How do we learn to consume less?
What role can manufacturers play within the supply chain in influencing and changing consumer behaviour? Ramon Arratia attempts to find out
Accenture and the World Economic Forum recently produced a report looking at how to make consumption more sustainable by decoupling growth from environmental impact. They argue that businesses, rather than governments, need to play the major role in making this happen.
Manufacturers need to understand that they have a huge potential to influence and change consumer behavior, to drive sustainable consumption. Measuring and reporting on corporate impacts is becoming more standard.
However, the key method of measuring the true environmental impact of a manufacturer is to take into account every impact from each life cycle stage of all of the products they produce - the combined impact of all products.
Most of these impacts occur either in the supply chain or during customers' use of products. Unilever has committed to doubling sales by 2020, whilst maintaining its current environmental impact level across its products - a factor two plan.
If it were to double sales and half its impact, it would be at factor four. However, some argue that we need to be at factor 10 to counteract people consuming more things.
For a consumer goods company such as Unilever, around 95% of product impacts typically come from outside its own operations. Sixty-eight per cent of Unilever's impacts are from consumer use, with only 3% from manufacturing.
If manufacturers can influence the design of their products and their majority impacts occur during customer use, it makes sense to go back to the design table. Some cars for example, have become more efficient by consuming less petrol. You might even find that your customers are using your products in the wrong way, creating a bigger environmental footprint than intended.
However, an issue with this is that whilst the customer will reap the economic benefits of the efficiency, the likelihood is that the producer won't. That's why the industry needs policies in place that reward more efficient products and penalise low efficiency products.
If you don't have a direct influence on the design, you can still reduce impacts from customer use indirectly. Proctor & Gamble's 'Turn to 30' campaign is a good example of this.
The main impacts from washing clothes occur from heating the water in the washing machines. The 'Turn to 30' campaign was about influencing consumer habits, without changing the design of the product (the detergents). Another way is to lobby for stricter standards for washing machine efficiency.
There are also more progressive decisions that manufacturers can make to promote sustainable consumption. One way is to simply delete the least sustainable products from your portfolio. In 2008 for example, B&Q announced that it was going to stop selling patio heaters following a long campaign by environmental groups.
This idea is key for supermarkets too. The carbon footprint of Tesco's customers, for example, is up to 100 times higher than its own direct footprint in the UK. So, supermarkets should edit the choice of sustainable products they offer to customers to influence buying behaviour. But what is the incentive for a retailer to stop selling any product?
A more viable way is to increase the relative sales of your most sustainable products - marketing and selling more groceries and less meat for a supermarket, for example. Also, products can be invented that cannibalise both the sales and impacts of other products. New mobile phones for example, can potentially replace alarm clocks, watches, calculators and cameras.
Renting or leasing products instead of selling them is an old idea. However, this model is difficult for manufacturers to adopt and isn't always a viable option economically. Who will succeed in make money by switching to renting drills, manufacturer Black and Decker, or retailer B&Q?
Beyond manufacturing, new businesses are emerging that sell low impact services, such as car share company Zipcar which reduces the need to own cars, particularly in congested cities such as London. Services like these have the potential to boost sustainable consumption by reducing reliance on traditional products.
The main progress to sustainable consumption will be made by commercial wars between different products, technologies, services and business models.
Ramon Arratia is sustainability director for Interface in Europe, Middle East, Africa & India