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Every time we use a product - whether shampoo to wash our hair, detergent to clean our dishes, or soda to quench our thirst - greenhouse gases are generated throughout the value chain. Do consumer products companies consider consumers' emissions due to the product usage when they tally their greenhouse gases? Count their carbon credits? Or calculate their sustainability pledges? Not likely.
An A.T. Kearney assessment of the top consumer goods companies finds that while almost all companies worldwide (96 percent) evaluate ways to reduce their greenhouse gas emissions, only 63 percent work within their entire supply chains to do so. And only 21 percent embark on programs to lower the environmental impact associated with the consumer's use of their products. Rather than evaluating sustainability in terms of the entire product lifecycle, companies generally stay within their traditional approaches, which focus mainly on internal processes such as manufacturing and logistics. Yet, we also found that in some categories less than 5 percent of the total impact of greenhouse gas emissions arises from these internal processes.
A product lifecycle approach to sustainability measures a company's total environmental impact - from raw materials, to production, distribution, consumer use, and disposal of the product by the consumer.
Today, it is becoming clear that companies must go beyond their traditional internal approaches and consider the entire product lifecycle when measuring environmental impact. Future growth will depend on aligning with consumers' priorities. Companies are under pressure to create sustainable products - not only from consumers but also from governments, retailers and suppliers. As natural resources become scarce, companies must consider the long-term sustainability of their business models and broaden their approach to...