Companies and the public sector are coming under considerable scrutiny on management of their ocean plastic impact with significant media and public attention focused on the amount of single-use plastic packaging, drinking straws and other plastic items in circulation across supply chains.
These same organizations are faced with expectations to align their climate change mitigation ambitions with the latest science that emphasizes the drastic reduction measures that are needed.
The new report from Green Alliance confirms what we’ve been advising our clients on since the emergence of this anti-plastic public sentiment: Public awareness and expectation is leading some organizations to make knee-jerk reactions to external demands that are not well thought through, lack a view on the unintended consequences where a change in plastics management negatively can affect carbon ambitions and are often not aligned with the organization’s core business strategy.
Taking a considered, strategic, holistic approach is not easy. And here we’re exploring just two environmental impacts when of course many other environmental and social impacts need to be considered. Nonetheless, we’d like to share guidance for developing an evidence-based strategy that supports your organization’s own objectives; managing the risk while also grasping the opportunities available.
First, know your sustainability principles
It is understood that carbon emissions can be resolved with much of the progress made through an energy transition, but up to 45 percent needs to happen through a circular economy.
So, plastic management and carbon reduction can align to a common end when done correctly. And there is an opportunity to simplify the complexity by looking at key materials that have the biggest potential in circularity. Organizations need to identify where the greatest potential opportunities are for different impacts and then combine to form a unified approach.
Apply your cultural approach to setting strategy
We have found that an organization’s approach to setting its strategy is directly related to the culture of an organization and its leadership. Organizations tend to fall between two ends of a spectrum: either taking a very cautious or a very ambitious approach.
With a more progressive culture, the strategy allows for goals that the organization doesn’t yet know how to achieve. For a more conservative culture, the organization needs to be assured of how it will achieve its strategy, the plan is more fully developed and goals have a clear roadmap.
We see a roughly equal split from the businesses we’re engaged with, where half are led by a culture of innovation, wanting to be at the forefront of the industry. In the other half, we see a different approach: pragmatic and careful, benchmarking and footprinting before they set any targets.
Both approaches are credible. The importance lies with an awareness of one’s own organizational culture and approach — there are risks and benefits to both, and an organization needs to know which to be aware of.
Those organizations with a more liberal approach may be at risk of making a knee-jerk decision that leads to unintended consequences. On the other hand, we’ve also seen how organizations with cautious cultures can get caught up in detail at the strategy stage and therefore become mired in complexity, before being able to learn and grow insight from trials.
To illustrate this, let’s consider the fact that: About 50 percent of the world’s greenhouse gas emissions come from materials used in our production and consumption cycles. About eight materials are responsible for 20 percent of those emissions — often plastic, and particularly recycled PET, has a lower footprint in terms of its carbon and GHG emissions than the alternatives.
So, if your strategy determines your company is going to drop a plastic for an alternative such as glass, you may undo much of your work to reduce carbon emissions.
We’re not advocating for certain choices being right or wrong. We are making the case for organizations to stick to a defined strategy and being able to communicate how their choices align with that strategy — whether as an explanation to the public to customers to a supply chain or to policymakers and NGOs.
Setting a guiding principle is an effective way to create an adaptable, resilient strategy. A guiding principle is a goal the company strives to achieve and is applied across all of the company’s global operations. Once the principle has been determined, it creates a global framework the company operates within even if the technical solutions may differ between the countries.
There are several benefits of setting a guiding principle. Having a guiding principle helps a company define what its strategy will focus on and help determine what they aim to achieve within that strategy. In addition, having a guiding principle can be a way for the company to clearly communicate the rationale behind certain choices it makes to stakeholders and the public.
Setting interim targets can be a useful tool in this process. They can help develop a path towards a longer-term goal, and we have found they are used by businesses that are more mature on this journey.
Here is an example of an interim set of goals for a product manufacturer. Between now and 2025, the business will:
- Move to more recycled content
- Do more labeling for consumers to understand how to recycle
- Make an investment in infrastructure
- Back chemical recycling
When looking at these targets through the lens of a corporate guiding principle, some will make good sense in line with the overall target. Others will pull against it.
For example, if a company’s guiding principle focuses on reducing the carbon footprint of the organization, selling produce without protective plastic would not be a relevant approach as it would increase food waste and boost the carbon footprint.
So, it’s important to identify the organization’s guiding principle, how it is affected by the company’s culture and decision-makers and how interim goals can support forward progress. The organizations that are more mature on this journey have learned how to plot these points together and make them an operational reality within their organization.
The Unilever example
In the face of anti-plastic public sentiment, Unilever came out to say that plastic is supporting its desire for a lower carbon footprint and that changing to another material is not the right choice for the organization. Instead, it is focusing on the reduction of virgin material.
Unilever is not repositioning in the face of public pressure, it is clarifying its message as it receives public challenges. That’s critical when ensuring that your strategy can adapt and address changes in the market.
Finally, think local
While there is a need for a global position and strategy, there are likely to be significant regional differences to contend with. There are different regulations, varying degrees of public consciousness around the plastic and climate change agendas, and different types of products being produced in different regions. Therefore, the technical solutions need to be regionally responsive, but the messages need to support the global strategy.
Organizations must flex to adapt to different regions and message differently to each stakeholder group but within the consistent framework of their global strategy. Having a guiding principle can be an effective way to communicate how technical solutions being applied to different countries connect to one common global goal.
It’s not enough to recognize the risk of trade-offs and unintended consequences. For organizations to be truly resilient and well prepared for a future of shifting public priorities and unexpected consumer pressures, it is imperative that they build a flexible but defensible strategy that can adapt and respond to the future unknowns of climate change.
Editor’s note: If you’re attending GreenBiz 20, you can learn more about the tradeoffs involved with plastics commitments during the “Plastics Pledges and Climate Commitments” breakout session Feb. 5.