Consumer Goods Technology - July 2008 - (Page 5)

INSIGHTS INDUSTRY ANALYSIS, DATA AND RESEARCH our industry has begun to embrace its own role and responsibility in the matter. Making a real commitment to sustainability recognizes that social, environmental, economic and other factors affect the business. But, it is important that management also realize that sustainability has other implications that might not seem obvious at the start. These include both the risks and opportunities arising from any major initiative where governance standards, engagement strategies, reputation, corporate culture and accountability for results will either support and reinforce the mandate or show the degree to which the company says one thing, but does another. A study, conducted in May 2007 by the GMA and Deloitte Consulting, on how consumer products companies balance these opportunities and risks also examined the reasons why companies must take this subject more seriously. In summary, three key issues arise: • Environmental implications of conducting business: CG companies have a large environmental footprint across the value chain from sourcing, to consumption, to disposal, drawing heavily on natural resources at each step. • Changing consumer awareness and preferences: Consumers are being exposed to more eco-friendly products and are now “buying green” in increasing numbers, with 17 percent of U.S. households falling into the “Lifestyle of Health & Sustainability” category and another 21 percent into the “Naturalites” category. It’s not hard to imagine, apart from price and performance, that sustainability might soon become the decision maker for consumers. • Governance and compliance requirements: Currently any environmental/ sustainability reporting remains voluntary in most countries, including the United States. The emphasis on compliance, however, is gaining ground as agencies, like the Financial Accounting CONSUMER GOODS TECHNOLOGY | J U LY 2 0 0 8 | Standards Board, are working on guidelines for public accounting of environmental matters. RESPONSIBILITY VERSUS PR EXERCISE Research among companies in the United States and the UK indicates that while there is a significant focus on sustainable initiatives in the industry maturity levels differ by country and organization. For example, consumer businesses based in the European Union are ahead of their counterparts in the United States on this issue. However, more than 60 percent of these companies state that the key drivers of “AS MORE AND MORE COMPANIES BEGIN TO ADOPT SUSTAINABLE PRACTICES, AND WITH R E G U L AT O R Y C O M P L I A N C E B E C O M I N G A N O R M , I T I S C L E A R T H AT S U S TA I N A B I L I T Y I S N O T A PA S S I N G FA D.” sustainability initiatives are internal, with a reduction in operational costs, commodity risk management and the upholding of corporate values being the main points of focus. While most companies state they are measuring and reporting sustainability progress, there is little consistency or depth in understanding what, precisely, is being accomplished. S U S TA I N A B I L I T Y A N D T H E F U T U R E AMR Research predicts that the next few years will be critical for manufacturers and retailers as they establish their roadmap toward green 5 W W W. C O N S U M E R G O O D S . C O M http://WWW.CONSUMERGOODS.COM

Table of Contents Feed for the Digital Edition of Consumer Goods Technology - July 2008

Consumer Goods Technology - July 2008 Contents Edit Note Insights Special Report Catching Up With... Energy-Minded Efficiency Waste to Wonder Greater Good Natural Business Built to Last Setting Sustainable Goals Sustainability, Part 2 CGT Events Between the Lines

Consumer Goods Technology - July 2008

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