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SC JOHNSON’S GREENLIST™: HEALTH, ECOLOGY, PROFITS
In 2001, SC Johnson launched Greenlist,™ a screening system that identified the environmental and health characteristics of 90% of the chemicals in the company’s products. Greenlist resulted in environmentally preferable reformulations that preserved or enhanced product effectiveness with no increase in cost. By 2006, Greenlist had decreased the environmental footprint of SC Johnson’s products by more than 25%, without increasing costs, and in the case of Windex® Blue Glass Cleaner, increased revenue and market share. (“Footprint assessments” measure a company’s resource use and environmental and health impacts.) Greenlist provided a visible and practical tool consistent with the company’s long-standing integration of sustainability concerns (health, ecology, community) into corporate strategy. In mature markets, with commodity products and continual cost pressures, Greenlist was designed to help protect the company’s brand names, differentiate products, and improve product performance. With a patent on the Greenlist process granted in 2005, and given SC Johnson’s industry status as a major player in its product categories (including household cleaning, air fresheners, toiletries, and food storage), Greenlist became a strategic play.
Company Background and Category Killers
Dominant consumer-packaged goods (CPG) are called “category killers” and often define the entire product category with their distinct brand name. For example, it is hard to imagine a child asking for a “sandwich creme cookie” instead of an OREO® (Nabisco). Trying to repress a sneeze, would you ask for a “facial tissue” or a Kleenex® (Kimberly-Clark)? Do you want “chlorine-free bleach” or Clorox.® In some parts of the United States, any kind of cola is commonly called a coke, regardless of Coca-Cola® and Coke’s® registered trademarks.
Though SC Johnson’s corporate identity might not be on the tip of the average American’s tongue, the venerable firm has built several category killers. Pledge® and Raid® are examples of their powerful brands. Other household names like Glade,® Windex,® Drano,® Edge,® Saran Wrap,® and Ziploc® drive annual sales in excess of $6 billion.
Founded in 1886 by its namesake Samuel Curtis Johnson, SC Johnson began as a parquet flooring company. The focus of the firm evolved following the success of an early floor maintenance product, Johnson’s Prepared Paste Wax, which was developed specifically to meet customer requests. Led by five successive generations of Johnson family members, SC Johnson in 2006 employed 12,000 people in more than 70 countries, and sold in more than 110 countries.
The company’s Greenlist came about because senior management could see that the company needed a customized approach to environmental and health concerns that incorporated metrics to measure progress. Beginning in 2001, known and potentially toxic or bioaccumulative ingredients of existing SC Johnson products such as surfactants, solvents, propellants, and insecticides began to be evaluated against the Greenlist criteria. Each received a score between 0 and 3, with 3 being the best. Working with suppliers, substitute ingredients that were either “better” or “best” compared with the current input, and not more expensive, were found or developed and phased in over time. Within SC Johnson, the Greenlist system was to be implemented worldwide by 2007. By 2006, external recognition and inquiries encouraged SC Johnson’s development of a patent-licensing system that was expected to extend the standards to other manufacturers after 2007.
Creating Greenlist involved the collaboration of key suppliers, university scientists, government agencies, and nongovernmental organizations (NGOs). Indeed, many of the substitute ingredients identified and implemented through the process were originally suggestions from large suppliers like Dow Chemical and the BASF Corporation. The assessment process identified substitute manufacturing inputs that eliminated millions of pounds of chemicals known to be or suspected to be deleterious to environmental and human health. In so doing, this process increased sales, with no increase in costs.
Windex Blue Glass Cleaner Loses One Million Pounds (of VOCs)
“Through the Greenlist process we developed a new formula for Windex® using raw materials that are better for the environment while also exceeding the expectation of the consumers for cleaning,” said Scott E. Johnson vice president for global environmental and safety actions (Johnson is not a member of the SC Johnson family). The new formulation “did not streak and was easy to wipe” — two important user concerns. Windex was in fact reformulated twice in the four years following the launch of the Greenlist. Each time the goal of the reformulations was the same, to both improve cleaning and reduce volatile organic compounds (VOCs). The combined result was savings of more than one million pounds of VOCs and a 30% improvement in cleaning performance. Those benefits were achieved using “a patentable combination of surfactants, low-VOC solvents and a unique polymer.” The scale of the benefits was not planned or anticipated but instead emerged organically from the process of innovation.
Raid, Saran Wrap, and Others join the Clean-up Crew
In the wake of that success, other Windex stock-keeping units (commonly called by the acronym SKUs — each representing a distinct product) were reformulated using the Greenlist process. In Raid Ant & Roach Baits, the Greenlist process facilitated the replacement of Chlorpyrifos, a broad-spectrum organophosphate insecticide that is highly toxic to aquatic organisms, can bioaccumulate in tissues of aquatic organisms, and is moderately persistent in the environment. Chlorpyrifos was replaced by Abamectin, a biodegradable pesticide that does not bioaccumulate and is produced by natural fermentation. Chlorine in the form of polyvinyl dine chloride (PVDC) was removed from Saran Wrap, eliminating the company’s need to produce 1.85 million pounds of potentially dioxin-creating PVDC (dioxin is a carcinogen). In addition to those large-scale improvements to name-brand products, SC Johnson’s Greenlist process catalyzed change across product lines. For example, the company was able to replace Nonylphenol ethoxylate (NPE) surfactants used in several different SKUs with ingredients that had better environmental profiles, and were in many cases biodegradable, of low aquatic toxicity, and generated from a renewable resource without imposing prohibitive expenses.
Given its success, SC Johnson ramped up the amount of raw material tracked through Greenlist from 220 million kilograms in 2001–02 to more than 620 million kilograms in 2005, a figure that now represents more than 90% of the material inputs to their facilities. Scott Johnson delineated four main challenges facing Greenlist in 2007 and beyond: 1) data management/metrics, 2) adapting to changing science/available materials, 3) reformulating existing products, and 4) a strategy for extending the Greenlist to competitors through licensing.
SC Johnson’s Concern for the Natural Environment Comes Naturally
Active, pro–health/environmental change at SC Johnson was driven internally by corporate culture and strategy, and supported by specific policies and practices. The strategic plan at the time stated the requirements of improvement to both product footprint and corporate environmental footprint. Behind that commitment were Johnson family members, who brought scientific acumen (degrees in chemistry, physics, and engineering). Fisk Johnson, for instance, spent time at the helm of sister company Johnson Outdoors, which in 2006, still produced the iconic wooden Old Town canoe and other recreation equipment. Seeking solutions to customers’ needs that improve financial, ecological, and health performance simultaneously appeared to draw logically from the family’s long-standing commitment to environmental values and a closely related definition of what constitutes healthy products and good business.
As illustrative of this history, in 1955, SC Johnson pioneered water-based aerosols. The first company to remove chlorofluorocarbons (CFCs) from all aerosol products, SC Johnson removed CFCs three years ahead of the 1978 U.S. mandate. Spurred on by its ecoefficiency initiative, they were also one of the first companies to join the World Business Council on Sustainable Development (WBCSD) in 1992 when corporate attention to sustainable development issues was minimal at best. Given its record and consistent commitment to health and natural environment protection, SC Johnson has received more than 40 awards, including the Ron Brown Presidential Award for Corporate Leadership and the EPA’s first-ever Lifetime Atmospheric Achievement Award.
First introduced as a material assessment metric, the Greenlist criteria were later incorporated into employee performance reviews and compensation. This patented method allowed SC Johnson to quantify and reward performance that went against what traditionally have been more qualitative goals. Greenlist simplified and integrated what heretofore had been very hard to measure or assess.
How the Greenlist™ Works
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In an interesting postscript, in 2005, in the highly proprietary and somewhat clandestine world of scents (included in virtually all home products), SC Johnson together with suppliers and the Research Institute of Fragrance Manufacturers embarked on a multiyear project to identify persistent, bioaccumulative, and toxic (PBT) ingredients. As with Greenlist, successful phaseout of undesirable ingredients would require a team approach. Only time would tell, but SC Johnson could be pioneering another strategically important mechanism to differentiate its products in response to growing public desire to know what is in the common household products they use.