Go green or go broke… your choice !

Excerpted from Brandweek, “Go Green Or Else!” By Elaine Wong, Dec 2, 2008

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Environmental legislation and climate changes could eat up as much as 47% of packaged goods companies’ profits by 2018 if they don’t adopt long-term sustainability measures  …

A report, Rattling Supply Chains … addresses long-term profitability of the packaged goods industry. The findings are based on “future analysis” of how much certain commodities will go up, including oil, cereal, soy and palm oil, and how they will fare under certain environmental, governmental policy and climate situations. The term used to describe these hypothetical scenarios is “ecoflation.”

Companies that can reduce their reliance on materials like plastic or paper, through sustainability initiatives, can cut costs when economic pressures cause price increases…Companies can expect a reduction of anywhere from 13 to 31 percent in earnings by 2013… if adequate sustainability measures are not taken….

Companies like P&G and Nestle have already implemented sustainability strategies. Nestle is placing more emphasis on sourcing materials locally to cut down on transportation. Meanwhile, P&G is cross-leveraging research and design teams across different brand categories…

These are just a few examples of the extent to which many companies have considered going green. Oftentimes, retooling a supply chain to be more sustainable involves “rethinking the product itself … It has as much to do with improving business practices as it does with improving environmental practices. In fact, the two go hand-in-hand.”

Edit by SAC

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Investing in sustainability reduces costs, but it can also have the added benefit of encouraging consumers to buy your product.  According to a recent IRI report, 50% of consumers consider sustainability efforts when purchasing consumer product goods.  Indicating that neither the product, nor the people (consumer) can be separated from the sustainability process.

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