Henkel on

Sustainability
By- Ananya Aggarwal
Aditya Raj Gupta
Mahak
Shoumorup Mukhopadhyay
Table of Contents

Table of Contents 1
Abstract 2
Henkel Corpora5on 2
Henkel’s Vision for Sustainability 3
Henkel & the Construc5on Sector 3
Henkel’s Green Prac5ces 4
Evalua5ng Henkel’s Path to Sustainability 6
Understanding the Business Model 6
Rethinking the Exis5ng Business Model 9
Reinven5ng & Reorganizing Henkel’s Business Model Sustainably 10
Char5ng a New Business Model for Henkel 11
Implemen5ng Reorganisa5on of Henkel’s Business to the New Model 13
Conclusion 15
References 16

1
Abstract
This paper explores the sustainability practices of the multinational corporation Henkel,
which operates in various industries, including adhesives, personal care, and laundry/home
care. The paper discusses Henkel's commitment to sustainability, its current sustainability
strategy, and its vision for the future. The paper also explores the role of the construction
sector in contributing to global carbon emissions and how Henkel's sustainable practices can
make a positive impact in this area. Finally, the article evaluates Henkel's business model and
provides suggestions for reinventing and reorganizing it sustainably.

Henkel Corpora3on
The multinational Henkel Corporation, with its headquarters in Düsseldorf, Germany, is well
known for its wide range of industrial and consumer products. The business, which has a long
history dating back to 1876, has grown to become the global leader in various important
industries.

The conglomerate engages in three major types of business:

1. Technologies for Adhesives: Henkel is well known for its cutting-edge adhesive
solutions that serve a variety of industries, including automotive, electronics,
packaging, and aerospace. Worldwide, applications for assembly, repair, and
maintenance rely heavily on brands like Loctite, Teroson, and Technomelt, which are
recognised as being of the highest calibre.

2. Personal care and beauty products: Their main emphasis of Henkel's Beauty Care
division. Famous brands like Schwarzkopf, Dial, and Persil are heavily represented in
this market. These companies provide a variety of skincare, toiletry, and haircare
products that improve the health of people around the world.

3. Laundry & Home Care: This category offers a variety of laundry and cleaning supplies.
Brands like Persil, Purex, and All are well-known names, and consumers rely on them
for cleaning and washing tasks in both residential and business settings.

Henkel's global reach encompasses a wide range of nations, demonstrating its dedication to
supplying innovative and high-quality products. The corporate strategy of Henkel emphasises
sustainability. The business is committed to minimising its environmental impact and
advancing ethical business practises. This includes programmes to lower carbon emissions,
adopt circular economy ideas, conserve water, and use responsible sourcing techniques.

Henkel is a significant participant in the adhesive, beauty care, and household products
industries thanks to its commitment to sustainability, creative product development, and
global presence. Its dedication to ethical business practises places it in a leadership position
in tackling the changing environmental and social issues of our time.

2
Henkel’s Vision for Sustainability
Henkel’s current sustainability strategy revolves around implementing concrete measures
and projects to achieve practical progress. With their 2030+ Sustainability Ambition
Framework, they have developed new long-term ambitions in the three dimensions of
Regenerative Planet, Thriving Communities and Trusted Partner to drive further progress.

The current plan is divided into three categories and the outcomes:

1. Regenerative Planet: In order to move towards a future that is resource-efficient and

climate neutral, they seek to modify their processes, products, and use of raw
materials. They are concentrating on strategies to mitigate climate change, a
functioning circular economy, and the preservation of biodiversity and the natural
world. They further develop their business activities to drive solutions in the following
areas: Climate, Circularity and Nature.

2. Thriving Communities: They support better lifestyles for individuals. They have a
social duty to uphold human rights, foster diversity, and advance equity. They support
global education access and social advancement, and they offer aid in times of need.
To put in perspective, they work in the following areas: Equity, Education and Well-
being.

3. Trusted Partner: They draw on their value-oriented corporate culture and scientific
and technological expertise to strengthen the performance while maintaining our
integrity. They have integrated sustainability in their portfolio and in their business
processes and provide transparent reporting on this to our stakeholders. The three
pillars for this are: Performance, Transparency and Collaboration.

Henkel & the Construc3on Sector

The building and construction sectors account for nearly 40% of global energy-related carbon
dioxide emissions in constructing and operating buildings. However, more than half of all GHG
emissions are related to materials management (including material extraction and
manufacturing) when aggregated across industrial sectors. The building and construction
sector has a vital role to play in eliminating carbon, as it is responsible for more than one-
third of global carbon emissions. Henkel produces industrial good and in a way they are also
responsible for contributing to the CO2 emissions.

The major sectors should be the first one to target to get more immediate impact on the
environment. Sustainable practices take time to show their result and it is imperative to take
them as soon as possible for the companies. The world is already targeting carbon net zero
by 2050.

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Henkel’s Green Prac3ces
Like many other large corporations, Henkel Corporation is constantly modifying its
sustainability practises to meet shifting social and environmental standards. On a broader
scale, Henkel has ambitious targets and moving towards but these are few broader
suggestions that can be incorporated in the practices. Companies like Henkel might consider
modifying or enhancing the following sustainable practises:

Their current practices and targets as mentioned in their sustainability report is as follow:

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While there are many segment that are already addressed in their sustainability report but
few need more emphasis and can be given more importance in the entire report. These
adjustments can assist Henkel Corporation in maintaining its leadership position in
sustainability by showcasing its dedication to addressing new environmental and social issues
while satisfying stakeholder and customer expectations. Continuous improvement is crucial
when it comes to sustainable practises, which are a dynamic component of corporate
responsibility.

1. Carbon Emissions Reduction: Henkel should increase its ambition in terms of carbon
emission reduction goals and quicken the switch to renewable energy sources. They
may also look at carbon capture and storage options.
2. Circular Economy Initiatives: Henkel can further optimise resource utilisation by
creating novel product designs and materials that support recyclable, repairable, and
reusable materials.

3. Water Conservation: Adopting cutting-edge water-efficient technologies and

encouraging responsible water management can improve ongoing efforts to reduce
water consumption in industrial processes and products.

4. Sustainable Sourcing: By using more sustainably produced raw materials, supporting

fair trade principles, and guaranteeing clear supply chain traceability, the company
can increase its emphasis on responsible sourcing.

5. Packaging Innovation: Henkel may work on even more environmentally friendly

packaging options, like lowering the use of single-use plastics, enhancing the ability to
recycle packaging, and reducing the overall amount of packaging waste.

6. Product Sustainability: It's critical to spend money on research and development in

order to produce more ecologically friendly products, lessen environmental impacts,
and increase product lifespans.

7. Diversity and Inclusion: Organisations ought to continuously advance diversity and

inclusion by putting in place more thorough diversity initiatives, making sure that pay
parity is maintained, and promoting inclusive working cultures.

8. Innovation for Sustainability: One area that can be improved is investing in cutting-
edge sustainability solutions, such as alternative materials or energy-saving
technologies.

9. Sustainability in the supply chain: Henkel can work with suppliers to promote and
impose more sustainable practises all throughout the supply chain. This involves
making sure that raw materials are sourced sustainably and with ethical labour
practises.

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Evalua3ng Henkel’s Path to Sustainability
As identified earlier, Henkel’s engagement with the construction and manufacturing sectors
makes it prime candidate for business model innovations hinging on sustainable practices. In
order to undertake Sustainable Business Model Innovation, Henkel needs to recognize its
current capabilities & shortcomings and rethink its strategic vision & positioning in light of
evolving trends such as the comprehensive sustainability problem, rapid digitalization, and
evolution in consumer preferences, lifestyles and consumption patterns.

Understanding the Business Model

Target Customers: Henkel’s adhesives & sealants are widely used in the B2B space for
manufacturing, industrial & construction purposes. In the B2C space, Henkel provides
laundry, beauty, personal care and hygiene products.

Value Proposition to Customers:

1. Quality and Reliability: Customers can rely on Henkel’s adhesives, sealants, and other
offerings to meet the highest standards and deliver consistent performance.
2. Customization and Tailored Solutions: Henkel works closely with customers to
understand their unique requirements. They offer customized formulations and
solutions to meet specific industry demands.
3. Cost-Efficiency: Henkel's products are designed to optimize processes and reduce
waste, helping customers lower their overall operational costs, especially in the B2B
space.

Value Delivery to Customers:

Henkel delivers value to its customers by leveraging a combination of key resources, activities,
and strategic partnerships. These elements ensure the reliable delivery of its value
proposition over time.

Key Resources:

1. Research and Development (R&D): Henkel invests heavily in R&D to develop

new products, improve existing ones, and remain at the forefront of
innovation in adhesives, sealants, and consumer goods.
2. Manufacturing Facilities: Henkel operates manufacturing plants worldwide,
providing the necessary infrastructure to produce its wide range of products
efficiently and cost-effectively.
3. Brands and Intellectual Property: Henkel owns a portfolio of well-known
brands, patents, and proprietary technologies, which contribute to its
reputation and differentiation in the market.

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 Key Activities:

1. Innovation and Product Development: Henkel continuously engages in

research and product development to create new and improved solutions,
staying competitive and meeting evolving customer needs.
2. Manufacturing and Quality Control: Efficient manufacturing processes and
rigorous quality control measures ensure the consistency and quality of
Henkel's products.

Strategic Partnerships:

1. Suppliers: Henkel collaborates with a network of suppliers to secure a reliable

source of raw materials for its products.
2. Retailers and Distributors: Partnerships with retailers and distributors help
Henkel reach end customers, ensuring its products are readily available in
various markets.
3. Industry Collaborations: Henkel partners with industry associations, research
institutions, and organizations to drive innovation, address common
challenges, and influence industry standards.

Value Capture:
Henkel primarily captures value through the following revenue streams - product sales (with
B2B sales driving high volumes and therefore calling for improved efforts towards
sustainability initiatives), customised solutions, intellectual property that generates revenue
through licensing, royalties & partnerships, and after-sales services.

Current Ambitions:

1. Sustainability Leadership: Henkel aimed to be a leader in sustainable solutions for

B2B customers. This includes reducing the environmental footprint of their products,
promoting circular economy practices, and helping their industrial clients meet their
sustainability goals.
2. Innovative Product Offerings: Henkel sought to provide innovative and high-
performance products to their B2B customers, particularly in the industrial sector. This
innovation includes adhesives, sealants, and surface treatment solutions tailored to
meet the evolving needs of various industries.
3. Digital Transformation: Henkel recognized the importance of digitalization in B2B
interactions. They aimed to enhance their digital offerings, such as e-commerce
platforms, online ordering systems, and digital customer service solutions to
streamline transactions and provide better service to their B2B customers.

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SWOT Analysis:

Strengths:

1. Diverse Product Portfolio: Henkel has a wide range of products across various
industries, including adhesives, sealants, consumer goods, and industrial
solutions, allowing them to serve a broad customer base.
2. Innovation and R&D: Henkel invests significantly in research and
development, driving innovation and allowing them to introduce new, high-
quality products to the market.
3. Global Presence: Henkel operates in numerous countries, with a robust
international presence, which provides access to a broad range of markets and
customers.

Weaknesses:

1. Industry Dependence: Henkel's business is somewhat dependent on the

economic conditions in the industries they serve, which can be subject to
cyclical downturns.
2. Competitive Market: In some product categories, Henkel faces strong
competition from other multinational corporations, which can impact pricing
and market share.
3. Complex Operations: Managing a diverse product portfolio and global
operations can be complex and resource-intensive, potentially leading to
operational challenges.

Opportunities:

1. Sustainability Focus: Henkel can capitalize on the growing emphasis on

sustainability by developing and marketing more eco-friendly products and
solutions.
2. Digital Transformation: Leveraging digital technologies for sales, marketing,
and customer service can enhance efficiency and customer experience.
3. Emerging Markets: Expanding further into emerging markets can open new
revenue streams, particularly in regions with increasing industrialization and
consumer demand.

Threats:

1. Economic Uncertainty: Economic downturns can impact customer demand,

affecting Henkel's sales and profitability.
2. Commodity Price Fluctuations: Changes in the prices of raw materials can
influence production costs and product pricing.
3. Supply Chain Disruptions: Events like natural disasters, geopolitical issues, and
global supply chain disruptions can impact the availability of raw materials and
distribution.

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Rethinking the Exis3ng Business Model
Drivers impac5ng Henkel’s Business:

1. The pressing sustainability challenge is a dual-factor for Henkel. Adap5ng to eco-

friendly prac5ces and products can enhance the brand's reputa5on and customer
loyalty, turning it into an opportunity. However, ignoring sustainability may pose a
threat as consumers increasingly demand environmentally responsible solu5ons.
2. Digitaliza5on and the fourth industrial revolu5on disrupt tradi5onal business models,
making con5nuous innova5on essen5al for Henkel's survival. Embracing technology
offers new growth avenues, but failing to adapt risks obsolescence.
3. Evolving consumer preferences and lifestyle changes create opportuni5es for Henkel
to deliver products aligned with these shijs. Failing to adapt to changing
consump5on pakerns may result in reduced market relevance and missed
opportuni5es for value crea5on. Henkel must con5nuously innovate to cater to
shijing customer demands.

Other major players:

Henkel Corpora5on faces compe55on in various segments of its business. The following are
some of its major compe5tors in each area and how they compete:

1. Adhesives and Sealants:

• 3M: 3M is a significant compe5tor in the adhesives and sealants sector. They
offer a wide range of adhesive products and compete with Henkel in areas
such as industrial adhesives, tapes, and bonding solu5ons.
• Dow, Inc.: Dow is a leading chemical company that competes with Henkel in
adhesive and sealant manufacturing. They offer solu5ons for various
industries, including construc5on, automo5ve, and electronics.

2. Consumer Goods (Detergents, Personal Care, Beauty):

• Procter & Gamble (P&G): P&G is a major compe5tor in the consumer goods
industry, offering popular brands such as Tide, Pantene, and Olay, compe5ng
directly with Henkel's laundry and beauty product lines.
• Unilever: Unilever is another global consumer goods company that competes
with Henkel, offering products in categories like laundry detergents, personal
care, and home care.

3. Industrial SoluUons:
• BASF SE: BASF is a chemical company that competes with Henkel in various
industrial sectors, including coa5ngs, paints, and specialty chemicals.
• AkzoNobel: AkzoNobel is a global paints and coa5ngs company that
competes with Henkel in areas like adhesive technologies, surface
treatments, and industrial coa5ngs.

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 4. Beauty Care and Professional Products:
• L'Oréal: L'Oréal is a major compe5tor in the beauty care sector, offering a
wide range of cosme5cs, skincare, and haircare products. They compete with
Henkel's beauty and professional products.
• Estée Lauder: Estée Lauder is another global beauty company that competes
with Henkel in the cosme5cs and skincare market.

Compe5tors generally challenge Henkel through innova5on, product quality, marke5ng, and
pricing strategies. Henkel's success in these compe55ve markets relies on its ability to
differen5ate its products, provide value-added solu5ons, and con5nually adapt to changing
consumer and industrial trends. Addi5onally, the focus on sustainability is becoming a key
bakleground, with companies aiming to meet the growing demand for environmentally
friendly products and solu5ons.

Obstacles for Henkel’s Innova5ve Overhaul:

Implemen5ng the RESTART model for sustainable business innova5on can be a complex
process with several poten5al obstacles for Henkel.

1. Cost ConsideraUons: Developing and implemen5ng sustainable business innova5ons

ojen requires significant investments in research, development, and new processes.
These upfront costs can be a barrier to adop5on, especially in a compe55ve market.
2. Resistance to Change: Employees and stakeholders may resist changes in business
models and prac5ces. Henkel must manage this resistance and promote a culture
that embraces sustainability and innova5on.
3. Complexity of Supply Chains: Henkel operates in mul5ple industries, each with
complex supply chains. Implemen5ng sustainable prac5ces may require re-evalua5ng
and restructuring these supply chains, which can be challenging.
4. Regulatory Compliance: Mee5ng sustainability goals ojen involves naviga5ng
complex and evolving regulatory environments. Staying compliant with a variety of
regula5ons globally can be challenging and costly.
5. Consumer Demand: While sustainability is an opportunity, mee5ng varying
consumer demands across different regions and industries can be demanding.
Henkel must balance customiza5on with global strategies.
6. Resource Availability: Sourcing sustainable materials and resources can be a
challenge, as these materials may not be as readily available or as cost-effec5ve as
tradi5onal alterna5ves.

Reinven3ng & Reorganizing Henkel’s Business Model Sustainably

In a rapidly changing global business landscape, adaptation and innovation are essential for
long-term success. Companies like Henkel, a multinational corporation with diverse
operations, must navigate this evolving terrain with a commitment to sustainability and a
willingness to re-evaluate and re-design their business models. This essay will explore in-
depth the "Reinvent" and "Reorganize" phases of the sustainable business model innovation
process, focusing on how Henkel, a leader in the adhesive and consumer product industries,
can effectively embark on this transformative journey.

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Char3ng a New Business Model for Henkel
Outlining New Ambitions:

Embarking on a sustainable business model innovation journey requires setting ambitious and
clear objectives that align with Henkel's overarching commitment to environmental and social
responsibility. Consider the adhesive business within Henkel, which plays a critical role in
several industries. One ambitious goal could be to achieve complete carbon neutrality in
adhesive production by 2030. This goal, which is specific, measurable, and time-bound,
demonstrates Henkel's unwavering commitment to reducing its carbon footprint.

In addition to carbon neutrality, Henkel can establish specific targets for water conservation.
By 2030, the company might aim to reduce water consumption in its manufacturing facilities
by a substantial percentage, say, 30%. This goal not only contributes to sustainability but also
aligns with the increasing global concern over water scarcity.

Identifying New Target Customers:

Identifying and targeting new customer segments is a fundamental component of business

model reinvention. In the personal care and beauty product sector, Henkel can expand its
reach to attract environmentally conscious consumers who prioritise sustainable choices. To
cater to this growing segment, they could develop a new line of skincare products that
exclusively use all-natural, organic ingredients. These products are not only gentle on the skin
but also on the environment, reflecting Henkel's commitment to sustainability.

Henkel can also identify businesses that are actively seeking to enhance their sustainability
profiles. For instance, in the adhesive sector, they can specifically target manufacturers
looking to reduce their carbon footprint in the assembly process. By recognizing and focusing
on these new customer segments, Henkel can access markets where sustainability is of
paramount importance.

Defining Fresh Value Propositions:

Reinventing the business model necessitates a redefinition of the core value propositions to
align with sustainability principles. For the adhesive sector, Henkel can develop adhesives that
are not only highly effective but also eco-friendly. These adhesives would bond materials with
maximum efficiency while producing zero harmful emissions during the curing process.
Henkel's commitment to delivering innovative, sustainable solutions would set it apart in the
market.

In the personal care and beauty sector, value propositions can revolve around natural
ingredients, biodegradable packaging, and cruelty-free testing. By offering products that align
with consumers' growing concerns about the environmental and ethical aspects of personal
care items, Henkel can tap into a market segment that is increasingly influential.

Capturing Value in Innovative Ways:

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To capture value in innovative ways, Henkel can explore revenue streams beyond the
traditional product sales model. In the adhesive sector, for instance, Henkel can licence its
cutting-edge, sustainable adhesive technologies to other manufacturers. Collaborating with
automotive manufacturers to provide eco-friendly adhesives for vehicle assembly is one such
approach. This initiative not only generates additional revenue but also extends the reach of
sustainable solutions to a broader audience.

In the business-to-consumer (B2C) space, especially in the personal care and beauty sector,
subscription-based models can be introduced. Customers can subscribe to receive monthly
supplies of their preferred products. This approach reduces single-use packaging and
promotes customer loyalty. Henkel can offer exclusive discounts, promotions, and eco-
friendly packaging options to subscribers, creating a win-win scenario for both the company
and its customers.

Prerequisites for Going to Market:

Before introducing new business models to the market, Henkel must ensure that their
products comply with regulatory and industry sustainability standards. For their sustainable
adhesives, achieving recognized certifications such as "Green Seal" or "Cradle to Cradle" is
crucial. These certifications serve as endorsements that their products meet rigorous
sustainability criteria, providing customers with confidence in their choices.

Transparent communication plays a pivotal role in taking new business models to the market.
Henkel can leverage its strong online presence and social media platforms to convey its
commitment to sustainability. The company can share detailed sustainability reports, product
life cycle analyses, and information about certifications on their website. The goal is to create
a transparent and informative platform that empowers consumers to make sustainable
choices.

Testing and Experimentation:

Pilot projects and partnerships can be instrumental in testing and fine-tuning new business
models. Henkel can collaborate with key customers in the automotive industry to test the
adoption of sustainable adhesives in real manufacturing processes. These pilot projects
provide valuable insights and real-world data to optimise the new business models.

Moreover, Henkel can engage in collaboration with research institutions and industry
associations to further validate the sustainability benefits of their products. Such partnerships
can provide independent verification of the environmental and social advantages of Henkel's
products, strengthening their position in the market.

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Implemen3ng Reorganisa3on of Henkel’s Business to the New Model
Alignment with Value Creation and Delivery:

Reorganising the business model necessitates the comprehensive integration of sustainability

into every facet of operations. In the adhesive sector, Henkel can establish cross-functional
sustainability teams that work collaboratively across departments, including R&D,
manufacturing, marketing, and customer service. These teams are responsible for ensuring
that sustainability practices are embedded in the product development process and are a core
consideration in decision-making.

Moreover, it's essential to align internal incentives with sustainability goals. Henkel can
introduce performance bonuses tied to sustainability targets. For example, employees
involved in product development can receive bonuses for successfully reducing the
environmental footprint of a new adhesive product. These incentives drive employee
engagement and commitment to sustainability.

Resource Leverage:

Optimising resource utilisation is a fundamental aspect of reorganisation. In the adhesive

sector, Henkel can invest in state-of-the-art, energy-efficient manufacturing technologies. By
adopting low-carbon production processes, they not only reduce their carbon footprint but
also set an industry benchmark for sustainable manufacturing.

Furthermore, Henkel can prioritise waste reduction and recycling. They can implement a
comprehensive recycling program within their manufacturing facilities, reusing materials and
minimising waste sent to landfills. For instance, waste materials generated during the
adhesive production process can be repurposed into raw materials for other products.

Counting, Incentivizing, and Communicating:

Developing robust metrics and reporting mechanisms is critical for tracking progress toward
sustainability goals. Henkel can establish key performance indicators (KPIs) that measure
carbon emissions, water consumption, waste reduction, and adherence to sustainability
standards. These KPIs can be integrated into regular performance evaluations, and employees
who excel in sustainability can receive bonuses and recognition.

Transparent communication is equally vital. Henkel should provide detailed sustainability

reports to stakeholders, including customers, investors, and the public. These reports should
highlight achievements, challenges, and the company's vision for a more sustainable future.
By openly sharing their sustainability journey, Henkel builds trust and accountability with
stakeholders.

Preparing for a New RESTART:

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Preparing for a "RESTART" involves several strategic steps. First, Henkel should invest in
comprehensive employee education and training programs. These programs ensure that all
employees, from product developers to customer service representatives, understand and
contribute to the sustainability initiatives.

In addition, Henkel can strengthen relationships with suppliers to enforce ethical and
sustainable sourcing throughout the supply chain. For instance, they can collaborate with
suppliers to ensure that raw materials are sustainably sourced and produced without
exploiting labour or harming the environment. This not only aligns with Henkel's values but
also extends their sustainability efforts beyond their operations.

Moreover, Henkel can establish a sustainability innovation hub within the organisation. This
hub is responsible for driving research and development of eco-friendly products and
solutions. It brings together experts from various fields to collaborate on sustainability-driven
projects. For example, this hub can focus on developing new, sustainable materials for
adhesive products, setting the stage for the future of sustainable adhesives.

In addition to the specific initiatives discussed in the "Reinvent" and "Reorganise" phases,
there are several overarching strategies that Henkel can employ to ensure the success of its
sustainable business model innovation:

1. Investment in Research and Development: Henkel should allocate a significant

portion of its budget to research and development to continuously innovate
sustainable solutions. This includes exploring alternative materials, reducing the
environmental impact of production processes, and enhancing product lifespans.

2. Holistic Supply Chain Sustainability: Collaboration with suppliers to promote

sustainable practices throughout the supply chain is imperative. Henkel should take
an active role in ensuring that all raw materials are sourced sustainably and that
ethical labour practices are upheld at every stage.

3. Partnerships and M&A: To accelerate innovation in sustainability, Henkel can explore

mergers and acquisitions with companies specialising in sustainable technologies. For
example, they can acquire a company focused on developing eco-friendly adhesives
or personal care products. Additionally, strategic partnerships with organisations
dedicated to sustainability can accelerate innovation.

4. Consumer Education: Henkel should actively educate consumers about the

environmental and social benefits of their sustainable products. This can be achieved
through comprehensive marketing campaigns, product labelling, and informative
content on their website and social media channels.

5. Regulatory Compliance: Henkel should closely monitor and adapt to evolving

sustainability regulations. They can establish a dedicated team responsible for

14
 tracking global sustainability standards and ensuring that their new business models
comply with these standards.
6. Investment in Circular Economy: Research and development related to circular
economy practices, such as recycling and reusing materials, align with Henkel's
sustainability goals. For example, they can invest in developing innovative recycling
methods for their adhesive products, ensuring a closed-loop system for materials.

7. Global Supply Chain Transparency: Henkel can establish global supply chain
transparency to trace the sourcing of raw materials. This initiative ensures that all raw
materials are sourced sustainably and aligns with ethical labour practices. By
leveraging blockchain technology, they can provide consumers with real-time
information on the origins of their products.

8. Stakeholder Engagement: Engaging with stakeholders, including customers,

employees, investors, and environmental organisations, is essential. Henkel can
conduct regular sustainability summits where stakeholders can provide input and
feedback on the company's sustainability initiatives. This engagement fosters a sense
of collective responsibility.

Conclusion
Henkel's commitment to sustainable business model innovation is a reflection of its
dedication to environmental and social responsibility. By "Reinventing" and "Reorganising"
their business model, Henkel not only adapts to a changing world but also paves the way for
a more sustainable future. These efforts will contribute not only to Henkel's success but also
to the global endeavour to build a more environmentally conscious and responsible business
landscape. With transparency, innovation, and a strong focus on sustainability, Henkel is well-
positioned to lead the way in sustainable business model innovation. By focusing on these
aspects, Henkel can maintain its leadership position in addressing environmental and social
challenges while satisfying stakeholder and customer expectations in a rapidly changing
world. Continuous improvement in sustainable practices is vital to achieving this vision.

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