Kimberly-Clark Corporation: The Environmental Sustainability Challenge

Abstract:

The case discusses the sustainability initiatives of US-based consumer products giant, Kimberly-Clark (K-C), with the emphasis being on the company's policies and practices related to the environment. K-C manufactured products like Kleenex and Huggies, which essentially involved the use of paper and tree pulp. The company procured the pulp required from several forests located across America, and also owned forest lands prior to 2004. Though the company used recycled fiber, it also used virgin fiber procured from the forests in many cases. From the early 1990s, the company had several policies in place for environmental compliance, energy, waste disposal, etc.

Subsequently, it introduced several policies from time to time for forest management, sustainable use of natural resources, environmental practices of vendors, etc. The five year vision of the company for 2000-2005, and 2005-2010 also addressed the initiatives taken by the company to being environmentally responsible.

K-C started reporting its environmental initiatives in the early 2000s and the first sustainability report was published in 2003. The report and the subsequent reports addressed issues like corporate governance, suppliers, charitable giving, and environmental stewardship. In the reports, the company claimed that it did not source fiber from mixed hardwood forests and temperate rain forests. It also said that it mostly used fiber from pre and post consumer waste paper. In case virgin fiber was used, it was purchased only from suppliers who had certified their forest lands and wood procurement activities against any globally recognized standard.

However, environmental groups like Greenpeace and the Natural Resources Defense Council (NRDC) claimed that K-C was destroying ancient forests for manufacturing its products and was misleading the public about its business practices. A campaign called 'Kleercut' was launched by Greenpeace. The environment groups accused K-C of greenwashing, and accused it of destroying the ancient Boreal forests in Canada. Another report by NRDC claimed that less that 19% of the total fiber used by K-C was recycled and some products like Kleenex, Scott, and Viva did not contain recycled material at all. According to subsequent reports from the environmental organizations, though the company claimed that it procured fiber from suppliers that maintained high ecological standards, only 5.3% of the fiber used by it came from Forest Stewardship Council certified operations. Greenpeace brought out advertisements of the Kleercut campaign in several media channels like newspapers, television, and even on the Internet to discourage people from buying the products of K-C. K-C's reporting standards also came under the scanner with the critics alleging that there was a disconnect between what the company was reporting and its actual practices.

The 'Kleercut' campaign created many problems for K-C and put its reputation at stake. K-C responded to the allegations by saying that many of them were false and made with the intention of tarnishing its image. However, since late 2006, the company had introduced various changes in its environmental policies and practices, particularly with reference to its supply chain. It conducted a comprehensive lifecycle assessment for its key products to study the environmental impact of virgin fiber compared to recycled fiber. It also revamped its corporate sustainability management structure and formed an external sustainability advisory board to provide independent perspective and advice on the company's sustainability programs. Notwithstanding the various changes initiated by K-C, the company continued to attract the criticism of environmental groups who claimed that it continued to have a detrimental effect on the environment.

Issues:

» Analyze the environmental sustainability initiatives adopted by K-C.

» Understand the policies governing the activities of the company in this area.

» Study how K-C went about implementing sustainability policies.

» Understand issues and challenges in sustainability reporting and its significance.

» Evaluate the underlying reasons for the growing criticism against K-C and explore ways in which the company can address this issue.

» Understand the concept of greenwashing and discuss and debate if K-C's environmental initiatives actually amount to 'greenwashing'.

Contents:

Keywords:

Sustainability, Environmental sustainability, Corporate social responsibility, Sustainability policy, Sustainability management structure, Sustainability reporting, Greenwashing, Supply chain, Fiber procurement policy, Life cycle assessment, Kimberly-Clark, Kleenex, Kleercut

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