December 15, 2020

A Primer on Corporate Sustainability for 2021

Both the role and prominence of sustainability in corporate decision-making will continue to increase in 2021.

This momentum will be driven by the incoming Biden administration, which has already made clear its intentions to address climate and environmental issues with both “carrot” and “stick” policies. These policies are likely to strengthen existing corporate sustainability reporting practices and impact everything from the way goods are manufactured to the creation of new incentives in the investment world.

Consumers will continue to drive this shift towards sustainability as well. BCE has seen increasing evidence in its own tracking research and client engagements across sectors that specific consumer segments are seeking out products with credible and meaningful stories to tell around sustainability. This progress is still uneven, and certain consumer sectors have far outpaced others, but younger consumers are driving this change and portend a much broader coalition of sustainable-minded shoppers that will remake the product landscape in the future.

So what does “sustainability” mean today, and how should companies be thinking about the role of sustainability in their business going forward? BCE has developed a primer that describes three core elements of sustainability today – Process, Provenance, and Lifecycle:

PROCESS – is the manufacturing process itself becoming more sustainable?

1. Example: The conventional process for dying denim (e.g. making blue jeans blue) is incredibly detrimental to the environment in two distinct ways

  • The dye by-product is often running directly into the waterways of local manufacturing sites polluting local water sources
  • The process requires an incredible amount of water

2. Implication: Finding ways to reduce the intensity of the resources being used and/or the harmful environmental impacts of the process itself is one of the more common ways of addressing sustainability today

  • In the example of “making blue jeans blue,” standards bodies like Bluesign® exist to help make this manufacturing process more sustainable and then provide 3rd party verification for consumers

PROVENANCE – are you changing the source or composition of the materials being used to become more sustainable?

1. ExampleComposition: Manufacturing products from virgin materials versus post-consumer recycled materials

  • Developing new plastic to create new fleece versus manufacturing fleece from post-consumer plastic (recycled plastic bottles)

2. ExampleSource: Manufacturing garments from wool instead of fleece

  • This avoids the use of plastics altogether
  • Wool biodegrades in considerably less time than most conventional fleece available in the market today

3. Implication: Addressing “provenance” may have a greater impact on the sustainability of the product versus addressing “process,” but it is likely to be more complex and potentially more expensive

  • It requires a wholesale change in sourcing strategies, if not the creation of new supply chains that don’t yet exist
  • It can have negative implications on quality/performance of the product, particularly when trying to comp products that already exist/have a customer expectation associated with them in the market

LIFECYCLE – are you creating products with the cradle-to-grave in mind?

1. Example: What is the cradle to grave implication of the product? How much energy or resource is required to make it, and how readily can it go back to its underlying component-parts and be used again or fully biodegrade?

2. Implication: This is among the more advanced ways of thinking about sustainability, and is more often seen today in relatively young companies where sustainability is part of their founding story – these are the companies who have built “sustainability” into their P&L and bottom line from the very beginning.

As companies explore what “sustainability” means for their organizations, evaluation of Process, Provenance, and Lifecycle should frame these initial discussions. With a new year on the horizon and cultural momentum building towards a more sustainable future, 2021 is the right time to begin asking these questions.

Related team members

Richard Crumb
Managing Partner & Co-Founder Menlo Park
Walt Shepard
Principal Boston
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