The Footprint Chronicles

I believe this is the first company that can potentially track the life of its product from raw material to delivery, this is definitely a success because it allows Patagonia to confidently state their level/s of sustainability. 

The greatest challenge for most companies is the raw material stage, I believe enough noise has been made about 'child labour, bad working conditions especially in factories, employee compensation to the point that most companies that are focused on sustainability have managed to 'some what' manage these challenges. 

The responsible sourcing of raw materials is still very much something that companies are struggling with, if you look at the current case of Apple inc where the gold used in their electronics is sourced from DR Congo and the conditions are appalling and this has caused a media frenzy.

Patagonia has definitely created value for the environment, customers and society.

My real-life example: Proctor & Gamble Taicang Plant

Speaking of sustainability, I'd like to introduce you the place I have worked: Proctor & Gamble Taicang Plant in China.
It is built in 2012 and looks like this from the outside, a modern plant with a big beautiful garden.

What is special about it? It is one of the most environmentally friendly plants in P&G:
1.100% wind power usage for production
2. reduced water usage by rain water collection system and waste water recycling
3. 0 manufacturing waste landfill
4. Administrative building obtains LEED Gold Certificate for green building, which is the first in P&G history

As a former insider of the plant project, I believe in P&G supply chain's efforts to be sustainable in the way it produces its products, but as I recall, the project encountered a lot of difficulties:

1. Cost: In order to realize all these green efforts, there was around 20% incremental capital investment, and around 10% incremental on-going production cost because of extra depreciation and wind power premium. Although the project was initially supported by Product Supply function during the funding and construction phase, after the factory was up and running, it was very heavily challenged by Finance function for its higher production cost.  - As the financial analyst at the time, I really had a difficult time to survive.

2. Product marketing: it was very difficult to market the Taicang-produced products by the concept of sustainability at the time. Chinese consumers were not ready - they are indifferent to the wind-power and environment concept, but very sensitive to price promotions. Therefore, the company bears more cost but cannot see return from incremental sales.


So, what do you think? Should companies expect returns from their green efforts, or should they do it purely for the environment's sake (which is unlikely....)?


To see more on Taicang plant, here is a link that introduces its environmentally friendly efforts:

http://www.mcdonoughpartners.com/projects/pg-taicang-100-wind-powered-beauty-plant/

Is Hong Kong A Sustainable Location For Entrepreneurs And Startups?

Hong Kong is well known as financial center and it is  board with the country which is the largest collection of manufacturing talent in the world. A lot of articles talk about entrepreneurship and business in Hong Kong. The following article"Is Hong Kong A Sustainable Location For Entrepreneurs And Startups? " brought my attention to look at startup businesses in Hong Kong.

It is mentioned in the article that for the last years, many startups enter Hong Kong with aim to create business; however not all of them stay there for a long time as the market is very competitive and only big companies are able to play. The prices for living and as well for startup businesses is very high. New startup businesses are not able to sustain their business and move to other countries with their information/business as it is much easier to sustain the business in other places compare to Hong Kong.

This issue was noticed by a lot business people and therefore a new system will be created to support startup businesses. This system called Hong Kong Startup Ecosystem.

The cost of the ecosystem is approximately US$2.8 to US$3.5 billion which is  lower than in Vancouver and Singapore (system is 4 time bigger than Hong Kong). Based on the analysis the following reasons attracted to create the ecosystem:
1. As an administrative of China, Hong Kong has its own government and legal system.
2. Startups businesses are rising dramatically.

The analysis shows pros and cons of the system. Also it shows which steps should the government and its business take with aim to keep the system sustainable. Following link for the ecosystem: https://www.techinasia.com/hong-kong-startup-ecosystem-report-2016

However, from one point to make the system work for a long time, the government should decrease prices for startups,shorter the process also make them aware about the sustainability of their businesses which will be useful both for Hong Kong and for the companies. From another point of view, the question will be: will all businesses follow sustainability steps and feel responsible for their businesses? For that the country should have a very strong with aim to keep the environment sustainable and have various types of business.

TOMS Shoes: Somebody should've done The Value Plan...

Back in 2011, I met the CEO of TOMS Shoes, Blake Mycoskie, at a school event. I recall thinking what a great social enterprise TOMS Shoes was, completely sold on their story and advertising campaign of "One for One" (buy one shoe, give one to a child in need). This campaign was the fuel to their big initial success, grabbing the hearts and minds of young people, like myself, who wanted to be part of something bigger than themselves. 

Here's a video about "One for One":

Fast forward a few years later, I realized that "One for One" was nothing more than a well-intentioned, yet misled sustainable marketing campaign. TOMS Shoes soon became under public scrutiny, when further research revealed that their donation of shoes to developing countries was in actuality causing local shoe makers to lose business (see below).

With a growing number of people realizing TOMS shortcomings in producing true social value, TOMS reacted to this through their "Beyond One for One" campaign. This included a breakdown of the number of jobs and amount of social value they produce to offset the externality of their "One for One" campaign.

(http://www.toms.com/beyond-one-for-one)

Although TOMS can be commended for their attempt to respond to the public scrutiny, it is still up for debate about whether or not they are producing more harm than good. It may also have been a little too late to change the negative views of their "One for One" campaign as seen by the many negative comments on the first YouTube video I presented.

As sustainable and responsible marketers, it is important for us to think critically and deeply as to what possible externalities businesses may unintentionally cause. The social value proposition must consider the effects on all direct and indirect stakeholders within the value system. Perhaps if TOMS Shoes properly performed "The Value Plan," they wouldn't have had to suffer the consequences from their current predicament. >__o ha..ha....

Pokémon don’t Go

Last class we touched the Marketing Idea of Pokémon Go. We discussed how responsible it is or should it be. This game is very popular all over the world. All of us heard that there were several car accidents including mortal one. 

But I will tell you another story how Pokemon GO playing could influence your life.

September 3rd 2016 the District Court of Yekaterinburg arrested Ruslan Sokolovsky, and put him to jail for two months. Ruslan is a 22-years old video-blogger who played Pokémon inside the church. Blogger accused of insulting the feelings of believers and inciting hatred. The grounds were published it on YouTube videos, one of which the young man was playing Pokemon Go in the famous the Temple-on-blood, while others critical of the Russian Orthodox Church. Here is the link for the news, It is in Russian but I already translated most part. http://www.bbc.com/russian/news-37265688

Of course we can discuss if the reaction is good enough, maybe it is too strict. But that is also the question to developers. Should be any restrictions for playing conditions and places to play.

Do the producers should concern about their customers more?  

Fashion companies - Greenwashing?

From Rana Plaza Collapse in 2013 in Bangladesh
To a recent cotton farmer project by CottonConnect funded by Primark
To the World Recycle Week of H&H.
These two fashion retailers were involved into the collapse. (Bangladesh fashion factory safety work severely behind schedule)
Much concern about greenwashing in fashion industry.

 

Many companies in fashion industry are getting profits from selling cheap fashion in developed markets by outsourcing in developing countries where they can easily go through the loose laws in labor practices and environment. The collapse of Rana Plaza happened in 2013 is a typical example to see that such exploitation has been going on. (Rana Plaza articles) 1,135 factory workers died in the Rana Plaza collapse. H&H and Primark are involved in the incident where they failed to keep track on their supply chain. Their factories or suppliers had not installed basic fire-safety measures before Rana Plaza and even two years after the incident. “13% of those suppliers have failed to take the basic step of removing locks from doors which could impede workers escaping a fire.” According to theguardian (Bangladesh fashion factory safety work severely behind schedule), the renovation of the site is still in very slow pace.

Meanwhile, these fashion companies have implemented some side project, event such World Recycle Week of H&H and Cotton Farmer Project by CottonConnect financially funded by Primark. According to theguardian (Am I a fool to expect more than corporate greenwashing?) (Primark tackles fast fashion critics with cotton farmer project in India), such event looks like a kind of greenwashing.

In case of Primark,  “The company argues that buying Fairtrade cotton or paying farmers more is not a suitable strategy for them – although a statement on its website refers to a plan to sell Fairtrade in the future “depending on market demand”.”

In case of H&H, “it would take 12 years for H&M to use up 1,000 tons of fashion waste.” and “if 1,000 tons is recycled, that roughly equates to the same amount of clothes a brand of this size pumps out into the world in 48 hours. Then there are the voucher schemes, which often fuel more purchasing.” Besides, “H&M’s Recycle Week clashes exactly with the grassroots Fashion Revolution campaign.” “Last April’s Fashion Revolution got huge traction on social media (124 million impressions of the hashtag alone).” “H&M will now use the same idea for World Recycle Week.”

The question is whether they have started looking at their supply chain seriously or they are just finding out ways to build their “reputation” to hide real problems behind?!

Reference:

Am I a fool to expect more than corporate greenwashing? <ttps://www.theguardian.com/commentisfree/2016/apr/03/rana-plaza-campaign-handm-recycling>

Bangladesh fashion factory safety work severely behind schedule
<https://www.theguardian.com/world/2016/jan/28/bangladesh-factory-safety-scheme-stalls>

Primark tackles fast fashion critics with cotton farmer project in India <https://www.theguardian.com/sustainable-business/2016/sep/30/primark-tackles-fast-fashion-critics-cotton-farmer-project-india-gujarat-cottonconnect>

Rana Plaza <https://www.theguardian.com/world/rana-plaza>

Hello and Welcome to the 2016 Sustainable and Responsible Marketing class blog! Here you'll share your ideas, news stories, and feedback regarding the impact of Marketing on Sustainable and Responsible Business Practices. I'm looking forward to working with you this term!