Value Chain Sustainability: Collaboration the Key to Success
In today’s economy companies must increasingly compete for customers and resources, and consumer interests and resource scarcity are changing the way they do business. To stay competitive, companies must look beyond their own operations and consider opportunities to reduce their environmental footprint and increase resource efficiency across the entire value chain: at the front-end, in the design and manufacturing of products and packaging; and in the systematic recovery of valuable materials once the consumer is finished with the product or package.
By working closely with value chain partners and other key stakeholders, companies can discover optimal solutions and drive impactful action. For example, my company has learned that through collaboration we enable greater efficiencies, cost reduction, better product and packaging performance and ultimately increased competitive advantage.
The traditional value chain is a linear system, with upstream suppliers providing component parts for products, and downstream entities providing product distribution and points-of-sale. However, a simple linear value chain is no longer appropriate for describing the complex relationships, partners and stakeholders that companies must now consider and manage to ensure sustainability. Complex connections, between various stages of product lifecycle, as well as various partners, stakeholders and infrastructures, must be acknowledged and supported. In this economy, a company’s license to operate is now firmly based in its ability to mitigate and reduce the impacts of products at all lifecycle stages.
With that in mind, my company raised its sustainability targets across the entire value chain and found that our comprehensive approach to value chain sustainability is aligned with and supportive of many of our customers who have set their own ambitious sustainability targets.
Making Value Chain Sustainability a Reality
To realize value chain sustainability, companies must design their products and packaging with an environmental mindset. The design aspect of the value chain network includes both the engineering of the product or package, as well as its material inputs.
Light-weighting, or improving the product-to-packaging ratio, exemplifies an engineering design opportunity that affects product transportation efficiency and environmental impacts. For example, the product-to-packaging ratio for our cartons is as high as 96:4, meaning fewer trucks are required to deliver the same amount of product. Ultimately, product-to-packaging ratio improvements coupled with an efficient shape and robustness as well as no refrigeration requirements for our aseptic containers translates into greenhouse gas emissions reductions and increased distribution cost savings.
The materials used to manufacture products and packaging are another key design consideration, and a major determinant of environmental footprint. In a resource constrained world, the use of renewable resources just makes sense. If stewarded wisely, they replenish naturally and offer a more secure and sustainable supply base. As one of the largest buyers of paperboard in the world, we understand our potential to stimulate demand for certified wood fiber and set a new standard for sustainable sourcing practices. We actively engage our North American paperboard suppliers to ensure the wood fiber for our cartons comes from sustainably-managed forests certified to the highest standards. In conjunction with the World Wildlife Fund (WWF) and its Global Trade Forestry Network, we have developed Forestry Guidelines to rate our suppliers and we independently audit them every year. Also, given the significant impact of our aluminium component (50 percent of the carton’s carbon emissions footprint, and 25 percent of its fossil fuel consumption footprint), we have joined other stakeholders on the Responsible Aluminium industry initiative, working to improve social and environmental management in bauxite mining, climate impacts and recovery rates of used aluminium.
There is also a strong incentive for us to optimize food production by delivering the best possible equipment and support to customers. Supplying processing and packaging systems that are resource efficient and reduce waste and emissions along the value chain contributes to our new Climate Goal and reduces the environmental footprint of our customers’ products. By working closely with customers, offering them innovative tools to measure impacts, anticipating their future needs and delivering solutions for improvement lets companies create ever more efficient value chains.
More and more companies are collaborating to address complex environmental and social value chain challenges. The Sustainable Apparel Coalition unites leading apparel and footwear manufacturers, retailers, NGOs, academics, and the US Environmental Protection Agency to establish a shared vision and to achieve desired outcomes for issues tied to water use and quality, energy and greenhouse gases, waste, chemicals and toxicity, and labor. The Coca-Cola Company has employed a collaborative approach to managing water supply issues in India by establishing a partnership with the United Nations Development Programme (UNDP), and engaging a complex network of partners and stakeholders to develop local water stewardship initiatives.
Through communication, shared learning and active support, it is possible to work with value chain partners to improve social, economic and environmental performance. It is our experience that by connecting and collaborating with stakeholders within a broad value chain network, and focusing on improving value chain sustainability, companies will be better positioned to manage risk, engage customers through a new strategic agenda, establish more competitive long-term supplier bases, and build accountability, credibility and trust. Accordingly, those companies will become more resilient, more efficient and more agile; capabilities that are vital in this increasingly uncertain and competitive market.
Elisabeth Comere is the director of environment and government affairs for Tetra Pak in North America, the world leader in packaging and food processing solutions. She joined the company in 2006 as Environment Manager for Europe where she helped define and drive Tetra Pak’s environmental strategy. She joined the North American operations in 2010, focusing on advancing Tetra Pak’s commitment to sustainability in the US and Canada, and she is active in various industry and customer packaging and sustainability initiatives. Elisabeth previously served as a political adviser to a member of the European Parliament in Brussels, Belgium, and headed the environment department of the Food & Drink Industry group in Europe.
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