EDF Climate Corps fellow | August 25, 2011
Like many companies today, Avon Products has embraced the belief that business should have a higher purpose than simple profit. Since its beginning in 1886, Avon has held that a business's core purpose is, as its founder David H. McConnell once said, "[to contribute] to the well-being of society and the environment in which it functions."
Along with this belief comes an imperative to conduct business accordingly. Yet, doing so seems to have become increasingly difficult. The competitiveness of global markets and the importance of maintaining low operating costs have made conducting business responsibly all the more challenging.
However, overcoming these obstacles and succeeding as a responsible business is indeed possible. And, as an EDF Climate Corps fellow, my work with Avon this summer has been aimed at helping Avon do just that. Essentially, there are four steps Avon follows that are both key to its success, and easily adoptable by other companies.
Step 1: Understand
First it is vital to understand the social and environmental impacts of the company's operations in order to make informed decisions about deploying the company's resources. To this end, it is important for facilities to report key performance indicators, such as energy use, which will enable the company's leadership to understand both the intensity and aggregate nature of its impacts. In order to gain a truly comprehensive perspective this needs to be done locally, regionally and globally.
Step 2: Prioritize and Analyze
Having ascertained the impacts of the company's operations, efforts can then be prioritized to identify and evaluate potential investment projects. Facilities which show the highest intensity of resource use per unit of production or square foot of facility-space may represent the most significant opportunities for investment into cost-saving, impact-reducing projects. Likewise, investing in facilities located in areas in which resources such as electricity or waste disposal cost more may also lead to substantial cost savings.
Step 3: Take Action
Once opportunities and projects have been identified and evaluated across the company, the company's leadership can then looks at the available investment capital and optimize its employment to accomplish the company's objectives.
Step 4: Repeat
For this process to truly work, it's essential that process doesn't stop at Step 3. Markets and business are naturally ever-changing and, as a result, it's essential that assessing impacts, prioritizing efforts and analysis, and taking action are integrated into the normal business cycle. Otherwise, opportunities are likely to be missed and the impacts of conducting business are likely to grow.
Avon's approach may be useful to help other companies succeed in reducing their impact and increasing their benefit to society. In as much as it does, sharing this approach helps Avon fulfill its objective of contributing to "the well-being of society and the environment in which it functions."
EDF Climate Corps matches trained students from leading business schools with companies to develop practical, actionable energy efficiency plans. Sign up to receive emails about EDF Climate Corps, including regular blog posts by our fellows. You can also visit our Facebook page or follow us on Twitter to get regular updates about this project.