When a shopper walk into a grocery store, each and every item being sold is either in shiny plastic wrapping or another form of packaging. Once the product is opened or used, the packaging goes right into the trash. Humans have I believe companies in this day and age must strive to adopt environmentally friendly packaging for two major reasons. First, consumers have been increasingly shying away from products that do not meet eco-friendly standards while opting for more of those using recyclable packaging material or other forms of “green” alternatives, such as biodegradable packaging. As consumers’ awareness on environmental issues grow, the trend seems to be favoring those companies taking a vow to fight such issues. Second, guess what? Fossil fuels will not last forever.
Granted, most companies’ main goal is to generate increasingly higher profits, which makes it harder for those wishing to become greener to insert environmental responsibility into their value chains while remaining competitive. Nevertheless, for the past few years there seems to be a growing number of consumers who will opt for companies which adopt environmentally friendly packaging in spite of the higher prices. One of the reasons behind that may be attributed to climate change and its perceived impact in our current society. According to an article from Entrepreneur on purchasing behavior, consumers “know they must change their spending habits now for the sake of their own health and that of their children.” In studies conducted by Nielsen for the year of 2018, it was reported that products with sustainability claims performed 3% better than its regular counterparts. I strongly believe that these numbers will only grow in the years to come, in that not only the consumers, but governments worldwide have been doing more to incentivize sustainable practices by offering subsidies and tax-reliefs to companies determined to be a part of the change.
It may sound risky and even unattainable to increase your manufacturing costs, leading to higher product prices all the while remaining operational. However, from a public relations perspective, this may very well prove to be the smart choice. Besides having a clear conscience that as a company you are doing your part for a better future, it seems that being an agent of change nowadays is ‘cool’. Take the automobile company, Tesla Inc., as an example. Tesla continues to surprise investors and analysts in Wall Street year after year with its record-breaking sales numbers. Despite its much-higher-than-average prices, the company’s electric vehicles have been backed by an allegiance of agents of change, who do not seem to care about paying the premium when they can come home and look at their friends and families with that feeling of being a hero, saving the world one day at a time by putting less CO2 into the atmosphere. This is the future. Here, heroes do not wear capes or fly around, but instead, they drive electric cars and shop from environmentally-friendly companies.
Plastic and other types of non-friendly packaging materials derive mostly from fossil fuels, specifically oil. It is not a surprise that one day fossil fuels will deplete, and then what? Many argue that that day is too far in the horizon to be considered as a potential threat to companies. I beg to differ. It is important to understand that longer before fossil fuels have been completely depleted, there will be incremental rises in the price of oil-based products, and that is due to the ever-decreasing supply of oil. According to an article from The Guardian, once peak production has been reached, “global oil production can be expected to decline steadily at about 2-3% a year, the cost of everything from travel, heating, agriculture, trade, and anything made of plastic rises”. Therefore, besides just following the social trend, companies who choose to modify their value chains to utilize environmentally-friendly packaging now, will have a competitive edge in the years to come as oil prices increase and make plastic and other related materials more expensive.
To conclude, I believe companies that choose to go green may be sacrificing higher revenues and funding opportunities for now. However, in the long-run these companies shall be rewarded by a more environmentally-conscientious population, government, and markets, in addition to a depletion of fossil fuels, which will prove fatal to those who were skeptical or simply waited too long to wear the cape, and become the heroes, the agents of change.
Essay by: Natan Nogueira
Florida International University