Change for the Better

April 15th, 2011

Sustainability is a term we’ve all heard used a lot lately in the press. While most often associated with environmental issues, the definition of sustainability goes beyond eco to include broader social issues, such as fair labor practices and other economic practices that impact production, consumption and disposal.

“We can’t solve problems using the same kind of thinking we used when we created them.” – Einstein

In study after study, consumers say they want to buy from companies they trust and respect. Companies that treat the environment well, are ethical and are socially responsible. And they have a growing toolset to gather information to aid in purchase decisions.

But historically, business and society have been pitted against each other to some degree in addressing issues like sustainability. This is in part because commonly held perceptions legitimized the idea that companies must sacrifice profits to provide societal benefits. This, in turn, pushed the responsibility to the consumer to seek sustainable choices, and they often paid substantially more in the process.

However, people and companies are beginning to think differently. Sustainability is emerging as a market driver and a way to differentiate a company or product, with the potential to grow profits and present opportunities for value creation — a pretty dramatic evolution from its traditional focus on efficiency, cost and supply chain risk.

The website GoodGuide.com provides a free iPhone app that rates and compares tens of thousands of products on their environmental, health and social impacts.

The companies that are responding to the new demands are prospering more than those that resist. In fact, some companies are truly doing well by doing good. Walmart is one such company. Many people love to hate Walmart, but as the 19th largest economy on earth (well ahead of Norway), what Walmart does affects and influences a significant number of companies and people.

A couple years ago Walmart launched its Sustainability Index (http://walmartstores.com/sustainability/9292.aspx), a three-phase plan that will ultimately create a label that would tell shoppers the environmental toll of every product it sells, from the greenhouse gas emissions to the water used. When, as part of its ambitious sustainability program, Walmart said it would sell only concentrated laundry detergent, which uses less packaging and water, manufacturers fell into line.

Initiatives like this put pressure on all the manufacturers of products that sell to Walmart to look at their own practices. Can excess packaging be cut? Can more sustainable practices be put into place? They are looking because pretty soon it will be transparent to all of us and that could become a competitive differentiator.

Walmart also used its scale to drive the creation of new energy-saving technologies, such as LED freezer case lights, which are now commonly used by other retailers, and LED parking lot lighting. Both efforts saved Walmart millions. They also recognized the long-term economic benefits for customers by offering products that help them save on their utility bills, such as compact fluorescent light bulbs and more energy efficient televisions.

And recently, Walmart joined the fight against obesity. The company is reformulating thousands of products to make them healthier, and is pushing its suppliers to do the same. The company has committed to cut sodium in its products by 25 percent, added sugars by 10 percent, and to get rid of trans fats altogether over the next five years. Walmart has also committed to cut the cost of fruits and vegetables.

When you combine what feels like real momentum in the business sector with increasing consumer education and understanding, as well as efforts like that of Alex Bogusky’s COMMON, it seems like we are making progress towards solving some big problems. http://fearlessrevolution.com/blog/introducing-common.html

What are you doing?


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