Achieving more with less: Henkel’s Factor 3 strategy

This paper aims to provide an inside view and analysis of corporate eco-efficiency/sustainability strategy resulting in recommendations for the consumer goods industry.

The paper is framed by a literature review and case studies of corporate sustainability strategies. Original research was conducted via in-depth, face-to-face interviews (26) of Henkel senior management familiar with the company’s “Factor 3” strategy.

This research identifies certain challenges to corporate sustainability strategy including consumer use of products and how best to measure ecological and social footprints. It shows that many managers find the Factor 3 strategy to be clear and understandable but with challenging goals and metrics; managers and executives are optimistic about success and feel Factor 3 gives Henkel a competitive edge. This paper uncovers areas of in the strategy that need improvement including consumer education, industry partnering, accountability and supply chain strategy, and also finds that the Factor 3 affects employees on a personal level, changing behavior and evoking positive responses.

While there is considerable literature on corporate eco-efficiency sustainability strategies, there has not been sufficient critical third-party analysis of how these strategies are progressing, the challenges they face and what their trajectory is. Because strategies like Henkel’s Factor 3 represent an increasingly popular corporate vision and set of articulated goals, researchers and practitioners need a deeper understanding of how large, global companies are tackling sustainability and how successful these strategies have been.