Beyond Sustainable Management: What is a Circular Society Where Companies and Consumers "Collaborate"? (Part 2)

Two domestic Dentsu Group companies developed the "Don't Stop There PLATFORM," aiming to realize a circular society by combining "collection and recycling" of items like empty containers with "promotional activities" such as coupons and points. Meiji Co., Ltd., Lawson, Inc., and Nakadai Holdings Co., Ltd. participated in the proof-of-concept experiment conducted until the end of January 2024.

Following Part 1, where representatives from participating companies reflected on the pilot, Part 2 features Hiroshi Takahashi and Fumihito Yoshitsugu, Business Producers (BP) at Dentsu Inc. responsible for Meiji and Lawson, respectively.Moderated by Mineko Hotta from the Sustainability Consulting Office, who spearheaded the circular platform's development, they discussed the project's origins, the journey to realization, what only the Dentsu Group could achieve, and future prospects.

From upstream to downstream in the supply chain: A new approach to solving social issues

Hotta: First, let me explain the background behind launching the "PLATFORM that doesn't end with 'and that's it'". Traditionally, a company's business concluded with creating and selling products or services. Nowadays, however, a major corporate responsibility is taking on the collection and recycling of resources. The challenge is that collection and recycling incur costs and don't directly generate revenue. That's precisely why many companies are grappling with this issue.

Against this backdrop, the Dentsu Group has adopted "B2B2S (Business to Business to Society)" as its management policy. Can we leverage our strengths in marketing and digital to create mechanisms that drive changes in societal and consumer awareness and behavior? Driven by this vision, we developed the "Don't Stop There PLATFORM" to digitally connect the arterial industries (manufacturers), the venous industries (those handling collection and recycling), and consumers.

In June 2023, when we released a call for companies to participate in this proof-of-concept experiment, Takahashi-san, who handles Meiji, and Yoshitsugu-san, who handles Lawson, volunteered from within the company. Why did you decide to propose this platform to your clients?

Yoshitsugu: In my role handling Lawson, I've always promoted campaigns and initiatives focused on solving social issues. Among these, this platform struck me as a completely new perspective—one that adds promotional elements to recycling activities. I thought, "This might be an incredible system that solves social issues while also boosting sales," and immediately proposed it to Lawson.

Takahashi: I've been handling Meiji for about 20 years. Meiji was already grappling with the challenge of how to reduce GHG (greenhouse gas) emissions to achieve carbon neutrality.Approximately 85% of Meiji's GHG emissions fall under "Scope 3." "Scope 3" refers to indirect emissions within the supply chain, including emissions from upstream activities like raw material procurement and product transportation, as well as downstream emissions from product use and disposal. For Meiji, the majority of these emissions stem from the procurement of raw milk.This is a challenge unique to the dairy farming industry. Dairy farming significantly impacts greenhouse gases not only through CO₂, but also through methane (CH₄) and nitrous oxide (N₂O) emitted from cow burps and manure processing. Meiji had been working on upstream GHG reduction efforts, such as optimizing feed.

We were discussing whether to expand these efforts downstream to include consumer collaboration when we noticed the news release seeking companies for this pilot project. We immediately recognized this as precisely the kind of initiative we had been discussing and proposed it to Meiji.

Toward realizing B2B2S, the Dentsu Group itself is putting in the effort, focusing on long-term initiatives rather than one-offs.

Hotta: In this pilot, the novel challenge was that Dentsu Group itself built a resource circulation platform, not just proposing it to clients. What do you think Dentsu Group uniquely enabled in this pilot?

Takahashi: When proposing sustainability initiatives to clients, we often encounter a common barrier. While they understand the social significance of the project, they struggle to find the motivation and conviction to proactively engage in sustainable activities as a company. In contrast, this time, Dentsu Inc. involved its group company, DENTSU PROMOTION PLUS INC., to drive the project forward and build the platform. This was possible precisely because of the diverse expertise within the Dentsu Group.

Sustainable initiatives like this cannot be achieved by a single company alone. Sometimes, they require collaboration even with competitors and co-creation that transcends industry boundaries. Dentsu Inc. has many group companies and the potential to involve numerous clients.

Yoshitsugu: Exactly, Dentsu truly acts as a "hub." Our clients include both manufacturers and retailers, and the ability to engage diverse companies across industries is unique to the Dentsu Group. Furthermore, with group companies excelling in various fields—from research and consulting to creative, communication, and digital—clients can feel assured and trust that Dentsu will see projects through to completion. That's likely why Lawson immediately agreed to participate in the initiative.

Hotta: On the other hand, were there any difficulties or challenges you faced in realizing the pilot project?

Takahashi: While I wouldn't call it a struggle, we were careful from the outset not to create overly high expectations among clients regarding sustainable initiatives. Of course, our goal was to contribute to the business by ensuring solid resource recovery rates and coupon redemption rates. However, even if we couldn't achieve these during this limited-time initiative, we believed it was crucial to identify the reasons and make updates. Activities like this shouldn't be abandoned immediately just because a single attempt didn't yield results.Getting consumers to wash, flatten, dry, and bring paper cartons to stores is more troublesome and has a higher barrier than peeling off labels and discarding PET bottles. We repeatedly explained this, urging them to try it first, update as we go, and keep it going.

Yoshitsugu: Creating mechanisms to increase participation became the next challenge. The three Lawson stores where we conducted the pilot were all in central Tokyo. As Lawson mentioned in the first part, we feel this was one reason the collection rate didn't increase. It was positive that we established a shared understanding: this initiative shouldn't end after one attempt; continuing it will increase participation.

What constitutes sustainable initiatives that contribute to the ongoing growth of client businesses?

Hotta: Based on these insights, could you share your future outlook? What do you aim to do to achieve greater results, and what initiatives do you plan to implement using this platform?

Yoshitsugu: We want to carefully consider how to increase promotion efficiency, such as selecting stores to implement the program in, for example, "three stores near residential areas." By doing so, we can gradually increase the number of participating stores. Also, while this time we only collected paper cartons with plastic caps, we want to expand the types of resources collected. This will increase participation and lead to sales promotions. We want to create that kind of positive synergy.

Takahashi: A major takeaway from this pilot was witnessing the emergence of what we call "sustainable customers" – those with high loyalty who also actively participate in collection and recycling. How can we cultivate this segment as a new marketing target?While expanding scale, like increasing store numbers, is essential, we're also considering whether we can offer value beyond monetary incentives like coupons. For example, could we create a structure where participating in recycling initiatives within local governments or communities provides non-monetary value? That would ideally lead to more sustainable customers.

Hotta: For the Dentsu Group, this platform is also a new initiative. Having worked directly with the client this time, if there are any key points or mindsets you'd like to share with other BP teams within the company, please tell us.

Yoshitsugu: BPs inevitably get caught up in chasing numbers, often focusing solely on whether short-term profits increase or not. However, if we consider the perspective of becoming a long-term partner for our clients, this platform can help build stronger relationships. In an environment where sustainable management is demanded of every company, being able to make proposals with a long-term perspective represents significant value for BPs.

Takahashi: I completely agree on the importance of considering clients' interests from a medium-to-long-term perspective. From a slightly different angle, overseas, animal-based milk faces strong headwinds due to environmental concerns.But I personally love "Meiji Oishii Milk" and have long considered how to help Meiji solve challenges in its core business. I want consumers to understand dairy farming's issues while also rediscovering the value milk provides. Rather than companies tackling this alone, I aim to involve society in solving these challenges. That mindset was behind our participation in the pilot project.

I think it's worthwhile to consider sustainability not just in the context of social contribution, but also by valuing the client's core aspirations for their business – their hopes for how it should be and how it should continue.

Hotta: Thinking long-term and co-creating while involving society and consumers—these are all essential for companies to realize sustainable projects, not just within Dentsu Inc. I believe this represents a new approach toward the Dentsu Group's goal of becoming an IGP (Integrated Growth Partner).

Breaking down all barriers and collaborating hand-in-hand. Not stopping after just one attempt, but continuing to update and evolve. These are indispensable conditions for solving social issues. Leveraging the unique strengths of the Dentsu Group, we will continue to develop initiatives that involve many companies.