Marketing and Sustainability, Part 1: Beyond Buzz

Reprised story: Part 1 of this series first appeared in Tips&Trends on July 24, 2007. We repost it in recognition of Earth Day.

The "sustainability thing" has reached a turning point. It has moved beyond being a buzzword. Important economic issues are at stake. And there are great opportunities for companies to improve corporate reputations, become involved in the community and control business costs by adopting green management policies.

Defining sustainability is tricky because it means so many things to a vast number of believers. In simple terms, being sustainable reduces our impact on the earth, wisely uses our resources and recognizes that future generations deserve a role in decision-making about this planet. "There is an interdependence between ecological, economic and social factors in achieving sustainability," the Washington Department of Ecology states as the first of its eight sustainability principles.

This column is the first of a two-part look at understanding the concept of sustainability and how companies may adopt and support green practices and programs as reputation-management and cause-marketing strategies. CFM knows from its opinion research that many business leaders in Oregon believe supporting sustainable programs is a smart thing to do, although they don't necessarily believe there are direct economic payoffs. (See: Sustainability as a Business Attribute and Advantage.)

There are big benefits to being green. But first, you need to understand what is at stake.

Understanding the New, New World Order

Reduce, reuse and recycle is the mantra of environmentalists. Increasingly, they also are the watchwords for smart business managers. Choices that minimize the energy and materials used for production, the options for delivery of services and the disposal of waste may save company money.

Per capita, no nation produces more waste - and underutilizes it - as much as the United States. What is startling to realize is the intensity of the international battle being waged for our waste. Why is that important?

Manufacturing managers and materials experts describe a new, new world order where U.S. jobs are at stake because of the shrinking availability of recycled materials. Nations exporting goods in containers to North America refill those containers with recycled materials for the return trip. They are willing to pay top dollar.

China, India and Eastern Europe under the Common Market all have a voracious appetite for our recycled goods. They are in competition with U.S. industries as these fast-growing foreign markets seek raw materials for products to meet the needs of their emerging consumption-oriented youth markets (15-25 year olds).

Some local examples tell the story:

Paper: Recycled paper is a vital source of material for production of new paper products. With the exception of tissue plants, no new paper manufacturing facilities are planned in the United States. A 100-million ton shortfall in recycled paper is cited as the reason for the U.S. industry's hesitation to expand capacity, according to Peter Grogan, who is Weyerhaeuser's recycling market development manager and recipient of the National Recycling Coalition's Lifetime Achievement Award (2006). With only 4 percent of its land covered with forests, China is desperate for raw materials and our curbside recycle bins are a vital source, Grogan says in a presentation he gives entitled "The New, New World Order."

A partial answer to filling the resource needs may be sitting under our desks. Only half of all office waste paper makes it to the recycling box. This is why local and regional governments, such as Metro in the Portland-area, will step up efforts to assist local businesses to increase recycling rates.

Glass: Use of recycled glass bottles (cullet) in the production of glass sheet products helps keep energy consumption down. Energy costs for the Owens Illinois glass plant in Portland have increased during the last few years because there is a shortage of amber cullet, says Bob Dolphin of the Portland plant. Ironically, the Portland plant is the only Owens Illinois facility designed to use amber cullet because establishment of the Oregon Bottle Bill in the 1970s promised a steady supply. Where have all the bottles gone?

E-waste: Local governments in the metro area stage periodic computer round-ups. In Clackamas County, for example, hundreds of cars will line up as drivers pay a small fee to dispose of old PCs and monitors. Used computers and peripherals contain valuable components such as metals, once the hazardous materials are removed. E-waste recyclers have little problem getting rid of inventory because buyers for China are aggressive about purchasing the waste, says Craig Lorch of Total Reclaim in Seattle.

These examples and other commodity shortages were discussed during last month's Association of Oregon Recyclers (AOR) annual conference.

What Corporations Can Do

Wage war on waste. Build green buildings for energy efficiency. Feed low-income populations by recycling unserved food products. All are different ways of moving forward on sustainability. On the PR front, companies can build their own sustainability image in the community by considering three possible strategies:

Cause marketing: A business may enhance its standing in the community by adopting and supporting non-profit organizations engaged in sustainability efforts. In the public relations trade, that's called Cause Marketing. Companies may make contributions, donate the services of employees, share a percentage of product sales with a worthy cause - just a few examples of adding a green luster to the company image.

Examples of activities include:

1. Helping a local group sponsor environmental events.

2. Paying for environmental speakers to appear before community groups.

3. Supporting projects advocated by local offices of sustainability such as community educations programs run by the City of Portland, Metro, the counties and the state Department of Environmental Quality.

4. Attending a conference, such as the recent event hosted by the Lake Oswego Chamber of Commerce with help from the City of Lake Oswego and Clackamas County. (See story: City gives green light on sustainability.)

Reputation Management: Companies also may become involved through a Reputation Management strategy. Start first by making sure internal green practices are understood and followed. Is waste being reduced? Recycling maximized? Energy conserved? Employee incentives used to achieve green goals? Is sustainability a well articulated part of the of the firm's values?

A careful review and updating of corporate values, combined with a risk and opportunities assessment, can guide companies as external business decisions are made. A company with a green sheen may be viewed with greater respect.

Branding: Finally, there are those companies that take Reputation Management to the next level. They actually brand their services and products as green. Examples include:

1. Architecture and engineering: SERA Architects of Portland practices what has become known as green engineering. SERA specializes in the reuse of historical and used building materials, as well as energy-efficient design. SERA's green transition has helped the company double in size. Gerding-Edlen Development - in its Pearl District projects and elsewhere in the Northwest - slowly has gained a national reputation as a green-building specialist.

2. High-tech: A Portland-based maker of computers and Nexus-brand high-definition TVs, CTL (Computer Technology Link) is an early adopter of green manufacturing and affordable buy-back and recycling programs for its products. And since its early days, Tektronix, Inc. has been recognized as an industry environmental leader.

3. Agriculture: Tillamook Cheese gained positive attention when it became one of the first dairies in the nation to offer growth-hormone-free (rBst) products. That decision was made as part of a reputation management review.

Take small steps if necessary, but take the steps on the path of building a sustainability reputation. In the second part of this series, find out how to connect with the best resources.