Q&A Special | Sustainability in Businesses: Is it more than a trend? – Asia Food Journal

Q&A Special | Sustainability in Businesses: Is it more than a trend? – Asia Food Journal

profit meets purpose

Courtesy of Alliance to End Plastic Waste

Understanding the profit of purpose and how sustainability can redefine business success.   

By Cath Isabedra  

Leaderboard of Asia Food Journal

In an era where the existential threat of climate change looms large and consumer awareness is at an all-time high, businesses face a paradigm shift in how they operate. No longer can profitability be the sole pursuit. There’s a growing imperative to align financial success with broader societal and environmental impacts.   

This integration of profit meets purpose is not just an ethical choice but an economic one, redefining the essence of sustainable business strategies in today’s corporate world.  

As organisations grapple with these evolving expectations, they must navigate the complexities of implementing robust sustainability initiatives without compromising their bottom line. The plastic value chain serves as a prime example of this shift, with initiatives like the Alliance to End Plastic Waste catalysing action across sectors to combat plastic pollution. Such collaborations underscore the necessity for innovation, systemic change, and stakeholder engagement in reimagining a future where business success is intrinsically linked to positive environmental and social outcomes.  

In the quest to illuminate the paths leading toward a sustainable future, insights from the pioneers and architects of environmental stewardship are invaluable.   

Asia Food Journal is pleased to converse with Nicholas Kolesch, Vice President, Projects, Alliance to End Plastic Waste. He shares his insights on sustainable plastics management in the complex maze of environmental solutions.   

Our conversation with Kolesch promises not only to peel back the layers of the strides in plastic waste reduction. We also delved into the mind of someone at the helm of change, driving forward with unwavering commitment and innovative strategies.  

This exclusive interview offers a rare glimpse into the thoughts of a leader shaping the narrative and altering the landscape of sustainable practices within the industry.  

How does the “profit meets purpose” business model differ from traditional profit-focused approaches, and what are its key characteristics?    

Many companies have had some form of CSR activity over many decades. Often, they “give back” or “do their part” to support society through environmentally or socially responsible activities. In recent years, with the apparent increase in harm to the natural environment, including unprecedented biodiversity loss and the acceleration of climate change, these activities are evolving into more robust sustainability strategies that target business transformation to bring about a fundamental reduction in a company’s environmental footprint. This includes actions on product design, energy consumption, raw material, and resource usage, as well as waste abatement.   

“Beyond recognising the need to incorporate sustainability principles and actions, many companies have started to see it as an imperative to building and maintaining a competitive advantage while at the same time responding to increasing regulation, either existing or anticipated.”      

Companies across the plastic value chain are bringing more responsible, more sustainable solutions forward in all phases of their products’ lifecycle: manufacture, use, and end-of-life. But to tackle the challenges at each stage, sustainability initiatives must go beyond their own direct activity – collaboration is key.   

That’s where organisations such as the Alliance to End Plastic Waste play an important role.   

By convening companies from across the plastics value chain, the Alliance serves as a laboratory of solutions that address the plastic waste challenge holistically. Through more than 50 projects across the globe, we are developing, de-risking, and scaling solutions that are economically viable, environmentally beneficial, and socially responsible – supported by more than 70 companies from across the value chain.    

How can organisations in the consumer-facing FMCG space measure and assess their environmental and social impact to ensure they are making progress toward sustainability goals?    

Usually, the journey starts with materiality assessments to understand where the organisation can have the largest positive impact given its operating environment. When looking at carbon footprint, most companies are now holistically taking account of their Scope 1, 2, and 3 emissions.   

More broadly, companies also view the sustainability profile of their products with a lens that spans the manufacturing, use, and end-of-life phases, assessing the environmental footprint across the product lifecycle. Through this, an organisation can better understand what ESG standards are appropriate and applicable for their business, as well as how compliant they are with these standards.    

When it comes to addressing the plastic waste challenge, taking a holistic view is particularly relevant. Right from the design phase, manufacturers should consider the end-of-life phase of their products already, including optimal resource usage to mitigate climate impact, but also a product’s recyclability or potential for reuse.   

In making these assessments, companies can have a positive influence up and down the plastic value chain on their suppliers, customers, and even the recycling or waste management sector.    

As these responsibilities grow more pressing and complex, many companies have appointed a Chief Sustainability Officer (CSO). However, it’s not enough to have a single individual solely responsible for their sustainability ambitions and compliance.   

“The CSO should act like a conductor of an orchestra – directing the way forward across the many departments and business units of a company – so that everyone is aware, empowered, and accountable for sustainability in the day-to-day business.”   

What challenges may companies face in adopting a “profit meets purpose” model, and how can they overcome these challenges?    

Sustainability should be considered an investment in the longevity of a business. While no task is more urgent today than mitigating climate risk, there are many other sustainability challenges that need attention. Businesses should consider their wider operating conditions to ensure that their activities have the lowest possible impact on current and future generations, with a particular focus on climate change and biodiversity loss.   

While that is easy to say, making it a reality is far harder. One starting point is to collaborate more closely with suppliers and customers in a way that introduces more circularity into the business.    

But systemic change does not happen overnight; it requires a high amount of collaboration and stakeholders to be aligned, which can sometimes result in slower adoption than everyone would like. This, however, is a hugely exciting opportunity to implement new ways of working and evolve existing business models.   

For example, companies starting to implement “design for circularity” principles are disruptors that are not just pulling their plastic value chain partners in the direction of circularity but also clearly differentiating themselves, providing customers with better value propositions compared to their competitors.   

How can consumer preferences and demands for sustainable products and practices drive the adoption of the business model in the FMCG industry?    

Every trip a consumer makes to the supermarket is an opportunity to make a sustainable choice; here, they can send important signals and opt for the most sustainable product or service available. At home, the impact consumers have is equally significant – ensuring that waste is minimised and understanding the local waste management system so that the highest rate of resource recovery is achieved – ideally through reuse, composting, and recycling.  

Without an adequate understanding of their local waste system, many conscientious consumers engage in “wishcycling,” putting an article in the recycling bin when it is actually not recyclable in their jurisdiction. Empowering consumers requires a concerted effort across industries and municipalities, informing and educating the public in ways that are easy to understand.     

At the other end of the value chain is the need to advance more responsible and sustainable production. As demand signallers for recycled plastic use, the FMCG industry is critical to the success of the recycling industry.   

Brands and convertors need to turn their pledges into reality through actively sourcing recycled plastic, providing the necessary leadership that will help to close both quality and quantity gaps. This starts in the procurement department, where incentives should be aligned with sustainability pledges, ensuring that the sourcing of recycled materials is not solely subject to pricing considerations.   

At the same time, the industry can come together to define recycled content specifications that provide much-needed guidance to recyclers around the quality of recycled plastic needed.   

In this light, what role do innovation and technological advancements play in helping companies transition toward a circular economy and reduce their environmental impact?    

On the journey toward a more circular economy for plastics, many proven solutions can be broadly implemented. However, there are also huge opportunities for improvement by leveraging technological innovation. From advanced mechanical and chemical recycling processes to high-speed sorting enabled by robotics, artificial intelligence, and novel ideas, including digital watermarks, the scope for innovative solutions in waste management is growing rapidly.   

To drive this innovation, the Alliance has been working to de-risk new technologies, providing funding, expertise, and convening power to accelerate new developments. Concurrently, we are working with start-ups across the globe via the End Plastic Waste Innovation Platform, a start-up accelerator that has resulted in more than 220 pilots. These pilots have attracted over US$185 million in capital.     

Innovation and technological advancement will always be welcome, but much of the challenge of managing plastic waste can be addressed with existing solutions. Across the world, around three billion people still lack access to waste management services. To solve big parts of this issue, we are looking at basic waste management infrastructure that does not need to be complicated. Here, it is important to build capacity and find innovative finance and policy models to drive change at scale.     

For example, as one of the earliest projects funded by the Alliance to End Plastic Waste, “Project STOP Jembrana” in Indonesia now offers formal waste collection services to more than 124,000 people.   

To date, the material recovery facility has collected over 12,959 tonnes of waste, including 1,528 tonnes of plastic. The waste management infrastructure ensures a cleaner, healthier environment for the community. The programme reached financial sustainability in early 2023 and, in the future, will be managed solely by the local government and community in Jembrana Regency. The challenge is now for other jurisdictions in Indonesia to implement similar models, with funding and capacity-building efforts required to make these work.   

How can businesses collaborate with stakeholders, including governments, NGOs, and other industry players, to create a more sustainable ecosystem?    

The world is watching how everyone across the value chain responds to the challenge to be more sustainable, but no single entity can do this alone. Corporations need to fulfil their net-zero commitments; manufacturers need to be accountable for ensuring their converting systems can manage both recyclable and virgin materials; resin producers are under pressure to maximise the amount of recycled content in their pellets to meet the requirements of the value chain, and so on.     

Across the plastics value chain, the Alliance to End Plastic Waste is playing a key role in fostering much-needed collaboration.   

“More than just a platform for discussing what needs to be done, we are a vehicle for action on the ground – funding projects, de-risking technologies and business models, and advancing solutions.”   

Among our stakeholders, including members and project partners, we catalyse direct action to build a sustainable plastic value chain. In doing so, we are creating opportunities to improve collection support waste reduction and advance a more circular approach by extending the overall life cycle of plastic.   

Collaboration and incentivisation, especially at the government level, are essential to enable and drive investment towards much-needed infrastructure to ensure plastic waste is diverted from landfills and incineration to avoid environmental leakage.    

What are the potential economic benefits for organisations that embrace the profit meets purpose model and invest in sustainability initiatives?    

The appeal of products that are environmentally and socially responsible is not limited to niche audiences but is making genuine headway with a broader base of consumers around the world. A study from McKinsey and Nielsen reveals a broad link between consumer spending and products with ESG-related claims, proving that today’s consumers are backing their ESG preferences with their purchasing power.     

Southeast Asia generates 31 million tons of plastic waste every year, presenting both a huge challenge and opportunity. The inherent value in much of this waste needs to be unlocked, starting with basic collection, followed by investments in downstream processing and recycling.  

As a first step, the FMCG industry can play a major role in adopting a “trash to treasure” mentality; by choosing to use recycled plastic in their products, this signals a demand for the material, with a significant downstream effect on attitudes towards collection and broader waste management.    

How can the Alliance to End Plastic Waste facilitate collaboration among stakeholders in the plastic value chain to drive progress in tackling plastic waste, and what are some of the specific initiatives they are involved in?    

The Alliance to End Plastic Waste aims to address the plastic waste challenge and support the transition to a circular economy for plastic. We do this by finding economically viable, socially responsible, and environmentally beneficial solutions.   

We want to achieve our goal through demonstrated projects and action on the ground, where we directly engage stakeholders in our projects, so they play a direct role in effecting the needed change. We can fund and help develop waste management systems, but municipal authorities must own and consistently operate them.     

In Asia, the Bersih Indonesia: Eliminasi Sampah Plastik initiative is one of our most ambitious waste management projects and a testimony to the power of what we can achieve through public-private partnerships. By bringing together municipal and national governments, expertise and funds from the private sector, and the participation of local communities, we are building a self-sustaining and commercially viable waste management system that will serve 2.6 million people in the Regency of Malang in East Java.   

Through funding from the Alliance, five material recovery facilities and related transfer stations will be built, more than 1,000 waste collection vehicles will be procured, and each of the approximately 550,000 households will receive two bins to segregate their waste.   

To ensure this system is sustainable, the Alliance and its implementation partners have worked hand-in-hand with the Regency government and environment agency on design and implementation plans. With this effort, we aim to demonstrate that a waste-free environment is possible in Indonesia, supporting the establishment of a circular economy for plastic waste.    

How does sustainability contribute to long-term business resilience and brand reputation in the consumer market? What are some successful examples of companies in the FMCG space that have effectively integrated sustainability into their business models while maintaining profitability?    

Many examples of leading global companies have successfully embraced and, importantly, embedded sustainability into their supply chains to take end-to-end responsibility for their products. Every business, be it in the FMCG space or not, has this opportunity.    

To help enable a circular economy for plastic and ensure that it is credible and achievable, it is important that we develop realistic solutions that are supported by science. It will not be quick to drive widespread adaptation, but recognising the challenges in transitioning to a more circular economy and being transparent is part of the journey.   

Being upfront about any contradictions between perceived benefits and science-based results will help organisations make the right choices that will bolster business resilience and brand reputation, helping to retain consumer trust in the long term.     

Profit with Purpose: Join the Eco-Revolution  

The insights from Nicholas Kolesch underline a transformative era in business, where the confluence of profit and purpose heralds a sustainable future. By embedding environmental stewardship into the corporate DNA, organisations can navigate sustainability’s complexities, fostering economic and ecological resilience.   

The Alliance to End Plastic Waste exemplifies this strategic pivot, catalysing change through global partnerships and innovative solutions, proving that the path to sustainability can also be paved with profitability. As businesses look ahead, integrating such forward-thinking models will not only carve out competitive advantages but will also contribute to a sustainable legacy for future generations. Join this collective journey; let’s design a world where business success and environmental custodianship thrive in tandem.  

Nicholas Kolesch is the Vice President of Projects, Alliance to End Plastic Waste   

Nicholas brings a strong international background in chemicals and plastics, previously serving as Strategic Planning Manager (Singapore) and Head of Marketing Automotive (Vienna) for the Borealis Group. Nick has worked extensively in Europe and Asia throughout his career and held sales, marketing, strategy, and management positions in Hong Kong, Switzerland, Thailand, and the United Kingdom with Ciba Specialty Chemicals. As Vice President of Projects, Nick manages the screening, development, and execution of the large-scale portfolio of projects in accordance with the Alliance strategy.  

This story first appeared in our “Savoring Innovation: A Glimpse Into Tomorrow’s Pantry” issue.