Are we where we need to be on sustainability? Clearly not. But is there reason to be optimistic? Absolutely. At a societal level, public expectation of the positive part businesses can play in tackling social and environmental issues is increasing.
And this reflects a general shift in values that is helping to lock sustainable change deep into business practice – reinforcing the good, castigating the bad, spurring on Governments to provide the greater certainty required. At an individual company level, there are plenty of great innovations to celebrate.
Yet as we do so, we remain mindful that many of the most impressive examples are driven by clear sight of mega forces, such as climate change and resource scarcity, that are only intensifying in their severity.
So as we begin a New Year, here are six stories that made a splash in 2012 and are likely to set the scene for 2013. Your comments, as ever, are welcome….
1. The economy finds its ‘moral’ compass: big name comedians and high street coffee chains get tackled on tax avoidance
This year marked a significant shift in the ‘equitable economy’ debate.
After railing against the recklessness of the financial sector, public anger morphed into moral indignation amid revelations that some of the world’s biggest brands have been shamelessly robbing the Exchequer of its “fair share” of corporation tax
Tax – and not paying enough of it – has now engulfed Olympic sponsors, celebrity comedians, Silicon Valley giants, high street brands, BBC TV presenters and even cash-in-hand cleaners.
It has become, in the words of one British billionaire, the “smell test” for social approval and it heralds a potentially broader examination of how businesses contribute to society, which may gather momentum next year.
2. A change of weather for belief in climate change: droughts, floods and superstorm Sandy has put global warming back into public view
We ended 2012 on a pretty bleak note as far as climate change was concerned. According to research by the Global Carbon Project, carbon emissions rose again this year by an estimated 2.6 percent, making our hope of limiting global warming by 2C seem increasingly unachievable.
A recently released report by PwC, entitled Too Late for 2 degrees?, advises that governments now need to scenario plan for a warming planet “of not just 2C, but 4C or even 6C”. Since 2C would still mean catastrophic climate change, with sea levels rising by 2.7 meters according to best estimates, it’s hard to overstate the mess we’re in.
Indeed, climate change is already contributing to the deaths of 400,000 people each year and costing the global economy $1.2 trillion, according another recent study.
Yet notwithstanding the significance of such reports, the climate change story that most people will remember this year will come not from these headline figures but from shocking scenes around the world of its effects already in play.
Some of the images that brought this home hardest were of the US suffering a double-whammy of record droughts costing $50bn followed by a devastating assault on New York by superstorm Sandy, costing a further $71bn.
Seeing is believing and believing is significant given the US’s influence in making the political weather overseas. After the record heatwave, US belief in climate change reached 70 percent, up from 65 percent the previous year. After Sandy, there are signs that even climate doubters are beginning to rethink. A separate poll showed that in follow-up calls 61 percent of people previously sceptical now say temperatures have been rising over the past century, compared with 47 percent in 2009.
Could these early but encouraging signs help create the political space for meaningful action? After Sandy went on the rampage, New York Mayor Bloomberg, a Republican, endorsed President Obama in this year’s election in an open letter entitled, “A Vote for a President to Lead on Climate Change.” It was a message to which President Obama seemingly responded when invoking the “destructive power of a warming planet” in his acceptance speech.
These heightened expectations were not delivered on at Doha. But with the President under pressure to make good on those initial signals, and an electorate increasingly experiencing the effects of climate change first hand, we shouldn’t write of 2013 as a year of action quite yet.
3. Consumers have a strategic role to play in greening business: M&S’s shwopping highlights the need to close the loop on product waste
Diminishing natural resources, rising commodity prices, mounting waste, and growing public pressure to reduce other environmental impacts is paving the way for some exciting business innovations.
M&S launched “shwopping” in April this year with the aim of helping to reduce the 350,000 tonnes of old clothes being dumped each year – making textile the fastest growing waste stream to landfill. With help from national treasure Joanna Lumley, shwopping encourages consumers to return and old item of clothing each time they buy a new one. More than 5,500 tonnes of clothes have so far been given a life beyond landfill.
The initiative has highlighted the opportunity for brands to make consumers part of the solution, particularly in sectors such as fashion where the greatest share of environmental impacts are made after purchase. In retail at least, the idea is cottoning on. H&M has recently launched a version of shwopping globally and Patagonia, the outdoor clothing brand, has gone three steps further still by encouraging its consumers to reduce the amount of new stuff they buy, repair (and re-wear) what’s damaged, and through their Common Threads eBay platform, enable customers to sell items they’re no longer using.
Outside fashion, other companies, such as US electronics retailer Best Buy, are also beginning to see the value of engaging consumers in a circular economy.
We can expect more next year as companies explore the potential to deepen customer loyalty by involving them in closing sustainability loops.
4. Don’t underestimate consumer power in enforcing corporate sustainability: Apple u-turns on EPEAT after public criticism
This year once again revealed the power of consumers, supercharged by social media, to hold even the biggest, most powerful brands to account.
In July, Apple announced that it would no longer register its products with EPEAT, the Electrical Products Environmental Assessment Tool – assumed to be linked to its new products being unlikely to meet EPEAT criteria
The decision prompted a ban of Apple products by San Francisco procurement city officials. On the face of it, with local officials spending a mere $45,579 (£29,365) on Apple technologies, a boycott represented a drop in the ocean compared to $65bn annual sales and Apple stood its ground.
But the company misunderstood the statement they were making by ditching EPEAT certification – which many took as a sign that Apple was parting ways with its green principles.
The ensuing backlash was huge and, although green groups such as Greenpeace added to the frenzy, was markedly consumer-driven.
After just three days, the firm were forced into an embarrassing u-turn, citing the disappointment of “many loyal Apple customers” as critical to correcting their “mistake” and getting back on to the register.
If brands take one moral from the story for next year it should be that consumers do care about sustainability, and they are more than prepared to say so directly.
5. Sustainable innovation goes 2.0: Unilever, Heineken, Sony and Sainsbury’s harness the wisdom of the crowd
2012 was the year businesses turned to crowdsourcing to crack sustainability.
We saw Unilever, Heineken, and Sony each launch new online platforms designed to pull in outside expertise to solve challenges ranging from sustainable showering and greener packaging to inspiring consumer behaviour change. There were also offline experiments, too, with Sainsbury’s teaming up with Green Mondays to ask 200 FTSE peers and competitors to suggest ways of making its 2020 Sustainability Plan stronger.
These bold approaches to open innovation have two main benefits. On an immediate level they enhance businesses’ capacity to tackle complex problems by drawing on a wealth of knowledge outside company walls. But in a broader sense, focused collaboration also helps to bring society and business back together, with profound cultural as well as practical implications.
2013 is set to see more brands trawling the internet for sustainability fixes to existing products, but the real opportunity will involve working with online communities to source, build and implement altogether new ideas.
6. Systems thinking and storytelling: KMPG and Nestlé show the opportunity to join up and talk up sustainability
We are fast-waking up to the fact that issues such as climate change, water, food, and energy stress are symptoms of the same thing: unsustainable growth in a finite world. Businesses are readily connecting the dots in recognising these challenges as interlocking, as a KPMG report has brilliantly highlighted. This year saw Nestlé’s Chairman Peter Brabeck launch a new blog exploring the water challenge in relation to food and energy, while Shell has also stepped up its thought-leadership on what it is calling the “stress nexus” ahead of the launch of a new set of 2030 scenarios next year.
2013 is therefore likely to see a wave of proactive efforts by corporates keen to join-up and talk-up sustainability activities in the context of new, broader narratives that go beyond mitigating issues in silo and describe instead more holistic, integrated, big picture plans. We will see “systems thinking” become one of the big buzz words, which is no bad thing given the need to collaborate and tackle issues in the round