Jan 16, 2012
The World Economic Forum has launched its latest report on sustainable consumption in advance of its presentation and debate in Davos later this month. Entitled More with Less: Scaling Sustainable Consumption and Resource Efficiency, the report sets out the case for companies, governments and in particular plain old citizens to embrace sustainable consumption as a means of advancing the transition to a sustainable economy. So why is the Forum, and its members and friends, so interested in sustainable consumption, this being its fourth report on the topic in as many years?
“Sustainable consumption has gained centre-stage”, wrote S.D. Shibulal, Infosys’s Chief Executive, in celebrating the 10th birthday of the ‘BRICS’, highlighting the sad fact despite a decade of extraordinary advances in emerging economies, hundreds of millions of Indians still living in dire poverty. And he is certainly right that consumption lies at the core of our challenge and its solutions. Indeed, the very term ‘sustainable consumption’ reflects the paradoxes that it seeks to resolve.
Consumption for many is pure and simply the means to drive economic success. Consume more from us, plead the Europeans of the abstemious Germans, as China commits to boosting its domestic consumption to provide a more balanced growth pathway in years to come. Wayne Swan, Australia’s treasurer, in describing the country’s economic bounce back, concluded, “We have an economy with strong investment, rising incomes, sustainable consumption and low unemployment and these are the building blocks of a strong economy”. Mr Swan’s call for sustainable consumption has little to do, one suspects, with Mr Shibulal’s call to address endemic poverty.
For others, it’s all about the role of the consumer in driving change. Mark Bolland, Chief Executive of Marks & Spencer, champions the view that technology-enabled consumers will increasingly use social networking to ‘choice edit’ their consumer decisions. This is an opportunity, he argues, for those companies that get it, and a profound threat for those who do not, and for us all a chance to get sustainability on track. This view of the empowered consumer is not, it must be said, universally shared. Peter Brabeck-Letmathe, Nestlé’s Chair, speaking at the Global Green Growth Forum in Copenhagen last October, pointed out that consumers did not ask for the internet, but have embraced it now that it is available to them. Similarly, he argued, they will not be the driving force of green growth, but will respond positively once business gives them affordable and desirable, green products.
Sustainable consumption figures as a cross-cutting theme in the draft text for the UN’s Rio+20, The Future We Want, which sets out the need to, “establish a 10-Year Framework of Programmes on sustainable consumption and production”. Whilst being typically UN-unspecific as to what this might include, the UN surely intends the focus to cover both Mr Shibulal’s anti-poverty agenda and the need to secure ‘more for less’ in reducing the use of natural resources and levels of pollution. Economic growth per se, let alone business success, is not really the UN’s thing despite the focus on green growth at the forthcoming Rio+20 event in June.
Paul Polman, Unilever’s Chief Executive, speaking at the launch of the company’s Sustainable Living Plan at its headquarters in London in late 2010, provided perhaps the most integrated vision of sustainable consumption. In asserting that there is “no conflict between sustainable consumption and business growth”, he reaffirmed the three-fold essentials of sustainable consumption: as a growth driver, a means of bringing improved material well-being to the poor, and as a means for reducing the material impact of that consumption.
Mr Polman is right, but it is easier to describe sustainable consumption’s three-cornered hat than deliver it in practice. We can all list our noble consumer items, the low energy bulbs, organic t-shirts, low-pollutant freezers and carbon-offset (very low cost) holiday flights. Equally, we can with some prompting mention a few of the benchmarks for our changing consumer standards, the forest and marine stewardship councils’ signature stamps, fair trade marks, and for some the more exotic and time consuming benchmarks for de-selecting products made by companies with a bad record in anything from climate to internet privacy.
But for the world’s two billion or so middle class consumers (and I applaud the exceptions) this represents a small niche in our overall consumption patterns. Green growth may well mean ‘more-with-less’, as the Forum’s title seductively promises, but it still means way too much of the ‘more’. There remains a daunting gap between action and what needs to be done. Consumer-facing sustainability initiatives, whilst making laudable progress in everything from coffee to buildings to vehicles, are not making serious inroads into their respective markets to safeguard their targeted resource, species or indeed community.
Scale is therefore at the heart of the challenge, and so rightly this is the focus of the Forum’s new report, and I am pleased to have had the opportunity to contribute to its creation. By 2030, three billion middle class consumers will be out there demanding products and services. In a resource constrained world, those companies and economies that can deliver against these demands without unsustainable natural resource use and pollution will secure powerful competitive advantage. Accenture, the Forum’s research partner, calculates that the economic output at risk in 2030 if the response to a “peak metals” scenario on iron and steel is business as usual. Similarly for nations – sustainable competitiveness for nations is the new buzzword in the Forum’s corridors as it launches its first country-level rating alongside its traditional global competitiveness index, building in vision and substance on some of the early work on the ‘responsible competitiveness’ of nations.
So if there is money to be made, economies to be grown, as well as a world to save, what’s the hold up? It’s a puzzle that we have so far failed to get to scale in addressing the challenge and hopefully reaping the economic and business benefits. After all, we live in an era of scale. Our US$ 70 trillion global economy is powered by US$ 210 trillion of financial assets; over five billion mobile phones are in circulation with penetration rates rising by 35% each year; and over a period of just two weeks in August 2008, 4.7 billion people (70% of the world’s population) tuned in to watch the Beijing Olympics on television. Modern societies are addicted to ‘speed-to-scale’, so why can’t we make it happen when it comes to sustainable consumption, or can we?
The Forum’s report usefully distinguishes three, complementary ways to deliver ‘more-with-less’: by rebuilding the value chain and products themselves, essentially supply-side responses; through consumer responses, the demand side; and finally by changing the rules of the game, whether this means norms, voluntary standards or the rule of law. Noticeably, the report’s emphasis is on the supply side and to some extent the rules of the game, perhaps confirming broader support for Peter Brabeck-Letmathe take that consumers are market-takers rather than makers. And supply side responses are of course what are needed if we are to re-engineer global value chains to be environmental smarter and share the wealth they generate more fairly.
Yet we write off consumer action far too easily. Many cite the problem of price premiums to buying ethically when we do not blink at design and status of premiums of hundreds of percent for everything from underpants to airlines. Technology, as Mr Bolland points out, is a game changer in catalyzing collective action. Indeed, we are witnessing an up-swelling of new forms of collective action, from the unfinished business of the Arab Spring to the on-going actions of the Occupy movement, which spread to over 900 cities in less than 3 weeks. Tens of millions of microblogs were generated in China within 24 hours of the train crash last year, and even Burma appears to be succumbing to the tripartite pressure of people, politics and profit. Citizens are making themselves heard from the protests on the streets of Moscow to those of Athens.
These citizens’ movements are rarely thought of as the vanguard of sustainable consumption, but we should not be so hasty in our judgment. Many commentators of Egypt’s early uprising have pointed out the coincidence of food price spiking, in significant part triggered by the financial market’s speculative trading in commodities. The Occupy movement has not focused on consumption per se, but has called for corporate reforms and greater equality in outcomes of today’s global markets. Many of the estimated 180,000 ‘mass protests’ in China last year called for less corruption, greater accountability and a fairer deal for poorer communities. These scaled uprisings may not be about the peaks of sustainable consumption, but are without doubt the heartland of its foothills.
Collective citizen action on sustainable consumption will ultimately be rooted in their imaginations about themselves and the societies that they want to live in, more than it is about price or even ‘point-of-sale-ethics’. Beyond the basics, consumption follows social identity, a point well-understood by sociologists and marketers, but still painfully absent from the strategies of sustainable consumption crusaders. Governments can help, not just through establishing new rules, but by providing leadership in setting and pushing foward visions of what is possible. President Lula of Brazil did just that in insisting that malnutrition could be overcome, and in his tenure went a long way to doing just that. Governments of Denmark, Germany and Korea, and perhaps most of all China, are redefining the international political landscape by moving unilaterally and ambitiously forward on the green growth agenda.
Businesses, similarly, can catalyze dramatic change by advancing what I have elsewhere called ‘unreasonable ambition’ for their own companies. Partly this is about the aspirations and strategies of individual companies led by unusual, amazing folks, and we need to celebrate such leadership. But scaling ultimately demands collective action, sometimes through competitive forces but often grounded in collaboration. Acting together, some of the world’s largest companies could commit to targets that would put many national targets, including those of major economies, to shame. Imagine this happening in the run up to Rio+20, a set of post-Millennium, Sutainabable Development Goals that businesses, working with others, commit to over the period to 2020. Could such goals shame, goad or create the imperative for governments, at Rio+20, in the climate negotiations, or at the World Trade Organisation or any one of a dozen stalled, inter-governmental, to act with courage and collective intelligence.
The World Economic Forum’s ‘More with Less’ report is a call to action that blends pragmatism with radicalism into a cocktail fit for this era. It spells out what needs to be done, the cost of inaction, and the potential benefits from turning big words into big actions.
At the G8 (remember them) in Birmingham back in 1998, the New Economics Foundation, organiser of the counter, Peoples’ Conference, published the report ‘Purchasing Power’. That report set out many examples of sustainable consumption, mainly emerging from the politics of change from South Africa to Chile and even the US. It was a voice for change, from the outside, barely heard on the inside. The Forum’s report on the other hand comes not from the street, but from the boardrooms of global businesses and their international and local partners. We cannot afford to choose. Both despite and because of the power of business, scale will only happen when it finds either common purpose or mutual interest to act in concert with the street. The opportunity does exist, and must be taken, to join the dots.
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