GreenBiz.com® |
ClimateBiz |
GreenerBuildings |
GreenerComputing |
GreenerDesign |
Greener World Media
All Recent Posts on GreenBiz.com
-
WASHINGTON, D.C. -- More than two-thirds of S&P 500 companies fail to even mention risks presented by global warming in their annual reports, while just 5 percent lay out a strategy for mitigating those risks, according to a study by investor group Ceres, the Environmental Defense Fund and the Center for Energy and Environmental Security.
-
OAKLAND, Calif. -- A handful of new surveys point to the increased willingness to pay more -- or earn less -- for consumer products or environmentally friendly workplaces, but in which America?
-
BRACKNELL, UNITED KINGDOM -- New partnerships with utilities in the United Kingdom, Germany, Sweden and Norway have boosted Dell's worldwide renewable energy power sourcing to 26 percent, the company said.
Sponsored Links
Pondering the Sustainable Consumption Conundrum
I'm not sure whether it was strategic or serendipitous that the World Business Council on Sustainable Development released a report on sustainable consumption just a week before a recessionary Christmas -- a time when countless millions were torn between the desire to shop and insufficient means to do so. Either way, it made for enhanced reading of what already was a pretty enlightening report.
The report's unimaginative title "Sustainable Consumption: Facts and Trends" (download -- PDF), belies a bold premise: that companies need to start looking beyond "greening up" their products and services and begin embedding sustainability principles into their core business models -- "delivering sustainable value to society and consumers, helping consumers to choose and use their goods and services sustainably, and promoting sustainable lifestyles that help to reduce overall consumption of materials and resources."
That's a tall order, one not easily achieved with the mindset of today's business leaders, or the incentives given most business leaders to grow at any cost. It's hard to imagine the preponderance of today's global companies shifting their business models to this degree, not to mention the preponderance of consumers deciding that maybe "having it all" doesn't necessarily refer merely to "stuff."
Or will the current economic meltdown change things? Is there a scenario in which global consumption patterns could change to embrace more sustainable products and levels of consumption? That's the trillion-dollar question.
Pondering the sustainable consumption conundrum is not new stuff for the WBCSD, a membership organization comprised of roughly 200 of the world's largest companies. For more than a decade, the group has brought together corporate giants like Adidas, 3M, British Telecom, Henkel, Johnson & Johnson, Nokia, Procter & Gamble, and Sony to study the means by which companies can not only reduce the impacts of their products, but create new ones that meet the needs of those in both developed and emerging economies with little or no environmental and social impacts.
As far back as 1995, the group issued a policy statement noting that
Sustainable production and consumption involves business, government, communities, and households contributing to environmental quality through the efficient production and use of natural resources, the minimization of wastes, and the optimization of products and services. The WBCSD recognizes the need for business to take a leadership role in promoting sustainable patterns of production and consumption that meet societal needs within ecological limits. Business can best work towards these goals through responsible environmental management, enhanced competitiveness and profitable operations.
The response over the ensuing 13 years has been steady, albeit underwhelming, progress. Most manufacturers have made gradual efficiency improvements, reducing the waste, energy, water, materials, toxicity, and carbon embedded in their products and processes. Pollution prevention and "eco-efficiency" have been the watchwords, as companies found they could lower costs and reduce risks by cutting or eliminating emissions and other waste streams. Some companies have heralded their accomplishments through green marketing. Most don't bother, given that their successes amount to not much more than "doing less bad," a tough tale to spin.
But the WBCSD's newest report takes a notable turn. "This report signals a shift in the nature of the sustainable consumption agenda from the introduction of niche products and services to the embedding of sustainability principles into the core business model," it notes. In other words: "greening up" isn't good enough.
It's not that eco-efficiency isn't needed, says the WBCSD. It's necessary, but not sufficient. What's needed is a three-pronged approach:
Each of these three prongs strike me as an order of magnitude more difficult than the one before it. As I see it, Innovation -- the growth of more sustainable products (a term, some would argue, that is oxymoronic: something either is, or isn't, sustainable) -- is well underway. Each year, we see a steady parade of goods that are more energy efficient, less packaged, or require fewer resources in their manufacture, use, and disposal.
Choice Influencing -- creating a market for next-gen green products that transform markets and engender radical innovation, new business models, and changes in customer behavior -- is an ideal that never seems to become reality. Companies are inherently timid to disrupt consumers' routines, and consumers seem too comfy in their purchases and habits to make even smallish shifts in their behavior, even when it leads to better outcomes and experiences. It's up to disruptive technologies -- the iPod and iTunes come to mind -- to shift both market and individual behavior. Even then, the incumbents (e.g., record companies) will drag their feet for years in the name of preserving their dwindling market share.
The third prong, Choice Editing -- "editing out" unsustainable products and processes -- seems a pipe dream, a long slog of a journey that no one -- corporate and political leaders alike -- seem willing to undertake, let alone press others to do so, too.
Will the current economic turmoil change that dynamic? Will companies and consumers, chastened by their reversal of fortune, be more willing to consider new ways and means of production and consumption? For example, will citizens see virtue -- for themselves and their communities -- in community gardens, car-sharing, lending libraries for tools, local banks, and other co-operative and collaborative forms of conducting commerce? Will they open themselves to quality, not quantity, thereby changing the value propositions by which they shop?
Like I said, it seems a far-off vision, even on my more optimistic days.
The WBCSD is quick to point out the institutional barriers to this transformation. Among them:
There is currently no common understanding of what a sustainable product or lifestyle is. Business may determine the sustainability of a product based on a full life cycle analysis. Retailers, governments, and other actors may assess the "sustainability" or "un-sustainability" of a product based on varying disclosure criteria or societal pressure. As a result of this confusion over who determines the sustainability of a product, choices to edit the availability of certain products are often in conflict. Business, governments, and society (including consumers) must work together to define sustainable products and lifestyles.
Clearly, it won't be easy, but the opportunities seem limitless for those that get it right. As I wrote in my new book:
To a large extent, this is the ultimate green-economy strategy -- enabling customers to reduce their impacts by doing business with your company. What is the opportunity to create products or services that become the green default -- the no-brainer option that is better and greener? What is the opportunity to be disruptive -- changing the economics, the business model, the market perception in a way that renders such barriers as the unaffordability and inconvenience of "going green" moot? What is the opportunity to create products that solve customers' problems -- enabling them to fulfill their needs in a way that makes them genuinely part of the solution?
Any ideas?
LinkedIn
StumbleUpon
Digg
John
We have a "pay as you throw" recycling station in our town. We have to purchase garbage bags that hold non-recycled refuse.
Our tendency is to purchase items and foodstuffs enclosed in recycle-friendly containers to keep down the cost/frequency of purchasing "pay as you throw" bags.
Since our town has moved to "pay as you throw", the local supermarket is probably seeing a little bit of a slowdown in purchase of items like orange juice and milk in nonrecycle-able wax containers.
So, the market will respond if the cost of unsustainable practices are passed on to the consumer in a transparent way.
Green must save the consumer time, money or make them healthier and happier. These benefits must be obvious to the consumer if the "green revolution" is to continue to gain momentum.
Choice influencing - focus on women's market
I agree that #2 on your list, choice influencing, is a dream that has yet to become a reality. Still, I see opportunity there, especially in influencing/educating the women's market. The goal would be to partner with women in the existing core market for sustainable products. Then, use their input/feedback to help influence the next layer of female consumers (intrigued but for whatever reason, not yet completely sold on sustainability) - and so on.
The passion of a woman who has discovered that she can take care of her children/household in smarter ways is unstoppable. Women really do listen and learn from other women along the way.
The beauty in putting some effort toward this now is that the way women buy (using a balance of left and right brain traits) is becoming the standard for the general consumer (male and female) in many categories. Sustainable consuming is a pursuit that knows no gender, but can be influenced by beginning with women.
Some sustainability Ideas for business
Joel,
You correctly point out the oxymoronic character of the term "sustainable product." But the criticism can be made for almost every use of sustainable X, where X is value, lifestyles,or consumption-- all terms appearing in the column. Their use by the WBCSD suggests that they really do not understand what is at stake. What is badly needed is a change in values away from equating well being with material goods toward new ones stressing relationships.
You are certainly justified in being skeptical. The economic downturn will almost certainly reduce spending on goods of all sorts, but is not likely to change underlying values especially since the solution being offered to the financial crunch is a very big stimulus to return consumption to former levels. Business could be a leader and, in my opinion, must be a leader if change is to happen. But, as more and more of the global businesses that are represented in the WBCSD become little more than financial machines, managed by MBAs and lawyers, it will be very difficult to find understanding and willingness to take the huge leap that you, correctly, see will be needed. Only the most far-sighted firms can even think about themselves as aiming to reduce consumption. That makes no sense at all under the current rules and theories about what business is all about.
In my book, Sustainability by Design: A Subversive Strategy for Transforming our Consumer Culture, and on my website, I point the way to a new sustainability set of values that could drastically change consumption and suggest roles for business. But these new roles are far from business-as-usual, even with a newly formulated emphasis on sustainable consumption.
John Ehrenfeld
Good points and questions
Thanks.
Building a consensus on what a sustainable future looks like, for business/government/society -- and translating that for use and implementation by individual consumers, is where the opportunity and profit will be. Without doing that hard work to get there, all will be diminished. With it, all will be empowered and better off in the end.
Eembedding sustainability principles into the core business model, and consumption behaviors, involves the biggest paradigm shift since, like maybe ever.
Sustainable consumption rests on "planned durability"
Products that don't wear out or go out of style are at the heart of sustainable consumption. The longer a product's services life, the more it contributes to sustainability. Products with a long service life delay their own disposal costs, and also the energy and materials costs of their replacements.
The disposal and replacement costs inherent in rapid product replacement cycles short-circuit the benefits of energy-efficient manufacturing processes that use sustainable raw materials. One of my all time favorite commercials showed a new car owner extolling the virtues of his favorite car make, one whose sales depended on "planned obsolescence." He looks out at the camera and asks, "If it wasn't such a great car, why would I have bought so many of them?" The screen then fades to a text message: "Volvo. Buy ONE."
sustainable consumption
Sustainable consumption - How do we get there? Through responible pricing of goods - e.g. putting environmental taxes on big cars. And outlawing unsustainable merchandise - e.g. asbestos, pvc and cars of a certain size.
We need more political activism to guide markets, producers and consumers. The crises of the financial system demonstrates: if actors in the markets don't act responsibly the state needs to intervene in the interest of a functioning society. The same principle applies here. We know about the necessity of being sustainable for our survival. We just don't act with urgency and courage.
We need to establish rules and norms in the political arena to guide - or: regulate - the behaviour of actors in all markets. There is no free lunch.
profit motive
Companies exist to make a profit.
Sustainability will only be taken seriously in the boardroom if a senior executive can articulate how sustainability will lead to higher profits for a company.
So sustainability has to be strongly linked to an increase in sales, increase in margins or decrease in costs.
I read very little regarding companies making a strong case for sustainability.
Probably because for most of these companies at this point in history, a strong business case can't be made.
This will change, but it will take time.
Post new comment