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Sustainability is rapidly growing as a driver of corporate strategy and behavior. Many companies are adopting various approaches to operating more sustainably and are requiring their suppliers to do the same. Henkel, a major multinational corporation, has long considered sustainability a part of its corporate culture, and it launched a well-articulated strategy in 2011 to achieve an aggressive set of sustainability objectives.
"Sustainability is in our DNA" is a familiar phrase heard at corporate headquarters in Dusseldorf, Germany. Sustainability is one of five promoted corporate values and a major point of pride at Henkel. Henkel calls its corporate-wide sustainability strategy "Factor 3". The objective of a "factor strategy" for sustainability can be summed up as "doing more with less" (Weizsacker et al. , 1997).
Henkel's strategy was propelled by considerable work done by the corporation's sustainability team with input from the company's most senior executives and also from Arizona State University's Global Institute of Sustainability (ASU), which conducted an analysis of how Factor 3 appears to be progressing, especially in view of its long-term goals.
The analysis showed that Henkel is well on its way to meeting Factor 3's first five-year objectives, thus reinforcing the company's reputation as a corporate leader in sustainability. But it also suggested that such rapid progress toward achieving the objectives may become difficult to maintain in the future. This article provides corporate strategists and executives and those who study sustainability with insights, challenges and opportunities learned as a result of Henkel's experience with its Factor 3 approach.
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Henkel's sustainability history
Fritz Henkel and two partners founded the company in 1876. From the beginning, Mr. Henkel made care for workers and community participation important themes. Continual family ownership for almost 140 years now has helped Henkel maintain and refine this original sense of responsibility and infuse sustainability into its corporate culture.
From its roots as a small business, Henkel has evolved into a multinational corporation with 47,000 employees and hundreds of brands with three key business sectors: laundry and home care, beauty care and adhesive technologies. Many of its products, including Persil detergent and Schwarzkopf hair care, are household names in Europe. With its acquisition of The Dial Corporation in 2004, Henkel began an aggressive pursuit of market share in...