Special Report: Leading the Way to a Better Planet

Cause-based marketing — i.e., attaching your business to a philanthropic endeavor or social cause — has become increasingly popular among retail brands today. Consumers want to know that the brands they're purchasing from are committed to more than just growing their bottom lines. They expect retailers to be involved in the communities where they operate, whether that means donating to the local children's hospital or helping to build a park. Three retailers that are at the forefront of cause-based marketing when it comes to environmental sustainability are Kohl's, Ikea and Staples.

Caring About the Environment
Being an environmentally sustainable organization is part of Kohl's DNA. The department store retailer's Kohl's Cares initiative aims to protect and conserve the environment through a variety of innovative solutions that encourage long-term sustainability. These solutions range from building environmentally-friendly facilities — Kohl's recently announced the activation of its largest solar project to date at its million-square-foot e-commerce fulfillment center in Edgewood, Md., as well as a 25 percent expansion in its solar program in 2012 (solar panels were installed at approximately 30 additional Kohl's stores last year); joining the Environmental Protection Agency's (EPA) WasteWise program to formally measure and report its strong commitment to waste reduction and recycling; and partnering with vendors who share Kohl's commitment to supply chain sustainability.

Kohl's has been recognized for its efforts in this arena. The retailer was recently named one of the EPA's Energy Star Partners of the Year for its commitment to environmental sustainability. Kohl's achieved Energy Star certification for 75 stores in 2012, for a companywide total of 752 stores. It also surpassed its goal of achieving a 2 percent improvement in energy efficiency (it achieved a 2.5 percent improvement) by the end of 2012. Kohl's has also recommissioned HVAC units at 114 stores, conducted energy audits at 58 stores and actively monitors alerts sent by its energy management system to warn of excessive energy use at the store level.

"Kohl's takes its commitment to green power and sustainable operations seriously and has set several goals to ensure we continue to strategically advance our programs," said John Worthington, Kohl's chief administrative officer, in a company press release announcing its 2012 Sustained Excellence in Green Power Award from the EPA. "From offsetting 100 percent of our energy use to having 200 solar locations by 2015 to educating our partners about how to establish successful programs of their own, Kohl's is proud to do our part to support green power use."

Kohl's has some lofty goals for its environmental sustainability efforts going forward. It hopes to have 200 brick-and-mortar locations with solar power and 800 Energy Star-labeled stores by 2015; and by 2015, 85 percent of all the waste it generates will be recycled (it currently is at 83 percent).

More Than Just Furniture
Ikea, the international retailer of ready-to-assemble furniture, has taken steps within its organization to better care for the planet. It's not just the company and its employees that are striving to make a difference, however. Ikea customers have been making a positive impact, too.

It starts with Ikea offering products that enable its customers to live a more sustainable life at home. From LED light bulbs — by 2016 all of the light bulbs sold at Ikea will be LED — to energy-efficient appliances (e.g., induction stovetops) to recycling bins, Ikea provides the tools you need to do more with less and conserve energy.

Ikea is working behind the scenes to make itself a more sustainable organization. It sources products in a responsible way while investing in renewable energy and energy-efficient technology to help tackle climate change and lessen its impact. Ikea has partnered with the World Wildlife Fund and the Forest Stewardship Council to support responsible forestry practices for all the wood that it uses in its products. The retailer's long-term goal is that all wood used in its products is recycled or comes from forests independently verified as responsibly managed.

Cotton, the second most important raw material for Ikea behind wood, is also a strategic priority for the brand. Ikea recently reinforced its goal to use only cotton produced entirely in line with the Better Cotton Initiative in all its products by the end of 2015. Ikea plans to grow worldwide demand for sustainable cotton at affordable prices, ensuring that consumers don't have to pay a premium for cotton products that are more sustainably farmed than conventional cotton — e.g., using less water and fewer chemicals and pesticides. Forecasts suggest cotton production costs will increase as conventional cotton farming becomes more water and chemical intensive. Ikea believes it's possible to produce cotton at a lower cost and through practices that have a lower impact on the environment. In 2012, Ikea used 160,000 tons of cotton in its products.

In addition to sourcing sustainable products, Ikea is working to make its facilities (e.g., brick-and-mortar stores and distribution centers) more energy efficient. Nearly 90 percent of all waste in the company's stores is recycled or used for energy production, and more than half of the energy used to power Ikea buildings is renewable. Solar panels are being added to all new and existing structures, and Ikea is investing heavily in wind farms. The retailer is in the midst of building a nine-turbine wind farm in central Sweden, which will produce renewable electricity equivalent to 75 percent of the electricity consumption of all the brand's stores in the country.

An international brand, Ikea ships its products to customers across the globe. This means trucks, ships and planes are transporting those goods — and emitting carbon dioxide in the process. Ikea has set a goal to increase its fill rate — i.e., the share of the space in trucks and containers that's actually used — from its current 63 percent to 70 percent. More products transported per load translates to fewer deliveries and a sizable decrease in carbon dioxide emissions.

"One way to fit bigger loads is to get rid of bulky wooden pallets and replace them with space-saving paper pallets," said Klas Ekman, Ikea's group transport manager, on the company's website. "They are only one-third the height of their wooden ancestors and the inches saved often means that we can fit one more layer of products in trucks and containers. Some 90 percent of shipments from suppliers to Ikea distribution centers and stores are now made using paper pallets or loading ledges."

The Soul of its Organization
Staples Soul is the office supply retailer's initiative to make a positive difference for its customers, associates and the environment. In 2011, the retailer unveiled its overarching sustainability strategy, which contains five pillars:

• sell more sustainable products and services;
• offer easy recycling solutions for our customers;
• eliminate operational waste;
• maximize energy efficiency and the use of renewable energy; and
• become a sustainability leader in the global community.

Staples has set numerous goals for its environmental sustainability program, including reducing the use of packaging materials in the U.S. by 20 percent by 2020; recycling 100 million ink and toner cartridges each year across all operations by 2020; recycling 40 million pounds of e-waste each year globally by 2020; reducing waste to landfill by 25 percent globally by 2020; reducing the electrical intensity of its global operations by 25 percent by 2020; ensuring that 50 percent of its U.S. stores achieve Energy Star registration by 2020; and reducing global carbon emissions by 50 percent by 2020.

"We're proud of our ability to have a beneficial impact on the environment while meeting the needs of our customers," said Ron Sargent, chairman and CEO of Staples, in the company's 2011 Annual Report. "Our priorities include selling more sustainable products and services, offering easy recycling solutions, eliminating operational waste, maximizing energy efficiency, and becoming a sustainability leader in the global community."

Some highlights of Staples' recent sustainability efforts include the following:

• Staples has collected more than 71.5 million ink and toner cartridges and more than 21.5 million pounds of technology waste.
• At year's end, 16 percent (286) of Staples' active facilities had received Energy Star certification.
• At the end of 2011, Staples had 36 solar installations at its facilities and purchased more than 340 million kWh of green power.
• Staples used 53 all-electric trucks to make deliveries to customers in multiple markets across the country. The trucks meet all performance requirements, helping reduce fuel costs and air pollution.
• Staples has reduced electrical consumption by 12 percent and natural gas consumption by 19 percent in its Canadian brick-and-mortar stores since 2010 through the use of centralized lighting and temperature set point controls, a "Lights Out" educational campaign, and lamp replacements and improvements.

These three cross-channel retailers have realized that their environmental sustainability efforts not only have a positive impact on the environment, but also have a positive impact on their bottom line. Increased sales and cost savings teamed with a better planet truly makes it a win-win scenario.