Sustainability

1. Sustainability Ethics March 14th

2. Sustainability • Economics The Dismal Science • Population growth is exponential • Resource growth is linear at best, diminishing or finite at worst

3. The Natural Step Sustainable (Business) Systems: • Keep the earth’s natural resources in the earth as long as possible. • Manage the production of toxic substances. • Not displace, over harvest or otherwise degrade our natural ecosystem. • Use the earth’s resources fairly and efficiently to meet basic human needs worldwide. References: Robèrt Karl-Henrik. 2002. The Natural Step Story: Seeding a Quiet Revolution (Gabriola Island, BC: New Society Publishers) (2002), available at www.newsociety.com; The Natural Step, at www.naturalstep.org (Natural Step system conditions, also called principles of sustainability, define basic conditions that need to be met in a sustainable society).

4. Ford • “As we endeavor to become a leading contributor to a more sustainable world, corporate citizenship has become an integral part of every decision and action we take.”

5. McDonald’s • “Yes, McDonald's is committed to social responsibility. We are committed to doing the right thing. We want to make a positive difference to the world.” - Jack Greenburg, Chairman and CEO, McDonald’s

6. Nike • “As a citizen of the world , Nike must Do the Right Thing - try to be transparent about what we are doing right, and about what we are doing wrong; embrace diversity; drive sustainability.” - Phil Knight - Chairman and CEO, Nike.

7. The Macroenvironment • The Natural Environment • Concern for the natural environment has grown steadily, increasing the importance of these trends: • Shortage of raw materials • Increased pollution • Increased governmental intervention

8. China Looming • China second largest consumer of oil (after the U.S.) Currently at 8% • China has been responsible for nearly two-fifths of the increase in global consumption since 2000. • China's surge in energy demand is also the main reason for the doubling in the world price of coal over the past year. Last year China consumed 40% of all the coal and 30% of all the steel in the world.

9. The Macroenvironment Many companies use recycling to help protect natural resources

10. The Political Environment • EPA “This growing, changing product stream presents new challenges and responsibilities in designing and managing electronic products to reduce their life-cycle environmental impacts. By applying the principles of product stewardship, electronic equipment can be made with fewer toxic constituents and designed with upgradeability, durability, and recyclability in mind, making these product systems more sustainable.”

11. Carpet • . “The disposal issues surrounding used carpet are of concern because of carpet's relatively significant contribution to the nation's waste stream and the inherent difficulties with its recycling. According to carpet industry estimates, approximately 4.7 billion pounds of carpet were discarded in the United States in 2002. Most years, carpet accounts for over 1 percent of all municipal solid waste by weight or about 2 percent by volume.”

12. “Only 3.8 percent of total carpet discards were recycled in the United States in 2002. Under the National Carpet Recycling Agreement, industry has set a goal of achieving a 20 to 25 percent recycling rate by 2012.”

13. Packaging Laws • “In most parts of the developed world, packaging constitutes as much as one-third of the non-industrial solid waste stream. At least 28 countries currently have laws designed to encourage reduced packaging and greater recycling of packaging discards. Many of these countries require manufacturers to take back packaging discards or pay for their recycling.”

14. In green packaging, corn replaces petroleum

16. Organic farming is practiced in approximately 100 countries throughout the world, with more than 24 million hectares (59 million acres) now under organic management. Australia leads with approximately 10 million hectares (24.6 million acres), followed by Argentina, with approximately 3 million hectares (7.4 million acres); both have extensive grazing land. Latin America has approximately 5.8 million hectares (14.3 million acres) under organic management, Europe has more than 5.5 million hectares (13.5 million acres), and North America has nearly 1.5 million hectares (3.7 million acres).—The World of Organic Agriculture 2004-Statistics and Future Prospects, February 2004. www.soel.de/inahlte/publikationen/s/s_74.pdf.

17. "Organic is a niche, but a very profitable niche. Give consumers what they truly want/need and they will dig deeply into their pockets. Organic dairy is mainstream. Two-thirds of the organic milk and cream is delivered to consumers via conventional supermarkets, not the 'health food stores' frequently associated with the organic of days gone by. Half of the organic cheese and yogurt sold in this country passes through a conventional supermarket. Organic is here to stay, not a fad marching by in the night. Several dairy companies have their arms around the organic segment of the business. Others will likely get involved. Whether you opt in or not, it certainly is a category worth watching. It gives us one more window into the minds of consumers." —Jerry Dryer, J/D/G Consulting, in "Organic Lessons," Prepared Foods, January 2003 www.preparedfoods.com/archives/2003/2003_1/0103organic.htm.

18. Consumer Behavior • Here's a pop quiz: Two products are sitting next to each other in a store. They're practically identical, but one is environmentally better -- let’s say it's recycled, recyclable, biodegradable, less toxic, or contains less packaging. Both are priced about the same.

19. So, given that public-opinion surveys report that roughly three Americans in four call themselves "environmentalists," and that marketing studies tell us that roughly 7 in 10 consumers would gladly choose the greener product over its less-green counterpart, why has green consumerism remained a largely marginal aspect of shopping?

20. According to the Business for Social responsibility • 1. There's no mandate. • 2. The public is dazed and confused. • 3. People lack perspective. • 4. Companies making greener products are afraid to speak up. • 5. Green benefits aren't always evident.

21. Some more sources • http://www.greenmarketing.com/Green_Marketing_Book/Chapter06.html • http://eartheasy.com/article_green_consumers.htm • http://www.pmmag.com/CDA/ArticleInformation/features/BNP__Features__Item/0,2379,4034,00.html • http://www.greenmoneyjournal.com/article.mpl?newsletterid=27&articleid=277 • http://www.life.ca/nl/94/LOHAS.html

22. Segmenting, Targeting, Positioning

23. The Green Team • Measure for measure Starbucks philosophy is to continuously seek ways to reduce waste from our system in the first place, whenever possible. • Waste Audit Results from the study indicated that five materials dominate Starbucks retail waste by volume: cardboard, milk jugs, paper cups, pastry boxes and milk cartons. Based on the findings, Starbucks is exploring additional ways to divert waste through packaging reduction, reuse and recycling. • Commuter Mug Discount One way Starbucks reduces waste is by encouraging customers and partners (employees) to use reusable mugs. Customers who use their own mugs receive a $0.10 discount. In 2003, customers used commuter mugs more than 13.5 million times, keeping an estimated 586,800 pounds of paper from landfills. • Grounds for Your Garden Coffee grounds make up the heaviest portion of the waste stream in Starbucks stores. Through the Grounds for Your Garden program, Starbucks encourages reuse of spent coffee grounds by giving them to customers and parks as nitrogen-rich soil amendment.

24. Recycling • In 2003, Starbucks managed the waste and recycling at 1,544 of our stores, of which 61% have a recycling program.

25. Environmental impact Starbucks measures the environmental performance of our store design and operations by the amount of electricity, gas and water consumption per square foot of retail space. Additionally, Starbucks looks at recycling rates and our customers’ use of commuter mugs as indicators of environmental performance. Information about these areas for a sample of stores where data is available is represented in the accompanying graphs. Starbucks is exploring innovative solutions to improve performance in all of these areas.

28. NIKE’S Corporate Responsibility • Nike’s corporate responsibility (CR) mission is simple and straightforward. It is clear acknowledgement that CR work should not be separate from the business – but should instead be fully integrated into it. CR mission: • We must help the company achieve profitable and sustainable growth. • We must protect and enhance the brand and company. • “Sustainable” can have many meanings, all of which apply here. Sustainable growth suggests that Nike will be around for generations, that Nike is planning for the long haul. Sustainable growth also requires us to find ways of generating profit while minimizing our potentially negative impact on communities or nature.

29. Sustainable Product Innovation • Nike’s two environmental long-term aspirations: eliminating waste and eliminating toxics • Nike’s footwear teams use a Sustainability Index to assess each footwear category’s progress toward reaching their sustainability goals. They currently use the Index to measure the five best-selling shoes per category, as a way of focusing on where we might have the greatest impact.

30. Nike’s Top Sellers of 2000 • The top-selling shoes, based on units sold, for the week ending Sept. 3, 2000, are as follows:1. Nike Jr. Tiempo youth soccer cleat2. Nike Land Shark 3/4 football cleat3. Nike Twitch Shark 3/4 high football cleat4. Nike Air Jordan Retro 6 basketball shoe5. Nike Air Amenity cross trainer gray/obsidian/white

31. What is the real reason?? • The real reason why the famous shoe company is so sustainable and doing so well is not only because of its great sales in apparel and shoes and not because of the different product designs to fit the needs of the consumers, but its employee benefits and diversity programs and environmental initiatives and community investment.

32. Those Key Elements *Employee benefits *Diversity programs *Environmental initiatives and community investment • Those key elements are how companies of today are growing and can remain in today’s markets. Nike has done a wonderful job of growing into a successful business and remains a sustainable and profitable company that it is.

33. Treat Your Employees Right!!! • In recent years, Nike has focused on refining our skills at • (a) identifying risk of code compliance • (b) uncovering issues • (c) implementing strategies that can be used to drive performance and enable change within Nike internally and on a broader level. • Nike has evolved from a focus on a Code of Conduct to advocating common standards across the industry. We’ve evolved from outsourcing labor monitoring to relying on a trained team of internal monitors and support for common monitoring platforms such as the Fair Labor Association.

34. Employees Make a Difference • If a U.S. based employee contributes to a qualified non-profit organization, we match the contribution, dollar-for-dollar, up to $5,000 per employee per year. When a U.S. based employee volunteers for a qualified non-profit organization, we donate $10 for every qualifying hour of volunteer work. • In Europe, employee activism is encouraged through our Sport4ACause Fund. When employees engage in charitable sporting events, Nike matches the funds they raise. In the UK, our “EXTRA TIME” program gives employees six days per year for volunteer activities.

35. Nike is Diverse • In 2004, for the third year in a row, Nike received a perfect score on the Human Rights Campaign Foundation’s Corporate Equality Index. The Index rates corporate America’s treatment of gay, lesbian, bisexual and transgender employees. • Nike established its Global Women’s Leadership Council (GWLC) to promote and support the career advancement of women within the company; it is focused on advocacy, building connections, catalyzing action, and measuring results. Advisory Teams, involving 155 men and women from across Nike, were created to support the Council.

36. Reuse- A-Shoe • Reuse-A-Shoe is a key component of Nike's long-term commitment to waste elimination by helping to close the loop on the life cycle of literally millions of pairs of old, worn-out or otherwise unusable athletic shoe material. Reuse-A-Shoe also plays an important role in Nike's long-term commitment to help increase the physical activity of young people to improve their lives by reusing this old athletic shoe material in new places for kids to play and be active.

37. Philanthropy • Nike is donating half of its proceeds to various Tsunami Aid Relief organizations from sales in all of its stores nation wide. • Nike also has a foundation in which it helps less fortunate children get an education in public schools.

38. Product Development

39. Hybrids

40. Branding Oregon Forest Products • The lumber industry in Oregon is in desperate need of change. Hundreds of lumber mills have closed and over 20,000 jobs have been lost since 1990 in spite of a decade with the highest number of housing starts and lumber consumption on record. One of the major reasons for the decline in demand of Oregon lumber has been an increase in imported lumber.

41. Because Oregon lumber companies cannot compete with the imported lumber on price and still maintain a profit, they have to find new ways to differentiate themselves from their competitors. One of the main strengths, according to the Oregon Department of Forestry, is the environmental friendliness of the harvesting techniques and the sustainability of Oregon forests. According to Rick Fletcher, an Oregon State University extension forester, “It’s not being driven by regulation; it’s being driven by the marketplace” (KOIN 6)

42. Companies such as Timber Pro UV have had a great deal of success in recent years because of their environmentally safe wood stains. Consumers are willing to pay a premium price for environmentally friendly products

43. It shouldn’t be hard to receive the environmental approval seal since Oregon already has strict laws governing harvest practices. Most Oregon businesses’ lumber already follows the reforestation provisions of the Oregon Forest Practices Act since it has 99 percent compliance according to the Oregon Department of Forestry.

44. In 2003, Home Depot experienced a sixty-five percent growth in the sales of FCS wood. Home Depot is one of the 500 U.S. retailers who participate in the chain-of-custody certification—lumber that is guaranteed to have come from an FSC certified forest

45. Will Oregon be able to brand its forests? • Does branding a commodity work? • Sunkist oranges • California Cheese • Got milk • Will it provide a strategic competitive to Oregon?

46. http://www.promotewood.com/branding-newproduct/product-branding.htmhttp://www.promotewood.com/branding-newproduct/product-branding.htm • http://www.energy.state.or.us/industry/lumber.htm • http://www.odf.state.or.us/DIVISIONS/management/asset_management/logppage.asp • http://www.globalwood.org/market/market_prices_america.htm • Brand Oregon. April 30, 2004. http://www.oregon.gov/BRANDOREGON/news.shtml • Geist, Wendy. Telling their Oregon stories. Gazette-Times. January 31, 2005. • Milstein, Michael. Oregon might brand lumber with green seal of approval. The • Oregonian. April 25, 2005. • Oregon Considers Branding 'Green' Lumber. KOIN 6 News. April 26, 2005. • http://www.koin.com/news.asp?RECORD_KEY%5Bnews%5D=ID&ID%5Bnews%5D=2294 • http://egov.oregon.gov/ODF/STATE_FORESTS/docs/management/resource_policy/FAQ/TFA-Oregons_Facts_Figures.pdf • http://oregon.gov/ODF/STATE_FORESTS/state_forest_management.shtml

48. Quick Facts • Started in November of 1993 • Milk Sales for the previous 15 years had been going down; and at an increasing rate. • $2 billion annually spent to advertise beverages (had to do something different to stand out) • $23 million budget for milk

49. Results of Campaign • Exceeded expectations • 60% ad recall awareness in 3 months, 70% in 6 • Improved consumption in California from an $18 million decline the previous year to a $13 million increase • Became part of the pop culture landscape

50. Jury still out on the cheese campaign