Supplying the future in the absence of alchemy

Today we launch the fourth in a series of reports on Sustainable Consumption. This report highlights that trends across demand and supply, as well as the rules of the game, are changing industry dynamics. This requires solutions and action at a scale that is much greater than current efforts.

We all know the situation – billions of new consumers in emerging markets, people saying they want green when they are responding to survey questions but don’t back this up with their buying habits as consumers. Price volatility and possible disruptions in supply chains constrain the availability of key commodities. Existing production systems that are dependent on the throughput of materials cannot sustain growth in the face of such constraints.

The idea of decoupling growth from resource throughput is still far from mainstream. Gone are the days when we could hope to make gold from lead (which is incidentally the most recycled of all metals at 95%).

There are clear lessons from the project discussions that took place over the past year:

When it comes to addressing sustainable consumption challenges, we need to bring businesses and supply chains together.  Individually, many businesses are sustainability champions. Collectively, businesses have the power to shift entire markets and act on the scale of nations.  This is particularly important in a time when multilateral systems, such as the UN climate process, are not delivering fast enough.

The technologies enabling resource efficiency and recycling continue to advance, even if the centuries old explorations of alchemists have faltered. Some clear actions include making public procurement more sustainable through efficiency and eco design standards for government purchases, trade policy that supports sustainable goods and services, and reform of subsidies, in particular the US$409bn spent on fossil fuel subsidies last year.

The consumption side is where it gets interesting. Each of the CEOs and business leaders we spoke to said consumers were critical for sustainable consumption and that business and governments need to be more directive and engaged with consumers on these issues. Unfortunately, the insights tend to stop there. When pushed, it seems business, academia, governments and even consumers themselves doesn’t know quite how to do this. The solutions are out there but they need to be found.

It could be that companies are reluctant to influence consumer buying habits – but they do this every day through promotions, advertising and product placement. How to do this sustainably is another issue. As consumer acceptance grows, there is also a need for more competition among sustainable products. This will ensure consumers don’t have to compromise on price, performance or practicality.

Sustainable consumption will be a key issue addressed at the World Economic Forum Annual Meeting 2012 in Davos-Klosters this month. There, our team will drive a business-led dialogue to help better understand what the solutions might be. Along with key partners, we hope to develop a programme of practical action over the next year to move action on this issue forward.