Innovation as Accelerator for Sustainability - Essay Example

? Innovation as accelerator for sustainability The interface between sustainability and innovation is the sweet spot for the future Class Innovation as accelerator for sustainability The interface between sustainability and innovation is the sweet spot for the future Introduction How or what can the corporate purchasing department of packaging materials contribute on the sustainability, in order to be better positioned towards the future in order for this company to regain its top position in the SAM Dow Jones Sustainability (DWJS) index ? In order to be a part of the SAM Dow Jones Sustainability index, a company must fill out an assessment of its sustainability and according to the measure for the criteria, it will be listed and assessed within the index. This can greatly increase contact with investors, connecting to issues that are important to the investors. In order to increase the level of assessment on this important resource, the food and beverage company in question should find innovative methods of packaging in order to increase their value as a company that is socially responsible and actively pursuing avenues of real change. In recent years, the discussion of sustainability has been at the forefront of the public relations strategies of most businesses. While it would be nice to hope that corporate responsibility was a result of enlightenment, it has been the development of global communications through which the pressure to right the wrongs that are occurring across the planet have become enough pressure for companies to have a broader concern for sustainability. The concept of sustainability covers a wide range of resource management issues including, but not limited to, labour, environmental issues, and resources. While there are a great number of companies making a concerted effort to lesson the impact their industry has on the resources of the Earth, there is much to be done to reinvent the philosophy of a disposable world that has ruled the two centuries throughout the industrial era. One of the biggest problems in the world today is that of the amount of waste that is produced through packaging. The only way to combat this problem is through innovative techniques that shrink the level of left over product once either a package is opened or a product has been used and discarded. The amount of solid waste that is created through packaging is staggering. Through innovations and creative thinking, corporations have developed products and packaging that has less of an imprint on the environment, thus supporting the sustainability of that aspect of the health of the world. Defining Sustainability Sustainability is a product of responsible behavior within the corporate framework. Business that is conducted in a socially responsible manner maintains and preserves resources so that business can continue without adversely impacting the availability of what is needed to continue business. Furthermore, sustainability is a way in which to frame how to continue a valued and quality environment within the world, both in humanitarian spheres and in environmental spheres. Sustainability is best conducted through the stakeholder form of corporate governance where all stakeholders are considered during the decision making process. The U.K. and the U.S. have corporate models that are more oriented towards the shareholder model of corporate governance, thus impeding the philosophy that best supports long term goal making that will provide for socially responsible decisions that are intended for sustaining all of the interests of those who have a stake in the business (Hoffman 2007, p. 29). Several companies can be examined for their efforts towards social responsibility and sustainability. Nike corporation, as an example, was cited for using manufacturing plants in countries with lax human rights laws and practices in regard to workers in order to save money on the costs of creating their line of products. During 1996 and 1997, Nike was under a tremendous amount of pressure because of the working conditions in the factories. Part of the problem was that instead of making meaningful changes, the first effort was to create public relations releases with claims of changes (Kasky v. Nike: Just the Facts 2007). In this world with conscientious watch groups and instant communications, public relations must have a credible and worthwhile foundation to have any effect. In West Africa there is a thriving cocoa bean farm industry, however there is a dark side of the business that taints the chocolate industry. It is the habit of cocoa bean farms to buy young boys as slaves to work their industry. The majority of cocoa beans come from West Africa, thus causing a problem with the ethical use of chocolate. However, there are very few companies that have boycotted the West African cocoa bean. It has been determined that slavery of young boys is practiced on approximately 90% of the farms, thus causing an economic difficulty within the country should the beans be refused by the chocolate companies (Bales 2007, p. 193). However, this has not occurred. West Africa started their cocoa bean industry in 1858 and within a hundred years, provided more than one third of the worlds cocoa bean exports. At this time, 85% of the worlds cocoa beans are produced in West Africa, despite the human rights violations (Shillington 2005, p. 570). A company can make a great impact on how the sustainability of the world. The Ford Motor Company has used a variety of innovative techniques in order to provide environmental sustainability in regard to the impact they make on the world. One of the innovations they have made, adhering to one of the tenets of post-Fordism, is in creating flexible building mechanisms so that the Ford F-150 can be adjusted to fit the type of fuel efficiency of a country. Ethanol engines are now the standard in Brazil and the F-150 can be built to accommodate this standard. As well, in Europe where diesel engines are more prevalent, the Focus can be adapted for this type of engine (Ford 2011). Moreover, the plant in Deerfield Michigan has created some elements of environmental sustainability through creative measures. As an example, the ceiling of the plant is designed with a carbohydrate based surface where live plants are grown in order to contribute to the rain shedding which helps to cool the building. The sides of the plant are covered with climbing plants which furthers this shedding creates a honeycomb effect that is a natural filtering system that extends to the Rouge River. Creative ventilation, natural light, and solar panels are all used in order to lower the impact of the environmental footprint that Ford would otherwise leave (Banham 2002, p. 262). The definition of sustainability is extended to a great number of elements of industrial and corporate responsibility. Sustainability is sustaining the work force, the environment, resources and the perception of the industry for responsible behavior. One of the most powerful ways in which a business can create sustainability is through providing for environmentally responsible packaging for its products. In the UK, it is estimated that each person generates an average of 500 kg of solid waste each year. The unfortunate statistic is that this rate is a doubled rate from the 1990 rate of 250 kg per year. All of this waste creates a burden on the environment and steals natural resources as it is managed (Azapagic 2004, p. 118). Through finding methods of creating environmentally responsible packaging, the environment is treated with the respect and care that is necessary to sustain the natural resources that would otherwise be wasted. The Importance of Sustainability and Innovation Corporate social responsibility, or CSR as referred to by McWilliams and Siegel (2001), is relevant to the maximization of profits in that it increases the public’s perception of the corporation for these types of acts, thus supporting increased sales. Therefore, this is a form of investment for a firm (p. 119). A company has the opportunity to be listed on the Dow Jones Sustainability Indexes will increase investor interest, thus increasing the share value. As an example, BP, after the incident of their oil spill in the Gulf of Mexico has been removed from the index, leaving it vulnerable to the consequences of no longer being included for investor contact (Sam Indexes 2010). It is through innovation that the competition within the green level of a firm’s business can be measured. As mentioned previously, the Ford Motor Company has been an innovator in the use of green technologies. A device has been invented by the company that can identify four different types of plastics so that drink bottles made of plastic, as well as other plastics can be recycled and used for parts of their vehicles such as luggage racks and door padding (Banham 2002, p. 261). This type of end game type of re-purposing of the packaging contributes to salvaging the environment. Ford manages to recycle 380 million pounds of garbage each year with this process (Banham 2002, p. 262). One of the ways in which waste reduction is being addressed is through the use of packaging that can be utilized as good storage solutions. When the package is not immediately thrown out and used to help with storing the product, the product packaging provides a solution. Companies such as Healthy Choice and General Mills in the U.S. are working towards creating packaging that is easily opened and reclosed, thus eliminating some of the waste that occurs during food preparation and storage (Lamb, Hair, and McDaniel 2008, p. 296). As has been shown, innovations have the power to come at a problem from an unusual perspective, creating solutions to problems that are connected, thus providing for savings in the long run. Innovations in food packaging are vital in creating long term savings and reduction in costs from the support of consumer. In creating packaging that either creates a savings from the purchasing end of the supply chain, or has a solution that is viable at the end of the supply chain for disposal of the waste, a firm is establishing their participation in responsible behaviour, thus supplying the world with an opportunity to participate in the advantages that such responsibility conveys. Innovations in the packaging industry provide for competitive creations that make the world a better place. Green Packaging According to Min and Galle (1997), the only way to reduce the overall level of waste is to begin with the purchase of packaging so that the reduction of waste at the end of the supply chain is thwarted by the use of environmentally responsible packaging from the beginning (p. 12). Woters, Anderson, and Wynstra (2005) show that it is important to quantify not only the simple price of an item, but its impact on the purchasing experience and how it is perceived, thus creating costs that have come from either losses or increases due to the way in which the choices for what to purchase has been made (p. 167). According to Carter and Jennings (2004), there is a direct connection between green purchasing choices and the overall performance of a firm. Direct costs are not affected, however, there is a link between indirect costs and the purchasing choices as to the sustainability that they show (p. 146). The way in which the perception of the company is held, the way in which the packaging costs during the consumer decision making process, and the way in which valuable resources are wasted when improper packaging is creating all affect the overall price of the item. Therefore, spending an extra amount on environmentally sound packaging will save through the perception that using green packaging can project. While Min and Galle (1997) suggest that it is at the purchasing end that green packaging should be addressed, Walton, Handfield, and Melnyk (1998) suggest that innovations at the end of the supply chain, that can be utilized after the use of the packaging, is the way to address the issue. The goal is to minimize the waste, not by minimizing the packaging, but by finding ways in which to clean-up after the packaging has been used. This is considered an “end of the pipe” solution, whereby the clean-up is defined as the goal rather than the reduction from the beginning of the process (p. 3) Conclusion With the global advantages of business tightening the economic connections between one state and another, corporate responsibility and sustainability have become buzz words with a depth of meaning that affects the world through the impact that conducting business has upon the connectivity of different states and the consequences of that connectivity. While the humanitarian and environmental impact that businesses have had on a territory have always been important, global communications have now created the perception of that impact that is known to those who are not directly affected. Therefore, both out of decency and responsibility and for the advantages of keeping a socially responsible public relations image, corporations are having a greater concern for the impact that their businesses have upon the world. Consumers expect the product mythologies from which they do most of their shopping to support their believes in saving the environment, as well as in labour care and the care of the elderly. Packaging is one of the most predominant problems within the framework of industry created waste. In the food and beverage industry, this issue is even more of a problem since the purchase and then discarding of packaging is a daily event. The advantages of addressing the issues will spread throughout the process, creating increased sales and a better statistical evaluation that can be used to influence the market. Shares of the firm can sell at a higher rate when a service such as the Dow Jones Sustainability Index features a business with a good rating. The problem can be addressed from the purchasing end of the supply chain or through using pieces that can be used by the consumer at the end of the process so that disposal of the packaging will have a low level footprint upon the environment. Innovative creations that specifically address the problems that are observed in trash management will help the world, the perception of the corporation, and lead to overall management of a serious problem. References Azapagic, Adisa. 2004. Sustainable development in practice: case studies for engineers and scientists. Chichester [u.a.]: Wiley. Bales, K. 2007. Ending slavery: how we free today's slaves. Berkeley, University of California Press. Banham, R., & Newman, P. 2002. The Ford century: Ford Motor Company and the innovations that shaped the world. New York: Workman. Carter, C.R. and Jennings, M.M. 2004, The role of purchasing in corporate social responsibility: a structural equation approach. Journal of Business Logistics. Vol. 25, No. 1, 145-186. Hoffman, Michael. 2007. A critical analysis of the balance scorecard - with special consideration. Norderstedt, Germany: GRIN Verlag. “Kasky v. Nike: Just the Facts“. 2007. Reclaiming Democracy: Restoring Citizen Authority over Corporations. Retrieved on 3 February 2011, from Lamb, Charles W., Joseph F. Hair, and Carl D. McDaniel. 2008. Marketing. Mason, OH: Thomson/South-Western. McWilliams, Abagail and Donald Siegal, 2001. Corporate social responsibility: Theory of the firm perspective. Academy of Management Review, Vol. 26, No. 1, 117- 127. Min, Hokey and William P Galle, 1997. Green purchasing strategies: Trends and implications International Journal of Purchasing and Materials Management; Vol. 33, No. 3, 10-16. Sam Indexes. (2010). Dow Jones Sustainability Indexes. Retrieved on 3 February 2011 from Shillington, K. 2005. Encyclopedia of African history, vol 1.New York, Taylor Francis Group. Walton, Steve V., Robert B Handfield, and Steven A Melnyk, 1998. The green supply chain: Integrating suppliers into environmental management processes, International Journal of Purchasing and Materials Management, Vol. 34, No. 2, 2 -11. Woters, M., Anderson, J.C., and Wynstra, F., 2005. The adoption of total cost ownership for sourcing decisions - a structural equations analysis. Accounting Organizations and society. Vol. 30, No. 2, 167-191. Read More