Putting ESG at the center of the business

Jeffrey Whitford remembers an aha moment he had a few years ago about the nexxus between science and sustainability. The head of sustainability and social business innovation for MilliporeSigma, the U.S. and Canadian life sciences business operations of the German company Merck KgaA, Whitford was shopping at a Kohls when he looked at the price of a stack of wrinkle-free shirts.

“I thought that wrinkle-free must be the result of a different kind of weave because there was no way you could dump chemicals on them to make them wrinkle-free at that price,” Whitford says. Turns out, he was wrong. “When I dove into it, I discovered the manufacturer used chemicals and that there are no regulations about the use of fomaldehyde.”

A light came on: “It’s not our core business, but I wondered if we could use a green chemical approach to making wrinkle-free apparel,” he recalls. Back at the lab, his team began to investigate the question. Did the company enter that business? Not yet, Whitford says, but adds “One of my team members is in the lab making final adjustments and getting ready to file a patent.”

As Whitford notes, wrinkle-free chemicals isn’t core to MilliporeSigma’s business, but scientific research into those kinds of questions is. The firm serves academics doing research in chemistry and pharmaceutical companies during the research and development phase and as they ramp up production to bring new products to market. MilliporeSignma also develops reference standards, such as the machine in the airport security area where passengers hands are swiped for chemical residues related to firearms and bombs. “We’re a one stop shop for research and manufacturing for the scientific industry,” Whitford says.

It is also among a handful of companies like Unilever, Cisco, REI and Patagonia that have put sustainability and broader ESG-related issues at the center of their businesses. Without question, ESG has ascended to the top of the ToDo list for supply chain manager in recent years.

We’re not sure why. It could be a reaction to consumers who appear to be asking more questions about where and how products are manufactured; it could be the result of the investment community’s interest in the topic; or it could be that companies are trying to get ahead of more government regulation. Regardless, ESG was a recurring theme at all of the events I’ve attended this year, I’ve also noticed that the subject comes up frequently in my conversations with supply chain leaders, and typically, it’s the leaders who raise it and not me.

The financial markets may not be rewarding those companies yet compared to their competitors, but Whitford believes that as more regulation is passed, the companies that have made the early investments in capabilities and transparency will have a competitive advantage.

MilliporeSigma points out that it has launched two visible initiatives to decrease the environmental impact of its products by putting sustainability at the forefront of each stage of the product life cycle.

One is the implementation of a Design for Sustainability (DfS) framework to integrate sustainability into its products, systems and services and the other is the launch a few years ago of its SMASH Packaging Plan, something it described as an industry-first framework created to drive improvement in packaging sustainability by reducing the number of materials the company uses while also employing more eco-friendly materials.

Let’s start with the social business innovation portion of Whitford’s title; the sciences, he says, have a lot of work to do to change the face of the industry. “When you hear the word scientist, you probably think of Einstein, an old white guy with crazy hair,” he says. “Our core belief is that we need to change the expectation of what a scientist looks like so we can get broader representation from all communities.”

MilliporeSigma, he added, is trying to do that through a community outreach program that sends a shipping container turned into a mobile lab into the field with diverse employees who can introduce science to under-served communities. The program is designed to reach every continent. Another initiative is focused on developing a base of minority-owned businesses that can provide solutions for sustainability. “We’re looking at ways to identify young minority entrepreneurs who can get into the sciences and then help them grow their businesses,” Whitford says.

The Design for Sustainability framework and the SMASH Packaging Plan are among the most visible internal initiatives to deliver on the company’s commitment to sustainability, says Fabien Thibault, global manager, product and packaging sustainability. Guided by pillars that emphasize the optimization of resources, the use of sustainable materials and design for the circular economy, “Our objective is to develop innovative products with fewer environmental impacts,” he says. “The framework includes all of the steps of the product lifecycle, from materials to the manufacturing process to how we pack and ship our product, and finally to how we handle the end of life to ensure a greener solution to our customers.”

Packaging was an obvious area with room for improvement because chemicals have to comply with strict transportation requirements around hazardous materials and materials that are temperature controlled. “Those requirements often mean more packaging that can create disposal challenges for our customers,” Thibault says. Packaging is also visible to the customer that is tasked with disposing of it.

MilliporeSigma is taking a 4-pronged approach to packaging design to meet its goals. It includes:

• Shrink to reduce the amount of packaging used to ship its products,
• Secure the future by achieving zero deforestation by ensuring that the wood and fiber-based packaging materials used do not contribute to deforestation.
• Switch to sustainable packaging materials that use recycled content, bioplast packaging or, when possible, replace plastic with a more sustainable material,
• Save by eliminating materials that are detrimental to the recycling process.

Examples of how these are being put into action include the introduction of returnable containers that can be cleaned and re-used. The company also collaborated with a large customer on a design that reduced the packaging required for that customer’s products by 24%, and also significantly reduced the time required by the customer to open the packaging, access the product and then get the packaging to the recycling area. “We’re continuing to look at other products where we can take that same approach with our customer,” Thibault says.

One of the questions surrounding the current focus on ESG is whether the energy around it is sustainable, or whether it will just be more fodder for the annual report?

Whitford and Thibault say their customers are taking the issue to heart as evidenced by information being requested today on RFPs. “We are getting questions about modern slavery, child labor, conflict minerals, our commitment to diversity and inclusion and gender parity and how we are investing in our communities,” Whitford says. “It’s no longer just about CO2 emissions and our water footprint.”

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