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From idealism to profitability?
The report Our Common Future introduced the term "sustainable development" in 1987
(United Nations, 1987). Since then concern about environmental and social challenges has
grown tremendously. At the same time consumption and waste generation are growing even
more. Today, to sustain our consumption, we need one-and-a-half planets. If everybody lived
with the same standard of living as the Kuwait or Swedish population, we would need from
five to six planets (McDonald,2015).
How can we change the track of unsustainable development? Three key actors, or
stakeholders, are the key drivers for change: governments, companies and individuals. I will
address their challenges, status and contributions.
Governments' role is to set the right incentives for sustainable development, incorporate
environmental costs associated with consumption in the price of products, set limitations for
depletion of sources, etc. However, in democracies, politicians acting in line with this
framework are less likely to receive public support and suffer from low votes during elections.
Furthermore, the public's trust of politicians is relatively low. In Norway, for example, one of
the countries claiming to be very concerned about sustainable development, trust in politicians
is low.
Government initiatives toward sustainable development, such as lowering taxes on
electrical cars in Norway, combined with the opportunity to drive in bus and taxi lanes, and
park downtown for free, have revolutionizedthe car market. In 2015 the car that sold the most
in Norway was battery driven (Valle, 2016).In Ireland, adding a tax to plastic bags reduced
the annual use of plastic bags per capita from 328 bags to 2l bags per person (Department of
Environment,2007). Given the immense effect government initiatives can have, it is a
paradox that this opportunity to change people's purchasing behavior in a more sustainable
direction is not applied more often.
Only 36 percent of the Norwegian population has trust in the government with regards to
the climate challenge (Trædal, 2013). Currently Norway has the largest growth in climate gas
emissions in Westem Europe (Nikolaisen, 2012).
If experience so far suggests that politicians will not be able to change the development
track to a sustainable one, we have to turn to other key movers, such as corporations. The
concern about and interest in corporations' contribution to sustainable development, corporate
social responsibility (CSR), has increased tremendously in the last 30 years, as illustrated in
Figure 1.
Figur I Growth in Corporate Social Responsibility in Media (Factiva)
According to the EU, corporate social responsibility is "the responsibility of enterprises
for their impacts on society" (EU, 2011), and companies have made major improvements in
production and products offered. Instead of producing big gas gtzzlers, automobile
enterprises are now competing to develop the most energy-efficient electrical cars from
recycled materials. Mobile phones that filled a car's trunk 20 years ago are now small enough
to fit in your back pocket. Negative media coverage of child labor and poor working
conditions in developing countries has driven companies to survey their production lines to
protect their brand names and avoid such scandals. Companies engaged in production of
unsustainable products have furtherrnore experienced direct financial losses. After the Paris
climate summit in 2015, the share-price of Peabody, a large coal producer, fell 12,6 percent
(Kar-Gupta et al, 2015).
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Many companies want to engage in sustainable development, but are struggling with lack
of customer demand. Customers are less likely to purchase products that are more sustainable.
More sustainable and healthy products (those produced without pesticides, non-meat foods,
ecological products, etc.) are generally higher-priced, which is one of the key reasons
customers do not choose sustainable products. When companies ask customers to what extend
they prefer sustainable products, 50 percent answer that they are willing to pay more for
goods and services from responsible companies (Nielsen, 2013).In the store, however, their
wallet decides, and people choose cheaper and less sustainable products. For example, in a
suryey, 40 percent of respondents said they would purchase climate quotas to make their
flights carbon neutral (NTB, 2008). Less than one percent of the customers bought voluntary
carbon offsets (SAS, 20Il).
In Financial Times, Martin Wolf sums the situation up perfectly: "There is no point in
making moral demands. People will not do something on this scale because they care about
others, even including their own more remote descendants. They mostly care rather too much
about themselves for that." (V/olf 2013)
In my opinion, Wolf is right: V/e cannot count on consumers chancing their consumer
pattern in order to be "nice." To make consumer pattems more sustainable, innovation and
initiatives that create sustainable products preferred by the market are necessary.
Instead of focusing on what is not working, it is more constructive to focus on what is
working relative to changing consumer behavior in the direction of sustainability. The
Appreciative Inquiry Model, initiated by David Cooperride, focuses on business initiatives
that have actually been successful and can be a good approach. A study conducted in Norway
in2015 attempted to identify successful CSR initiatives; i.e., initiatives that were both
sustainable and profitable for companies. We found lots of such cases, and I will mention two
of them in this essay: "weird vegetables" and smaller buffet plates.
The weird vegetables initiative is based on using fruit and vegetables that do not meet
standard o'looks" requirements. They might be too small, for example, or have strange shapes.
The concept of weird vegetables was introduced by a franchiser of a large Norwegian food
chain. First tested on a small scale, the initiative was so successful that all stores in the chain
applied the concept. The weird vegetables were sold with a 30 percent rebate, one by one (that
is, in small quantities). The food store chain experienced increased sales and profits.
Furthermore, it was a healthy initiative because customers increased the amount of fruits and
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vegetables they purchased. Finally, the initiative received great interest from media, which
resulted in many positive articles about the chain store's brand.
Another initiative took place at a hotel that reduced the size of plates available at its food
buffet. Guests could of course serve themselves several times. Still, the volume of waste was
significantly reduced, as guests to a greater extent finished their servings and left less food on
their plates (i.e., reduced leftovers). The initiative reduced food costs as well as expenses for
managing leftover food. The study, initiated by the hotel itself, implied extra work for
employees to weigh leftover food and compare the results relative to the size of plates.
However, in the long run, the initiative was profitable. The company also received positive
meclia coverage, anct increase<l employees' pride in their workplace.
Both initiatives required the companies to take risks. Engaged individuals who are willing
and able to motivate colleagues and leaders to try out ideas are therefore a necessity.
Providing more motivation, openings and venues for creative thinking among employees is
crucial to foster such initiatives. Marketing these activities can inspire employees in other
companies to be more creative. Teaching innovation from a sustainable perspective in
business school is therefore equally important.
Creative thinking on a small scale cannot make the world sustainable in a short time. Too
much focus, however, has been placed on environmentalists like Al Gore flying around the
world waming people about the negative consequences of climate challenge. Most people are
aware of this challenge, and attention needs to shift from a negative, "destructive" focus to
more creative solutions.
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References
Department of Environment. (2007). Plastic Bag Levy to be increased to 22c ftom lluly
2007. http://www.environ.ielenvironment/waste/plastic-bags/plastic-bags-levy-be-
increased-2 2c -2 I -iúv -07
EU. (2011). Corporate Social Responsibility: a new definition, a new agenda for action.
Retrieved from http://ec.europa.eu/enterprise/newsroom/cflitemdetail.cfm?item:id:5511
Kar-Gupta et al, S. (2015). Paris climate pact sinks coal stocks, lifts renewable energy.
http : //www. reuters. com/article/us -climatechan ge-summit- stocks-
idusKBNOTX22A2O I 5 1 2 1 4.
McDonald, C. (2015, June 16, 2015). How many Earths do we need? BBC News.
Nielsen. (2013). 50% of global consumers surveyed willing to pay more for goods, services
from socially responsible companies, up from 201 l.
Nikolaisen,P.-I. (2012). Norge har Vestens største utslippsvekst. Telcnisk Ukeblad,
http://www.tu.no/artikler/norse-har-vestens-storste-utslippsvekst/236282.
NTB. (2008). Fire av ti vil kjøpe klimakvoter. Telcnisk Ukeblad,
http://www.tu.no/politikV2008/2004/2016/fire-av-ti-vil-kjope-klimakvoter.
SAS. (2011). The SAS Groupe Sustainability Report 2010. Retrieved from
http://www.sasgroup.net/erVwp-content/uploads/sites/2/2014l09/SAS-Group-
Sustainability-Report-20 I 0-Enelish.pdf
Trædal, E. (2013). Naturvernforbundet har størst tillit på klima.
United Nations, W. C. o. E. a. D. (1987). Our Common Future (Vol. SBN 0-19-282080)
Oxford: Oxford University Press.
Valle, M. (2016). 1-orårets mest solgte bil går på batteri. Telcnisk Ukeblad,
http://www.tu.no/artiklerlfiorarets-mest-solgte-bLl.gu pa-battetll2ló488
Wolt M. (2013). Why the world faces climate chaos. FT, May 14,
htfp:llwww.ft..com/intllcmslslÙlc926f926e928-bbf929-911e922-a924b924-
00 1 44feab00 1 47de.html#axzzOO 1 421eSaf00 1 48EO.
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