With a rising level of awareness about the role of consumers in the overall environmental picture rising, it would make sense that we would not only begin seeing studies about how consumers felt about green, and whether or not they are willing to buy “green”, but begin to see companies take steps to understand what that means for themselves as well.
In a recent report, Redesigning Business Value: A Roadmap for Sustainable Consumption, the World Economic Forum lays out a document that is in part supposed to report out and motivate leaders who were not in the room, and as always, part to show that there is a historic opportunity upon us. An opportunity that really is ours to waste.
So, with that, the report opens up with a set of constraints that they feel is needed to build a future of sustainable consumerism:
- Innovation: Sustainability is an enabler of innovation and should be at the core of the design of products and services and the development of new business models and platforms.
- Collaboration: New forms of collaboration between business partners, along entire value chains, and with key stakeholder groups will be needed.
- Investment: To catalyse a prosperous future, business needs to look beyond short-term pressures and focus on investment for the long term, working to build understanding among investors of the value at stake in long-term planning.
- Values: To become relevant in shaping a better future for society, new values-based frameworks are needed to align behavior in more productive and innovative ways.
- Leadership: As business leaders, we choose to lead from the front, because we see that the cost of inaction to our businesses far outweighs the cost of action.
All of which are good, but of course, I would also add Commitment and Sacrifice to that as well. commitment because while everyone keeps saying that this is a long term problem, strategies are still being constructed in a very short term manner… and have visibly fallen apart since COP15 wrapped up. Sacrifice because (as I you will see later), this entire exercise is being sold a as a huge win for EVERYONE. business wins, policy makers win, civil society wins, and the earth wins, and without any sacrifice on any level. Sure there is a change in mindset, but costs of production will not have to go up, margins will hold, and consumers can choose all the sustainable products they want at the same cost (if not lower) than those stinky brown ones.
Why sustainable consumption matters to business
In 2009, The Business Case for Sustainability provided a cogent argument for sustainability as an issue that should be incorporated into the strategy and operations of business, not just as a matter of stakeholder responsibility but as a matter of business survival and value creation:
- Managing resource risks: Sustainability matters to business because it reduces exposure to volatile and rising resource prices, to the risk of increased scarcity of resources and to the risk that these (carbon, water, waste) are radically re-priced in the near future. Embracing models of sustainable consumption across the value chain will provide stronger resilience against external shocks.
- Shaping the regulatory environment: Principles of sustainability are increasingly being incorporated into the regulatory environment. If businesses wish to flourish in this environment, they must make themselves active participants in its construction.
- Engaging consumers as citizens: The biggest drivers of corporate sustainability investments are consumer concerns, employee interest and government legislation.8 For business, driving sustainable consumption can be an effective long-term strategy for deepening authentic engagement with consumers and employees.
- Engaging consumers as customers: Consumers increasingly want to be treated as customers, demanding not only more sustainable products and services, but also greater transparency over sourcing and content of existing ones. At the same time, the speed, spread and changing patterns of use of the media are forcing businesses to adopt pre-emptive strategies to manage their reputational risk on sustainability issues. Engaging proactively with the sustainable consumption is one way of managing these challenges in depth.
- Driving innovation: Businesses are the chief engines of value creation and innovation in society. The challenge of sustainable consumption presents an opportunity
A list of 100% gains for companies… that while good (and some very new), I think fails in some way to be completely transparent about the risks that business face should they continue to do little. that, while some firms may have the opportunity to shape the regulatory environment, more than likely, they are going to be shaped BY IT. That while they formulate a strategy on engaging citizens, heir once loyal consumers are going to turn into citizens and begin demanding change.
That being said though, where I do like the report (in attitude and guidance) is that while a bit over aspirational, it does offer a strong pragmatic approach for readers to follow, and is grounded in economic approach. That, while certainly selling the win to everyone, looking between the documents lines and you will see how it is promoting a radically different approach to how products are produced, sold, and disposed of through their closed loop analysis. The report also does a good job to highlight the importance of investment funds coming into the space to apply the appropriate pressure, as well as highlight the role that regulations will play as resources run dry and governments are forced to make a decision.
Issues that are highlighted through 6 sections of analysis, and at the end of the report, they developed a list of 6 steps for how this group intends to make it happen:
- Catalyse opportunities for business towards creating a consumer movement for sustainable consumption
- Connect corporate executives and university leaders, with a view to creating a pipeline of future talent for sustainable businesses
- Index, compare and contrast the existing metrics and tools for measurement of sustainable consumption
- Bridge perspectives between investors and companies on the role of sustainability in driving long-term value creation
- Create an innovation platform for sustainability which connects open sourced intellectual property to developers and markets
- Collaborating while competing: explore business models, tensions and solutions, and regulatory implications
- Launch a pilot to measure and manage waste in the food value chain, and share key learnings
- Launch a consumer industry pilot on reverse logistics, and identify key barriers and opportunities for scalable solutions
- Develop a track to bring the business voice into the United Nations Process for Sustainable Consumption and Production
- Look at the implications for business in moving beyond gross domestic product (GDP) as the main measure of social progress
To which I would add:
- Move economic calculations from current models to one that includes costs negative exernalities
- Move product sustainability initiatives beyond single products to entire portfolios
- Work with government agencies (and consumer groups) to move standards for industries forward (i.e. Hybrid technology rollout to EVERY car)
- Focus on making specific reductions in packaging waste, and improving product designs that improve reuse and recyclability
- Focus on real consumer awareness campaigns that provide unbiased sources of educational materials on products, where they come from, and the impacts they have on the economic, environmental, and societal sustainability.
All in all, where I really enjoyed this report – and others that WEF has put out – is the emphasis on multi-stakeholder engagement through an issue, and a respect for the role that the supply chain itself plays. However, there is still a need for a bit more honestly when it comes to the fact that to achieve environmental balance and sustainability, there will be sacrifices. sacrifices not only within industry, but also in the wider community.