Following the Paris climate talks, environmental sustainability is rising back up the agenda for country leaders and for businesses. Attention has been refocused and, in due course, could lead to tighter regulations and penalties for companies with less than clean carbon records. There is growing pressure from investors and consumers too, who want to be able to see the proof of companies’ claims to be greener.
A recent study for UPS, The Fifth Annual Change in the (Supply) Chain Survey, found that high-tech companies in particular are working hard to meet their responsibilities. For three quarters of companies, being greener also means cost savings (due to greater efficiency), while for 71% there is peace of mind about meeting customer expectations.
According to Peter Harris, director of sustainability, EMEA, UPS, to achieve these sorts of goals small businesses need to look at the types of customers they are serving and the challenges this might be placing on efficiently getting products to their end destination. Offering delivery options can be a boon for SMEs, he explains.
“Globally, we are seeing an increase in consumer e-commerce and growth in urbanisation. With e-commerce shipments typically being business-to-consumer (B2C) as opposed to business-to-business (B2B), it means fewer packages per stop. Carriers may therefore be driving more miles and using more fuel to deliver fewer goods. By providing service options, such as UPS My Choice and UPS Access Point, your customers can take control over when and where they receive deliveries, helping goods to avoid unnecessary miles and in turn lowering the levels of emissions attributed to your package.”
Vetting supply chain partners
If your whole proposition as a business is to promote greener behaviour, it’s more important than ever to be consistent – reflecting those values along your supply chain, and by checking the green credentials of partner companies and service providers.
POD Point is a green business in the UK producing electric vehicle charge points, which it exports successfully to Norway. Founder Erik Fairbairn says: “Being green is an approach that’s required across all business functions, and exporting is no different.
“Although green practices include more than just shipping, some rules of thumb can help. For example, many shipping companies report their carbon intensity, so you can compare the options, and perhaps then choose to use a carbon-offsetting solution to reduce your carbon footprint.”
Meeting green disposal requirements
But how easy is it to maintain green commitments and standards when exporting, when additional parties are involved along the supply chain – for example, when it’s not as easy logistically for customers to return end-of-life items for disposal?
In Europe, companies selling electrical and electronic equipment must provide a way for customers to dispose of old equipment when selling a new version of the same item. EU waste electrical and electronic equipment (WEEE) regulations apply irrespective of how the goods are sold – whether direct or by internet, mail order or telephone. Sending goods all the way back to the UK isn’t practical (or very green), which means looking for local solutions and partnerships.
It isn’t just manufacturers of electrical items that need to consider green disposal. Internet Ink supplies printer ink across Europe and the US. On home soil, it runs a recycling scheme for used cartridges. “We give our customers a prepaid plastic envelope that can be filled with up to five ink cartridges, or if they have a bulk delivery then we can organise a courier for larger orders,” explains e-commerce manager Andrew Rushbury.
But in an export context, it isn’t quite so easy to replicate the strategy. “We only recycle in the UK, due to shipping and postage costs,” Rushbury says. “We offer Freepost here and use the old cartridges for re-manufacturing, saving the cartridges from landfill where possible. For customers overseas, we advise them to look for local recycling banks or online centres.”
Innovating with business models
In the case of furniture company Opendesk, the commitment to being greener led to a novel business model which allows it to export without moving physical products. Instead of manufacturing then shipping its products, it designs the furniture centrally. The company then partners with hundreds of small local manufacturers around the world, which make the items to order.
“For us, being environmentally friendly isn’t just an add-on to what we do; it’s part of our DNA and a key differentiator,” says CEO Tim Carrigan. “Furniture is typically big and heavy, so exporting it can leave a large carbon footprint. Opendesks are only transported for the ‘final mile’ from workshop to a customer’s workspace.
“It has also allowed us to scale quickly – as entering a new market is just a question of finding new, local makers”, Carrigan notes. “This model also responds to our customers’ preference for locally-made, bespoke furniture. As Opendesks are made on demand, we have no stock inventory.”
Be a leader
Elvis & Kresse turns industrial waste into innovative lifestyle products and returns 50% of profits to charities related to the waste. One product line is made from decommissioned fire hoses and half of all related profits are donated to The Fire Fighters Charity. The company now collects 12 different waste streams, has several charitable partnerships and is involved with collaborations across industries, from fashion houses to FTSE 100 companies.
In common with other green leaders, founder Kresse Wesling has driven environmental sustainability into the core of the company’s activities. “All our packaging is reclaimed: the products are packed, protected and labelled, all with materials that we reclaim and remanufacture,” she says. “But SMEs don’t need to go this far: there are many green packaging solutions on the market that don’t add much, if anything, to costs. Businesses should shout about the fact they are doing this because it can be a selling point for many customers, setting them apart from the competition.”
On the importance of sustainable practices in the current climate, Hari Mann, a business expert at Hult International Business School says: “Green choices in exporting matter, especially given the scrutiny that consumers are now making and the emphasis they are placing on the complete supply chain. There’s a greater ability to measure the green impacts across the supply chain. For exporters, it’s important to look at your supply chain and analyse its green credentials. Search for green alternatives and look at what your competitors might be doing.”
- For more tips on how to export sustainably, please visit the UPS Export Toolkit.
Content on this page is paid for and produced to a brief agreed with UPS, sponsor of the Exporting to New Markets hub on the Small Business Network.
