Sustainability: More than an Environmental Concern?

By Larry Jackson | 03 Aug 2015

As Australian consumers become increasingly concerned about the environment, now is the time for retailers to be on the front foot and ensure sustainability in the supply chain process.

Sustainability attributes are becoming an increasingly important consideration in Australians’ purchasing decisions. In a global report conducted by Nielsen on corporate social responsibility, it found 55 percent of respondents are willing to pay extra for earth friendly products.

However, sustainability isn’t just about how your products are made and where they come from. How they are delivered is equally important. One aspect of importance is assuring that the paper products and packaging used to deliver the products you stock are sustainable.

The greater emphasis put on the role of sustainability in paper products – be it reused, recycled, certified, or deforestation-free materials – marks a fundamental and critical marketplace shift. Whereas many manufacturers had focused on delivering convenient and attractive products, paper and packaging development must now also take greater account of environmental concerns, as consumers show increased awareness of sustainability issues.

Recent research from North America, released earlier this year by our affiliate Asia Pulp and Paper (APP) revealed the call for more sustainably sourced products continues to gain momentum. Sixty-two percent of Baby Boomers, those born between 1946 and 1964, and 68 percent of GenXers, those born between 1965 and 1980, agreed that sustainability attributes are an important consideration in their purchasing decisions. This figure rises to 83 percent for millennials, those born between 1981 and 1995. Similarly, 52 percent of millennials are willing to pay extra for more earth-friendly paper products, compared to only 38 percent of GenXers and 36 percent of Baby Boomers.

Although the survey was carried out in North America, the findings provide valuable insight into one of the most developed paper and packaging markets in the world, as well as support the argument that consumers are willing to pay more for sustainable products.

Environmental considerations, therefore, are likely to become a critical business driver as the millennials’ cohort becomes more economically influential.

The increasing demand for sustainably sourced paper and packaging will have significant implications for retailers, who will need to ensure the brands they stock are responsible in the way they source their packaging.

How can retailers achieve this? Preferably, you would talk to each of your suppliers. You’d ask them where they get their products, trace them back to the original source and make sure each link in the chain is sustainable. This due diligence process can be difficult, costly and time consuming for retailers to implement, however suppliers have a responsibility to provide this information especially if the paper and packaging products are being imported.

Australia has followed in the footsteps of the US and the EU by putting in place a law (Illegal logging Prohibition Act 2012) prohibiting the import or sale of illegally sourced forest products, including paper and packaging. Importers are now required to carry out reasonable due diligence to ensure their imports do not originate from illegally logged timber. The laws under the act will affect products that Aussies use on a day-to-day basis so knowing the origin is hugely important.

One way to confirm the paper and packaging from the brands you stock is sustainable, is to check the product is certified by globally recognised forestry schemes, such as The Programme for the Endorsement of Forestry Certification (PEFC). Certifications, like PEFC, have been set up to ensure products are made sustainably at all levels of the supply chain.

An increasing number of brands have also adopted transparent policies opening themselves up to a greater level of consumer scrutiny. Transparency is used to reassure customers about a company’s commitment to the environment and show there are no skeletons hiding in the closet.

Earlier this year, as part of APP’s commitment to transparency and openness, the Rainforest Alliance published an independent report on its progress in implementing their Forest Conservation Policy. This was the first time it had been evaluated in this way. Although it is not always easy for an organisation to open up to scrutiny, APP believes that a third party review of its supply chain was an important step in communicating to customers about its environmental commitments.

Changing consumer tastes and more active regulatory bodies, coupled with a growing global population, which puts greater pressure on resources, will drive a new sustainability agenda for the paper and packaging industry. With Australian consumers becoming more environmentally conscious, retailers may want to track the sustainability of their packaging paper products now, before they do, if they want to remain competitive in the future.

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