Welcome! This is your ultimate guide to sustainability in the Promotional Products Industry. In this article, we take a deep dive on how companies in the promo industry can get started with sustainability. Let’s get started.
Promo Industry Overview
History
The promotional products industry (“promo” for short) involves the creation and distribution of branded merchandise, such as pens, T-shirts, mugs, etc. These products are used by companies to promote their brands, products, or services to clients, employees, and prospects. It encompasses the design, production, and strategic distribution of these items as marketing tools. The first known promotional product in the United States is largely recognized as George Washington’s 1789 Inauguration Buttons (sageworld). Since then, organizations in the US and all over the world have used promotional products to communicate their vision and share the message of their organization with the world.
Promo Today
Today, modern companies in the promo industry are generally broken into 2 main categories – Suppliers and Distributors:
- Suppliers are companies that manufacture or import a wide range of products such as pens, apparel, drinkware, and tech gadgets. They often specialize in producing high-quality items that can be customized with logos or slogans according to client specifications. Suppliers play a crucial role in maintaining inventory, ensuring product quality, and offering competitive pricing to distributors.
- Distributors are companies that act as intermediaries between suppliers and end customers. They provide expertise in selecting appropriate promotional products, managing the customization process, and delivering the final products to clients. Distributors often offer additional services like graphic design, warehousing, and fulfillment. This makes them integral to the promotional products supply chain and marketing strategies of their clients.
We caught up with Dino Bangiorno, for some additional industry insight. Dino is the Managing Director of eXtendTech, a firm that amongst other things, specializes in building software solutions for the promo industry. Prior to eXtendtech, Dino spent nearly 11 years working for Halo, PPAI’s #2 Distributor in 2024. He had this to say:
“When I first came to the promo industry in the mid-90s, the differences between supplier & distributor organizations were drastically different then they are today. Nowadays, I see some distributors that handle more in-house decoration of goods than some suppliers. Some distributor companies also have teams that specialize in the sourcing of products from overseas which historically was handled on the supplier side. The industry’s overall growth & evolution, which has attracted attention from outside investors, has only helped to accelerate the blurring of lines between suppliers & distributors.”
PPAI
A critical institution within the promotional products industry is the Promotional Products Association International. This is the industry’s largest not-for-profit trade association, with over 15,000 member companies. Since 1903, PPAI has served the promo industry as a leading voice in news, research, events, and industry solutions (PPAI). PPAI’s motto is: “Promotional Products Work!” Recently, PPAI has cemented two initiatives among the most important in the industry – digital transformation and sustainability.
Many companies in the promo industry and within PPAI have turned to Oracle NetSuite ERP as part of their digital transformation strategy. A leading NetSuite implementation partner in the promo space is Bryant Park Consulting. Sara Carrero, Practice Manager at BPC had this to say: “Our mission at BPC is to help Promo companies navigate the complexities of digital transformation, ensuring they achieve sustainable growth through effective tech adoption. We understand the unique needs of the Promo industry and offer customized digital solutions that streamline operations, reduce costs, and improve customer experiences.” Sustainability in the promotional products industry goes hand in hand with digital transformation, as it is crucial to leverage digital technologies for managing sustainability data.
Sustainability in the Promotional Products Industry
Within PPAI and the promo industry, sustainability is becoming more and more important. PPAI’s leadership has prioritized sustainability as one of the industry’s key initiatives. PPAI includes sustainability as a metric in ranking member companies and issuing industry awards. PPAI has even gone as far as certifying its events as carbon neutral.
“We have heard loud and clear the imperative from our membership – supporting them in their sustainability journeys requires dedicated focus as an association, in education, providing resources, guidance and aligning with important business service members like CarbonSuite.” – Elizabeth Wimbush, PPAI Director of Sustainability and Responsibility.
But why?
Companies in the promotional products industry are increasingly facing pressure from stakeholders to make their products and business operations more sustainable. This pressure is largely coming from 2 main groups:
- Regulators. Around the world, regulators have passed sustainability reporting mandates that affect promo companies and require them to report certain sustainability-related information. For example, the State of California, the US Securities and Exchange Commission, and many others globally.
- Customers. Fortune 500 companies like Microsoft, Mastercard, Amazon, Walmart, Disney, and many others have implemented mandates for companies within their value chain to disclosure various sustainability metrics. These companies are working to reduce their Scope 3 (value chain) emissions, so they are beginning to include sustainability metrics in their vendor contracts and RFPs. This trend will only continue and grow as more large companies set sustainability targets. We are tracking these requirement here.
In addition to these requirements, your company may just be interested in building sustainability into your organization because it’s good business practice. Nowadays, consumers are more and more likely to purchase products that are more sustainable. They are putting companies under scrutiny to back up any sustainability claims that they make about their company or products.
Sustainability in the promotional products industry can seem like a daunting task. Lots of new concepts, acronyms, and data to understand, sometimes in a very short period of time. You’re probably wondering where to start…
Getting Started with Sustainability
It always helps to start with definitions. What is sustainability? Well, according to the United Nations, sustainability is “meeting the needs of the present without compromising the ability of future generations to meet their own needs” (United Nations, 1987). This definition was established all the way back in 1987, and is still used today. Within the umbrella of “Sustainability” is “Corporate Sustainability.” Although “A standardized definition of CS does not exist.” (Montiel and Delgado-Ceballos, 2014), one popular definition is “The ability of a firm to nurture and support growth over time by effectively meeting the expectations of diverse stakeholders.” (Neubaum and Zahra, 2006).
Additionally, PPAI itself defines sustainability as ““sustainability in the promotional products industry means making, sourcing and distributing promotional items in ways that reduce negative environmental and social impacts while supporting long-term economic success” (PPAI Media). As we go through the article, keep these definitions in mind, and consider how they applies to your business.
One of the first steps you can take it to understand your organization’s carbon footprint. This process is called Carbon Accounting. Below is an outline of the general best practices when getting started with Carbon Accounting and other sustainability data tracking:
Record
Corporate Carbon Footprint (Scope 1, 2, and 3 Emissions)
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- You can manage what you don’t measure. The first step is to start tracking your corporate carbon footprint. This includes your Scope 1, 2, and 3 emissions, and covers greenhouse gas emissions from your business operations – from vehicles that you own to the embedded emissions in products that you purchase. This applies to both Suppliers and Distributors. More info here. Take it from the experts – carbon accounting is very difficult to perform manually. It requires data integrations, complex calculations, unit conversions, emission factor management, and audit traceability.
- We recommend that you implement a Carbon Accounting Software System to streamline the tracking of this data and save your team countless hours of manual work. CarbonSuite automates the data collection and data collection of your Scope 1, 2, and 3 emissions, all within your NetSuite ERP system.
- For most companies, Scope 3 emissions make up the majority of your corporate carbon footprint. Because most of this data is held within your various value chain partners, it can be very difficult to collect. However, this is not a reason to procrastinate. We recommend that if you don’t have access to direct Scope 3 “Activity Data” from your value chain partners, then you start by estimating your emissions using the financial value of your ERP transactions. This method is typically called the “Spend Based” method of calculating emissions. Using the Spend Based method, you can get a picture of your total emissions and target hot spots.
Value Chain Emissions
- Next, focus on refining your data accuracy. Analyze your results and target the Emission Categories that make up the majority of your emissions. Again, this will likely be within your Scope 3. Users of CarbonSuite can easily report on emissions by vendor, by item, by project, by department, by employee, and many other segments. Because CarbonSuite is part of your NetSuite ERP system, it automatically captures the metadata from your NetSuite Transaction records like Vendor Bills, Expense Reports, and Credit Card Transactions.
- Once you’ve analyzed your data, start building a plan to collect your value chain data. This is where things start to differ between Promo Suppliers and Distributors. For example, for Promo Suppliers, Tier 1 vendors (suppliers that you purchase directly from) are likely raw materials suppliers that supply paper, cotton, plastics, etc. However, for Promo Distributors, your Tier 1 vendors are actually the aforementioned Promo Suppliers. So Promo Suppliers need to collect Value Chain data from their raw materials vendors and Promo Distributors need to collect data from Promo Suppliers.
- I know what you’re thinking, this requires a huge amount of collaboration between value chain partners. CarbonSuite can help you implement a program for optimizing this data collection process. We even have tools that can help you automate this process. Start thinking about the following questions:
- Who are my largest vendors? Are they already reporting their emissions?
- What kind of communications do I currently have with my vendors?
- What policies do I already have in place with my vendors? Would they be open to accepting a policy change that required reporting their carbon emissions?
Product Carbon Footprint
- Some promo companies will want to go even further and calculate the carbon footprint of the products that they sell. While this may seem similar to a corporate carbon footprint, the methodology is slightly different and requires different data collection activities. Product carbon footprints might make more sense for Promo Suppliers, since they are the ones who manufacture the products.
- Using your corporate carbon footprint and other data that can be collected from your ERP and other systems, you can allocate emissions to individual products that are produced. This means that when the product leaves your facility, it enters the world with a product carbon footprint that can be used by downstream partners to calculate more accurate carbon footprints for their operations. This process of calculating product carbon footprints is quite difficult, so be sure to consult with sustainability experts before undertaking this exercise.
- Product carbon footprints can serve multiple other functions. Aside from providing your value chain with more accurate data, you may be able to advertise and prove that your products have lower emissions than alternatives. This can give you advantages in the market as buyers look for lower and lower emission products and establish your brand as a sustainability leader in the industry.
Waste Generated
In addition to Carbon Accounting, you can track the amount of waste generated and the percentage of that waste which was diverted from landfills through recycling or composting efforts. You can also outline initiatives undertaken to reduce waste production, such as improving operational efficiencies and promoting waste minimization practices among employees and suppliers. Suppliers would likely focus more on the waste generated in manufacturing operations and distributors would focus more on the waste generated by products sold when they reach their end of life (i.e. landfilled, recycled, combusted, etc.).
Water Consumption
Manage total water consumption and the measures taken to improve water efficiency and reduce usage. Water consumption is especially relevant for suppliers that manufacture textiles, as it is a very water intensive process. Distributors that sell textiles may be interested in disclosing the “water footprint” of products that they sell so that customers are aware of the water impact of their purchases.
Energy Consumption
Suppliers and Distributors can both calculate their total energy consumption, breaking it down by source (e.g., renewable vs. non-renewable), and outline steps taken to increase energy efficiency, such as upgrading to energy-efficient equipment and optimizing production processes. They can also describe investments in renewable energy projects and their progress towards achieving net zero energy consumption.
Reduction Targets
Document specific, measurable targets for reducing environmental impacts, such as goals for lowering greenhouse gas emissions, waste production, and water usage over a defined period. During the period, you would provide updates on progress towards these targets, including any challenges encountered and strategies adjusted to stay on track.
Climate Risk
Assess the potential financial and operational risks posed by climate change, such as the impact of extreme weather events on supply chains and assets. You can also outline their climate risk management strategies, including scenario analysis, resilience planning, and investment in adaptive technologies.
Report
Once you have recorded your sustainability data, the next step is to report the data. Climate reporting frameworks are relatively industry agnostic and thus would potentially apply to both Suppliers and Distributors. There are various methods that may be used to report your results, see below:
Value Chain Disclosure
You may have already gotten requests from your customers or vendors to disclose sustainability metrics. We’ve got you covered with our Corporate Supplier Sustainability Policies guide. We have been meticulously tracking the supplier sustainability policies of major customers in the promo industry and consolidated them into an easy-to-access list. Check it out here.
Voluntary Disclosure
Voluntary climate disclosure has been around for more than 20 years, and today thousands of companies are voluntarily reporting their climate-related metrics under frameworks such as CDP, GRI, Ecovadis, ISSB, and SBTi. We track a consolidated list of voluntary climate disclosure frameworks, check out our Climate Disclosure Tracker and review the second group of frameworks that don’t have the “!” mandatory icon.
Mandatory Disclosure
Over the past few years, voluntary disclosure has given rise to mandatory climate reporting. For example, the State of California, the US Securities and Exchange Commission, and many others globally. Mandatory climate disclosure will only become more prevalent, and since many of these mandatory disclosures include mandates for reporting supply chain impacts, smaller companies that are not technically under mandates will receive reporting requests from their larger customers and vendors. To confirm whether your organization is under one or more climate reporting mandates, check out our Climate Disclosure Tracker and review the first group of frameworks that have the “!” mandatory icon.
Communicate Results
It’s very important to share your progress with your stakeholders. They will hold you accountable, and it is your responsibility to keep them informed on your progress. In addition to formally reporting your emissions, you can use any of these methods to communicate your results regarding sustainability in the promotional products industry:
- Internal Communication: If communication is effective, your employees can be the most important agents of change. The goal is to build sustainability into the core of your organization, and keeping your employees engaged in the Carbon Accounting process is crucial for this.
- Organization website: Publish the information on your website, including emissions data and reduction targets, in a dedicated section or page.
- Annual reports: Include information on emissions and reduction targets in your annual reports, which can be distributed to shareholders, investors, and other stakeholders.
- Press releases: Issue press releases to announce new emissions reduction targets or updates on progress towards existing targets.
- Investor relations: Share information on emissions and reduction targets with investors through investor relations channels such as conference calls and webcasts.
- Social media: Use social media platforms to share information about your emissions and reduction targets with customers, employees, and the general public.
- Industry groups and trade associations: Participate in industry groups and trade associations and share information on emissions and reduction targets with other members.
- Sustainability reports: Publish independent sustainability reports that provide detailed information on your emissions and reduction targets.
Reduce
Once you have Recorded and Reported your sustainability data, you can begin to Reduce. It’s important to first track your data and set a baseline before taking steps to reduce your environmental footprint. As the saying goes, “you can’t manage what you don’t measure,” and the same goes for sustainability initiatives. Most organizations that validate reduction targets even require that you have first established a base year of data to measure your reduction targets against.
Set targets
Once you have an understanding of your corporate environmental impact and sustainability data, you can set reduction targets. Reduction targets are used to track your company’s progress against baseline goals and have your results certified. The following organizations are some of the most popular for establishing reduction targets:
Implement Reduction Strategies
Reduction strategies differ based on your region, business operations (Suppliers vs. Distributors), and company goals. For example, for Suppliers, it might make more sense to focus on energy efficiency in facilities and reducing waste in the production process, but for Distributors it might make more sense to focus on optimizing product transportation & distribution and reducing packaging waste. Visit our our list of Reduction Strategies that can be implemented within your organization to reduce emissions. Get in touch with the CarbonSuite team to discuss opportunities for tailored emission reduction plans, optimized for your business.
Offset Emissions
Reduction is ALWAYS the preferred option, but carbon offsets can be a useful tool to offset the emissions you cannot reduce. Depending on your region and reporting framework, generally speaking, you can reduce your total company emissions by purchasing verified carbon offsets from a voluntary carbon marketplace, such as Salesforce Net Zero Marketplace, Patch, Cloverly.
You can also reduce your total company Emissions by directly developing a project that reduces Emissions (planting trees; funding carbon capture / sequestration projects; funding mangrove planting in tropical regions, etc.) BUT that carbon reduction cannot be sold back onto the voluntary carbon market because you used it internally.
Additionally, if you generate carbon reductions in your business operations or fund offset projects, you can sell that onto the voluntary carbon market as a “carbon credit.” It does, however need to be verified and tested by a third party assurance provider (Ex: Verra Gold Standard). However, it is critical that your project can prove “Additionality” which basically means that there was a reasonable chance that the project would have produced greenhouse gas emissions if the project developer had not decided to convert it into a carbon credit project. Since the markets are all voluntary, the best approach is to work with an assurance provider to verify the project and the additionality before the credits are sold onto the voluntary market.
Closing Thoughts on Sustainability in the Promotional Products Industry
Corporate sustainability is a journey, not a destination. Like many other industries, sustainability in the promotional products industry can be complex and has lots of room to grow. It’s true that “promotional products work,” and it’s time that they work for both customers and for the planet. Faced with a daunting task, the promo industry has an opportunity to become a leader in the corporate sustainability movement. Consumers are not turning back; they are demanding that the products they purchase are produced sustainably, and they are holding companies accountable.
Elizabeth Wimbush (PPAI Director of Sustainability and Responsibility) and the team at PPAI have been working hard to provide resources and guidance to PPAI members on sustainability, product responsibility, and other policies around environmental responsibility. Check out PPAI’s Environmental Responsibility Resources Center to learn more.
About CarbonSuite
CarbonSuite is a Built-for-NetSuite carbon accounting software solution that helps your company to record, report, and reduce its environmental impact. CarbonSuite is a certified NetSuite “SuiteApp” that automates carbon accounting and sustainability reporting, all directly within your NetSuite ERP system. As certified experts in both NetSuite and Sustainability Management, CarbonSuite is here to help you streamline and integrate your sustainability process within your existing financial and operational processes in your ERP system.
CarbonSuite is a certified PPAI solution partner, you can view our solution listing on the PPAI Solutions Center. PPAI members that use NetSuite can even get a discount on their licensing with CarbonSuite. CarbonSuite is dedicated to driving sustainability in the promotional products industry. For more information, contact us at [email protected].