Sustainable Business Development: Colgate Toothpaste - Literature review Example

ESSAY 2 SUSTAINABLE BUSINESS DEVELOPMENT: A CASE STUDY OF COLGATE TOOTHPASTE by City, State Date INTRODUCTION Settling on Colgate toothpaste as the product of discussion was informed by the growing human population and the basic human need of oral hygiene. This means that as the world population surges, so is the demand for this product and a sustainable model must, therefore, be adopted to ensure minimal environmental impact in Colgate’s product life cycle. Another reason for choosing Colgate toothpaste was the universal distribution of its inputs that are sourced from far and wide geographical locations and its worldwide distribution network. By virtue of being a household name in all the continents of planet earth, Colgate toothpaste bears greater responsibility for ensuring that its material sourcing, manufacturing, distribution and consumption processes leave minimal carbon footprint. All global brands must come up with a cocktail of mitigation strategies in their respective regions of operation to ensure sustainability. This is for the sole reason that no single sustainability model can apply to all parts of the world with each region facing unique environmental challenges that call for custom made mitigating strategies. Colgate has to think in this line and asses the most viable sustainability model in its region of operation. The diversity in strategies adopted by The Colgate-Palmolive Company makes this product most suitable for analysis with reference to sustainable business development. This essay will look into the pool of literature on the subject to bring out a deeper meaning of the concept. A deep analysis of the environmental impacts of Colgate and a discussion of how these impacts can be mitigated will be undertaken. Suggestions will then be brought fourth for mitigating the environmental impacts in the context of theoretical debates about sustainability after which a conclusion will be drawn. LITERATURE REVIEW This chapter looks at the body of knowledge in the area of sustainable business development. From past literature on the subject, deeper insights will be gained into the origin of sustainability as a concept, the pillars that support the concept, contribution of efficiency towards sustainability and how it can be assessed. The origin and meaning of the sustainable development concept Traced from the early centuries, sustainable development as a concept was adopted in the management of forests between the 12th and 16th century AD but remained dormant until the 1950s when its significance came to light (Rogers, Jalal & Boyd, 2008). According to Bergh, (1994), it’s the 1972 report by scientists Denis and Donella Meadows titled “Limits to Growth” that the term sustainability came to the mainstream. As they described the ideal global equilibrium, a model that would see proper use of world resources by the population without leading to unprecedented collapse of the global economic system as a result of uncontrolled exploitation, was proposed. Marten (2001), defines sustainable development as the clear plan to achieving continued existence of systems and practices in activities where utilization of resources and immediate replication is required. Marten (2001), further explains that sustainable development corresponds with expanded economic and human growth for an expanding society. In this regard, the concept calls for an organization principle where limited resources are sustained to meet the needs of future generations who will still have life on planet earth. A suitable business, therefore, is one that envisions an ideal future for the human race and uses the available resources to meet the present human needs without undermining the veracity, permanence and splendour of such ecological systems (Lawn, 2006). A business that utilizes resources with future generation in mind through its operational systems is considered sustainable. The relationship between economic growth, consumption and sustainability There is a very close relationship between economic progress, consumption and sustainability with one having immense effect on the others. According to Larson (2007), economic growth drives consumption which then negatively impacts sustainability because as demand grows, the likelihood of unsustainable resource exploitation is at its highest. For this reason, the three pillars of an economy, societal demands (consumption) and a sustainable environment must not be examined in isolation, but looked at as part of a system confined by environmental limits. Given the finite nature of natural resources, economic growth and consumption must be managed within the confines of resource capacity (environment). The diagram below further explains: Pillars of sustainability To properly understand how sustainability, economy and consumption correlate, it is important to take a closer look at the three pillars that define the concept. From the approach of these three pillars, companies seek to balance between long term social, environmental and factors in the economic sphere that require them to properly understand consumption and how economic growth impacts sustainability. According to Serageldin & Cernea (1994), a triple bottom line approach to this concept is the best way of explaining the relationship between economy, consumption and sustainability, in this approach, the following are taken into account: People: They are the social pillar of sustainability and with them, come demand that fuels consumption. To achieve sustainability, the need of an individual must be balanced by those of the group. Most organizations achieve this balancing act by implementing corporate social responsibilities that are in sync with their overall corporate missions to ensure that the “people” aspect is absorbed within their operational frameworks. In this regard, the approach adopted by Wal-Mart, for example, will be completely different from that of Colgate Palmolive because of the divergence of their industries and operation procedures. Planet: Brebbia & Beriatos (2011), explain that environmental sustainability takes effect when the activities and operational systems within an organization have minimal impact on the planet’s health. It is line with this philosophy that Herman Daly came up with a proposition that for resources that are renewable like trees, the rate of harvest should not be in excess of regeneration. In the area of pollution, waste produced from business activities should not surpass assimilative environmental capability. With regards to non-renewable resources, as they are depleted, renewable alternatives should be harnessed (Brebbia & Beriatos 2011). This holistic approach ensures that a sustainable model is developed. Profit: This is the economic pillar within sustainability; it defines the policies that use social and economic resources for the best possible outcome. An economic model is considered sustainable if it distributes resources equitably and uses the same efficiently in a responsible manner that facilitates long term benefits while remaining profitable in the process. Consumption is an important aspect of economic sustainability because as demand drives profit, initiatives should be taken to see reduction in energy consumption and pollution lessening, two aspects that pose serious threat to the long term success of any enterprise. The three pillars discussed define sustainability and corporate social responsibility because they help in determining an organization’s roadmap to success. Economic sustainability as a pillar, involves ensuring that enough demand for a good or service is created but in a way that this thirst for consumption does not create environmental impacts that jeopardize the long term profitability of an enterprise (Mcintyre, Ivanaj & Ivanaj, 2009). There is, therefore, clear evidence of a close relationship between consumption, economic growth and sustainability. From the discussion above, equilibrium must be achieved among the three aspects if a business is to be considered sustainable. The role of efficiency in achieving sustainability (2013) explains efficiency in the context of sustainability as the ability to utilize the least amount of resources required to achieve intended results. In this regards, efficiency achieves sustainability in the following ways: Reducing wastage – An efficient system minimizes waste throughout a product’s life cycle. Proper use of raw materials ensures that little is disposed and this has immediate positive impact on the environment. Reduced energy use in manufacturing and distribution processes for goods, not only minimise carbon emission but contribute to a condensed overall organizational footprint. Enhancing profitability – When efficiency achieves the objective of minimal waste and optimised energy use, the costs go down and profits increase. An increase in profits gives an organization the financial liberty to pursue its intended corporate social responsibility objectives that help achieve a sustainable business model in the end. Creating a sustainable corporate culture - an organizational culture that revolves around efficiency can be easily sustained over time because of profits realized. With profits, growth plans can be implemented to the achievement of a holistic model. Assessing the environmental impacts of products and services Several techniques have been developed to assess the environmental impacts of products and services. The most acceptable technique is Life Cycle Assessment (LCA). According to Hertwich (2010), this technique determines the environmental footprint of products/services from production through usage to disposal. Other assessment techniques include: Life Cycle Inventory (LCI) – This is an aspect of LCA that deals with the collection of data. It involves the tracking down of all inputs and outputs, which include raw materials, energy used and emissions generated thereof. Life Cycle Impact Assessment (LCIA) - This technique analyses inventory for environmental impact. An example of LCIA is in a manufacturing set up that uses specific amounts of petroleum as part of its inventory. Computing the impact of fuel combustion on global warming constitutes the LCIA process (Zbicinski, 2006). All these techniques are complimentary in establishing the environmental impact of a product/service. By looking at the entire life cycle, areas of bigger impacts are easily identified and mitigating measures taken. Phases of the cycle that are found efficient can be sustained and improved to achieve even better results. Analysis of the environmental impacts of Colgate toothpaste Understanding the environmental impact of Colgate require a total review of the products life cycle. Below is a step by step use of LCA to identify the environmental impact of Colgate: Raw materials Since Colgate as a brand consumes an estimated 0.2 percent of all the palm oil production from the Asian countries of Thailand, Indonesia and Malaysia, the product in essence makes significant contribution to the ongoing deforestation of tropical rain forests in these countries that has seen indigenous catchment areas destroyed to give way to palm tree plantations (Avery, 2005). Such has further reduced natural habitats for some of the world’s most endangered animal species like the tiger and Asian Jaguar that have for years lived in the Asian rain forests. Besides palm oil, Colgate uses plastic tubes in its packaging and these have significant carbon footprint in their manufacture. Transporting the raw materials from the source to manufacturing plants equally involves shipment by land, air or sea, activities that have significant carbon emission further contributing to the products carbon footprint. Manufacturing With the release of company’s 2015 sustainability objectives, Colgate Palmolive reported the following as its areas of focus; health promotion, saving on water, making contribution to communities and overall reduction in environmental impact (Lammers, 2012). With a market presence in over 200 countries across all the continents of the world, Colgate as a product consumes huge amounts of water and energy in its manufacturing process. These have the notable impact of depleting water as a limited natural resource and carbon gas emissions. Reducing these two areas of environmental impact can make a significant contribution to making the brand sustainable. Distribution The movement of Colgate as a final product to retail stores around the world, just like transportation of raw materials, contribution to emissions. The amount of energy required in the distribution process is a function of distance from storage warehouses to final consumers, the kind of infrastructure between the two locations in terms of quality and the number of storage locations between bulk buyers to final consumers. Since Colgate has market presence in some of the least developed countries in the world, quality of infrastructure is usually very poor in these locations and that increases the products carbon foot print as more fuel is consumed. The company, however, has the advantage of lessening these setbacks in areas with proper infrastructure where efficient transport mechanisms can be adopted. Consumption Use of water while brushing teeth with Colgate is a major source of the products impact on the environment. According to waterwise.org.uk (2015), if one leaves a tap running while brushing, then six litres is water per minute and by turning the tap off while brushing, an estimated 12 to 18 litres can be saved. Educating consumers on good water management while using Colgate will ensure that little waste is attached to the product and intended sustainability achieved. Disposal Given the availability of Colgate in tubes of multiple sizes most of which don’t last long with households given the small volume of toothpaste they contain, disposal is the products biggest challenge especially in developing countries with inferior solid waste management systems (Berger, 2011). Solution to the disposal is recycling with the help of technology where machines with the ability to sort polymers are employed. In other areas, Colgate has come up with new packaging designs that are more sustainable in terms of size, quality and amount of plastic used. From the in-depth look at Colgate’s life cycle, several areas can be improved to ensure that minimal negative impact on the environment is left and Colgate remains on top as a more sustainable product. From the analysis, the impact of raw materials on the environment appears to be the most severe and therefore, callas for proper mitigating action. To get a better picture however, it is important to look at some of the mitigating strategies that the company has employed to lessen the impacts identifies in the product’s life cycle. Discussion on how the environmental impacts can be mitigated Throughout Colgate’s life cycle as reviewed above, grey areas have been identified. This section of the essay researches secondary data to establish the actions taken by the company so far to mitigate the environmental impacts together with a proposal on what more can be done in ensuring the sustainability of Colgate both as a brand and as a business model. In the area of raw materials, the following mitigating actions can be taken: a) Support re-forestation activities in Asia – With figures showing that more natural forest land in Indonesia, Malaysia and Thailand is being lost to palm plantation, Colgate Palmolive as accompany should set up to support activities to re-plant lost forests in these areas that are not necessarily lost to the cultivation of palm trees so that equilibrium is reached between acreage lost to the product’s raw materials and those reclaimed. According to Lessly Lammers (2012), shareholder advocacy group As You Sow (AYS) petitioned Colgate -Palmolive to implement a system that will see all major suppliers adopt a metrics system that quantifies their impact on climate change and report the generated data. This has the significance of helping the company know exactly how its entire supply chain is impacting the environment, which is a useful step in formulating sustainable policies. Presently, the company has asked sixty of these suppliers to come up with energy minimization targets and share their data on green house emissions. All these are under the company’s Carbon Disclosure Supply Chain Project (Lammers 2012). Colgate should work with local NGOs in the affected countries to help them implement the re-forestation strategy since this is not their core function. By having an external organization dedicated to this course will give the company time to focus on their core business while still lessening their activities’ impact on the environment. b) Look for alternative, more environmentally sustainable inputs to palm oil – The use of palm oil from the available statistics is not sustainable because as the Asian rain forest is depleted, more harm to animal habitat. It is possible to seek alternatives to palm oil and spare the Asian tigers and Jaguars. For this reason, more research should be undertaken by Colgate to identify a matching equivalent to palm oil and stop further encroachment into Asian forest by palm farmers. c) Set up manufacturing plants around areas with most raw materials – It has been identified that transportation of inputs from the source to manufacturing plants is a major carbon emitter, especially in countries with poor transport infrastructure. As mitigation, these plants should be located in areas that can be easily accessed by suppliers and not far from raw materials so that less petroleum energy is used in delivering inputs to the destined locations. Here is a list of actions that can be taken against negative environmental impacts in manufacturing Colgate: a) Reduced water and energy consumption at plants – According to the report by AYS on their petition to Colgate, the advocacy group stated that the company had committed to reducing water consumption at its plants by 40 percent and 20 percent of energy. The company’s sustainability report show that between 2002 and 2010, water usage was reduced by 44 percent and carbon emissions by 21 percent, water wastage on the other hand was cut by 31 percent (Elks, 2014). The company CEO Ian Cook highlighted that it had been Colgate’s responsibility to achieved acceptable sustainability standards even before statutory regulations in this area were in place. As such, he mentions that the concept of sustainability is built in the company’s business model and affects decision processes (Elks, 2014). By reducing the amount of energy used in these plants scattered all over the world, Colgate as a brand will make cumulatively significant savings in its journey towards absolute sustainability. b) Increased recycled content packaging – The Company intends to increase recycled packaging from current 40% to 50 percent. This has the significance of reducing carbon emissions involved in the manufacture of new toothpaste tubes. The challenge however, is in developing countries where solid waste management systems are not advancing posing a challenge for the recycling process. c) Development of a totally recyclable toothpaste tube – Presently, some of Colgate’s tubes are not recyclable, as a mitigation strategy, the company needs to adopt fully recyclable packaging for its toothpaste and strive towards using one hundred percent recycled material in new packaging (Berger, 2011). This will make a significance contribution to sustainability. d) Elimination of PVC in the packaging process – PVC has been found not to be environmentally friends, from the energy consumed in its manufacturing to post disposal stage. As such, its elimination by Colgate will be a significant contributor to lessening of the products carbon baggage. To achieve sustainable distribution with Colgate, the following should be done: a) Set up warehouses among consumers- Having storage plants close to consumers reduces energy consumption in delivery the product to end uses which in the end lessens the carbon baggage. Colgate should work towards ensuring the distance between warehouses and end users is further shortened. This move does not only contribute to the product’s sustainability but also reduces the cost of doing business and eventually profitability. b) Use natural light in storage facilities – Storage facilities consume a lot of energy because of their vast sizes, by fitting sections of the roof with transparent sheets that allow the penetration of natural light during the day; this energy usage can be significantly reduced to the lessening Colgate’s carbon footprint. c) Adopt energy efficient means of transport – Low consumption trucks and electric railway lines can be used where available to transport the products to end users. Consumption of Colgate also has environmental challenges that require the following actions to mitigate: a) Educations on water use – Minimal water usage in utilizing Colgate should be encouraged with consumers taught on the significant e of closing taps while brushing and only opening them when cleaning up. Revelation that six litres of water is lost per minute when taps are not closed is major set back towards the products overall sustainability because on a global scale, billions of litres are water each day from brushing of teeth alone. b) Knowledge of recycling policies – Technology and media campaigns should be initiated to pass the message of recycling across. Using the mobile phone platform as a tool for achieving this objective can come in handy for Colgate. As for disposal, consumers should be encouraged to properly dump the empty tubes in a manner that makes it easy for the company to recycle. This process must be consumer driven especially in developed nations where there are proper solid waste management mechanisms. If consumers understand the significance of properly disposing the tubes and if there can be a reward system, then this phase of Colgate’s life cycle can be 100 percent sustainable. A reward system for disposal can be in terms of an exchange program where a free packet of Colgate is given a certain number of tubes delivered to a specified location. The whole program should make both economic and environmental sense to the company. In addition, such a program can be used by mobile technology where a mobile Application is designed to help consumers track their usage of Colgate and know how much of the empty tubes used were actually recycled. Significance of technology in sustainability In all the discussed mitigation strategies, technology must play a significant role in helping the process of achieving Colgate’s sustainability. From sourcing of raw materials to disposal, all the phases of the products life cycle can use technology to t\achieve the set sustainability objectives. Technology is, therefore, at the centre stage of all the above ongoing and proposed mitigation strategies. The relation between improved efficiency and sustainable development goals at Colgate The mitigation actions proposed above are all aimed at improving efficiency. An efficiency supply chain that is not only accountable in terms of its greenhouse gas contribution but also balanced in terms of the balance between negative and positive environmental impacts, ensures sustainability (Zbicinski, 2006). As a brand, Colgate is striving to properly manage the negativities in its life cycle for overall product sustainability. It has clearly emerged that efficiency leads to sustainability because profitability, minimal wastage and overall customer satisfaction, are all realized with the help of an efficient system. An organization cannot be sustainable unless its internal systems are efficient. By ensuring internal efficiency, it becomes much easier for external stakeholders like suppliers for example, to meet the set efficiency benchmarks that are all aimed at sustainability. Colgate Palmolive, from the findings, has achieved enviable levels of sustainability and having incorporated the concept in its decision making process as mentioned by the company’s CEO Ian Cook, sets a good precedence for their suppliers to adopt similar standards. The company’s goal of fully recycled packaging in its product segments by 2020 can therefore be realised if the intended gradual improvements around the area of efficiency are implemented (Elks, 2014). From the product life cycle audit, each phase has implemented improvement mechanisms aimed at achieving sustainability through efficiency. It is therefore fair to state that from the Colgate case study, efficiency is a requisite to sustainability. CONCLUSION Coalgate’s life cycle analysis has clearly revealed that there are serious environmental impacts associated with the product. From raw materials sourced in Asia that are harming natural rain forests and endangered species’ habitats to water and energy wastage during the manufacturing process, Colgate has some serious changes to make if its sustainability objectives are to be realised. Knowledge of water wastage by consumers while using the toothpaste is area that costs the planet billions of litres of scarce drinking water and as a responsible product, should see to it that this is reduced through a proper campaign across all possible information dissemination platforms. In an effort to lessen these impacts, Colgate must stick to its plans in the areas of tube recycling, water wastage reduction, energy usage minimization, sourcing for alternatives to palm oil and elimination of high carbon oriented inputs like PVC. Continuously ensuring that sustainability forms the backbone of Colgate as a brand and a business model is pivotal to its future achievement of set objectives. This is because, the most conscious stakeholders in an organization become of sustainability; the easier it is to implement environmentally friendly policies. Having identifies the need to work with external partners like NGOs and government institutions in balancing the company impact on rain forests in Asia, which is its source of palm oil. Technology should equally not be left out in all phases of the product life cycle. Use of technology has proven to be quite effective in implementing most sustainability policies and its inclusion is one way of achieving results in the shortest duration. In summary, Colgate, unlike other brands, has so far initiated and achieved in specific areas, sustainable business development and with the implementation of current policy frameworks in this area, the rand will most likely be a market leader in sustainable business. Bibliography AVERY, G. C. (2005). Leadership for Sustainable Futures Achieving Success in a Competitive World. 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