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Connecting the Dots Between Consumers, Consumption & Sustainability: The External Face of Unilever’s Sustainable Living Plan

09 Wednesday Jul 2014

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What role does a consumer-facing sustainability strategy play in an ambitious plan like the Unilever Sustainable Living Plan? That’s where I left off in my interview with Marketing Chief Keith Weed last week in our review of the ambitious Plan two years since launch.

From Desire to Habit: Unilever’s Five Levers for Change

He chose to respond by explaining a framework called the “Five Levers for Change” that his team developed to solve exactly this dilemma. An excerpt:

  1. Make it understood. Sometimes people don’t know about a behavior and why they should do it. This Lever raises awareness and encourages acceptance.
  2. Make it easy. People are likely to take action if it’s easy, but not if it requires extra effort.  This Lever establishes convenience and confidence.
  3. Make it desirable. The new behavior needs to fit with how people like to think of themselves, and how they like others to think of them.  This Lever is about self and society.
  4. Make it rewarding. New behaviors need to articulate the tangible benefits that people care about.  This Lever demonstrates the proof and payoff.
  5. Make it a habit.  Once consumers have changed, it is important to create a strategy to help hold the behavior in place over time. This Lever is about reinforcing and reminding.

“We need to continue to work with others to drive this change. If we achieve the Sustainable Living  Five_Levers_of_Change_unileverPlan, and it doesn’t change business at scale, ultimately that’s a fail. Unilever’s impact is huge but we’re still a drop in the ocean. We need a movement going for businesses to help address this,” he explained.

“We are already working with organizations like the World Toilet Organization, UNICEF and others on sanitation, for example, which is a very important issue for us. Two million children die every year from pneumonia or diarrhoea. In a world where there are more mobile phones than toilets or toothbrushes, our work ahead is sure cut out for us,” he added.

The fact is Unilever cannot do it alone. None of it.

And Weed and team have understood that since launching the Unilever Sustainable Living Plan. While scale is a huge factor, organizations require individual and mass power to change consumer behavior and habits. And that is where the Five Levers for Change along with creative partnerships like the kind Weed referred to can help.

Making Sustainability Personal…

“I was in Brazil recently speaking to a lady in Sao Paulo about the environment and the city’s pollution. For her this meant dust from the nearby construction and the tainted flavor of her water supply. These were her immediate challenges – not deforestation or climate change. People view the world through the prism of my world – family, friends, and community. Our world is a step bigger: the city you live in, the supermarket, the local dump, etc. And the final level, ‘the world’ is the rainforest, the ice melting in the Arctic,” Weed continued.

His point: We need to connect “my world” with “the world” for consumers. “Right now we’re at level one. When I asked the lady what she thought would solve the issues, she suggested stopping the
littering because it would stop the drains from getting clogged and therefore avoid local floods. Level One,” he said.

What companies need to do is create a movement and work with people to drive change. A natural question then: Is Unilever working with other companies on its initiatives or primarily with nonprofits?

… and a Business Driver

One example Weed offered was palm oil.

“We purchase a lot of palm oil but it still makes only for three percent of the world’s palm oil. We started our journey by promising to source 100 percent of our palm oil sustainably by 2020. It’s a clear signal to the entire palm oil supply chain that that is the future we are working toward.”

“But this goal would be impossible to reach across the value chain without working with other purchasers of palm oil. So we work with other businesses and NGOs on the Roundtable on Sustainable Palm Oil to do this collectively.”

In fact, Weed says Unilever managed to reach the 100 percent goal last year because of this collective effort. The next step: To make the supply chain of sustainable palm oil easier and connected by 2020. “Right now procuring sustainable palm oil means weaving through a very complex supply chain,” he added.

Another example: the work of the Consumer Goods Forum, which includes 650 members including manufacturers, competitors, retailers and NGOs, responsible for over $2.5 trillion in sales. And Weed is pretty positive about the goals and work of the Forum: “There are a lot of companies getting behind the need to address the negative impacts of deforestation, and momentum is starting to build,” he said.

While momentum is starting to build – with several companies announcing new initiatives and collaborations – the issue did bring us back full circle to where we started: how do we connect these overarching partnerships with the average consumer?

Subtle Messaging & Cause Marketing

And what role does cause marketing play in Unilever’s 2020 plan? Should we expect more nuanced advertising on the lines of the Dove campaign, for example? Or go full throttle like Patagonia’s Sourcing_unilever“Don’t  Buy This Jacket” campaign?

It’s going to be subtler, says Weed. “For example, for our Tomato soup in Germany or our Ketchup in India, we talk about sourcing tomatoes sustainably. With our Lipton tea, we talk about sourcing all our tea and tea bags sustainably by 2020,” Weed explained.

“Consumers comprehend these messages differently though. When we talk about sourcing our tea sustainably, customers see the Rainforest Alliance logo as a sign of better quality and taste, not necessarily sustainability. With our Hellman’s mayonnaise we discuss cage-free eggs. Consumers perceive that as an indication of better food: animals are better looked after therefore they’re getting better food. However, it’s still early days,” he added.

Work Culture: Participating in Change

Early days also for Unilever’s employees, who are witnessing – and participating – in a significant shift culturally at a company that has left behind decades of “doing things one way” to a more complex ideology. How has the company’s culture evolved since 2010?

According to Weed, the greater purpose espoused by the Sustainable Living Plan has been significant for employees – kind of like Performance with Purpose over at competitor PepsiCo. “The notion that you can work for a business to earn money, build a career and also do it in a better way is significant. We need new ways of doing business in the future – our generation has stolen from our children’s
generation financially and environmentally – so we ‘re going out and saying we want our employees to innovate and encourage new ways of doing business,” Weed said.

In fact, the marketing chief, who also leads internal and external communications for Unilever, says despite the many crises facing our world today engagement levels among employees have gone up consistently every year.

A sentiment that resonated in an email I received this week from Kam Erik Fierstine, a project delivery manager in Unilever Engineering Services at the company’s Henderson, Nev.-based ice cream plant. Here’s what he wrote when I asked him about the culture at his company:

“The Sustainable Living Plan is something that is quite apparent to those of us that live in a desert-like area where we are very conscious of water usage. It has shown our employees that Unilever has the same values that we were raised with. Our employees would not put up with a leaky faucet at home, and now they have the backing of management to proactively fix these simple issues at work.”

“We all agree that we want to leave a healthy planet for future generations and we can help do that by conserving our resources. Our employees see the management team walking the talk and that empowers them to escalate issues and voice new ideas. They will now do small things to make a larger impact like pick up things from the floor or switch off conveyors or equipment when not in use.”

The Henderson, Nev.-based ice cream plant was recently honored by the Innovation Center for U.S. Dairy for its sustainability practices.

“They see us taking on challenges in a positive way and that’s inspiring,” Weed wraps up.

Originally written for and published on CSRwire’s Commentary section Talkback on May 1, 2013.

Earthwards 2.0: Johnson & Johnson Seeks to Evolve Sustainable Product Innovation

09 Wednesday Jul 2014

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In recent posts, I explored the genesis of Johnson & Johnson’s proprietary Earthwards® process and how it has been used to help develop greener products to meet customer needs. For Johnson & Johnson, the process of instilling a sustainability mindset began with introspection and questioning: How does an organization with multiple product lines and a global workforce develop and define greener products? And the process began with a tool called GAIA, or Global Aquatic Ingredient Assessment.

In the beginning, GAIA was operating almost exclusively with R&D because it was a science-based tool with specific emphasis on measuring downstream ecosystem impacts.  Implementation of the Earthwards process accelerated broader adoption and has helped spur greener product innovation based on lifecycle thinking that is, in part, quantified by tools like GAIA. But Earthwards, despite its rigor and initial success, is still in its infancy.

In 2012, Senior Director for Worldwide Environment Health and Safety Al Iannuzzi enlisted a team of experts that volunteered to examine the Earthwards process and recommend areas for improvement. What’s next? I explore the future of the program through the eyes of two well-respected sustainability experts who recently weighed in as part of that expert team: Andrew Winston and L. Hunter Lovins.

_____________________________

By now, you’ve probably caught a glimpse of that new inspiring Honda Civic 2013 commercial, framing innovation as believing that ‘things can always be better.’  For Winston, making things better begins by asking questions. “As we pursue sustainability in the future, asking the right questions will be as important as the answers we get,” he said.

For the people at Johnson & Johnson, the concept of continuous improvement is a driving force. So it makes sense that their efforts to evolve the current Earthwards methodology into a better process  began with some Earthwardshonest introspection and engagement with a few external experts, including Winston and Lovins.

In a recent phone call with Winston, I asked him his impressions of the Earthwards process.

He believes that the Earthwards process is a solid program with appropriate categories and logical steps that “empowers product developers with information and helps them understand the choices. It’s a well-designed system, but does have its pros and cons.”

I asked him to elaborate.

“They have the right categories, seven in all, but the concern is that a product could be improving in three distinct areas, but these may not be the most important areas to focus on in order to address the products’ greatest material impacts.  There’s a fine line between simplicity and enabling efficient assessments.”

Of course there are trade-offs. But the biggest challenge internally is giving employees the time and information they need to become comfortable with the Earthwards process and appreciate the impacts of improvements across the lifecycle.

“It is a fair point,” said Iannuzzi. “Our Review Board, including three external experts, also helps to keep the process objective, making sure that the brands focus their improvements on meaningful areas. To make this even more robust, we will require each application to address the lifecycle screen hot spot areas identified in step two of the Earthwards process, the lifecycle screen.”

Sufficiently Ambitious or Room for Improvement?

There is broad agreement among the experts that Johnson & Johnson has a long history of – and
interest in – environmental protection and sustainability. “The company has cared about its impact on the environment and on people, and taken a position of responsibility,” Lovins noted.

While both Lovins and Winston said that the Earthwards  process is one of the most comprehensive sustainable product tools in the industry, and in Lovins’ view, “a strong and rigorous process.” She also feels there is opportunity for the company to become even more aggressive in making this a companywide initiative.

“They need to examine the inadequacies of the Earthwards process, align it with tougher science-based goals and then make a commitment to hold every product to those goals.”

Winston had similar sentiments, specifically around the 10 percent benchmark Johnson & Johnson has set for improvements against Earthwards’ sustainability criteria. “The problem with a goal like 10 percent is that it’s kind of an internal-looking, corporate improvement. These goals at the product level need to be shooting for more dramatic increases.”

Some of J&J’s leading products are doing more than the required 10 percent anyway, so why stop there?

According to Iannuzzi, Johnson & Johnson sees the potential to raise the bar, perhaps substantially on some dimensions, but also recognizes the need to balance meaningful improvements within the original intent of Earthwards.

“J&J is always up for a challenge, but we want to make sure we don’t raise the bar so high that it becomes detrimental to Earthwards’ intended purpose of widespread adoption,” said Iannuzzi. “If we make the bar so high that almost no product can get there, no one would pursue it.”

 New Blueprint Needed?

According to a recent study commissioned by Johnson & Johnson titled The Growing Importance of Sustainable Products in the Global Health Care Industry, 54 percent of health care organizations globally say green attributes are very important in their purchasing decisions of health care products medical wasteand supplies. And this trend appears to be gaining traction, as 40 percent of global hospitals expect their future request for proposals to include sustainability criteria for the products they purchase. Among the greatest concerns hospitals share are the amount of energy they use and the volume of waste they generate.

With data like these indicating that the strongest push for sustainability is coming from within the healthcare sector, how will this influence the evolution of the Earthwards process?

To get at the heart of this question, Winston suggests that Johnson & Johnson ask itself whether doing better than 95 percent of its competitors is good enough.

In fact, Winston said Johnson & Johnson should go further than others and has challenged the company to raise the requirements for Earthwards recognition. For example, the baseline could be higher than the current 10 percent improvement needed to achieve recognition in the different categories, especially in the energy efficiency category, in light of the general scientific consensus that greenhouse gas emissions need to be reduced by 85 percent by 2050.

Iannuzzi responded: “We plan to better understand the greenhouse gas emissions impacts of the improvements we make this year with the Earthwards process and consider ways to further encourage them in our products.”

Lovins suggests the company be more transparent with customers about where it is in the process of sustainable product development and where it is going. Iannuzzi’s team is already responding by sharing more content on www.earthwards.com including more information about the 36 products that have received recognition so far and other external-facing efforts like a six-part series with CSRwire.

Internal Certification Process, Not a Sustainability Strategy

Coleman Bigelow, Johnson & Johnson Global Sustainability Marketing Director, sees the Earthwards program as an internal product stewardship and green marketing process rather than a long-term sustainability strategy like that of Marks & Spencer’s Plan A or Unilever’s Sustainable Living Plan.

The Earthwards process ensures “every product we produce has undergone a lifecycle screening and is as sustainable as possible. For the first time, we have a process that offers something to the developers, the R&D folks, as well as the marketers and sales associates,” Bigelow explained.

Iannuzzi, a Johnson & Johnson veteran of 28 years who has spearheaded the Earthwards program internally from the start and is a popular sustainability champion among the team, doesn’t foresee the company taking an approach akin to GE’s Ecomagination with a separate structure, either.

“Our philosophy is to embed sustainability into every product, not create something special or separate,” Iannuzzi explained. That said, the company does plan to track how much of its revenue stems from Earthwards recognized products. So while it is not its own revenue generating business unit, per se, it certainly could prove to save the company money over the long haul as well as drive innovation internally.

When I asked Iannuzzi about Earthwards’ ten-year plan, he reflected.

“Ideally, I envision it as a way of showing customers how we are coming up with more innovative products using sustainability as the driver. This means moving Earthwards process away from being an add-on and moving it toward full integration.  External communication will also be key.”

“But right now, it’s not as well integrated as we would like,” Iannuzzi admits.

Regardless, Winston seems convinced that Johnson & Johnson’s efforts have been both aggressive and innovative as a whole. The next tricky move for the company, say the experts, is to be mindful of how quickly the Earthwards program grows in scope without losing sight of the program’s quality.

As the team at Johnson & Johnson prepares for Earthwards round two, the experts’ advice should help the healthcare company scale its journey from green to greener without losing sight of the ultimate goal: A sustainable planet for future generations.

For now, it’s back to the white boards.

About Andrew Winston and L. Hunter Lovins

A globally recognized expert in green business strategies, Winston is the author of Green Recovery and co-author of Green to Gold, the international best-selling guide to what works – and what doesn’t – when companies go green. Winston is also founder of Winston Eco-Strategies, a sustainability consultancy dedicated to helping companies use environmental strategy to grow, create enduring value, and build stronger relationships with their stakeholders. He writes extensively on green business strategy, including a weekly column for Harvard Business Online and guest byline articles on Huffington Post.

Lovins is an award-winning sustainability consultant, featured speaker at conferences across the globe and author of Natural Capitalism: Creating the Next Industrial Revolution. Lovins is also president and founder of Natural Capitalism Solutions (NCS), which creates innovative, practical tools and strategies to enable companies, communities and countries to become more sustainable. Lovins is also a professor of sustainable business management at Bard College and Denver University, and consults for large and small companies, and governmental clients.

Originally written for and published on CSRwire’s Commentary section Talkback on March 13, 2013.

IKEA’s Sustainability Strategy: Save the World, One Product At a Time

09 Wednesday Jul 2014

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  • 154,000 workers.
  • 47 percent of all managers are women [compared to 17 percent of the American Fortune 500’s board seats or the female representation at the recently concluded World Economic Forum].
  • 338 stores worldwide.
  • 8 percent comparable store sales growth in FY2012.
  • A third of total energy consumption met through renewable energy.

Is IKEA‘s newly minted sustainability strategy working? Titled People & Planet Positive, the strategy was borne out of the retailer’s business mission: to create a better everyday life for the many people. The 2012 report marks the first update for the superstore whose goals start from the obvious – a fourfold increase in sales by 2020 – and go on to include the other two pillars of sustainability – engagement of customers, employees and suppliers, energy dependence, as well as community development.

In typical European fashion – understated with an emphasis on data – the release headline read: The IKEA Group is Growing and Financially Strong. Mind you, the release announces the retailer’s 2012 Sustainability report, not the latest quarterly report on financials. What better way to position sustainability?

I spoke to Chief Sustainability Officer Steve Howard briefly on the cusp of the report’s release. Excerpts:

Aman Singh: What are some of the key highlights of the 2012 Sustainability Report that you would want every CSRwire reader to know?

Steve Howard: We’ve divided the report into two parts. First is the forward-looking piece, which talks about our new sustainability strategy and lays out our 2020 goals. Implementing these goals has  meant a huge amount of work and unleashed an incredible amount of enthusiasm across the workforce. IKEA_2012_Sustainability_Report_Updates

The second piece deals with our impact. In terms of our operations, extending our work on energy has been significant. We completed installing 50,000 solar panels across our business locations by the end of FY 12. Last year, we committed to invest $2 billion in renewable energy by 2015. We’re already committed $500 million of that.

IKEA now owns wind farms in six countries. Thirty-four percent of our energy came from renewable sources last year. We’ve committed to reach 100 percent by 2020. Not bad for a furnishing company.

In our supply chain, we committed to reaching 100 percent compliance with our suppliers. We have 80 auditors working on this goal as well as independent team validating the work of our auditors. [Once we rolled this out] some suppliers agreed to collaborate while others decided not to. So we parted ways with as many as 60 suppliers. That has real business consequences – for us as well as the suppliers.

This goal has been a real test for us on how serious we are with our promises and commitments. Because our strategy is embedded and understood across divisions, our decision to part ways with 60 suppliers was not received with any criticism. We’ve also worked with our supply chain partners on funding projects and have reached more than 100,000 farmers on improving farm conditions, water conservation, etc.

Again, our goal is to reach every single one of our farmers by the end of 2015.

One of IKEA’s goals is to have at least 95 percent of coworkers, 95 percent of suppliers and 70 percent of consumers view IKEA as a company that takes social and environmental responsibility seriously. How’s that going?

Most of our suppliers, customers and coworkers are in the “I don’t know” category. They judge us and have opinions about IKEA but don’t know what we do on sustainability. What we also know is that people care. Once we communicate the urgency, they do care about things like climate change, the  future of their children, etc.

VIDJA_lamp_IKEAMoving forward, we will strengthen our customer communications. For example, last year we replaced the doors of one of our frame cupboards with honeycomb fiber, which is as strong as solid chipboard but uses 40 percent less material. Cupboards need strong doors, not heavy doors. And this reduces the cost to produce the cupboard, therefore, reducing the price for our customers, which makes it a better customer proposition.

Similarly, the VIDJA lamp was redesigned last year to take out unnecessary components [as many as 24 of the 33 original components were removed] and replaced with LED lights, resulting in half the weight and the same performance.  Additionally, we can now load 128 VIDJA lamps on a pallet vs. 80 previously, which means we can ship more at once, reducing our fuel usage and shipping costs.

Just like that, every IKEA product has a story. That’s the direction for our business. Soon everything will be traceable back to source but it’s a lot of hard work and we are starting to talk about these stories. But it will take us some time to get the communication across to our customers globally.

That’s emblematic of a true lifecycle approach. With thousands of products and a growing footprint internationally [IKEA is in China and will soon debut its first store in India] there must be some challenges in balancing sustainability goals and growing scale?

While having a mission and being a values-led business helps, it all comes down to a significant execution and implementation effort. Our people are motivated to lower prices and find sustainable solutions. I use three numbers to talk about sustainability within IKEA:

  • 1.5 planets: needed to provide resources for today’s population
  • 3 billion: extra consumers expected to overcome poverty across emerging markets by 2030
  • 6degrees centigrade warming: A catastrophe.

Integrating_sustainability_into_product_development_IKEAThese numbers are real. And hit hard. We’re over-consuming against the urgency of climate change.  This hits the heart of business: we are either sustainable or bust. We have to do whatever is needed. And we know that.

We can help our customers save energy by switching over to LED lights. We’re essentially banning non-LEDs by committing to sell and use only LED lights in our products. We can help people save water in a meaningful way by using energy-saving equipment. Simple things like LEDs, for example, can reduce our customers’ expenses by 30 percent. That’s equal to a 10 percent pay raise!

This is our opportunity…and it’s highly motivating.

How does reporting on these metrics help? Whose reading the report?

We just want to be transparent. We’re not expecting IKEA customers or coworkers to rush to read our sustainability report. It is meant for a specialist audience that believes in the phrase, you can only manage what you can measure.

Businesses – and management teams – like to have clear targets so that they can report against them [and benchmark, analyze and improve performance]. So why not use the same logic for sustainability?

Originally written for and published on CSRwire’s Commentary section Talkback on January  21, 2013.