“Driven to invent.” That’s the Keter Group’s slogan. The global lifestyle and outdoor solutions manufacturer, with 24 plants selling in 90 countries, isn’t unique in having a catchy motto. It is, however, unique in the corporate world for its ability to follow through on its goal of driving sustainable innovation in the design and production of recyclable resin products.
Keter Group is a global leader in the design, manufacture, and distribution of innovative, high-quality resin products for the home, garden, and leisure markets. The company was founded in Israel in 1948 and has since grown to become one of the world’s largest manufacturers of resin-based household and garden consumer products.
The company is committed to sustainability and has a long history of innovation in sustainable design and production. Keter’s products are made from recycled materials and are designed to be durable and long-lasting. It also invests in renewable energy and energy efficiency initiatives.
This is dogma to Keter Group Chief Executive Officer Alejandro Pena.
In 2020, Keter released its first sustainability report, which outlined the company’s commitment to reducing its environmental impact. The report set ambitious goals for reducing greenhouse gas emissions, waste, and water consumption. Keter Group continued this ambitious endeavor and released a second report in 2021.
Keter has made significant progress in achieving those sustainability goals. In 2021 the company reduced its greenhouse gas emissions by 20%, waste by 10%, and, water consumption by 11%. Keter also increased the use of recycled content in its products to 39.4%.
Keter’s Four Pillars Explained
The philosophy behind Keter’s business model is supported by four primary pillars. The first principle is: “We invent what’s new and next.”
Alejandro Pena and Keter Group believe this to mean that the company isn’t just designing lifestyle solutions for what its client’s needs are today, but also guiding them toward the solutions they will need in the coming years.
“Part of our DNA is being entrepreneurial and agile and I think the original mindset that was brought in with the business was that nothing is impossible, and we have done our best to uphold that,” Johnson said.
Keter also believes it’s working in a “global marketplace,” and that means being responsible as an entity not just in the areas where it is selling products, but also toward its employees working in communities living in those manufacturing locations.
“The foundation of our business is our employees, regardless of where they are based, and we know that each of them share our core values of innovation, accountability, agility, entrepreneurship, and respect,” Johnson said.
Additionally, Keter Group presumes that, regardless of the additional complexities involved, its products should be produced to reflect practical usage for its customers, a seemingly simple idea that anyone who has ever been confused as to how a product is actually supposed to work (and doesn’t) can relate to.
The final pillar of Keter’s manta is perhaps one of its most compelling. The company chooses to “build in a sustainable manner.”
The company uses renewable energy whenever possible and invests in energy efficiency initiatives. Keter also has a zero-waste policy, which means that all of the waste generated during manufacturing is recycled or reused.
Keter’s sustainable manufacturing practices help to reduce the company’s environmental impact. The company’s use of renewable energy helps to reduce greenhouse gas emissions and the company’s investment in energy efficiency initiatives helps to reduce energy consumption.
Keter certainly isn’t the first company to attempt to embrace environmental efforts, but studies have shown that when those efforts are performative, they often falter. When they’re ingrained in a company’s ethos, when the company makes business decisions based at least in part on ESG effects, it can have a positive outcome for the company’s bottom line.
A study by consulting firm McKinsey & Company found organizations that have both created financial value and increased the broader impact of ESG — or what McKinsey calls “ESG momentum” — are dependent upon seven organizational elements, many of which are present in Keter’s operational mandates.
Details of those mandates can be found here, but the most pronounced parallels with Keter lie in what are likely the most essential behaviors the study outlines.
The first is the concept that organizations “approach ESG from a growth perspective,” which is to say the organization looks to do more than “conform” to industry or regulatory requirements and instead chooses to do beyond those guidelines in order to “unlock new opportunities.”
“What Keter has done is implement a standard process cycle to cover sales functions, marketing and operations, and logistics,” Johnson said. “We ensure that the company has an efficient and effective supply chain that is on a monthly rolling cycle for both our indoor and outdoor business. The main piece is our forward outlook and clarity on what sales and marketing are doing to drive the business and what operations and manufacturing and logistics need to do to enable that.”
Another important element in making ESG efforts work for the business as opposed to against is the buy-in of C-level leadership. Regardless of what a company says it will do, without leadership buy-in, it’s just words.
Thankfully for Keter Group, CEO Alejandro Pena guides the company according to ESG principles on sustainability and has already seen the positive business effects those efforts can have.
“We actually make our product where the product is consumed,” Pena said in an interview in late 2022 regarding the company’s posture during the business disruption of the pandemic. “This enabled us to be more responsive to adapt quicker to this particular dynamic. We were able to react faster than our competition and when we saw the end of that cycle, we were also able to react and contract faster than many of our competitors, who again have very long lead times and are not as flexible as we may be.”
While semantic arguments can be made as to the differences between ESG, sustainability, and innovation, the three are inextricably linked, and the more harmony businesses can find between them, like Keter Group, the brighter the future looks.