Can Avery Dennison Deliver the Full Sustainability Package?

Will a leading packaging solutions provider catalyze a climate change Death Spiral, or sustainably change the industry landscape?

Headquartered in my very own hometown of Glendale, California is the global leader in labeling and packaging materials, Avery Dennison, a public $6 billion, Fortune 500 company.[1] Little did I know growing up how prevalent Avery Dennison was in my everyday life. Mammoth brands like Coca-Cola, Unilever, Proctor & Gamble, and L’Oreal source numerous sub-brand packaging labels from Avery Dennison.[2] In its position between the supply-side of ever-shrinking forests, and global demand of brands it packages, will Avery Dennison catalyze sustainable change, or a climate Death Spiral, with its products filling up GHG-emitting landfills every day?

Fortunately, Avery Dennison has begun to transition to a sustainable operating model. While the company is off to a promising start, more must be done to complete the package.

Key Value Chain Risks

“Climate change threatens Avery Dennison’s supply chain, our customers’ businesses and the communities we’re part of…the fight against climate change is just smart strategy.”

– Dean Scarborough, Avery Dennison CEO

Avery Dennison faces various internal and external risks, including procurement threats as resources packaging product inputs – paper – become more scarce, as will the 570 million gallons of water consumed annually in production; production is also energy intensive, but presently 100% reliant on traditional electricity and natural gas.[3] As its highly visible customers gain increasingly sustainability-aware and -demanding consumers, Avery Dennison will inevitably be held accountable by a set of powerful customers.

Today’s Sustainable Package

Avery Dennison has rolled out process and product changes to turn a complex multi-stakeholder challenge into shared opportunity. While the initiatives have tremendous potential, time has yet to determine their true returns.

In its 2014, Avery Dennison announced three major sustainability commitments by 2025:

  1. To grow revenues in sustainable product and service innovations.
  2. To achieve at least 26% emissions reduction.
  3. To be 95% landfill-free, with at least 75% of waste reused, repurposed, or recycled. [4]

First, Avery Dennison has begun to concentrate growth in sustainable product and service development. In 2013, the company implemented responsible paper procurement policies, maximizing use of recycled and FSC certified fibers, and working with the Rainforest Alliance to validate tracking of paper and pulp sources. Avery Dennison has diminished use of PVC, PVdC, and DEHP, materials producing negative environmental impact. [5]

Avery Dennison has developed a new impact analysis tool across its product line, the Greenprint™, which measures six dimensions of a product’s environmental performance:

screen-shot-2016-11-04-at-5-41-55-pm

Source: Avery Dennison Sustainability Report, 2012-14.

Avery Dennison also uses this tool with clients to make packaging decisions. For instance, L’Oreal worked with Avery Dennison to implement Greenprint to evaluate replacing product labels with a new Avery Dennison product line using less material, requiring little production water, and emitting fewer GHGs. The collaboration led to a 19% impact reduction for the replaced labels. [6]

To reduce emissions, Avery Dennison has begun optimizing energy use by piloting installment of wireless sensors to measure equipment component consumption and fine-tune production processes as well as coordinate shutdowns for idle equipment. Looking across unused and older facilities, they are closing and/or consolidating plants. The company has also made the move to fluorescent and LED bulbs. [7]

To become landfill-free, Avery Dennison is redirecting manufacturing waste material from landfills to plants that can convert the waste to energy through combustion.

In the early stages of its transition, the progress of these final two steps between 2012-14 include, “328,000 metric tons of GHGs…not emitted from landfills—the equivalent of removing nearly 280,000 cars from the road.” [8]

Completing the Package  

Avery Dennison has just started with its mix of innovative and incremental approaches, yet still has many opportunities ahead:

Client ROI Clarity: Avery Dennison’s greatest opportunity lies in connecting the sustainability dots to its clients’ top and bottom line. Without understanding the costs and benefits, how will clients be motivated beyond their good intentions and PR risks to contribute to Avery Dennison’s sustainable revenue goals? Greenprint is a start, but it just measures external costs. Clients need to understand their share in the value created.

Quantifiable Targets: It is still unclear how, and by how much, Avery Dennison aims to grow from sustainable products. Concrete, quantifiable commitments around sustainability contributions to the top and bottom line will make their first 2025 goal more clear and realizable by enabling these goals to cascade into performance metrics by which leadership, departments, or individuals can target and be held accountable to. In addition, a measureable target will create more transparency to stakeholders. 

Renewables: While incremental changes to production are already making an impact, Avery Dennison still relies 100% on traditional energy, and has not begun to focus on reducing its water usage. The company should evaluate renewables, fuel switching, and even the energy reproduced from its own manufacturing waste. Otherwise, there are only so many optimization tweaks possible to curb incremental emissions.

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Sources:

  1. “The Big Picture,” Avery Dennison Website. http://www.averydennison.com/en/home/our-company/the-big-picture.html.
  2. Ibid.
  3. “Avery Dennison Sustainability Report, 2012-14”. http://www.averydennison.com/content/dam/averydennison/corporate/global/English/Documents/Sustainability/AveryDennison_SustainabilityReport_2012-14_f.pdf
  4. Ibid.
  5. Joe Thornton, Ph.D. “Environmental Impacts of Polyvinyl Chloride Building Materials.” https://www.healthybuilding.net/uploads/files/environmental-impacts-of-polyvinyl-chloride-building-materials.pdf
  6. “Avery Dennison Sustainability Report, 2012-14”. http://www.averydennison.com/content/dam/averydennison/corporate/global/English/Documents/Sustainability/AveryDennison_SustainabilityReport_2012-14_f.pdf
  7. Ibid.
  8. Ibid.

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2 thoughts on “Can Avery Dennison Deliver the Full Sustainability Package?

  1. It is exciting to read about Avery Dennison’s collaboration with L’Oreal on new product labels with reduced environmental impact. For such collaborations, who bears the increased cost associated with the modified materials and production processes? If L’Oreal shares the increased costs with Avery Dennison, are such costs passed along to consumers? Pricing can be a powerful tool to incentivize clients to modify their packaging orders.

  2. Interesting post! I’m curious if the product changes under Greenprint have indeed increased the product costs for Avery Dennison. Assuming they have, I think it would definitely be challenging to pass along the costs to the clients or the ultimate consumer. One idea is that Avery Dennison and its clients could work together to promote consumer awareness around the environmental costs of packaging and increase consumers’ willingness to pay for more sustainable packaging. In addition, brands such as L’Oreal can advertise their sustainable packaging as one of the ways that they are an environmentally friendly company and improve their brand image. However, the ROI can be very hard to measure and attribute any brand equity or financial results directly to the more sustainable packaging. In this type of industry that likely have low margins and are at the mercy of their clients, I wonder if governments should play a bigger role in regulating and enforcing standards?

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