Are product sustainability programs at a tipping point?

Over the last few months I’ve had a chance to speak to a large number of senior business, EH&S and sustainability leaders at a variety of Fortune 500 ERM clients about product sustainability and what it means to their organizations. What resonated in these conversations is that designing and implementing product sustainability programs at an enterprise level is now a strategic imperative for many companies. This was a consistent theme across many different market sectors and was being driven by the belief that a product sustainability program could create significant business value for their organizations.

Generally, these programs focus on improving performance across the enterprise in the following areas (including but not limited to): life-cycle management, product regulatory compliance, supply-chain management, materials, waste, energy, water, packaging and product innovation. Companies are finally being able to see that a product sustainability program can lead to opportunities to increase sales, reduce risk, improve brand recognition and trust as well as develop organizational capabilities related to sustainability and innovation. And, of course, an improvement in their overall environmental and social performance.

This hasn’t always been the case. Companies historically addressed product sustainability issues reactively, intended to deal with a specific customer request related to a product life-cycle or supply-chain initiative, or with a pressing regulatory issue. It was not because they saw the ability to create business value by designing and implementing product sustainability programs at the enterprise level.

Companies are now seeing that the status quo of reactive responses is no longer enough. Many of these companies are seeing their market leadership position erode as their competitors are beginning to make serious commitments — as well as substantive progress — towards product sustainability leadership. They are realizing that they need to be more proactive in understanding and meeting regulatory requirements to ensure they have a license to operate in an environment where the global regulatory landscape is increasing and becoming more complex. They have better access to product-level data and information as a result of the implementation of large scale EHS and sustainability information systems; these systems not only report what is — or is not — in a given product but can also indicate resource (e.g., energy) intensity to help manufacturers improve overall business processes. Some companies are losing business by not effectively communicating the environmental impacts of their products and operations in response to a customer supply chain initiative.

Next page: focusing on the most important opportunities