 Panel Discussion Green card to corporate legitimacy SATURDAY 13 OCTOBER 2007
Government, civil society and consumer pressure was such that “businesses now have to follow a second agenda alongside their bottom line,” said Jacqueline Coté, adding “they have to pursue a public policy agenda, like it or not.” Her point was taken up by L’Oréal’s Laurent Gilbert who said his company was integrating sustainable development throughout the product cycle, from research right through to packaging. “Products mean ingredients. We evaluate the global impact of ingredients on fair trade, biodiversity, health, environmental sustainability and social impact on the supply chain,” he said. L’Oréal practices what Gilbert called “green chemistry,” he added. This meant using renewable materials, ecological transformation principles and biodegradable active ingredients. Gilbert said the amount of plastic contained in the company’s shampoo bottles was 30 per cent less than a couple of years ago, and was recycled plastic. The company was going further by working to develop biodegradable bottles. Renault’s Alice de Brauer outlined some of her company’s endeavours in favour of sustainable development. The current Clio compact car consumed 30 per cent less fuel and produced 75 per cent fewer emissions than the model of two years ago, she said. In addition, solvent emission during production of cars had been reduced by 50 per cent. Like L’Oréal, Renault now applied sustainability criteria to every stage of manufacturing, from component parts through to recyclability of cars at the end of their product lives. The recently-launched upmarket 2007 Laguna is 95 per cent recyclable, de Brauer said. One of the biggest challenges was to be doing this and still making cars people could afford, she said, citing studies showing only 5 per cent of consumers would pay more for an ecological car. She was frank about what had pushed the company in that direction. “It was regulation,” she said, adding that such an attitude shift was particularly challenging for the automobile industry in that it “constitutes an attack on our very culture.” “Traditionally, our business has been about making cars that go ‘vrooom,’ that go fast, that look manly,” she said. She admitted that the reaction to new restrictions in the first few years was denial, and that acceptance had come only gradually by “mobilising men and women around scientific data.” Renault was now ranked No. 2 in the world in sustainable development among auto manufacturers. Tensie Whelan of the Rainforest Alliance called the shift towards sustainability a “design revolution.” She said: “We are redesigning how we produce and consume things, looking at water use, energy use, environmental conservation and working conditions.” Stressing that this was no an easy matter, she took the example of biofuels. “You can say that ‘oil is bad,’ which it is, and we’re running out of it, but we have to look at the impact and sustainability of alternatives,” she argued. Growing corn for biofuel required one unit of energy for a yield of only 1.2 units of fuel energy. Other unintended consequences resulted from using sugar cane, which polluted when burned, and from palm oil, the increased use of which has resulted in massive deforestation in Indonesia, Whelan reported. This is where the Rainforest Alliance stepped in, working with companies to examine supply chains, striving to make them sustainable. Whelan told of her work with Gibson, the guitar manufacturer, which uses mahogany, a threatened species in much of the world. The Rainforest Alliance had hooked Gibson up with producers in Guatemala practicing sustainable forestry who now sold directly to the guitar company. Eliminating the middleman also meant communities earn more from their labour. These kinds of practices don’t just make companies look good. Whelan said such commitment produced a measurable increase in satisfaction and loyalty among a company’s employees. L’Oréal’s Gilbert said this factor was one of the main driving forces behind his company’s sustainability policy, more so than shareholder or consumer activism. Whelan said an important shift had taken place in the past decade, as older generation CEOs and employees retired and were replaced by people who had grown up environment-savvy. But she tempered the idealism by saying a main reason behind sustainable practices was to avoid risking damaging brand reputation. “Brands now represent 70 per cent of a company’s value, vastly more than its assets,” she said. Scandals like the Nike sweatshop affair had scared other brands into ethical behavior. “If a brand is attacked it has a major negative impact on the bottom line,” she said. “But I’m not saying they don’t also want to do the right thing." __________________________________________ |