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Corporate-Non-Profit Partnerships: Kimberly-Clark Case Shows Benefit of Evolving Relationship

By Melissa J. Anderson

It wasn’t too long ago that Kimberly-Clark, a global tissue products manufacturer, and the conservation world were at odds. In fact, as Raz Godelnik of TriplePundit pointed out, in 2009, Greenpeace was targeting K-C for clearing forests that were home to endangered species.

But in 2009, the Greenpeace and its partner organizations declared victory over the company, in a campaign called “Klearcut.” According to the Klearcut website:

“At a joint news conference in Washington DC, Greenpeace and the Kimberly-Clark Corporation, the world’s largest tissue-product manufacturer, announced an historic agreement that will ensure greater protection and sustainable management of Canada’s Boreal Forest and other ancient forests around the world.”

The company promised to source 100 percent of its fiber from “environmentally responsible sources.” Additionally:

“During the evolution of this policy, Kimberly-Clark stopped buying more than 325,000 tonnes of pulp a year from logging operations in the Kenogami and Ogoki Forests. The company managing these forests was unwilling to protect endangered forest areas in them and supply Kimberly-Clark with Forest Stewardship Council certified pulp.”

The agreement between the groups was considered a big win for conservation groups and ushered in a new, collaborative style of relationship between corporations and advocacy organizations.

And now, with the announcement of a new relationship with the World Wildlife Federation, K-C has changed the corporate conservation conversation again.

Conservation Partnerships

Last month, Kimberly-Clark announced its expansion of membership in the Global Forest & Trade Network (GFTN). The WWF initiative is designed to end illegal logging and “conserve the world’s most valuable and threatened forests.”

Previously, only select portions of the global company were participating in the GFTN, but, as K-C announced at the GFTN’s 20th Anniversary Reception at the Forest Stewardship Council (FSC) General Assembly meeting in Sabah, Malaysia, the company will now participate worldwide.

Kerry Cesareo, WWF’s Managing Director of Forests said, “Given its breadth of product offerings and market influence, we commend Kimberly-Clark’s leadership in pushing the pulp and paper industry toward more responsible sourcing practices.”

She continued:

“Our collaboration will improve forest management, reduce impacts from production, and help protect the forests and habitats at the core of our mission. And Kimberly-Clark can offer consumers responsible alternatives for tissue and personal care products. This shows the true power of collaboration.”

Sustainable Approach to Business Strategy

According to the company, this commitment represents its shifting business goals – to include sustainability as a key component of strategy.

Suhas Apte, Vice President, Global Sustainability, for Kimberly-Clark, “At Kimberly-Clark, we believe what is good for business must also be good for the planet… As the largest tissue manufacturer in the world, we are committed to responsible fiber sourcing. Expanding our work globally with WWF and the GFTN is an important way K-C can be part of the solution to the sustainability challenges our world faces.”

Kimberly-Clark has committed to have “100 percent of its virgin wood fiber sourced from certified suppliers by 2015.” By collaborating with the WWF on the GFTN initiative, Kimberly-Clark will receive the organization’s support to achieve this goal.

It’s difficult to say now if the strategy is paying off. Last week the company reported an 18% drop in second-quarter earnings, which it says are due to rising costs for materials. According to the Wall Street Journal:

“The disconnect between falling oil prices and Kimberly-Clark’s rising costs comes because refineries have been using more, lower-costing natural gas than oil, a process that creates fewer of the byproducts that Kimberly-Clark uses. The supply shortage, as well as continuing high demand from economies like China, is sending prices higher for items like adhesives and absorbent materials used in diapers, and packaging materials.”

In order to cut costs, the WSJ reported, the company will seek new options in procuring materials and in its supply chain operations. Let’s hope that doesn’t change the company’s sustainability commitments. A transcript of the earnings call reveals that the sustainability issue did not come up in conversation, but according to the WSJ, “In an interview, Falk said that Kimberly-Clark gained market share from private labels in ‘virtually every category,’ a promising sign that shoppers are willing to spend more.”

Hopefully this also reflects a desire on behalf of customers to pay a premium for sustainably sourced products.

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