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From Carbon20 to Betterbusiness: Reckitt Benckiser makes sustainability corner stone of its growth agenda
Reckitt Benckiser launched a new sustainability strategy in 2012 upon early achievement of its successful Carbon20 programme. The new betterbusiness strategy is based on an analysis of key global trends of decreasing resources and was developed to integrate it with a new business vision and purpose.
Reckitt Benckiser (RB) has a lengthy and substantial record of action on sustainability dating back to the 1990s. In 2007, RB announced its target of reducing its carbon emissions by 20% from 2007 levels by 2020 . In 2012, they reached this target – 8 years before schedule. They have also reduced water use by 16% per unit of production since 2000. Carbon20 achieved a 21% improvement in greenhouse gas emissions based on the full RB product lifecycle, from raw material sourcing to disposal.
In late 2011 RB decided to reevaluate its business paradigm. The timing was appropriate as it also coincided with arrival of a new chief executive and the development of a new business strategy. Speaking about the new “betterbusiness strategy”, Dave Challis, Global Sustainability Director at Reckitt Benckiser says, “In 2012 we announced a new company vision, purpose and business strategy. We also reported that we had achieved our 2020 carbon reduction goals, a massive eight years ahead of time. So we considered our new purpose and assessed the global megatrends affecting the world - including increasing water scarcity, pressure on natural resources and the growth of emerging markets. We thought about where we could make a real difference. And then we set ourselves a set of new 2020 goals: to reduce our water impact by a third, to reduce our carbon footprint by a further third - and to generate a third of our net revenue from more sustainable products.”
For a company whose majority of products, including Dettol, Air Wick, Lysol and the whole range of house hold products,are mostly dependent on water as the chief ingredient, the threat of this depleting natural resource is felt at its core. To check the trend of unrestrained usage of water, RB recently came up with a new water footprint management system. This system builds upon their established total carbon footprint measurement system. “It measures our total RB company carbon footprint, both in absolute terms as well as per dose of product (which is how we measure our success). Many of the elements of the water impact measurement system are the same and we continue to consider the whole life of our products - from raw materials through manufacturing and the consumer use of our products. It was important for us to consider not only the total amount of water used in each of these stages, but to take into account the scarcity of that water. So we use water scarcity factors to add this dimension. So, the measurement system can provide us with both the total water use as well as what we call the total water impact. This will help us focus our efforts in areas where water isalready scarce - or may become scarce in the near future,” Challis adds.
The new strategy other than aiming to reduce carbon emissions and water usage by a third each, also seeks to build one-third of revenue from ‘more sustainable products’ themselves. Challis says, “Responsible business also inspires new product development, it helps us to identify and manage risks, it helps identify cost savings and it gives our employees something to work together on regardless of where they work or what kind of role they have. The potential business benefit from sustainability is one of the reasons why we set our ambitious new goal for 1/3 of our net revenue to come from more sustainable products by 2020 - we've a long way to go but we're already seeing some great ideas from around the world on how we can innovate and introduce game-changing new products in the future.” To that effect, RB has recently come out with a Lysol Power & Free bathroom cleaner, which use hydrogen peroxide. Hydrogen peroxide is environmentally friendly, since it is natural occurring and breaks down into water and oxygen. It also has only one-third the carbon footprint of the previous active ingredient. RB has also devised a Sustainable Innovation Calculator to assess ingredients, packaging and water, in addition to carbon, at the product level.
It is the seemingly simple things which turn out to have the maximum impact. Just by redesigning packaging for Harpic in India, RB is saving 162 tonnes of plastic a year, in addition to saving associated emissions from transporting lower weight. Another packaging redesign from a tub to a pouch for a Vanish launch in Thailand is saving 23,000 tonnes of carbon.
It does look like RB has identified the interface between being a responsible business and not compromising on sales and is using it to its optimum advantage. Even its iconic Dettol program has managed to decouple the idea that a socially responsible business cannot be profitable. RB accelerated the sales of Dettol under a sanitation program through surveys, outreach and camps. They targeted women with new babies, undertook a school hand-wash program and a hospital program, giving out free samples of Dettol for first time users. In India, now, sanitary products are almost synonymous with Dettol – and it also claims that consumers use about 15% less water with their new Dettol Touch Foam hand wash than with conventional hand wash. Challis says, “Integrating sustainability into our business processes has a huge number of potential benefits for us, our consumers and stakeholders - in addition to the environmental and societal benefits.”
Talking about how their sustainability focus is perceived by shareholders, Challis says, “Our shareholders expect us to manage our risks and to identify opportunities connected to the sustainability topic and this has been a focus for RB for many years. We've been recognized in various ethical investor indices - we are a part of the FST4Good index, were rated as a carbon performance leader in the most recent Carbon Disclosure Project (CDP) ratings with a score of 93% and A rating, and just a few days back received a Sector Mover Sustainability Award by RoecoSAM in the 10th Sustainability Yearbook which was launched at the World Economic Forum (WEF).”
Reckitt Benckiser does seem to have achieved a commendable amount in a short period of time. Since their sustainability agenda is so intertwined with their business strategy, it is probably only a matter of time before they achieve their ‘betterbusiness’ targets.
The author Anindita Chakraborty is part of the Sustainability Outlook Team
SUCESSO BRINDES PROMOCIONAIS