Rising consumption in a world of seven billion: ideas on sustainable business innovation

Posted on December 4, 2011

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With a rapidly increasing population of over seven billion, the threat to the planet has less to do with the absolute number than with what, how and how much we consume.

While the debate of whether or not consumers can change industry may continue to circulate on a “higher” level, we all exist within and participate in a global culture of consumerism.  As the population reaches and surpasses 7 billion, as countries continue to develop (especially highly populated nations like China and India), the pressures on the world’s resources intensify.

“The challenge of how we meet the nutrition, health, shelter, apparel, energy, and entertainment needs of the next billion without further eroding the planet’s finite resources are surely among the most significant of our time.” – says Caren Holzman, SustainAbility.

Each year our planet can produce a certain amount of resources and absorb a certain amount of use, or nature’s budget for the year.  According to the calculations by the Global Footprint Network, we are currently 135% above the capacity of our planet to replace essential “services” like clean water, clean air, arable land, healthy fisheries and stable climate.  Our over-consumption is eating into the very ecological systems that all the world’s economies – and indeed, all life – depend on.  Consider that by 2050, we’ll be 500% above capacity unless we change how we make, use and throw away our “stuff”.  (Leonard and Ridgeway, 2011)

These numbers are daunting, and these obstacles may seem insurmountable in achieving a more sustainable society.  Nevertheless, at this critical point, it is our role to look for ways to shift consumer behaviour and business models to repair some of the damages done to the planet.  From a business perspective, as resources become constrained – which stall economies – businesses must think differently and more innovatively regarding the concept of value, and delivering products and services to the customer.

According to Caren Holzman, there are some signals of hope for a reversal in the way that consumers value and use products and services.  She outlines four trends:

1.  Companies driving behaviour change of customers

Holzman draws on the case of Alliance Boots – a pharmacy-led health and beauty retailing and pharmaceutical wholesaling company – as an example.  This company recognizes that only 7% of the environmental footprint is in the production of their health and beauty products and 93% is in the way the consumers use them in terms of water and energy, and is taking steps to influence the way consumers use products.  This illustrates that the overall challenge is for companies: to use core assets and connections with consumers to drive behaviour changes.

2.  Selling less and repairing and recycling more 

“The greenest product is the one that already exists” – eBay

Holzman uses the “Common Threads” initiative withPatagonia, and their partnership with eBay, which asks customers not buy something if they don’t need it.  If they do need it, they ask customers to buy something that will last a long time (i.e: ‘slow clothes’ movement), and to repair what breaks.  And after you grow tired of the item, reuse or resell what is no longer worn or used.

3.  Collaborative consumption – “What’s mine is yours” 

Many consumer “sharing” initiatives are popping up around the world, including: Car sharing, space or storage sharing, clothes swapping, tool sharing, or textbook renting.  This has been probably the most popular out of the four trends.  This concept of “renting” or “sharing” rather than buying has been around for some time.  But a challenge to this trend remains:  Can companies make collaborative consumption scalable and profitable?

 4.  The unstable economy – driving sustainable behavior 

With threats of a double-dip recession looming, and low consumer confidence, American consumerism is changing.  Polls during the recession in 2010 found that nearly half of Americans said they were spending less time buying nonessentials, and more than half were spending less money in stores and online.  As a replacement, people are spending more time cooking or taking part in organizational, civic and religious activities (according to some studies), and are driving fewer miles and choosing the “staycation”.

Holzman asks: Is America- the worlds capital of consumerism – making a change for the better?  And can this unstable economy lead to more responsible consumerism in the long term?  Thus, the challenge is: Can companies afford to lose sales in non-essential products and instead create profit from experiential and/or service oriented business models?

 * Building on and reinforcing these four trends are four further insights into what is needed to address some of these concerns of sustainable consumption – according to Caren Holzman (SustianAbility) and Gregory Unruh (author of Earth Inc.) *

Guide your consumer

  • Businesses should not offer a more sustainable product in addition to unsustainable equivalents –  rather offer them “instead”.
  • Choice influencing – where corporate advertizing budgets are dedicated to driving sustainable consumption.

 Influence beyond the transaction

  • Businesses can educate customers on benefits of more sustainable consumption (as up to 90% of environmental impacts are in the customer use phase).
  • An example used is Levi’s “Care Tag” which “advises the owner to wash less, wash in cold water, line dry and donate the jeans to Goodwill”

 Look beyond your own business and think scale

  • New innovations can become platforms for wider change.  Holzman uses the plant-based bottle that Coca-Cola designed, which is now being used by Heinz.
  • Ask: What are the potential partners and collaborators?  What is the potential of your idea in terms of scale?

Continue to defy the pressure of Wall Street and measure true costs

  • As long as short-term profits and other Wall Street concepts of success persist, companies will be challenged to address business model shifts linked to sustainable consumption.
  • Unilever and Puma are stand-out successes, which defy this dominant model.

Regardless of if you work within the white, blue, green-collar sectors, these concepts are meant to introduce some of the challenges of consumerism and sustainability in an overpopulated world.  I hope that you, the reader, will gain something from it, perhaps provoking you to ask where you fit into the system, or inspiring you to ask yourself what changes you can make at the consumer level or beyond?

Thanks for reading!

-K-

This lumeschannel post was inspired by the blog post Caren Holzman of SustainAbility “A Business Plan for Seven Billion,” (http://www.sustainability.com/blog/a-business-plan-for-seven-billion#.Tttb2GO4m5w) published in light of the birth of earths 7th billionth baby on October 31.  “From Mass Consumerism to Mass Change: Hope for Sustainable Consumption” (http://www.sustainability.com/blog/from-mass-consumerism-to-mass-change-hope-for-sustainable-consumption#.TttfZWO4m5w) also by Holzman, provided the information on the four trends.  Another resources which provided context and background information was “Stuffing Ourselves on Black Friday” (http://www.thecleanestline.com/2011/11/stuffing-ourselves-on-black-friday.html#more) by Annie Leonard and Rick Ridgeway from Patagonia’s Blog: The Cleanest Line.  All these concepts have been combined with insights learned through the LUMES program.  

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