Sustainability Perfectly Compatible with Growth Gary McGann, Smurfit Kappa Group
It is a strategy that makes good business sense too, he says. “We’ve always caveated our approach to sustainability and the environment on the grounds that it also has to make commercial sense,” he says. “In fact it has major commercial value and benefit to us as a company, in parallel with the positives for the environment.”
“Commercially it obviously suits us to be more progressive than our competitors. The big international brand companies, they’re way down the line in terms of commitments, demands, desires and progress on this subject. Unless people can actually serve them to the standards they are seeking and requiring, then they won’t be able to be suppliers.”
Smurfit Kappa Group is one of the world’s largest manufacturers of paper- based packaging products, employing 38,000 people in 31 countries. According to CEO Gary McGann, sustainability is an integral part of its business strategy, and perfectly compatible with profitable growth.
Smurfit Kappa Group has placed sustainability at the heart of its business strategy for many years. “In the business we’re in – we own forests in Latin America, and we are very significant interactors with forestry in Europe – we’ve always been mindful of the need to renew and replace trees that are cut basically for paper purposes,” says CEO Gary McGann.
From that starting point, the group has today moved into the areas of recycling, optimal use of natural resources and avoidance of land fill, and of course lowering carbon emissions. The company recently issued its fourth annual sustainability report, a useful discipline, he says. “It creates a greater discipline internally. If you publish you have to be satisfied that what you’re saying is valid. It has also created a greater discipline in how we challenge and measure ourselves, so that we’re always calibrating and quantifying and setting targets.”
“Everybody is looking for testimony and evidence of progress on sustainability. We’ve said we will take the totality of our business and ensure that we can, through our products, allow customers to communicate to their customers that what they are acquiring is the most sustainably progressive.”
“We in turn are working with our suppliers. In the case of forestry we’re ensuring that in five or 10 years all of our product raw materials will be Chain of Custody certified, and we will
be able to confirm the levels of CO2 emissions, the level of water discharge, and the water cleanliness.”
Indeed, while the group has made significant progress in terms of carbon emissions, cutting them (on a volume adjusted basis) 4% year-on-year in 2010, and targeting 20% reduction by 2020 from a 2005 base, water has become a key focus. “The world is going to run short of water, so for industries like ours that are major water users, this has become a critical issue. Through extensive investment, we have improved our chemical oxygen demand (COD) – the measure of cleanliness of water – by 25% since 2005, and we’ve committed to another 10% in the next 5 - 10 years.
The group recently won key customer recognition awards for sustainability from Coca-Cola and Unilever. “We win awards with customers on a number of different fronts, but these are particularly attractive in that they reassure and motivate our people about the validity and the genuine importance of sustainability in the demands we’re putting on them. You have to keep replenishing the motivation and intent of your people, and in a real commercial company there is nothing more fundamental than customer recognition to catch everybody’s attention.
McGann believes reporting initiatives like the Carbon Disclosure Project are crucial in order to inject the necessary degree of objectivity and transparency. “Unless people are setting targets, being reviewed on those targets and having those targets validated and reported on transparently, this becomes a devalued and debased process which will ultimately fail,” he stresses. “The more we have CDP, and people like them, reinforcing the demands, pushing the boundaries, cajoling and nuancing and incentivising people through recognition – and through sanctions if necessary – the better it is.”
McGann also believes that larger organisations must play a role in helping small businesses meet the sustainability challenge, if they are not to become excluded. “In this current climate, it’s difficult for a company or a sole trader to invest in something unless they know there’s a genuine and timely payback. It’s important that there’s recognition in the broader business society that we must work with smaller suppliers and try to give them not just demands, but help in terms of getting them accredited.”
29
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40