writing assignment
Current CSR Event: Lego and Sustainable Blocks
Recently, Lego embarked on a journey to reconstruct all of their legendary plastic Lego blocks into sustainable materials and eliminate plastic from their production line. They hope to make the full transition by 2030 and utilize materials like sugar cane, etc. It is a conscious effort by Lego to address plastic pollution and mitigate threats to marine life. According to Lego CEO, Niels Christiansen, they are unsure yet as to whether it will affect their profit margins, but they are committed to maintaining the quality of their products, while also becoming leaders in the plastic pollution space. Additionally, aside from just cutting out plastic usage, they are also focusing their efforts on replacing the plastic with sustainable materials not derived from, or produced with fossil fuels. Though they haven’t rolled out a full line of the new blocks, they currently offer small plant-derived sets of Lego blocks as gifts accompanying large purchases. It is possible that the potential increase in production costs could be passed off to customers, but Christiansen’s only comment on the matter was that, “We have high quality products that offer a building experience as well as a playing experience and can be used for many, many years. Our prices are based on that rather than on whether the product is made from one thing or another.”
Lego’s attempt to diminish the negative effects of its plastic toy block empire and become a leader in sustainability, falls well within the Triple Bottom Line theory. First and foremost, it seemingly fulfills environmental sustainability as Lego shifts from plastic materials to sustainable, plant-based options. They are limiting their usage of hazardous substances and waste on the physical environment. In addition, Lego is operating on the premise that natural resources are limited, apparent through their effort to utilize materials that are not derived or produced using oil. It is not apparent if they have made any intentional efforts towards social sustainability. However, making such a clear concentrated attempt towards something so positive may affect employees’ morale and productivity. It could also have a positive impact on the community and competitors, especially if Lego truly becomes a champion of plastic consumption and sustainable materials. In terms of economic sustainability, time will tell whether they are able to increase their overall profit margin or not. Christiansen has given the impression that they will continue to focus on increasing profit margins, along with their sustainability goal. He did not deny that possible increased production costs could affect the price consumers pay, indicating their active attempt to ensure consistent (if not higher) revenues. “I think it’s too early to say whether it will be necessary” [to sacrifice profit to achieve the company’s sustainability goal.] “But we won’t compromise on our quality.” Especially seeing as the quality and long-term durability of Lego blocks will remain the same, I think the company has a decent probability of increasing revenues since they offer the same quality to consumers, with the added benefit of sustainability and increased publicity and consumer relationships. Furthermore, if the alternatives they find for oil and plastic are cheaper, they could achieve large cost-savings and long-term success and sustainability.
Some of the apparent drivers of Lego’s corporate social responsibility efforts include: moral obligation, sustainability and reputation. They have taken up this agenda in order to address plastic pollution and diminish threats to marine life, seemingly as a moral obligation to “do the right thing.” Switching to sustainable materials and eliminating excessive oil-use enables them to create a sustainable foundation for future generations. Lego’s journey to become leaders in the plastic pollution space undoubtedly does great things for their reputation and improves their company image and brand.
Though my long-term goal is to become a lawyer, I plan to work in business consulting for a few years before law school. Sustainability is a hot topic in the consulting industry right now as many companies seek solutions and avenues to become more sustainable. I think it is pretty remarkable that Lego, a company whose core product is plastic blocks, is reinventing their products and processes to become more sustainable and environmentally-friendly. Though some may argue they did it solely for the public relations boost and potential increases in revenue, I would argue that there are many years before they can recoup their losses from making such a major shift in their operations. In addition, they are unsure right now as to whether it would even increase their profit margin. Yet, they undertook this mission anyways and I believe many companies can learn from this. As a consultant, I can encourage my clients, as well as my own company, to take sustainable approaches and use Lego’s example that is never too late to make major operational changes, even if it is a core product. They were able to look outside their company bubble, to the environment they were affecting, as well as their long-term sustainability and make major changes accordingly. There are many opportunities within consulting to analyze the effects of proposed solutions and affect company-wide change, so I should always keep sustainability and environmental effects at the forefront when devising resolutions with my teams. Regardless of where I am in my career or what occupation I have, sustainability is always relevant and it is vital that I encourage myself and those around me to look long-term and outside of the narrow scope of just employees and clients. As Lego taught us, there is always a way to
fulfill our moral obligations and “do the right thing”, even if it forces us to reinvent our core product and disturb a seemingly un-disturb-able production cycle.
Wienberg, Christiansen. “Lego’s Billionaire Owners Want to Ditch Plastic (Yes, Really).” Bloomberg.com, Bloomberg, 4 Sept. 2018, www.bloomberg.com/news/articles/2018-09-04/billionaire-lego-owners-plastic-agenda-comes-at-an-unknown-cost.