recycling or composting initiatives.
In Sony’s recycling policy, for example, the company states that it “subscribes to the principle of individual producer responsibility (IPR), that is, the idea that a producer bears responsibility for its products over their entire life cycle.” In order to meet this commitment, the company is “focused on recycling-oriented product design, collection and recycling used products, and building global recycling systems that suit the needs of individual countries and regions.”
The development of a recycling program typically stems from the creation of a policy, followed by nominating a project manager and assembling a team. One of the early steps in the process is to conduct a detailed waste audit to clarify the types and volumes of materials involved. From there, a recycling plan can be created. After launching the program, it should be monitored to measure its success in diverting materials from the trash. And by celebrating the program’s accomplishments, the company can help build employee engagement and reinforce behaviors that support the recycling effort. Recycling@Work offers a 10-step action plan for implementing a workplace recycling program.
The term “greenwashing” refers to the practice of making unsubstantiated or misleading environmental claims by a company about its products, services, or operations. Another definition refers to it as a situation when a company invests more in marketing itself as environmentally friendly than on minimizing its environmental impact. Customers and employees alike are becoming increasingly sensitive to greenwashing. It can damage brands and employee engagement. It is also against the law.
In 2019, for instance, Miami Beach-based retailer Truly Organic Inc. (Truly Organic) and its founder and CEO were ordered to pay $1.76 million to settle a Federal Trade Commission complaint alleging that their nationally marketed bath and beauty products are neither “100% organic” nor “certified organic” by the U.S. Department of Agriculture (USDA). The company advertised its products as vegan, even though certain products contain non-vegan ingredients like honey and lactose, according to the complaint.
Organizations can guard against greenwashing claims by taking safeguards such as the following:
- Avoid using fuzzy or general claims such as natural, eco-friendly, sustainable or planet-safe
- When using more specific green terminology, understand the meaning and ensure that you use the terms accurately.
- Make sure that claims are evidence-based, and that you have the data to back them up.
- Do not make claims about environmental improvements your company has made if they were required to achieve regulatory compliance.
- Transparency matters. Be honest about where your company is in its sustainability journey. Don’t lie by omission, for example, if your efforts to be more green pale in comparison to your overall footprint.
- Do not tout your sustainability superiority if you have suppliers or customers who have a very poor sustainability record.
Recycling in the supply chain
Corporate recycling programs that concentrate on a facility approach can successfully divert recyclable materials but find themselves hard-pressed to address the challenges of nonrecyclable or difficult-to-recycle materials. Companies are coming to recognize that in order to achieve zero waste, a supply chain approach to recycling may be required. Through aligning procurement with the recycling initiative, companies can make more powerful change. They can leverage their buying power to request packaging that is easily recyclable, for example, as well as packaging that is made from recycled material. Having a corporate pallet policy and working with suppliers, for instance, can help companies avoid accumulating and dealing with broken or odd-sized pallets.
Recycling is also an important consideration from the customer perspective. As in the case of Sony, mentioned above, companies are increasingly mindful of the recycling implications of their packaging and products for customers. Ease of recycling is part of overall customer engagement with a product and can no longer be ignored. According to the 2019 EcoFocus Trend Survey, 71% of consumers overall, and 76% of Millennials, said they feel positive towards companies that use recyclable packaging.
The Positive Economic Impact
A Triple Bottom Line approach is the right thing to do, and it is also good business. Attention to recycling and sustainability resonates with many customers and helps improve brand image. It also strikes a positive chord with employees. According to the Deloitte Millennial Survey 2019, younger workers “show deeper loyalty to employers who boldly tackle the issues that resonate with them most, such as protecting the environment.”
As for the relationship between sustainability and profitability, Bank of America Merrill Lynch found in 2018 that companies with a better ESG (Environmental, Social and Governance) record than their peers delivered higher three-year returns, had a greater likelihood of becoming high-quality stocks and were less likely to experience large price declines or bankruptcy.
As the Triple Bottom Line approach becomes more pervasive, sustainability concerns are becoming integral to corporate strategy. Corporate leaders are embracing the importance of recycling and zero waste initiatives within the broader context of their corporate sustainability aspirations.