Cradle to Cradle Design

white paper | June 2007
Cradle to Cradle Design
designing for eco-efficiency in the
package goods industry

white paper | June 2007 | Cradle to Cradle Design | 1
The Ripple Effect of Sustainability
The alarming recent decline in bee populations across the United
States and Europe represents a potential environmental
catastrophe that could collapse the food chain and eventually wipe
out humanity. Many don't realize how vital the bee is in maintaining
a balanced eco-system. In fact, according to experts, if bees were to
become extinct, humanity would perish in just four short years.
The plight of the bees is just one example of the negative impact
that humans are having on the environment. Another one is
consumer-packaging waste.
We would like to share with you some very preliminary ideas and
processes that can assist your organization in establishing a
sustainable advantage in the marketplace, ensuring, among other
things, that bee populations continue to strive.
This information has been gathered from a wide range of resources
and organizations that have led and embraced sustainable business
practices and environmentally driven change. Also included is
information to help you sell the idea of developing a sustainable
platform within your organization. In the Process section, we have
outlined a series of steps to help your organization evaluate its
sustainability opportunities. We will provide further insights as our
firm conducts an international study on sustainable packaging.
"If the bee
disappeared off the
surface of the
globe, then man
would only have
four years of life
left. No more bees,
no more pollination,
no more plants, no
more animals, no
more man."
Albert Einstein

Sustainability: The New Competitive, Meaningful Advantage
The 21st
-century packaging industry will be characterized by
increasing globalization, revolutions in information technology,
rapid process and product innovations, and a skeptical, hard-to-
target consumer base. There are also population and social factors
that are profoundly changing the marketplace. But the marketplace
cannot survive for long on a planet already reaching ecological
limits with ozone depletion, loss of bio-diversity, poor water quality
and management, and climate change. These changes are forcing
the consumer packaged goods industry to rethink business
strategies and develop materials, products and industrial processes
and services that are more eco-efficient.
Environmental concerns are evident in the increasingly
environmentally conscious marketplace, and are being felt in the
packaged goods and manufacturing sectors, driven by retailers’
need to meet consumers’ demands. Over the years, a growing
percentage of consumers have become aware of the impact of their
purchasing habits on the environment. They now evaluate the
environmental efficiency of a package as part of their buying
decision, considering factors such as over-packaging,
biodegradability, and environmentally friendly manufacturing
processes. Perhaps the strongest sign of the growing importance of
sustainable packaging and products is consumers’ willingness to pay
a premium for environmentally friendly products.
In Cradle to Cradle, William McDonough and Michael Braungart
argue that the conflict between industry and the environment is
not an indictment of commerce, but an outgrowth of purely
opportunistic design. The design of products and manufacturing
systems growing out of the Industrial Revolution reflected the spirit
of the day—and yielded a host of unintended, yet tragic
consequences.
Today, with our growing knowledge of the living earth, package
design can reflect a new spirit of sustainability.

Packaging Waste: a Growing Concern for the Environment
Because of its large volume, packaging waste tends to be very
visible. Approximately 70% of primary packaging is used for food
and drink. Once the product is used, the packaging is often
discarded, covered in residues of the original contents.
A recent UK study identified that an estimated 9.3 million tons of
waste packaging was generated in 2001. Of this, 5.1 million tons
came from households, and the remaining 4.2 million tons from
commercial and industrial sources.
Waste has clearly become a problem in the developed countries.
Landfill capacities are decreasing, and the average consumer
produces between 250 and 620 kilograms of household waste per
year. About 25 to 30% of this is packaging waste. Although the
European community has initiated stringent targets, consumers are
generating significantly higher levels of waste; so much so that
recycling alone will not eliminate current environmental issues.
Packaging waste represents about 17% of municipal solid waste by
weight, and 3% of total waste in Europe (EC, Dec 2001). From 1997
to 2001, packaging waste increased by 7% across the EU. From
2000 to 2008, EU packaging waste is expected to increase by 18%
(from 65 to 77 million tons) (EEA, 2004). Similar trends are evident
in Australia and the UK.
With a growth in greenhouse gas emissions resulting from the
sourcing, manufacturing and distribution of packaging, recycling is
no longer our primary concern. Packaging consumes resources
during production (raw materials), increases transportation costs
(the larger the package, the fewer the units that make up a
shipment) and must be disposed of (energy to dispose or recycle).
It also increases solid waste.
In addition to improved environmental performance, many ‘green’
products work as well or better than traditional products, and can
even save money. Switching to safer cleaning products, for example,
can reduce incidents of allergic reactions, asthma, burns, eye

damage, major organ damage, and cancer connected with the
hazardous chemicals used in many traditional cleaning products.
Buying 100% recycled-content paper can reduce energy use by
44%, decrease greenhouse gas emissions by 37%, cut solid waste
emissions in half, decrease water use by 50%, and practically
eliminate wood use. Similarly, energy-efficient vehicles and
renewable energy cut greenhouse gas emissions and harmful air
pollutants while lessening our dependence on imported oil.
Organizations can benefit from similar ecological and economic
advantages by switching to environmentally friendly purchasing,
processes and products. Overall, the implementation and
integration of green purchasing concepts constitutes a system-wide
process reform that contributes to an organization’s reduction in
ecological footprint (cumulative associated ownership to global
ecological damage, stemming from a demand for natural resources
to sustain economic and social balance).
Sustainability Awareness and Action are Low Within the
Packaging Industry
A 2006 study analyzed the levels of awareness and adoption of
sustainability among Packaging Digest readers.
About 80% of total study participants expressed at least some
familiarity with the topic of sustainability in the packaging industry.
However, only 8% mentioned being extremely familiar with the
topic. Most respondents felt that emphasis on sustainable packaging
has increased within the last year, and about two-thirds mentioned
that they have taken at least some action related to sustainability
within that same time frame. However, there was no significant
percentage of participants taking any one action toward
sustainability, suggesting that there is still no real consensus in the
packaging industry when it comes to sustainability activities.

More respondents view sustainability as an environmental versus
economic initiative at present. They also find it more important for
sustainability activities to meet market criteria for performance and
cost, more so than environmental targets.
As a sign of its growing importance, sustainable design was seen as
a very or somewhat important factor in packaging decisions. In fact,
87% of respondents mentioned at least some percentage of their
current customers are asking for or requiring sustainable packaging.
Of all respondents, about two-thirds have some metric in place for
measuring their success with sustainability. However, there was no
real unity among answers, as source reduction, the most common
metric, is only used by 13% of participants.
On the topic of additional resources needed to help reach
sustainability goals, the most common answer reflected the need
for more information (11%). Again, this suggests a very fragmented
understanding of the definition of sustainability in the packaging
industry.
There were no significant differences between responses from
manufacturers and end users in the study. Some noteworthy
observations emerged in a few areas. First, slightly more end users
view sustainability as an economic initiative.
Secondly, manufacturers have slightly more customers who ask for
or require sustainable packaging, versus customers who don’t.
Lastly, end users viewed manufacturers, educational institutions,
and trade shows as moderately credible sources of information on
sustainability.

Sustainability, the Evolution of Recycling
The recent increase in public awareness of sustainability issues has
led to a shift in consumer thinking. Whereas in the past shoppers
sought to protect the environment through recycling, their focus is
now on choosing products with packaging sourced, manufactured
and distributed in environmentally friendly ways. Several
organizations, such as Wal-Mart, are making a priority of going
green. Brands are finding a new opportunity to communicate the
ecological attributes of their packaging now that the retailer has
introduced its Packaging Scorecard, ranking brands on greenhouse
gas emissions, recycled content and other package development
factors.
Since launching the program last year, Wal-Mart reports “active
use” of the scorecard, with more than 2,270 vendors already
logging on to its website, and at least 117 products entered into the
system—numbers the retailer expects will increase in the coming
year as brands gain a better understanding of the scorecard and
their own packaging capabilities.
0
37.5
75.0 112.5
150.0
49
30
25
24
24
6
80
67
60
66
62
54
47
45
Meets market crteria for performance and cost
Is benefcial, safe and healthy for indivduals and communties throughout its life cycle
Is made from materials in all probable end-of-life scenarios
Is physically designed to optimize materials and energy
Is manufactured using clean producton technologies and best practices
Maximizes the use of renewable or recycled source materials
Is effectively recoved and utilized in bological and/or industrial crade-to-cradel cycles
Is sourced, manufactured, transported and recycled using renewable energy

Wal-Mart and other retailers are responding to the growing trend
that has consumers demanding and willing to pay more for green
products. In a Canadian study conducted in 2001 at Concordia
University by Michel Laroche, Jasmin Bergeron and Guido Barboro-
Forleo, 57% of females and 40% of males said they would pay a
premium for green products. The study found females, the
traditional shopper of the household, are more environmentally
concerned than males. It suggested that these individuals are more
inclined to think of how a ruined environment may negatively
impact not only their partner, but also their children’s future. The
study did not differentiate between participants’ education levels,
household incomes, home ownership and work status.
The Concordia University study suggests a consumer’s degree of
eco-literacy is not an indicator of his or her intent to purchase
green products. Consequently, shoppers with a high awareness of
ecological issues have the same levels of purchase intent as those
with a lower awareness.
Consumers willing to pay more for green products feel that today’s
ecological problems are severe, that corporations do not act
responsibly toward the environment, and that behaving in an
ecologically favorable way is important. They place a high
importance on security and warm relationships with others, and
often consider ecological issues when making a purchase.
Finally, the research reveals that 80% of consumers who are more
likely to spend more for green products say they refuse to buy
products from companies that are accused of being polluters.
However, respondents who claimed to recycle and buy
environmentally friendly products were not always those willing to
pay more for green goods.
13.1% of the study’s
respondents are
willing to pay a higher
price for green
products.

What are carbon footprints?
Carbon footprints measures the amount of carbon emissions
produced by the things we do. From flying, to driving our cars, to
the things we buy, every one of us leaves a carbon footprint on the
environment.
In total, the Carbon Trust estimates that the UK emits 648 million
tons of carbon emissions every year. This means each person in the
UK can be linked to an average of 11 tons of carbon emissions
annually.
Walkers Cheese & Onion Crisps feature carbon footprint on
packaging
Pepsi recently acquired the UK’s leading potato chip brand, Walkers.
The organization took a leadership role in environmental
sustainability by featuring the carbon footprint of their product on
its packaging.
Walkers' carbon footprint figure was calculated by drawing up a
map of the key stages in their supply chain—from sowing potato
and sunflower seeds, to getting the chips into stores, to finally
disposing of the packaging. The carbon figure expresses the total
calculated output of carbon emissions connected with this lifecycle.
Converting the energy consumption involved in each of the lifecycle
stages into the resulting amount of carbon emissions, then adding
up each stage’s figures, leads to a final carbon footprint calculation
of 75 g.
Walkers is one example of an organization that is not only
environmentally conscious, but committed to raising awareness of
the importance of ecologically responsible business practices. The
carbon footprint feature on their packaging suggests Walkers has
taken steps to minimize waste and emissions in all of their
manufacturing and distribution stages. Consumers have taken note
of this.

Moving from efficient to Eco-efficient Packaging: the key to
sustainability
The President’s Council on Sustainable Development defined eco-
efficiency as the production, delivery, and use of competitively
priced goods and services, coupled with the achievement of
environmental and social goals. Key to the fundamentals of eco-
efficiency is the strong alignment between environmental
performance and shareholder value, and the consideration of the
full life cycle or cradle-to-cradle product cycle (raw materials,
manufacturing, use, and end-of-life).
The definition of eco-efficiency coincides with the definition of
sustainability, namely meeting your needs while not compromising
the ability of future generations to meet theirs (Bruntland
Commission). The concept of eco-efficiency has been recognized by
the government of Canada as a key mechanism for industry to
contribute to sustainable development.
Recently, the Canadian House of Commons Standing Committee
on Industry noted that eco-efficiency is an important business
practice and management tool, whereby innovations in technology,
production, processes, product design and business organizations

and practices can lead to lower unit costs, improved product
quality, lower environmental-related liability, less material usage and
a less adverse impact on the environment.
Organizations such as Walmart, BASF, Compaq Computer,
DaimlerChrysler, Shell Canada, Canfor, Noranda, Airbus, 3M, GE, BP
Amoco, Alcan and Weyerhaeuser have all embraced eco-efficiency
programs to improve their competitive advantage, and participated
in a related study conducted by Five Winds International in 2000.
The study analyzed the practices of organizations that had
integrated eco-efficiency within their business as part of their
competitive advantage.
The results indicated that companies which anticipate and
implement eco-efficient practices do so to get ahead of the pack
with market and regulatory trends, to reduce costs, to gain
competitive advantage, and to ensure long-term profitability and
sustainability. In addition, these organizations had realized that
capital markets now factor in environmentally friendly and
sustainable practices when evaluating a firm.
For example, the AMP Capital Sustainable Share Fund uses a
sustainable approach to investing, integrating financial analysis with
environmental, social and governance factors shaping companies’
future growth prospects. The Fund invests primarily in companies
listed on the Australian Securities Exchange.
Green investors
Socially responsible investing (SRI) has gained some visibility and
credibility in the eyes of individual and institutional investors, and
stock portfolios managed following SRI principles are rapidly
growing in world markets. The “2003 Report on Socially
Responsible Investing Trends in the United States” reveals that the
value of socially screened portfolios now exceeds $2 trillion. This
represents a 240% growth since 1995, 40% faster than all

professionally man-aged assets. The report identifies 200 ethical
mutual funds in operation, compared to 55 in 1995.
In Canada, this ethical boom has been matched, according to a
survey conducted by the Social Investment Organization in 2002.
The survey shows that more than $50 billion Canadian is now
managed in a socially responsible fashion in Canadian stock markets.
The recent launch of several new SRI financial indexes, such as the
Dow Jones Sustainability Indexes in the U.S., FTSE4 Good Indexes
in Europe, and the Jantzi Social Index in Canada, is an additional
sign of the rise in popularity of ethical investing. Ethical or socially
responsible investing reflects a broader philosophical movement
committed to sustainable development and the advancement of
human rights. Promoters of socially responsible investing believe
that directing or reallocating money toward firms embracing this
philosophy is an important step in the achievement of a better
society.
Wal-Mart’s Sustainability Program
As part of its sustainability program, Wal-Mart plans to measure its
60,000 worldwide suppliers on their ability to develop packaging
and conserve natural resources. This initiative, scheduled to begin in
2008, is projected to reduce overall packaging by 5%. In addition to
reducing and preventing millions of pounds of trash from reaching
landfills, the initiative is projected to save 667,000 metric tons of
carbon dioxide from entering the atmosphere. This is equal to
213,000 trucks off the road annually, and saving 323,800 tons of
coal and 66.7 million gallons of diesel fuel from being burned. This
initiative will also create $10.98 billion in savings, just from a 5%
reduction in 10% of the global packaging industry.

Wal-Mart alone is poised to save $3.4 billion. “Packaging is where
consumers and suppliers come together and can have a real impact
on both business efficiency and environmental stewardship,” said
Wal-Mart CEO H. Lee Scott. “Even small changes to packaging have
a significant ripple effect.
Improved packaging means less waste, fewer materials used, and
savings on transportation, manufacturing, shipping and storage.”
Wal-Mart’s Packaging Scorecard tool will allow buyers to have
information about packaging alternatives or more sustainable
packaging materials in one location.
Key Drivers Motivating Adoption of Eco-efficiency
initiatives
The aforementioned Five Winds study clearly shows that while eco-
efficiency does not address all social, economic and environmental
considerations encompassed by sustainable development, it is an
important and necessary step in moving toward more sustainable
patterns of production and consumption. The practice of eco-
efficiency encompasses a range of approaches, from simple changes
The study identified a range of
supporting drivers that should
be taken into consideration
when developing an eco-
efficiency program:
1. Brand Image
2. Competitive Advantage
3. Cost Reduction
4. Customer Relations
5. Employee Relations
6. Regulatory Relations
7. Innovation
8. Legislation
9. Liability
10. Long-term Profitability and
Access to Capital
11. New Markets
12. Environmental Performance
13. Standards (ISO, etc.)
14. Supplier Relations

to more innovative solutions. The companies studied fell into three
categories of environmental management:
Market Driven
The decision to become eco-efficient is either driven by regulatory
requirements, or motivated by customer expectations and desires.
Competitive Advantage
The company uses its eco-efficient capabilities to create markets
where it has sole or leadership market position.
Sustainable
This is the pinnacle of eco-efficient achievement, where the
organization proactively integrates economic growth, health and
safety, and environmental and social well being into its operations.
The goal is to gain a competitive advantage and long-term viability.
Eco-efficiency Tools
The study clearly identified eco-efficiency as a key enabling concept
and tool for companies to gain a competitive advantage. The
success of a company’s eco-efficiency program depends on the
chosen strategic approach, and on its degree of implementation,
which is affected by several factors: management commitment and
support, internal capacity including management systems and tools,
financial resources, and customer requirements.
Key tools used to implement eco-efficiency programs include the
following:
Management Systems
All surveyed companies had adopted environmental management
systems. These are either specific systems or hybrid approaches that
incorporate sustainable development and security.

Life Cycle Tools
The majority of companies went beyond their own operational
boundaries to examine the life cycle aspects of their products, and
of the materials contained in those products.
Supplier Management Programs
For some companies in the study, particularly manufacturers,
working with their suppliers is a key aspect of improving the overall
environmental performance of their products, as well as managing
risks and reducing costs.
Design for Environment
Several companies integrated environmental considerations into the
product development process. This leads to improved
environmental performance, elimination of risk and liability, better
choices with respect to selection of materials and processes, and in
some cases enhanced quality and performance.
Corporate Environmental Reporting and Communication
Implementation of an open communication program that provided
transparency was seen by some as a key activity in building
relationships with communities and regulators.
Other activities included training and awareness-raising, eco-
labeling, greenhouse gas trading pilots, forest certification programs
such as the Forest Stewardship Council, auditing, and assurance
programs.
Forest Stewardship Council
The Forest Stewardship Council (FSC) is an international
organization that brings people together to find solutions that
promote responsible stewardship of the world’s forests.
FSC is a stakeholder-owned system for promoting responsible
management of forests.

Through consultative processes, it sets international standards for
responsible forest management.
It accredits independent third-party organizations that can certify
forest managers and forest product producers to FSC standards.
Its trademark provides international recognition to organizations
that support the growth of responsible forest management.
Its product label allows consumers everywhere to recognize
products that support the growth of responsible forest
management worldwide.
Over the past 13 years, over 90 million hectares in more than 82
countries have been certified according to FSC standards, while
several thousand products are produced using FSC-certified wood
and carrying the FSC trademark. FSC operates through its network
of National Initiatives in 43 countries.
Critical Elements Impacting Eco-efficiency Changes
With the help of various studies and pertinent market information,
as well as our extensive expertise in branding and package design,
we have identified eight key areas that impact the viability and
integration of a sustainable eco-efficiency program within consumer
packaged goods organizations:

Critical Elements impacting Eco-efficiency changes
The diagram in the previous page presents the key elements that
should be taken into consideration to ensure a successful eco-
efficient packaging initiative:
Supplier Network
With today’s just-in-time manufacturing practices, companies rely
heavily on their vendors and supply chain partners. These entities
can significantly impact a sustainability program in the ways they
source, manufacture and distribute component products that
support the manufacturing process.
Product Sourcing
Working with primary producers to ensure your company develops
or sources environmentally friendly products is an expedient way to
create eco-efficiency. Initiatives can range from selecting fair-trade
vendors, to sourcing products from accredited environment-
conscious suppliers, to collaborating with suppliers to establish
standards for eco-efficient growing and sourcing of raw materials.
Manufacturing
Companies can review current manufacturing processes to identify
short and long-term solutions for reducing waste, cutting energy
usage, and optimizing plant efficiency.
Packaging
While a product of manufacturing, packaging generates the most
landfill waste and should be the focus of its own eco-efficiency
program. Waste reduction can be applied in a range of areas, from
the amount and type of materials used in the packaging process, to
the inks used on the final label.
Distribution
Identifying cost-effective distribution systems that allow for a
reduction in energy use can make a significant difference for the
environment.

Systems
You can develop systems to track and benchmark the evolution of
your eco-efficiency program. Use them to evaluate progress, assess
immediate needs and shape long-term goals.
HR
The success of a program is directly linked to the buy-in and
support of the organization’s staff. Identifying knowledge gaps and
educational opportunities is a crucial step in ensuring the program
is properly implemented at all levels of the manufacturing process.
Communication
Effectively sharing knowledge and accomplishments is vital in
maintaining interest and support, ultimately contributing to the
success of your organization’s eco-efficiency program.
The Product Sustainable Life Cycle
According to the Sustainable Packaging Coalition, design has a
huge impact on the entire packaging supply chain, from material
sourcing to material recovery. The Coalition offers a set of steps
that apply to the sourcing and manufacturing of packaging as part
of a sustainable eco-efficiency program.
Each step is an opportunity to identify potential improvements in
the sustainability of the product’s life cycle. When used in
conjunction with the eight elements of an eco-efficient
organization, these steps will maximize the success of your
sustainability program.

The Process
To help your organization implement a successful eco-efficiency
program, consider a five-step process incorporating key milestones
and deliverables:
Although the process is linear in approach, implementation is
circular—the program is repetitious and includes a re-assessment
upon completion of the first wave of changes.
The success of the program will depend on ensuring all participants
have a clear understanding of the steps, deliverables and their
contribution to the process.

The Goals
The goals consist of a range of opportunities:
• Reduce energy, waste and costs
• Increase value for shareholders and investors
• Differentiate your organization from competitors
• Anticipate future regulations
• Create innovative new products or processes
• Open new markets
• Attract and retain the best employees
• Improve your image for shareholders and the public
• Reduce legal risks and insurance costs
• Contribute to a higher quality of life
The Process
Step One: Charter Development
Assign divisional and functional members to a
sustainability leadership team.
Establish a clearly defined charter for the team to follow:
• The charter should cover:
• Background/Case for Action
• Project Scope
• Project Objectives
• Team Structure (RASCI Chart)
• Project Structure/Governance
• Project Timelines
• Success Criteria
• Project Assumptions
• Constraints
• End Product Description
This process would culminate in a presentation to senior
management for approval.

TIMING: two to three weeks
Step Two: Assessment
Confirm key consumer, trade, governmental, and competitive
trends.
Identify industry best practices and their relevance to your
organization.
Review Pepsi international best practices and their relevance to
Canada.
The assessment should be conducted via online research with the
broader organization and key suppliers, as well as one-on-one
interviews with key stakeholders.
Review the organization’s current sustainable capabilities as they
relate to:
• Supplier Network
• Product Sourcing
• Manufacturing
• Packaging
• Distribution
• Systems
• HR
• Communication
Develop strategic implications to lay the foundation for a
sustainable program.
TIMING: four to eight weeks

Step Three: Identifying Metrics
Based on the assessment stage, identify sustainable metrics for:
• Short-term
• Long-term
• Internal capabilities
• External capabilities
Identify measurement tools.
Present recommendations and establish alignment.
Step Four: Programming
Having identified key metrics, develop an implementation plan that
covers the following matrix:

Identify short and long-term initiatives within the matrix, based on
a five-year plan.
Step Five: Implementation
Within the sustainability matrix, establish commitments for each of
the key departments within your organization to ensure support
and alignment:
• Town hall meetings
• Workshops
• Clearly defined action plan with investment implications
• Cross-functional team structure
This phase is on going. The sustainability matrix needs to be
updated as projects are completed and new opportunities emerge.
TIMING: four to eight weeks
Step Six: Evaluation
This ‘sustainability tune-up’ will ensure strategies and action plans
deliver on the key metrics.
Since new legislation and market dynamics impact the plan,
conduct a yearly evaluation to ensure action plans meet stated
goals.
TIMING: two to three weeks, yearly

The Audit
In order to clearly understand opportunities and potential gaps,
consumer packaged goods organizations need to initiate an audit
of their current state within all facets of the company. What follows
is a series of questions that will assist in identifying both short-term
and long-term opportunities.
Your first step toward eco-efficiency should be the formation of an
eco-efficiency committee that would provide leadership and
direction to the organization. This group would be made up of a
wide cross-section of organization members to ensure fair
assessment of both challenges and opportunities.
This sample audit is a starting point in leveraging a sustainability
platform for your organization, and will need adjustments to meet
your specific requirements.

For more information, contact:
Jean-Pierre Lacroix, President
Shikatani Lacroix
387 Richmond Street East
Toronto, Ontario
M5A 1P6
Telephone: 416-367-1999
Email: jplacroix@sld.com

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