End of August, The Economist released an article titled “New green wave”.
I was always criticising the sustainability goals companies that set up GHG, water, energy consumption, SHE, etc. targets as being too much self-oriented. And I finally found an article that agrees with me in the sense that these goals are more efficiency policies than actual sustainability goals. What we should call a sustainability goal should be linked to Impact evaluation. (Read more about Monitoring and Impact Evaluation here.)
Let’s name these first “sustainability goals” as the the 1st green wave. These targets reduced operating costs while benefiting the environment. But they are rather modest.
“As a result, most corporate sustainability plans rarely amount to more than cost-saving measures and compliance with government regulations, plus a few projects with a public-relations punch (say, reforesting parts of a cleared jungle). They fall well short of putting sustainability at the heart of what firms do.”
Real and expected sustainability goals should embrace targets for the company, the people it works with and sells to. Unilever and its Living Plan is a one of the main example as it goes beyond the operating performance with regards to waste, energy, etc. while keeping these in mind. But also integrates the consumers in countries under development that used soap in the rivers, for example, therefore Unilever works on creating awareness among them while reviewing the formulation to minimise the environmental impacts of such local practices.
As well, we can see the importance to integrate sustainability issues in the day to day business as being part of the core strategy of the company. This new green wave may not ensure short-term savings or revenue increase. These sustainability targets could raise costs, not cut them, making environmentally friendly consumer goods more expensive than the eco-hostile variety. Efforts to combat social inequality could boost wages. Training can be costly.
However, as argued by Paul Pollman (CEO of Unilever), “they change customers’ behaviour in beneficial ways—by, say, increasing demand for green products that the firm makes. They also please investors concerned about environmental threats. The trouble is that consumer behaviour is often slow to change and that, if green products are too expensive, the firm risks losing market share. Environmental investors are still a minority among shareholders, most of whom continue to be more concerned about quarterly earnings.”
This aspect of long-term changes and benefit creation, is something that I always been aware of. And this is the main difficulty I face while discussing with company, is to show the short-term financial benefits of adopting real sustainability goals. However, I am convinced about it and this is why, while working at the Union for Ethical BioTrade, I promoted the voluntary standard being at the management system level and that it should be endorsed by the hierarchy and not only the staff engaged in the process. While, I and the UEBT team, we reviewed the verification system, between 2011 and 2013, we strengthened this commitment with various step by step obligations members should take to ensure a full endorsement of biodiversity, sustainability issues, commitments in the business as usual work.
This kind of commitments, improvements, work could be considered as part of the Green Economy concept. Read more about it here and look at a video on Biodiversity in the Green Economy here.
On another subject but confirming the changes towards improving sustainability goals into long-term impact. The world is facing a new challenge with regards to sustainable agriculture. As you might know or notice, the South-South trade is rising and taking more and more importance in the global market. But unfortunately, the awareness regarding sustainability issues is much less a real concern for these countries.
As mentioned by Philip Schleifer, last Friday in the Guardian: “Trade in agricultural commodities between southern countries is booming, but with a lack of sustainability standards, a crisis is brewing.”
Philip Schleifer explained that despite the existing voluntary systems, they do not respond to the issues faced by South-South trade. For example in India, companies producing, importing Palm oil are more concerned about providing the (poor) population with oil and derivatives than participating in sustainable initiatives so to keep costs and prices low.
In 2013, India imported a total of 8.67m metric tonnes of crude palm oil – mostly from Indonesia and Malaysia – of which only 144 tonnes were RSPO certified (0.0016%).
Even if India is growing fast in its development and might one day reach the level of awareness (which is not extraordinary neither) of northern big brands with regards to sustainable agriculture. The impacts of commodities production in agriculture are already there and quite heavy, therefore, we need to think in adapting, creating new systems that fit with such countries priorities and needs.
My questions would be:
- How to promote sustainable agriculture in these countries (ref. Malaysia, Indonesia, Angola, Brazil, etc.) where a lot of deforestation happens to access agricultural lands and therefore future markets?
- How to avoid these populations to have the same (bad) consumption habits northern countries created?
- But on the other hand, why should not they have access to the same products as we do?
So let’s continue to promote the “New green wave” with broader sustainability goals while thinking in solutions for South-South more sustainable trade. Let’s promote the Green Economy.
- The Guardian
- Schumpeter_ A new green wave _ The Economist – Print edition