Sustainability risks, opportunities

MISSISSAUGA, ONT: Green business is becoming the new normal, but according to one company that got a head start, it can be lonely at the top.

When Frito-Lay, a division of PepsiCo Foods Ltd., launched the first 100 per cent compostable bag for its SunChips, hundreds of irked consumers used youtube videos and facebook groups to complain the bag was too noisy.

The American division of Frito-Lay pulled the new packaging and went back to the drawing board for a quieter compostable bag.

But Marc Guay, president of Canadian operations, says that wasn’t about to happen here.

“We’ve decided to keep the biodegradable bag and to make some noise with this decision,” Guay said, speaking at the recent Canadian Manufacturers and Exporters’ Sustainable Manufacturing Summit in Mississauga, Ont.

Frito-Lay Canada shot back with its own social media campaign ― a youtube video celebrating the noisy bag.

In the video, Frito-Lay Canada’s sustainability chief says “the trade off is pretty clear; a little more noise for a little less waste.”

He invites viewers to try the chips and tells them, “if you still think it’s too noisy, contact us and we’ll send you a free pair of earplugs.”

It’s not the company’s first environmental initiative to create some social stigma.

Several years ago, Frito-Lay Canada became the only food manufacturer to implement a policy asking stores to return cardboard boxes to its distribution centre for re-use.

Not everyone was pleased about it.

“We had this one retailer who didn’t want to have anything to do with it. They liked the $10 a ton they were getting from the scrap people they were selling the cardboard to,” Guay recalls.

But Guay knew the company had a “very public” sustainable image so in a meeting with its CEO, he called him on it.

“If you’re really committed, you would consider repurposing these FritoLay cartons just like we do with your competitors,” he said.

“That’s where the tide turned and we now do half a million cases a year with this customer.”.

He acknowledges these projects turned off some consumers and clients, but says the benefits have outweighed the risks.

The cardboard box policy has saved three million trees a year, he points out.

“Each cardboard is worth a dollar. We get to use it five or seven times before we have to discard it. Do the math. It’s a lot of money,” he said.

According to other presenters at the summit, companies can expect more risks by not greening their business.

Tighter regulations on industrial air emissions, rising energy and raw material costs, plus increased pressure throughout the supply chain for sustainable practices are just some of the drivers for manufacturers to adopt environmental practices.

“We’re seeing more integrated reporting, lifecycle analysis and, with that, supply chain pressure, especially with B2B companies,” says Katie Dunphy, manager of global sustainability services at the consulting firm, KPMG.

Matt Loose, director of the Ottawa-based sustainability consulting company Stratos, agrees.

He says it’s becoming increasingly common for companies to have to fill out sustainability surveys for clients, pointing to Walmart and IBM as just some examples.

Loose expects this will eventually become the norm for all manufacturers.

“I guarantee you it’s coming,” he says, adding some businesses are already documenting the lifecycle of their merchandise for customers as well as retailers.

Sports equipment and clothing manufacturer Timberland created a carbon equivalent of a nutrition label for its products.

For businesses that are interested in carbon counting and reporting, but aren’t sure how to start, Loose offers several tips such as:

• Look at what peer companies of similar size in your sector have done;
• Consult the Global Reporting Initiative’s website, which provides an overall framework for sustainability reporting;
• Determine what makes sense to measure for your business. Small and medium sized companies won’t need as many indicators as larger enterprises;
• Be public about the launch of the report.

As sustainability becomes more widespread, resources are improving to help companies along the way.

The Automotive Parts Manufacturers’ Association and Natural Resources Canada are managing a project that sends university co-op students through manufacturing facilities in Southern Ontario.

Students take an energy inventory of each plant and make recommendations of where to make improvements, adding the information to a database.

The long-term plan is to morph the database into the upcoming ISO 50001 standard so any manufacturer that uses the software properly will automatically adhere to the standard.

Another project in Ontario is helping manufacturers meet the requirements of the province’s new Toxics Reduction Act, 2009.

The CME and the Ontario Center for Environmental Technology Advancement (OCETA) are providing workshops to regulated facilities to help them identify opportunities to reduce not only toxic emissions but also solid waste and water and energy use.

They’re developing a website that will resemble QuickBooks for taxes, only for toxics accounting. The site will lead companies step by step to meet the legislation’s reporting requirements.

Down the road, they plan to use the site to communicate success stories. It’s expected to launch in the new year.