Analysis: toy manufacturing - Lego builds a sustainable supply chain
Lego’s quick action to smarten up its packaging supply chain is a model some competitors should copy
After being targeted by a Greenpeace campaign, Lego has cut out deforestation in its supply chain with a new sustainability policy.
Greenpeace, the leading environmental advocacy group, launched a social-media-heavy campaign in June against major toy industry players Mattel, Hasbro, Disney and Lego for sourcing packaging materials from endangered Indonesian rainforests through controversial supplier Asia Pulp & Paper (APP).
According to a recent Greenpeace report – How APP is Toying with Extinction – Lego exposed itself to greater risks of being linked to APP and deforestation by increasingly manufacturing its products in China where paper products have a high risk of being connected to APP.
Coincidentally, at the time of the campaign launch, Lego was in the midst of developing a new packaging and paper policy to reduce its production impact on the environment, says Helle Sofie Kaspersen, vice-president for Lego’s corporate governance and sustainability.
Lego has set forth plans to reduce the amount of packaging materials used for its products, and use recycled fibre whenever possible. When it is not possible to use recycled fibres, the company will use materials that have been produced in a sustainable manner. All virgin fibres used will have Forest Stewardship Council (FSC) certification.
Lego had been working on the new sustainability policy as a response to stakeholders’ concerns about the company’s packaging, according to Kaspersen.
Contacted by Greenpeace prior to the start of the campaign, Lego representatives met with members of the environmentalist group to discuss the company’s paper procurement policy three days after the campaign’s start.
Kasperson says that Greenpeace’s knowledge and expertise in environmental matters is a valuable tool as the toy company develops its new packaging policy.
Despite the progress made with its new policy, Lego still faces a challenge in ensuring that its suppliers are not involved in deforestation outside of its dealings with Lego, Kaspersen says. Due to these difficulties, Lego relies upon maintaining good relationships with its suppliers based on trust and dialogue in order to ensure that only sustainable materials are used in Lego products.
While Lego’s new policy addresses the increased risks from producing its products in China, the company must now thoroughly implement its policy to cut deforestation out of its supply chain, says Ian Duff, Greenpeace’s forest campaigner in the UK. Confident in the company’s ability to do so, Duff says, “[Lego is] much better placed in many ways to implement this solution than environmentalist groups because they have a very good understanding of international supply chains.”
Greenpeace has, however, criticised the “weak responses” of Mattel, Hasbro and Disney, stating that these companies have “so far failed to commit to clear action to remove rainforest destruction from their packaging”. Mattel and Hasbro say they have directed their suppliers to stop sourcing from APP. Mattel says it will develop a sustainability policy that will require suppliers to commit to sustainable forestry management practices.
While Greenpeace acknowledges these companies’ responses as “a start”, the environmental organisation claims that companies’ press releases have been vague, lacking adequate changes to their sustainability policies for the company to successfully address deforestation.
Disney says that it is assessing the challenges of its complex supply chain, but has not mentioned involvement with APP.
Without adequate action, Greenpeace warns that the toy companies will continue to be linked to destroying rainforest homes of species such as the endangered Sumatran tiger.
While Lego has demonstrated that companies can effectively address deforestation in their supply chains, the hesitant responses of the other companies leave little hope for widespread change in the toy industry.