Empowering Business through Corporate Responsibility
Sustainable Solutions Corporation
155 Railroad Plaza, Suite 203
Royersford, PA 19468
Tad Radzinski, PE, LEED AP, SFP
Over the past decade, the landscape of business has changed dramatically.
As the global economy expands, consumption and demand are on the rise.
Political policies and economic crises have challenged businesses to transform
their long-term strategies and identify new and innovative approaches.
Corporate Responsibility has been proven as the key to advance business
strategies and ensure continued success in a turbulent marketplace. This white
paper examines the growing need to revolutionize business, and the intrinsic
value of adopting sustainability as a business strategy.
Market Implications of Corporate
Sustainability Initiatives
Investor Relations and Stakeholder Demands
Recent reports are finding that major investors are quietly
pulling out of some firms that were once thought to be
“a sure thing”. This move by financial experts reflects a
lack of faith in traditional business strategies, and is
prompting the need for innovation and new sources of
sustainable revenue. These industry-leading companies
need something to differentiate their brand and ensure
the long-term viability of their business.
So what is the answer? Corporate Sustainability can be
vital in protecting critical resources and assuring investors
of your commitment to a secure future. A progressive
business strategy based on an understanding of future
trends, resource constraints and market needs is the key
to a successful Corporate Sustainability program. It leads
to innovative business practices that consumers, and
therefore investors, can’t wait to support.
In other instances, investors have specifically demanded
that companies address certain environmental
concerns. In the first quarter of 2013, Dunkin Donuts was
approached by New York State Comptroller, Thomas
DiNapoli. DiNapoli, responsible for the $1.9 million
pension fund investment in Dunkin Donuts, filed a
shareholder resolution regarding palm oil sourcing. Palm
oil is used in many of Dunkin Donuts products, which is an
area of concern due to the negative environmental and
social impacts of some producers. As a result of the
resolution, Dunkin Donuts has committed to sourcing
100% sustainable palm oil to reduce habitat damage
and support fair working practices. Several other
corporations that the pension fund has stake in,
including Sarah Lee and the J.M. Smucker Company,
have also agreed to exclusively source from Roundtable
on Sustainable Palm Oil certified sources.¹
1. http://www.triplepundit.com/2013/03/dunkin-donuts-source-onlysustainably-produced-palm-oil/
Market Implications of Corporate
Sustainability Initiatives
Consumer Preferences
Today’s consumers are more educated about the environmental impacts of the products they
use and the companies they source from, and are proactively shaping the future of business.
Through their spending power and online influence, consumer groups like the Baby Boomers,
which control approximately 70% of disposable income in the U.S., and the Millennials, many of
whom have never known a world without smartphones, are demanding more sustainable
corporations.
Sustainable principles resonate with Baby Boomers who want to protect the interests of future
generations, including their children and grandchildren. Alternatively, Millennials are more
skeptical than previous generations and are wary of big business. Through transparency and
product innovation, Corporate Sustainability has helped companies like Apple, Timberland
and Unilever appeal to these consumer groups. As competition increases in today’s
marketplace, the need for inventive ways of conducting business and reaching consumers has
significantly advanced the role of Corporate Sustainability in strategic business plans.
Sustainable Procurement Policies
In answer to changing consumer preferences and stakeholder demands, many leading
organizations have implemented Sustainable Procurement Policies. These consist of standards
for locating and purchasing environmentally preferable products and raw materials. This
movement has fueled the green product market and created a system of supply chain
management that focuses on shared responsibility and impact reduction.
Resource Constraint Raises Costs and Drives Innovation
In examining the abundance of commonplace products that utilize petroleum, not only
in processing, but as a raw material, the results tend to shock most. The Institute for the
Analysis of Global Security projects that by 2020, 83% of the world’s oil reserves will be
controlled by Middle Eastern regimes, a monopoly that will be free to affect prices at
will.² Petroleum is only one example of the extreme resource dependency of developed
nations; for other examples, please refer to my previous white paper, Sustainable
Product Development: Critical for Resource Conservation and Product Innovation.
As more countries enter the developed world, resource consumption is going to increase
exponentially, which will drastically affect oil consumption. Organizations that are
heavily oil dependent, such as manufacturers of any of the products included in Figure 1
(below), as well as companies in the transportation and logistics industries, are going to
realize a significant price increase, and possibly resource shortages. Some progressive
businesses, however, are proactively addressing this impending issue.
Figure 1 – Household Products Made from Petroleum
Solvents
Floor Wax
Ballpoint Pens
Football Cleats
Dashboards
Balloons
Ink
Sweaters
Boats
Insecticides
Cortisone
Sun Glasses
Upholstery
Tires
Nail Polish
Fishing Lures
Purses
Detergents
Dresses
Dishwasher Parts
Golf Bags
Perfumes
Shoes
Heart Valves
Motorcycle Helmets Caulking
Tool Boxes
Shoe Polish
Putty
Crayons
CD Player
Faucet Washers
Petroleum Jelly
Transparent Tape
Dyes
Parachutes
Curtains
Food Preservatives
Antiseptics
Clothesline
Deodorant
Tents
Vitamin Capsules
Antihistamines
Basketballs
Soap
Footballs
Enamel
Percolators
Life Jackets
Panty Hose
Refrigerant
Skis
Pillows
TV Cabinets
Rubbing Alcohol
Linings
Tool Racks
Car Battery Cases
Dishes
Shag Rugs
Electrician's Tape
Mops
Slacks
Epoxy
Telephones
Paint
Umbrellas
Yarn
Insect Repellent
Oil Filters
Anesthetics
Roofing
Toilet Seats
Fertilizers
Hair Coloring
Denture Adhesive
Artificial Turf
Linoleum
Fishing Rods
Lipstick
Speakers
Plastic Wood
Artificial Limbs
Ice Cube Trays
Synthetic Rubber
Tennis Rackets
Rubber Cement
Fishing Boots
Cameras
Glycerin
Nylon Rope
Candles
Trash Bags
Dice
Dentures
Water Pipes
Hand Lotion
Roller Skates
House Paint
Shampoo
Model Cars
Wheels
Paint Rollers
Surf Boards
Guitar Strings
Luggage
Folding Doors
Aspirin
Shower Curtains
Antifreeze
Football Helmets
Awnings
Bandages
Figure 1 http://www.ranken-energy.com/Products%20from%20Petroleum.htm
2. http://www.iags.org/futureofoil.html
Interface® Case Study: The Business Value of Corporate Sustainability
Interface is the world’s largest producer of carpet tile, a petroleum based product. Thanks to
the foresight and leadership of the late Ray Anderson, Interface is on its way to phasing out the
need for oil in its production process. By setting lofty, seemingly impossible goals, Anderson
initiated one of the greatest examples of industry innovation of our time, and demonstrates the
value of Corporate Sustainability.
Monetizing Sustainability³

Aiming to reduce waste and remove oil from the supply chain, Interface has pioneered
carpet tile recycling. Now 49% of total raw materials the company uses are recycled or
bio-based, which helps mitigate fluctuating oil prices.

By reducing waste to landfill by 72% from 1996-2010, Interface’s QUEST program has
accumulated a total of $438 million in avoided costs.

Having renewable energy sources for 36% of total energy use alleviates rising utility costs.

Sustainable carpet options have increased sales by reaching demanding consumers.
3. http://www.interfaceglobal.com/Sustainability/Our-Progress/AllMetrics.aspx
Changing Climates Shift Market Preferences and Can Limit Production
Admittedly a ubiquitous term, climate change is affecting businesses – now and in the future.
As the climate changes, periods of extreme weather are increasing. The implications of this
include effects on natural resources, manufacturing plants and future product demands.
Natural Resources
Changing weather patterns are impacting many natural resources through inconsistent crop
yields, declining biodiversity, droughts/flooding, and lowering resource quality. Identifying
alternative materials and planning for sustainable acquisition is necessary to alleviate
uncertainty in future resource availability.
Manufacturing Plants
As periods of extreme weather become more frequent, manufacturing plants will need to be
designed to withstand changing local climates. Designing resilient buildings protects
organizations from unexpected delays in production due to natural disasters like flash flooding
or extreme wind and power outages.
Future Product Demands
Consumers will be affected by climate change and will demand more resilient products from
manufacturers. Changing regional weather will alter market preferences and should be
anticipated by forward-thinking corporations. At present, many consumers are unprepared for
the effects of climate change. One such example is the citizens of New York City and the
resulting floods from Super Storm Sandy in October 2012. As these events become more
common, a new product demand which was previously unneeded will enter the market.
Developing Countries and the Growing Middle Class:
How do we Give Nikes, Levis and iPhones to
Three Billion More People?
The world population continues to increase, and as more countries
become developed, the middle class is growing around the globe. The
BRIC countries alone – Brazil, Russia, India, and China – consist of 3 billion
people. These countries are all at a similar state of economic
development and are generating a new group of empowered
consumers. This begs the question: How do we give Nikes, Levis and
iPhones to three billion more people? Is it even possible?
We live in what I refer to as a “consumer-istic” society, and as more
individuals have the means and resulting purchasing power, global
demand for consumer goods is going to increase drastically. The current
manufacturing system of take-make-waste will be unable to support the
markets of the future. Resource conservation and increased resource
productivity are necessary to ensure continued product development
and to maintain the consumer economy as we know it.
Responsible Design principles engrained in a Sustainable Product
Development (SPD) Program provide manufacturers a realistic solution to
demand increases and resource constraint, while mitigating costs. SPD
programs are designed to identify opportunities for improvement and
generate more sustainable products. SPD teams use life cycle thinking
techniques and tools to consider alternative materials, processes and
sourcing that result in decreased environmental impacts throughout the
product’s life. Combining innovative design techniques with life cycle
data allows manufacturers to evaluate future products before going to
market, thus increasing environmental performance, enhancing market
appeal and maximizing ROI.
A Return to U.S. Manufacturing as Foreign
Wage Rates Increase
As countries develop and the middle class
grows, foreign wage rates are increasing. These
rate hikes have impacted the cost of production
and are beginning to fuel domestic growth.
Many companies are bringing manufacturing
operations back to the U.S. because of rising
overseas labor costs and increasing oil and
transportation expenses. Trends are showing that
U.S. manufacturing is becoming fiscally
beneficial again.
Speaking at the National Retail Federation's
(NRF) Annual Convention, Bill Simon, President
and CEO of Walmart U.S., announced Walmart's
commitment to revitalizing our domestic
economy. The retail giant plans to use its
extensive influence and buying power to
promote onshoring and increased production of
U.S. goods. Over the next ten years, Walmart
pledges to purchase an additional $50 billion in
U.S.-made goods. Bringing manufacturing back
to the U.S. not only boosts the local economy,
but will allow Walmart to reduce transportation
costs.
Onshoring manufacturing operations is going to
cause companies to reevaluate their supply
chains. Sustainable supply chain management
can improve quality control, reduce waste and
inefficiencies, as well as avoid other associated
costs.
Corporate Social Responsibility
A Key Strategy for Continued Success
An emerging focus in business strategy is measuring and leveraging social
performance. This includes enhancing the local communities in which corporations
operate, improving employee and customer relations, and actively affecting social
and environmental change. Industry has been cited as the only entity with the influence to affect rapid, substantial change in society. This is mainly due to the fact
that government and regulatory pressure move too slowly.
Having the power to shape society has given businesses the opportunity to progress
to new levels of production and enhance their market position. Corporations that
are advancing sustainable principles are driving toward this goal, creating new
markets, and establishing competitive advantage. Pioneering Corporate
Responsibility is a necessary step for companies that wish to excel, and a key
strategy for continued success. Organizations that
do not evolve and innovate will go extinct.
The old way of doing things is out, and
forward-thinking companies are setting the
standard for the new economy.
Sustainable Solutions Corporation
155 Railroad Plaza, Suite 203
Royersford, PA 19468
Tad Radzinski, PE, LEED AP, SFP
Copyright 2013 by Sustainable Solutions Corporation