The Nicholas Center welcomed Steve Carter – VP and Corporate Controller from SC Johnson (“SCJ”). Steve delivered a very interesting presentation about sustainability from a financial perspective.
Steve started the talk by a brief introduction about SC Johnson:
- Trusted CPG company with annual sales of $9B
- Present in over 70 countries worldwide
- Privately held company able to pursue long-term sustainability objectives
Financial improvement and environmental sustainability are two objectives in the business strategy of SCJ. At times the two objectives conflict with one another yet SCJ strives deliver both. Some of the profitable sustainability initiatives have included green brands, eco friendly formulations and packaging, and renewable energy consumption.
For emission/energy consumption, Steve gave several examples. The most innovative sustainability measure came from a facility in Indonesia. Production of palm oil is very popular in that region and palm nut shells are the byproduct of making palm oil products. SCJ burns the shells as a fuel source with little enviromental impact and reduces the required amount of diesel fuel by 80%. This helped SCJ cut Glass House Gas (“GHG”) by 50% and eliminate the waste created by the palm oil industry.
Not every sustainability project will be financially viable. To address that concern, SCJ developed a framework to evaluate financial return and environmental return for every project. The target is to carry out the projects that bring high financial and environment return.
Steve ended his presentation with this conclusion:
- A holistic approach is essential to consider the environment impact across the entire product life cycle.
- It is possible to improve the environmental profile of formulations while maintaining product performance.
- Better environment formulation or packaging can reduce cost.
- Different financial standard may be required to achieve the highest environmental benefits.
Vinh Ngo is pursuing an MBA from the Nicholas Center for Corporate Finance and Investment Banking. Prior to the program, he worked as a Senior Auditor and Senior Consultant for Accounting Auditing Consulting Company, based in Hanoi, Vietnam. Vinh graduated from Academy of Finance, Hanoi, Vietnam in 2006 with a Bachelor's of Science degree in accounting. He enjoys ping pong, badminton, and Chinese chess in his spare time.