Monthly Archives: July 2019

What Does “Sustainability” Mean to Manufacturers? Ingersoll Rand Helps to Explain Through Operations & Products

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One of the long-term success stories in U.S. manufacturing is that of Ingersoll Rand, with history dating back to the 1870s as the Industrial Revolution gained great momentum in North America.

The company’s products were needed by other industrial revolution companies (such as compressors), by mining companies (rock drills), and in various elements (locks and more) of the b-to-b market.  When the Panama Canal was being built by the U.S., Ingersoll Rand drills were on the job. 

Over the decades numerous industrial companies were acquired, with technologies and products added – including such well-known names as Clark Equipment Company, Trane, Thermo King, Dresser-Rand, Harrow Industries, and others. In 2006 the company celebrated its 100th anniversary of listing on the New York Stock Exchange.

Today the company’s products are used in business and residential heating and air conditioning systems (HVAC), in the food industry, on golf courses (the familiar Club Cars), in temperature control (for transport), as well as the company’s plants turning out power tools, control systems and other equipment (there are 51 plants worldwide).

In 2014 at the UN Climate Summit the company announced its Global Climate Commitment to reduce GhGs from products and operations by 2030.  So – how is Ingersoll Rand doing today? 

Today’s Top Story is a Forbes interview with Rasha Hasaneen, VP-Product Management Excellence and Innovation (before joining the company she was at General Electric. The interview is authored by Joan Michelson, a ForbesWomen contributor) who talks with Rasha about “process” as well as products. 

Ingersoll Rand has “a holistic view of sustainable innovation”, helping the company to find common ground with customers, partners and potential recruits.  Keys to innovating with a “core value of sustainability” including (1) anticipating customers’ unstated needs; (2) performance comes first with sustainability a close second; (3) the focus is primarily on product portfolios; (4) the company is constantly innovating; (5) data helps make the business case for understanding the customers’ industries; (6) use the organization’s unique “language” to get support for innovation.

These “6 tips” explain, says Rasha Hasaneen, comprise the Ingersoll Rand approach to innovation.  The challenges to address in the era of global warming with record heat across the U.S. include design and production of HVAC systems (heating, ventilation, A/C) which account for half of the energy consumption in U.S. homes and 39% of commercial buildings.

The company explains “sustainability”:  At Ingersoll Rand, we integrate sustainability into the anatomy of how we help our customers success and how we run our operations.  There’s good information on the firm’s 2030 Sustainability Commitment and the challenges the company, customers and society faces here.

We note here that the two aspects of “sustainable” definitions used today in industry are involved: developing sustainable, long-term products for customers (such as innovative HVAC systems) and making those products sustainability — and to be sustainable and responsible as well in the language of ESG.

Note:  The company’s headquarters was for a long time in New York City, moving to neighboring New Jersey in the 1970s and then on to Davidson, North Carolina.  The company is now incorporated in Dublin, Ireland (that’s a clear sign for us of the impact of globalization of what we formerly considered to be our “national” businesses!).

Top Story

6 Tips For Driving Sustainable Manufacturing From Ingersoll Rand
(Tuesday – July 16, 2019) Source: Forbes – As record heats spread across the U.S. (and the globe), air conditioning systems and the power systems they depend upon are getting a workout. These HVAC systems – heating, cooling and ventilation – are used 24/7 “account for…

About Those Assembled “Best Of” Lists of Companies – What Lessons Are There For The Managers Of Other Firms…Not On The List Of The Chosen?

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There are a number of “best of” lists that corporate managers and investment professionals scour to see what companies are judged to be doing well (by the list makers)…whether they be industry peers & competitors, or possible acquisitions or partners, and for investors, whether the listed firms might be the right choices for investment portfolios.

One annual list that we do follow is the one produced by Corporate Knights – the “Global 100 Most Sustainable Corporations”, published for the 15th year in 2019.  This list begins with around 7,500 possible inclusions in the top 100, all firms generating $1 billion or more in revenues.  Analysts devote 5,000 hours scouring almost 4 million data points to narrow the field to the chosen 100.

Examining the results, Holly Johnson of The CEO Magazine shared her perspectives with her readers.  There were top takeaways she learned from examining the work of Corporate Knights analysts:

  1. The top companies “live longer” (average age for the top 10 was 87 years!).
  2. They are better governed than peers, with lower CEO-to-worker pay ratio. They pay more in taxes.
  3. They’re “greener,” generating more revenues from clean (positive green or social impact) goods and services.
  4. More women are found in their ranks, and in the board room; there’s bound to be found a link between exec compensation and sustainability measures.
  5. Revenue is “cleaner” – generated through sustainable products. The Top Company is Chr. Hansen, generating 80% of revenues from development of natural solutions for food preservation and crop protection, as well as alternatives to using antibiotics for food animals.
  6. Investors are happier with these firms. 

You can find the details from each of these findings in our Top Story. There’s a link to the Top 100 Corporate Knights list in The CEO Magazine post.

The company names you’ll find in the Top 10 of the Top 100 firms include Prologis (USA); GlaxoSmithKline Plc (UK); Banco do Brasil S.A. (Brazil); Taiwan Semiconductor (Taiwan).

Author Holly Johnson is staff writer and digital producer with The CEO Magazine, in Australia, where “she now delves into the world of leading business executives.”  The magazine is Australia’s leading business publication.

Top Story

Green leaders: The world’s most sustainable companies in 2019
(Tuesday – July 02, 2019) Source: CEO Magazine – According to Corporate Knights’ list of the 2019 Global 100 Most Sustainable Corporations, it encompasses carbon and waste reduction, gender equality in leadership and even revenues derived from clean products. 

Do Consumer Favor Sustainable Brands for Their Products and Services Needs? NYU Stern School Research Dives Deep into the Data For Answers

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by Hank Boerner – Chair and Chief Strategist, G&A Institute

Many people in consumer marketing are wondering about consumer preferences for “sustainable” products! In our weekly newsletter the G&A Institute team offers media and experts’ shared perspectives on various issues and matters related to corporate sustainability, responsibility; and, sustainable, responsible and impact investing.

In recent months the content shared frequently has focused on trends in the consumer market — to help answer the question of whether or not consumers reacting to brand-facing companies positioning themselves as sustainability leaders.

Is this type of brand marketing a successful strategy?  Worth the effort? 

So the important question in all of this “wondering” is: Are consumers now favoring sustainable or green (or pick your term of definition) for their products & services at retail? 

In our ongoing monitoring of news, feature and research results — such as for the fashion and footwear industries, the auto industry, food & beverages, and certain other categories — the results tell us brand leaders are now often introducing sustainable products alongside their usual cash cows. We included several items for you in this week’s newsletter along these lines. This was our top story:

Writing in the Harvard Business Review, Tensie Whelan, professor at New York University Stern School of Business, and leader of the NYU Stern Center for Sustainable Business, and Randi Kronthal-Sacco, director of Corporate Outreach for the Center (and formerly with Johnson & Johnson) describe the results of their recent in-depth research project. 

This research centered on trying to answer the question — do U.S. consumers actually purchase sustainably marketed products?  (Spoiler alert: yes – you must read the HBR article to find out more.) 

Whelan and Kronthal-Sacco used volumes of data sets from bar scan codes at retail for food, drug, dollar, and mass merchandisers, looking at 36 categories and 71,000+ SKUs, accounting for 40% of consumer products goods (CPG) sales over a 5-year period.

So, what did they find to be the largest share of sustainability-marketed products? 

Almost $1-in-$5 purchases at retail are for toilet tissue, facial tissue (think: forest products); milk, yogurt (the yield of countless dairy farmers); coffee (lots of attention on the global coffee-growing belt circling the Earth, and worker conditions therein); salty snacks (really?); and bottled juices (you’ll notice that Coke and Pepsi and other beverage marketers are advertising their shift away from sugary drinks). 

At the bottom of market share:  laundry care, floor cleaners and chocolate candy (accounting for a 5% share).

Say Tensie and Randi:  Pay attention, marketers and those all along the retail value chain, from grower field and factory floor to shelf space.  Consumers are voting with their dollars, for sustainable and against un-sustainable brands. 

Winners in the corporate sector include PepsiCo and Unilever; laggards include Kraft Heinz. (For the leader, Unilever:  think of the company’s sustainable labels like Seventh Generation, Sundial Brands and Pukka Herbs.)

And we are seeing in the many stories we bring you each week about consumers and sustainability, the future for sustainable CPG at retail is looking bright – look at the apparel industry.for examples  The agora is alive and well with many more sustainably-branded products on the shelves.  That’s the good news for sustainability professionals.

The NYU researchers used data from IRi (the research house for CGP, retail and health and beauty – information at: https://www.iriworldwide.com/en-US/Insights)

Congratulations to our colleagues Tensie Whelan and Randi Kronthal-Sacco at NYU Stern Center for Sustainable Business for sharing their insights and perspectives.

This Week’s Top Story

Research: Actually, Consumers Do Buy Sustainable Products
(Thursday – June 20, 2019) Source: Harvard Business Review – NYU Stern’s Center for Sustainable Business just completed extensive research into U.S. consumers’ actual purchasing of consumer packaged goods (CPG), using data contributed by IRI, and found that 50% of CPG growth from 2013 to…