Office Depot has always been something of an environmental leader in the business supplies world. It is now more than ten years since it was the first major office reseller to launch a green products catalogue with its Green Book; in 2008 Office Depot built the world’s first Leadership in Energy and Environmental Design (LEED) certified retail store prototype in Austin, Texas; and a year later it launched the Green Business Review to help customers better understand their buying behaviours in terms of green purchasing.
New for 2014 is Office Depot’s first ever Greener Purchasing Program (GPP), a step-by-step set of tools to help its customers save time and money while reducing their environmental footprint. The GPP fits into a wider sustainability programme that Office Depot is set to introduce next year. OPI spoke to Office Depot’s Senior Director of Environmental & Supplier Diversity Strategy Yalmaz Siddiqui for more on the GPP and the company’s sustainability goals.
OPI: Firstly, what has the merger with OfficeMax meant for environmental and sustainability initiatives at Office Depot?
Yalmaz Siddiqui: We’ve had robust programmes in both organisations for the past number of years. I think the legacy Office Depot programme probably had a few additional elements with bit more of a focus on the B2B contract customer segment. The merger will allow us to bring that legacy Office Depot programme into the legacy OfficeMax customer base – they had a lot of strength in higher education sector, for example, and we will be able to benefit from that.
Having said that, in Canada, OfficeMax Grand & Toy had a pretty advanced sustainability programme that was perhaps more integrated than what we had at Office Depot in the US. We’ll look to implement those positives across the board as Office Depot moves in the direction of a more integrated approach.
On something like green delivery, Office Depot and OfficeMax actually had their own unique programmes: OfficeMax and Grand & Toy with the Boomerang Box – which is a reusable box system – and Office Depot with the Greener Delivery programme which uses a paper bag in a reusable tote. So with the integration we have to think about which of these programmes is the most viable and offers the best solution for our customers. We have not made that decision yet and it is just one of the many things we have to evaluate.
Also, the merger is giving us a chance to rethink our overall sustainability programme; one thing I think we’ve done very well over the years is to have a strong environmental programme and a strong supplier diversity programme, but we have not necessarily weaved everything together into a wider corporate sustainability initiative. Now we’re thinking about how we can bring green together with other areas such as social accountability, diversity and philanthropy. That’s by no means easy and we are still in the process of developing a clear roadmap for this, including things such as metrics, the funding required and staffing.
OPI: When do you hope to introduce this global approach?
YS: In Europe, we are already piloting a corporate sustainability approach, which is being led by my colleague Shela Fletcher (see also Sponsored Article, page 42). Here in the US, in September we took a step forward by integrating supplier diversity into our annual Greener Purchasing Awards and Summit. We will look to do that wherever possible. I believe 2015 will be the first year where we truly have the baseline metrics in place to measure our success against. Because one thing you have seen in the Office Depot environmental programme is that it’s very metrics oriented.
When Newsweek did its green rankings, Office Depot’s transparency scores on environmental metrics were far superior to almost any other retailer. So as we transition our programme from a green focus to a sustainability focus, we’re going to think a lot about the metrics we want to measure and establish concrete baselines for 2015.
OPI: And I suppose these metrics will apply downstream to the customer and upstream to your supplier base?
YS: The focus will be very much on the customer. What we have found with many sustainability programmes is that they are very supplier-focused. One of the biggest things I think we have done at Office Depot is focus downstream and think about how we can influence our customers – particularly B2B – and educate them and act almost as service consultants to them in their purchasing programmes; and reward them, as you saw recently with our Greener Purchasing Awards. We believe this is the right focus.
It’s not of interest to all customers, obviously, but it is important to many (and more and more each year). And we are finding a wide range in many segments, from the public sector to
large corporates and in higher education and K-12.
OPI: To what extent is this global approach driven by customers or by you internally?
YS: I think it’s coming from the fact that the whole sustainability movement is evolving from a set of thematically different areas like philanthropy, diversity, the environment and social accountability. And they are all thematically different – there was a reason they were all managed separately because the thinking you need to do in each of the areas is very different. But there is an overlap between them and a motivation that is similar: in that in some ways you are trying to go beyond the basics – almost like a higher purpose of business idea – in the way you manage your business and in the way you buy and sell.
The customers of ours that are thinking about environmental sustainability are also thinking about social sustainability, about diversity and philanthropy, so there is a recognition by the leaders in this space to bring these areas together. While it’s complex, it’s still the right approach long term.
OPI: Are there any other external drivers, like legislation?
YS: Certainly in Europe, legislation like REACH, green procurement directives and ROHS have been very influential in our sector, amongst many others.
If you take North America, there has been a strong focus on supplier diversity for many years – federal and state governments having specific goals to source from small businesses, woman, minority or veteran-owned firms, etc. So we as a large business have to ‘crack the code’ in terms of how we optimise our sourcing, not only from our large vendors, but also sourcing from innovative small suppliers to meet the federal and state diversity requirements.
That’s not like the social sustainability theme that’s big in Europe, I’d say. What’s talked about there tends to be in terms of workers’ rights, human rights and things like that. So we have to respond to different customer priorities in different regions, and our overall strategy has to encompass the different focus areas by geography.
OPI: Green products have a reputation of being more expensive. How have you coped with that?
YS: Educating our customers on this exact topic and the concept that some products are more expensive, some are less, some deliver immediate savings, and some deliver long-term savings, has been a huge part of our success in North America. At legacy Office Depot we’re at just over $2.1 billion in annual sales from products that have green attributes. Add in OfficeMax and that number reaches almost $3 billion, so it’s a pretty substantial portion of our total business. Part of the reason we’ve reached that is we’ve helped educate the marketplace that green doesn’t need to be more expensive.
Our number two product category is ink and toner and the greenest choices are the least expensive choices in terms of remanufactured products. With products such as file folders, boxes and storage solutions, many of our private brand suppliers that are greener are also less expensive, so that’s been part of the way we’ve been able to grow – because we’ve helped people get over their bias from a price standpoint.
OPI: Tell me about your Greener Purchasing Program (GPP).
YS: That is something we launched this year. It’s a complimentary service for our contract customers that are active and are serious about greening their purchasing. We’ve done elements of each part of the GPP for hundreds of customers over the years. For example, we have executed hundreds of green business reviews, hundreds of LEED credit reports and hundreds of informational sessions with customers.
Bringing it all together for a single customer step by step – virtually a free consulting service – is still relatively rare, but we already have a good number of customers involved and are looking forward to expanding the programme We are excited about the GPP as both a differentiator for Office Depot and an influencer within the industry.
OPI: What kind of resources do you have available?
YS: We’re still a pretty small team. There’s myself leading the function, both in terms of environment and supplier diversity, and then we have one dedicated environmental manager in the field in North America, three environmental associates at corporate level and four dedicated diversity managers. Additionally, we have associates in Canada and Europe. Going forward, we will probably grow on the environmental side so we’ll be able to handle more customer needs in terms of taking them from the beginning to the end of the process.
We are also creating what we call ‘Greener Office Champions’ who have been trained in our total solutions set. These are associates who have declared an interest in green and got approval from their managers to be trained and take on this extra responsibility. This is an approach that will allows us to integrate more green knowledge across our associate base and reach more customers; I’m excited to report that we have about 25 of these champions so far.
OPI: How did your recent Green Purchasing Summit go?
YS: Very well. The event is always rated very highly by attendees and we believe it generates loyalty to Office Depot. For the first time we integrated diversity into the mix this year in keeping with our goals to develop a broader sustainability approach. This was also the second year we have held the event at our global headquarters in Boca Raton and most of the company’s senior leadership attended and supported the event.
That certainly raises the profile of the awards and gives them more credibility amongst the suppliers that attend the expo part of the day – the customers probably don’t know the senior managers, but the vendors do, so when they see top executives there, they recognise that green (and sustainability) is a priority for Office Depot. It’s also indicative of being customer-focused
and recognising customers for something that is important to them and important to us.
OPI: Are you expanding your range of green products at all?
YS: I think we’ve already got a very diverse range of products, from furniture to cleaning and breakroom. I think that there will be more of a focus on how to ramp up our private brand in green and expand the product categories covered.
For example, we don’t have Office Depot brand green cleaning products, and that’s a huge growth area in the cleaning and breakroom market. Cleaning is very hot and we’re currently relying on a series of good national brand partners, but there’s a gap in that area for private brand and that’s an opportunity we’re going to look to fill.
OPI: Could that mean making an acquisition in that category?
YS: As is the case for all product categories, we’re evaluating all our options.
OPI: Any other green areas that you’re looking to develop?
YS: When we’re talking about solutions, we’ve got satisfactory take-back solutions for ink, toner and technology, but I think we can do more thinking in terms of packaging the offerings for take back, because that’s a growing area of customer interest. They’re asking, "What do we do with the stuff at end of life?" And not just ink, toner and technology, but everything. We don’t have a solution per se as yet, but we’re thinking about that.