In 1994, IKEA was defied with incriminations that some of their carpets may have been produced using child labor. Their reaction to these accusations was rapid and robust: they rewrote its purchasing contracts with all their suppliers around the world acknowledging them that IKEA was not using child labor. Notwithstanding the complex management of the child labor challenge and the subsequent bad publicity, the corporation never contemplated pulling out. Through IKEA’s commitment with this issue over the years, the company became convinced that simple-minded Western world solutions – such as boycotts, contract terminations or trade sanctions – would not lead to the abolition of child labor – which now IKEA considers it an embedded problem born out of poverty, poor health and education, social norms and indebtedness.

IKEA’s philosophy resulted in the implementation of several programs: they committed to UNICEF by funding development projects for the areas in which their supply chain is allocated and, as well as that, in 2000 IKEA formalized all the practices and policies in a corporate code of conduct: “The IKEA Way on Purchasing Home Furnishing Products (IWAY)”. IWAY fixed the company’s expectations regarding their providers in terms of working conditions –accentuating child labor requirements– and environmental responsibilities. IKEA enforces IWAY by auditing and guidance and only after repeated cycles of non-compliance, the relationship terminates.

IKEA advocated for “being legitimate instead of legal” and truly aims to change the rules of the game regarding their industry and supply chain by going beyond business practices and transforming community mind-sets. However, journalists call for fast and straightforward reactions and answers when the company states that they still have not completely resolved the problem existing since 1994 regarding their supply chain. No matter how much time IKEA spends in explaining the media the complexities of the topic and their long-term systematic solutions, sensationalized and untrue reports are continuously published as a result of the hotness of the affair -child labor- and the high visibility of IKEA.

This case made me wonder on which type of marketing campaign does IKEA need in order to make their public understand their approach, comprehend the complexity of IKEA’s ethical but controversial approach and make them less vulnerable to over-simplistic media reporting. To run away from green-washing perceptions IKEA needs: to heavily communicate with transparency all their practices, to search for independent verification of their claims and to encourage consumers to act by including in their brand image bigger sustainable issues, in this case, their treatment of the child labor challenge.

Some initiatives could be: explanatory videos posted in IKEA’s social media, open educational events or conferences, collaborations well-known institutions as Save the Children and UNESCO by jointly communicating their work together to construct even a stronger moral brand image…

Before being an exchange student for one semester at UBC, I used to live at home with my parents where, like the average families, they had a nice and complete toolbox. However, the other day I needed a screwdriver. The fact that I didn’t have at my disposition the family toolbox made me wonder: How many times per year do we actually use that box? Is it worthy for me to buy a screwdriver that I will barely use?

Simultaneously to this, in class, we started to discuss the concept of Customer Solutions by setting the product in the heart of sustainability. The question we made ourselves was: Can we shift from goods to services?  While having this conversation, I realized that a company renting tools instead of selling them is precisely what I needed at that moment. That would be a way not only to avoid paying the high prices of buying one of these goods but also, a way to give further life to a product that otherwise would have been uselessly laying somewhere in my room.

Consequently, I searched on the internet in case I could find this type of service somewhere in Vancouver. And, surprisingly enough, I found it: It is called the Vancouver Tool Library (VLT). They decided to make their business model more circular through the concept of “Products as services”: this happens when goods vendors embrace the idea of themselves as service providers, leasing access to and not selling ownership of a product.

All in all, VLT is a cooperative tool lending that loans a wide variety of tools for home repair, gardening, and bicycle maintenance. They also offer affordable workshops on tool related skills and projects. This type of business model is an effective hedge against cost volatility and resource sacristy. Nevertheless, I believe they face a great challenge in terms of convenience and creating a change in consumer behavior: it will always be extremely convenient in consumer mind to have this tool directly at home, even if being conscious of the little use you will give to it and the significantly higher cost compared to simply renting it when needed. This is the controversial trade-off in the consumer’s mind: commuting and convenience vs. lower price and sustainability.

VLT’s mission:

“We are motivated by a vision of our community empowered by the tools and skills needed to transform their homes and communities into vibrant spaces that reflect a commitment to sustainability. To get there, we are creating a community resource that will reduce the costs of improving and greening the places in which we live, work, and play.”

 

VLT Webpage: http://vancouvertoollibrary.com

Loop is a zero-waste platform from a coalition of major consumer product companies to replace one-time packaging with reusable containers, and they will launch its first pilots this year. The more I read about it, the more I realized the tremendous future potential the design of this project has and how it is a real example embracing many issues we discussed in class. Let’s get started!

Loop worked with well-known brands as Procter & Gamble, Nestle, PepsiCo, Unilever, and more than a dozen others for over a year to develop this new platform. Each package is intended for 100 or more uses. In the early introduction, products will be offered through Loop’s website. When you order, for instance, deodorant or mouthwash, a deposit will be paid for the bottle – which will come with a recyclable tote. When products are used, the empty containers will be thrown back in the tote.  When the tote is filled, you can go to the Loop website to request a delivery driver to pick it up or, as well as that, drop it off at their store.

Eight out of ten companies listed by Greenpeace as the world’s largest contributors to the plastic waste crisis are actually part of Loop. The fact that these are major brands – like Tide and Gillet – is beneficial for several reasons. Firstly, it shows how the largest brands are accepting that packaging needs to change towards reusability and compostable plastic. Secondly, the commitment of larger brands has an enormous impact and potential to scale up. And finally, the fact that Loop is partnering with leading companies – and not niche brands targeting only green consumers – is noteworthy. The CEO of TerraCycle– partner behind the project – stated: “We don’t need to prove our brand of shampoo or ice-cream – like Haagen-Dazs. It is already the best. It is just giving them an alternative way to access those things.”

Moreover, Loop’s platform believes that shifting the ownership of a package from the consumer back to the brand drive numerous opportunities: it’s no longer a cost, but an asset. Instead of aiming the cheapest packaging, you aim for a better-looking or better-performing packing. Furthermore, Loop’s baseline is “to create systems that don’t make you change.” This is, they aim to reach mass-adoption by being as convenient as throwing something in the trash – and, factually, even easier than recycling. Likewise, the cost of the products will be similar to the one paid now.

So, essentially, regarding what we discussed in class:  Loop is generating an outstanding impact by working with international brands; they make use of the closed-loop recycling business model, they understood sustainability as a way to enhance efficiency and, finally, they managed to overcome the “changing-behavior” barrier.

A disillusioned Catalan psychologist named Cristóbal Colón – shattered by his experiences in Spain’s mental asylums – decided that the patients of all local asylums around the La Garrotxa region needed a job in order to fit into a society which thought that giving them bed and board was the limit of its responsibility. He believed these patients could be an effective part of the local economy and this would allow them to be valued as contributing members of society. That is how in 1984, Colón became a businessman by starting a little co-operative farm named “La Fageda” with a compelling goal in mind: creating shared value.

Thirty-five years later, Colón runs a business with 256 employees and annual sales of 16M euros. La Fageda, which makes high-quality yogurts, jams and ice cream, has been studied at business schools as far away as Harvard and has reached the second position after Danone in the Catalonian yogurt market. More importantly, it has fulfilled its aim of giving employment, homecare and social inclusion to almost the entire population of work-capable mentally ill people in La Garrotxa. There have been many ups and downs, but La Fageda ran on enthusiasm for many years: its staff and workers giving up weekends to tour towns with cuddly calves and samples of their yogurts. Those in charge sometimes found themselves working late into the night to fulfill orders on time. Finally, the creamy, ecological, full-fat yogurts made from La Fageda’s own milk became a runaway success and a real example of how profitable companies can also be sustainable.

However, I believe that the most astonishing part is that after being consuming their dairy products all my life, it was only recently when I took a social business course in my university that I got to know all this shared value background they hold. Shaded Green Marketing Strategy is La Fageda’s approach to their branding: they have never sold itself as a social cause. Once Colón said: “We want to compete like any other brand. Our message had to be that, even though we had people with disabilities, we were perfectly capable of doing things well”. Instead, they build their reputation around a visitors’ center – attended by 55,000 people each year.  Colón once stated: “That is the best marketing we have: People go away not just liking the yogurt but also – after seeing the forest, the cows listening to their music and the workers doing their jobs – as apostles.”

In fact, La Fageda bases its marketing in engaging people’s emotions and had genuinely succeeded in local terms:

“We have helped put Garrotxa on the map, and the people here now proudly claim La Fageda as part of their world.”