Sustainability is about specifics for Kruger

Steven Sage says being vague helps no one, even when you fall short on meeting your goals.
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Strategy‘s ongoing series on sustainability and CSR has revealed that getting employees on-board with environmental initiatives can be a challenge, but has benefits to recruiting, brand perception and, of course, the planet.

But even the best-laid plans encounter obstacles, and navigating around them can give any leadership team pause. Steven Sage, a marketing and sustainability veteran at Kruger Products (pictured), explains why brands shouldn’t shy away from such challenges.

Steven Sage came to Canada specifically to build a sustainability program for Kruger Products – one he insisted would set specific goals to be reported on annually. The paper product company’s leadership was supportive, but shifting to a culture of transparency is easier said than done.

Sage (currently VP of sustainability and innovation) was hired in 2009 after nearly 20 years in marketing at Georgia Pacific, an American pulp and paper concern. When he arrived in Canada, Kruger was still a private company (it’s IPO would come in 2012). It was his plan to build a timeline to meet well-defined goals for things like waste, water and energy reduction.

There were those in the company who wanted to keep things broad – committing to reducing water use, for example, without specifying how much – to avoid any commercial backlash in case the company fell short.

“Even though it is a leap of faith to set them, the act of setting specific targets is what’s important,” Sage told strategy. “Targets show commitment and point the organization forward.”

But, he says, back in 2009 “the notion of transparency was a bit of a disconnect” at the privately owned organization. “I was insistent that if we were going to do this, we’d do it properly. [The leadership] were supportive of that, but they just didn’t understand what that meant. The big question was ‘What if we don’t meet the targets? How do you manage through that?’”

He began addressing these concerns individually with the 10 members of the company’s leadership team, gathering their concerns and questions, anonymizing them, and then taking them to CEO Mario Gosselin. This provided an unvarnished list of concerns the various business units had that the CEO then addressed at an off-site retreat. It demonstrated top-level support for the project, but also allowed people to safely have their say. It opened the lines of communication. “There were then a lot of people helping me figure out, technologically, what was achievable,” Sage said.

However, that question of managing a missed target became less academic when the company released Sustainability 2015, a major benchmarking report, and revealed that it had missed its energy use target.

Aiming for a 15% reduction from 2009 levels across the enterprise, it managed only to reduce energy use by 5%. “We deployed a new technology that the market demanded, but it uses more energy and generates more emissions,” Sage said. Kruger’s largest customers are retailers such as Loblaw and Walmart, which set transparency goals of their own and demand suppliers provide increasingly complex sustainability data. The specter of soured relations with major retailers showed there was more than paranoia behind those early worries.

But the reaction to that missed target was minimal because the company had demonstrated such leadership in other areas. Defined goals and strict measurement paid off because, despite missing the energy mark, it had exceeding targets on six of its 2015 goals. During that time it had also partnered with Canadian Grocer magazine on an industry-wide forum to help CPG companies connect and build best practices for their sustainability programs.

And even that new technology that muddled Kruger’s energy reduction figures represented a positive sustainability step because it “uses less water and less fibre. So, it’s pretty easy to explain that. We’re a growing company and we invested in this technology, we’re adjusting our numbers and are committing for 2020 to meet our original target.”

Far from receiving backlash for falling short, Kruger was named Walmart’s Sustainability Vendor of the Year in 2016. “Demonstrating leadership in sustainability and minimizing our environmental footprint through our business processes and the products we sell is incredibly important to us,” said Andrew Telfer, manager, sustainability at Walmart Canada, in a release.

Telfer said Kruger had “been a great industry leader in creating opportunities for retailers and suppliers to collaborate in their sustainability efforts.”

That’s all Sage needs to hear to know Kruger’s moving down the right path. “The validity of a real program has been well received by the people who matter most to us: our customers.”

Correction: This article originally identified Joseph Kruger II as CEO. Strategy regrets the error.