15. Model formal report

Bennett and Bingham, Inc. (BBI)

2300 Darcy Ave

Austin, TX 78705

December 12, 2019

Bennet and Bingham, Inc.

2300 Darcy Ave

Austin, TX 78705

Dear PWG Managers,

Attached is the formal proposal, “Sustainability Dispute Resolution,” submitted in accordance with my agreement with CEO Gracie Allen and COO George Burns. I expect that this report will help you inform the PWG members about sustainability to get them on board with the proposed sustainability changes to solve the current dispute.

As directed, the report addresses the PWG managers and member concerns raised. My work has been monitored by George Burns and this report is structured in accordance with the outline that he approved. I appreciate your cooperation as BBI works through addressing this difficult issue.

Sincerely,

PR Operations Manager

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PROPOSALS FOR ADDRESSING SUSTAINABILITY DISPUTES AT BBI

Prepared for the Project Working Group Managers

Prepared by          , Document Manager, Research Division

December 12, 2019

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Table of Contents

Executive Summary………………………………………………………….…  1

Introduction………………………………………………………………………   2

PR Issue………………………………………………………………………………  2

Problem……………………………………………………………………    2

Economic Argument……………………………………………………  2

Financial Argument……………………………………………………    3

Burden Issue……………………………………………………………………….  4

Problem………………………………………………………………………   4

Importance to PWG Members  ……………………………………..  4

Customers …………………………………………………………………….  5

Competition………………………………………………………..……….    5

CSO Issue………………………………………………………………………….…  6

Problem…………………………………………………………………………  6

CSO Not A Burden Argument………………………………………..  6

The CSO position………………………………………………………….   7

Examples: Other Companies With CSO Argument……….  7

Conclusion……………………………………………………………………….…  8

References……………………………………………………….………………..   9

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Executive Summary

CEO Gracie Allen believes that the organization should become more sustainable. Before implementing such changes, she wants to get a consensus from BBI employees to make sure they stand behind the proposed changes. Her proposal has caused pushback from the PWG members because they believe sustainability is just a PR issue, it will cause an added burden to their workload, and they are apprehensive about the new CSO position because they are professionals who do not need to be watched over. This report address the PWG member concerns with credible research from a variety of sources to convince the PWG members to support the sustainability initiative.

The PR issue is addressed with research from published professional journals and technology news media outlets to prove that sustainability has a direct connection to other areas beyond PR. These sources show how sustainability is linked to circular economic principles and the financial outlook of BBI as a strategy for lowering manufacturing costs.

Second, the burden issue is addressed by acknowledging that sustainability will in fact cause an added burden on PWG members, but it cannot be avoided because it is too important of an issue for BBI to ignore. Research exemplifying its importance to BBI’s customers and competition proves its relevance to the PWG members.

Third, the CSO issue section begins with a discussion about how a majority of the added burden previously mentioned will be alleviated through the creation of this new position. Additionally, the PWG member concern that this new employee will watch over them is addressed by explaining the flexible job description of the CSO, so BBI can ensure that this employee will not assume a managerial role. Finally, the CSO issue is concluded with evidence of how CSO’s have helped other companies save money, to illustrate to PWG the types of benefits BBI can experience from hiring a Corporate Sustainability Officer.

Overall, this persuasive research directly addresses the concerns of the PWG members to convince them to support Allen’s sustainability initiatives because it will allow BBI to improve our economic and financial standing, appeal to customers and compete against others in the business, and hire a new employee dedicated to working on these issues so that BBI can experience the same benefits that other companies have from engaging in more sustainable practices.

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Introduction

The purpose of this final report is to persuade the PWG members to support the sustainability initiatives by providing them with arguments based on credible research. This report will address the PWG member concerns about the sustainability initiative proposed by Gracie Allen. The first concern this report will address is the PR issue with evidence of the economic and financial impacts of sustainability. Second, the burden issue will be addressed through research that proves its importance to the PWG members by way of customers and competition. Finally, this report will address the CSO issue by detailing that it is not an added burden, it is a defined position, as well as evidence of other companies with a CSO.

The Public Relations Issue

• Problem

The PWG members believe that the only reason that Gracie Allen is pushing the new sustainability practices is to maintain the company’s positive public relations. For this reason, they believe that this initiative is not of their concern, as they are not working under the PR department. Based on research, I will show PWG members that sustainability is an issue that encompasses much more than PR through sources that show it is an economic and financial issue.

• Economic Argument

Sustainability is not just a PR issue, in fact, it is also a practice that will affect BBI’s economic utility. By converting to sustainable packaging of its products, BBI will engage in circular economy principles which means that products and materials will be at their highest utility and value, which is cost effective for the company as a whole (Steenis, Van Der Lans, Van Herpen, & Van Trijp, 2018, p. 854). Circular economy as defined by the World Economic Forum as an “ industrial system that is restorative or regenerative by intention and design and aims for the elimination of waste through the superior design of materials, products, systems and business models” (You Matter, 2018). In other words, sustainable packaging is one way that BBI can engage in circular economic principles that will work to reduce our costs associated with manufacturing, such as waste and energy expenses. By reducing waste and energy used in our packaging process, BBI can save money and in turn increase our profits. These economic benefits that BBI can experience from engaging in more sustainable practice shows that sustainability’s positive effects go beyond the realm of PR. Not only can BBI gain more positive PR by engaging in sustainability, it can also give us an economic advantage.

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• Financial Argument

As previously mentioned, Manufacturing costs are a financial issue for BBI that sustainability will impact. The economic benefit and financial benefit BBI can receive from sustainability practices are directly linked. Currently, PWG members believe sustainability is of no interest to them, however, cost and BBI’s bottom line is a concern for all BBI employees. There is a common misconception that the implementation of sustainability practices is costly. However, according to author and manufacturing expert, Mark Albert, “Saving the planet and making a profit are not in conflict or irreconcilable. They are, in fact, complementary impulses that can propel manufacturing into a safer, greener, more sustainable level of operation” (Albert, 2016, p. 18). This quote explains the rationale behind BBI’s push for sustainability in that becoming more sustainable is not just a recurring cost that BBI is looking to take on, rather it is an investment our organization is looking to make in order to operate more sustainably to increase our profit margin. While initial investment to redesign packaging may be costly, the long term cost of manufacturing sustainable packaging will be lower in comparison to current packaging methods making it a worthwhile investment of BBI’s hard earned assets. So, although the initial costs associated with redesigning packaging may be expensive, in the long run it is more cost effective because it will cut manufacturing costs in BBI’s factories.

Overall, this research gathered from published professionals and technology news media outlets, should prove to PWG members that sustainability encompasses other departments besides Public Relations, as it is clearly linked to BBI’s economic and financial success.

The Burden Issue

• Problem

The PWG members complain that their current workload is putting them under enough stress as it is, and are hesitant to get on board with Allen’s sustainability initiative because of the perceived burden that sustainability will add to their existing workload. In this section, I will address that sustainability may be an added burden, but it is worthy of PWG employee concern because of the impacts it will have on our customers and competition.

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• Importance to PWG Members Argument

While implementing sustainability at BBI may be an added burden, it is important for PWG members to be concerned with these practices because it directly effects our customers and competition, two groups that should be of every BBI employees’ concern.

• Customers

Those in opposition to implementing sustainability believe it is a waste of time for companies to spend time and money on something that customers do not even care about. Customers are concerned with paying the cheapest price for their products, so companies do not need to be bothered with how much energy goes into packaging our products, because it is not something that is consistently factored into their purchase decisions (Laughland & Bansal, 2011, p. 3). While this may have once been the case, the behavior of consumers is changing, in fact the above source is from 2011 because it is hard to find an argument against sustainability in 2019 because research shows that it is on consumers’ minds. Consumers today are doing more research and being more conscious about the environmental effect their purchases have which is why sustainability is a current consumer buying trend that BBI needs to adopt in order to maintain our loyal customer base. Forbes described five key consumer buying trends, three of which can be addressed through adopting sustainable packaging. Customers are searching for green products, prioritizing values, and looking for differentiation from companies on attributes other than price which are features BBI can deliver on if we adopt the proposed sustainability practices (Barr, 2019). Forbes magazine is not the only observer of these market trends, in fact a professional research study published by Global Cosmetic Industry found that “54% of shoppers claim to consider elements of sustainability when selecting both products and stores” (Scherer, 2012, p. 50). As a company we cannot afford to ignore this large percentage of the consumer population that is looking for more sustainable products to purchase. This should prove to PWG members the sense of urgency that BBI is faced with to move forward with sustainability practices. Put simply, if BBI does not address the concerns of the customer, we will lose customers and profits, so while this may be an added burden it should be an area of concern to all PWG members. A third reason sustainability is important to BBI’s customer relations is because a company’s brand image is closely tied with its sustainability practices, so it would be in BBI’s best interest to invest it it’s future by committing to sustainable packaging.

A marketing study found that consumers have a positive attitude towards sustainably packaged products and associate products packaged sustainably to be of higher quality (Steenis, Van Der Lans, Van Herpen, & Van Trijp, 2018, p. 854). This article provides research that supports BBI’s sustainability initiatives and proves that it will help the company as a whole maintain its completive edge and positive reputation. Customers are essential to BBI’s profitability and our livelihood as a company. The future of BBI should be every employee’s concern, and one of the best ways to ensure a profitable future is to maintain our loyal customer base. BBI can maintain our loyal customer base and continue to deliver quality products by initiating more sustainable practices because sustainability is a key attribute consumers are looking for in their products.

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• Competition

Sustainability is a concern that our competition has made strides to address, and BBI needs to take similar action in order to stay relevant in this competitive industry. As a seller of office products, BBI’s main competitor is Staples. On their corporate website, Staples details their sustainability practices in terms of packaging. In 2012, Staples launched a “Smart-Size Packaging System” that allows them to reduce their carbon footprint as a company (Staples, 2019). Since 2011, they have decreased the packing materials used for shipping by 8% and it is their goal to get to 20% by 2020 (Staples, 2019). Since Staples is our main competitor, BBI cannot afford to ignore their actions to become more sustainable. In order to compete, BBI must match Staples’ efforts in sustainability, as it is an important value consumers are looking for in the brands and products they purchase.

While adding sustainability may be an added burden to PWG current workload, it is important for BBI to address in order to stay relevant in this industry, as it is something that our customers are looking for and our competition is aiming to deliver on. When posed with the option between buying from BBI and our competition, we want customers to choose BBI and feel satisfied that their purchase meets their expectations and standards. Ultimately, BBI must adapt to the changing market tastes or risk losing our loyal customer base to our competition.

The CSO Issue

• Problem

Many PWG members are unfamiliar with the CSO position and worry that if BBI moves forward with hiring one, they will feel like they are being babysat while they do their job. The PWG members are offended at the idea of hiring a CSO because they are competent, responsible professionals who do not need a new employee telling them what to do. Based on research of the CSO, I will address how this new employee can help with the burden issue under a specific job description that doesn’t put this individual in a managerial role, and how other companies have succeeded with the help of a CSO.

• Not a Burden Argument

As previously discussed, sustainability will be an added burden on PWG members. However, hiring a CSO ensures that one person is dedicated to thinking about sustainability, taking much of the burden off the individual employee. According to Inc., hiring a CSO can help companies gain the competitive edge, without adding a burden to the current employees (Kline, 2014) . Hiring a CSO ensures that one person is dedicated to thinking about sustainability, taking much of the pressure off the other employees (Kline, 2014). PWG members can be assured that by implementing these sustainability practices they will not receive added unnecessary burden to their current workload because the CSO will take on the added work.

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• Defined Position Argument

The job description of a CSO can be tailored to BBI specifically to ensure that the PWG members do not feel like this new employee will assume a managerial role. The job description of a CSO tends to vary from company to company, so BBI can specifically decide what makes sense for the CSO to do within our organization. Serafeim and Miller, two business professionals, surveyed nearly seventy CSOs and found that their primary job duties are usually to help companies in one of the following stages: compliance, efficiency and innovation (Gerdeman, 2014). Compliance refers to the beginning stages of their work in which a CSO helps make sure the organization is compliant with industry sustainability regulations (Gerdeman, 2014). Second, efficiency is about finding ways to save the company money through becoming more sustainable (Gerdeman, 2014). Finally, innovation is the more advanced stage in which sustainability becomes a company core value and a long term view is taken with the goal of maximizing profits and influencing world change (Gerdeman, 2014). Using these concepts as a guide for defining the CSO job description, BBI can explicitly define what the CSO can do for our organization regarding sustainability so that it works within the current company structure. The CSO will be concerned with sustainability, not the management of employee’s, so PWG members can be assured that they will not feel as though they are being babysat by this new employee.

• Examples of Companies with effective CSO

There are many companies that have seen success from hiring a CSO including our competition Staples, as well as many other well-known companies such as Google, Nike, MasterCard, Target, and Ikea (Townsend, 2018). Our closest competition, Staples, has had Jake Swenson as their Director of Sustainability for eight years. During this time he has focused on corporate sustainability and has implemented the service that Staples now offers called Staples Advantage. Through this program your company can hire a Staples sustainability representative to help the organization find sustainable solutions, eco-conscious products, green expertise, and reporting tools (Staples, 2019). One company Swenson worked to help was the University of Colorado. His challenge was to reduce cleaning costs without sacrificing performance, and his work lowered their costs by 23% (Swenson, 2012, p.29). Additionally, Swenson was also hired by the State of Kansas and he was able to lower their costs by 30%. (Swenson, 2012, p. 30). Staple’s work with the University of Colorado and the State of Kansas is just a small example of what a CSO could offer to BBI. Through hiring a CSO to look at our spending habits and implementing more sustainable practices, BBI can save money and increase our profits. Sustainability will give BBI the opportunity to increase our profits and put us in good standing against our competitors in an industry aimed at becoming more sustainable. Other organizations have seen substantial costs savings from introducing more sustainable practices to their businesses, and BBI can experience similar benefits as these other companies by hiring a CSO.

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Conclusion

PWG members should get on board with Allen’s sustainability initiative because sustainability should be every BBI employees’ concern as it effects our economic and financial standing as well as greatly impacts our customers and competition, and therefore our profit. Customers are looking for more sustainable brands and products and our competition is aiming to deliver on this attribute, so we may be at risk for losing our valued consumers if we do not adapt to their changing evaluative criteria. Naturally, all these changes seem to warrant an added workload to the PWG members, but they can be assured that by hiring a CSO, the sustainability issues, practices, procedures and protocol will all be dealt with by this new BBI employee, who will be focused on sustainability, not the management of PWG members. For these reasons I urge the PWG members to be concerned about sustainability and support BBI’s initiatives so that as a company we are setting ourselves up for a successful and profitable future.

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Works Cited

Albert, M. (2016). Sustainability—clearly linked to profitability. Modern Machine Shop, 89(2),18. Retrieved from http://search.ebscohost.com.rwulib.idm.oclc.org/login.aspx?direct=true&db=bth&AN

Laughland, P., & Bansal, T. (2011). The top ten reasons why business aren’t more sustainable.  Ivey Business Journal, 75(1),1. Retrieved from http://search.ebscohost.com/login.aspx

Barr, S. (2019). Sustainability, values and community are what consumers want from retailers this holiday season. Forbes. Retrieved from https://www.forbes.come/sites/stevenbarr/2019/10/02/sustainability-values-and-community-are-the-top-consumer-trends-of- holiday-2019/#68d4d92718b9

Gerdeman, D. (2014). What do chief sustainability offiers do? Forbes. Retrieved from https://www.forbes.com/sites/hbsworkingknowledge/2014/10/08/what-do-chief-sustainabilty-officers-do/#76453d0833ab

Kline, M. (2014). Why your company needs a chief sustainability officer. Inc. Retrieved from https://www.inc.com/maureen-kline/why-your-company-needs-a-chief-sustainability-officer.html?cid=search

Scherer, B. (2012). The right message: translating sustainability packaging to consumers. Global Cosmetic Industry, 180(9), 50-52. Retrieved from http://search.ebscohost.com.rwulib.

Staples, Inc. (2019). Sustainable products: creating greener packaging. Retrieved fromhttps://www.staples.com/sbd/cre/marketing/about_us/corporate-responsibility/ environment/sustainable-products/

Steenis, N., Van Der Lans, I., Van Herpen, E., & Van Trijp, H. (2018). Effects of sustainable design strategies on consumer preferences for redesigned packaging. Journal of Cleaner Production, 205, 854-865. https://doi-org.rwulib.idm.oclc.org/10.1016/j.jclepro.2018.

Swenson, J. (2012). Sustainability at Staples-making it easy to make a difference. Retrieved from http://www.responsiblepurchasing.org/webinars/office_products_webinar_slides_103112.pdf

Townsend, S. (2018). 46 sustainability leaders (who are also women). Forbes. Retrieved from https://www.forbes.com/sites/solitairetownsend/2018/07/18/46-sustainability-leaders- who-are-also-women/#2d2ac7df1110

You Matter (2018). Circular economy-definition, principles, benefits & barriers. Retrieved from https://youmatter.world/en/definition/definitions-circular-economy-meaning-definition- benefits-barriers/

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