Hasbro Targets Greener Packaging and Supply Chain
<p>GI Joe has been green since 1964, when the action figure first went into battle for toymaker Hasbro. Now the plastic and cardboard package he comes in will be environmentally-friendly, too.</p>
Now the plastic and cardboard package he comes in will be environmentally-friendly, too.
So will the packaging for such classic toys and games as Mr. Potato Head, Play-Doh, Monopoly and Candy Land, all of which, along with more recent phenomena like Littlest Pet Shop and the Transformers, are made by Hasbro, a Pawtucket, RI-based firm that sold about $4 billion of toys last year.
Hasbro releases its first corporate social responsibility report today, and it should be available here. The company offered me a preview of the report and a chance to talk with Brian Goldner, the company's CEO, and Kathrin Belliveau, vice president of corporate responsibility at Hasbro.
Hasbro was formed by brothers Henry and Helal Hassenfeld (get it, Has-bro?) in 1923, and family member Alan Hassenfeld remains on the firm's board; that kind of long-term family ownership often leads to an ethic of social responsibility and, in fact, Hasbro has been paying attention to its social impact for years, particularly when it comes to overseas factories. It's been slower to look at environmental issues but, even so, the company tops its bigger rival, Mattel, in the rankings released just this week by nonprofit Climate Counts. [See my blog post yesterday, Big Brands Take More Climate Action, But Policy Needed for Progress] Hasbro also ranks No. 59 on FORTUNE's "100 Best Companies to Work For" List.
Goldner has chaired the board's social responsibility committee since 2006. I asked him why the company is doing a report now.
Partly, he said, it's because the company is expanding -- in recent years, it opened marketing and sales offices in China, Brazil, Russia and Korea, among other places -- and Hasbro wants to communicate its values to its employees everywhere.
"As we hire hundreds of new people around the world," Goldner said, "we want people to understand that we're not only in the markets to win but we're there to be a good corporate citizen."
"At the end of the day, I think it comes down to, frankly, myself and our senior management team who feel very strongly about this as individual citizens and people who are running a company," he said. CSR at the company is a "long process of continuous improvement."
Most of the news (such as it is) in today's report is about packaging. The company said it would eliminate polyvinyl chloride (PVC) from "all new core toy and game packaging beginning in 2013," it promised to insure that 90 percent of paper and board packaging will come from recycled material, or from sources that practice sustainable forest management, by 2015, and it noted that it has already replaced all the wire ties in its packages with ties made from paper rattan or bamboo mix. Fun fact: The company said the changeover to rattan and bamboo "eliminated approximately 34,000 miles of wire ties – more than enough to wrap around the circumference of the Earth."
In truth, the planet is unlikely to notice much of this. Reducing packaging is all to the good, but it's a bigger issue when it comes to things we consume frequently (fast food, drinks, groceries, etc). Hasbro's packaging reductions were surely driven, at least in part, by Walmart's attempts to get all of its suppliers to cut back on packaging. I asked Belliveau about this, and she replied: "Certainly their scorecard process, which we have been very committed to, has guided us, but we also have our own aspirations and requirements that are driving our business."
What's more, Hasbro will continue to use lots of PVC. The company says it is keeping it in its toys because it is a extremely durable plastic, which resists wear and tear. It's low-cost, too. Belliveau said: "There's a lot of good things about PVC. We're not here to attack PVC. Really, it came to a landfill issue, and an incineration issue."
On greenhouse gases, Hasbro said recently that it is on track to reduce its direct global greenhouse gas emissions (GHG) a further 10 percent for the time period 2008-2012, building upon earlier U.S. reductions of more than 43 percent from 2000-2007. The company operates factories in East Longmeadow, Mass., and Ireland, but most of its manufacturing is done by third-party vendors in Asia; it's in the process of getting emissions data from them as well.
But Hasbro's bigger impacts are social – on the kids who play with its toys, and on the workers who make them. Here, the company has a good record, as best as I can tell. In 2007, when other toy companies, including rival Mattel, were forced to recall millions of toys made in China because of worries about lead paint, Hasbro was unaffected.
For its supply chain, Hasbro has operated according to a public policy of global business ethics since the early 1990s. In this report, for the first time, the company makes the names of all of its suppliers public.
Goldner told me that when Hasbro has made acquisitions, it learned that its costs tend to be higher than rival toymakers. "We tend to pay about 10 percent more for product," he said. "That has a lot to do with the product safety protocols that we have in place."
The payback from those higher costs is hard to quantify. It comes in the form of recalls that are avoided, or scandals about child labor that don't happen.
Goldner hopes that consumers will, over time, recognize Hasbro's efforts. "We believe the Hasbro name can be a trust mark," he said. We'll see.
Photo of GI-Joe doll via Shutterstock.com.