October 13, 2009 | Conferences
ESCA: Making money, going green
Bob Auger reports on the issues involved with taking a more environmental approach to retailing
“We shouldn’t be looking 50 years ahead to work out the benefits of going green. We need to decide what we should do today and tomorrow,” Edwin Van Der Meerendonk, VP European Supply Chain, Walt Disney Studios Home Entertainment, told the Entertainment Retailing and Supply Chain Conference (ESCA).
Van Der Meerendonk, who heads the Digital Entertainment Group Europe (DEGE) Supply Chain Efficiencies committee, was speaking on a panel at the London conference discussing “The financial benefits of going green.”
The DEGE and the DEG in the United States are joint sponsors of ESCA, together with the Media and Entertainment Services Alliance (MESA). These organisations play an active part in bringing the diverse elements of the home entertainment industry together to encourage a sustainable approach to the business.
DEG Executive Director Amy Jo Smith introduced the green session in which Van Der Meerendonk was joined by Maria Bauer, Environmental and Sustainability Officer, Sony DADC, and Hans Arentson, MD of packaging specialist Paperfoam.
Smith began with a summary of the background to DEG’s involvement in the green agenda. “We started with a mandate from one of our major retailers to seek a 5% reduction in carbon emissions by 2013. At that time, every studio was looking at sustainability on an individual basis. There was no standardisation and limited resources were being allocated, so we brought all the parties into the DEG and started to look at it as one group,” she said.
The DEG had decided that any green initiative must protect and improve the category, and not result in declining sales or a lessening of the creative approach, she said. “The plans had to demonstrate verifiable results – no ‘green washing’ – and establish standards that would drive innovation and sales,” said Smith.
Van Der Meerendonk said there were many good reasons for developing a green supply chain, noting that there are some things that the industry is obliged to do either driven by government regulation or the need for corporate responsibility.
“The retailers are telling us what we have to do, in order to meet their targets for sustainability. Businesses want to be green but they also need to make money, so you will see that many of the DEG initiatives are aimed at improving business efficiency and employee satisfaction,” he said.
He told the audience that the industry could not ignore the impact of global warming, noting, “Packaging improvements bring quantifiable results.” He said achievements so far included reducing paper weight for the wrap (from 100 gsm to 80 gsm) and a 30-gram reduction of the Amaray case, to 53 grams. A further cut in weight, to 44 grams, is in the pipeline and a case made entirely of recycled material is being tested, he said.
Consumers do not throw away the discs in any quantity, the DEG discovered, but packaging was not always retained and progress towards biodegradable materials was clearly desirable.
Among other improvements in development are reductions in shipping packaging and weight and the development of pallet-level multi-studio parcel consolidation, he said. The work done so far had achieved an 11% reduction in the carbon footprint of a DVD, from close to 500 grams in 2006 down to 445 grams by the end of 2008.
Van Der Meerendonk said that DEG Europe leverages information from its North American counterpart, developing common goals and objectives and sharing findings. He noted, however, that many of the advances have so far been confined to the US and that countries within the EU remain some way behind.
“DEG Europe will continue to address uniquely European concerns such as government regulation, retailer sustainability programmes and supplier and replicator capacity. We plan to create Green task forces, in partnership with retailers and suppliers, to establish bench marks that the industry can use as a target,” he said.
He said that some factories such as Sony DADC in Austria were able to achieve efficiencies at a plant level and he acknowledged that Germany, birthplace of the “Grüne Punkt” or Green Dot recycling mark, has probably made the most progress in the EU. In the UK and in Poland, SLAM recycling is working with industrial clients to solve the disposal problem of plastic and cardboard waste. “Direct shipment from replicators can also produce carbon savings,” he said, adding that around 54% of the total DVD/BD product is now recyclable.
Van Der Meerendonk said that there are some “quick wins” when it comes to sustainability. These include reduction in paper weight for the inlay or cover, the use of vegetable based inks, and improved recyclables. “Fewer returns and the ability to recycle obsolete stock, rather than destroying it, can also bring benefits,” he said.
“Co-ordination is the key to the future,” he concluded, “the DEG Europe Supply Chain Efficiency Group is focused on studying and identifying opportunities, seeking to align industry initiatives and increase efficiency by combining logistics across the supply chain partners.”
In reply to Smith, who asked why the sustainability agenda should concern the industry, Van Der Meerendonk said, “First, we have a responsibility to the future, and everyone in the industry is aware of that. But it also makes good business sense. DEG Europe rejected any ideas that did not improve efficiency and reduce costs.”
He called for volunteers from across the industry, “We can’t do this as individuals. We need cross-company solutions that can only be achieved by working together,” he said.
When Smith posed the question, “What investment is needed to ensure that the home entertainment business can be truly green?” Van Der Meerendonk had a one-word answer, “Time!”
Sony DADC’s Maria Bauer described the way that both internal and external factors were driving efficiency within the company. “Going green starts with energy saving measures at the plant including projects such as river water cooling and other environmental initiatives. Retailers are asking for sustainable solutions from Sony DADC and we are providing them,” she said.
Van Der Meerendonk singled out Tesco as a good example of the increasing number of European retailers who are requesting green initiatives from suppliers. “The industry needs a coordinated response to this demand. Change cannot be achieved by individual companies; working together is the only route that will produce results,” he said.
Paperfoam Managing Director Hans Arentson said, “Paperfoam is working to ensure that trays can be handled on existing packaging lines leading to more cost-effective production. The industry has asked for new solutions and new products and there are now many suppliers who can provide product with a high percentage of recycled content, at a very competitive price.”
Summing up, Smith said it was clear that efficiencies could contribute to the green goal of the home entertainment industry, concluding: “There’s a lot we can do before we need to spend money.”