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 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?

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Comments

[Kevin]

I am in the process of reading your new book now. It seems to me that the number one goal of the WBCSD should be to help properly educate consumers (and everyone else... like the government officials, the media, etc.) about what these terms mean. You will know you have succeeded when a beer-drinking NASCAR fan looks for the recylcing bin after downing his Miller Lite. I do not think this is an impossible task. I think the WBCSD simply needs to think along these terms. Once everyone is one the same page, describing your product or service as part of a "sustainable lifestyle" will have meaning to the average consumer.

[Mark W. McElroy]

Dear Joel:

I think you've done a fairly good job of highlighting the issue in this piece. Here are some short comments in response:

1. There are no sustainable products, per se. The phrase itself is non-sensical -- like referring to a fence post as unethical.

2. Life-cycles, by contrast, can or cannot be sustainable. Why? Because they refer to human activities, which can be ethical or not. (By now, it should be clear to you that I hold to a values-based view of sustainability. Sustainability is an ethic, not a physical property. It only applies to humans and their activities).

3. On the basis of the above, the solution (i.e., THE solution) is to increase our reliance on individual corporate sustainability management, measurement, and reporting. If every company in the world is sustainable in terms of their activities and operations, then the macro sustainability problem goes away.

And contrary to what the WBCSD says, there is no controversy over what the term means -- not among the well-read, anyway. That's just a red herring. You had it right when you made the oxymoron comment above. Sustainability entails thresholds. A company is either sustainable or not, there is no more or less.

Regards,

Mark

[Mike Kilroy]

Capitalism seems to require constant growth, and that growth is endangering human existence. Can there be such a thing as sustainable growth? Or will human society have to learn to live more simply and more communally and, yes, more spiritually to truly get environmental threats under control?

Tall order either way.

[Sara Sweeney]

I have been thinking about this conundrum for the last few months and in my opinion -with respect to a sustainable 'lifestyle,' is that we won't green consumer our way to one. Currently, we are a society built on stuff, and having more of it, which in turn, makes us happy. Or so we think. And we gauge this happiness on GDP and GNP -amorphous economic terms which have nothing to do with being human; they have only to do with economics and buying/selling product. A sustainable lifestyle is one not built on stuff, having stuff, buying stuff, and then buying more stuff. Which then breaks and is thrown out. A sustainable lifestyle is handing down a family toaster.

Of course, we need to buy certain things, like food, and cars, and computers, and tv's. But how many of these do we need, and how much do we need, and -the 800 pound gorilla in the room question, how much is too much? And believe me, I can be just as guilty of wanting more than I need.

In reality, there is no such thing as a sustainable consumer. But until we get away from gauging success on the GDP and GNP, we will somehow convince ourselves that buying from the most "sustainable" company is better than the alternative -purchasing from the "unsustainable" company.

A very thought-proving post as usual Joel. Thanks.

[Bill Dunnington]

As always, a beatifully written post. A delicately framed articulation of a pivotal problem - too many people, too much stuff - take, make, waste still prevails as the economic paradigm that the earth's natural systems can't support.

What's it going to take? Is it possible to do cradle-to-cradle at scale? How do we stop kidding ourselves about abundance vs the realities of resource scarcity?

A value-added tax on global middle classers to depress consumption - starting with oil, gasoline and power consumption? How?

[Steve Meyers]

Price signals are essential to motivate consumers, and the "Green movement" needs to embrace policies that help to incorporate the full social cost of products into their price. This involves both traditional regulation that requires industries to reduce impacts (which often will increase product costs),as well as new approaches to taxation (such as coupling a carbon tax with equal, offsetting reductions in income or payroll taxes.

[Jeffrey Hollender]

The World Business Council on Sustainable Development’s report is exactly the type of big, un-incremental thinking that we so desperately need right now. A few reactions:

1. How do we develop a shared understanding of what it means to "deliver sustainable value to society and consumers, help consumers to choose and use their goods and services sustainably, and promote sustainable lifestyles that help to reduce overall consumption of materials and resources"? Since no single organization can do this alone, what detailed principles will guide the effort?

2. The WBCSD’s member organizations never put real muscle behind the council’s 1995 policy statement: “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.” Thirteen years later, what have we learned?

3. I strongly disagree with Joel’s assertion that “Innovation — the growth of more sustainable products — is well underway.” Nearly all such innovation falls under the “less bad” category. That paradigm will never fuel the growth of “sustainable lifestyles.”

4. I am heartened that the WBCSD companies are even thinking about the so-called third prong, “Choice Editing — ‘editing out’ unsustainable products and processes.” Despite Joel’s skepticism, this can’t be “a pipe dream.” It’s the only path that leads to the ultimate goal: “to meet societal needs within ecological limits.” Seventh Generation intends to follow that path, and we encourage others to join us.

The backdrop to the WBCSD’s report is of course the financial crisis, which has brought into focus a new set of unprecedented challenges:
• the meltdown in the financial markets has shown us that market economics do not necessarily produce a healthy economy
• the current regulatory environment has allowed many parts of our financial markets to become de facto Ponzi schemes
• the measurements we depend on to determine the true health of our economy (GDP, etc) fall far short of the goal
• while “me first” is the mantra that has best defined our culture, we’re on the brink of discovering that we’re in this mess together.

What we need now is a multi-stakeholder process that brings together the key players from the business, government, and NGO communities to design a Marshall plan for a sustainable world.

Who will help organize it? Who will help fund it? My hand is raised.

Jeffrey Hollender
President & Chief Inspired Protagonist
Seventh Generation

[Mark W. McElroy, Ph.D.]

Regarding Jeffrey's Comments:

My hand is raised. I suggest, for starters, that Seventh Generation Corp. produce a corporate sustainability report that actually measures and expresses its sustainability performance in absolute terms. This would necessarily involve the inclusion of social and environmental context in ways that no corporate sustainability report has ever done before, including Seventh Generation's.

It is one thing to preach for sustainability; it is quite another to practice the bona fide measurement of it. Common Jeff, set the example. Just do it. Imagine a world in which every corporation actually did this. What's holding you back?

Regards,

Mark

[John Garn]

To develop a shared understanding requires beginning the dialogue with key environmental indicators that everyday people can identify with. No one needs more government or business reports with pages of metrics that have little meaning to consumers. Stick with the basics--electricity use per product, water consumption, solid waste generation. Most people have some relation to these key indicators, even if it is just dollars out at first. They have the ability to get their use information to see how many kilowatts or gallons of water they consumed. Environmental information needs to be as conspicuous on products as nutritional information is on food.

This challenge of useful indicators is even worse for the cities we live in. In California, a leader in sustainability, we have a terrible tracking system for key environmental indicators. Try getting water use information on a per capita basis. The most recent information is 2001! Try finding out how much gasoline and diesel is purchased in a California county. If you do, let me know how you did it.

As for the success indicator being when a NASCAR fan recycles a beer can, that will only happen in states that have a recycling infrastructure in place. Over 25 states have no such infrastructure so we don't even have the means to begin a transition to a sustainable culture in the US.

Businesses, like Walmart, need to be required to take back their packaging for reuse, not receiving tons of accolades for requiring the consumer to try and recycle it. They need to make products that can be repaired and not replaced. They need to stop participating in the disposable mindset that has 5% of Americans using 25% of the global resources.

[William Barnes]

Mr. Hollander, when was the last time your company, or any other consumer product company recommended people consider USING LESS PAPER TOWELLS or NONE AT ALL? Of course, this will never happen because the profit motive forces companies to promote ever-growing levels of consumption. This inherent drawback is the conundrum faced by every publicly traded corporation. How can you grow (or die) by consumption and at the same time try to somehow force this square peg into the round hole of sustainability?