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SDGs News

2021-06-07 11:31:18 ใน News & Events » 0 517
Differentiation Strategy for Environmentally Friendly Products in the SDGs / ESG Investment era

CSV or Creating Shared Value invests in corporate value improvement. Recently, even in Japan, more major manufacturers have turned to environmentally friendly products. Needless to say, environmentally friendly products cost more.

So what kind of strategy a company should implement with the issue of the higher cost of environmentally friendly products?

After interviewing a number of makers, we have come to the conclusion. And the answer is SDGs.

Environmentally friendly products are not new, they have been slowly gaining popularity in the market. Many brand makers see the recent boom of these product as a new trend. So what is the different between the old trend and the trend that is going on now?

I think the extensive use of SNS or Social Networking Service (or social network, in short) and the efforts for SDGs are what make the new trend unique. As the world became smaller because of SNS, news and what is going on in the world can be seen and read simultaneously by almost everyone.

The image of a straw stuck in the sea turtle’s nostril launched the global battle against marine debris. Greta Thunberg's remarks on global warming have been widely heard through SNS. More young people speak up against global warming. And what happen in distant countries become more universal. What seemed to be public matter now become more personal.

Giant brands in the West like Nestlé, Starbucks, Unilever, P & G and IKEA join the environmentally friendly trend, announcing their strings of environmental efforts which are growing stronger and wider. And the trend was picking up the momentum.

In 2015, the SDGs were unanimously adopted by the United Nations who addressed the issues of the environment and global warming. The issue became a global commitment with the Paris Agreement on CO2 reduction.

Major Japanese manufacturers have announced their efforts to contribute to SDGs. And many corporate activities have come to address environmental issues. As related to this, the spread of ESG investment has accelerated, and according to BlackRock, the largest asset management company in the US, investment for ESG or Environmental, social governance have increased. Government Pension Investment Fund (GPIF), Japan's largest institutional investor, has fully invested in ESG as well. This is phenomenal.

Against this background, more companies are adopting environmentally friendly products which many of the them lead to the cost increase. Of course, building the better world does not come cheap. There are its merits though. It helps improve corporate value and build a competitive edge in the market.

But how do we invest in comparatively costly environmentally friendly products without taking toll on the company’s competitiveness? What kind of strategy has been implemented? Are you already one of those companies?

Let’s take a look at CSV (Creating Shared Value), suggested by American economist, Michael Porter in 2011. The concept is that competitiveness of a company and the health of the communities around it are mutually dependent. It is believed that new business will be created by working on and investing in social development.

SDGs aim at solving social issues and building the sustainable economic growth. That makes CSV, whose objective is to pursues social solutions and improve profit, highly relevant.

Now it is time to incorporate environmentally friendly products into the CSV approach. Once CSV is implemented, the cost may increase but so does the corporate value of the company. We believe that it will lead to improvement of a company’s competitiveness.

In other words, the reason for adopting environmentally friendly products even at a cost, is to start in the upcoming new market.

The business roundtable, of Keidanren (Japan Business Federation) of the United States, released in August 2019, put the employees, customers, local communities and the environment on the list of stakeholders. It is the first major policy change in 22 years.

World Economic Forum's annual meeting (Davos meeting) in January 2020 also redefines Capitalism. “Capitalism, as we have known it, is dead. This obsession we have with maximizing profits for shareholders alone has led to incredible inequality and a planetary emergency,” it says.

This calls for:
1) Raising the "reason" to tackle social issues such as global warming and marine plastic waste by convincing the people in power rather than only consumers. More groups of people in the society are involved.

2) Adopting environment-friendly products as a means to solve social issues. Therefor the new market and social order will be built, companies gain more competitive edge.

3) Planting a new way of engagement in the management cycle, and enhancing the company's new competitive capacity.
DGs are formulated on the premise that traditional capitalism management models are no longer sustainable. SDGs management sees that the more the company grows, the higher the market share, and the more sustainable the world will be. Such is the direction the new business is heading.

Against this background, new companies focus on SDGs initiatives are mostly Japanese listed companies. It is time to examining the value of business conduct. The adoption of environment-friendly products is expected to contribute to the SDGs.

This is how the environmentally-friendly products we handle can contribute to your SDGs’ cause. We will go in detail of each type of products so you can see how our work can help you achieve the goal toward CSV.

1 Biodegradable products
The raw materials used in biodegradable products are mainly PLA, PBAT, PBS, etc. The humidity and temperature are affecting factors of biodegradation. Product biodegrades in an environment where conditions are met to encourage the breakdown by microorganism.

‘Biodegradation’ is often a key word when we speak of biodegradable products. The raw material itself uses a lot of biomass from plants which absorbed CO2 during its natural life. The CO2 will be emitted to the environment when the product is incinerated. Biodegradable is carbon offset. And CO2 reduction is important for SDGs, which is the goals many companies are working on to incorporate it into their corporate activities. Adopting biodegradable products will contribute to SDG's 13th goal "Climate Action"

You can find out on our website how we can help reduce CO2.

2 Paper Container (Bio PBS coating)
The paper containers we handle are coated with biodegradable Bio-PBS, which will be broken down by microorganism in soil. As more companies ask for non-plastic coating paper containers, Bio-PBS coated ones are being used.

We believe that this product can add more value and contribute to your corporate value.

Bio-PBS uses plant-based raw materials and fit into SDGs’ 13th goal because of its carbon offset quality.

Using paper with bio-PBS coatings as an alternative to petroleum-based products which is a limited resource, contributes toward a sustainable society the SDGs aim for.

3 Bio PE / Bio PET products
Biomass plastic uses renewable organic resources such as plants as a raw material. Even though it is not biodegradable, but the use of biomass makes BIO PE/Bio PET products carbon offset, and contributes to SDG’s 13th goal “Climate Action”. In addition, the "Plastic Resource Recycling Strategy" developed by the Japanese government in May 2019, aims to introduce the use of maximum biomass plastic to 2 million tons by 2030.

As the estimated domestic shipment of biomass plastics in 2017 is less than 40,000 tons, it feels like quite an ambitious goal. But as a raw material, biomass is cheaper than the biodegradable one. Its formability and function are not inferior to conventional plastics, making it attractive to companies new to environmentally friendly products.

Due to the current low value of dollars, it is expected that Bio PE / Bio PET products will become a popular choice.

4 PET Recycled Products
Used PET bottles collected can be recycled into various products such as tableware, cosmetic containers, films, and miscellaneous goods. The 12th goal of SDGs "Responsible Consumption and Production " tackles the mass production and mass consumption capitalism is based on. It is said that one should know the limit when it comes to consumption.

The reuse of resources and the reduction of waste among the global leading companies will form the trend of new “circular economy”. The aim is to minimize the use of new raw material as much as possible.

In addition to PET Recycled products, we also handle boilers that use waste plastic as fuel. Toplax’s highly experience staff and our extensive trading network is ready to serve customers who look for equipment and machineries that contribute to environmentally friendly manufacturing and recycling society.

Finally
Our years of experience working with customers on environmentally friendly products tells us one thing. That is environmentally friendly products are the trend that cannot be ignored by you as well as by your competitors. The number of choices of such products is mindboggling.

One may think twice before pursuing environmentally friendly products because of its higher cost.

The fact is it will increase the corporate value and market competitiveness. Educating about its merit to customers is important.

At Toplax, we do not simply sell products, but we tailor made sales strategy to fit the customer's need, from the beginning to the end.

Covid-19 epidemic and its consequences remind us of how important sustainable society is to us. In the post-Covid world, the importance of SDGs will be more eminent than ever. For corporations, instead of having to choose between the environment or the economy, the environment and the economy will become the only option. Comes the time for healing and change for the world. Our products contribute to the environmental and social cause as well as the business itself.

We hope to assist you to increase your competitive edge in the market, and your value for the earth.