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Are product sustainability programs at a tipping point?

By Chris Nelson, GreenBiz, published 8-22-12

“Over the last few months, I’ve had a chance to speak to a large number of senior business, EH&S and sustainability leaders at a variety of Fortune 500 ERM clients about product sustainability and what it means to their organizations. What resonated in these conversations is that designing and implementing product sustainability programs at an enterprise level is now a strategic imperative for many companies. This was a consistent theme across many different market sectors and was being driven by the belief that a product sustainability program could create significant business value for their organizations.

Generally, these programs focus on improving permforance across the enterprise in the following areas (including but not limited to): life-cycle management, product regulatory compliance, supply-chain management, materials, waste, energy, water, packaging and product innovation. Companies are finally being able to see that a product sustainability program can lead to opportunities to increase sales, reduce risk, improve brand recognition and trust as well as develop organizational capabilities related to sustainability and innovation. And, of course, an improvement in their overall environmental and social performance.

This hasn’t always been the case. Companies historically addressed product sustainability issues reactively, intended to deal with a specific customer request related to a product life-cycle or supply-chain initiative, or with a pressing regulatory issues. It was not becasue they saw the ability to create business value by designing and implementing product sustainability programs at the enterprise level.

Companies are not seeing that the status quo of reactive responses is no longer enough. Many of these companies are seeing their market leadership position erode as their competitors are beginning to make serious commitments – as well as substantive progress – towards product sustainability leadership. They are realizing that they need to be more proactive in understanding and meeting regulatory requirements to ensure they have a license to operate in an environment where the global regulatory landscape is increasing and becoming more complex. They have better access to product-level data and information as a result of the implementation of large-scale EHS and sustianbility information systems; these systems not only report what is – or is not – in a given product, but can also indicate resource (e.g. energy) intensity to help manufacturers improve overall business processes. Some companies are losing business by not effectively communicating the environmental impacts of their products and operations in response to a customer supply chain initiative.

Most importantly, there is an increasing emphsis placed on product life-cycle management to ensure their companies are focusing their attention on the most important opportunities and issues across the product value chain.

Most of these companies are struggling to understand how to unlock potential business value from a product sustainability program and to identify and access the resources they need to deliver on their vision for product sustainability. That’s where the challenges and complexity of designing and implementing product sustainability programs expose themselves. The business value is difficult to determine and in most cases the companies do not have – or are unsure as to whether they have – the right resources to make all of this a reality, from a people, tools and infrastructure perspective.”

To read the rest of the article and learn the questions a company should ask when designing and implementing a product sustainability program, CLICK HERE.