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Research and Evaluation of Seventh Generation Company

Paper Type: Free Assignment Study Level: University / Undergraduate
Wordcount: 2156 words Published: 11th Jun 2020

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Seventh Generation is a household products’ manufacturer that originated in Burlington, VT in 1988. The company mission statement is to “inspire a revolution that nurtures the health of the next seven generations” (Rose 2011). The founder, Jeffery Hollander, wanted people to understand that a company could be socially and economically accountable all the while not conceding profits. The founder determinedly believed that a profit could be made while being sustainable. The companies triple bottom line is not only erected around profits but ensuring a positive environmental effect. They believe a company should focus on healthy products, communities and the environment. As a testament to the founders’ implications that you can still make a profit while being economically responsible, the net income of Seventh Generation in 2014 was 144.2M and in 2018 was 439.9M. The sales of the company in 2014 was 636.25M and in 2018 was 3.22B. To this day, Seventh Generation holds true to their mission statement. According to Jennifer Rose, “as part of its commitment to producing healthy products, Seventh Generation has reformulated its products and retooled its packaging to reduce its greenhouse gas emissions, improve efficiency, increase use of recycled materials, and eliminate the use of toxic ingredients in the supply chain”. The company has given their research and development team the ability to make sustainable decisions based off “scorecards” provided by the company. These “scorecards” are a scoring-based system to compare materials and product formulations (Rose 2011). Furthermore, the company makes sure the manufacturers and suppliers have the same vision/goal as Seventh Generation. Image plays a big role in building relations with customers and communities. At Seventh Generation, they donate ten percent of its pre-tax profits to non-profit organizations. Also, they are very big on volunteering and allow their employees 16 hours of paid time to volunteer in the local community (Rose 2011). According to the Seventh-Generation website, by 2020 the company has four goals: nurture nature, transforming commerce, enhancing health, and building communities. They want to nurture nature by ensuring all products and packaging are biobased and recyclable. Seventh Generation wants to produce zero waste and create and use energy sustainably. The company wants to transform commerce by being 100% transparent with all ingredients, materials, packaging, and supply chain disclosure. As a part of their mission, they plan to create safer products, reduce greenhouse gasses and take responsibility for product packaging. All products will be not acutely toxic and free of chronic toxicants. The company firmly believes in enhancing the lives of its employees and others as well as communities.

Sustainability Plan: Technologies

As mentioned previously in the overview, Seventh Generation is manufacturer that produces household products that are environmentally friendly and completely toxic free. At Seventh Generation, their mission is to demonstrate to people that cleaning products can be all natural and be just as effective as other nonenvironmentally friendly, toxic cleaning products. One of Seventh Generations biggest qualities is their commitment to social sustainability. They are completely committed to their workers and the local communities. They offer 16 paid hours to each employee to volunteer in the local community as well as donating 10% of its pre-tax profits to non-profit organizations (Rose 2011). Seventh Generation is the world’s largest eco-friendly cleaning supplies seller. Everything this company does is centered around producing products that are healthy for consumers, using recycled material, having zero-waste packaging, and to increase diversity (Mainwaring 2019). Recently Seventh Generation has been purchased by Unilever. With the company switching ownership, it draws concern to their mission and values. However, Unilever is devoted to continuing with the company’s vision and pushing them to be eco-friendlier. As a testament to their commitment, Unilever developed a senior leadership board to validate the CSR goals the company has. By 2025, Seventh Generation is planning to be operating on 100% renewable energy. (Mainwaring 2019).

Sustainability Plan: Collaborate with Suppliers

Seventh Generation makes sure the manufacturers and suppliers have the same vision/goal as Seventh Generation. According to Seventh Generations website, “we hold all suppliers and manufacturers to the same high standards and accountability that we hold ourselves”. They only operate with companies that are reducing their carbon footprint and have the same vision from sourcing to manufacturing. According to the Director of Quality, Regulatory & Claims at Seventh Generation, “I believe that, by acting as good citizens and focusing on all stakeholders in the supply chain, businesses have the potential to change the world. This is aligned with Seventh Generation’s overall mission and long-term strategic goals. We want to encourage all of our suppliers to engage in sustainable business practices and impact management, so we became a Measure What Matters partner and started asking our suppliers to take the QIA in 2015.

Sustainability Plan: Assess Efforts with Suppliers

Seventh Generation is able to maintain their vision of a more environmentally friendly world with their suppliers and manufacturers across the board. They often invite them to the company to talk about sustainability. They call these “Supplier Days.” Seventh Generation asks each supplier to fill out an assessment and develop a question to improve upon. This program is geared towards improvement from all aspects.

Sustainability Plan: Collaborate with Customers

We currently live in a world that is focused on climate change and utilizing product and services that are aimed at bettering the environment. More people are focused on what they can do to reduce their carbon footprint. Consumers are all about purchasing products that are “eco-friendly.”  According to Simon Mainwaring, “brands that follow suit are rewarded with consumer goodwill, earned media and purchases”. Due to the engaged leadership and storytelling, Seventh Generation is able to produce a econ-friendly product that consumers want.

Sustainability Plan: Assess Efforts with Customers

Most companies would be concerned on how consumers dispose of the product and packaging. However, by 2025, Seventh Generation will source all natural or recycled materials and have zero-waste packaging. This gives the company ease knowing that after they purchase the product, the packaging can either be recycled or will be biodegradable. Furthermore, the product they purchase will be 100% toxic free and environmentally sound.

Sustainability Plan: Metrics

From the beginning, Seventh Generation, has made its mission to transform the cleaning product business. Their goal was to produce eco-friendly product while being sustainable. According to Jennifer Rose, “Over the last 23 years, the company has held true to its mission and the tenets of this program. As part of its commitment to producing healthy products, Seventh Generation has reformulated its products and retooled its packaging to reduce its greenhouse gas emissions, improve efficiency, increase use of recycled materials, and eliminate the use of toxic ingredients in the supply chain”. They continue to donate 10% of its pre-tax profits to non-profit organizations. Further, by 2025 they plan to be operating off of 100% renewable energy, using only recyclable material and zero waste packaging.

Implications for Financial: Plan

As stated before, Seventh Generation is the world’s largest eco-friendly cleaning supplies seller in the United States. They maintain a smaller but mighty business. As the economy focuses in on the environment around them and ways to protect it, the future for Seventh Generation looks bright, financially, that is. By 2025 they are planning to be powered off 100% natural resources and have zero waste packaging. The company is the epitome of environmental and social sustainability. The company has approximately 160 employees and generates an estimated $255 million in annual revenue.

Implications on Financial: Technology

As we analyze the emergence of new technologies and how these can impact environmental and social sustainability, we can better understand the vision Seventh Generation has for the company. According to Simon Mainwaring, “Seventh Generation’s 2025 goals include operating with 100% renewable energy. The brand is committed to sourcing all natural or recycled materials. It also plans to use solely zero-waste packaging and increase internal diversity. Further, Seventh Generation takes environmental accountability to the next level. It implements an internal carbon tax. The Social Mission Board is advocating for the company to double its carbon tax to$12 per ton of greenhouse gases emitted. This tax increases internal incentives to be sustainable”.

Integration: Come Together

Seventh Generation has a believes that operational sustainability is an important action to leading with purpose and expanding your business. Part of the reason they are so successful is that they share their impact-driven story with the world, without it, the customers won’t know what the company is about. As stated by Simon Mainwaring, “That’s why social good storytelling is a critical component to gaining earned media and consumer advocacy from your CSR initiatives”. Seventh Generation is leading the forefront of a ever expanding social movement.

Integration: Balance

The triple bottom line is made up of three parts: social, environmental, and financial. Seventh Generation has a good balance of all three. The company is prepared to sacrifice profit for the environmental sustainability. They believe health is the main mission and providing all-natural products is their goal. They lead the social movement for an eco-friendly company. They generate nearly $255 million in annual revenue with only 160 employees. They are focused more than ever with continuing to shift all aspect to be 100% green.

Integration: Outline

In 2020, Pure Strategies consulted with internal stakeholders and organized and led an interactive workshop. They discovered four areas they are focused on: Nurturing Nature, Transforming Commerce, Building Communities, and Enhancing Health. Their goals include: all energy derived from natural sources, 100% biodegradable packaging, 100% products and packaging biobased or post-consumer recycled content. They are currently at: 84% of products and packaging are bio-based, 100% of boric acid use has been eliminated from all product, 100% of ingredients in formulated products are disclosed (Pure Strategies).  As stated by Simon Mainwaring, “Long-term growth and environmental and social sustainability must go hand in hand to lead in today’s marketplace that is being increasingly defined by issues like climate change. Seventh Generation’s environmental and financial success, and how they achieve it, is a great learning opportunity for impact-driven brands”.

References:

  • Our 2020 Goals. (n.d.). Retrieved from https://www.seventhgeneration.com/blog/our-2020-goals
  • How Seventh Generation Engages Suppliers through MWM. (0AD). Retrieved from https://b-analytics.net/customers/case-studies/how-seventh-generation-engages-suppliers-through-mwm
  • Mainwaring, S. (2019, May 2). Purpose At Work: How Seventh Generation Accelerates Sustainable Growth. Retrieved from https://www.forbes.com/sites/simonmainwaring/2019/04/30/purpose-at-work-how-seventh-generation-accelerates-sustainable-growth/#6ab11e5b1547.
  • Product Sourcing. (0AD). Retrieved from https://www.seventhgeneration.com/insideSVG/product-sourcing.
  • PureStrategies. (n.d.). Pure Strategies, Solutions for a Sustainable Future. Retrieved from https://purestrategies.com/case-study/seventh-generation-aspirations-targets.
  • Rose , J. (2011). For Seventh Generation, corporate responsibility is a guiding principle. Retrieved from http://www.organicitsworthit.org/learn/seventh-generation-corporate-responsibility-guiding-principle
  • Sustainablity in Business: Seventh Generation. (2014, April 1). Retrieved from https://learn.uvm.edu/blog/blog-business/seventh-generation-bringing-sustainability-home
  • SVRGF: Seven Generations Energy Ltd. Annual Income Statement. (n.d.). Retrieved from https://www.marketwatch.com/investing/stock/svrgf/financials

 

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