Posts filed under ‘Environment’
Why do companies talk about and pursue ‘green’ products when there is often very little resonance among consumers? Is it because it is the right thing to do? Does it offer a competitive advantage to their brands? Or is it a strategy to achieve cost savings through energy and waste reduction?
It depends upon who you talk to.
There are some companies that get it right with the consumers and become successful, while others are constantly looking at ways to get it right. For the latter companies, here is my advice for a possible approach towards greener product development.
At Newell Rubbermaid, our first step is to understand that there is no such thing as a ‘green product’. Every product has potential trade-offs and we need to understand what ‘green’ attributes can be a good incremental value or a game changer. Some of the methods in understanding consumer relevance are through market research, either by primary or secondary insights and/or benchmarking with your peers and competitors.
Questions we need to answer to influence green product development in early stage gate processes are:
- To what extent are your consumers interested in ‘green’ products?
- To what extent are your consumers demanding ‘green’ for your product categories in particular?
- To what extent are consumer ‘needs’ related to environmental issues being met in the marketplace?
- To what extent are market trends forming that might drive greater desire for green solutions among consumers, retailers, and governments?
- Are there certifications/Eco labels available in the market that resonate with the core consumer of this product? To what extent is certification required to make a credible claim for this product category or market segment?
It is important that we understand these answers before we influence green product development. In the case of existing products, we should map out the green benefits using product mapping exercise like Value Analysis and Value Engineering. For those of you in pursuit of the green products,
- What kind of roadblocks have you found in innovating green products?
- Are we constantly looking out metrics to measure the green attributes to our revenue growth in our brands?
- What kinds of Green platforms do the consumer really care?
- What are the other effective methods to map out green attributes in our products?
Balaji Jayaseelan is Program Manager of the Global Environment and Sustainability group at Newell Rubbermaid. He is in charge of providing strategic advice to business units on a wide range of sustainability issues including energy/climate change, waste management, product claims, green product innovations and Life cycle management. He is a Chemical Engineer and holds a Masters in Environmental management concentrating on Sustainability. His professional interests and research focus on designing different models on socio-economics towards sustainable development and innovating green products. You can reach him at email@example.com.
Today we are kicking off a new series on the Green Tie, featuring the ‘Emerging Leaders’ within our membership. Dania Nasser is a student member of NAEM, pursuing a master’s degree in Environmental Management at Yale University.
In the wake of New York State Governor Andrew Cuomo’s decision to consider lifting the ban on hydrofracking, it seems like the term and the debate have gone mainstream.
As you probably know, hydrofracking (hydraulic fracturing) is a method by which natural gas stored in layers of rock is extracted through the use of chemicals, water and pressure to break through the rock and recover natural gas.
While several states allow the practice, it has become a lightning rod issue for many communities. There is serious concern that disturbing the layers of rock and sediment to recover natural gas can result in drinking water contamination. Currently, the Environmental Protection Agency is studying the general impacts of hydrofracking and looking to release a Federal report and possible guidelines in 2012.
Few things worth doing, however, pose zero risk. Risk should be monitored and tracked closely, but not automatically used as criteria for eliminating viable options.
I was recently discussing the issue of risk surrounding hydrofracking with a neurosurgeon friend, and it occurred to me the extent to which the practice might be compared with brain surgery. Take for example, a brain surgeon undertaking a patient suffering from an aneurysm. The source of the aneurysm is not always clear, and sometimes exploration for the source of the bleeding can cause more harm than good—but this is a major risk that doctors take. Doctors are able to take this risk because of all the risk mitigation that doctors take, such as years of practice and study, the latest equipment and time-tested procedures.
Hydrofracking poses a similar set of risks and obstacles. Just as with surgery, the risks must continue to be vetted and addressed. The same process is necessary to ensure proper practices and procedures set in place for hydrofracking.
If hydrofracking is increasingly seen as a viable option for recovering additional domestic energy, the concerns that have caused the controversy surrounding hydrofracking must be addressed. Areas that must be further addressed to ease anxiety surrounding hydrofracking include readying infrastructure and monitoring technologies, developing best practices, as well as working to carefully plan and manage the impacts of hydrofracking.
How do you weigh the risks of practices such as hydrofracking? How do you address the concerns internally as well as externally?
Dania Nasser is a student member of NAEM, completing a master’s degree in Environmental Management at Yale University. She is currently Director of Environmental Affairs at a New York law firm specializing in environmental and construction law. She is a member of NAEM’s Emerging Leaders group and the Board of the Manhattan Chamber of Commerce Green Finance Committee.
The message from stakeholders and investors is clear: Companies are expected to govern and begin disclosing water-related business risks. Historically, most companies have been able to simply acknowledge water as one of many important business issues. Much has changed in the past few years, with water positioned as a competitive issue and expectations trending towards quantification of water-related financial liability.
However, growing disclosure pressure isn’t the same as providing pragmatic “how to” for characterizing and quantifying water-related business risks. Moreover, characterizing the risk is only the beginning. The real challenge for companies is how to strategically prioritize risks and opportunities, build necessary competencies, and drive local water management plans. Why is water such a challenging, and potentially paralyzing, business issue you ask? Consider these factors:
- Nearly every activity, product, or business transaction uses water in some form – yet, there is no substitute;
- Water is both a local and temporal issue with potentially widely varying conditions (e.g., floods and droughts can occur in nearly the same location);
- Water, in general, is difficult to bound, measure, transport, and define access rights;
- It’s challenging to justify water-related strategic or capital investments based upon traditional ROI calculations;
- Cross-functional participation and solutions are required, including engagement up/down a company’s supply (value) chain; and,
- It is widely considered a human right, placing it in the sweet spot for media, political, and stakeholder attention.
What does this mean for companies that have yet to fully embrace water as a core business issue? There are two basic options:
- Start or accelerate a water strategy soon and possibly stay “ahead of the curve” thus determining your own pace of implementation; or
- Do the Basics – hedge your bets that water will not directly impact your company and expectations will stagnate. Given that water appears to be a resilient issue, companies that hedge could face monumental leaps to catch up to peers and meet stakeholder expectations in the near future, especially given the complexity and location-specific aspects. The cost of inaction could be significantly higher than self-paced implementation.
So, the first question many companies ask is how fast do they need to move? Well, the direct impact of water issues on any given company depends upon a range of variables including sector, size, brand recognition, and public image. First, let’s look at what we are seeing:
- Publications – recently published materials appear to be trending towards standardized buckets of water risk: Physical; Regulatory; Reputation; Investment. This has translated the business risks into simplified, real world concepts for a wide-range of stakeholders and investors to more easily comprehend and formulate inquires.
- Surveys – increasing number of non-governmental and supply chain surveys, including the second annual CDP Water Disclosure Project questionnaire, have significantly increased transparency of existing corporate strategies and knowledge gaps.
- Corporate Reporting – more companies are reporting water metrics, as well as water footprints, product life cycle assessments, and intensity indicators.
- Initiatives – water-focused NGOs and collective action partnerships have increased exponentially in recent years ranging from advocacy to standard development.
Collectively, these actions have provided investors and stakeholders with confirmation that 1) water is in fact a real business and investment risk; 2) a majority of companies are not proactively addressing the issue; and 3) water can be effectively managed, quantified, and reported on as demonstrated by the small number of corporate leaders in this space.
Nick Martin is an Associate with Antea Group. He will present ideas for developing a water strategy during NAEM’s webinar on “Water Risk Management” on June 21.
Take a bite out of your carbon footprint with today’s “at home” tip from NAEM’s Green Tips Guide, an employee engagement handbook: