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April 16, 2019

Loop's approach to sustainability/ESG

Written by Lucy Hartley
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If sustainability matters to your business, then pay attention to Loop.

Loop is a new e-commerce platform developed by international recycling company TerraCycle. Loop seeks to provide consumers with a destination to purchase personal care products in a way that eliminates packaging waste. And Loop is gaining momentum. Brands such as Unilever, P&G, PepsiCo, and Nestle have signed up. Procter & Gamble generated global headlines by joining Loop. In fact, Loop could be a model for how competitors can collaborate to usher in a circular economy that maximizes the use of resources – with a common goal of building a sustainable future.

A Mandate for Survival

In December 2018, I blogged about how sustainability has long been a must for business survival. From Unilever to Patagonia, Cisco to Danone, companies around the world are re-orienting their entire businesses around sustainability and for good reason: we have about 12 years to contain global warming or else face catastrophic results (that according to the Intergovernmental Panel on Climate Change). So when Procter & Gamble unveiled the introduction of reusable, refillable packaging on some of its most popular products in January 2019, the company wasn’t just checking the boxes on nice things to do to look like a sustainable company; Procter & Gamble was investing to protect its own future.

A Coalition 

What makes Loop special is that the platform relies on a coalition. With Loop, we see businesses locking arms to effect change rather than rolling out their programs independent of each other. Here’s how Loop will work when it goes live in 2019 (per a press release):

  • Consumers will go to the Loop website or a Loop partner retailer’s website and shop for products redesigned to be packaged in waste-free fashion.
  • Consumers will receive products via a specially designed shipping tote (Loop Tote) that eliminates the need for single-use shipping materials like cardboard boxes.
  • After consumers are done with their products, they will place their empty packages into Loop Totes. Loop will pick up the Loop Totes from their homes.
  • Loop will clean each product for safe re-use.
  • Loop will replenish the products and return refilled Loop Totes to consumers. Used products such as diapers will be recycled.

Having customers return their containers for re-use was popularized by The Body Shop after founder Anita Roddick sought a way to economize and protect the environment at the same time. What’s so exciting about Loop is that it takes this model and scales it in a dramatic way.

As Sander Defruyt, Lead of the New Plastics Economy initiative at the Ellen MacArthur Foundation, said in a recent Forbes article, “Addressing CO2 emissions from plastics is crucial for a successful transition to a low-carbon economy. But after 40 years of efforts to improve recycling, just 14% of plastic is collected for recycling today. It is clear that we cannot simply recycle our way to a plastic waste-free future.” 

Work to Do

Loop has work to do convincing consumers to rethink their personal shopping habits and returning products for reuse. But I’d argue that the challenge isn’t as great as you might think. Consumers increasingly value companies that practice what they preach when it comes to sustainability, and they’re showing that value in terms of how they spend. According to the Retail Industry Leaders Association, 68 million adult Americans base purchasing decisions on their own values (personal, social, and environmental), and will spend up to 20 percent more on environmentally sound products. Nearly 90 percent of millennials would be more loyal to a company that helps them contribute to social and environmental issues. 

Already Loop offers some early lessons for businesses embracing sustainability:

  • Teamwork makes the dream work. Don’t go it alone. Sustainability can and should affect every aspect of not only your internal operations, but your supply chain and broader business ecosystem.
  • Tell your story. Loop really took center stage when Procter & Gamble announced its involvement, generating coverage in high-profile media outlets such as Fast Company. The announcement made Procter & Gamble look forward-thinking. And it also shone a light on other brands: why aren’t you joining Loop, too? Corporate peer pressure is a good thing when it comes to saving the Earth.
Don’t be shy about telling your story about sustainability. In fact, many businesses work with Investis Digital to do just that. We often work with companies to create strategies and marketing/communications programs that communicate their sustainability commitment to investors, customers, and employees. As a next step, we suggest assessing your corporate brand to better understand gaps and opportunities around leveraging your story to drive business impact. Contact us to learn more.

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