{"id":21004,"date":"2017-11-05T10:53:22","date_gmt":"2017-11-05T15:53:22","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/lego-building-a-more-sustainable-future-brick-by-brick\/"},"modified":"2017-11-05T21:49:09","modified_gmt":"2017-11-06T02:49:09","slug":"lego-building-a-more-sustainable-future-brick-by-brick","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/lego-building-a-more-sustainable-future-brick-by-brick\/","title":{"rendered":"LEGO: Building a more sustainable future\u2014brick by brick"},"content":{"rendered":"

Is the business of business simply, business?<\/strong> Or can a profit-seeking entity create shareholder value by engaging in activities that promise no immediate monetary return for investors, but might contribute to a better world in the future? Poles haves suggested that there is a positive relationship between a company\u2019s CSR (Corporate Social Responsibility) actions and consumers’ reactions to that company\u2019s products.[i]<\/a> A growing body of academic research also concludes that consumers generally react positively to CSR initiatives in all stages of the decision-making process.[ii]<\/a> Thus, many companies have institutionalized CSR programs and are\u2014if not directly seeking to achieve a sustainable competitive advantage\u2014then at least complimenting their corporate strategies through these initiatives. Moreover, companies that carelessly contribute to the climate change these days are increasingly encountering negative publicity, hurting their overall businesses.[iii]<\/a><\/p>\n

Hence, the case for consumer-oriented companies to invest resources in reducing their global Co2 footprint is straightforward: reduce it and consumers might buy more of or pay more for your products.<\/p>\n

\"\"
Source: LEGO 2016 Responsibility Report<\/em><\/figcaption><\/figure>\n

This year, The LEGO Group<\/strong> (hereafter referred to as \u201cLEGO\u201d), a Danish plastic-toy manufacturer, achieved its ambition to balance 100% of its energy use with energy from renewable sources<\/strong>\u20143 years ahead of time.[iv]<\/a> Only one month after achieving this remarkable milestone, LEGO extended a partnership with WWF to reduce the global Co2 footprint of its suppliers by 10,000 tonnes per year towards 2020<\/strong>.[v]<\/a><\/p>\n

This move indicates a remarkable shift in the way some firms think about CSR initiatives from focusing on the impact of the firm to the impact of its supply chain<\/strong>. In the case of LEGO, the potential is huge: over 90% of the 1.1 million tonnes of Co2 produced annually from sourcing, producing, and distributing LEGO bricks is produced by LEGO\u2019s extended supply chain and not by LEGO itself (see illustration on the left). LEGO plans to include 80% of its suppliers in its Engage-To-Reduce\u00a0<\/em>(E2R) program to help them reduce their Co2 footprint through dialogue and cooperation.[vi]<\/a><\/p>\n

LEGO has also made mid-term and long-term commitments to address the climate change: In June 2015, LEGO announced its decision to invest USD 150 million[vii]<\/a> to identify and implement even more sustainable raw materials and packaging solutions by 2030. As part of this initiative, the company is setting up a Sustainable Materials Centre, which will employ more than 100 FTE\u2019s who will work full time on researching, developing and implementing sustainable raw materials to manufacture LEGO elements as well as packaging materials.[viii]<\/a><\/p>\n

To further address the climate change and stay true to its Danish roots (Denmark emits the least Co2 per capita of all countries in the world<\/a>[ix]<\/a>), my recommendations for LEGO and its management team would be to:<\/p>\n