Stakeholder Engagement in Mining Operations

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This post is part of a series on Stakeholder Engagement sponsored by Jurat Software.

Stakeholder Engagement can actually be worth its weight in gold. Prof. Witold Henisz of Wharton Business School has been studying political and social risk management for 15 years, focusing mainly on strategies of avoidance by studying gold mines. Henisz and this colleagues used data from 26 gold mines owned by 19 publicly traded firms between 1993 and 2008. By coding more than 50,000 "stakeholder events" found in media reports they developed an index of the degree of stakeholder cooperation or conflict for these mines.

The term "stakeholders" in this context, says Henisz, includes everyone from local and national politicians and community leaders to priests, war lords, paramilitary groups, NGOs and international bodies like the World Bank. The term "stakeholder event" includes reported actions or expressions of sentiment from these groups that indicate cooperation with the mine owners, as well conflict with them.

The researchers' goal was to figure out what role these stakeholder events played in companies' efforts to maximize profits. As Henisz notes:

"There is a powerful business case to win the hearts and minds of external stakeholders. We found in our research that the value of the relationship with politicians and community members is worth twice as much as the value of the gold that the 26 mines ostensibly control."

Putting a Value on Stakeholder Engagement

But how do you put a value on stakeholder engagement? In order to quantify this, the researchers looked at the firms' listings on the Toronto Stock Exchange, which requires each company to disclose enough data to calculate the net present value of their gold mine(s). The data includes audited information on gold reserves, what it will cost to get the gold out, what a mine's fixed costs are, etc. Based on this information, an estimate of gold value from each mine and market value of the parent company was calculated. Then tracking the actions of media-relevant stakeholders allowed the researchers to study the degree of cooperation and conflict for each mine. Then they came up with a single metric that served as an estimate of these delays and disruptions, improving the fit of the financial market valuation estimation of the 19 publicly traded parent firms.

"By incorporating this metric in a market capitalization analysis that also includes macro-political level constraints on policy change, we reduce the discount placed by financial markets on the net present value of the gold controlled by these 19 firms from 72% down to between 33% and 12%," the authors write in their paper.

This research is important because it finally quantifies what some mining firms have known all along -- that reducing conflict with external stakeholders in favor of winning their cooperation improves the companies' chances that a business plan can proceed on budget and on time, and most importantly, generate sustainable shareholder value.

Wider Implications of the Study

"Our findings are applicable wherever there is a project-based investment that can be delayed or disrupted and where people are worried about water supply, traffic patterns, environmental damage and so forth." Henisz says.

He has  also compiled a list of best practices for businesses that are serious about engaging stakeholders. First, he says, change the mindset of the company so that employees across the board believe that stakeholders are important. Second, get the necessary data to explain who the stakeholders are, what they want and who is connected to whom. Third, find a way to link data to operating performance, integrating the information into risk management systems rather than treating it as a separate category. Fourth, interact with stakeholders in the community in a genuine and fair manner; respond to their concerns and form connections rather than just writing a check. And last, find a way to disseminate information about the ongoing project that is credible and transparent.

Image credit: Unsplash

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Albertsons Shows How to Engage the Unengaged

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This post is part of a series on Stakeholder Engagement sponsored by Jurat Software.

When you consider a business like Whole Foods, the connection between customer engagement and sustainability is obvious, because the company has established a firm identity in conservation and related issues -- and when it forgets, alert customers will remind it. The challenge for a more mainstream supermarket like Albertsons is to bring conservation and recycling topics home to a clientele that may be too caught up in the rush of daily life to press for changes. The reward, though, is to reach a large cross-section of the population that may not otherwise cross paths with a well planned, focused sustainability effort. Albertson's has some ambitious zero waste plans for this fiscal year that promise to make corporate social responsibility part and parcel of one of life's most ordinary routines, the trip to the supermarket.

Albertsons, Zero Waste and Food Banks

Albertsons, which is a division of SUPERVALU, already tested the waters of zero waste with two of its Albertsons stores in Santa Barbara. The new plans include adding another 40 more by the time its fiscal year ends in February 2012. Although to SUPERVALU a zero is not necessarily a zero - the stores only have to achieve 90 percent to qualify for "zero waste" - it's still a good goal. Of particular interest is the company's existing engagement with food bank donations in order to reach that goal. SUPERVALU already has a strong track record in that regard, with about 60 million pounds donated through its Fresh Rescue program last year.

Engaging the Unengaged

One glance at an Albertsons weekly flyer is enough to tell you that the customer base is still shopping in pre-conservation mode, but that provides even more value to the company's CSR efforts. Reaching out to new audiences can be, and should be, a primary goal, and that's where companies selling "non-sustainable" products can have the greatest effect. That goes for services and activities, too, especially those in which sustainability would seem to be the last thing on anyone's mind. One great example is the world of auto racing, where California's Infineon Raceway is bringing sustainability concepts to thousands of racing fans. Another example is the U.S. military. Among many other sustainability programs, the Army's Net Zero Vision for military bases is going to impact hundreds of thousands of military personnel, their families, and their communities.

SUPERVALU and CSR

SUPERVALU may have a long way to go in some areas, but its latest CSR report (caution, big file) indicates a key strength, and that is its community partnerships. Aside from the Fresh Rescue program, the two Albertsons partnered with the City of Santa Barbara in a joint organic waste composting program. The report also underscores the profitability potentials for a well planned waste reduction effort, with a combination of recycling revenues and avoided waste disposal costs.

Image Credit: Roadsidepictures/Flickr

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Fast Food Garbage Makes up 50% of Street (and Pacific Gyre) Litter

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The Great Pacific Garbage Patch, aka the Pacific Gyre is roughly the size of Texas and contains about 3.5 million tons of trash, floating between Hawaii and San Francisco. About 80 percent of marine plastic pollution comes from the land. Clean Water Action (CWA) decided to learn more about the sources of trash that end up in the San Francisco Bay Area so the non-profit organization decided to collect samples of street litter from four Bay Area cities (Oakland, Richmond, San Jose, and South San Francisco) from October 2010 through April 2011. CWA collected trash from a few locations in each city.

CWA found that the biggest source (49 percent) of litter is fast food. The five most significant sources were McDonalds, Burger King, Seven Eleven, Starbucks and Wendy's. Up to 31 percent, according to CWA's findings, of the trash collected could be eliminated by reusable alternatives.

"The quantities of trash and plastic pollution in waterways are increasing dramatically. California regulators have been responding to this problem but the result is that the local government is having to spend millions of dollars in controlling trash. This is a short-term solution that doesn't get at the root cause of the problem," said Miriam Gordon, California director of CWA.

Gordon told Fast Company about one simple solution to help reduce trash: napkin dispensers. Gordon said, "We've spoken to restaurant owners who felt that they were spending too much money on napkins. Napkin dispensers make it hard to grab more napkins than you need, so [they] save money, and there are fewer napkins that can become litter."

"Even just asking customers if they need napkins, straws, and utensils before loading up their take-out bags could make a difference," the Fast Company article stated. "Many of the straws found on the street by Clean Water Action were still in their wrappers."

Starbucks sets an example

Starbucks is cited by the article as an example of a company that is trying to reduce its trash pollution. In the company's Global Responsibility Report 2010 it lists the goal of making 100 percent of its cups reusable or recyclable by 2015. With over 17,000 retail sites worldwide, achieving that goal would mean much less trash ending up in garbage cans or on the streets.

In 2008, Starbucks set the goal of developing recycling solutions for its paper and plastic cups by 2012 in order to meet its 2015 goal. "We’re currently on track to meet this goal," the report stated.

Starbucks hosted cup summits in Seattle in May 2009 and Boston in April 2010 where the company met with government officials, raw material suppliers, cup manufacturers, retail and beverage businesses, recyclers, competitors, conservation groups and academic experts. Early last year, it started a pilot program in seven of its Manhattan stores to test the recyclability of its paper cups with old corrugated cardboard. Starbucks expanded the program to 86 of its New York stores later in the year. This year it plans to launch recycling programs "in a number of our store communities."

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The Importance of Stakeholder Engagement

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This post is part of a series on Stakeholder Engagement sponsored by Jurat Software.

Keeping your stakeholders "engaged" is not the only function of stakeholder engagement within the boundaries of CSR. Indeed, engaging your stakeholder is the basis for  good corporate governance and this is often something that companies either ignore or underestimate. In my practice, often I think of stakeholder engagement as a web of connections between all the various components. It helps to get a definite mind-map of the situation and mark out all the important connections between the various stakeholders both upstream and downstream.

Two Tiers of Stakeholder Engagement

Any company, at any given point has to deal with suppliers, distributors, customers and employees - these are the stakeholders that they engage with on a daily basis and are therefore the first tier and most important (always giving allowances for the type of business). The second tier is the wider community, NGOs, labour organizations, governmental institutions, industry organizations and financial bodies. This distinction is important because it allows for a clearer distinction  of how to strategize stakeholder engagement as well as to draw parallels between the two tiers.

In the age of social media there are many ways to engage with your stakeholders, especially with the first tier. This kind of direct dialogue is important for companies because not only are they doing some very essential PR and marketing but it is also needed to take a direct pulse of a company's performance and also how well their products are received.

Employee engagement is one of the key components of first tier engagement in my opinion. Not only are employees the brand ambassadors, they are also customers which gives them a unique perspective into the business model. Having a strong program of employee engagement is essential and many companies are beginning to realize this. Not only are employees attracted to companies with active engagement, but a good system of employee engagement also means that employees continue to work for the company thereby increasing brand loyalty.

When the Tiers Cross-Over

The next most important consideration for stakeholder engagement is an example of how the two tiers can cross over. Consumers and the larger community constitute not only a first and second tier but also a crossover between the two. Community engagement programs not only speak to the larger community and potential consumers but also existing consumers to reinforce brand loyalty. Of course when you put these two examples together there are many levels of interactions between these stakeholder groups - employees are also consumers but are also members of the community at large. In this manner the web of connection grows, programs have to become more sophisticated in order to get a larger 'throw.'

Six Degrees of Separation

One of the things that gets taken for granted is the rule of 'six degrees of separation' - with the advent of social media I reckon the degrees of separation have been reduced even further. Good news travels, but bad news travels faster - this is never more important than when dealing with stakeholder engagement. Erudite communication therefore is one of the best tools for effective engagement. Drawing a fine line between too much information and too little information is a constant dance that companies have to contend with for a successful program of engagement. Apart from this, communicating is such a way that your stakeholders are talking back and you are not just talking at them.

The key to good social engagement is a series of events where first the initial web is established. Then the two tiers are constructed. The third step is designing the connections between the two tiers and expanding the web. Finally, effective communication of initiatives is the glue that holds together the web of stakeholder engagement.

Image credit: Perry Grone/Unsplash

 

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Interview: Eric Ostern on the Unilever Sustainable Living Plan

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Last week at Sustainable Brands ’11 in Monterey, I had a chance to sit down with Eric Ostern, Unilever’s Senior Manager of Corporate Responsibility and Community Relations to learn about some of the progress Unilever has made since the launch of the Unilever Sustainable Living Plan last fall.

3p: What distinguishes the Unilever Sustainable Living Plan from other sustainability efforts?

EO: The Unilever Sustainable Living Plan is really a comprehensive plan that is integrated into our business model and the plan has three core features. The first is that it runs across our entire portfolio including all of our brands and the 170 countries in which we operate. Second is that the plan covers not just the manufacturing facilities, but it also covers the entire lifecycle of our products, from how they’re sourced and manufactured, all the way through consumer use and disposal. And the third thing that makes the plan unique is that it’s not just about the environment. We find is that there are a lot of plans that focus on the environmental impacts associated with one’s manufacturing facilities but this plan has a social and economic component as well.

3p: The plan was launched in the fall of 2010 and it’s now June of 2011. Can you speak to any progress thus far?

EO: When we launched the plan, we said that we had an ambitious plan. We had set some ambitious targets and we had three big goals: the first which was to help over one billion people take action to improve their health and well-being; second, to halve the environmental impact associated with our products; and third was to source 100% of our agricultural raw material sustainably. … Sustainable agriculture has been something we’ve been doing now for over fifteen years. Recently we announced that we just bought the first available certificates for sustainable soy. Soy makes up approximately 1% of our agricultural raw materials. Unilever is a significant purchaser of agricultural raw materials. We buy about 7.5 million tons of agricultural materials on an annual basis. … This complements some of the work that we’re doing in terms of moving ahead and moving the needle forward on other crops that we purchase, like Lipton and our commitment to buy 100% of our teas sustainably sourced by 2020.

In addition what’s new with our plan is that we’ve also been starting to engage with consumers differently. One of the areas in that space is around water and water consumption. We know from some of our research that the average American woman spends about 10-12 minutes in the shower and yet at the same time, the majority of our greenhouse gases from our water and skin business are generated from consumer use of our products. And so we’re looking at – and this is a critical part: how do we create behavior change among consumers?

Suave, one of our leading hair care brands and presently in over 50million homes, has now launched a new initiative called “Turn off the Tap” and they’re talking to consumers right on pack – where consumers are using the product – on the benefits of reducing their hot water usage in the shower. And the critical thing here with Suave is that a lot of consumers are aware that greenhouse gases are bad for the environment but they’re not motivated by talking to them about “Hey, you should reduce your shower usage because it’s about greenhouse gases.” We’re talking to consumers in a very relevant and real way for them and the way that we’re doing that is talking to them about how they can save money. So we’re putting out facts to consumers. For example, “Did you know that the average family can save about $100 on their utility bill and about 3,200 gallons of water?” We’re actually talking to the consumer in a way that is meaningful to her and that’s driving a critical benefit for her, as well.

One of our commitments was that we wanted to increase recycling and recovery rates because one of our goals in halving the environmental footprint of our products is to halve the amount of waste associated with our products. Dove and Suave have formed a partnership with Recyclebank and it really is designed to engage the consumers in rewarding them for taking small everyday actions to recycle plastic bottles and waste. This is about how consumers want to do the right thing but they don’t always know how – nor do they have the resources to do it. So the partnership with Recyclebank is designed to help educate consumers, provide them with information, empower them, and at the same time reward them so ultimately it’s a win for the consumer because she’s getting valuable rewards from Recyclebank and it’s a win for the environment because they’re increasing recycling rates.

From an energy perspective, Unilever Canada has signed an agreement with Bullfrog Power. We will now be the largest purchaser of renewable energy in Canada and we will be purchasing renewable energy for our manufacturing facilities as well as our two offices there, which will cover about 90% of the energy Unilever purchases, which is a sizable commitment. Based on our partnership with Bullfrog Power, Bullfrog even created a new category for their partners because we are the largest purchaser.

--

I also asked Mr. Ostern about whether Unilever had considered converting some of its liquid products to powder to reduce water use, packaging materials and GHG emissions associated with transport but he was unable to answer my question. He also declined to provide details regarding what kind of materials Unilever is considering for their refill sachets, which fall under the company’s efforts to increase reuse of packaging. We look forward to hearing about these issues as more info becomes available.

***

Ali Hart is a sustainable communications and engagement strategist with a passion for life’s essentials: food, water and storytelling. Her background in the Entertainment industry, penchant for humor and MBA in Sustainable Management from Presidio Graduate School are Ali’s secret weapons in her quest to master the art of behavior change and to make sustainability inconveniently fun.

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Do Pennies Make Any Business or Environmental Sense?

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Pennies from heaven don’t mean very much anymore, especially considering their costs to the environment and the expense of mining and minting them. With apologies to Abe Lincoln, Mike’s Bikes, a company with nine locations in California, has taken a solid stand against continued use of the venerable coin.

The company recently announced it is “letting go of Lincoln” by banning pennies in its stories. Its website explained, “The world we live in is the world we ride in. To help take good care of it, we have decided to eliminate pennies from our stores. For all cash transactions where pennies would have been used, we will be rounding down in favor of the customer to the nearest nickel.”

The are some very solid reasons for bidding the penny adieu, as the store explains: Making pennies wastes natural resources and is toxic to people and the environment - Pennies are 3 percent copper, and 97 percent zinc and are primarily made from virgin ore.

Making pennies from zinc and copper means mining for those materials. Red Dog Mine, which is the largest zinc mine in the U.S. is by far the #1 polluter on the EPA's list, because of large quantities of heavy-metal and lead rich mining tailings. The process of refining both metals can release sulfur dioxide (SO2), lead and zinc into the environment. “Making pennies wastes taxpayer money - As of 2010, it cost 1.79 cents to make each 1 cent coin, meaning that taxpayers lost 0.79 of a cent for each of the 4 billion pennies the Mint produced that year; which represents a $32 million loss in 2010.

“Rounding down won't raise prices - At Mike’s Bikes, all transactions will be rounded in favor of the customer, so they will essentially function like a 1-4 cent discount on all cash transactions. Economists also have proved that eliminating the penny won't affect prices; we believe that the savings to the environment and the economy will more than compensate for the risk of any possible jump in prices. Pennies waste time and money - The average American wastes 12 hours a year handling pennies.

The National Association of Convenience Stores and Wallgreens estimate that handling pennies adds 2 to 2.5 seconds per cash transaction. By eliminating pennies, Mike's Bikes will save over $5K a year; rounding up to the customer's benefit allows us to share this saving with our customers. “Pennies are worth less than CA minimum wage - pennies are so worthless now that it doesn't even pay the California Minimum Wage of $8/hour to pick them up off the street.”

So much for the lucky penny theory. Retailers and other money handlers with a sustainable mind-set should heed and a follow the Mike’s Bikes lead. Sorry Abe, a “penny for your thoughts,” as the saying goes, no longer has any worthwhile meaning and the penny itself has long outlived its usefulness. No disrespect but you also grace the five-dollar bill, a slightly more valuable currency. Pennies are an expensive and environmentally wasteful nuisance. So let the nickel, featuring Thomas Jefferson’s features, become the new penny. It will be better for the environment and good for business.

Image credit: Unsplash

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The Five Driving Forces of CSR: Can You Name a Sixth?

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I take little credit for the intelligence of this post. Indeed, I give all that might be due to Werther & Chandler’s 2011 text, Strategic Corporate Social Responsibility: Stakeholders in a Global Environment, as well as to my Green Mountain College MBA Triple-Bottom-Line Management Course, in progress. Through these studies, the five below drivers have been articulated as those most germane to the promotion of CSR, but I ask you, my favorite TriplePundit readers, are there others? Have motivating factors been missed? What else has brought us here, to this CSR "Tipping Point"? The Five Driving Forces of CSR:

  1. Increased Affluence: CSR becomes more relevant as economies grow and stabilize. Therefore, the greatest attention to CSR is found in developed countries. Stable work and security provide the luxury of choice and socially responsible activism. No such luxury exists when basic needs are in question.
  2. Ecological Sustainability: Perhaps the most obvious and most talked about of the drivers, concerns over pollution, waste, natural resource depletion, climate change and the like continue to fuel the CSR discussion and heighten expectations for proactive corporate action. After all, it is in the best interest of firms to protect for the sustainable future the long-term availability of the resources on which they depend.
  3. Globalization: Globalization has had considerable impacts. First, the increased wealth and power of multinational corporations has led to questions on the decreased authority of the nation-state, especially in developing areas. Further, cultural differences have added to the complexity of CSR as expectations of acceptable behavior vary regionally. With increased power comes increased responsibility and globalization has fueled the need to filter all strategic decisions through a CSR lens to ensure optimal outcomes for diverse stakeholders.
  4. Free Flow of Information: Yes, blame the bloggers, but through the Internet and other electronic mediums the flow of information has shifted back to the stakeholders, especially in the case of three important groups: consumers, NGOs and the general media. Easily accessible and affordable communication technologies have permanently changed the game and only truly authentic and transparent companies will profit in the long term.
  5. The Power of the Brand: Brands are today the focal point of corporate success and much of the health of the brand depends on public perception of the corporation. In other words, reputation is key and honest CSR is a way to protect that reputation and therefore the brand.

As reported by the aforementioned text, Malcolm Gladwell referred to the tipping point as the point of critical mass after which an idea spreads widely and becomes generally accepted and broadly implemented. I argue that CSR has reached such a tipping point, pushed there by the five above factors. I further argue that CSR will become more mainstream and more part and parcel of everyday business strategy. These five forces have brought us here and will continue to promote and develop trends towards greater social responsibility on the part of firms. But, are there others? Factors that have not here been considered that have or will prompt this continued CSR evolution?    

Image credit: Morgan Sessions/Unsplash

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The Sufficiency Economy: A Thai Solution to Economic Sustainability

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This post is part of a blogging series by economics students at the Presidio Graduate School's MBA program. You can follow along here.

By Somsak Boonkam

The economy is a major force driving our lives, from the purchasing decisions we make to the public and private institutions we support. It determines how wealthy nations and their people are, and consequently becomes a determining factor for assessing quality of life. On the other hand, when the economy collapses, it brings us enormous devastation and takes wealth and prosperity back from the people.  When an economy ceases to grow, it’s not easy --or maybe even impossible -- to bring it back to the state where it used to be. Suppose that we are lucky enough to see economic growth and prosperity again, how can we know that a collapse is not going to happen in the future?  Maybe it’s time for us not to rely too heavily on conventional economic theories, but instead start to look for a more sustainable and effective economic strategy. The Sufficiency Economy might be a better solution for mankind to pursue and improve upon.

The Sufficiency Economy is a philosophy developed by King Bhumibol Adulyadej of Thailand through his royal remarks over the past three decades. The Sufficiency Economy is a happiness development approach, which emphasizes the middle path as an overriding principle for appropriate conduct by people at all levels.  The middle path is a way of thinking in which no one lives tooextravagantly or too thriftily. It encourages people to live in a way where they consume only what they really need, choose products carefully, and consider their impact on others and the planet. The sufficiency economy enhances the nation’s ability to modernize without defying globalization – it provides a means to respond to negative outcomes caused by rapid economic transitions.  This philosophy is a guide to making decisions that will generate outcomes that are beneficial to the development of the country.

Thailand values this new economics philosophy as a practical tool to effectively manage capitalism in a way that aligns and engages it with social sustainable development. In doing so, Thailand hopes that this approach will foster  accountability and empower people and their communities. More importantly, the main goal of The Sufficiency Economy is to measure economic development not just using GDP, but also by taking the reduction of social inequality and poverty into account.  This philosophy is also expected to help prevent another economic collapse such as the one that occurred during the mid-90s, and to be a powerful tool for moving the nation overall economy upward.

In this globalized world, we too often expect economic decisions to happen quickly without realizing that these hasty choices could adversely affect our lives and the lives of generations that come after us. It could also be argued that many of the past economic recessions resulted from the greediness and shortsighted decision-making of a group of bankers and executives. I believe that integrating the concept of The Sufficiency Economy into our worldview will give us a different perspective that promotes gradual development based on self-reliance and the principle of having “enough.” We would all do well to keep the three main tenets of this philosophy (moderation, reasonableness, and self-immunity) in mind as we try to change peoples' attitudes, behaviors, and way of living at both the micro and macro level.

Image credit: Flickr/Marko Mikkonen

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The Employment Multiplier – An Important Tool For Promoting The Burgeoning Green Economy

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This post is part of a blogging series by economics students at the Presidio Graduate School's MBA program.

By Eric Cetnarski

As one would expect from a Great Recession, much of American political and economic discourse has been focused on job creation.  And despite signals of recovery, the unemployment rate still remains above 9 percent.  Many Americans are still struggling to maintain their households – and as a result topics like ‘green-recovery’ and climate mitigation are not primary concerns.   Americans want jobs – even if they come from traditionally ‘dirtier’ industries like fossil fuel extraction and production.

It is important that climate mitigation and green industry advocates bear this in mind when communicating their initiatives. Statistics like the employment multiplier can help these advocates tell a compelling story when courting working-class Americans and municipal governments.

What is An Employment Multiplier?
An employment multiplier is one of the measures used to determine the impact a particular industry will have upon a municipality when it arrives or departs. In its simplest terms, the employment multiplier measures the amount of direct, indirect and induced jobs created (or lost) in the area. Direct jobs are related to the specific industry, while indirect jobs are those that support the industry. Induced jobs are those that are a result of direct/indirect employee’s spending money in the community. Generally, industries with a higher multiplier are more desirable.

Fossil Fuel Extraction And Production Are Desirable Because They Create Jobs

According to the U.S. Bureau of Economic Analysis Industry multiplier data, coal mining has an employment multiplier of 4.4 - meaning that for every mining job, 4.4 other jobs are created. Oil and gas extraction have a multiplier of 6.9.  As one can see, these industries can be viewed as a boon to communities.   It can prove politically difficult to thwart the advances of the fossil fuel industry -- unless compelling clean energy options can be presented.

Green Energy Alternatives Are Job Creation Options

Like other traditional energy industries, green industry initiatives have the potential to significantly bolster a region’s economy. Activities like maintaining a large solar array or maintaining a smart-grid can be as labor intensive as extracting and processing fossil fuels.   For example, the clean energy coalition Apollo Alliance reports that for every $1 million invested in smart grid installations, 5.2 direct and 7.9 indirect/induced jobs are created.   There are a host of other studies that indicate green industries like renewable energy production create both direct and indirect jobs in the municipalities they are located.

Green Jobs and the Multiplier:  Debunking Myths
Unfortunately many Americans still associate green industries with economic contraction and job loss. Traditional industries often confuse the public about green initiatives (e.g. California's 2010 Proposition 23). It is imperative that those in the green industries clearly communicate the economic benefits to communities - not just the environmental ones.   If they don't, then most American’s will overlook the burgeoning green economy in favor of what they see as a ‘safe bet’ in traditional industry.

This misconception is neither good for our economy nor our environment.

***

Eric Cetnarski is earning his MBA so that he can harness the power of business to provide more sustainable production and purchasing options to consumers and businesses. He believes profound social and environmental change can manifest from the consumer.

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Tom's of Maine Ditches the Aluminium Toothpaste Tube

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You may have noticed something new in the toothpaste aisle, and it's not an even more elaborate toothbrush. Tom's of Maine recently changed the tube your toothpaste comes in from the much loved, and apparently, much maligned aluminum tube to a more mainstream plastic laminate. The aluminum toothpaste tube was the original environmental packaging and I was eager to get to the bottom of the switch.

Tom's of Maine had long maintained that aluminum was the material of choice for toothpaste tubes because of its recyclability. I feared that the switch was related to Tom's relationship with it's parent company Colgate-Palmolive. I'm pleased to report that Colgate-Palmolive had nothing to do with the change in materials. Rather, the decision came after a careful review of a decade of consumer comments and a reevaluation of the assumption that aluminium was the most environmentally friendly material available.

Why the switch?
When viewed in aggregate, 25% of packaging complaints about Tom's products were related to the aluminium tube. Customers complained of cracks and splits that caused the product to leak. Parents complained that the tube was too hard for young toothbrushers to use; older customers had the same difficulties.

Says plant manager Bill Hetzel, "we had taken it as an indisputable fact that aluminium was the best material available, because of its recyclability, but the customer complaints challenged us to reconsider. We looked into the life cycle of our toothpaste tubes and realized that they weren't actually being recycled as often as we'd like, and even if the tubes made their way to recycling facilities many would not accept them because of the plastic caps attached."

The decision to move to more conventional packaging was not taken lightly. The customer comment review process took several years, and once the company determined that aluminium was out, the selection of plastic laminate and the factory switchover took about a year. Says Ellen Saksen, Toothpaste Brand Manager, "as a Tom’s of Maine employee, one of the first things you learn is to seek council. Over the course of the decision making process, we had hundreds of meetings. We needed to make sure the change was was right for the consumer and right for the company. Our stewardship model is very detailed. Consumers are hard on us, we welcome that, and we’re hard on ourselves."

Why plastic laminate?
Once aluminum was off the table, the field was wide open. The company considered biodegradable plastics, paperboard, and many other materials.

Because some of Tom's of Maine's toothpastes contain fluoride, the company is under strict FDA regulations about tube materials- they have to be very durable and pass rigorous testing. After much consideration, plastic laminate was chosen because it meets the FDA standards and because it is a lot lighter than aluminium. The weight of the product is key because it means the transport of the product has a much lower carbon footprint than the old aluminium tubes.

The tubes are also a lot more flexible and easier for little hands to squeeze.

Where is it sourced?
Tom's selected a tube manufacturer a truck drive away from its factory in Maine. The manufacturer was carefully selected for its focus on sustainability- a value shared by Tom's of Maine. The manufacturer recycles scraps from the manufacturing process and accepts Tom's of Maine's tube waste. Damaged tubes and the tubes returned by customers are returned to the manufacturer so that they can be incorporated into the downcycling stream. The recycled material is used mostly in industrial applications like bumpers for pallets, but the company is continuously sourcing new ways to reincorporate waste into the product stream.

How have customers responded?
The response has been 10:1 positive on the switch. That one customer who expresses dissatisfaction is not a surprise for Ellen Saksen, "change is hard, especially when it comes to a product you use every single day."

What's up next?
The toothpaste team is looking for better ways to recycle the new packaging. They're also working with distributors to get rid of the cardboard cartons that surround the tubes. Kids toothpaste is already sold without a carton and the adult versions are next in line for dematerialization.

The company has also funded research into bio-plastics. The most promising project on tap is one that incorporates local Maine potatoes into the packaging.

Image credit: Tom's of Maine via Facebook

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