Kimberly-Clark rebounded from Kleercut campaign to leadership position
By Scott James, Fair Trade Sports
This month we have a tale of civil disobedience and the corporate response that touches nearly every household in North America. It stretches from old growth forests of Canada to corporate boardrooms in Dallas. Oh, and a visit from Dr. Seuss’ Lorax. But first, my guest for this month’s interview, Dr. Michael Conroy.
In addition to being one of the go-to experts on product certification systems (his book on the topic stays in the short book stack on my desk for frequent reference), Dr. Conroy is a retired professor of economics, a board member of the Forest Stewardship Council (FSC) and an established “big picture” thinker. One of my companies produces an FSC-certified product, which gave Michael and me an excuse to reconnect recently. I asked him about the CSR movement here in the States, as well as what he sees abroad.
Scott: You travel internationally way more than I do, Michael. Tell me about where we (the US-based CSR community) are succeeding in relation to the rest of the world.
Michael: I’ve got an interesting story for you that starts in 2004. Back then a group of advocacy NGOs – led by Greenpeace – began campaigning to get Kimberly-Clark to reduce its impacts on intact forests and old growth forests around the world by purchasing its fiber from eco-certified forests and/or recycled paper sources. Kimberly-Clark (KC) is arguably the largest purchaser of wood fiber for tissue products in the world; and it has some of the best established brands in the world, including Kleenex, Scott, Cottonelle, and more.
Scott: I know from time spent in Texas that they’re in Dallas and have sales of $15B+ [It was actually almost $20B for 2010 when I looked this up later, but what's a billion or two between friends].
Michael: Greenpeace and company created a campaign called Kleercut to mimic the Kleenex brand. Over the course of the campaign more than 50 activists were arrested for peaceful civil disobedience linked to KC. The campaign focused on equating “Kleenex” with “Kleercut” and the forest damage created by the companies selling to KC. They proceeded to drum up support across grocery stores and college campuses, and succeeded in media hits as big as CNN Money and Fortune Magazine.
Scott: Is this the Dr. Seuss thing?
Michael: Yes. You’ll remember that in The Lorax Dr. Seuss has trees speaking for the plight of the environment. They rewrote the story to “personalize it” around KC and its suppliers, and then they acted it out, in costume, in front of the offices of KC board members! It always drew a great local media response.
Scott: So did it work?
Michael: Yes, the campaign succeeded in bringing KC to the table and in August of 2009, KC and Greenpeace jointly announced new sourcing policies for KC fiber that included a goal of ensuring 100% of the fiber used in all its products was from environmentally responsible sources, with a clearly expressed preference for FSC fiber. It pledged by 2011 to increase its use of recycled and FSC-certified fiber in North American products to 40%, and by 2012 it would no longer use any pulp from Canada’s vast boreal forest (a principal source at that time) unless it was FSC certified. By the end of 2010, well ahead of the target date, it had already reached 57% of its North American sourcing from FSC-certified or recycled fiber.
Scott: What implications and impact did that have on the rest of the industry, beyond the Canadian borders?
Michael: As a direct result of KC’s rewritten fiber sourcing policy, some of the largest forest products companies in the world are now actively seeking FSC certification of their supplies of wood chips and fiber. This includes companies that had actively opposed FSC standards as too demanding and too costly to implement.
Both of the largest forest products companies in Chile (Arauco and CMPC/Mininco) which account for 80% of Chile’s forest products industry, are in the midst of the FSC assessment process, changing their practices to meet FSC standards, at a cost of millions of dollars in re-tooling and re-structuring their operations. Both of those companies were co-founders of Chile’s competing forest products certification system, CertFor, and had resisted FSC certification for years. But they had begun to find that markets placed little or no value on CertFor certification, whose standards were weaker and less demanding.
It has taken both Arauco and CMPC/Mininco more than a year to design and implement the changes needed to meet the standards. And both companies, in private conversations, have told me that changes in purchasing policies of major companies like KC have made them realize that they needed to be FSC certified if they want to be able to sell to the leading branded manufacturers of wood and fiber products worldwide.
In Brazil, the pulp and paper industry, major suppliers of KC and other tissue manufacturing companies, have become so focused on FSC certification that their industry association, Bracelpa, has become a major contributor to the costs of FSC-Brazil’s office and a supporter of training workshops that inform the Brazilian paper products industry on the “whys and wherefores” of FSC certification.
Scott: Tell me more about the “whys and wherefores” and the benefits to both the forests and the companies doing business in forestry products.
Michael: Well, on the ground this means a number of important things. FSC requires respect for, and protection of, the rights of indigenous peoples, at levels often beyond the requirements of national legislation. Indigenous groups have now found that FSC is a new and powerful tool in their negotiations with forest products companies about access to, and use of, traditional lands.
FSC also has more stringent rules on environmental management, protection of biodiversity, and reduced areas of clear-cutting, greater setbacks from streams, rivers, and lakes than any other certification system, and stronger than almost any national legislation around the world. It requires engagement with local communities, protecting them from the negative impacts of logging (i.e. roads and bridges damaged, water polluted, etc.) and encouraging active hiring of local service providers, local technicians, and local labor.
The chain-of-custody certification in the FSC system provides strong assurance that products produced in compliance with the standards can be traced from the forest, through any and all processing, and right down to the final product sold to consumers.
The number of acres certified to FSC standards in North America is now more than 135 million, about one-third of the acres certified worldwide. In terms of the effect on other industry players besides KC, demand for FSC-certified wood and fiber products is booming worldwide. Our closest aggregate measure of demand for the FSC products is the demand for Chain of Custody certificates, required of companies processing certified wood and fiber for products taken to retail markets with the logo. These have grown from 16,000 worldwide to more than 22,500 (50% growth) over just the last 18 months.
Scott: And how did KC come out of all this?
Michael: KC rolled out its first KC Professional FSC toilet paper and other products in late 2010 (KC Professional serves hotels and other business/institutional buyers). It began selling Kleenex with an FSC logo on the bottom of the box at Costco stores late last year, and it is now going national throughout the US, supplying “FSC Kleenex” to virtually all consumer outlets. An amazing transformation in just two years!
Scott: Excellent. It will be interesting to watch the response of consumers to the logo. Thanks for your time, Michael!
This post originally appeared in Forbes.