Revenue Hemorrhaging From Toxic Chemicals: How To Heal

“Smart companies seize competitive advantage through strategic management of environmental  challenges."

This is the fundamental point of Product Stewardship initiatives and the key lesson from Sony's $130 million brush with product recalls, related fines, and environmental policy.
In the weeks before Christmas 2001, Sony faced a nightmare. The Dutch government was blocking Sony’s entire European shipment of PlayStation game systems; more than 1.3 million boxes were sitting in a warehouse instead of flying off store shelves.

Why was Sony at risk of missing the critical holiday rush? Because a small, but legally unacceptable, amount of the toxic element cadmium was found in the cables of the game controls. Sony rushed in replacements to swap out the tainted wires. It also tried to track down the source of the problem — an 18-month search that included inspecting more than 6,000 factories and resulted in a new supplier management system. The total cost of this “little” environmental problem was more than $130 million.  Sony executives refer to their PlayStation disaster as the “Cadmium Crisis.”
Actio Corporation makes product stewardship software so that a "Cadmium Crisis" can be averted.  This doesn't ever have to happen again, anywhere, to any-sized manufacturing company.  Actio serves large, big-name, global manufacturing companies, and smaller partially-global businesses; and manufacturing firms across almost all industries and verticals and across language and regulatory boundaries.  The innovative software combines supplier communication, regulatory lists, and substance volume tracking into a state-of-the art portal that is served up over the internet as SaaS.  That means there's no software to install or maintain; no compatibility issues to worry about.  For more on how it works, please contact this man:  Christian Nowak, Director Business Development at Actio HQ north of Boston in Portsmouth, New Hampshire.

Sony's penalties were not for breach of RoHS compliance, as some erroneously believe.  In fact, the RoHS directive hadn't been invented yet when the deed was done.  Sony's revenue loss and public relations trauma began with a relatively quiet, low-profile, local-European regulation of the use and declaration of chemicals in products.  Sony missed a spot, is all.  But what a chain of events!

(This event happened ten years ago now, so we don't feel bad bringing it up.)

There's a lesson in Sony’s experience — and in many similar experiences since:  there is money to be saved if companies have the right systems in place.  Especially as chemical-oriented environmental compliance rules become more -- not less -- ubiquitous and more strict.

Source:  From the marvelous Green to Gold by Daniel Esty & Andrew Winston.

Photo credits: selected from the wonderful image gallery at