Australian Paper

With clients like Qantas and Air New Zealand, design firm Buzz Products is acutely aware of the need for environmental sensitivity and the management of carbon offsets.

Among the many products the company designs, the volume of kids’ in-flight activity books can run into the hundreds of thousands. “The carbon input into manufacturing at that scale is quite large,” says Creative Director Doug Buckle. “So we work with our clients to reduce toxic levels initially, then look for sustainable materials, and then, at the end of that, also offer them the opportunity – just as you would your flights – to offset whatever remains with carbon credit.”

Since undertaking a sustainable policy four years ago and commissioning the Carbon Reduction Institute to do its internal audit, Buzz has “reduced its waste, packaging, recycling, and operational areas,” according to Tess Power, brand manager and sustainability chair at Buzz. “Then we went through and instigated a 10-step plan and continued to audit and [use] offsets from them. So we are audited each year to make sure we are reaching targets as well as becoming more sustainable.”

While Buzz don’t undertake a lifecycle assessment for each product they design, Buckle says each product undergoes “a four stage process: right size it, make it clean with no toxins, make it recyclable, and, if possible, make it re-harvestable, so there is no permanent impact on the Earth.”

Immersing themselves in new technology has proved useful as clients adopt green programs. For instance, when US giant Procter and Gamble (parent company to Buzz client L’Oreal) decreed that all its packaging would be sustainable, L’Oreal looked for solutions.

“We were all over clean ingredients and were going out and giving L’Oreal seminars,” says Buckle. “We presented a range of alternatives and showed why PVC was bad, and after a few projects they understood what they can and can’t do.”

Despite the perceived push for green products, Buckle says: “It’s often about doing it in a way that the customer would never notice. For example, with L’Oreal’s packaging it’s about keeping the premium look and feel, but taking out toxic materials which were irresponsible.”

“From my point of view,” designer Stefan Sagmeister has said, “living a full life includes doing no harm, and being aware of the world that you live in on various levels.”

The occasion for the reflection was the launch of Worldchanging: a user’s guide to the 21st century, that he had designed.

A bestselling book of 2006, Worldchanging includes a foreword by such heavy hitters as Al Gore and Bruce Sterling, while its editor, Alex Steffen, runs the influential non-profit web magazine of the same name. If Sagmeister comes across as idealistic, Steffen is very much aware of the bottom line.

“Money spent making greener profits is not a cost, it’s an investment,” says Steffen.

If you want facts and figures, ask Fuji Xerox. Since initiating its Sydney recycling facility, the company has recovered 99% of end-of-life equipment and parts, saving $13 million in new part costs, generated export revenue of $5 million, and created over 100 new jobs. For its efforts, Fuji Xerox is a finalist in the large business category of the 2010 Premier’s Sustainability Awards.

While awards might be confirmation of their corporate social responsibility, surely it’s the million-dollar profits that matter most. Doesn’t a business succeed by focusing on one thing: the bottom line?

Increasingly, businesses – like those on the Dow Jones sustainability index or the FTSE 4 Good, to which the Xerox parent company has been nominated – are realising that profit is only part of the equation. For them, contributing something back to society and being environmentally sustainable is also part of the economic business model – the triple bottom line.

Indeed, the very fact that big companies have chief financial officers or even chief sustainability officers scrutinising the triple bottom line is a transformation in corporate governance.

As the very existence of those stock market indices suggest, corporate social responsibility is not only increasingly prevalent, it’s the basis for a burgeoning shareholders revolution.

Taming the fickle and demanding shareholder is a major enterprise. It’s about having them recognise ‘patient capital’ – acknowledging that greening a company and corporate social responsibility takes time – and that stakeholders, not just shareholders, are affected by businesses. Exponential growth is appealing, but difficult to sustain.

But the sustainability revolution doesn’t need to happen only at the big end of town. As the directors of Etiko and Sustainable Living Fabrics, Nick Savaidis and Bill Jones, testify smaller companies can make a positive contribution as well.

While research by the Mobium group, Living LOHAS, suggests people are prepared to pay price premiums of around 5–10% for sustainable products, Savaidis and Jones believe it’s simply about a fair price for a fair-trade product.

Both directors agree that good products can be profitable with everyone along the supply chain paid fairly, the environment left undamaged, the wider community aided by company charities and the loop completed by educating the next generation.

Under the triple bottom line model, profit is not just the economic value created by the organisation after deducting the cost of all inputs. Value is measured by how society also profits.

As humble stakeholders, we can still create change. As Joel Makower, author of Strategies for the Green Economy, declares: “Every time you open your wallet, you cast a vote – for or against the environment!”

Or, as Stefan Sagmeister is wont to say, “Everything I do always comes back to me”.

Bill and Kay Jones bought a bankrupt fabric company and transformed it into a world leading, environmentally sustainable business. The winner of the 2007 Premier’s Sustainability Award for small business and the United Nations Association of Australia World Environment Day Award two years in a row, Sustainable Living Fabrics produces over 400 fabrics certified with independent green credentials. Bill Jones explains the benefits to the bottom line.

What inspired you to go ‘green’?

We realised customers were interested in going green. Our competitors were saying how green they were, but we had no way of telling. And we didn’t want to talk green without actually being green. The only way to get that message across was to be third-party certified.

How far has your company come?

When we started we had nothing to offer environmentally. Today, I think the awards prove we are a world leader. We were invited to attend last year’s United Nations World Leaders Summit – 120 business leaders were invited to New York in preparation for Copenhagen. At our table was the head of Philips worldwide.

How have you benefited economically?

Before, our whole ethos was making products at the lowest price we could. It became clear that there would always be someone who would undercut it. We needed to appeal to a wider group of potential customers, which included designers and architects.

Were there additional costs to going green?

Definitely. But we were able to increase our margins so we were at the same price level as our competitors, and we sold to a wider group of people and increased the demand. We wound up getting a higher proportion of our product specified by designers and architects than we had before.

How long does it take to turn a profit?

About three years from when you decide to do something. Economically, we’ve substantially increased our margins by 20% and sales by 30% over three years. But we didn’t go above a market price. It’s not about charging a premium for being green.

What benefits have you seen from the sustainable strategy?

It empowers our employees to spruik what we are doing, because they know it’s third-party certified. We’re now tapping into a lot of designers. We sell overseas, which we didn’t do previously. That is the future for expansion.

Should governments do more?

Governments should be involved in ecolabelling and not standing back, saying private enterprise leads things. The government should also be specifying carbon-neutral products. And its superannuation schemes should be driving companies to think long term, not short term.

How did your supply chain react?

Some were interested in change, others thought we were mad. Over time it has become a bigger issue. You now see some big American labels trying to ensure their supply chain doesn’t employ child labour. Today suppliers are more interested, and that’s why the price differential has gone down.

What changes did you make to the supply chain?

Textiles historically have been bad for the environment because of effluent – mainly from scouring, dyeing and finishing. We changed our wool source to one that was basically chemical-free and the scouring detergents were biodegradable, so the effluent from this process no longer damages waterways. Another result is that solid waste from scouring can be used as fertiliser. A host of dyestuffs has also been eliminated.

What sort of packaging do you use?

We recycle plastics and board, mainly post-consumer waste.

What advice would you give to designers in terms of eco-design?

Seek third-party certification. And maintain the integrity of their green decision. A lot of designers specify something, but it gets changed by clients or manufacturers.

What is the ‘Give back 40’ program?

We give employees 40 hours paid leave a year to work within the community.

Are there any inspirational references you recommend?

The documentary Global Dimming explains why you would want to reduce your carbon footprint.

Whilst the CPRS has been “parked’ for the foreseeable future, it is unlikely to be gone for long.

Ross Gittins pointed out in The Age recently that Australia has a commitment to “reduce emissions by 5% of their level in 2000 by 2020.”

But because our total emissions are growing we’re going to need to “reduce them by 22% of the level to which they’d otherwise have grown.”

Paddy Manning (also writing for The Age) takes things even further by telling us the with recent emissions reduction pledges for ‘China, Indonesia, Brazil and South Africa, Australia may yet need to deliver on ‘a much larger’ 15% reduction target.’

Net net, our country has an obligation that can’t and shouldn’t be avoided. It’s prudent and responsible for organisations to get their carbon reduction strategy in place today.

Scout’s Honour

Paul Allen

General Manager – Sustainable Development

Greg Bourne represents the changing face of the green movement – and of business. A former oilman, he’s currently CEO of the WWF where he regularly works with business and government to find solutions with a triple bottom line. Indeed, like the businessman who developed and encouraged the notion of Corporate Social Responsibility, Bourne is part of a generation of business leaders who’ve seen the writing on the wall: resources are finite, alternatives must be found. And design too has an essential role.

What impact can environmental sustainability have on social and economic factors?

From a business perspective, reducing a firm’s footprint not only allows for better environmental outcomes, but also better social outcomes and economic outcomes in terms of its profitability and longevity.

Is it led by consumers pushing business to do this?

One certainly is consumer activism. It also comes from the top of some firms when they realise that in the long run they are going to be out of business unless they find a more sustainable way to go forward. Pressure also comes from government – rules and regulations are changed. The final one to become important is at the large retail end where companies have the ability to ensure bad products are not on shelves. So, within the supply chain, being able to intervene is really key.

Has the rate of adopting a triple bottom line (TBL) been fast enough, and what would it take to accelerate change?

‘As you raise the bar, the game is high jump, it’s not limbo’. It accelerates because the top quartile of companies are already there. And given that everyone wants to be in the top quartile, not the fourth, then it accelerates because momentum is created. As long as society wants environmental and social performance improved by firms, the bar raises. The moment the general public takes their eye off the bar, there are other firms happily eroding the standards and bringing them down. So it’s a dynamic process.

What’s the role of WWF in lobbying business to consider environmental sustainability?

We see our role as working on how you find a solution. Working with business and with government is the area we find most fruitful with regard to the footprint of a particular firm or sector.

Can you give an example where WWF was particularly successful?

The Forest Stewardship Council is an organisation ‘birthed’, as it were, by WWF primarily a bit over a decade ago. We wanted to ensure that the forest being used had passed very stringent social, environmental and economic criteria. It is effectively an embodiment of the triple bottom line.

What’s the role of government?

Were all governments required to print only on FSC® papers with non-toxic inks it would send a really powerful signal throughout the whole of business, and then things would change. Awareness plus action is the real key.

Is it too easy to say it’s up to clients to lead this?

It does come from the client, but it also comes from the design end, no doubt about it. I’m absolutely sure the top quality firms who are commissioning lots of work will be buying from the leaders in the design industry and raising the bar.

What are three easy first steps for the design community?

Being aware of the environmental and social impacts of your design processes is the first thing. And then saying, ‘How would I push this? How would I make this more environmentally friendly, more socially friendly?’ And then unashamedly, ‘Can I make a margin out of it? Can I bring that attribute into my product and service and improve my economic bottom line?’.

What are the most pressing environmental issues in Australia today?

Climate change tends to dwarf everything that is changing around us.

How well does Australia rate in terms of environmental sustainability issues?

In terms of the consumption of land, energy we use, and food fibre and produce we use to support our lifestyle we have the fifth highest footprint on the planet – and high is not good.

What’s an essential information resource on environmental sustainability?

The United Nations Millennium Goals site:

www.un.org/millenniumgoals

Global Reporting Initiative:

http://www.global reporting.org

Living Planet Report 2008:

http://www.panda.org/about_our_earth/all_publications/living_planet_report

Joost Bakker is an artist who provokes questions about the way we (re)use the materials in our lives. Challenging notions of what sustainability can involve with beautiful, surprising and deceptively simple designs, his initial floral work for Melbourne restaurants and bars has led to everything from public installations to large housing solutions. After creating his Greenhouse restaurant in Melbourne’s Federation Square using completely recycled and sustainable materials (with a functioning roof garden), Bakker successfully replicated it in Perth to much excitement.

Bakker’s family migrated to Australia from Holland when he was nine years old, and has a long history of farming flowers. With his inventive eye for what others might term rubbish and a deep connection to the spaces in which we like to gather, Bakker is a natural fit for our social sustainability spotlight.

www.joost.com.au

www.greenhouseperth.com

Has your work always had a sustainable bent?

I’ve always found life in what other people see as waste. Once you’re interested, you start to get an understanding of how complex something like recycling actually is. Take the sticker on an apple. Making compost, I keep coming across these little stickers and thinking, ‘why couldn’t we use something that breaks down organically, instead of plastic?’ And I’ve always wondered why you’d buy flowers in Queensland and send them to Melbourne. It’s never made sense to me.

How did you go from working with flowers in small social spaces like restaurants and bars, to bigger work with other materials?

You do flowers in a restaurant and become friends with the people who own it, then they might ask for help with something else.

Is there an educational element to your work? 

I’m not into hammering things down people’s throats. I just do it, and if people like what I do, great – but it’s up to them to make change. And it is up to people, not government. People have to demand change. So I figure I won’t ram it down people’s throats, which means they might not pick up on some little details in my work. But I also like the idea that people who’ve been coming to Greenhouse for four months will suddenly notice something different.

Tell us about the Greenhouse in Perth.

It’s right in the heart of the city and will stay there for 10 years. We make everything there; yoghurt, fetta, jam; we’re milling our own wheat from a farm outside of Perth and making our own bread and pasta. It’s much busier than Melbourne and way beyond what we expected.

How do you feel about the response?

I’m shocked. As an artist I’m always doubtful people will appreciate an idea I have, but Perth must be ready for it. Somebody bought a piece at an exhibition back in 2002, and said, “I don’t like it, but I know I will. I know your stuff grows on me.” If you instantly love something, you can only grow to dislike it. If it slowly grows on you, I think you’ll have a better  appreciation of it.

Would you like to do more than simply make things?

I get asked to sit on panels and so on, but I’d rather keep doing stuff. I think that’s my role.

What are some of the problems thatcome up when businesses don’t take social sustainability into account?

A good example is the lack of focus on local communities. My daughter’s school is currently having an extension built. I pushed for them to use local builders, but they had to use governmentapproved contractors who ended up coming from the other side of the city.

If you had builders who live nearby working on this project, not only would you be reducing pollution and transport, they would take a lot more pride in theirwork than someone who’s more interested in finishing up in time to miss peak hour traffic.

Do you see business benefits from socially sustainable ideas?

Look at Greenhouse. If you run a business that sells food in Perth and you’re quiet, and you look across the road at a place that’s milling their own grain, growing their own vegetables, using cuts of meat that nobody normally wants and they’re busy, then you’d want to investigate.

You’d be forgiven for thinking that asking for a definition of sustainability is no longer safe. Like ‘digital’ – that other term most of us have trouble describing – sustainability is such a big part of our lives it’s assumed we understand it innately. But unlike digital, with its numbers lining up to provide concrete meaning, sustainability is open to interpretation, used to describe a company’s duty to shareholders as often as it is a responsibility to the environment. They’re both valid.

The most widely accepted definition states ‘development that meets the needs of the present without compromising the needs of the future’. Or, ‘the art of making sure the actions you make today can be repeated over and over again’. 1

Sustainability is not only about the environment or profits, resources, people, or community. The key to adapting and benefiting from sustainability is the integrated management of all these elements.

Matt Perry, a partner in Sydney-based sustainability agency Republic of Everyone, says “Business is people oriented, so we have a responsibility to people and the place they live, the planet.”

Behind this simple statement is a range of options and challenges that are both exciting and overwhelming.

Begin to accept the responsibilities of sustainable business by first looking at your organisation from an environmental perspective. How can you use resources more efficiently, and where can you reduce waste? There are dozens of tools available to help measure your footprint, and once you understand the various impacts your business has on the environment, decreasing costs and increasing efficiency becomes easy.

But you need to buy in.”In order to genuinely make a difference, you need your people on side,” Perry says.”That goes for senior guys giving you the mandate to make it a key pillar of business, right through to the foot soldiers who’ll ultimately make it happen.

From compulsory energy ratings on electrical appliances to carbon neutral beers, shareholders, consumers and employees are seeking improved environmental and social performance from businesses in every sphere. Last May, in the depths of the global financial crisis, Nielsen polling showed that while economic growth had become the most important social issue (for 55% of Australians polled), 51% of respondents put the environment as their first or second priority.2

“The consumer expects the brands to play their role. Increasingly, everyday people will expect them to have done due diligence. They may not understand it and analyse it, but they will expect it. Brands that take responsibility will win. In the end, they’ll be the most trusted,” Perry explains.

What starts with changing the lighting in your office can lead to significant savings and increased margins. Aiming for zero waste to landfill leads to a reduction in your environmental impact, and an added layer to your company’s story.

So don’t sit quietly at the back of the class hoping to pick it up as you go along. No one will lose points for asking for advice on getting involved.
1. Source: Peacock, Ben. “WTF Is Sustainability?” Republic of Everyone. 2008.
www.republicofeveryone.com/republications/wtfisustainability.pdf
2. Source: “Survey 1.” Nielsen Panorama, Australia. 2009.