We are aware of the cost our growth has on the environment, and, through the development and execution of this Sustainability Plan, we will be making an effort to minimize any negative impacts. Additionally, beyond helping curb global challenges, sustainability can help drive a successful business by focussing on a Triple Bottom Line strategy. The triple bottom line is a business concept that posits that firms should commit to measuring their social and environmental impact, in addition to their financial performance, rather than solely focusing on generating profit, or the standard “bottom line.” It can be broken down into “three Ps”: profit, people, and the planet.
Image: researchgate.net
Today, many investors or large corporate partners use comprehensive, environmental, social, and governance (ESG) metrics to analyze an organization’s ethical impact and sustainability practices. Investors examine factors such as a company’s carbon footprint, water usage, community development efforts, and board diversity.
Keeping sustainability at the forefront, can additionally help us stand apart from the competitors. As a rapidly growing corporation, our current and prospective investors, strategic partners, and customers may increase the expectations they place upon Setex Technologies to meet sustainability targets.
Customers are increasingly becoming more aware of sustainability issues and feel a responsibility towards resolving them. Being a start-up in a rapid growth period with a strong consumer focus, Setex Technologies is in a great position to leverage our own sustainable actions to become more appealing to the new generation of consumers. It will be easier for us to adjust our culture and standards as early as possible and at our current scale.
The US Sustainability market is rapidly rising; it was projected to hit $USD 150 Billion in 2021. Setex Technologies can enhance our position in this new market and form a loyal customer base that is more environmentally and socially conscious.
Improved Brand Perception
Sustainability issues have a strong link to brand perception. In addition, being a sustainable brand could be a competitive differentiator.
Potential Revenue Growth
In the two years since First Insight’s first report on Gen Z and sustainability was published, Gen X consumers’ preference to shop sustainable brands increased by nearly 25% and their willingness to pay more for sustainable products increased by 42%. Consumers across all generations, from Baby Boomers to Gen Z, are now willing to spend more for sustainable products (Forbes, 2021). Findings from Hubspot’s 2022 State of Consumer report indicates that nearly half (46%) of respondents say they’re more likely to buy from a company actively trying to reduce its environmental impact. Likewise, Forbes’ latest reporting states that 79% of consumers are changing their purchase preference based on products’ social or environmental impact.
In addition, many sustainability issues are implemented by reducing consumption. This can be translated to reduced costs (optimizing electricity use = better sustainability = reduced costs).
Recruiting and Retaining Top Talent
Millennials are more likely (https://www2.deloitte.com/) to choose to work in a company that shares their values, and “will go out of their way to work for a company that demonstrates a genuine commitment to corporate social responsibility, environment, and sustainability. If companies fail to prove that they are sincere about environmental and social sustainability, they risk alienating this group both as customers and employees.”
Increased Attractiveness to Enterprise
The majority of our enterprise customers have a public corporate responsibility agenda (Automotive, semiconductor, medical, sporting equipment, and manufacturing automation companies)
It means that:
Setex Technologies is implementing sustainability practices with an eye on improving long-term financial performance and strategically differentiating our company from alternatives in our target markets. We are striving to become a more sustainable company by driving socially responsible initiatives in the following areas:
Consumer Product Packaging
Since the beginning of 2022 Setex has launched a complete redesign of the packaging for our consumer products, to use more sustainable and environmentally friendly packaging. We targeted the following projects for improved sustainability:
Outer product packaging – Setex is in the process of replacing the outer packaging for our consumer products to recyclable, post consumer recycled, and FSC certified paper based packaging. As of December 2022, many of these projects are in their final stages of packaging redesign.
Image : Left Old, foil based packaging for gaming grips. Right, new FSC certified recyclable paper-based packaging
Gaming grips: We switched the packaging from a foil based packaging to a recyclable paper packing from FSC resources. The inks, dyes and adhesives used in the packaging are environmentally friendly and can be easily recycled in most of the nation’s counties.
Earbud Grips: As of December 2022, Setex Technologies is in the final stages of redesigning new packaging for this product category. We are replacing our plastic based packaging for an FSC certified and recyclable paper packaging and inserts. The inks, dyes and adhesives used in the packaging are environmentally friendly and can be easily recycled in most of the nation’s counties.
Inner Product Packaging: As of Q4, 2022, Setex Technologies sells tens of thousands of packaged nose pads units each month. Nose pads outsell any other product in our portfolio and have a 40% market share on Amazon.com. Our current inner packaging consists of a plastic pillbox. We are in our final stages of replacing the plastic pillbox with a low profile metal box made from steel and tin. These two metals are recyclable nearly everywhere. It is also easily recycled and is accepted by a majority of the Nation’s counties.
In 2023 we will evaluate replacing our outer multi-layer flexographic pouch packaging for our nose pads and thumbstick grips with more sustainable alternatives
Image Right, Old packaging with plastic pill box and New packaging with Tin box prototype
In addition to these efforts, packaging for all newly launched products is being designed with sustainability at the forefront.
We are very aware of the impact our consumer products have on the environment and want to take proactive steps to mitigate any negative impacts.Further, with the a consumer population that is becoming increasingly aware and concerned about the environmental and social impact of a company, Setex may use green marketing (Green Marketing – refers to the practice of developing and advertising products based on their real or perceived environmental sustainability. https://www.investopedia.com/) as an important element in any future marketing or public relations campaigns.
Consumer Product Shipping
In mid 2022 we switched over our setexgrip.com customer mailers to eco-friendly padded envelopes made from 50.27% recycled content, 10% post-consumer waste which are both made in the USA and recyclable. In the process, we also reduced our costs by 8 cents per bag, making this a win-win.. In 2023 we will be evaluating eco-friendly packing tapes and packaging padding to replace plastic based padding. This will further reduce our impact on the environment.
Additionally,we are currently searching for partners that can provide ethical carbon neutral shipping services. Our goal is to have our consumer product shipping division carbon neutral by 2030.
Supply Chain
As of September 2022, 100% of our suppliers and manufacturers are US-based and most are local to our area and state. This keeps our supply chain very traceable. Setex Technologies also currently does 100% of our own storage and fulfillment. As our company expands, we are aware that we may have to add lower-cost labor and bulk manufacturers from countries in Asia that can support rapid global growth. We are putting checks in place proactively, to prevent our supply chain from becoming opaque. This includes audits and a quality management system that keeps records of our suppliers that have been vetted against social and environmental abuse.
Products and Raw Materials
At Setex Technologies, we are continuously researching ways to use raw materials for our technology that are sustainable. In particular, we are evaluating the following efforts:
Grip Products
We are working on increasing the lifetime of our products in this category. In 2023 and 2024, we are proposing to look for a way to recycle the leftover material matrix that is left as a part of our scrap rate after die cutting. We are going to be looking for partners that can reuse our scrap materials while also searching for repurposing or recycling opportunities.
Tape Products
For our tape products, we have a major ongoing R&D project that is designing a roll- to- roll manufacturing line which will reduce excess material waste by making our manufacturing practices more efficient.
Molds
Ongoing R&D projects to increase mold lifetime which, in turn will make our manufacturing processes more sustainable.
Marketing
“Sustainable marketing is the process of creating, communicating and delivering value to customers in such a way that both natural (resources nature provides) and human (resources people provide) capital are preserved or enhanced throughout.” (Sustainable Marketing by Diane Martin and John Schouten.) Sustainable marketing goes beyond the needs and wants of society, and focuses on the well-being of all stakeholders and the broader world.
With changing market trends, Setex is focusing on meeting the following sustainable marketing values.
The majority of Setex Technologies Consumer and B2B marketing efforts are Digital in nature, therefore reducing resource consuming printed recycling materials. We will aim to convert any necessary printed materials to 80-100% post consumer recycled material by 2024.
Lab and Office resources
There are a number of Low visibility, non- product related areas, specifically pertaining to the lab and the office areas of Setex Technologies’ operations where we are continually improving our sustainability management practices and conserving resources. The following table delineates the multiple areas that we have identified as places where we can and are currently implementing more eco-friendly strategies. This is an ongoing process and we at Setex are determined to make these improvements, continually.
Office Facilities
Waste: | How to |
|---|---|
Paper |
|
Plastic |
|
Plastic |
|
Batteries |
|
Material |
|
Daily waste |
|
Waste: | |
|---|---|
Electricity use |
|
Printing paper |
|
Compost |
|
Food deliveries |
|
Kitchens |
|
Mail/Packages |
|
Events |
|
Offices appliances/amenities: | |
|---|---|
Sinks |
|
Electronics |
|
Offices inventory: | |
|---|---|
Sinks |
|
Electronics |
|
By identifying and targeting these areas, we can enhance our energy compliance and reduce impact.
While the above initiatives will be our targets for 2023 and 2024, some efforts will take more time and resources to implement. In this section, we identify additional initiatives that will be a longer-term organization focus of this plan.
Establish an ESG plan
Setex Technologies needs to establish an Environmental, Social and Governance criteria that is well balanced. We need to assess the risk of losing employee, customer, and investor support, and potentially even losing the license to trade in more stringent regulatory environments, like Europe, by not having an established plan. Further we also need to focus on not having too stringent of a policy for the fear of risking focus on growth, market share, and profits. As we build a global brand, we need to account for different values and work ethics across different sectors and geographies, as well as over time. Our target is to have an ESG plan approved by our Board of Directors by the end of 2025.
Adopting an EMS system
An EMS or Environmental Management System, is designed to monitor and report upon the environmental sustainability of a firm, for both internal and external stakeholders. They are used for compliance purposes and to increase business efficiency.
We can, in particular, look into getting ISO 14001 certified. ISO 14001 is a set of standards put forward by the International Organization for Standardization (ISO). Its purpose is to clarify the best practices for organizations that wish to reduce their environmental footprint by adopting an effective environmental management system (EMS) (Harvard Business Review). We will target evaluating whether to adopt an EMS system by the conclusion of 2025.
Tracing Emissions and Carbon Footprint
Another goal for Setex Technologies would be to track our Greenhouse gas emissions and carbon footprint. While at the moment, our footprint and impact are relatively small, as we continue to grow, we must be aware of our growing impact on the environment.
In the future we will need a reliable method to evaluate track and reduce, Scope 1 – direct emissions, Scope 2- indirect emissions from purchased energy and Scope 3 emissions- all other indirect emissions associated with a company’s upstream and downstream operations. Our goal is to have this tracking in place by the end of 2026.
Choosing a sustainability reporting standard
The sustainability reporting and rating matrices can be useful tools to think through a company’s choices and help ensure regulatory compliance, responsiveness to investor needs and ultimately lead to a superior corporate performance.
Some of the currently available, reputable options are as follows-
Each one of these standards has a different scope and objective and we have to navigate a sea of sustainability reporting options to choose one that fits our company needs and values.
Establish a Sustainability Role
Leveraging an existing employee’s role to encompass sustainability management, by investing in the employee’s education in the field, will help give Setex Technologies the necessary resources to give its sustainability program a focussed direction and a specific path forward to complete its objectives.
This also fulfills a key social sustainability objective of enhancing employee education and, in turn, carving out a path for greater success for our company. We hope to establish this role by Q2 2023, so we can move forward with the implementation of this plan as soon as possible
Consumer Survey
In the third quarter of 2023, we plan to conduct a consumer survey, through existing sales channels or as a separate project to gauge the interest of our consumer base (current and potential) in what aspects of product and service would they like to see intentional sustainability efforts.
Establishing a consumer recycling program
A dedicated recycling program for consumers, which includes a certain percentage off a new product, and/or other rewards, is an achievable starting point to begin packaging recycling efforts for our current consumer goods. In early 2024, we plan to start delineating a pathway for implementing this strategy.
Product Returns and Reverse Logistics
A goal for our company in the year 2025 is to evaluate a viable reverse logistics path for recycling and/or reusing our products.
At the moment we have 2 distinct e-commerce channels: Shopify and Amazon. With Shopify, we get full visibility about the returns and can contact the customer directly to see what the problem was, if they haven’t listed it and ask them if they wish to get a return or replacement. For replacement, the policy we have in place is to ask the customer for the return and then send out the new product. Upon return we visually inspect the product and unless it’s an unopened product with an inventory mismatch, it gets disposed of.
Amazon metrics are checked for return reasons from time to time by our operations team and most of the products the returns are handled by amazon. We do not have any visibility into the inventory part of the process and when and how Amazon scraps our returns.
For this year Amazon sales to return percentage of Setex products was 2.2%. Globally, with the rise of e-commerce, product returns top a trillion dollars annually with approximately 30% of the items sold online ending up in the returns pile as compared to 10% in stores.
By determining an effective and viable path of goods, Setex can retain customer loyalty and recoup value from returned products.
The following are the areas that we can focus on the specific changes we can make
For managing these logistics, we will train existing personnel or hire someone new within our Operations department, depending on sales volume.
Developing better products, in a better way, is the key to Setex’s success in the global arena. Focusing on less wasteful and sustainable manufacturing practices can only enhance our reputation.
We have to put a dedicated effort into encouraging employee growth, happiness, satisfaction and ultimately retention by linking employees’ values and support for sustainability with the daily work and the company’s operations. These efforts would ultimately build more cohesive teams that can work towards a common goal.
Measuring, reporting and managing a company’s sustainability is going to have a greater impact on corporate performance and reputation. We will also perform better in risk assessment reports by potential investors. As an increasing number of companies navigate towards net zero, choosing the right approach now is more critical than it has ever been before.