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ESG: Round Two

BY RALPH YOUNG

One year ago, we published our fi rst article on the global issue of environmental, social, and governance (ESG) initiatives. Th is was motivated by a research paper from Deutsche Bank at the time. Now, the fi rm has again shared with its followers the highlights—26 pages—from its recent sustainability conference. Th is fi nancial investment institution is one of four that we follow, as they have a focus on our industry.

Th e drumbeat has also been picked up by TAPPI and the Fibre Box Association, while fi nancial organizations are more focused on publicly traded corporations that must report via their 10-Ks to the U.S. Securities and Exchange Commission. Shareholders want to know!

There is much about who you are as a company to be shown by investing in the three principles outlined here. Also, be prepared to give an answer to stakeholders— that includes employees, both current and future.

It has been said that “deciding what is the right way and level to talk about sustainability is a key issue to be solved.” Others have expanded upon this decadesold phrasing and now call it “frugal innovation.” Th is is defi ned in terms of creating more business and social value, while minimizing the use of resources such as energy, capital, and time.

Start early to at least have a champion in your organization who is gathering published articles and reviewing 10-Ks. Adapting to new ways of thinking and building a new culture and mindset take time. Ultimately, this will permeate through the fi rm, and everyone will be engaged. Th e expectations of some of your customers are changing. Th e customer experience will not be the same.

Be careful about promoting electric vehicles (EVs), as the jury is still out about recycling those batteries after their 12- to 15-year life. Not for another 10 years will we have enough critical mass of old batteries to determine the true recyclability of them. We do know that currently it takes large amounts of water to recover lithium. We have not seen the life-cycle analysis for EVs as we have for corrugated, and EVs can use far more minerals than combustion vehicles. (Note: Th e Corrugated Packaging Alliance will release its latest Life Cycle Analysis for Corrugated later this year.)

While corporations have to have the best product and service to be competitive, they also need to build a company that participates with society where you work and live. It has an impact on the happiness of your stakeholders and shareholders.

You do not need to be looking at the global dialogue about cap and trade and carbon credits; your focus should be on your employees, wise use of resources and raw materials, effi ciencies, where customers are leaning, and misinformation and downright lies.

If you need to look at how far this has come and need a “corporate” template of how to proceed, look to Nike and its 10-K. Its goal is 100% renewable energy by 2025. Other fi rms such as MasterCard have diff erent motives of securing analytics on people in Th ird World countries who have always used cash systems. So be very careful who you model your programs after. Th at’s why we have each other in AICC! 

Ralph Young is the principal of Alternative Paper Solutions and is AICC’s technical advisor. Contact Ralph directly about technical issues that impact our industry at askralph@aiccbox.org.