The Footprint of Print and Digital Media Supply Chains
Print has profoundly changed the world since the days of Johannes Guttenberg, but now due to the prodigious volumes of energy and materials consumed and mountains of waste produced the printing industry is challenged to profoundly change itself. Current patterns of print and digital media production and consumption are unsustainable and must be reconfigured if we are to enjoy the essential services and benefits they provide to business, government and society.
Most of us think about the flows of energy and materials associated with print and digital media the way fish think about water. This is despite the fact that large organizations typically spend between 5% and 35% of every dollar spent (exclusive of labor) on paper and printing. To put the amount of energy involved in context, According to the Energy Information Administration (EIA) the US papermaking industry used 75 Billion kilowatt hours of energy in 2006… second only to the petroleum industry.
It is unlikely that print can or will be replaced be digital media. Packaging is still a major use of print that cannot be replaced, and digital media also consumes prodigious amounts of electricity. During the same period in 2006 the EIA reports that data centers and servers in the US used over 60 Billion Kilowatt hours of electricity.
However, print as we know it must be reinvented so that it can be used to package knowledge and goods for human consumption in ways that also address the challenges of sustainability, energy security and climate change. The reinvention of print and digital media will require a new “greening”.
In order for it to succeed this new greening of print can neither be based on the “Greening 1.0” moral-ethical imperatives urged by environmentalists, nor on purely emotional appeals. The “Greening 2.0” of print and digital media must be based on a conceptual framework called “sustainability” that is being used to redefine the way business is done by Fortune 1000 companies… one that balances economics, the ecology and social equity employing emotional appeals grounded in a triple bottom line business case.
Sustainability, energy security and climate change are challenging issues that compel every business, every government and every individual to rethink the ways in which they employ energy and manage waste. This article raises more questions than it answers, but that is primarily because the printing industry has not yet responded to many of the questions raised to the degree called for by urgency of the issues at hand.
Sustainability, energy security and climate change are also becoming mainstream corporate governance priorities among the largest corporations in the world… and supply chain sustainability is now the focus of a growing number of companies that are also dependent on print for the packaging, promotion and advertising of their products. In response to initiatives from organizations such as the Carbon Disclosure Project, The Carbon Trust and the Climate Group, corporate and publishing giants like Wal-Mart, Procter & Gamble, Time Incorporated and NewsCorp are beginning to press their supply chains to reduce their carbon footprints and reconfigure their products and services to measure, manage, report, verify and continuously improve their “triple bottom line” performance.
In response, printers and their suppliers will need to rethink what they say about being “green.” More importantly, because papermaking and other print related processes are among the largest industrial uses of energy in the world, print supply chains will need to reconfigure the flows of energy, materials and waste associated with printing if they want to win the business of such Fortune 1000 clients.
Addressing the new green priorities of business will require that printing companies and their suppliers look beyond cost, productivity, print quality. They will also have to reach beyond superficial measures undertaken to “green up” the image of a company in a hurry. Companies that fail to understand and address the issues of climate change, energy security and sustainability in measurable and material ways are more than likely to be shunned for “greenwashing”.
A key question is whether investor, consumer and print buyer priorities will demand the greening of print supply chains in ways that exceeds the ability of the graphic arts to respond in a timely and effective manner. To a great extent the answer to this question will depend on printers receiving clear and unambiguous market signals from print buyers that sustainability, energy security and climate change are priorities in their vendor selection criteria and purchasing decisions. An example of such a signal is aligning the reward and recognition buyers and suppliers with innovation and the achievement of triple bottom line benefits. It will also depend on graphic arts firms sending clear signals to their suppliers that they require more and better standards-based information about the environmental aspects and impacts associated with the goods and services that they buy. An example of would be requiring ISO 14040 based lifecycle analysis of all input raw materials to the printing process.
For most printers, being green used to mean complying with the law and “doing the right thing” for the planet, whether or not it was good for business. However, the new meaning of green is as much about “doing things right things for business” as it is about doing the right things for the planet. The greatest challenge that the printing industry faces is shaking off outmoded ways of thinking about environmental or “green” issues, and developing new ways to identify, analyze and act on information relevant to sustainability and climate change.
According to Professor Kenneth Macro Jr. of CalPoly’s Graphic Communication program “It seems that many if not most of the printers that I talk to are unfamiliar with the concept of sustainability, and they seem to hope that this preoccupation with climate change and things green will blow over. This is no time to be thinking like an ostrich. Instead of putting our heads in the sand we need to be putting our heads together to take action and ensure that our industry is sustainable and that print is seen as a responsible medium.”
While historically being “green” referred to environmental regulatory compliance, the new green is about “beyond compliance” sustainability that seeks to continually improve the environmental, social and economic performance of a business, a product or a service. Green products historically have been expected to cost more and to have lackluster performance, but the promise of the new green was perhaps best described by Wal-Mart CEO Lee Scott at a recent meeting of over 700 senior executives at a meeting of the Wal-Mart Sustainable Value Networks in March of 2007 “A working family shouldn’t have to chose between a product that they can afford and a sustainable product.” The new green being championed by companies like Wal-Mart, GE, Timberland, Bank of America, Unilever, Starbucks and others create and deliver value for money and are designed to do a better job of satisfying the primary needs sought. Greener printing must do the same.
The new wave of green sweeping over business is the crescendo of a movement that has been under way for over a decade, and there is little evidence that it will subside. According to John Grant, author of the “Green Marketing Manifesto”, the new interest in green not likely to fade because it is so strongly linked to a climate change agenda that is scientific. Grant maintains that on top of climate change there are a related set of issues: “water shortages (not just from low rainfall, but because we have seriously depleted the underground aquifers), seas holding only 10% of the edible fish stocks they did 100 years ago, soil erosion, storms, spreading diseases. Add war, economic turmoil, food shortages, water shortages and social disintegration and you can see why some call the impending (climate) crisis a global Somalia.”
According to Michael Longhurst, Member of the United Nations Environmental Program Advertising Advisory Committee, Senior Vice President, Business Development, McCann-Erickson “Sustainability is not green marketing. It is not a social program. It is not energy saving. It is all of these things and more. Sustainability is a collective term for everything to do with responsibility for the world in which we live. It is an economic, social and environmental issue. It is about consuming differently and consuming efficiently. It also means sharing between the rich and poor, and protecting the global environment, while not jeopardizing the needs of future generations. …Sustainability is an issue for governments, for industry, for companies and ultimately for consumers.
There has been a sea change in the degree to which sustainability, climate change, energy security and corporate social responsibility are on the lips and on the minds of consumers, Fortune 500 CEOs, institutional investors, judges and politicians. Three time Pulitzer Prize winning New York Times Columnist and author Tom Friedman recently described conservation and energy efficiency as a national security imperative, and rebuffed criticisms that environmentalism is a concern of the “girlie man” calling it “the most tough-minded, geo-strategic, pro-growth and patriotic thing we can do.”
Proactively addressing the challenges of climate change and sustainability will position your company to meet the growing demand for greener products and sustainable supply chain partners. On the other hand, failure to identify and reduce the greenhouse gas, energy and resource footprint of you business operations and supply chain may put your business at risk.
The sustainability of print will depend on the degree to which printing companies and their suppliers respond to the following questions:
- Can your company quantify and communicate how the print-related products and services that it offers are economically, environmentally and socially preferable to non-print alternatives?
- Is your company prepared to provide buyers with a lifecycle greenhouse gas inventory or footprint analysis of your operations and of the goods and services that you sell to them?
- Is your company prepared for significant spikes in the price of energy or of materials that depend on the affordable and available petrochemicals and fossil fuels?
- Is your company prepared to address the likelihood of state and or federal legislation to “cap and trade” greenhouse gas emissions?
- Is your company prepared to take advantage of a Green Employment Tax Swap (GETS) in which a tax on carbon dioxide (CO2) is used to rebate federal payroll taxes?
- Is your company prepared to pay a premium on insurance and or loans for failing to implement a comprehensive IS09000/14001/26000 quality/environmental/social responsibility management system?
- Is your company prepared to tell a prospective high potential employee about how your company’s dedication to sustainable business practices will improve their quality of life and career opportunities?
To address the questions posed above it is important to understand some of the powerful forces that have been at play in recent years. Among the major factors redefining what it means to be green are profound shifts taking place in the attitudes and behaviors of investors, consumers and business leaders with regard to sustainability in general as well as energy security and climate change in particular.
Major corporations are being driven to re-examine the standards of conduct and measures of performance that determine how they do business. Demand and action frameworks for sustainable supply chain management and procurement are arising from individual companies like Wal-Mart, from industry consortia such as the Sustainable Packaging Coalition, the Sustainable Advertising Partnership and the Sustainable Green Printing Partnership as well as from organizations such as the Institute for Supply Management and the Supply Chain Council. As a result, the worlds largest corporations are scrutinizing the corporate social responsibility performance of their operational practices and supply chain business practices ...including what they print, how they print and how print-related products and services are valued.
For many of companies in sectors such as pharmaceuticals and automobiles the greening of their supply chain practices began a decade ago with a focus on their “tier one” suppliers. Despite the fact that printing can represent 20% or more of every dollar spent by most corporations, it is not typically considered a “tier one” supply chain function. As a result, printing has only recently come under scrutiny now that the “lean and green” sustainability initiatives directed at tier one supply chain purchase are beginning to yield diminishing returns. While there is heightened interest in familiar topics such as the use of post-consumer recycled content, two new topics coming under coming under scrutiny are the “carbon footprint” associated with printing and print-related logistics as well as the fiber source “chain of custody” associated with paper.
While debates about the relative merits of FSC, SFI and PEFC forest product certification have been making headlines in the trade press of late, climate change, energy security, corporate social responsibility and carbon disclosure are the issues of greatest significance in the business press. Business leaders from companies like Exxon, BP, Wal-Mart, Target, General Motors, Toyota, Procter & Gamble, Kimberly Clark, The New York Times and Time Inc. are feeling growing pressure from investors, markets and regulators to address the challenges of sustainability and the impacts of climate change on business, society and the environment. For example, a coalition of 382 institutional investors with assets of more than $57 trillion called “The Carbon Disclosure Project” has called on over 2,500 of the worlds largest companies to voluntarily report on the greenhouse gasses emitted by their operational and supply chain activities.
While some may see voluntary reporting of greenhouse gas emissions as a burden or a risk, others see the process of conducting greenhouse gas inventories and transforming business processes to reduce their carbon intensity providing them with critical expertise and experience for what is likely to be a dramatically different regulatory environment in the next three to five years. While the majority of Fortune 500 companies now publish voluntary corporate social responsibility or sustainability reports in accordance with the guidelines established by the Global Reporting Initiative, that disclose their greenhouse gas emissions and other non-financial performance data, few printing companies are aware of them or publish such reports.
Congress is currently considering several bills that would establish caps on greenhouse gas emissions and then allow businesses to "trade" credits in order to stay below those limits. In addition, the governors of five western states recently agreed that they would coordinate efforts to set caps for greenhouse gas emissions from their region this year and create a market-based, carbon-trading program within 18 months.
In March of 2007 a group of 50 major U.S. investors including Merrill Lynch and the California Public Employees' Retirement System with over $4 trillion under management asked Congress to enact tough federal legislation to curb carbon emissions and dramatically change national energy policies. They called for the U.S. to "achieve sizable, sensible long-term reductions of greenhouse gas emissions” and recommended three policy initiatives: 1) realignment of energy policy to foster the development of clean technologies, 2) directions from the Securities & Exchange Commission (SEC) specifying what companies should disclose to investors on climate change in their financial reporting, and 3) a mandatory market-based solution to regulating greenhouse gas emissions, such as what has come to be known as "cap-and-trade."
In addition to investor pressure for greenhouse gas reporting, consumer attitudes toward climate change and the environment have also changed. A recent nationwide poll conducted by Knowledge Networks asked American consumers how much they have heard about “the problem of global warming or climate change due to the buildup of greenhouse gases,” 72 percent said a great deal or some (22% and 50% respectively), up from 63 percent a year ago, when 15 percent said a great deal and 48 percent some. Those who said “not very much” or “not at all” dropped from 38 percent to 28 percent. 75% embrace the idea that global warming is a problem that requires action. Perhaps most interesting, when asked to “suppose there were a survey of scientists that found that an overwhelming majority have concluded that global warming is occurring and poses a significant threat,” the percentage saying that they would favor taking high-cost steps increased sharply, from 34 percent to 56 percent.
Evidence of this change, there are an estimated 63 million adults in North America who are currently considered “LOHAS” Consumers. LOHAS stands for “Lifestyles of Health and Sustainability” and describes a $226.8 billion U.S. marketplace for goods and services focused on health, the environment, social justice, personal development and sustainable living. One of the factors that caused Wal-Mart to see sustainability as a “game changing” business growth strategy was the overwhelming and unexpected response of consumers to an organic cotton yoga outfit! The other was the inspiring response of Wal-Mart employees to hurricane Katrina.
As businesses wrestle with these issues, they are finding that climate change, energy security and the intensifying focus on sustainable business practices can have a significant impact on how they do business; on who they buy their equipment, energy and materials from; on their ability to attract and retain talented and motivated employees; on which markets they have permission to operate in and which customers they are valued by. As the world reaches consensus on the scientific understanding of climate change and the importance of striving for sustainability in the supply chains of business, companies are increasingly looking at how to manage sustainability’s “triple bottom lines”, navigate a “carbon neutral” path and position themselves for success is an increasingly complex and carbon-constrained world.
For a myriad of reasons a growing number of large corporations, publishers and government agencies are under pressure to manage the sustainability and climate change impacts of the supply chain practices. As a result, major corporations like Wal-Mart, Nike and Bank of America are rewriting their vendor qualification scorecards, putting new environmental management and greenhouse gas emissions information requests in their RFIs and new sustainability reporting and verification provisions in their RFPs.
Increasingly printing companies can expect to be asked:
- How do you measure, manage and report on your company’s environmental performance and its carbon footprint?
- Does your company have a dedicated director of sustainability and a published sustainability policy as well as a formal environmental management system that tracks energy and materials use, greenhouse gas emissions and waste?
- How much time does your senior management spend guiding your company’s sustainability policy and its sustainability performance strategy?
- How is your senior management recognized and rewarded for achieving your company’s sustainability performance objectives.
- Does your company document the environmental lifecycle impacts, energy use and greenhouse gas emissions associated with of the products and services that you manufacture and purchase?
- What is your company doing to develop continuous improvement strategies addressing climate change and sustainability in its supply chain practices?
The world depends on print to a far greater extent than is commonly understood, and yet, as print is currently specified and purchased by most it is not sustainable. This is not a time for the graphic arts to rest on its laurels and wait for buyers and specifiers of print to change their priorities. Rather it is a time for graphic arts print service providers to redefine themselves and work together to identify, analyze and act on making print sustainable and addressing the challenges presented by global warming in timely and innovative ways.
Addressing the issues at the nexus of commercial opportunity and sustainability presents the graphic communication industry with new opportunities to re-invent the ways in which the industry packages knowledge and goods for human consumption. There is opportunity to create new fortunes and a sustainable future for print. Our common future will largely depend on our ability to communicate and collaborate, as well as on our ability to design, produce and distribute knowledge and goods in ways that manage their lifecycle costs, measure their triple bottom line impacts and create significant quality of life benefits.