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How GP Approaches Sustainability
October 4, 2008 By: Mark Arzoumanian Official Board Markets"If we can't be sustainable in every way, then our company doesn't deserve to exist," says James Hannan, president and ceo, Georgia-Pacific Corp. (GP), Atlanta. He gave the keynote presentation at TAPPI's Corrugated Packaging Conference held last week in Atlanta.
Hannan defines sustainability within three dimensions: societal, environmental and economic. All too often proposed sustainability solutions come before the technology is in place, he adds. And tradeoffs are a constant.
"First we have to make peoples' lives better by providing them products that are of more value to them than alternatives," he states. "So we must have innovations. Second, we must practice environmental stewardship and compliance. Third, we must have long-term profitability. Long-term growth isn't possible without balancing all three."
He stressed that as far as GP is concerned, none of this is new--it's already part of the company's good business practices. GP recycles seven million tons of recovered paper and wood fiber annually and is working closely with its customers to reduce packaging use and eliminate waste. But recycling isn't an answer unto itself.
Customer demands are definitely a driving force behind the current sustainability movement, he notes. The industry has to be proactive and tell these customers its positive sustainability story.
"Will corrugated packaging be the packaging of choice?," he asks. "The industry can't look at sustainability as outside-needed. It has to be integrated, embedded. There's a lot of uncertainty right now. But that can lead to a wide range of options and a lot of flexibility."
Questions Remain--
Hannan admits that he has more questions than answers about the role of sustainability in the packaging industry. They include:
*Will people be willing to pay to be socially responsible? Will they pay more for "green"?
*What environmental, regulatory or legislative issues may change the cost of doing business relative to alternatives or competition?
"We have to stay connected with our elected officials, as well as with federal and state regulatory agencies, to help them better understand the costs and opportunities that exist as a result of proposed legislation and regulations," he says. "For example, regulation of carbon dioxide could completely change our industry's competitive position globally. In addition, mandates for the use of ethanol in fuels could increase the competition for wood fiber, as state and federal governments push for--and subsidize-- more alternative fuels like cellulosic ethanol." And that's okay, he says. Let the market play itself out.
Hannan says that companies facing the sustainability challenge understand GP's thinking. Key points of it include:
*Sustainability must always be discussed in the three aforementioned dimensions: societal, environmental and economic. No one of these can be over-valued or neglected;
*Sustainability must be based in fact and sound science;
*Sustainability claims must be intellectually honest, reality based, transparent, and verifiable;
*Opportunities must always be considered in light of the next best alternative. There is always a tradeoff;
*"Green" and "socially responsible" are fine strategies but they are too vague, ill-defined and subjective to be synonymous with sustainability;
*Sustainability measures are best applied as measures of progress rather than of absolute quality;
*Sustainability measures must be gathered and reported in a way that shows performance trends despite the growth or shrinkage of a business; and
*Winners should be chosen in the economic marketplace, not through political means or through legislative result.
