Pondering the Sustainable Consumption Conundrum

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by: Joel Makower

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 addidas, 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:

  • Innovation — Increasing the availability of more sustainable products and services through integrating sustainability and life-cycle processes into product design innovation that doesn’t compromise on quality, price, or performance in the market. "Business processes for the development of new and improved products, services, and business models are shifting to incorporate provisions for delivering maximum societal value at minimum environmental cost," it reports.
  • Choice Influencing — Creating a market for sustainable products and business models by working in partnership with consumers and other key stakeholders to demonstrate that sustainable products and lifestyles deliver superior performance at the best prices, and using marketing communications to influence consumer choice and behavior.
  • Choice Editing — Eliminating unsustainable products, product components, processes, and business models in partnership with other actors in society, such as policy-makers and retailers.

    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?

  • Original Post: http://makower.typepad.com/joel_makower/2008/12/pondering-the-sustainable-consumption-conundrum.html